<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<FILENAME>b38210pee10-k405.txt
<DESCRIPTION>PERKINELMER INC.
<TEXT>

<PAGE>   1

================================================================================

                                 UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                            ------------------------

                                   FORM 10-K

(MARK ONE)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
   EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
   EXCHANGE ACT OF 1934

           FOR THE TRANSITION PERIOD FROM             TO

                         COMMISSION FILE NUMBER 1-5075

                               PERKINELMER, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                            <C>

                MASSACHUSETTS                                   04-2052042
(STATE OR OTHER JURISDICTION OF INCORPORATION      (I.R.S. EMPLOYER IDENTIFICATION NO.)
              OR ORGANIZATION)
                                                                   02481
 45 WILLIAM STREET, WELLESLEY, MASSACHUSETTS                    (ZIP CODE)
  (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>

      REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:  (781) 237-5100
          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

<TABLE>
<CAPTION>
             TITLE OF EACH CLASS                 NAME OF EACH EXCHANGE ON WHICH REGISTERED
             -------------------                 -----------------------------------------
<S>                                            <C>
         COMMON STOCK, $1 PAR VALUE                    NEW YORK STOCK EXCHANGE, INC.
       PREFERRED SHARE PURCHASE RIGHTS                 NEW YORK STOCK EXCHANGE, INC.
</TABLE>

       SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:  NONE

     Indicate by check mark whether the registrant:  (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

     The aggregate market value of the common stock, $1 par value, held by
nonaffiliates of the registrant on March 13, 2001, was $3,192,441,444.

     As of March 13, 2001, there were outstanding, exclusive of treasury shares,
50,353,968 shares of common stock, $1 par value.

                      DOCUMENTS INCORPORATED BY REFERENCE

<TABLE>
<S>                                                        <C>
PORTIONS OF PERKINELMER, INC.'S PROXY STATEMENT FOR THE
  2001 ANNUAL MEETING OF STOCKHOLDERS....................     PART III (Items 10, 11, 12 and 13)
</TABLE>

================================================================================
<PAGE>   2

                                     PART I

ITEM 1.  BUSINESS

GENERAL BUSINESS DESCRIPTION

     PerkinElmer, Inc. (hereinafter referred to as "PerkinElmer", the "Company",
or the "Registrant", which terms include the Company's subsidiaries) is a global
technology company, which provides products and systems to the telecom,
pharmaceutical, chemical, semiconductor, medical, aerospace, and photographic
markets. The Company has operations in over 125 countries, and is a component of
the S&P 500 Index. The Company's continuing operations are classified into four
operating segments: Life Sciences, Optoelectronics, Instruments, and Fluid
Sciences. In 2000, the Company had sales of $1.7 billion from continuing
operations. The Company was incorporated under the laws of the Commonwealth of
Massachusetts in 1947.

RECENT DEVELOPMENTS

     On July 31, 2000, we completed our acquisition of NEN Life Sciences, Inc.
("NEN"), a provider of state-of-the-art drug discovery products, services,
reagents and technologies to the life sciences industry. NEN generated fiscal
1999 sales of $104 million. Details of the transaction and pro forma financial
information were reported on a current report Form 8-K filed by the Company with
the SEC on August 1, 2000.

OPERATING SEGMENTS

     Set forth below is a brief summary of each of the Company's four operating
segments (also referred to as "strategic business units" or "SBUs") together
with a description of certain of their more significant or recently introduced
products, services or operations.

  Life Sciences

     Our Life Sciences business unit helps solve the complex analytical problems
encountered in drug discovery and genetic screening laboratories by providing
solutions including measuring instrumentation with interfacing software, and a
wide range of reagents and consumables. In 2000, this business unit had sales of
$221 million, representing 13% of our total sales.

     Life Sciences is comprised of two strategic business enterprises: drug
discovery and genetic screening. Within the field of drug discovery, Life
Sciences focuses on customers engaged in pharmaceutical, biotechnology and
academia laboratory research and has a strong presence in research and high
throughput screening (HTS) technologies. HTS involves the surveying of a vast
number of leads using a combination of reagents, detection instruments and
software to detect those leads that might prove to be important targets for
drugs. Customers include the HTS laboratories of the world's major
pharmaceutical and biotechnology companies.

     In genetic screening, the subject of the screen is a human patient,
typically a large number of patients. For example, newborn babies can be
screened for signs of diseases that may be prevented through dietary change or
other intervention. Customers include public health authorities in the United
States and around the world.

     Principal Products.  The principal products of our Life Sciences business
unit include:

     - Multilabel counters and plate readers for rapid quantitative measurement
       of light signals.

     - Imaging systems to observe and measure cellular and molecular processes.

     - Sample handling and laboratory automation devices.

     - Chemical reagents to allow heterogeneous and homogeneous assays.

     - Information management software.
<PAGE>   3

     New Products.  New product releases include:

     - Key offerings for functional genomic and proteomic based research such as
       MICROMAX(TM) cDNA, Arrays, the Ultraview(TM) Live Cell Imaging system,
       and the ProXpress(TM) for multiwavelength Imaging.

     Brand Names.  Our Life Sciences business unit offers its products under
various brand names, including Wallac(TM), NEN(R), LANCE(TM), DELFIA(TM),
MICROMAX(TM) and [FP]2(TM).

  Optoelectronics

     Our Optoelectronics business unit produces a broad spectrum of
optoelectronic products, including high volume and high performance specialty
lighting sources, detectors, optical fiber communications components, imaging
devices, emitters and receivers, mux arrays, and large area amorphous silicon
detectors. In 2000, this business unit had sales of $497 million, representing
29% of our total sales.

     The Optoelectronics operations and sales organizations are aligned along
three major applications areas, or strategic business enterprises: Telecom,
Ultra Specialty Lighting and Imaging. Strong relationships exist with major
customers in each market including medical, analytical instrumentation,
telecommunications, consumer, entertainment, industrial and aerospace.

     Principal Products.  The principal products of our Optoelectronics business
unit include:

     - Telecom and sensor components such as high speed Indium Gallium Arsenide
       (InGaAs) positive intrinsic negative (PIN) photodiodes and avalanche
       photodiodes (APDs), InGaAs and APD hybrid microelectronic receiver
       modules, photodiode linear arrays, Dense Wavelength Division Multiplexer
       (DWDM) channel monitors, custom packaged laser diodes, Erbium Doped Fiber
       Amplifier (EDFA) pumps, DWDM laser diodes, and fiber optic and cable test
       equipment. Other products include detectors and sensors for security
       systems, climate and lighting controls, and blood pressure monitoring
       systems.

     - Ultra Specialty Lighting products such as specialty high-intensity
       discharge (HID) lighting sources and fiber optic systems (xenon, mercury
       xenon, krypton-arc and metal halide) for medical diagnostics, dental
       curing and whitening, video projection, semiconductor lithography, stage
       and studio lighting, cinema projection lighting, solid-state laser
       pumping, tanning, signage, aerospace lighting, large volume
       photoflashlamps and other lighting applications.

     - Imaging products such as linear and two dimensional CCD sensors and
       cameras for the machine vision and analytical markets, amorphous silicon
       panels used in x-ray imaging and film replacement markets,
       photomultipliers for use in analytical instruments, and photocells and
       thermopiles used in gas and thermal monitoring applications.

     New Products.  Recent product releases include:

     - The Ultra Specialty Lighting SBE, launched its UV exposure system, the
       Pro Form GII. This fully automatic imaging system is used for advanced
       PCB and HDI production. The XL2000 Xenon Lightsource was also launched
       expanding the product offerings in medical and endoscopic market
       applications.

     - The Telecom SBE introduced the 256 Mux Array receiver used in DWDM
       channel monitoring which improves the effectiveness of new and existing
       fiber optic cable. The Fiber Optic Test System business introduced the
       CD400L Delay Dispersion System and PMD4000 Polarisation Mode Dispersion
       Measurement System. The CD400L delay/dispersion system uses tunable
       lasers and DSP technology to provide state of the art performance
       measurements of delay and chromatic dispersion in DWDM components The
       PMD4000 enables fast PMD measurements for optical fiber makers and
       cablers.

     - The Digital Imaging SBE expanded on its amorphous silicon technology with
       the introduction of the LAE (Large Area Electronic) Detector. This
       detector is sold into markets such as Industrial Imaging. Medical Imaging
       and Non-Diagnostic Medical applications such as veterinary medicine.

                                        2
<PAGE>   4

     Brand Names.  Our Optoelectronics business unit offers its products under
various brand names including Heimann(TM), ILC(R), ORC, Reticon(R), Vactec,
Voltarc(R), Q-Arc, Power Systems and Amorphous Silicon.

  Instruments

     Our Instruments business unit develops, manufactures and markets
sophisticated analytical instruments and imaging detection systems for research
laboratories, academia, medical institutions, government agencies and a wide
range of industrial applications designed to provide industry-specific "sample
to answer" solutions. In 2000, this business unit had sales of $725 million,
representing 43% of our total sales.

     Applications and Customers.  The Instruments business unit has two SBEs:
Analytical Instruments and Detection Systems. Analytical Instruments provide
world class analytical solutions employing technologies such as molecular and
atomic spectroscopies, high pressure liquid chromatography (HPLC), gas
chromatography (GC), and thermal and elemental analysis. These instruments
measure a range of substances from biomolecules to organic and inorganic
chemicals and have applications in the pharmaceutical, food and beverage,
chemical semiconductor and environmental markets. Our Detection Systems SBE
provides a broad range of products including walk through weapons detection
systems, advanced explosive detection systems, and large cargo inspection
systems. Typical applications are in the aviation, transportation, government
facilities, customs, and hazardous materials detection markets.

     Principal Products.  The principal products of our Instruments business
unit include:

     - Analytical instruments used to accelerate the drug development process,
       decipher molecular mechanisms of drug actions, monitor and test for
       environmental pollutants, confirm nutritional content and safety of foods
       and beverages, and analyze the purity of raw materials used in the
       development of semiconductor and optical products.

     - Detection systems used to inspect cargo for weapons, explosives and
       contraband, hand-held and walk through metal detectors for security
       screening, and X-ray based technology to identify weapons, explosives or
       narcotics in hand carried or checked baggage.

     New Products.  Recent product releases include:

     - Optima(TM) 2000 and 4000 Inductively Coupled Plasma Optical Emission
       Spectrometers are used by organizations with a broad range of
       environmental, industrial, geochemical, nutritional, and clinical
       applications to determine the elemental content of materials.

     - Lambda(TM) 25/35/45 UV/Visible Spectrometers are based on the proven
       technology and industry leading performance of the established Lambda
       platform. These high quality systems provide dependable results and
       deliver proven robustness and reliability.

     - TurboMatrix(TM) Chromatography Sample Handling systems provide a more
       efficient means of introducing samples to gas chromatography systems.

     - TotalChrom(TM) 6.2 Chromatography Data Management Software makes
       compliance with internal and external regulations easier. It also
       includes TC Publisher(TM), a powerful reporting tool that allows users to
       generate a variety of reports. The seamless flow of TotalChrom data into
       the NuGenesis(R) SDMS database provides laboratories with an integrated
       method of data capture and management.

     - PX 2000 is a revolutionary security product which will employ advanced
       x-ray generation for the greatest amount of penetration and imaging.
       Advanced features of the product will allow future growth into technology
       expansions such as remote maintenance diagnostics, internet transfer of
       images and data, as well as complete networking of multiple machines
       across customer facilities.

     - VIS108 is a new generation advanced explosive detection system machine
       from the newly acquired Vivid Technologies business. This product will
       provide the highest speed and highest level of explosive detection
       capability in the airport checked baggage market. Market place directions
       to inspect 100% of

                                        3
<PAGE>   5

       airport checked luggage will necessitate the advanced and economic
       features of this newly deployed technology.

     - Mobix is a recent entry into the Large Cargo Inspection market place for
       Detection Systems. This system is capable of inspecting large trucks and
       cargo containers at points of entry and border crossings. This system has
       the capacity to detect illegal contraband and monitor the flow of
       commerce into countries.

  Fluid Sciences

     Our Fluid Sciences business unit provides enabling sealing solutions and
advanced fluid containment technologies to the world's leading aerospace,
semiconductor, medical implant and power generation equipment manufacturers.
Fluid Sciences produces static and dynamic seals and sealing systems; solenoid
valves and next-higher-level assembles; bellow devices; advanced pneumatic
components, systems and assemblies; and sheetmetal-formed products for
market-leading original equipment manufacturers and end users. The SBU also
provides durability and fluid testing services to engine and lubricant
manufacturers. In 2000, this business unit had sales of $252 million,
representing 15% of our total sales.

     Typical applications for the products of our Fluid Sciences business unit
are in critical aerospace, semiconductor, medical implant and power generation
equipment markets as well as lubricant and fuel testing.

     Principal Products.  The principal products of our Fluid Sciences business
unit include:

     - Welded metal bellows seals that hold the medication in patient pain
       reduction implants and welded metal bellows for wafer-process vacuum
       sealing and linear motion devices.

     - Valves that provide actuation or control on aircraft.

     - Brush seals and flexible, metallic C- and E-Seals(TM)that reduce or
       eliminate emissions and improve efficiency and fuel consumption in power
       generation engines.

     - Aircraft engine dynamic and static sealing to enhance engine efficiency
       and reduce fuel consumption.

     - UHV/UHP static sealing in gas delivery and process chamber systems, and
       in laser and memory devices.

     - Engine and component durability testing, fuel and lubricant testing,
       vehicle fleet and fuel system testing.

     New Products.  New product releases include:

     - Belfab(R) Higher-Level-Assemblies for critical semiconductor wafer
       process equipment.

     - Microplex(TM) Seals and Microprofile(TM) Joints to enhance performance in
       microturbines used in power generation.

     - Tytan(TM) Seals, second generation ultra-high vacuum seals developed for
       use in the increasingly harsh environment of semiconductor processing and
       vacuum equipment.

     - Advanced Brush Seals for difficult sealing applications in power
       generation and aerospace.

     Brand Names.  Our Fluid Sciences business unit offers its products under
various brand names, including Belfab(R), Centurion(TM), Pressure Science(TM),
Wright Components(TM), Automotive Research(TM), and Missouri Metal Shaping.

  Discontinued Operations

     For a number of years, the Company had provided services under management
and operations contracts to the United States Department of Energy (the "DOE")
and reports its former DOE Support segment as discontinued operations. The last
of these DOE contracts expired in 1997. The Company is in the process of

                                        4
<PAGE>   6

negotiating contract closeouts and does not anticipate incurring any material
loss in connection with such contracts in excess of previously established
reserves.

     On August 20, 1999, the Company sold the assets of its Technical Services
segment, including the capital stock of EG&G Defense Materials, Inc., a
subsidiary of the Company, to EG&G Technical Services, Inc., an affiliate of The
Carlyle Group LP, for approximately $250 million in cash and the assumption by
the buyer of certain liabilities of the Technical Services segment. Through its
Technical Services segment, the Company provided engineering, scientific,
management and technical support services to a broad range of governmental and
industrial customers. In 1999, Technical Services had sales of $303 million,
reported as discontinued operations.

MARKETING

     All four of the Company's business units, Life Sciences, Optoelectronics,
Instruments and Fluid Sciences, market their products and services through their
own specialized sales forces as well as independent foreign and domestic
manufacturer representatives and distributors. In certain foreign countries,
these operating segments have entered into joint venture and license agreements
with local firms to manufacture and market their products.

RAW MATERIALS AND SUPPLIES

     Raw materials and supplies used by the Company are generally readily
available in adequate quantities from domestic and foreign sources.

PATENTS AND TRADEMARKS

     While the Company's patents, trademarks and licenses in the aggregate are
important to its business, the Company does not believe that the loss of any one
patent, trademark or license or group of related patents, trademarks or licenses
would have a materially adverse effect on the overall business of the Company or
on any of its operating segments. The Company has both trademarks and registered
trademarks for a variety of its product names. Registration of the
PerkinElmer(TM) trademark is pending.

BACKLOG

     At December 31, 2000, the Company had a backlog in continuing operations of
approximately $360 million compared to $400 million at January 2, 2000. The
Company includes in backlog only those orders for which it has received a
completed purchase order. The Company estimates that more than 95% of its
backlog as of December 31, 2000 will be billed during 2001. Certain of these
orders are subject to cancellation by the customer with payment of a negotiated
charge. Because of the possible changes in delivery schedules, cancellation of
orders and potential delays in product shipments, the Company's backlog as of
any particular date may not necessarily be representative of actual sales for
any succeeding period.

COMPETITION

     Because of the wide range of its products and services, the Company faces
many different types of competition and competitors. This affects its ability to
sell its products and services and the prices at which such products and
services are sold. Competitors range from large foreign and domestic
organizations that produce a comprehensive array of goods and services, and
which may have greater financial and other resources than the Company, to small
concerns producing a small number of goods or services for specialized market
segments.

     In the Life Sciences segment, competition is on the basis of product
availability and reliability, and service level. Size of the competition ranges
from multinational organizations with a wide range of products to specialized
firms that in some cases have well established market niches. The Company
competes in these markets on the basis of innovative technologies, product
differentiation and quality. The proportion of large competitors in this segment
is expected to increase through the continued consolidation of competitors.

                                        5
<PAGE>   7

     In the Optoelectronics segment, no single competitor competes directly with
this segment across its full product range. However, the Company does compete
with specialized manufacturing companies in the manufacture and sale of
specialty flashtubes and ultraspecialty lighting sources, certain photodetectors
and photodiodes, switched power supplies and telecommunications products.
Competition is based on price, technological innovation, operational efficiency
and product reliability and quality.

     In the Instruments segment, the Company faces a similar situation in that
no single competitor competes directly with this segment as a whole. The Company
competes with instrument companies that serve particular segments of markets in
industrial instrumentation, and imagining detection systems. The Company
competes in this segment primarily on the basis of product performance, product
reliability, service and price.

     In the Fluid Sciences segment, competition is typically based on product
innovation, quality, service and price. In a few markets, competitors are large,
diversified engineering, and manufacturing concerns. Most of the Company's
competitors, however, are small specialized manufacturing companies offering
fewer product lines for narrower market segments. Competition for lubricant
testing services is from a few specialized testing companies and some
customer-owned laboratories, and is mainly based on quality and price.

     The Company competes primarily on the basis of product performance,
technological innovation, service and price.

RESEARCH AND DEVELOPMENT

     During 2000, 1999 and 1998, Company-sponsored research and development
expenditures were approximately $86 million, $71 million and $46 million,
respectively.

ENVIRONMENTAL COMPLIANCE

     The Company is conducting a number of environmental investigations and
remedial actions at current and former Company locations and, along with other
companies, has been named a potentially responsible party (PRP) for certain
waste disposal sites. The Company accrues for environmental issues in the
accounting period in which the Company's responsibility is established and when
the cost can be reasonably estimated. The Company has accrued $8.8 million as of
December 31, 2000, representing management's estimate of the total cost of
ultimate disposition of known environmental matters. Such amount is not
discounted and does not reflect any recovery of any amounts through insurance or
indemnification arrangements. These cost estimates are subject to a number of
variables, including the stage of the environmental investigations, the
magnitude of the possible contamination, the nature of the potential remedies,
possible joint and several liability, the timeframe over which remediation may
occur and the possible effects of changing laws and regulations. For sites where
the Company has been named a PRP, management does not currently anticipate any
additional liability to result from the inability of other significant named
parties to contribute. The Company expects that such accrued amounts could be
paid out over a period of up to five years. As assessments and remediation
activities progress at each individual site, these liabilities are reviewed and
adjusted to reflect additional information as it becomes available. There have
been no environmental problems to date that have had or are expected to have a
material effect on the Company's financial position or results of operations.
While it is reasonably possible that a material loss exceeding the amounts
recorded may have been incurred, the preliminary stages of the investigations
make it impossible for the Company to reasonably estimate the range of potential
exposure.

EMPLOYEES

     As of March 1, 2001, the Company employed approximately 12,500 persons.
Certain of the Company's subsidiaries are parties to contracts with labor
unions. The Company considers its relations with employees to be satisfactory.

                                        6
<PAGE>   8

FINANCIAL INFORMATION ABOUT OPERATING SEGMENTS

     Sales and operating profit by segment for the three years ended December
31, 2000 are shown in the table below:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                       2000          1999         1998
--------------                                    ----------    ----------    --------
<S>                                               <C>           <C>           <C>
LIFE SCIENCES
Sales...........................................  $  221,401    $  158,009    $134,635
Operating Profit (Loss).........................      (3,636)       15,768       9,044
OPTOELECTRONICS
Sales...........................................     496,851       447,681     274,506
Operating Profit (Loss).........................      96,931        40,317      (4,133)
INSTRUMENTS
Sales...........................................     725,261       532,128     185,038
Operating Profit (Loss).........................      58,894       (19,323)      6,647
FLUID SCIENCES
Sales...........................................     251,754       225,311     237,537
Operating Profit................................      45,071        31,078       3,887
OTHER
Sales...........................................          --            --      22,666
Operating Profit (Loss).........................     (10,685)       (1,188)    104,279
CONTINUING OPERATIONS
Sales...........................................   1,695,267     1,363,129     854,382
Operating Profit................................     186,575        66,652     119,724
</TABLE>

     The Company's Technical Services segment and former Department of Energy
segment are presented as discontinued operations and, therefore, are not
included in the preceding table. The results for the periods presented include
certain acquisition charges, restructuring charges and other nonrecurring items,
which are discussed in the Management's Discussion and Analysis section of this
document.

     Sales and operating profit by segment for the three years ended December
31, 2000, excluding goodwill and intangibles amortization, acquisition charges,
restructuring and nonrecurring items, are shown in the table below:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                       2000          1999         1998
--------------                                    ----------    ----------    --------
<S>                                               <C>           <C>           <C>
LIFE SCIENCES
Sales...........................................  $  221,401    $  158,009    $134,635
Operating Profit................................      39,186        23,959      16,215
OPTOELECTRONICS
Sales...........................................     496,851       447,681     274,506
Operating Profit................................      83,603        58,254      20,383
INSTRUMENTS
Sales...........................................     725,261       532,128     185,038
Operating Profit................................      79,430        45,323      16,202
FLUID SCIENCES
Sales...........................................     251,754       225,311     237,537
Operating Profit................................      47,735        26,978      26,566
OTHER
Sales...........................................          --            --      22,666
Operating Profit (Loss).........................     (13,694)      (10,260)    (14,636)
CONTINUING OPERATIONS
Sales...........................................   1,695,267     1,363,129     854,382
Operating Profit................................     236,260       144,254      64,730
</TABLE>

                                        7
<PAGE>   9

     Additional information relating to the Company's operating segments is as
follows:

<TABLE>
<CAPTION>
                                       DEPRECIATION AND
                                     AMORTIZATION EXPENSE             CAPITAL EXPENDITURES
                                 -----------------------------    -----------------------------
(IN THOUSANDS)                    2000       1999       1998       2000       1999       1998
--------------                   -------    -------    -------    -------    -------    -------
<S>                              <C>        <C>        <C>        <C>        <C>        <C>
Life Sciences..................  $17,719    $ 6,189    $ 5,059    $16,239    $ 7,465    $ 5,415
Optoelectronics................   25,967     34,430     25,615     34,242     21,155     17,256
Instruments....................   23,940     17,292     10,573      8,266      6,555      8,382
Fluid Sciences.................   10,663      7,093      6,042     10,895      4,515     10,325
Other..........................      859      1,111      1,221        956      1,402      3,111
                                 -------    -------    -------    -------    -------    -------
  Continuing operations........  $79,148    $66,115    $48,510    $70,598    $41,092    $44,489
                                 =======    =======    =======    =======    =======    =======
  Discontinued operations......       --    $   841    $ 1,869         --    $ 1,341    $ 2,033
                                            =======    =======               =======    =======
</TABLE>

<TABLE>
<CAPTION>
                                                                    TOTAL ASSETS
                                                              ------------------------
                       (IN THOUSANDS)                            2000          1999
                       --------------                         ----------    ----------
<S>                                                           <C>           <C>
Life Sciences...............................................  $  600,168    $  125,025
Optoelectronics.............................................     512,395       448,453
Instruments.................................................     816,916       854,452
Fluid Sciences..............................................     123,096       102,421
Other.......................................................     207,604       184,289
                                                              ----------    ----------
                                                              $2,260,179    $1,714,640
                                                              ==========    ==========
</TABLE>

FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS

     The following geographic area information for continuing operations
includes sales based on location of external customer and net property, plant
and equipment based on physical location:

<TABLE>
<CAPTION>
                                                                 SALES
                                                  ------------------------------------
(IN THOUSANDS)                                       2000          1999         1998
--------------                                    ----------    ----------    --------
<S>                                               <C>           <C>           <C>
U.S. ...........................................  $  797,587    $  661,609    $447,793
United Kingdom..................................     111,676        71,493      47,794
Germany.........................................     102,439        98,787      67,647
Japan...........................................      77,119        73,567      28,306
France..........................................      61,416        50,282      35,329
Italy...........................................      55,563        56,433      17,565
Other Non-U.S. .................................     489,467       350,958     209,948
                                                  ----------    ----------    --------
                                                  $1,695,267    $1,363,129    $854,382
                                                  ==========    ==========    ========
</TABLE>

<TABLE>
<CAPTION>
                                                              NET PROPERTY, PLANT AND
                                                                     EQUIPMENT
                                                              ------------------------
(IN THOUSANDS)                                                   2000          1999
--------------                                                ----------    ----------
<S>                                                           <C>           <C>
U.S. .......................................................   $160,732      $133,812
Finland.....................................................     26,356        17,277
Canada......................................................     19,051        14,718
Germany.....................................................     14,137        21,570
United Kingdom..............................................     12,836        13,282
Other Non-U.S. .............................................     41,648        27,375
                                                               --------      --------
                                                               $274,760      $228,034
                                                               ========      ========
</TABLE>

                                        8
<PAGE>   10

     Effectively, all of the sales and net property, plant and equipment of the
discontinued operations (consisting of the Technical Services segment and former
DOE segment) were U.S. based.

ITEM 2.  PROPERTIES

     As of January 30, 2001 the Company occupied approximately 4,360,000 square
feet of building area, of which approximately 1,840,000 square feet is owned by
the Company. The balance is leased. The Company's headquarters occupies 53,400
square feet of leased space in Wellesley, Massachusetts. The Company's other
operations are conducted in manufacturing and assembly plants, research
laboratories, administrative offices and other facilities located in 14 states
and 41 foreign countries.

     Non-U.S. facilities account for approximately 1,580,000 square feet of
owned and leased property, or approximately 36% of the Company's total occupied
space.

     The Company's real property leases are both short-term and long-term. In
management's opinion, the Company's properties are well-maintained and are
adequate for its present requirements.

     The following table indicates the approximate square footage of real
property owned and leased attributable to each of the Company's operating
segments:

<TABLE>
<CAPTION>
                                                              OWNED         LEASED        TOTAL
                                                            (SQ. FEET)    (SQ. FEET)    (SQ. FEET)
                                                            ----------    ----------    ----------
<S>                                                         <C>           <C>           <C>
Life Sciences.............................................    464,634       224,480       689,114
Optoelectronics...........................................    661,942       742,798     1,404,740
Instruments...............................................    243,257     1,417,893     1,661,150
Fluid Sciences............................................    468,369        78,460       546,829
Corporate Offices.........................................      4,561        53,400        57,961
                                                            ---------     ---------     ---------
CONTINUING OPERATIONS.....................................  1,842,763     2,517,031     4,359,794
                                                            =========     =========     =========
</TABLE>

ITEM 3.  LEGAL PROCEEDINGS

     The Company is subject to various claims, legal proceedings and
investigations covering a wide range of matters that arise in the ordinary
course of its business activities. Each of these matters is subject to various
uncertainties, and it is possible that some of these matters may be resolved
unfavorably to the Company. The Company has established accruals for matters
that are probable and reasonably estimable. Management believes that any
liability that may ultimately result from the resolution of these matters in
excess of amounts provided will not have a material adverse effect on the
financial position or results of operations of the Company.

     The Company has received notices from the Internal Revenue Service (IRS)
asserting deficiencies in federal corporate income taxes for the Company's 1985
to 1994 tax years. The total additional tax proposed by the IRS amounts to $74
million plus interest. The Company has filed petitions in the United States Tax
Court to challenge most of the deficiencies asserted by the IRS. The Company
believes that it has meritorious legal defenses to those deficiencies and
believes that the ultimate outcome of the case will not result in a material
impact on the Company's financial position or results of operations.

     The Company and its subsidiary, EG&G Idaho, Inc., were named in 1998 as
defendants in a lawsuit pending in the United States District Court for the
District of Idaho. Filed by two former employees of EG&G Idaho under the Civil
False Claims Act, the suit names as defendants six entities which were formerly,
or currently are, prime contractors or subcontractors to the Department of
Energy at the Idaho National Engineering and Environmental Laboratory.
Plaintiffs allege that the defendants submitted false claims to the government
for reimbursement of environmental activities which they knew or should have
known had either not been performed or were performed improperly. After several
preliminary motions narrowed the scope of the case, discovery is now set to
begin. Plaintiffs have yet to quantify the damages they are seeking.

                                        9
<PAGE>   11

     The Company's subsidiary, EG&G Rocky Flats, Inc. and two other companies
were also named as defendants in January 2000 in a civil false claim action
pending in the United States District Court for the District of Colorado
involving security issues at the Department of Energy's Rocky Flats Plant. The
United States Department of Justice has filed a motion seeking to have the case
dismissed.

     The Company intends to defend itself vigorously in these matters and
believes that their ultimate disposition will not have a material impact on the
Company's financial position or results of operations.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

     Listed below are the executive officers of the Company as of March 23,
2001. No family relationship exists between any of the officers.

<TABLE>
<CAPTION>
NAME                                                 POSITION                                      AGE
----                                                 --------                                      ---
<S>                                                  <C>                                           <C>
Gregory L. Summe...................................  Chairman of the Board,                        44
                                                     Chief Executive Officer and President
Robert F. Friel....................................  Senior Vice President                         45
                                                     and Chief Financial Officer
Terrance L. Carlson................................  Senior Vice President,                        48
                                                     General Counsel and Clerk
Richard F. Walsh...................................  Senior Vice President                         48
Robert A. Barrett..................................  Senior Vice President                         57
Patrik O. Dahlen...................................  Senior Vice President                         39
John J. Engel......................................  Senior Vice President                         39
Stephen P. DeFalco.................................  Senior Vice President                         40
</TABLE>

     Mr. Summe joined the Company in 1998 as President and Chief Operating
Officer, was elected President and Chief Executive Officer in December 1999, and
was elected Chairman of the Board in April 1999. Until late 1997, he was
President of AlliedSignal's Automotive Products Group. AlliedSignal, Inc., which
recently merged with Honeywell and became known as Honeywell International, is a
multi-billion multi-product company, which has operations in aerospace,
automotive and engineered materials businesses. Prior to being appointed
President of AlliedSignal's Automotive Products Group in 1997, Mr. Summe served
as President of AlliedSignal's Aerospace Engines from 1995 to 1997 and as
President of AlliedSignal's General Aviation Avionics from 1993 to 1995.

     Mr. Friel joined the Company in February 1999 as Senior Vice President and
Chief Financial Officer. From 1997 to 1999 he was Corporate Vice President and
Treasurer of AlliedSignal, Inc. Prior to that he was Vice President, Finance and
Administration of AlliedSignal Engines from 1992 to 1996.

     Mr. Carlson joined the Company in June 1999 as Senior Vice President,
General Counsel and Clerk. From 1997 to 1999 he was Deputy General Counsel of
AlliedSignal, Inc. Prior to that he was Vice President and General Counsel of
AlliedSignal Aerospace from 1994 to 1997, and from 1986 to 1994 he was a partner
in the law firm of Gibson, Dunn & Crutcher.

     Mr. Walsh joined the Company in July 1998 as Senior Vice President of Human
Resources. From 1989 to 1998, he served as Senior Vice President of Human
Resources of ABB Americas, Inc., the U.S. based subsidiary of an international
engineering company.

     Mr. Barrett was elected a Vice President of the Company in January 1997 and
a Senior Vice President in January 2000. He has served as President of the Fluid
Sciences Strategic Business Unit since May 1998. From 1990 to 1997, he served as
President and General Manager of the Company's Pressure Science division.

                                        10
<PAGE>   12

     Mr. Dahlen was elected a Vice President of the Company in October 1999 and
a Senior Vice President in January 2000. He has served as President of the Life
Sciences Strategic Business Unit since September 1999. From April through
October 1999, Mr. Dahlen was General Manager of the Reticon division of the
Optoelectronics Strategic Business Unit. From September 1995 through April 1999
Mr. Dahlen was Director of Marketing and General Manager of U.S. Diagnostics for
the Life Sciences Strategic Business Unit. Mr. Dahlen is a citizen of Finland.

     Mr. Engel was elected a Vice President of the Company in April 1999 and a
Senior Vice President in January 2000. He has served as President of the
Optoelectronics Strategic Business Unit since March 1999. Mr. Engel had been
associated with AlliedSignal since 1994, serving as Vice President and General
Manager of Business and General Aviation from 1997 to March 1999, Vice President
of the Flight Controls Enterprise in 1996, and Director of the Radar and
Collision Avoidance Enterprise from 1994 to 1995.

     Mr. DeFalco was elected a Senior Vice President in October 2000 and he has
served as President of the Instruments Strategic Business Unit since that time.
From June 1999 to October 2000, Mr. DeFalco served as Vice President of the
Company's Analytical Instruments business unit. From September 1998 to June
1999, Mr. DeFalco served as Vice President of Strategic Planning and Business
Development. Prior to 1998, Mr. DeFalco was associated with United Technologies
Corporation where he held the positions of Vice President of Strategic Planning
at the Company's Carrier Division and Corporate Director of Strategic Planning.

                                        11
<PAGE>   13

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET PRICE OF COMMON STOCK

<TABLE>
<CAPTION>
                                                                 2000 FISCAL QUARTERS
                                                        --------------------------------------
                                                        FIRST     SECOND     THIRD     FOURTH
                                                        ------    ------    -------    -------
<S>                                                     <C>       <C>       <C>        <C>
High..................................................  $79.25    $68.75    $107.00    $119.50
Low...................................................   39.06     50.00      62.13      89.06
</TABLE>

<TABLE>
<CAPTION>
                                                                 1999 FISCAL QUARTERS
                                                        --------------------------------------
                                                        FIRST     SECOND     THIRD     FOURTH
                                                        ------    ------    -------    -------
<S>                                                     <C>       <C>       <C>        <C>
High..................................................  $30.06    $35.63    $ 39.75    $ 43.81
Low...................................................   25.75     26.75      31.81      36.88
</TABLE>

DIVIDENDS

<TABLE>
<CAPTION>
                                                                   2000 FISCAL QUARTERS
                                                          ---------------------------------------
                                                          FIRST     SECOND      THIRD      FOURTH
                                                          -----     ------      -----      ------
<S>                                                       <C>       <C>         <C>        <C>
Cash Dividends Per Common Share.........................  $.14       $.14       $.14        $.14
</TABLE>

<TABLE>
<CAPTION>
                                                                   1999 FISCAL QUARTERS
                                                          ---------------------------------------
                                                          FIRST     SECOND      THIRD      FOURTH
                                                          -----     ------      -----      ------
<S>                                                       <C>       <C>         <C>        <C>
Cash Dividends Per Common Share.........................  $.14       $.14       $.14        $.14
</TABLE>

     The Company's common stock is listed and traded on the New York Stock
Exchange. The number of holders of record of the Company's common stock as of
March 21, 2001 was approximately 7,900.

     During fiscal 2000, the Company's Board of Directors declared four regular
quarterly cash dividends of 14 cents per share, each resulting in an annual rate
of 56 cents per share.

     On January 30, 2001, the Company announced its intention to effect a two
for one split of its common stock. The proposed split is subject to the approval
of the Company's shareholders at its Annual Meeting on April 24, 2001.

                                        12
<PAGE>   14

ITEM 6.  SELECTED FINANCIAL DATA

                         SELECTED FINANCIAL INFORMATION
                   FOR THE FIVE YEARS ENDED DECEMBER 31, 2000

<TABLE>
<CAPTION>
(IN THOUSANDS WHERE APPLICABLE)                     2000          1999          1998         1997        1996
-------------------------------                  ----------    ----------    ----------    --------    --------
<S>                                              <C>           <C>           <C>           <C>         <C>
OPERATIONS:
Sales..........................................  $1,695,267    $1,363,129    $  854,382    $927,482    $928,287
Operating income from continuing operations....     186,575        66,652       119,724      27,019      56,265
Income from continuing operations..............      86,067        28,371        79,001       9,562      34,264
Income from discontinued operations, net of
  income taxes.................................          --        15,665        23,001      24,130      25,892
Gain on disposition of discontinued operations,
  net of income taxes..........................       4,453       110,280            --          --          --
Net income.....................................      90,520       154,316       102,002      33,692      60,156
Basic earnings per share:
  Continuing operations........................        1.75           .62          1.74         .21         .72
  Discontinued operations......................         .09          2.77           .51         .53         .55
  Net income...................................         .84          3.39          2.25         .74        1.27
Diluted earnings per share:
  Continuing operations........................        1.68           .61          1.72         .21         .72
  Discontinued operations......................         .09          2.70           .50         .53         .55
  Net income...................................        1.77          3.31          2.22         .74        1.27
Weighted-average common shares outstanding:
  Basic........................................      49,106        45,522        45,322      45,757      47,298
  Diluted......................................      51,139        46,569        45,884      45,898      47,472
FINANCIAL POSITION:
Total assets...................................  $2,260,179    $1,714,640    $1,138,778    $777,737    $774,761
Short-term debt................................     186,206       382,162       157,888      46,167      21,499
Long-term debt.................................     583,337       114,855       129,835     114,863     115,104
Long-term liabilities..........................     230,854       196,511       124,799      95,940      76,087
Stockholders' equity...........................     728,389       550,776       399,667     328,388     365,106
Total debt/total capital.......................          51%           47%           42%         33%         27%
Common shares outstanding......................      50,001        46,366        44,746      45,333      46,309
CASH FLOWS:
Cash flows from continuing operations..........  $  145,548    $  108,768    $   40,853    $ 11,405    $ 48,291
Cash flows from discontinued operations........          --         7,061        28,702      23,433      31,867
Cash flows from operating activities...........     145,548       115,829        69,555      34,838      80,158
Depreciation and amortization..................      79,148        66,115        48,510      42,698      38,861
Capital expenditures...........................      70,598        41,092        44,489      47,642      78,796
Purchases of common stock......................      10,589           970        41,217      28,104      30,760
Cash dividends per common share................         .56           .56           .56         .56         .56
</TABLE>

---------------
Note: The information presented above includes in-process research and
      development charges, revaluation of acquired inventory, gains,
      restructuring and other nonrecurring items discussed in greater detail
      within Item 7, Management's Discussion and Analysis of Results of
      Operations and Financial Condition.

                                        13
<PAGE>   15

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION

OVERVIEW

     Fiscal 2000 represented the third year of the Company's transformation into
a global, high technology leader. During 2000, the Company continued its focus
on shifting the portfolio of businesses to higher growth potential. The Company
completed several acquisitions and divestitures including:

     - acquisition of NEN Life Sciences

     - acquisition of Vivid Technologies

     - divestiture of Berthold business

     - divestiture of Judson business

     - divestiture of IC Sensors business

     These transactions resulted in gains from divestitures, acquisition-related
charges and restructuring charges. The table presented below reconciles the
reported results of the Company in the accompanying financial statements to the
financial results before nonrecurring items. On this adjusted basis, EPS
increased 22% during 2000 to $2.08 versus $1.70 in 1999. Excluding results of
discontinued operations, 2000 adjusted EPS was $2.08 versus $1.36 in 1999,
representing an increase of 53%. Cash EPS increased 26% to $2.65 in 2000 versus
$2.11 in 1999.

<TABLE>
<CAPTION>
                                                              2000      1999
                                                              -----    ------
<S>                                                           <C>      <C>
Diluted EPS, as reported....................................  $1.77    $ 3.31
Gains on dispositions.......................................   (.56)    (2.63)
Acquisition and divestiture related charges.................    .77       .51
Restructuring-related and other.............................    .10       .51
                                                              -----    ------
"Adjusted" EPS..............................................   2.08      1.70
Goodwill and intangibles amortization.......................    .57       .41
                                                              -----    ------
"Cash" EPS..................................................  $2.65    $ 2.11
                                                              =====    ======
</TABLE>

ACQUISITIONS AND DIVESTITURES

     On January 14, 2000, the Company completed its acquisition of Vivid
Technologies, Inc. (Vivid) for an aggregate purchase price of approximately $67
million. The transaction was a stock merger whereby the shareholders of Vivid
received one share of the Company's common stock for each 6.2 shares of Vivid
common stock; approximately 1.6 million shares were issued in connection with
the acquisition. Vivid, which is a leading supplier of automated explosive
detection systems utilized in airports and high-security facilities worldwide,
generated sales of $21 million for the twelve months ended September 30, 1999.
Vivid's operations, included in the consolidated results of the Company from the
date of acquisition, are reported in the Instruments segment. The acquisition
was accounted for as a purchase under Accounting Principles Board (APB) Opinion
No. 16, and the Company allocated the purchase price of Vivid based on the fair
values of the net assets acquired and liabilities assumed. Portions of the
purchase price, including intangible assets, were valued by independent
appraisers utilizing customary valuation procedures and techniques. These
intangible assets included approximately $8.1 million for acquired in-process
research and development (R&D) for projects that had not reached technological
feasibility as of the acquisition date and for which no alternative use existed.
This allocation represents the estimated fair value based on risk-adjusted cash
flows related to the in-process R&D projects; these costs were expensed in the
first quarter of 2000. Other acquired intangible assets totaling $6.4 million
included the fair value of developed technology. These intangible assets are
being amortized over their estimated useful life of 10 years. Goodwill of $24.1
million resulting from the acquisition of Vivid is being amortized over 25
years.

     On July 31, 2000, the Company completed its acquisition of NEN Life
Sciences, Inc. (NEN), a provider of state-of-the-art drug discovery products,
services, reagents and technologies to the life sciences industry.

                                        14
<PAGE>   16

The Company purchased NEN from an investor group led by Genstar Capital LLC for
an aggregate purchase price of approximately $400 million. In connection with
the acquisition, the Company paid approximately $350 million in cash and issued
warrants to purchase approximately 300,000 shares of the Company's common stock
in exchange for all of the outstanding shares, options and warrants of NEN. In
addition, the Company repaid approximately $50 million of outstanding
indebtedness of NEN. The Company financed the acquisition and repayment of the
outstanding indebtedness with $410 million of commercial paper borrowings with a
weighted-average interest rate of 7%. These short-term borrowings were repaid in
early August with proceeds from the issuance of long-term convertible
debentures.

     NEN's operations, included in the consolidated results of the Company from
the date of acquisition, are reported in the Life Sciences segment. The
acquisition was accounted for as a purchase under APB Opinion No.16, and the
Company allocated the purchase price of NEN based on the fair values of the net
assets acquired and liabilities assumed. The allocation of the purchase price
has not yet been finalized, however, the Company does not expect material
changes. Portions of the purchase price, including intangible assets, were
valued by independent appraisers utilizing customary valuation procedures and
techniques. These intangible assets included approximately $24.3 million for
acquired in-process R&D for projects that had not reached technological
feasibility as of the acquisition date and for which no alternative use existed.
This allocation represents the estimated fair value based on risk-adjusted cash
flows related to the in-process R&D projects; these costs were expensed in the
third quarter of 2000. Other acquired intangible assets totaling $75.9 million
included the fair value of trade names, trademarks, patents and developed
technology. Goodwill of $270.8 million resulting from the acquisition of NEN is
being amortized over 20 years. Approximately $4 million has been recorded as
accrued restructuring costs in connection with the acquisition of NEN. The
restructuring plans include initiatives to integrate the operations of the
Company and NEN, and to reduce overhead. The primary components of these plans
relate to employment costs, consolidation of certain facilities, and the
termination of certain leases and other contractual obligations. Management is
in the process of developing its restructuring plans related to NEN, and
accordingly, the amounts recorded are based on management's current estimate of
these costs. The Company will finalize these plans during 2001, and the majority
of the restructuring actions are expected to occur during 2001.

     On May 28, 1999, the Company completed its acquisition of the Analytical
Instruments Division (AI) of PE Corp. for an aggregate purchase price of
approximately $425 million, plus acquisition costs. In addition, under the terms
of the Purchase Agreement dated March 8, 1999 between the Company and PE Corp.
(the "Purchase Agreement"), the Company assumed German and other pension
liabilities of approximately $65 million. These pension liabilities were
historically funded on a pay-as-you go basis, and the funding going-forward is
expected to remain consistent. The acquisition was accounted for as a purchase
under APB Opinion No. 16 and the Company allocated the purchase price of AI
based on the fair values of the net assets acquired and liabilities assumed. AI
produces high-quality analytical testing instruments and consumables, and
generated 1998 fiscal year sales of $569 million. AI's operations are reported
in the Company's Instruments segment. Portions of the purchase price, including
intangible assets, were valued by independent appraisers utilizing customary
valuation procedures and techniques. These intangible assets included
approximately $23 million for acquired in-process R&D. This allocation
represents the estimated fair value based on risk-adjusted cash flows related to
the in-process R&D projects. At the date of the acquisition of AI, the
development of these projects had not yet reached technological feasibility, and
the R&D in process had no alternative future uses. Accordingly, these costs were
expensed in the second quarter of 1999. Other acquired intangibles totaling
$163.8 million included the fair value of trade names, trademarks, patents and
developed technology. These intangibles are being amortized over their
respective estimated useful lives ranging from 10-40 years. Goodwill resulting
from the acquisition of AI is being amortized over 40 years. Approximately $28
million was recorded as accrued restructuring charges in connection with the
acquisition of AI. The restructuring plans include initiatives to integrate the
operations of the Company and of AI, and reduce overhead. The primary components
of these plans relate to: (a) employee termination benefits and related costs
for approximately 20% of the acquired workforce of approximately 3,000
employees; (b) consolidation or shutdown of certain operational facilities
worldwide and (c) termination of certain leases and other contractual
obligations.

                                        15
<PAGE>   17

     During the second quarter of 2000, the Company finalized its restructuring
plan for AI. Based on continued aggressive actions by the Company to improve the
cost structure of the acquired business, and increased costs related primarily
to employment integration, the Company adjusted its original estimate of
restructuring costs in connection with purchase accounting. The majority of the
remaining restructuring actions are expected to occur through fiscal 2001.

     On December 16, 1998, the Company acquired substantially all of the
outstanding common stock and options of Lumen Technologies, Inc. (Lumen), a
maker of high-technology specialty light sources. The purchase price of
approximately $253 million, which included $75 million of assumed debt, was
funded with existing cash and commercial paper borrowings. The acquisition was
accounted for as a purchase under APB Opinion No. 16, and the Company allocated
the purchase price of Lumen based on the fair values of the assets acquired and
liabilities assumed. Portions of the purchase price, including intangible
assets, were valued by independent appraisers utilizing proven valuation
procedures and techniques. These intangible assets included approximately $2.3
million for acquired in-process R&D for projects that did not have future
alternative uses. This allocation represents the estimated fair value based on
risk-adjusted cash flows related to the in-process R&D projects. At the date of
the acquisition, the development of these projects had not yet reached
technological feasibility, and the R&D in process had no alternative future
uses. Accordingly, these costs were expensed in the fourth quarter of 1998.
Acquired intangibles totaling $11.8 million included the fair value of trade
names, trademarks and patents. These intangibles are being amortized over their
estimated useful life of 10 years. Goodwill resulting from the Lumen acquisition
is being amortized over 30 years. Approximately $5 million was recorded as
accrued restructuring charges in connection with the acquisition. The
restructuring plans included initiatives to integrate the operations of the
Company and Lumen, and to reduce overhead. The primary components of these plans
related to: (a) transfer of certain manufacturing activities to lower-cost
facilities, (b) integration of the sales and marketing organization and (c)
termination of certain contractual obligations. The restructuring actions have
been completed.

     During the first quarter of 2000, the Company sold its micromachined
sensors and specialty semiconductor businesses for cash of $24.3 million,
resulting in a pre-tax gain of $6.7 million. Combined financial results of the
divested businesses for 2000 and 1999 were not material to the consolidated
results of the Company. During the third quarter of 2000, the Company recorded
pre-tax gains totaling $3.1 million from an insurance settlement and disposition
of a building.

     During the fourth quarter of 2000, the Company sold its Berthold business
at a pre-tax gain of $10 million. The Company has deferred gain recognition of
approximately $11.9 million of sales proceeds from this divestiture in
connection with certain contingencies related to the sale. Revenues for 2000 and
1999 for the divested business were $30 million and $38 million, respectively.
Also during the fourth quarter of 2000, the Company recorded a pre-tax gain of
$16 million from the sale of a building.

     During the second quarter of 1999, the Company sold its Structural
Kinematics business for cash of $15 million, resulting in a pre-tax gain of $4.3
million. Additionally, as a result of the Company's continuing evaluation of its
Instruments businesses, the Company undertook certain repositioning actions
during the second quarter of 1999, including exiting selected product lines and
activities, rebalancing its customer mix in certain businesses and other related
activities. These actions resulted in second quarter pre-tax charges of
approximately $3.4 million, primarily recorded in cost of sales. During the
fourth quarter of 1999, the Company sold its KT Aerofab business for cash of
$4.4 million, resulting in a pre-tax gain of $0.3 million. The net operating
results of the divested businesses for 1999 were not significant.

     In April 1998, the Company sold its Sealol Industrial Seals division for
cash of $100 million, resulting in a pre-tax gain of $58.3 million. The
after-tax gain of this divestiture was $42.6 million. Sealol's 1998 sales prior
to the disposition were $23 million, and its operating income was $2.1 million.
In January 1998, the Company sold its Rotron division for $103 million in cash,
resulting in a pre-tax gain of $64.4 million. During the first quarter of 1998,
the Company also sold a small product line for $4 million in cash, resulting in
a pre-tax gain of $3.1 million. The after-tax gain of these divestitures was
$45.2 million in 1998. During 2000 and 1999, in connection with the 1998
dispositions of the Company's Rotron and Sealol Industrial Seals divisions, the

                                        16
<PAGE>   18

Company recognized approximately $3.7 million and $13.2 million respectively, of
pre-tax gains from the previously deferred sales proceeds as a result of the
favorable resolution of certain events and contingencies.

     All of the gains described above are reported on the "Gains on
Dispositions" line in the consolidated income statements.

DISCUSSION OF CONSOLIDATED RESULTS OF OPERATIONS -- 2000 COMPARED TO 1999

     Revenues for 2000 were $1,695 million, increasing $332 million, or 24%,
versus revenues of $1,363 million in 1999. Organic growth for 2000 was 11%,
which the Company defines as growth in historical businesses plus growth in
acquired businesses assuming they were owned in prior periods, reduced for the
effects of exited businesses and foreign exchange. Revenues by segment during
2000 versus 1999 are discussed in further detail below under the caption
"Segment Results of Operations."

     Due to the number of changes in the portfolio of businesses, the table
presented below reconciles reported net income to net income before nonrecurring
items and goodwill and intangibles amortization.

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                  2000        1999
--------------                                                --------    --------
<S>                                                           <C>         <C>
Adjusted Income from Continuing Operations..................  $236,260    $144,254
Other Expense, Net..........................................   (42,983)    (25,254)
Adjusted Income from Continuing Operations Before Income
  Taxes.....................................................   193,277     119,000
Continuing Operations Nonrecurring Items:
  Acquisition-Related Charges...............................   (39,728)    (32,857)
  Gains on Dispositions.....................................    34,951      19,022
  Restructuring Charges, net................................    (3,209)    (29,520)
  Other Nonrecurring Items, net.............................    (5,431)     (5,228)
                                                              --------    --------
  Net Nonrecurring Items....................................   (13,417)    (48,583)
Goodwill and Intangibles Amortization.......................   (35,371)    (25,547)
                                                              --------    --------
Income From Continuing Operations Before Income Taxes.......   144,489      44,870
Provision for Income Taxes..................................   (58,422)    (16,499)
                                                              --------    --------
Income from Continuing Operations...........................    86,067      28,371
Gain/Income from Discontinued Operations, Net of Income
  Taxes.....................................................     4,453     125,945
                                                              --------    --------
Net Income..................................................  $ 90,520    $154,316
                                                              ========    ========
</TABLE>

     Adjusted operating income before goodwill and intangibles amortization,
gains, acquisition charges, restructuring and other nonrecurring items was
$236.3 million in 2000 versus $144.3 million in 1999, representing an increase
of $92 million, or 64%, during 2000. This increase during 2000 was due to higher
revenues discussed above, the benefits of restructuring and productivity
initiatives, and the favorable shift of the portfolio to higher margin
businesses through acquisitions and divestitures completed during 2000.

SEGMENT RESULTS OF OPERATIONS

     The Company's businesses are reported as four segments, reflecting the
Company's management methodology and structure. The Company's Technical Services
segment has been classified as discontinued operations due to its divestiture
during 1999. The accounting policies of the segments are the same as those
described in the footnotes to the accompanying consolidated financial
statements. The Company evaluates performance based on operating profit of the
respective segments. The discussion that follows is a summary analysis of the
primary changes in operating results by segment for 2000 versus 1999 and 1999
versus 1998.

                                        17
<PAGE>   19

  Life Sciences

     2000 Compared to 1999

     Sales of $221.4 million for 2000 increased $63.4 million, or 40%, versus
1999. Organic revenue growth for 2000 was 18%. Higher volumes from high
throughput screening, drug discovery applications, revenues from new products,
and the inclusion of revenues from NEN Life Sciences acquired in August 2000,
were the primary drivers of the increase in 2000 versus 1999.

     Purchase accounting and restructuring charges contributed to a reported
operating loss of $3.6 million for 2000 versus reported operating income of
$15.8 million in 1999. The 2000 operating loss included goodwill and intangibles
amortization of $9.3 million and certain acquisition related charges and other
nonrecurring items including a $24.3 million charge for acquired in-process R&D;
a $1.8 million charge for the revaluation of acquired inventory; $3.9 million of
net restructuring charges and $3.5 million of other acquisition-related charges.
The 1999 operating profit included goodwill and intangibles amortization of $2.4
million and net restructuring charges of $5.8 million. Operating profit before
goodwill and intangibles amortization and nonrecurring items for 2000 was $39.2
million, representing an increase of $15.2 million, or 63%, versus 1999. Higher
revenues discussed above, particularly sales of higher-margin new products, and
revenues from the NEN acquisition contributed to the increase in operating
profit before goodwill and intangibles amortization and nonrecurring items in
2000 versus 1999.

     1999 Compared to 1998

     Sales of $158 million for 1999 increased $23.4 million versus 1998.
Adjusting for the impact of the stronger dollar, revenue growth during 1999 was
17%. Higher volumes from continued strength in the high throughput screening and
genetic disease screening markets, and revenues from new products were the
primary contributors to this increase during 1999.

     Reported operating profit was $15.8 million during 1999 versus $9 million
in 1998, representing an increase of $6.8 million, or 76%. 1999 operating profit
included net restructuring charges of $5.8 million. Excluding nonrecurring items
in 1999 and 1998, operating profit increased $7.9 million during 1999 to $21.6
million, representing a 58% increase versus 1998. Higher sales discussed above
and increased gross margins across most businesses, driven primarily by
higher-margin new products sold in 1999, were the primary contributors for the
overall 1999 increase compared to 1998.

  Optoelectronics

     2000 Compared to 1999

     Sales for 2000 were $496.9 million versus $447.7 million in 1999,
representing an increase of $49.2 million, or 11%. Organic revenue growth for
2000 was 22%. Strong revenue growth across all businesses contributed to this
increase in 2000 versus 1999.

     Reported operating profit increased $56.6 million in 2000 to $96.9 million
versus $40.3 million in 1999, representing a 140% increase. The 2000 operating
profit included goodwill and intangibles amortization of $8.1 million and
certain nonrecurring items: gains on dispositions of $23.4 million;
restructuring credits of $9.9 million; restructuring charges of $10 million and
restructuring-related charges of $1.9 million related to the shift by the
Company to lower-cost manufacturing areas. The 1999 operating profit included
goodwill and intangibles amortization of $9.5 million and certain nonrecurring
items: net restructuring charges of $5.5 million and an asset impairment charge
of $3 million. Operating profit before goodwill and intangibles amortization and
nonrecurring items for 2000 was $83.6 million, increasing $25.3 million, or 43%,
versus 1999. The increase in 2000 was due primarily to higher revenues discussed
above, the sale of higher-margin new products and the continued benefits of Six
Sigma and other manufacturing initiatives.

                                        18
<PAGE>   20

     1999 Compared to 1998

     Sales for 1999 were $447.7 million, compared to 1998 sales of $274.5
million, representing an increase of $173.2 million, or 63%. Revenue from the
acquired specialty lighting business and strong organic growth was partially
offset by weakness in the sensors business and exited businesses.

     Reported operating profit for 1999 was $40.3 million versus an operating
loss of $4.1 million in 1998. The 1999 operating income included net
restructuring charges of $5.5 million and an asset impairment charge of $3
million. Excluding nonrecurring items, operating profit in 1999 and 1998 was
$48.8 million and $18.5 million, respectively, representing an increase of $30.3
million, or 164%. The 1999 increase was primarily due to higher revenues
discussed above, higher margin new products, the Company's exit from
unprofitable businesses and the shift by the Company to lower-cost manufacturing
areas.

  Instruments

     2000 Compared to 1999

     Sales for 2000 were $725.3 million, increasing $193.1 million, or 36%,
versus 1999. Organic revenue growth in 2000 was basically flat. The increase in
reported 2000 revenues versus 1999 was due primarily to the inclusion of the AI
business for a full year, partially offset by the company's sale of its Berthold
business in the fourth quarter, the effects of a stronger dollar in 2000 and
some softness in the aviation security market.

     Reported operating profit for 2000 was $58.9 million versus an operating
loss in 1999 of $19.3 million. The 2000 operating profit included goodwill and
intangibles amortization of $15.5 million and certain acquisition charges and
restructuring-related charges and other nonrecurring items: $8.1 million charge
for acquired in-process R&D; $1.1 million charge for the revaluation of acquired
inventory; $11.3 million of gains on dispositions; $2.2 million of
divestiture-related charges; $1.4 million of acquisition-related charges and
$3.5 million of other restructuring-related items. The 1999 operating profit
included goodwill and intangibles amortization of $11 million, certain
acquisition-related charges and other nonrecurring items: $23 million charge for
acquired in-process R&D; $15 million asset impairment charge; $9.8 million
charge for the revaluation of acquired inventory and restructuring-related and
other charges of $5.8 million.

     For 2000, operating profit before goodwill and intangibles amortization and
nonrecurring items was $79.4 million versus $45.3 million in 1999, representing
an increase of $34.1 million, or 75%. The increase is due primarily to the
inclusion of the Vivid and AI acquisitions for a full year in 2000, improvements
in manufacturing cost structure and benefits from restructuring actions.

     1999 Compared to 1998

     Sales for 1999 and 1998 were $532.1 million and $185 million, respectively,
increasing $347.1 million, or 188%, during 1999 compared to 1998. 1999 revenues
from acquisitions and higher security revenues during 1999 offset the effects of
divestitures and lower revenues in certain base businesses, primarily
automotive, compared to 1998.

     AI acquisition purchase accounting charges and certain nonrecurring items
during 1999 contributed to a reported operating loss of $19.3 million versus
operating income of $6.6 million in 1998. The 1999 operating loss included the
following: $23 million charge related to acquired in-process research and
development; a $9.8 million charge related to the revaluation of acquired
inventory; net restructuring charges of $1.4 million; an asset impairment charge
of $15 million and other repositioning costs of $4.4 million. Excluding
nonrecurring items in 1999 and 1998, operating profit in 1999 increased $19.8
million, or 136%, to $34.3 million compared to 1998. Operating profit from the
acquired AI and Lumen photolithography businesses were partially offset by the
effects of depressed market conditions in the security and automotive businesses
during most of 1999.

                                        19
<PAGE>   21

  Fluid Sciences

     2000 Compared to 1999

     Sales for 2000 increased $26.5 million to $251.8 million, a 12% increase
versus 1999. Organic revenue growth was 25% in 2000. Strong volume in the
semiconductor and power generation markets was the primary contributor to the
increase in 2000.

     Reported operating profit for 2000 was $45.1 million, up $14 million, or
45%, versus 1999. The 2000 operating profit included goodwill and intangibles
amortization of $2.5 million and certain nonrecurring items: gains on
disposition of $2.7 million and restructuring charges of $2.4 million. The 1999
operating profit included goodwill and intangibles amortization of $2.7 million;
$4.6 million of gains on dispositions and a net restructuring credit of $2.2
million. Operating profit before goodwill and intangibles amortization and
nonrecurring items for 2000 was $47.7 million, increasing $20.7 million, or 77%
versus 1999. Higher revenues discussed above and the benefits of lean
manufacturing initiatives were the primary contributors to the increase in 2000.

     1999 Compared to 1998

     During the third quarter of 1999, the Company's business segment previously
referred to as Engineered Products was renamed Fluid Sciences.

     Sales for 1999 were $225.3 million compared to $237.5 million in 1998,
representing a $12.2 million, or 5%, decrease. Recovery in the semiconductor
industry and continued growth in the power generation businesses was offset by
continued weakness in the aerospace markets and the absence of revenues from
businesses exited by the Company during 1998, primarily certain sheet metal
fabrication operations.

     Reported 1999 operating profit increased $27.2 million to $31.1 million
compared to $3.9 million in 1998. The 1999 operating income included gains on
dispositions of $4.6 million and a net restructuring credit of $2.2 million.
Excluding 1999 and 1998 nonrecurring items, 1999 operating profit was $24.3
million versus $25.2 million in 1998. Higher sales discussed above and higher
gross margins due to Six Sigma and restructuring initiatives were offset by
continued weakness in the aerospace markets and the absence of revenues from
businesses exited by the Company during 1998.

CONSOLIDATED RESULTS -- RESTRUCTURING AND ASSET IMPAIRMENT CHARGES

     The Company developed restructuring plans during 1998 to integrate and
consolidate its businesses and recorded restructuring charges in the first and
second quarters of 1998, which are discussed separately below.

     During the first quarter of 1998, management developed a plan to
restructure certain businesses. The plan resulted in pre-tax restructuring
charges totaling $30.5 million. As discussed in Note 3, the principal actions in
the restructuring plan included close-down or consolidation of a number of
offices and facilities, transfer of assembly activities to lower-cost geographic
locations, disposal of underutilized assets, withdrawal from certain product
lines and general cost reductions.

     During the second quarter of 1998, the Company expanded its continuing
effort to restructure certain businesses to further improve performance. The
plan resulted in additional pre-tax restructuring charges of $19.5 million. As
discussed in Note 3, the principal actions in this restructuring plan included
the integration of operating divisions into five strategic business units
(SBUs), close-down or consolidation of a number of production facilities and
general cost reductions. The Technical Services segment was subsequently sold
during the third quarter of 1999.

                                        20
<PAGE>   22

     The following table summarizes the current year restructuring activity
related to the 1998 plans:

<TABLE>
<CAPTION>
(IN MILLIONS)
-------------
<S>                                                           <C>
Accrued restructuring costs at beginning of period..........  $ 6.4
Reversals...................................................   (6.3)
Charges/Writeoffs...........................................    (.1)
                                                              -----
Accrued restructuring costs at end of period................  $  --
                                                              -----
</TABLE>

     The components of the restructuring charges met the criteria set forth in
Emerging Issues Task Force Issue 94-3, Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (Including
Certain Costs Incurred in a Restructuring). The charges do not include
additional costs associated with the restructuring plans, such as training,
consulting, purchase of equipment and relocation of employees and equipment.
These costs were charged to operations or capitalized, as appropriate, when
incurred.

     During the third quarter of 1999, due to the substantial completion of the
actions of the 1998 restructuring plans, the Company reevaluated its 1998
restructuring plans. As a result of this review, costs associated with the
previously planned shutdown of two businesses were no longer required due to
actions taken to improve performance. As a result of these developments, the
Company recognized a restructuring credit of $12 million during the third
quarter of 1999, which primarily affected the Fluid Sciences and Optoelectronics
segments. The $12 million credit is reflected in "Restructuring Charges, Net" in
the consolidated income statements.

     During the second quarter of 2000, the Company recognized a restructuring
credit of $6 million related to its 1998 restructuring plans. This resulted from
the Company's strategic review during the second quarter of 2000 of its
portfolio of businesses, actions taken to improve performance at costs lower
than originally estimated, and the sale of certain businesses included in the
restructuring plans.

     The acquisitions by the Company discussed in Note 2 and the Company's
divestiture during the third quarter of 1999 of its Technical Services segment
(exiting government services) were strategic milestones in the Company's
transition to a commercial high technology company. Consistent with the
strategic direction of the Company and concurrent with the reevaluation of
existing restructuring plans during the third quarter of 1999, the Company
developed additional plans during the third quarter of 1999 to restructure
certain businesses to continue to improve the Company's performance.

     These plans resulted in a pre-tax restructuring charge of $23.5 million
recorded in the third quarter of 1999. As discussed in Note 3, the principal
actions in these restructuring plans include close-down or consolidation of a
number of offices and facilities, transfer of assembly activities to lower-cost
geographic locations, disposal of underutilized assets, withdrawal from certain
product lines and general cost reductions. The restructuring plans are expected
to result in the elimination of approximately 400 positions, primarily in the
manufacturing and sales categories. The major components of the restructuring
charge were $13.6 million of employee separation costs to restructure the
worldwide organization, including the sales and manufacturing focus, $2.3
million of noncash charges to dispose of certain product lines and assets
through sale or abandonment and $7.6 million of charges to terminate lease and
other contractual obligations no longer required as a result of the
restructuring plans. The charges do not include additional costs associated with
the restructuring plans, such as training, consulting, purchase of equipment and
relocation of employees and equipment. These costs will be charged to operations
or capitalized, as appropriate, when incurred.

                                        21
<PAGE>   23

     The following table summarizes the current year restructuring activity
related to the 1999 plan:

<TABLE>
<CAPTION>
(IN MILLIONS)
-------------
<S>                                                           <C>
Accrued restructuring costs at beginning of period........    $ 20.8
Provisions................................................       2.4
Reversals.................................................      (4.9)
Charges/Writeoffs.........................................     (12.4)
                                                              ------
Accrued restructuring costs at end of period..............    $  5.9
                                                              ------
</TABLE>

     During the fourth quarter of 2000, the Company reevaluated its 1999
restructuring plan due to the substantial completion of the respective actions
and the continuing transformation of the portfolio of businesses during 2000.
This resulted in the reversal of $4.9 million of remaining reserves from the
1999 plan and the recording of a pre-tax restructuring charge of $15.1 million
for actions to be completed in 2001 (the "2000 plan"). These charges related to
the Company's Life Sciences and Optoelectronics segments. The principal actions
in the restructuring actions included close-down or consolidation of a number of
offices and facilities, transfer of assembly activities to lower cost geographic
locations, disposal of unutilized assets and general cost reductions. The
restructuring charges were broken down as follows by operating segment: The Life
Sciences' principal actions are associated with rationalization of its
distribution network and overall facility consolidation. The Optoelectronics'
principal actions are associated with its Lighting and Imaging businesses and
relate to the shift of certain manufacturing to low cost geographic areas,
facility consolidation and general cost reductions.

     The following table summarizes activity related to the 2000 plan:

<TABLE>
<CAPTION>
                                                                         TERMINATION
                                                          DISPOSAL        OF LEASES
                                           EMPLOYEE      OF CERTAIN       AND OTHER
                                          SEPARATION    PRODUCT LINES    CONTRACTUAL
(IN MILLIONS)                               COSTS        AND ASSETS      OBLIGATIONS    TOTAL
-------------                             ----------    -------------    -----------    -----
<S>                                       <C>           <C>              <C>            <C>
Life Sciences...........................    $ 2.9           $ .1            $2.1        $ 5.1
Optoelectronics.........................      7.2            2.8              --         10.0
                                            -----           ----            ----        -----
Total restructuring charges.............     10.1            2.9             2.1         15.1
Amounts during 2000.....................       --             --              --           --
                                            -----           ----            ----        -----
Accrued restructuring costs at December
  31, 2000..............................    $10.1           $2.9            $2.1        $15.1
</TABLE>

     During the second quarter of 2000, the Company finalized its original
estimates of the goodwill and restructuring plans related to the acquired AI
business. As a result of strategic review of the acquired business, continued
aggressive actions by the Company to improve the cost structure of the acquired
business, and increased costs related primarily to employment integration, the
Company adjusted its original estimate of restructuring costs recorded at the
acquisition date in connection with purchase accounting.

     Approximately $4 million was recorded as accrued restructuring costs in
connection with the NEN acquisition in the third quarter of 2000.

     The following table summarizes the current year restructuring activity
related to the Lumen, AI, and NEN acquisitions:

<TABLE>
<CAPTION>
(IN MILLIONS)
-------------
<S>                                                           <C>
Accrued restructuring costs at beginning of period..........  $14.1
Provisions, through purchase accounting, net................   28.0
Charges/Writeoffs...........................................   (9.8)
                                                              -----
Accrued restructuring costs at end of period................  $32.3
</TABLE>

     There are no accrued restructuring costs related to Lumen at December 31,
2000 as all respective actions were completed during 2000. Cash outlays during
2000 were approximately $33 million for all of these plans.

                                        22
<PAGE>   24

The Company expects to incur approximately $30 to $35 million of cash outlays in
connection with these plans throughout fiscal 2001. These funds will come from
operating cash flows or borrowings from existing credit facilities. The majority
of the actions remaining are expected to occur during 2001. The estimated full
year's pre-tax savings under the restructuring plans, due primarily to lower
depreciation and lower employment costs, when the plans are fully implemented
are anticipated to be approximately $30 to $35 million, or $.39 to $.45 per
share.

DISCONTINUED OPERATIONS

     On August 20, 1999, the Company sold the assets of its Technical Services
segment, including the outstanding capital stock of EG&G Defense Materials,
Inc., a subsidiary of the Company, to EG&G Technical Services, Inc., an
affiliate of The Carlyle Group LP (the "Buyer"), for approximately $250 million
in cash and the assumption by the Buyer of certain liabilities of the Technical
Services segment. Details of the transaction are discussed in Note 7 to the
accompanying consolidated financial statements.

     The results of operations of the Technical Services segment were previously
reported as one of five business segments of the Company. The Company accounted
for the sale of its Technical Services segment as a discontinued operation in
accordance with APB Opinion No. 30 and, accordingly, the results of operations
of the Technical Services segment have been segregated from continuing
operations and reported as a separate line item on the Company's accompanying
consolidated income statements.

OTHER EXPENSE

  2000 Compared to 1999

     Other expense, net, was $42.1 million in 2000 versus $21.8 million in 1999.
This net increase in other expense was due primarily to the higher interest
expense on increased debt levels resulting from acquisitions.

  1999 Compared to 1998

     Other expense, net, was $21.8 million in 1999 versus $1.4 million in 1998.
This net increase in other expense was due primarily to the impact of higher
interest expense on increased debt levels, at higher 1999 short-term rates,
resulting from acquisitions. Included in 1999 other expense was $2.2 million of
income received by the Company related to the demutualization of a life
insurance company in which the Company is a policyholder.

INCOME TAX PROVISION

     The provision for income taxes on pre-tax income from continuing operations
for 2000 and 1999 was $58.4 million and $16.5 million, respectively. Reported
income tax expense as a percent of pre-tax income for 2000 and 1999 was 40.4%
and 36.8%, respectively, due, in part, to the income tax effect on nonrecurring
items. Excluding the nonrecurring items and related tax effects, the effective
tax rate was 32.5% in 2000 and 32% in 1999.

FINANCIAL CONDITION

     Short-term debt at December 31, 2000 was $186 million and was comprised
primarily of commercial paper borrowings. The weighted-average interest rate on
the commercial paper borrowings, which had maturities of 60 days or less, was
6.7%.

     Short-term debt at January 2, 2000 was $382 million and included one-year
promissory notes of $150 million issued to PE Corp. at an interest rate of 5%,
money market loans of $85 million and commercial paper borrowings of $140
million.

     In March 2001, the Company's $300 million revolving credit facility was
refinanced and will expire in March 2002 and the Company also refinanced an
additional $100 million revolving credit facility which expires in March 2006.
These agreements, which serve as backup facilities for the commercial paper

                                        23
<PAGE>   25

borrowings, have no significant commitment fees. There were no amounts
outstanding under these lines at January 2, 2000 or December 31, 2000.

     At December 31, 2000 and January 2, 2000, long-term debt was $583.3 million
and $114.9 million, respectively, and included $115 million of unsecured
ten-year notes issued in October 1995 at an interest rate of 6.8%, which mature
in 2005. The carrying amount approximated the estimated fair value at December
31, 2000, based on a quoted market price.

     In August 2000, the Company sold zero coupon senior convertible debentures
with an aggregate purchase price of $460 million. The Company used the
offering's net proceeds of approximately $448 million to repay a portion of its
commercial paper borrowings, which had been increased temporarily to finance the
NEN acquisition. Deferred issuance costs of $12 million were recorded as a
noncurrent asset and are being amortized over three years. The debentures, which
were offered by a prospectus supplement pursuant to the Company's effective
shelf registration statement, are due August 2020, and were priced with a yield
to maturity of 3.5%. At maturity, the Company will repay $921 million, comprised
of $460 million of original purchase price plus accrued interest. The Company
may redeem some or all of the debentures at any time on or after August 7, 2003
at a redemption price equal to the issue price plus accrued original issue
discount through the redemption date. Holders of the debentures may require the
Company to repurchase some or all of the debentures in August 2003 and August
2010, or at any time when there is a change in control of the Company, as is
customary and ordinary for debentures of this nature, at a repurchase price
equal to the initial price to the public plus accrued original issue discount
through the date of the repurchase. The debentures are currently convertible
into 5.4 million shares of the Company's common stock at approximately $85 per
share.

     In connection with the completion of the NEN acquisition on July 31, 2000,
the Company paid approximately $350 million in cash and issued warrants to
purchase approximately 300,000 shares of the Company's common stock in exchange
for all of the outstanding shares, options and warrants of NEN. In addition, the
Company repaid approximately $50 million of outstanding indebtedness of NEN. The
Company financed the acquisition and repayment of the outstanding indebtedness
with $410 million of commercial paper borrowings with a weighted-average
interest rate of 7%. These short-term borrowings were repaid in August 2000 with
proceeds from the issuance of long-term convertible debentures, as discussed
above.

     Cash and cash equivalents decreased by $1.1 million and were $125.6 million
at the end of fiscal 2000. Net cash provided by operating activities for 2000
was $145.5 million. This was comprised of net income before depreciation,
amortization and other noncash items, net, of $212 million, partially offset by
gains on dispositions and sales of investments, net, of $39.6 million and a
$26.9 million net change in certain assets and liabilities and other items
during 2000. The primary components of this net change included a $4.3 million
increase in accounts receivable, a $23.4 million increase in inventory and $33
million of cash outlays associated with restructuring activities. The increase
in inventory is due primarily to the inclusion of Vivid and NEN, both acquired
in 2000. Capital expenditures were $70.6 million in 2000. The Company estimates
that fiscal 2001 capital expenditures will be approximately $65 to $70 million.

     During 2000 and 1999, the Company purchased 198 thousand and 20 thousand
shares, respectively, of its common stock through periodic purchases on the open
market at a cost of $10.5 million and $0.9 million, respectively. As of December
31, 2000 the Company had authorization to purchase 5.7 million additional
shares.

     The Company has relatively limited involvement with derivative financial
instruments and uses forward contracts to mitigate the effect of foreign
currency movements on transactions denominated in foreign currencies. The
contracts generally have maturities that do not exceed one month and have no
cash requirements until maturity. Credit risk and market risk are minimal
because the contracts are with large banks and gains and losses are offset
against foreign exchange gains and losses on the underlying hedged transactions.
The notional amount of outstanding forward contracts was approximately $190
million as of December 31, 2000.

                                        24
<PAGE>   26

DIVIDENDS

     During fiscal 2000, the Company's Board of Directors declared four regular
quarterly cash dividends of 14 cents per share, each resulting in an annual rate
of 56 cents per share.

STOCK SPLIT

     On January 30, 2001, the Company announced its intention to effect a two
for one split of its common stock. The proposed split is subject to the approval
of the Company's shareholders at its Annual Meeting on April 24, 2001.

ENVIRONMENTAL

     The Company is conducting a number of environmental investigations and
remedial actions at current and former Company locations and, along with other
companies, has been named a potentially responsible party (PRP) for certain
waste disposal sites. The Company accrues for environmental issues in the
accounting period that the Company's responsibility is established and when the
cost can be reasonably estimated. The Company has accrued $8.8 million as of
December 31, 2000, representing management's estimate of the total cost of
ultimate disposition of known environmental matters. Such amount is not
discounted and does not reflect any recovery of any amounts through insurance or
indemnification arrangements. These cost estimates are subject to a number of
variables, including the stage of the environmental investigations, the
magnitude of the possible contamination, the nature of the potential remedies,
possible joint and several liability, the timeframe over which remediation may
occur and the possible effects of changing laws and regulations. For sites where
the Company has been named a PRP, management does not currently anticipate any
additional liability to result from the inability of other significant named
parties to contribute. The Company expects that such accrued amounts could be
paid out over a period of up to five years. As assessments and remediation
activities progress at each individual site, these liabilities are reviewed and
adjusted to reflect additional information as it becomes available. There have
been no environmental problems to date that have had or are expected to have a
material effect on the Company's financial position or results of operations.
While it is reasonably possible that a material loss exceeding the amounts
recorded may have been incurred, the preliminary stages of the investigations
make it impossible for the Company to reasonably estimate the range of potential
exposure.

FORWARD-LOOKING INFORMATION AND FACTORS AFFECTING FUTURE PERFORMANCE

     This report contains "forward-looking statements" as defined in Section 21E
of the Securities and Exchange Commission Act of 1934. For this purpose, any
statements contained in this report that are not statements of historical fact
may be deemed to be forward-looking statements. Words such as "believes,"
"anticipates," "plans," "expects," "will" and similar expressions are intended
to identify forward-looking statements. There are a number of important factors
that could cause the results of PerkinElmer, Inc. to differ materially from
those indicated by these forward-looking statements including, among others, the
factors set forth below.

     The following important factors affect our business and operations
generally or affect multiple segments of our business and operations:

     OUR OPERATING RESULTS COULD BE HARMED IF THE INDUSTRIES INTO WHICH WE SELL
     OUR PRODUCTS ARE IN DOWNWARD CYCLES.

          Some of the industries and markets into which we sell our products are
     cyclical. Industry downturns often are characterized by reduced product
     demand, excess manufacturing capacity and erosion of average selling
     prices. Any significant downturn in our customers' markets or in general
     economic conditions would likely result in a reduction in demand for our
     products and could harm our business. For example, in 1998 the operating
     results of our Fluid Sciences segment were adversely affected by the
     downturn in the semiconductor market.

                                        25
<PAGE>   27

     IF WE DO NOT INTRODUCE NEW PRODUCTS IN A TIMELY MANNER, OUR PRODUCTS COULD
     BECOME OBSOLETE, AND OUR OPERATING RESULTS WOULD SUFFER.

          We sell many of our products in industries characterized by rapid
     technological changes, frequent new product and service introductions and
     evolving industry standards. Without the timely introduction of new
     products and enhancements, our products could become technologically
     obsolete over time, in which case our revenue and operating results would
     suffer. The success of our new product offerings will depend upon several
     factors, including our ability to:

        - accurately anticipate customer needs;

        - innovate and develop new technologies and applications;

        - successfully commercialize new technologies in a timely manner;

        - price our products competitively and manufacture and deliver our
          products in sufficient volumes and on time; and

        - differentiate our offerings from our competitors' offerings.

          Many of our products are used by our customers to develop, test and
     manufacture their products. We therefore must anticipate industry trends
     and develop products in advance of the commercialization of our customers'
     products. In developing any new product, we may be required to make a
     substantial investment before we can determine the commercial viability of
     the new product. If we fail to accurately foresee our customers' needs and
     future activities, we may invest heavily in research and development of
     products that do not lead to significant revenue.

     ECONOMIC, POLITICAL AND OTHER RISKS ASSOCIATED WITH INTERNATIONAL SALES AND
     OPERATIONS COULD ADVERSELY AFFECT OUR SALES.

          Since we sell our products worldwide, our businesses are subject to
     risks associated with doing business internationally. We anticipate that
     revenue from international operations will continue to represent a
     substantial portion of our total revenue. In addition, many of our
     manufacturing facilities, employees and suppliers are located outside the
     United States. Accordingly, our future results could be harmed by a variety
     of factors, including:

        - changes in foreign currency exchange rates;

        - changes in a country's or region's political or economic conditions,
          particularly in developing or emerging markets;

        - longer payment cycles of foreign customers and difficulty of
          collecting receivables in foreign jurisdictions;

        - trade protection measures and import or export licensing requirements;

        - differing tax laws and changes in those laws;

        - difficulty in staffing and managing widespread operations;

        - differing labor laws and changes in those laws;

        - differing protection of intellectual property and changes in that
          protection; and

        - differing regulatory requirements and changes in those requirements.

     FLUCTUATIONS IN OUR QUARTERLY OPERATING RESULTS MAY CAUSE OUR STOCK PRICE
     TO DECLINE.

          Given the nature of the markets in which we participate, we cannot
     reliably predict future revenue and profitability. Changes in competitive,
     market and economic conditions may cause us to adjust our operations. A
     high proportion of our costs are fixed, due in part to our significant
     sales, research and development and manufacturing costs. Thus, small
     declines in revenue could disproportionately affect our

                                        26
<PAGE>   28

     operating results in a quarter. Factors that may affect our quarterly
     operating results and the market price of our common stock include:

        - demand for and market acceptance of our products;

        - competitive pressures resulting in lower selling prices;

        - adverse changes in the level of economic activity in regions in which
          we do business;

        - adverse changes in industries, such as pharmaceutical discovery,
          telecommunications, semiconductors and electronics, on which we are
          particularly dependent;

        - changes in the portions of our revenue represented by our various
          products and customers;

        - delays or problems in the introduction of new products;

        - our competitors' announcement or introduction of new products,
          services or technological innovations;

        - increased costs of raw materials or supplies; and

        - changes in the volume or timing of product orders.

          In addition, the stock market has experienced extreme price and volume
     fluctuations. This volatility has significantly affected the market prices
     of securities for reasons frequently unrelated to or disproportionate to
     the operating performance of specific companies. These broad market
     fluctuations may adversely affect the market price of our common stock.

     WE MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT OUR ACQUISITION STRATEGY,
     INTEGRATE ACQUIRED BUSINESSES INTO OUR EXISTING BUSINESS OR MAKE ACQUIRED
     BUSINESSES PROFITABLE.

          One of our strategies is to supplement our internal growth by
     acquiring businesses and technologies that complement or augment our
     existing product lines. We may be unable to identify or complete promising
     acquisitions for many reasons, including:

        - competition among buyers;

        - the need for regulatory approvals, including antitrust approvals; and

        - the high valuations of businesses.

          Some of the businesses we may seek to acquire may be marginally
     profitable or unprofitable. For these acquired businesses to achieve
     acceptable levels of profitability, we must improve their management,
     operations, products and market penetration. We may not be successful in
     this regard and may encounter other difficulties in integrating acquired
     businesses into our existing operations.

          To finance our acquisitions, we may have to raise additional funds,
     either through public or private financings. We may be unable to obtain
     such funds or may be able to do so only on unfavorable terms.

     WE FACE AGGRESSIVE COMPETITION IN MANY AREAS OF OUR BUSINESS; IF WE DO NOT
     COMPETE EFFECTIVELY, OUR BUSINESS WILL BE HARMED.

          We encounter aggressive competition from numerous competitors in many
     areas of our business. We may not be able to compete effectively with all
     of these competitors. To remain competitive, we must develop new products
     and periodically enhance our existing products in a timely manner. We
     anticipate that we may have to adjust prices of many of our products to
     stay competitive. In addition, new competitors may emerge, and entire
     product lines may be threatened by new technologies or market trends that
     reduce the value of these product lines.

                                        27
<PAGE>   29

     IF WE FAIL TO MAINTAIN SATISFACTORY COMPLIANCE WITH THE FOOD AND DRUG
     ADMINISTRATION'S REGULATIONS AND THOSE OF OTHER GOVERNMENTAL AGENCIES, WE
     MAY BE FORCED TO RECALL PRODUCTS AND CEASE THEIR MANUFACTURE AND
     DISTRIBUTION, AND WE COULD BE SUBJECT TO CIVIL OR CRIMINAL PENALTIES.

          Some of the products produced by our Life Sciences segment are subject
     to regulation by the United States Food and Drug Administration and similar
     international agencies. These regulations govern a wide variety of product
     activities, from design and development to labeling, manufacturing,
     promotion, sales and distribution. If we fail to comply with the FDA's
     regulations or those of similar international agencies, we may have to
     recall products and cease their manufacture and distribution. In addition,
     we could be subject to fines or criminal prosecution.

     CHANGES IN GOVERNMENTAL REGULATIONS MAY REDUCE DEMAND FOR OUR PRODUCTS OR
     INCREASE OUR EXPENSES.

          We compete in markets in which we or our customers must comply with
     federal, state, local and foreign regulations, such as environmental,
     health and safety and food and drug regulations. We develop, configure and
     market our products to meet customer needs created by these regulations.
     Any significant change in these regulations could reduce demand for our
     products.

     OBTAINING AND ENFORCING PATENT PROTECTION FOR OUR PROPRIETARY PRODUCTS,
     PROCESSES AND TECHNOLOGIES MAY BE DIFFICULT AND EXPENSIVE; WE MAY INFRINGE
     INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

          Patent and trade secret protection is important to us because
     developing and marketing new technologies and products is time-consuming
     and expensive. We own many U.S. and foreign patents and intend to apply for
     additional patents to cover our products. We may not obtain issued patents
     from any pending or future patent applications owned by or licensed to us.
     The claims allowed under any issued patents may not be broad enough to
     protect our technology.

          Third parties may seek to challenge, invalidate or circumvent issued
     patents owned by or licensed to us or claim that our products and
     operations infringe their patent or other intellectual property rights. We
     may incur significant expense in any legal proceedings to protect our
     proprietary rights or to defend infringement claims by third parties. In
     addition, claims of third parties against us could result in awards of
     substantial damages or court orders that could effectively prevent us from
     making, using or selling our products in the U.S. or abroad.

     WE HAVE SUBSTANTIAL EXISTING DEBT AND MAY INCUR ADDITIONAL DEBT IN THE
     FUTURE.

          We have substantial amounts of outstanding indebtedness. Our
     substantial level of indebtedness increases the possibility that we may be
     unable to generate cash sufficient to pay the principal of, interest on and
     other amounts due in respect of our indebtedness when due. We may also
     obtain additional long-term debt and working capital lines of credit and
     issue additional commercial paper to meet future financing needs, which
     would have the effect of increasing our total leverage.

          Our substantial leverage could have significant negative consequences,
     including:

        - increasing our vulnerability to general adverse economic and industry
          conditions;

        - limiting our ability to obtain additional financing;

        - requiring the dedication of a substantial portion of our cash flow
          from operations to service our indebtedness, thereby reducing the
          amount of our cash flow available for other purposes, including
          capital expenditures;

        - limiting our flexibility in planning for, or reacting to, changes in
          our business and the industries in which we compete; and

        - placing us at a possible competitive disadvantage with less leveraged
          competitors and competitors that may have better access to capital
          resources.

                                        28
<PAGE>   30

          A significant portion of our outstanding indebtedness bears interest
     at floating rates. As a result, our interest payment obligations on such
     indebtedness will increase if interest rates increase.

MARKET RISK

     Market Risk:  The Company is exposed to market risk, including changes in
interest rates and currency exchange rates. To manage the volatility relating to
these exposures, the Company enters into various derivative transactions
pursuant to the Company's policies to hedge against known or forecasted market
exposures.

     Foreign Exchange Risk Management:  As a multinational corporation, the
Company is exposed to changes in foreign exchange rates. As the Company's
international sales grow, exposure to volatility in exchange rates could have a
material adverse impact on the Company's financial results. The Company's risk
from exchange rate changes is primarily related to non-dollar denominated sales
in Europe and Asia. The Company uses foreign currency forward and option
contracts to manage the risk of exchange rate fluctuations. The Company uses
these derivative instruments to reduce its foreign exchange risk by essentially
creating offsetting market exposures. The instruments held by the Company are
not leveraged and are not held for trading purposes. The Company uses forward
exchange contracts to hedge its net asset (balance sheet) position. The success
of the hedging program depends on forecasts of transaction activity in the
various currencies. To the extent that these forecasts are overstated or
understated during periods of currency volatility, the Company could experience
unanticipated currency gains or losses. The principal currencies hedged are the
British Pound, Canadian Dollar, Euro, Japanese Yen and Singapore Dollar. In
those currencies where there is a liquid, cost-effective forward market, the
Company maintains hedge coverage between minimum and maximum percentages of its
anticipated transaction exposure for periods not to exceed one year. The gains
and losses on these contracts offset changes in the value of the related
exposure.

     Interest Rate Risk:  The Company maintains an investment portfolio
consisting of securities of various issuers, types and maturities. The
investments are classified as available for sale. These securities are recorded
on the balance sheet at market value, with any unrealized gain or loss recorded
in comprehensive income. These instruments are not leveraged, and are not held
for trading purposes.

     Value-At-Risk:  The Company utilizes a Value-at-Risk ("VAR") model to
determine the maximum potential loss in the fair value of its interest rate and
foreign exchange sensitive derivative financial instruments within a 95%
confidence interval. The Company's computation was based on the
interrelationships between movements in interest rates and foreign currencies.
These interrelationships were determined by observing historical interest rate
and foreign currency market changes over corresponding periods. The assets and
liabilities, firm commitments and anticipated transactions, which are hedged by
derivative financial instruments, were excluded from the model. The Company's
computations are based on the Monte Carlo simulation, utilizing a 95% confidence
interval and a holding period of 30 days. The VAR model is a risk analysis tool
and does not purport to represent actual gains or losses in fair value that will
be incurred by the Company. The VAR model estimated that there is a 5% chance
that the market value of the derivative instruments held as of December 31, 2000
will deteriorate due to foreign exchange fluctuations by more than $3 million.
During the four quarters ended December 31, 2000, the VAR ranged between $1
million and $3 million, and averaged approximately $1.8 million.

     Management periodically reviews its interest rate and foreign currency
exposures and evaluates strategies to manage such exposures in the near future.
The Company implements changes, when deemed necessary, in the management of
hedging instruments which mitigate its exposure.

     Since the Company utilizes interest rate and foreign currency sensitive
derivative instruments for hedging, a loss in fair value for those instruments
is generally offset by increases in the value of the underlying transaction.

     It is the Company's policy to enter into foreign currency and interest rate
transactions only to the extent considered necessary to meet its objectives as
stated above. The Company does not enter into foreign currency or interest rate
transactions for speculative purposes.

                                        29
<PAGE>   31

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

                       PERKINELMER, INC. AND SUBSIDIARIES

                         CONSOLIDATED INCOME STATEMENTS
                    FOR THREE YEARS ENDED DECEMBER 31, 2000

<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)                 2000          1999         1998
--------------------------------------------              ----------    ----------    --------
<S>                                                       <C>           <C>           <C>
Sales:
  Products..............................................  $1,484,275    $1,206,038    $784,520
  Services..............................................     210,992       157,091      69,862
                                                          ----------    ----------    --------
Total Sales.............................................   1,695,267     1,363,129     854,382
                                                          ----------    ----------    --------
Cost of Sales:
  Products..............................................     917,428       746,417     496,861
  Services..............................................      85,768       107,043      54,126
  Revaluation of Acquired Inventory.....................       2,946         9,857          --
                                                          ----------    ----------    --------
Total Cost of Sales.....................................   1,006,142       863,317     550,987
Selling, General and Administrative Expenses............     418,979       327,142     203,740
Research and Development Expenses.......................      86,117        71,248      46,026
In-Process Research and Development Charges.............      32,400        23,000       2,300
Restructuring Charges, Net..............................       4,105        11,520      50,027
Asset Impairment Charges................................          --        18,000       7,400
Gains on Dispositions...................................     (39,051)      (17,750)   (125,822)
                                                          ----------    ----------    --------
Operating Income From Continuing Operations.............     186,575        66,652     119,724
Other Expense, Net......................................     (42,086)      (21,782)     (1,397)
                                                          ----------    ----------    --------
Income From Continuing Operations Before Income Taxes...     144,489        44,870     118,327
Provision for Income Taxes..............................      58,422        16,499      39,326
                                                          ----------    ----------    --------
Income From Continuing Operations.......................      86,067        28,371      79,001
Income From Discontinued Operations, Net of Income
  Taxes.................................................          --        15,665      23,001
Gain on Disposition of Discontinued Operations,
  Net of Income Taxes...................................       4,453       110,280          --
                                                          ----------    ----------    --------
Net Income..............................................  $   90,520    $  154,316    $102,002
                                                          ==========    ==========    ========
BASIC EARNINGS PER SHARE:
  Continuing Operations.................................  $     1.75    $      .62    $   1.74
  Discontinued Operations...............................         .09          2.77         .51
                                                          ----------    ----------    --------
Net Income..............................................  $     1.84    $     3.39    $   2.25
                                                          ----------    ----------    --------
DILUTED EARNINGS PER SHARE:
  Continuing Operations.................................  $     1.68    $      .61    $   1.72
  Discontinued Operations...............................         .09          2.70         .50
                                                          ----------    ----------    --------
Net Income..............................................  $     1.77    $     3.31    $   2.22
                                                          ==========    ==========    ========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        30
<PAGE>   32

                       PERKINELMER, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                  AS OF DECEMBER 31, 2000 AND JANUARY 2, 2000

<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)                     2000          1999
--------------------------------------------                  ----------    ----------
<S>                                                           <C>           <C>
Current Assets:
  Cash and cash equivalents.................................  $  125,551    $  126,650
  Accounts receivable.......................................     359,068       346,160
  Inventories...............................................     230,766       201,724
  Other current assets......................................     177,676       140,560
                                                              ----------    ----------
TOTAL CURRENT ASSETS........................................     893,061       815,094
                                                              ----------    ----------
Property, Plant and Equipment:
  At cost...................................................     550,040       496,347
  Accumulated depreciation and amortization.................    (275,280)     (268,313)
                                                              ----------    ----------
Net Property, Plant and Equipment...........................     274,760       228,034
                                                              ----------    ----------
Investments.................................................      36,730        14,911
Intangible Assets...........................................     951,441       592,438
Other Assets................................................     104,187        64,163
                                                              ----------    ----------
TOTAL ASSETS................................................  $2,260,179    $1,714,640
                                                              ==========    ==========
Current Liabilities:
  Short-term debt...........................................  $  186,206    $  382,162
  Accounts payable..........................................     151,805       152,920
  Accrued restructuring costs...............................      53,344        41,759
  Accrued expenses..........................................     326,244       275,657
                                                              ----------    ----------
TOTAL CURRENT LIABILITIES...................................     717,599       852,498
                                                              ----------    ----------
Long-Term Debt..............................................     583,337       114,855
Long-Term Liabilities.......................................     230,854       196,511
Commitments and Contingencies
  Stockholders' Equity:
  Preferred stock -- $1 par value, authorized 1,000,000
     shares; none outstanding...............................          --            --
  Common stock -- $1 par value, authorized 100,000,000
     shares; issued 61,454,000 shares in 2000 and 60,102,000
     in 1999................................................      61,454        60,102
  Capital in Excess of Par..................................      98,514            --
  Retained earnings.........................................     835,917       762,009
  Accumulated other comprehensive income (loss).............     (39,042)      (14,040)
  Cost of shares held in treasury; 11,680,000 shares in 2000
     and 13,736,000 shares in 1999..........................    (228,454)     (257,295)
                                                              ----------    ----------
Total Stockholders' Equity..................................     728,389       550,776
                                                              ----------    ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..................  $2,260,179    $1,714,640
                                                              ==========    ==========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        31
<PAGE>   33

                CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
                  FOR THE THREE YEARS ENDED DECEMBER 31, 2000

<TABLE>
<CAPTION>
                                                                                       ACCUMULATED
                                                                                          OTHER
                                                                           CAPITAL    COMPREHENSIVE     COST OF         TOTAL
(DOLLARS IN THOUSANDS EXCEPT         COMPREHENSIVE   COMMON    RETAINED   IN EXCESS      INCOME       SHARES HELD   STOCKHOLDERS'
PER SHARE DATA)                         INCOME        STOCK    EARNINGS    OF PAR        (LOSS)       IN TREASURY      EQUITY
----------------------------         -------------   -------   --------   ---------   -------------   -----------   -------------
<S>                                  <C>             <C>       <C>        <C>         <C>             <C>           <C>
BALANCE, DECEMBER 28, 1997.........                  $60,102   $540,379    $    --      $ (3,857)      $(268,236)     $328,388
Comprehensive income:
  Net income.......................    $102,002          --    102,002          --            --              --       102,002
  Other comprehensive income, net
    of tax:
    Gross foreign currency
      translation adjustments......       4,608          --         --          --         4,608              --         4,608
    Reclassification adjustment for
      translation losses realized
      upon sale of Sealol
      Industrial Seals.............       3,115          --         --                     3,115              --         3,115
    Unrealized losses on securities
      arising during the period....        (137)         --         --          --          (137)             --          (137)
                                       --------
  Other comprehensive income.......       7,586
                                       --------
Comprehensive income...............    $109,588
                                       ========
Cash dividends ($.56 per share)....                      --    (25,408)         --            --              --       (25,408)
Exercise of employee stock options
  and related income tax
  benefits.........................                      --      6,618          --            --          21,698        28,316
Purchase of common stock for
  treasury.........................                      --         --          --            --         (41,217)      (41,217)
                                                     -------   --------    -------      --------       ---------      --------
BALANCE, JANUARY 3, 1999...........                  60,102    623,591          --         3,729        (287,755)      399,667
Comprehensive income:
  Net income.......................    $154,316          --    154,316          --            --              --       154,316
  Other comprehensive income
    (loss), net of tax:
    Foreign currency translation
      adjustments..................     (17,804)         --         --          --       (17,804)             --       (17,804)
    Unrealized gains on securities:
      Gains arising during the
        period.....................          93
      Reclassification
        adjustment.................         (58)
                                       --------
    Net unrealized gains...........          35          --         --          --            35              --            35
                                       --------
  Other comprehensive income
    (loss).........................     (17,769)
                                       --------
Comprehensive income...............    $136,547
                                       ========
Cash dividends ($.56 per share)....                      --    (25,499)         --            --              --       (25,499)
Exercise of employee stock options
  and related income tax
  benefits.........................                      --      8,369          --            --          20,264        28,633
Issuance of common stock for
  employee benefit plans...........                      --      1,232          --            --          11,166        12,398
Purchase of common stock for
  treasury.........................                      --         --          --            --            (970)         (970)
                                                     -------   --------    -------      --------       ---------      --------
BALANCE, JANUARY 2, 2000...........                  60,102    762,009          --       (14,040)       (257,295)      550,776
Comprehensive income:
  Net income.......................    $ 90,520          --     90,520          --            --              --        90,520
  Other comprehensive income
    (loss), net of tax:
    Foreign currency translation
      adjustments..................     (25,484)         --         --          --       (25,484)             --       (25,484)
    Unrealized gains on securities:
      Gains arising during the
        period.....................         481
      Reclassification
        adjustment.................           1
                                       --------
    Net unrealized losses..........         482          --         --          --           482              --           482
                                       --------
  Other comprehensive income
    (loss).........................     (25,002)
                                       --------
Comprehensive income...............    $ 65,518
                                       ========
Cash dividends ($.56 per share)....                      --    (27,533)         --            --              --       (27,533)
Exercise of employee stock options
  and related income tax
  benefits.........................                      --         --      33,230            --          34,939        68,169
Issuance of common stock for
  employee benefit plans...........                      --       (155)      5,228            --           4,389         9,462
Purchase of common stock for
  treasury.........................                      --         --        (102)           --         (10,487)      (10,589)
Mergers, acquisitions and other....                   1,352     11,076      60,158            --              --        72,586
                                                     -------   --------    -------      --------       ---------      --------
BALANCE, DECEMBER 31, 2000.........                  $61,454   $835,917    $98,514      $(39,042)      $(228,454)     $728,389
                                                     =======   ========    =======      ========       =========      ========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        32
<PAGE>   34

                       PERKINELMER, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOW
                    FOR THREE YEARS ENDED DECEMBER 31, 2000

<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS)                                          2000        1999        1998
----------------------                                        ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
Operating Activities:
  Net income................................................  $  90,520   $ 154,316   $ 102,002
  Deduct net income from discontinued operations............         --     (15,665)    (23,001)
  Deduct net gain on disposition of discontinued
    operations..............................................     (4,453)   (110,280)         --
                                                              ---------   ---------   ---------
  Income from continuing operations.........................     86,067      28,371      79,001
  Adjustments to reconcile income from continuing operations
    to net cash provided by continuing operations:
    Revaluation of acquired inventory.......................      2,946       9,857          --
    In-process research and development charges.............     32,400      23,000       2,300
    Noncash portion of restructuring charges................      2,900       2,300      12,020
    Asset impairment charges................................         --      18,000       7,400
    Depreciation and amortization...........................     79,148      66,115      48,510
    Amortization of debt discount and issuance cost.........      8,567          --          --
    Gains on dispositions and sales of investments, net.....    (39,570)    (21,624)   (130,545)
    Changes in assets and liabilities which provided (used)
     cash, excluding effects from companies purchased or
     divested:
      Accounts receivable...................................     (4,256)    (54,439)      7,830
      Inventories...........................................    (23,380)     12,132       3,265
      Accounts payable and accrued expenses.................     25,264      62,660      13,797
      Tax benefit of common stock option exercises..........     30,843       5,811       3,431
      Accrued restructuring costs...........................    (31,440)    (21,005)     29,569
      Prepaid and deferred taxes............................         --      (2,616)    (12,359)
      Prepaid expenses and other............................    (23,941)    (19,794)    (23,366)
                                                              ---------   ---------   ---------
Net Cash Provided by Continuing Operations..................    145,548     108,768      40,853
Net Cash Provided by Discontinued Operations................         --       7,061      28,702
                                                              ---------   ---------   ---------
Net Cash Provided by Operating Activities...................    145,548     115,829      69,555
                                                              ---------   ---------   ---------
Investing Activities:
  Capital expenditures......................................    (70,598)    (41,092)    (44,489)
  Proceeds from dispositions of businesses and sales of
    property, plant and equipment...........................     87,780      31,560     210,505
  Cost of acquisitions, net of cash and cash equivalents
    acquired................................................   (397,384)   (302,288)   (217,937)
  Proceeds from sales/ costs of purchases of investments....    (20,457)      6,086       7,623
  Other.....................................................      1,919      (1,408)       (160)
                                                              ---------   ---------   ---------
Net Cash Used in Continuing Operations......................   (398,740)   (307,142)    (44,458)
Net Cash Provided by (Used in) Discontinued Operations......     (2,690)    163,259      (2,033)
                                                              ---------   ---------   ---------
Net Cash Used in Investing Activities.......................   (401,430)   (143,883)    (46,491)
                                                              ---------   ---------   ---------
Financing Activities:
  Proceeds from issuance of convertible debt................    448,000          --          --
  Increase (decrease) in commercial paper borrowings........     37,000     (10,000)    104,156
  Payment of acquired Lumen revolving credit borrowings.....         --          --     (59,090)
  Other debt increases (decreases)..........................   (233,991)     69,529       7,270
  Proceeds from issuance of common stock....................     46,902      28,923      28,316
  Purchases of common stock.................................    (10,589)       (970)    (41,217)
  Cash dividends............................................    (27,533)    (25,499)    (25,408)
                                                              ---------   ---------   ---------
Net Cash Provided by Financing Activities...................    259,789      61,983      14,027
Effect of Exchange Rate Changes on Cash and Cash
  Equivalents...............................................     (5,006)     (2,844)        540
                                                              ---------   ---------   ---------
Net (Decrease) Increase in Cash and Cash Equivalents........     (1,099)     31,085      37,631
Cash and Cash Equivalents at Beginning of Year..............    126,650      95,565      57,934
                                                              ---------   ---------   ---------
Cash and Cash Equivalents at End of Year....................  $ 125,551   $ 126,650   $  95,565
                                                              =========   =========   =========
Supplemental Disclosures of Cash Flow Information (see also
  Note 2):
  Cash paid during the year for:
    Interest................................................  $  45,236   $  28,438   $  12,367
    Income taxes............................................     21,819      82,368      59,029
  Noncash Investing and Financing Activities:
    One-year secured 5% promissory notes issued to PE Corp.
     in connection with the acquisition of the Analytical
     Instruments Division...................................         --     150,000          --
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        33
<PAGE>   35

                       PERKINELMER, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

     Principles of Consolidation:  The consolidated financial statements include
the accounts of PerkinElmer, Inc. (formerly EG&G, Inc.) and its subsidiaries
(the Company). All material intercompany balances and transactions have been
eliminated in consolidation.

     Nature of Operations:  PerkinElmer, Inc. is a global high technology
company which provides products and systems to the telecom, medical,
pharmaceutical, chemical, semiconductor, photographic and other markets. The
Company's operating segments are Life Sciences, Optoelectronics, Instruments and
Fluid Sciences. In August 1999, the Company divested its Technical Services
segment, which is presented as discontinued operations in accordance with
Accounting Principles Board (APB) Opinion No. 30, Reporting the Results of
Operations (see Note 7).

     Use of Estimates:  The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

     Sales:  The majority of the Company's product sales are recorded at the
time of shipment and when persuasive evidence of an arrangement exists, the
seller's price to the buyer is fixed or determinable and collectibility is
reasonably assured. Provision is made at the time the related revenue is
recognized for the cost of any installation obligations and the estimated cost
of product warranties. When other significant obligations remain after products
are delivered, including certain customer acceptance provisions, revenue is
recognized only after such obligations are fulfilled. If a loss is anticipated
on any contract, provision for the entire loss is made immediately. Revenue
related to the sale of maintenance contracts is deferred and amortized on a
straight-line basis over the service period. For equipment leased to a customer
under a sales-type lease, revenue recognition generally commences when the
equipment has been shipped and installed.

     In the fourth quarter of 2000, retroactive to January 1, 2000, the Company
adopted Securities and Exchange Commission (SEC) Staff Accounting Bulletin
("SAB") No. 101, Revenue Recognition in Financial Statements, which provides
guidance in applying generally accepted accounting principles to certain revenue
recognition issues. The adoption of SAB 101 did not have a material impact on
the Company's financial position or quarterly or annual results of operations.

     The former Technical Services segment had cost-reimbursement contracts with
governmental agencies. These contracts included both cost plus fixed fee
contracts and cost plus award fee contracts based on performance. Sales under
cost-reimbursement contracts were recorded as costs were incurred and included
applicable income in the proportion that costs incurred bear to total estimated
costs.

     Inventories:  Inventories, which include material, labor and manufacturing
overhead, are valued at the lower of cost or market. The majority of inventories
is accounted for using the first-in, first-out method of determining inventory
costs; remaining inventories are accounted for using the last-in, first-out
(LIFO) method.

     Property, Plant and Equipment:  For financial statement purposes, the
Company depreciates plant and equipment using the straight-line method over
their estimated useful lives, which generally fall within the following ranges:
buildings and special-purpose structures -- 10 to 25 years; leasehold
improvements -- estimated useful life or remaining term of lease, whichever is
shorter; machinery and equipment -- 3 to 7 years. Nonrecurring tooling costs are
capitalized, while recurring costs are expensed. For income tax purposes, the
Company depreciates plant and equipment over their estimated useful lives using
accelerated methods.

     Pension Plans:  The Company's funding policy provides that payments to the
U.S. pension trusts shall at least be equal to the minimum funding requirements
of the Employee Retirement Income Security Act of 1974. Non-U.S. plans are
accrued for, but generally not funded, and benefits are paid from operating
funds.

                                        34
<PAGE>   36
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Translation of Foreign Currencies:  The balance sheet accounts of non-U.S.
operations, exclusive of stockholders' equity, are translated at year-end
exchange rates, and income statement accounts are translated at weighted-average
rate in effect during the year; any translation adjustments are made directly to
a component of stockholders' equity.

     Intangible Assets:  In accordance with Statement of Financial Accounting
Standards (SFAS) No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of, and APB Opinion No. 17, Intangible
Assets, the Company reviews long-lived assets and all intangible assets
(including goodwill) for impairment whenever events or changes in circumstances
indicate the carrying amount of such assets may not be recoverable.
Recoverability of these assets is determined by comparing the forecasted
undiscounted net cash flows of the operation to which the assets relate, to the
carrying amount including associated intangible assets of such operation. If the
operation is determined to be unable to recover the carrying amount of its
assets, then intangible assets are written down first, followed by the other
long-lived assets of the operation, to fair value. Fair value is determined
based on discounted cash flows or appraised values, depending upon the nature of
the assets. (See Note 4 for further discussion of asset impairment charges.)

     Stock-Based Compensation:  In accordance with SFAS No. 123, Accounting for
Stock-Based Compensation, the Company accounts for stock-based compensation at
intrinsic value with disclosure of the effects of fair value accounting on net
income and earnings per share on a pro forma basis.

     Cash Flows:  For purposes of the Consolidated Statements of Cash Flows, the
Company considers all highly liquid instruments with a purchased maturity of
three months or less to be cash equivalents. The carrying amount of cash and
cash equivalents approximates fair value due to the short maturities.

     Environmental Matters:  The Company accrues for costs associated with the
remediation of environmental pollution when it is probable that a liability has
been incurred and the Company's proportionate share of the amount can be
reasonably estimated. Any recorded liabilities have not been discounted.

     Comprehensive Income:  The Company has adopted the provisions of SFAS No.
130, Reporting Comprehensive Income, which established standards for reporting
and display of comprehensive income and its components. Comprehensive income is
the total of net income and all other nonowner changes in stockholders' equity.

     Segments and Related Information:  The Company has adopted the provisions
of SFAS No. 131, Disclosures about Segments of an Enterprise and Related
Information. The statement established standards for the way that public
business enterprises report information and operating segments in annual
financial statements and requires reporting of selected information in interim
financial reports.

     Derivative Instruments and Hedging:  The Financial Accounting Standards
Board issued SFAS No. 137, Accounting for Derivative Instruments and Hedging
Activities -- Deferral of the Effective Date of SFAS No. 133, in June 1999. SFAS
No. 133 is now effective for all fiscal quarters of all fiscal years beginning
after June 15, 2000; earlier adoption is allowed. The statement requires
companies to record derivatives on the balance sheet as assets or liabilities,
measured at fair value. Gains or losses resulting from changes in the values of
those derivatives would be accounted for depending on the use of the derivative
and whether it qualifies for hedge accounting. The effect of the adoption of
SFAS No. 133 as of January 1, 2001 will not be material.

     Reclassifications:  Certain amounts from prior years have been reclassified
to conform to the 2000 financial statement presentation.

NOTE 2.  ACQUISITIONS AND DIVESTITURES

     On January 14, 2000, the Company completed its acquisition of Vivid
Technologies, Inc. (Vivid) for an aggregate purchase price of approximately $67
million. The transaction was a stock merger whereby the shareholders of Vivid
received one share of the Company's common stock for each 6.2 shares of Vivid
common stock; approximately 1.6 million shares were issued in connection with
the acquisition. Vivid, which is a leading
                                        35
<PAGE>   37
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

supplier of automated explosive detection systems utilized in airports and
high-security facilities worldwide, generated sales of $21 million for the
twelve months ended September 30,1999. Vivid's operations, included in the
consolidated results of the Company from the date of acquisition, are reported
in the Instruments segment. The acquisition was accounted for as a purchase
under Accounting Principles Board (APB) Opinion No. 16, Business Combinations.
In accordance with APB Opinion No. 16, the Company allocated the purchase price
of Vivid based on the fair values of the net assets acquired and liabilities
assumed. Portions of the purchase price, including intangible assets, were
valued by independent appraisers utilizing customary valuation procedures and
techniques. These intangible assets included approximately $8.1 million for
acquired in-process research and development (R&D) for projects that had not
reached technological feasibility as of the acquisition date and for which no
alternative use existed. This allocation represents the estimated fair value
based on risk-adjusted cash flows related to the in-process R&D projects; these
costs were expensed in the first quarter of 2000. Other acquired intangible
assets totaling $6.4 million included the fair value of developed technology.
These intangible assets are being amortized over their estimated useful life of
10 years. Goodwill of $24.1 million resulting from the acquisition of Vivid is
being amortized over 25 years.

     On July 31, 2000, the Company completed its acquisition of NEN Life
Sciences, Inc. (NEN), a provider of state-of-the-art drug discovery products,
services, reagents and technologies to the life sciences industry. The Company
purchased NEN from an investor group led by Genstar Capital LLC for an aggregate
purchase price of approximately $400 million. In connection with the
acquisition, the Company paid approximately $350 million in cash and issued
warrants to purchase approximately 300,000 shares of the Company's common stock
in exchange for all of the outstanding shares, options and warrants of NEN. In
addition, the Company repaid approximately $50 million of outstanding
indebtedness of NEN. The Company financed the acquisition and repayment of the
outstanding indebtedness with $410 million of commercial paper borrowings with a
weighted-average interest rate of 7%. These short-term borrowings were repaid in
early August with proceeds from the issuance of long-term convertible debentures
(see Note 14).

     NEN's operations, included in the consolidated results of the Company from
the date of acquisition, are reported in the Life Sciences segment. The
acquisition was accounted for as a purchase under APB Opinion No. 16, and the
Company allocated the purchase price of NEN based on the fair values of the net
assets acquired and liabilities assumed. The allocation of the purchase price
has not yet been finalized, however, the Company does not expect material
changes. Portions of the purchase price, including intangible assets, were
valued by independent appraisers utilizing customary valuation procedures and
techniques. These intangible assets included approximately $24.3 million for
acquired in-process research and development (R&D) for projects that had not
reached technological feasibility as of the acquisition date and for which no
alternative use existed. This allocation represents the estimated fair value
based non risk-adjusted cash flows related to the in-process R&D projects; these
costs were expensed in the third quarter of 2000. Other acquired intangible
assets totaling $75.9 million included the fair value of trade names,
trademarks, patents and developed technology with lives ranging from 10 - 20
years. Goodwill of $270.8 million resulting from the acquisition of NEN is being
amortized over 20 years. Approximately $4 million has been recorded as accrued
restructuring costs in connection with the acquisition of NEN. The restructuring
plans include initiatives to integrate the operations of the Company and NEN,
and to reduce overhead. The primary components of these plans relate to
employment costs, consolidation of certain facilities, and the termination of
certain leases and other contractual obligations. Management is in the process
of developing its restructuring plans related to NEN, and accordingly, the
amounts recorded are based on management's current estimate of these costs. The
Company will finalize these plans during 2001, and the majority of the
restructuring actions are expected to occur during 2001.

                                        36
<PAGE>   38
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The components of NEN's purchase price and preliminary allocation were as
follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S>                                                           <C>
Consideration and acquisition costs:
  Cash paid to NEN..........................................     $348,918
  Debt assumed..............................................       48,262
  Acquisition costs.........................................       13,647
  Fair value of warrants issued.............................        6,940
                                                                 --------
          Total.............................................     $417,767
                                                                 ========
Preliminary allocation of purchase price:
  Current assets............................................     $ 34,327
  Property, plant and equipment.............................       59,755
  Other assets..............................................          739
  Acquired intangibles......................................       75,900
  In-process R&D............................................       24,300
  Goodwill..................................................      270,790
  Liabilities...............................................      (48,044)
                                                                 --------
          Total.............................................     $417,767
                                                                 ========
</TABLE>

     On May 28, 1999, the Company completed its acquisition of the Analytical
Instruments Division (AI) of PE Corp. for an aggregate purchase price of
approximately $425 million, plus acquisition costs. In addition, under the terms
of the Purchase Agreement dated March 8, 1999 between the Company and PE Corp.
(the "Purchase Agreement"), the Company assumed German and other pension
liabilities of approximately $65 million. These pension liabilities were
historically funded on a pay-as-you-go basis, and the funding going-forward is
expected to remain consistent. The acquisition was accounted for as a purchase
under APB Opinion No. 16. In accordance with APB Opinion No. 16, the Company
allocated the purchase price of AI based on the fair values of the net assets
acquired and liabilities assumed. AI produces high-quality analytical testing
instruments and consumables, and generated 1998 fiscal year sales of $569
million. AI's operations are reported in the Company's Instruments segment.
Portions of the purchase price, including intangible assets, were valued by
independent appraisers utilizing customary valuation procedures and techniques.
These intangible assets included approximately $23 million for acquired
in-process R&D. This allocation represents the estimated fair value based on
risk-adjusted cash flows related to the in-process R&D projects. At the date of
the acquisition of AI, the development of these projects had not yet reached
technological feasibility, and the R&D in process had no alternative future
uses. Accordingly, these costs were expensed in the second quarter of 1999.
Other acquired intangibles totaling $163.8 million included the fair value of
trade names, trademarks, patents and developed technology. These intangibles are
being amortized over their respective estimated useful lives ranging from 10-40
years. Goodwill resulting from the acquisition of AI is being amortized over 40
years. Approximately $28 million was recorded as accrued restructuring charges
in connection with the acquisition of AI. The restructuring plans include
initiatives to integrate the operations of the Company and of AI, and reduce
overhead. The primary components of these plans relate to: (a) employee
termination benefits and related costs for approximately 20% of the acquired
workforce of approximately 3,000 employees; (b) consolidation or shutdown of
certain operational facilities worldwide and (c) termination of certain leases
and other contractual obligations.

     During the second quarter of 2000, the Company finalized its restructuring
plan for AI. Based on continued aggressive actions by the Company to improve the
cost structure of the acquired business, and increased costs related primarily
to employment integration, the Company adjusted its original estimate of
restructuring costs recorded at the acquisition date in connection with purchase
accounting. The majority of the remaining restructuring actions are expected to
occur through fiscal 2001.

                                        37
<PAGE>   39
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The components of the purchase price and allocation were as follows:

<TABLE>
<CAPTION>
                                                              (IN THOUSANDS)
                                                              --------------
<S>                                                           <C>
Consideration and acquisition costs:
  Cash paid.................................................    $ 275,000
  Seller note...............................................      150,000
  Pension liabilities assumed...............................       65,000
  Acquisition costs.........................................       10,000
                                                                ---------
                                                                $ 500,000
                                                                =========
Preliminary allocation of purchase price:
  Current assets............................................    $ 253,777
  Property, plant and equipment.............................       33,308
  Acquired intangibles......................................      163,800
  In-process R&D............................................       23,000
  Goodwill..................................................      185,941
  Liabilities assumed and other.............................     (159,826)
                                                                ---------
                                                                $ 500,000
                                                                =========
</TABLE>

     On December 16, 1998, the Company acquired substantially all of the
outstanding common stock and options of Lumen Technologies, Inc. (Lumen), a
maker of high-technology specialty light sources. The purchase price of
approximately $253 million, which included $75 million of assumed debt, was
funded with existing cash and commercial paper borrowings. The acquisition was
accounted for as a purchase under APB Opinion No. 16, and the Company allocated
the purchase price of Lumen based on the fair values of the assets acquired and
liabilities assumed. Portions of the purchase price, including intangible
assets, were valued by independent appraisers utilizing proven valuation
procedures and techniques. These intangible assets included approximately $2.3
million for acquired in-process R&D for projects that did not have future
alternative uses. This allocation represents the estimated fair value based on
risk-adjusted cash flows related to the in-process R&D projects. At the date of
the acquisition, the development of these projects had not yet reached
technological feasibility, and the R&D in process had no alternative future
uses. Accordingly, these costs were expensed in the fourth quarter of 1998.
Acquired intangibles totaling $11.8 million included the fair value of trade
names, trademarks and patents. These intangibles are being amortized over their
estimated useful life of 10 years. Goodwill resulting from the Lumen acquisition
is being amortized over 30 years. Approximately $5 million was recorded as
accrued restructuring charges in connection with the acquisition. The
restructuring plans included initiatives to integrate the operations of the
Company and Lumen, and to reduce overhead. The primary components of these plans
related to: (a) transfer of certain manufacturing activities to lower-cost
facilities, (b) integration of the sales and marketing organization and (c)
termination of certain contractual obligations.

     Unaudited pro forma operating results for the Company, assuming the
acquisitions of Lumen and AI occurred on December 29, 1997, and NEN occurred on
January 3, 1999, are as follows:

<TABLE>
<CAPTION>
       (IN THOUSANDS EXCEPT PER SHARE DATA)             2000          1999          1998
       ------------------------------------          ----------    ----------    ----------
<S>                                                  <C>           <C>           <C>
Sales from continuing operations...................  $1,765,111    $1,681,817    $1,556,094
Income from continuing operations..................      92,981        (3,547)       45,813
  Basic earnings per share.........................        1.89          (.08)         1.01
  Diluted earnings per share.......................        1.82          (.08)         1.00
Net Income.........................................  $   97,434    $  122,398    $   68,814
  Basic earnings per share.........................        1.98          2.69          1.52
  Diluted earnings per share.......................        1.91          2.69          1.50
</TABLE>

                                        38
<PAGE>   40
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The pro forma amounts in the table above exclude the in-process R&D charges
of $24.3 million, $23 million and $2.3 million for NEN, AI and Lumen,
respectively. The unaudited pro forma financial information is provided for
informational purposes only and is not necessarily indicative of the Company's
operating results that would have occurred had the acquisitions been consummated
on the date for which the consummation of the acquisitions is being given
effect, nor is it necessarily indicative of the Company's future operating
results. The pro forma amounts do not reflect any operating efficiencies and
cost savings that the Company believes are achievable. Pro forma amounts for the
Vivid acquisition are not included as its effect is not material to the
Company's consolidated financial statements.

     During the first quarter of 2000, the Company sold its micromachined
sensors and specialty semiconductor businesses for cash of $24.3 million,
resulting in a pre-tax gain of $6.7 million. Combined financial results of the
divested businesses for 2000 and 1999 were not material to the consolidated
results of the Company. During the third quarter of 2000, the Company recorded
pre-tax gains totaling $3.1 million from an insurance settlement and disposition
of a building.

     During the fourth quarter of 2000, the Company sold its Berthold business
at a pre-tax gain of $10 million. The Company has deferred gain recognition of
approximately $11.9 million of sales proceeds from this divestiture in
connection with certain contingencies related to the sale. Revenues for 2000 and
1999 for the divested business were $30 million and $38 million, respectively.
Also during the fourth quarter of 2000, the Company recorded a pre-tax gain of
$16 million from the sale of a building.

     During the second quarter of 1999, the Company sold its Structural
Kinematics business for cash of $15 million, resulting in a pre-tax gain of $4.3
million. Additionally, as a result of the Company's continuing evaluation of its
Instruments businesses, the Company undertook certain repositioning actions
during the second quarter of 1999, including exiting selected product lines and
activities, rebalancing its customer mix in certain businesses and other related
activities. These actions resulted in second quarter pre-tax charges of
approximately $3.4 million, primarily recorded in cost of sales. During the
fourth quarter of 1999, the Company sold its KT Aerofab business for cash of
$4.4 million, resulting in a pre-tax gain of $0.3 million. The net operating
results of the divested businesses for 1999 were not significant.

     In April 1998, the Company sold its Sealol Industrial Seals division for
cash of $100 million, resulting in a pre-tax gain of $58.3 million. The
after-tax gain of this divestiture was $42.6 million. Sealol's 1998 sales prior
to the disposition were $23 million, and its operating income was $2.1 million.
In January 1998, the Company sold its Rotron division for $103 million in cash,
resulting in a pre-tax gain of $64.4 million. During the first quarter of 1998,
the Company also sold a small product line for $4 million in cash, resulting in
a pre-tax gain of $3.1 million. The after-tax gain of these divestitures was
$45.2 million in 1998. During 2000 and 1999, in connection with the 1998
dispositions of the Company's Rotron and Sealol Industrial Seals divisions, the
Company recognized approximately $3.7 million and $13.2 million respectively, of
pre-tax gains from the previously deferred sales proceeds as a result of the
favorable resolution of certain events and contingencies.

     All of the gains described above are reported on the "Gains on
Dispositions" line in the consolidated income statements.

NOTE 3.  RESTRUCTURING AND INTEGRATION CHARGES

     The Company developed restructuring plans during 1998 to integrate and
consolidate its businesses and recorded restructuring charges in the first and
second quarters of 1998, which are discussed separately below.

     During the first quarter of 1998, management developed a plan to
restructure certain businesses. A discussion of the businesses affected within
each segment is presented below. The plan resulted in pre-tax restructuring
charges totaling $30.5 million. The principal actions in the restructuring plan
included close-down or consolidation of a number of offices and facilities,
transfer of assembly activities to lower-cost geographic locations, disposal of
underutilized assets, withdrawal from certain product lines and general cost
reductions.
                                        39
<PAGE>   41
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Specific businesses within each segment which were affected by the
restructuring actions are as follows: the Fluid Sciences business affected
primarily manufactures mechanical components and systems; the Optoelectronics
businesses affected produce various lighting and sensor components and systems;
the Instruments restructuring related primarily to its X-ray imaging business
which produces security screening equipment, as well as its Instruments for
Research and Applied Science business which produces particle detector
equipment.

     During the second quarter of 1998, the Company expanded its continuing
effort to restructure certain businesses to further improve performance. The
plan resulted in additional pre-tax restructuring charges of $19.5 million. The
principal actions in this restructuring plan included the integration of
operating divisions into five strategic business units (SBUs), close-down or
consolidation of a number of production facilities and general cost reductions.
The Technical Services segment was subsequently sold during the third quarter of
1999.

     The components of the restructuring charges met the criteria set forth in
Emerging Issues Task Force Issue 94-3, Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (Including
Certain Costs Incurred in a Restructuring). The charges do not include
additional costs associated with the restructuring plans, such as training,
consulting, purchase of equipment and relocation of employees and equipment.
These costs were charged to operations or capitalized, as appropriate, when
incurred.

     During the third quarter of 1999, due to the substantial completion of the
actions of the 1998 restructuring plans, the Company reevaluated its 1998
restructuring plans. As a result of this review, costs associated with the
previously planned shutdown of two businesses were no longer required due to
actions taken to improve performance. As a result of these developments, the
Company recognized a restructuring credit of $12 million during the third
quarter of 1999, which primarily affected the Fluid Sciences and optoelectronics
segments.

     During the second quarter of 2000, the Company recognized an additional
restructuring credit of $6 million related to its 1998 restructuring plans. This
resulted from the elimination of certain planned actions, actions taken to
improve performance at costs lower than originally estimated, and the sale of
certain businesses included in the restructuring plans.

     These credits are reflected in "Restructuring Charges, Net" in the
consolidated income statements.

     The restructuring charges related to continuing operations recorded in 1998
were broken down as follows by operating segment:

<TABLE>
<CAPTION>
                                                                             TERMINATION OF
                                                          DISPOSAL OF       LEASES AND OTHER
                                        EMPLOYEE        CERTAIN PRODUCT       CONTRACTUAL
(IN MILLIONS)                       SEPARATION COSTS    LINES AND ASSETS      OBLIGATIONS       TOTAL
-------------                       ----------------    ----------------    ----------------    ------
<S>                                 <C>                 <C>                 <C>                 <C>
Life Sciences.....................       $ 3.6               $   .4              $  .6          $  4.6
Optoelectronics...................         8.5                  6.4                5.4            20.3
Instruments.......................         6.4                  2.9                2.0            11.3
Fluid Sciences....................         6.2                  1.9                1.8             9.9
Corporate and Other...............         3.8                   --                 .1             3.9
                                         -----               ------              -----          ------
Total restructuring charges.......        28.5                 11.6                9.9            50.0
Amounts incurred through January
  3, 1999.........................        (8.1)               (11.6)              (1.0)          (20.7)
                                         -----               ------              -----          ------
Accrued restructuring costs at
  January 3, 1999.................        20.4                   --                8.9            29.3
Amounts incurred during 1999......        (8.3)                  --               (2.6)          (10.9)
Amounts reversed during 1999......        (7.4)                  --               (4.6)          (12.0)
                                         -----               ------              -----          ------
</TABLE>

                                        40
<PAGE>   42
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                                                             TERMINATION OF
                                                          DISPOSAL OF       LEASES AND OTHER
                                        EMPLOYEE        CERTAIN PRODUCT       CONTRACTUAL
(IN MILLIONS)                       SEPARATION COSTS    LINES AND ASSETS      OBLIGATIONS       TOTAL
-------------                       ----------------    ----------------    ----------------    ------
<S>                                 <C>                 <C>                 <C>                 <C>
Accrued restructuring costs at
  January 2, 2000.................         4.7                   --                1.7             6.4
Amounts incurred during 2000......          --                   --                (.1)            (.1)
Amounts reversed during 2000......        (4.7)                  --               (1.6)           (6.3)
                                         -----               ------              -----          ------
Accrued restructuring costs at
  December 31, 2000...............       $  --               $   --              $  --          $   --
                                         =====               ======              =====          ======
</TABLE>

     The acquisitions by the Company discussed in Note 2 and the Company's
divestiture during the third quarter of 1999 of its Technical Services segment
(exiting government services) were strategic milestones in the Company's
transition to a commercial high-technology company. Consistent with the
strategic direction of the Company and concurrent with the reevaluation of
existing restructuring plans during the third quarter of 1999, the Company
developed additional plans during the third quarter of 1999 to restructure
certain businesses to continue to improve the Company's performance.

     These plans resulted in a pre-tax restructuring charge of $23.5 million
recorded in the third quarter of 1999. The principal actions in these
restructuring plans include close-down or consolidation of a number of offices
and facilities, transfer of assembly activities to lower-cost geographic
locations, disposal of underutilized assets, withdrawal from certain product
lines and general cost reductions. The restructuring plans are expected to
result in the elimination of approximately 400 positions, primarily in the
manufacturing and sales categories. The major components of the restructuring
charge were $13.6 million of employee separation costs to restructure the
worldwide organization, including the sales and manufacturing focus, $2.3
million of noncash charges to dispose of certain product lines and assets
through sale or abandonment and $7.6 million of charges to terminate lease and
other contractual obligations no longer required as a result of the
restructuring plans. The charges do not include additional costs associated with
the restructuring plans, such as training, consulting, purchase of equipment and
relocation of employees and equipment. These costs will be charged to operations
or capitalized, as appropriate, when incurred.

     The restructuring actions related to the 1999 charge are broken down as
follows by business segment:

<TABLE>
<CAPTION>
                                                                             TERMINATION OF
                                                          DISPOSAL OF       LEASES AND OTHER
                                        EMPLOYEE        CERTAIN PRODUCT       CONTRACTUAL
(IN MILLIONS)                       SEPARATION COSTS    LINES AND ASSETS      OBLIGATIONS       TOTAL
-------------                       ----------------    ----------------    ----------------    ------
<S>                                 <C>                 <C>                 <C>                 <C>
Life Sciences.....................       $  .5                $ .8               $ 4.9          $  6.2
Optoelectronics...................         6.1                  .8                 2.1             9.0
Instruments.......................         1.8                  --                  --             1.8
Fluid Sciences....................         5.2                  .2                  .1             5.5
Corporate and Other...............          --                  .5                  .5             1.0
                                         -----                ----               -----          ------
Total restructuring charge........        13.6                 2.3                 7.6            23.5
Amounts incurred through January
  2, 2000.........................        (2.1)                (.2)                (.4)           (2.7)
                                         -----                ----               -----          ------
</TABLE>

                                        41
<PAGE>   43
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                                                             TERMINATION OF
                                                          DISPOSAL OF       LEASES AND OTHER
                                        EMPLOYEE        CERTAIN PRODUCT       CONTRACTUAL
(IN MILLIONS)                       SEPARATION COSTS    LINES AND ASSETS      OBLIGATIONS       TOTAL
-------------                       ----------------    ----------------    ----------------    ------
<S>                                 <C>                 <C>                 <C>                 <C>
Accrued restructuring costs at
  January 2, 2000.................       $11.5                $2.1               $ 7.2          $ 20.8
Provisions during 2000............         2.4                  --                  --             2.4
Amounts incurred during 2000......        (7.4)                (.2)               (4.8)          (12.4)
Amounts reversed during 2000......        (4.0)                 --                 (.9)           (4.9)
                                         -----                ----               -----          ------
Accrued restructuring costs at
  December 31, 2000...............       $ 2.5                $1.9               $ 1.5          $  5.9
                                         =====                ====               =====          ======
</TABLE>

     Further details of the Company's restructuring actions are presented below.
Specific businesses within each segment which were affected by the restructuring
actions are as follows: the primary Fluid Sciences business affected
manufactures certain products for the aerospace markets; the Optoelectronics
businesses affected produce various lighting and sensor components and systems;
the Instruments restructuring relates to its analytical instruments business,
its X-ray imaging business which produces security screening equipment, and its
Instruments for Research and Applied Science business which produces particle
detector equipment.

     Close-down of certain facilities:  Costs have been accrued for the closing
down of certain facilities. These costs relate primarily to the Instruments and
Optoelectronics segments.

     Transfer of assembly activities:  The Company continues to relocate certain
activities, primarily in its Optoelectronics segment, to lower-cost geographic
areas, such as the Philippines, Indonesia and China. The costs included in the
restructuring charges related to costs associated with exiting the previous
operations. Actual costs to physically relocate are charged to operations as
incurred.

     Disposal of underutilized assets:  The Company plans to dispose of
underutilized assets either through sale or abandonment, primarily in its
Instruments and Optoelectronics segments.

     Withdrawal from certain product lines:  The Company has made a strategic
decision to discontinue certain unprofitable product lines, primarily in its
Optoelectronics segment.

     Most of the actions remaining at December 31, 2000 are expected to occur in
fiscal 2001.

     During the fourth quarter of 2000, the Company reevaluated its 1999
restructuring plan due to the substantial completion of the respective actions
and the continuing transformation of the portfolio of businesses during 2000.
This resulted in the reversal of $4.9 million of remaining reserves from the
1999 plan and the recording of a pre-tax restructuring charge of $15.1 million
for actions to be completed in 2001 (the "2000 plan"). These charges related to
the Company's Life Sciences and Optoelectronics segments. The principal actions
in the restructuring plans included close-down or consolidation of a number of
offices and facilities, transfer of assembly activities to lower cost geographic
locations, disposal of underutilized assets and general cost reductions. The
restructuring charges were broken down as follows by operating segment: The Life
Sciences' principal actions are associated with rationalization of its
distribution network and overall facility consolidation. The Optoelectronics'
principal actions are associated with its Lighting and Imaging businesses and
relate to the shift of certain manufacturing to low cost geographic areas,
facility consolidation and general cost reductions.

                                        42
<PAGE>   44
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following table summarizes activity related to the 2000 plan:

<TABLE>
<CAPTION>
                                                                             TERMINATION OF
                                                       DISPOSAL OF          LEASES AND OTHER
                                     EMPLOYEE        CERTAIN PRODUCT          CONTRACTUAL
(IN MILLIONS)                    SEPARATION COSTS    LINES AND ASSETS         OBLIGATIONS          TOTAL
-------------                    ----------------    ----------------    ----------------------    -----
<S>                              <C>                 <C>                 <C>                       <C>
Life Sciences..................       $ 2.9                $ .1                   $2.1             $ 5.1
Optoelectronics................         7.2                 2.8                     --              10.0
                                      -----                ----                   ----             -----
Total restructuring charges....        10.1                 2.9                    2.1              15.1
Amounts during 2000............          --                  --                     --                --
                                      -----                ----                   ----             -----
Accrued restructuring costs at
  December 31, 2000............       $10.1                $2.9                   $2.1             $15.1
                                      =====                ====                   ====             =====
</TABLE>

     During the second quarter of 2000, the Company finalized its restructuring
plan for AI. Based on continued aggressive actions by the Company to improve the
cost structure of the acquired business, and increased costs related primarily
to employment integration, the Company adjusted its original estimate of
restructuring costs recorded at the acquisition date in connection with purchase
accounting. The majority of the remaining restructuring actions are expected to
occur through fiscal 2001.

     The following table summarizes reserve activity through December 31, 2000
related to the May 1999 AI acquisition as discussed in Note 2:

<TABLE>
<CAPTION>
(IN MILLIONS)
-------------
<S>                                                           <C>
Accrued restructuring costs at beginning of period..........      $12.4
Provisions, through purchase accounting, net................       24.0
Charges/Writeoffs...........................................       (7.7)
                                                                  -----
Accrued restructuring costs at December 31, 2000............      $28.7
                                                                  =====
</TABLE>

     The following table summarizes reserve activity through December 31, 2000
related to the December 1998 Lumen acquisition and July 2000 NEN acquisition as
discussed in Note 2 (all Lumen actions were completed during 2000):

<TABLE>
<CAPTION>
(IN MILLIONS)
-------------
<S>                                                           <C>
Accrued restructuring costs at beginning of period
  (Lumen)...................................................      $ 1.7
Provisions, through purchase accounting.....................        4.0
Charges/Writeoffs...........................................       (2.1)
                                                                  -----
Accrued restructuring costs at end of period................      $ 3.6
                                                                  =====
</TABLE>

     Cash outlays during 2000 were approximately $33 million for all of these
plans. The Company expects to incur approximately $30 to $35 million of cash
outlays in connection with these plans throughout fiscal 2001. The majority of
the actions remaining are expected to occur during 2001.

NOTE 4.  ASSET IMPAIRMENT CHARGES

     During the third quarter of 1999, in connection with its ongoing review of
its portfolio of businesses, the Company conducted a strategic review of certain
units within its business segments. The strategic review triggered an impairment
review of long-lived assets of certain business units that were expected to be
disposed. The Company calculated the present value of expected cash flows of
certain business units to determine the fair value of those assets. Accordingly,
in the third quarter of 1999, the Company recorded noncash impairment charges
and wrote down goodwill by $15 million in the Instruments segment and $3 million
in the Optoelectronics segment. Sales and

                                        43
<PAGE>   45
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

operating profit for the businesses under strategic review were approximately
$54 million and $2 million, respectively, in 1999. During 2000, the Company
disposed of its Berthold business which represented $30 million of the $54
million of sales.

     During the second quarter of 1998, the Company recorded a $7.4 million
noncash impairment charge related to an automotive testing facility in the
Instruments segment. The impairment charge applied to fixed assets and resulted
from projected changes in the principal customer's demand for services. The
Company calculated the present value of expected cash flows of the testing
facility to determine the fair value of the assets.

NOTE 5.  OTHER EXPENSE

     Other income (expense), net, consisted of the following:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                              2000        1999        1998
--------------                                            --------    --------    --------
<S>                                                       <C>         <C>         <C>
Interest Income.........................................  $  4,495    $  3,365    $  6,873
Interest Expense........................................   (41,412)    (28,284)    (11,391)
Gains on sales of investments, net......................     1,294       1,952       4,465
Other...................................................    (6,463)      1,185      (1,344)
                                                          --------    --------    --------
                                                          $(42,086)   $(21,782)   $ (1,397)
                                                          ========    ========    ========
</TABLE>

     Other consists mainly of foreign exchange losses, and $2.2 million of
income received by the Company in 1999 related to the demutualization of a life
insurance company in which the Company is a policyholder. The increase in
interest expense in 2000 versus 1999 is due to the impact of higher debt levels
resulting from acquisitions.

NOTE 6.  INCOME TAXES

     The components of income from continuing operations before income taxes for
financial reporting purposes were as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                               2000       1999        1998
--------------                                             --------    -------    --------
<S>                                                        <C>         <C>        <C>
U.S. ....................................................  $ 34,807    $ 1,044    $ 26,664
Non-U.S. ................................................   109,682     43,826      91,663
                                                           --------    -------    --------
                                                           $144,489    $44,870    $118,327
                                                           ========    =======    ========
</TABLE>

                                        44
<PAGE>   46
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The components of the provision for income taxes for continuing operations
were as follows:

<TABLE>
<CAPTION>
                                                                       DEFERRED
(IN THOUSANDS)                                              CURRENT    (PREPAID)     TOTAL
--------------                                              -------    ---------    -------
<S>                                                         <C>        <C>          <C>
2000
  Federal.................................................  $13,161    $ 14,338     $27,499
  State...................................................    3,470       3,095       6,565
  Non-U.S. ...............................................   25,538      (1,180)     24,358
                                                            -------    --------     -------
                                                            $42,169    $ 16,253     $58,422
                                                            =======    ========     =======
1999
  Federal.................................................  $ 9,397    $ (5,436)    $ 3,961
  State...................................................      921        (621)        300
  Non-U.S. ...............................................   13,052        (814)     12,238
                                                            -------    --------     -------
                                                            $23,370    $ (6,871)    $16,499
                                                            =======    ========     =======
1998
  Federal.................................................  $32,067    $ (7,538)    $24,529
  State...................................................    3,802        (977)      2,825
  Non-U.S. ...............................................   15,951      (3,979)     11,972
                                                            -------    --------     -------
                                                            $51,820    $(12,494)    $39,326
                                                            =======    ========     =======
</TABLE>

     The total provision for income taxes included in the consolidated financial
statements was as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                2000       1999       1998
--------------                                               -------    -------    -------
<S>                                                          <C>        <C>        <C>
Continuing Operations......................................  $58,422    $16,499    $39,326
Discontinued Operations....................................    2,847     80,522     14,706
                                                             -------    -------    -------
                                                             $61,269    $97,021    $54,032
                                                             =======    =======    =======
</TABLE>

     The major differences between the Company's effective tax rate for
continuing operations and the federal statutory rate were as follows:

<TABLE>
<CAPTION>
                                                                2000     1999     1998
                                                                -----    -----    -----
<S>                                                             <C>      <C>      <C>
Federal statutory rate......................................     35.0%    35.0%    35.0%
Non-U.S. rate differential, net.............................    (12.4)   (18.0)   (19.0)
Future remittance of non-U.S. earnings......................       --       --      8.4
State income taxes, net.....................................      2.9      1.4      1.6
Goodwill amortization.......................................      8.2      7.6       .6
Goodwill write-downs........................................       --     11.7       --
In-process R&D..............................................      7.9       --       --
Change in valuation allowance...............................     (1.7)     9.0      2.0
Other, net..................................................       .5     (9.9)     4.6
                                                                -----    -----    -----
Effective tax rate..........................................     40.4%    36.8%    33.2%
                                                                =====    =====    =====
</TABLE>

     The 2000 tax provision and effective rate for continuing operations
includes tax for nonrecurring items such as the disposals of Berthold, IC
Sensors and Judson. The effective tax rate on continuing operations, excluding
nonrecurring items, was 32.5% in 2000.

                                        45
<PAGE>   47
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The 1999 tax provision and effective rate for continuing operations was
impacted by a non-deductible goodwill write-down. Excluding the impairment
charges and related tax effects, the effective tax rate was 32% in 1999.

     The tax effects of temporary differences and carryovers that gave rise to
deferred income tax assets and liabilities as of December 31, 2000 and January
2, 2000 were as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                  2000        1999
--------------                                                --------    --------
<S>                                                           <C>         <C>
Deferred tax assets:
  Inventory reserves........................................  $  3,331    $  7,042
  Other reserves............................................    22,336      16,417
  Deferred income...........................................     6,179       6,024
  Vacation pay..............................................     5,704       5,499
  Net operating loss carryforwards..........................    14,447      28,562
  Postretirement health benefits............................     4,981       4,072
  Restructuring reserve.....................................    16,005      15,567
  In-process R&D............................................    10,726       8,970
  All other, net............................................    47,265      50,138
                                                              --------    --------
Total deferred tax assets...................................   130,974     142,291
                                                              --------    --------
Deferred tax liabilities:
  Pension contribution......................................   (14,565)    (13,354)
  Amortization..............................................    (6,488)       (468)
  Depreciation..............................................   (39,896)    (19,661)
  All other, net............................................   (17,588)    (20,748)
                                                              --------    --------
Total deferred tax liabilities..............................   (78,537)    (54,231)
                                                              --------    --------
Valuation allowance.........................................   (14,447)    (28,580)
                                                              --------    --------
Net prepaid taxes...........................................  $ 37,990    $ 59,480
                                                              ========    ========
</TABLE>

     At December 31, 2000, the Company had non-U.S. (primarily from Germany) net
operating loss carryovers of $53.4 million, substantially all of which carry
forward indefinitely. The valuation allowance results primarily from these
carryovers, for which the Company currently believes it is more likely than not
that they will not be realized.

     Current deferred tax assets of $54 million and $92 million were included in
other current assets at December 31, 2000 and January 2, 2000, respectively.
Long-term deferred tax liabilities of $16 million and $33 million were included
in long-term liabilities at December 31, 2000 and January 2, 2000, respectively.

     In general, it is the practice and intention of the Company to reinvest the
earnings of its non-U.S. subsidiaries in those operations. Repatriation of
retained earnings is done only when it is advantageous. Applicable federal taxes
are provided only on amounts planned to be remitted. In connection with 1998
divestitures, certain proceeds will not be permanently reinvested in those
operations, and, accordingly, federal taxes in the amount of $10 million were
provided in connection with those earnings.

NOTE 7.  DISCONTINUED OPERATIONS

     On August 20, 1999, the Company sold the assets of its Technical Services
segment, including the outstanding capital stock of EG&G Defense Materials,
Inc., a subsidiary of the Company, to EG&G Technical Services, Inc., an
affiliate of The Carlyle Group L.P. (the "Buyer"), for approximately $250
million in cash and the assumption by the Buyer of certain liabilities of the
Technical Services segment. Approximately $2.1 million of the cash purchase
price will be paid by the Buyer to the Company on the seventh anniversary of the
closing of this transaction. The

                                        46
<PAGE>   48
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company recorded an additional pre-tax gain of $7.3 million on the disposition
of discontinued operations as a result of a post-closing selling price
settlement in the second quarter of 2000.

     The results of operations of the Technical Services segment were previously
reported as one of five business segments of the Company. The Company accounted
for the sale of its Technical Services segment as a discontinued operation in
accordance with APB Opinion No. 30 and, accordingly, the results of operations
of the Technical Services segment have been segregated from continuing
operations and reported as a separate line item on the Company's Consolidated
Income Statements. The Company recorded a pre-tax gain on disposition of
discontinued operations of $181 million, net of transaction and related costs,
during 1999. The $110 million after-tax gain was reported separately from the
results of the Company's continuing operations.

     The Company's former Department of Energy (DOE) segment is also presented
as discontinued operations in accordance with APB Opinion No. 30. The Company's
last DOE management and operations contract expired in 1997. The Company is in
the process of negotiating contract closeouts and does not anticipate incurring
any material loss in excess of previously established reserves.

     Summary operating results of the discontinued operations (through August
20, 1999) were as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                  1999        1998
--------------                                                --------    --------
<S>                                                           <C>         <C>
Sales.......................................................  $302,776    $553,514
Costs and expenses..........................................   278,242     517,762
                                                              --------    --------
Operating income from discontinued operations...............    24,534      35,752
Other income................................................     1,147       1,955
                                                              --------    --------
Income from discontinued operations before income taxes.....    25,681      37,707
Provision for income taxes..................................    10,016      14,706
                                                              --------    --------
Income from discontinued operations, net of income taxes....  $ 15,665    $ 23,001
                                                              ========    ========
</TABLE>

NOTE 8.  EARNINGS PER SHARE

     Basic earnings per share was computed by dividing net income by the
weighted-average number of common shares outstanding during the year. Diluted
earnings per share was computed by dividing net income by the weighted-average
number of common shares outstanding plus all potentially dilutive common shares
outstanding, primarily shares issuable upon the exercise of stock options using
the treasury stock method. The following table reconciles the number of shares
utilized in the earnings per share calculations:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                 2000      1999      1998
--------------                                                ------    ------    ------
<S>                                                           <C>       <C>       <C>
Number of common shares -- basic............................  49,106    45,522    45,322
Effect of dilutive securities:
  Stock options.............................................   2,011     1,015       516
  Other.....................................................      22        32        46
                                                              ------    ------    ------
Number of common shares -- diluted..........................  51,139    46,569    45,884
                                                              ======    ======    ======
</TABLE>

     Options to purchase 27,200 and 92,000 shares of common stock were not
included in the computation of diluted earnings per share for 2000 and 1998,
respectively, because the options' exercise prices were greater than the average
market price of the common shares and thus their effect would have been
antidilutive. Additionally, the Company's zero coupon senior convertible
debentures (See Note 14) are currently convertible into 5.4 million shares of
the Company's common stock at approximately $85 per share. Conversion of the
debentures was not assumed in the computation of diluted earnings per share
because the effect of assumed conversion would have been antidilutive.

                                        47
<PAGE>   49
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 9.  ACCOUNTS RECEIVABLE

     Accounts receivable were net of reserves for doubtful accounts of $15.0
million and $12.9 million as of December 31, 2000 and January 2, 2000,
respectively. The increase is primarily due to the higher revenues in 2000
versus 1999 and the inclusion of Vivid and NEN in 2000.

NOTE 10.  INVENTORIES

     Inventories as of December 31, 2000 and January 2, 2000, consisted of the
following:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                  2000        1999
--------------                                                --------    --------
<S>                                                           <C>         <C>
Finished goods..............................................  $ 88,508    $ 87,177
Work in process.............................................    56,482      26,342
Raw materials...............................................    85,776      88,205
                                                              --------    --------
                                                              $230,766    $201,724
                                                              ========    ========
</TABLE>

     The increase in inventories was primarily due to the acquisitions of Vivid
and NEN in 2000.

NOTE 11.  PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment, at cost, as of December 31, 2000 and January
2, 2000 consisted of the following:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                  2000        1999
--------------                                                --------    --------
<S>                                                           <C>         <C>
Land........................................................  $ 26,058    $ 28,724
Buildings and leasehold improvements........................   143,402     127,908
Machinery and equipment.....................................   380,580     339,715
                                                              --------    --------
                                                              $550,040    $496,347
                                                              ========    ========
</TABLE>

     Increases in property, plant and equipment due to the acquisitions of Vivid
and NEN and capital expenditures during 2000 were partially offset by decreases
resulting from dispositions and the effect of translating fixed assets
denominated in non-U.S. currencies at current exchange rates.

NOTE 12.  INVESTMENTS

     Investments as of December 31, 2000 and January 2, 2000 consisted of the
following:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                 2000       1999
--------------                                                -------    -------
<S>                                                           <C>        <C>
Marketable investments......................................  $21,936    $11,082
Joint venture and other investments.........................   14,794      3,829
                                                              -------    -------
                                                              $36,730    $14,911
                                                              =======    =======
</TABLE>

     The primary components of the increase in investments in 2000 versus 1999
are certain strategic alliances and equity investments made through the
Company's Life Sciences and Optoelectronics segments.

     Joint venture investments are accounted for using the equity method.
Marketable investments consisted of trust assets which were carried at market
value and were primarily invested in common stocks and fixed-income securities
to meet the supplemental executive retirement plan obligation, as well as an $8
million equity investment in Genomic Solutions made in 2000. The market values
were based on quoted market prices. As of December 31, 2000 the fixed-income
securities, on average, had maturities of approximately 15 years. The net
unrealized holding gain on marketable investments, net of deferred income taxes,
reported as a component of accumulated other comprehensive income (loss) in
stockholders' equity, was $0.9 million and $0.4 million at December 31, 2000 and

                                        48
<PAGE>   50
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

January 2, 2000, respectively. During 2000, the Company completed a strategic
alliance with and made an initial $5 million investment in Bragg Photonics, a
maker of key fiber optic components. The Company's initial 13% investment in
Bragg Photonics was increased to 26% during the year for a total investment at
December 31, 2000 of $10 million.

     Marketable investments classified as available for sale as of December 31,
2000 and January 2, 2000 consisted of the following:

<TABLE>
<CAPTION>
                                                                  GROSS UNREALIZED HOLDING
                                                     MARKET     -----------------------------
(IN THOUSANDS)                                        VALUE      COST      GAINS     (LOSSES)
--------------                                       -------    -------    ------    --------
<S>                                                  <C>        <C>        <C>       <C>
2000
  Common stocks....................................  $17,356    $16,021    $1,689     $(354)
  Fixed-income securities..........................    4,143      4,074        69        --
  Other............................................      437        492        --       (55)
                                                     -------    -------    ------     -----
                                                     $21,936    $20,587    $1,758     $(409)
                                                     =======    =======    ======     =====
1999
  Common stocks....................................  $ 7,046    $ 6,345    $  721     $ (20)
  Fixed-income securities..........................    3,360      3,449        --       (89)
  Other............................................      676        652        24        --
                                                     -------    -------    ------     -----
                                                     $11,082    $10,446    $  745     $(109)
                                                     =======    =======    ======     =====
</TABLE>

NOTE 13.  INTANGIBLE ASSETS

     Intangible assets consist mainly of goodwill from acquisitions accounted
for using the purchase method of accounting, representing the excess of cost
over the fair market value of the net assets of the acquired businesses.
Goodwill is being amortized over periods of 10-40 years. Goodwill, net of
accumulated amortization, was $688 million and $417 million at December 31, 2000
and January 2, 2000, respectively. Other identifiable intangible assets from
acquisitions include patents, trademarks, trade names and developed technology
and are being amortized over periods of 10-40 years. Other identifiable
intangible assets, net of accumulated amortization, were $263 million and $175
million at December 31, 2000 and January 2, 2000, respectively. Intangible
assets as of December 31, 2000 and January 2, 2000 consisted of the following:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                   2000         1999
--------------                                                ----------    --------
<S>                                                           <C>           <C>
Goodwill....................................................  $  744,607    $477,072
Other identifiable intangible assets........................     304,300     182,550
                                                              ----------    --------
                                                               1,048,907     659,622
Accumulated amortization....................................     (97,466)    (67,184)
                                                              ----------    --------
                                                              $  951,441    $592,438
                                                              ==========    ========
</TABLE>

     The increase in intangible assets resulted primarily from the Vivid and NEN
acquisitions.

NOTE 14.  DEBT

     Short-term debt at December 31, 2000 was $186 million and was comprised
primarily of commercial paper borrowings. The weighted-average interest rate on
the commercial paper borrowings, which had maturities of 60 days or less, was
6.7%.

                                        49
<PAGE>   51
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Short-term debt at January 2, 2000 was $382 million and included one-year
promissory notes of $150 million issued to PE Corp. at an interest rate of 5%,
money market loans of $85 million and commercial paper borrowings of $140
million.

     In March 2001, the Company's $300 million revolving credit facility was
refinanced and will expire in March 2002 and the Company also refinanced an
additional $100 million revolving credit facility which expires in March 2006.
These agreements, which serve as backup facilities for the commercial paper
borrowings, have no significant commitment fees. There were no amounts
outstanding under these lines at January 2, 2000 or December 31, 2000.

     At December 31, 2000 and January 2, 2000, long-term debt was $583.3 million
and $114.9 million, respectively, and included $115 million of unsecured
ten-year notes issued in October 1995 at an interest rate of 6.8%, which mature
in 2005 as well as $460 million of zero coupon senior convertible debentures
described below. The carrying amount of the unsecured ten-year notes
approximated the estimated fair value at December 31, 2000, based on a quoted
market price. The estimated fair value of the convertible debentures
approximated $558 million at December 31, 2000, also based on a quoted market
price.

     In August 2000, the Company sold zero coupon senior convertible debentures
with an aggregate purchase price of $460 million. The Company used the
offering's net proceeds of approximately $448 million to repay a portion of its
commercial paper borrowings, which had been increased temporarily to finance the
NEN acquisition. Deferred issuance costs of $12 million were recorded as a
noncurrent asset and are being amortized over three years. The debentures, which
were offered by a prospectus supplement pursuant to the Company's effective
shelf registration statement, are due August 2020, and were priced with a yield
to maturity of 3.5%. At maturity, the Company will repay $921 million, comprised
of $460 million of original purchase price plus accrued original issue discount.
The Company may redeem some or all of the debentures at any time on or after
August 7, 2003 at a redemption price equal to the issue price plus accrued
original issue discount through the redemption date. Holders of the debentures
may require the Company to repurchase some or all of the debentures in August
2003 and August 2010, or at any time when there is a change in control of the
Company, as is customary and ordinary for debentures of this nature, at a
repurchase price equal to the initial price to the public plus accrued original
issue discount through the date of the repurchase. The debentures are currently
convertible into 5.4 million shares of the Company's common stock at
approximately $85 per share.

     In connection with the completion of the NEN acquisition on July 31, 2000,
the Company paid approximately $350 million in cash as a part of the purchase
price. In addition, the Company repaid approximately $50 million of outstanding
indebtedness of NEN. The Company financed the acquisition and repayment of the
outstanding indebtedness with $410 million of commercial paper borrowings with a
weighted-average interest rate of 7%. These short-term borrowings were repaid in
early August with proceeds from the issuance of long-term convertible
debentures, as discussed above.

NOTE 15.  ACCRUED EXPENSES

     Accrued expenses as of December 31, 2000 and January 2, 2000 consisted of
the following:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                  2000        1999
--------------                                                --------    --------
<S>                                                           <C>         <C>
Payroll and incentives......................................  $ 43,064    $ 32,720
Employee Benefits...........................................    48,495      49,293
Federal, non-U.S. and state income taxes....................    42,292      45,234
Other accrued operating expenses............................   192,393     148,320
                                                              --------    --------
                                                              $326,244    $275,657
                                                              ========    ========
</TABLE>

     The increase is due primarily to the inclusion of Vivid and NEN, both of
which were acquired in 2000.

                                        50
<PAGE>   52
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 16.  EMPLOYEE BENEFIT PLANS

     Savings Plan:  The Company has a savings plan for the benefit of qualified
U.S. employees. Under this plan, the Company contributes an amount equal to the
lesser of 55% of the amount of the employee's voluntary contribution or 3.3% of
the employee's annual compensation. Savings plan expense charged to continuing
operations was $5.4 million in 2000, $3.9 million in 1999, and $2.7 million in
1998.

     Pension Plans:  The Company has defined benefit pension plans covering
substantially all U.S. employees and non-U.S. pension plans for non-U.S.
employees. The plans provide benefits that are based on an employee's years of
service and compensation near retirement. Assets of the U.S. plan are comprised
primarily of equity and debt securities.

     Net periodic pension cost included the following components:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                              2000        1999        1998
--------------                                            --------    --------    --------
<S>                                                       <C>         <C>         <C>
Service cost............................................  $  6,063    $  8,539    $  9,365
Interest cost...........................................    16,974      19,528      18,300
Expected return on plan assets..........................   (17,998)    (23,130)    (23,360)
Net amortization and deferral...........................      (487)       (645)       (816)
                                                          --------    --------    --------
                                                          $  4,552    $  4,292    $  3,480
                                                          ========    ========    ========
</TABLE>

     The following table sets forth the changes in the funded status of the
principal U.S. pension plan and the principal non-U.S. pension plans and the
amounts recognized in the Company's consolidated balance sheets as of December
31, 2000 and January 2, 2000.

<TABLE>
<CAPTION>
                                                        2000                    1999
                                                --------------------    --------------------
(IN THOUSANDS)                                  NON-U.S.      U.S.      NON-U.S.      U.S.
--------------                                  --------    --------    --------    --------
<S>                                             <C>         <C>         <C>         <C>
Actuarial present value of benefit
  obligations:
Accumulated benefit obligations...............  $63,518     $157,587    $84,110     $144,588
                                                =======     ========    =======     ========
Projected benefit obligations at beginning of
  year........................................  $91,888     $171,106    $32,571     $259,468
AI projected benefit obligations at date of
  acquisition.................................       --           --     67,780           --
Service cost..................................    1,439        4,624      1,528        7,011
Interest cost.................................    4,778       12,196      3,872       15,656
Benefits paid.................................   (3,398)      (9,677)    (2,345)     (11,802)
Actuarial loss (gain).........................   (4,168)      (3,898)    (4,489)       1,859
Effect of exchange rate changes...............   (6,251)          --     (7,029)          --
Dispositions..................................  (17,584)          --         --           --
Settlement loss -- discontinued operations....       --           --         --       20,316
Curtailment gain -- discontinued operations...       --           --         --      (13,798)
Reduction of projected benefit obligations --
  discontinued operations.....................       --           --         --     (107,604)
                                                -------     --------    -------     --------
Projected benefit obligations at end of
  year........................................   66,704      174,351     91,888      171,106
                                                -------     --------    -------     --------
Fair value of plan assets at beginning of
  year........................................       --      254,535         --      310,024
Actual return on plan assets..................       --      (14,038)        --       65,040
</TABLE>

                                        51
<PAGE>   53
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                                        2000                    1999
                                                --------------------    --------------------
(IN THOUSANDS)                                  NON-U.S.      U.S.      NON-U.S.      U.S.
--------------                                  --------    --------    --------    --------
<S>                                             <C>         <C>         <C>         <C>
Benefits paid and plan expenses...............       --       (9,678)        --      (12,679)
Transfer out-discontinued operations..........       --         (472)        --     (107,850)
                                                -------     --------    -------     --------
Fair value of plan assets at end of year......       --      230,347         --      254,535
                                                -------     --------    -------     --------
Plan assets less (greater) than projected
  benefit obligations.........................   66,704      (55,996)    91,888      (83,429)
Unrecognized net transition asset.............       --          512         --        1,024
Unrecognized prior service costs..............     (732)         (52)      (918)         (54)
Unrecognized net gain.........................    3,252       19,469      2,385       48,078
                                                -------     --------    -------     --------
Accrued pension liability (asset).............  $69,224     $(36,067)   $93,355     $(34,381)
                                                =======     ========    =======     ========
Actuarial assumptions as of the year-end
  measurement date:
  Discount rate...............................      6.0%         7.5%       5.8%         7.5%
  Rate of compensation increase...............      3.3%         4.5%       3.5%         4.5%
  Expected rate of return on assets...........       --          9.0%        --          9.0%
</TABLE>

     Non-U.S. accrued pension liabilities classified as long-term liabilities
totaled $86 million and $122 million as of December 31, 2000 and January 2,
2000, respectively. The U.S. pension asset was classified as other noncurrent
assets.

     The Company also sponsors a supplemental executive retirement plan to
provide senior management with benefits in excess of normal pension benefits. At
December 31, 2000 and January 2, 2000, the projected benefit obligations were
$16.4 million and $14.9 million, respectively. Assets with a fair value of $9.2
million and $9.8 million segregated in a trust, were available to meet this
obligation as of December 31, 2000 and January 2, 2000, respectively. Pension
expense for this plan was approximately $2.0 million in 2000, $1.8 million in
1999 and $1.4 million in 1998.

     Postretirement Medical Plans:  The Company provides health care benefits
for eligible retired U.S. employees under a comprehensive major medical plan or
under health maintenance organizations where available. The majority of the
Company's U.S. employees become eligible for retiree health benefits if they
retire directly from the Company and have at least ten years of service.
Generally, the major medical plan pays stated percentages of covered expenses
after a deductible is met and takes into consideration payments by other group
coverages and by Medicare. The plan requires retiree contributions under most
circumstances and has provisions for cost-sharing changes. For employees
retiring after 1991, the Company has capped its medical premium contribution
based on employees' years of service. The Company funds the amount allowable
under a 401(h) provision in the Company's defined benefit pension plan. Assets
of the plan are comprised primarily of equity and debt securities.

     Net periodic postretirement medical benefit cost (credit) included the
following components:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                              2000        1999        1998
--------------                                            --------    --------    --------
<S>                                                       <C>         <C>         <C>
Service cost............................................  $    232    $    289    $    360
Interest cost...........................................       992       1,036       1,250
Expected return on plan assets..........................    (1,219)     (1,304)     (1,245)
Net amortization and deferral...........................    (1,516)     (1,022)       (402)
                                                          --------    --------    --------
                                                          $ (1,511)   $ (1,001)   $    (37)
                                                          ========    ========    ========
</TABLE>

                                        52
<PAGE>   54
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following table sets forth the changes in the postretirement medical
plan's funded status and the amounts recognized in the Company's consolidated
balance sheets at December 31, 2000 and January 2, 2000:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                 2000       1999
--------------                                                -------    -------
<S>                                                           <C>        <C>
Actuarial present value of accumulated benefit obligations:
  Retirees..................................................  $10,379    $13,672
  Active employees eligible to retire.......................      371        800
  Other active employees....................................    2,117      5,256
                                                              -------    -------
Accumulated benefit obligations at beginning of year........   12,867     19,728
                                                              -------    -------
Service cost................................................      232        289
Interest cost...............................................      992      1,036
Benefits paid...............................................   (1,196)    (1,204)
Actuarial loss (gain).......................................      430     (2,782)
Plan adjustments............................................      530         --
Settlement loss -- discontinued operations..................       --        381
Curtailment gain -- discontinued operations.................       --     (2,350)
Reduction of accumulated benefit obligations -- discontinued
  operations................................................       --     (2,231)
                                                              -------    -------
Change in accumulated benefit obligations during the year...      988     (6,861)
                                                              -------    -------
  Retirees..................................................   10,651     10,379
  Active employees eligible to retire.......................      400        371
  Other active employees....................................    2,804      2,117
                                                              -------    -------
Accumulated benefit obligations at end of year..............   13,855     12,867
                                                              -------    -------
Fair value of plan assets at beginning of year..............   14,474     15,255
Actual return on plan assets................................     (590)     3,214
Benefits paid and plan expenses.............................   (1,630)      (757)
Transfer out-discontinued operations........................       --     (3,238)
                                                              -------    -------
Fair value of plan assets at end of year....................   12,254     14,474
                                                              -------    -------
Fair value of plan assets less (greater) than accumulated
  benefit obligations.......................................    1,601     (1,605)
Unrecognized prior service costs............................     (489)        --
Unrecognized net gain.......................................    4,614      9,234
                                                              -------    -------
Accrued postretirement medical liability....................  $ 5,726    $ 7,629
                                                              =======    =======
Actuarial assumptions as of the year-end measurement date:
  Discount rate.............................................      7.5%       7.5%
  Expected rate of return on assets.........................      9.0%       9.0%
  Health care cost trend rate:
     First year.............................................      8.0%       9.0%
     Ultimate...............................................      5.5%       5.5%
     Time to reach ultimate.................................  3 years    4 years
</TABLE>

     The accrued postretirement medical liability included $4.7 million and $6.6
million classified as long-term liabilities as of December 31, 2000 and January
2, 2000, respectively.

     If the health care cost trend rate was increased 1%, the accumulated
postretirement benefit obligations would have increased by approximately $0.6
million at December 31, 2000. The effect of this increase on the annual cost for
2000 would have been approximately $42,000. If the health care cost trend rate
was decreased 1%, the

                                        53
<PAGE>   55
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

accumulated postretirement benefit obligations would have decreased by
approximately $0.5 million at December 31, 2000. The effect of this decrease on
the annual cost for 2000 would have been approximately $37,000.

     Deferred Compensation Plans:  During 1998, the Company implemented certain
nonqualified deferred compensation programs that provide benefits payable to
officers and certain key employees or their designated beneficiaries at
specified future dates, upon retirement or death. Benefit payments under these
plans are funded by a combination of contributions from participants and the
Company.

     Other:  In April 1999, the Company's stockholders approved the 1999
Incentive Plan, under which cash performance awards as well as an aggregate of
3.5 million shares of the Company's common stock were made available for option
grants, restricted stock awards, performance units and other stock-based awards.

NOTE 17.  REIMBURSEMENT OF INVESTED CAPITAL

     In 1997, the Company received a $30.4 million payment as part of the
negotiation of a joint development contract. This payment represented a $27
million reimbursement of previously invested capital, which will be amortized to
income over the estimated life of the related assets, and a $3.4 million
reimbursement of cost of capital, which was included in other income. The
reimbursement, net of accumulated amortization, included in long-term
liabilities was $11 million as of December 31, 2000 and $15.3 million as of
January 2, 2000.

NOTE 18.  COMMITMENTS AND CONTINGENCIES

     The Company is subject to various claims, legal proceedings and
investigations covering a wide range of matters that arise in the ordinary
course of its business activities. Each of these matters is subject to various
uncertainties, and it is possible that some of these matters may be resolved
unfavorably to the Company. The Company has established accruals for matters
that are probable and reasonably estimable. Management believes that any
liability that may ultimately result from the resolution of these matters in
excess of amounts provided will not have a material adverse effect on the
financial position or results of operations of the Company.

     In addition, the Company is conducting a number of environmental
investigations and remedial actions at current and former Company locations and,
along with other companies, has been named a potentially responsible party (PRP)
for certain waste disposal sites. The Company accrues for environmental issues
in the accounting period that the Company's responsibility is established and
when the cost can be reasonably estimated. The Company has accrued $8.8 million
as of December 31, 2000, representing management's estimate of the total cost of
ultimate disposition of known environmental matters. Such amount is not
discounted and does not reflect any recovery of any amounts through insurance or
indemnification arrangements. These cost estimates are subject to a number of
variables, including the stage of the environmental investigations, the
magnitude of the possible contamination, the nature of the potential remedies,
possible joint and several liability, the timeframe over which remediation may
occur and the possible effects of changing laws and regulations. For sites where
the Company has been named a PRP, management does not currently anticipate any
additional liability to result from the inability of other significant named
parties to contribute. The Company expects that such accrued amounts could be
paid out over a period of up to five years. As assessments and remediation
activities progress at each individual site, these liabilities are reviewed and
adjusted to reflect additional information as it becomes available. There have
been no environmental problems to date that have had or are expected to have a
material effect on the Company's financial position or results of operations.
While it is reasonably possible that a material loss exceeding the amounts
recorded may have been incurred, the preliminary stages of the investigations
make it impossible for the Company to reasonably estimate the range of potential
exposure.

     The Company has received notices from the Internal Revenue Service (IRS)
asserting deficiencies in federal corporate income taxes for the Company's 1985
to 1994 tax years. The total additional tax proposed by the IRS amounts to $74
million plus interest. The Company has filed petitions in the United States Tax
Court to challenge most of the deficiencies asserted by the IRS. The Company
believes that it has meritorious legal defenses to those

                                        54
<PAGE>   56
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

deficiencies and believes that the ultimate outcome of the case will not result
in a material impact on the Company's consolidated results of operations or
financial position.

NOTE 19.  RISKS AND UNCERTAINTIES

     For information concerning various investigations, claims, legal
proceedings, environmental investigations and remedial actions, and notices from
the IRS, see Note 18. For information concerning factors affecting future
performance, see Management's Discussion and Analysis.

     Costs incurred under cost-reimbursable government contracts, primarily in
the former Technical Services segment, which is presented as discontinued
operations, are subject to audit by the government. The results of prior audits,
completed through 1996, have not had a material effect on the Company.

     The Company's management and operations contracts with the DOE are
presented as discontinued operations. The Company's last DOE management and
operations contract expired on September 30, 1997. The Company is in the process
of negotiating contract closeouts and does not anticipate incurring any material
loss in excess of previously established reserves.

NOTE 20.  STOCKHOLDERS' EQUITY

     Stock-Based Compensation:  Under the 1999 Incentive Plan, 3.5 million
additional shares of the Company's common stock were made available for option
grants, restricted stock awards, performance units and other stock-based awards.
At December 31, 2000, 1.9 million shares of the Company's common stock were
reserved for employee benefit plans.

     The Company has nonqualified and incentive stock option plans for officers
and key employees. Under these plans, options may be granted at prices not less
than 100% of the fair market value on the date of grant. Options expire 7-10
years from the date of grant, and options granted become exercisable, in ratable
installments, over periods of 3-5 years from the date of grant. The Compensation
Committee of the Board of Directors, at its sole discretion, may also include
stock appreciation rights in any option granted. There are no stock appreciation
rights outstanding under these plans.

     The following table summarizes stock option activity for the three years
ended December 31, 2000:

<TABLE>
<CAPTION>
                                             2000                      1999                      1998
                                    ----------------------    ----------------------    ----------------------
                                                 WEIGHTED-                 WEIGHTED-                 WEIGHTED-
                                     NUMBER       AVERAGE      NUMBER       AVERAGE      NUMBER       AVERAGE
(SHARES IN THOUSANDS)               OF SHARES      PRICE      OF SHARES      PRICE      OF SHARES      PRICE
---------------------               ---------    ---------    ---------    ---------    ---------    ---------
<S>                                 <C>          <C>          <C>          <C>          <C>          <C>
Outstanding at beginning of
  year............................    4,572       $23.53        3,300       $20.05        4,187       $19.64
Granted...........................    2,782        50.77        2,711        25.94          568        22.82
Exercised.........................   (1,862)       20.23       (1,109)       19.08       (1,209)       19.87
Lapsed............................     (667)       31.02         (330)       23.28         (246)       20.29
                                     ------                    ------                    ------
Outstanding at end of year........    4,809        39.03        4,572        23.53        3,300        20.05
                                     ======                    ======                    ======
Exercisable at end of year........    1,245        25.42        1,851        19.31        1,540        19.46
                                     ======                    ======                    ======
</TABLE>

                                        55
<PAGE>   57
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following table summarizes information about stock options outstanding
at December 31, 2000:

<TABLE>
<CAPTION>
RANGE OF EXERCISE PRICES                           OPTIONS OUTSTANDING               OPTIONS EXERCISABLE
------------------------                  --------------------------------------    ----------------------
                                                        WEIGHTED-
                                                         AVERAGE       WEIGHTED-                 WEIGHTED-
                                                        REMAINING       AVERAGE                   AVERAGE
                                          NUMBER OF    CONTRACTUAL     EXERCISE     NUMBER OF    EXERCISE
(SHARES IN THOUSANDS)                      SHARES      LIFE (YEARS)      PRICE       SHARES        PRICE
---------------------                     ---------    ------------    ---------    ---------    ---------
<S>                                       <C>          <C>             <C>          <C>          <C>
$ 3.11 -  21.63.........................      622          4.8          $19.53         375        $18.52
 21.75 -  27.75.........................    1,158          5.6           26.26         688         26.43
 28.44 -  39.72.........................    2,156          5.9           36.94         171         30.03
 40.63 - 118.56.........................      889          6.6           73.53          62         94.85
</TABLE>

     During 2000, approximately 2,782,000 options were granted pursuant to the
1999 Incentive Plan at exercise prices ranging from $39.65 per share to $118.56
per share. During 1999, 1,611,000 options were granted pursuant to the 1992
Stock Option Plan at exercise prices ranging from $25.75 per share to $28.81 per
share; 421,000 options were granted pursuant to the 1999 Incentive Plan at
exercise prices ranging from $29.69 per share to $39.19 per share and 250,000
options were granted to an officer at an exercise price of $27.25 per share
pursuant to a plan other than the 1992 and 1999 Plans. In connection with the
acquisition of Lumen Technologies, Lumen options were converted into
approximately 429,000 Company stock options, effective January 5, 1999. These
options had an average exercise price of $14.47 per share and were fully vested.
In January 1998, the Board of Directors granted 400,000 options to an officer at
an exercise price of $21.19 per share; 200,000 options were granted pursuant to
the 1992 Plan, and 200,000 options were granted pursuant to a plan other than
the 1992 Plan. In addition, 167,500 options were granted pursuant to the 1992
Plan at various dates in 1998 at exercise prices ranging from $23.13 per share
to $30.25 per share.

     The weighted-average fair values of options granted during 2000, 1999 and
1998 were $17.66, $9.14 and $6.83, respectively. The values were estimated on
the date of grant using the Black-Scholes option pricing model. The following
weighted-average assumptions were used in the model:

<TABLE>
<CAPTION>
                                                              2000         1999        1998
                                                            ---------    ---------    -------
<S>                                                         <C>          <C>          <C>
Risk-free interest rate...................................        6.5%         4.9%       5.4%
Expected dividend yield...................................          2%           2%         2%
Expected lives............................................  3.7 years    5.5 years    6 years
Expected stock volatility.................................         46%          27%        27%
</TABLE>

     In April 1999, the Company's stockholders approved the 1998 Employee Stock
Purchase Plan, whereby participating employees currently have the right to
purchase common stock at a price equal to 85% of the lower of the closing price
on the first day or the last day of the six-month offering period. The number of
shares which an employee may purchase, subject to certain aggregate limits, is
determined by the employee's voluntary contribution, which may not exceed 10% of
base compensation. During 2000, the Company issued 210,144 shares under this
plan at a weighted-average price of $43.68 per share. During 1999, the Company
issued 358,000 shares under this plan at a weighted-average price of $22.14 per
share. There remains available for sale to employees an aggregate of 1.9 million
shares of the Company's stock out of 2.5 million shares authorized by the
stockholders.

     As permitted by SFAS No. 123, Accounting for Stock-Based Compensation, the
Company continues to apply APB Opinion No. 25 in accounting for its stock option
and stock purchase plans. As required, the following table

                                        56
<PAGE>   58
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

discloses pro forma net income and diluted earnings per share had compensation
cost for the Company's stock-based compensation plans been determined based on
the fair value approach:

<TABLE>
<CAPTION>
(IN THOUSANDS EXCEPT PER SHARE DATA)                        2000        1999        1998
------------------------------------                       -------    --------    --------
<S>                                                        <C>        <C>         <C>
Net income:
  As reported............................................  $90,520    $154,316    $102,002
  Pro forma..............................................   76,092     145,354     100,000
Diluted earnings per share:
  As reported............................................     1.77        3.31        2.22
  Pro forma..............................................     1.49        3.12        2.18
</TABLE>

     Pro forma compensation cost may not be representative of that to be
expected in future years since the estimated fair value of stock options is
amortized to expense over the vesting period, and additional options may be
granted in future years.

     Shareholder Rights Plan:  Under a Shareholder Rights Plan, preferred stock
purchase rights were distributed on February 8, 1995 as a dividend at the rate
of one right for each share of common stock outstanding. Each right, when
exercisable, entitles a stockholder to purchase one one-thousandth of a share of
a new series of junior participating preferred stock at a price of $60. The
rights become exercisable only if a person or group acquires 20% or more or
announces a tender or exchange offer for 30% or more of the Company's common
stock. This preferred stock is nonredeemable and will have 1,000 votes per
share. The rights are nonvoting, expire in 2005 and may be redeemed prior to
becoming exercisable. The Company has reserved 70,000 shares of preferred stock,
designated as Series C Junior Participating Preferred Stock, for issuance upon
exercise of such rights. If a person (an Acquiring Person) acquires or obtains
the right to acquire 20% or more of the Company's outstanding common stock
(other than pursuant to certain approved offers), each right (other than rights
held by the Acquiring Person) will entitle the holder to purchase shares of
common stock of the Company at one-half of the current market price at the date
of occurrence of the event. In addition, in the event that the Company is
involved in a merger or other business combination in which it is not the
surviving corporation or in connection with which the Company's common stock is
changed or converted, or it sells or transfers 50% or more of its assets or
earning power to another person, each right that has not previously been
exercised will entitle its holder to purchase shares of common stock of such
other person at one-half of the current market price of such common stock at the
date of the occurrence of the event.

     Comprehensive Income:  The components of accumulated other comprehensive
income (loss) were as follows:

<TABLE>
<CAPTION>
                                           FOREIGN CURRENCY                        ACCUMULATED OTHER
                                             TRANSLATION       UNREALIZED GAINS      COMPREHENSIVE
(IN THOUSANDS)                               ADJUSTMENTS        ON SECURITIES        INCOME (LOSS)
--------------                             ----------------    ----------------    -----------------
<S>                                        <C>                 <C>                 <C>
Balance, December 28, 1997...............      $ (4,380)            $ 523              $ (3,857)
Current year change......................         7,723              (137)                7,586
                                               --------             -----              --------
Balance, January 3, 1999.................         3,343               386                 3,729
Current year change......................       (17,804)               35               (17,769)
                                               --------             -----              --------
Balance, January 2, 2000.................       (14,461)              421               (14,040)
Current year change......................       (25,484)              482               (25,002)
                                               --------             -----              --------
Balance, December 31, 2000...............      $(39,945)            $ 903              $(39,042)
                                               ========             =====              ========
</TABLE>

                                        57
<PAGE>   59
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The tax effects related to each component of other comprehensive income
(loss) were as follows:

<TABLE>
<CAPTION>
                                                              BEFORE-TAX    TAX (PROVISION)    AFTER-TAX
(IN THOUSANDS)                                                  AMOUNT          BENEFIT         AMOUNT
--------------                                                ----------    ---------------    ---------
<S>                                                           <C>           <C>                <C>
2000
Foreign currency translation adjustments....................   $(25,484)         $  --         $(25,484)
Unrealized gains on securities:
  Gains arising during the period...........................        673           (192)             481
  Reclassification adjustment...............................          1             --                1
                                                               --------          -----         --------
Net unrealized gains........................................        674           (192)             482
                                                               --------          -----         --------
Other comprehensive income (loss)...........................   $(24,810)         $(192)        $(25,002)
                                                               ========          =====         ========
1999
Foreign currency translation adjustments....................   $(17,804)         $  --         $(17,804)
Unrealized gains on securities:
  Gains arising during the period...........................        143            (50)              93
  Reclassification adjustment...............................        (89)            31              (58)
                                                               --------          -----         --------
Net unrealized gains........................................         54            (19)              35
                                                               --------          -----         --------
Other comprehensive income (loss)...........................   $(17,750)         $ (19)        $(17,769)
                                                               ========          =====         ========
1998
Gross foreign currency translation adjustments..............   $  4,608          $  --         $  4,608
Reclassification adjustment for translation losses realized
  upon sale of Sealol Industrial Seals......................      3,115             --            3,115
Unrealized losses on securities arising during the period...       (211)            74             (137)
                                                               --------          -----         --------
Other comprehensive income..................................   $  7,512          $  74         $  7,586
                                                               ========          =====         ========
</TABLE>

NOTE 21.  FINANCIAL INSTRUMENTS

     Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of temporary cash investments
and accounts receivable. The Company believes it had no significant
concentrations of credit risk as of December 31, 2000.

     In the ordinary course of business, the Company enters into foreign
exchange forward contracts for periods consistent with its committed exposures
to mitigate the effect of foreign currency movements on transactions denominated
in foreign currencies. Transactions covered by hedge contracts include
intercompany and third-party receivables and payables. The contracts are
primarily in European and Asian currencies, generally have maturities that do
not exceed one month and have no cash requirements until maturity. Credit risk
and market risk are minimal because the forward contracts are with very large
banks, and gains and losses are offset against foreign exchange gains and losses
on the underlying hedged transactions. Realized gains and losses on foreign
currency instruments, which are hedges of committed transactions on assets and
liabilities, are recognized at the time the underlying transaction is completed.
Realized and unrealized gains and losses on forward contracts, which are not
hedges of committed transactions, are recognized in income. The notional amount
of outstanding forward contracts was approximately $190 million as of December
31, 2000 and $75 million at January 2, 2000. The carrying value as of December
31, 2000 and January 2, 2000, which approximated fair value, was not
significant.

     See Notes 1, 12 and 14 for disclosures about fair values, including methods
and assumptions, of other financial instruments.

                                        58
<PAGE>   60
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 22.  LEASES

     The Company leases certain property and equipment under operating leases.
Rental expense charged to continuing operations for 2000, 1999 and 1998 amounted
to $19 million, $19.2 million and $10.1 million, respectively. Minimum rental
commitments under noncancelable operating leases are as follows: $16.4 million
in 2001, $8.3 million in 2002, $6.5 million in 2003, $5.3 million in 2004, $5
million in 2005 and $31 million after 2005.

NOTE 23.  INDUSTRY SEGMENT AND GEOGRAPHIC AREA INFORMATION

     In 1998, the Company adopted SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information, which changed the way the Company reports
information about its operating segments. The Company's businesses are reported
as four reportable segments which reflect the Company's management and structure
under four SBUs. The accounting policies of the reportable segments are the same
as those described in Note 1. The Company evaluates the performance of its
operating segments based on operating profit. Intersegment sales and transfers
are not significant.

     The operating segments and their principal products and services are:

     Life Sciences:  Sample handling and measuring instruments, computer
software and chemical reagents for use in bio-screening and population screening
laboratories. Bio-screening activities include academic research applications
and drug discovery applications in high throughput screening laboratories of
major pharmaceutical companies. Population screening activities include
inherited and infectious disease screening, as well as routine clinical
diagnostics.

     Optoelectronics:  A broad spectrum of optoelectronic products, including
large area amorphous silicon detectors, high volume and high-performance
specialty lighting sources, detectors, imaging devices, as well as telecom
products, which include emitters, receivers and mux arrays.

     Instruments:  Products and services for detection, measurement and testing
applications, including analytical instruments for the pharmaceutical, food and
beverage, environmental, chemical and plastics industries.

     Fluid Sciences:  Static and dynamic seals, sealing systems, solenoid
valves, bellows devices, advanced pneumatic components, systems and assemblies
and sheet metal-formed products for original equipment manufacturers and end
users.

     Sales to U.S. government agencies, which were predominantly to the
Department of Defense and NASA in the former Technical Services segment, which
is reflected as discontinued operations in the accompanying financial statements
(see Note 7), were $326 million and $524 million in 1999 and 1998, respectively.

     Sales and operating profit by segment for the three years ended December
31, 2000 are shown in the table below:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                            2000          1999         1998
--------------                                         ----------    ----------    --------
<S>                                                    <C>           <C>           <C>
LIFE SCIENCES
Sales................................................  $  221,401    $  158,009    $134,635
Operating Profit (Loss)..............................      (3,636)       15,768       9,044
OPTOELECTRONICS
Sales................................................     496,851       447,681     274,506
Operating Profit (Loss)..............................      96,931        40,317      (4,133)
INSTRUMENTS
Sales................................................     725,261       532,128     185,038
Operating Profit (Loss)..............................      58,894       (19,323)      6,647
</TABLE>

                                        59
<PAGE>   61
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
(IN THOUSANDS)                                            2000          1999         1998
--------------                                         ----------    ----------    --------
<S>                                                    <C>           <C>           <C>
FLUID SCIENCES
Sales................................................     251,754       225,311     237,537
Operating Profit.....................................      45,071        31,078       3,887
OTHER
Sales................................................          --            --      22,666
Operating Profit (Loss)..............................     (10,685)       (1,188)    104,279
CONTINUING OPERATIONS
Sales................................................   1,695,267     1,363,129     854,382
Operating Profit.....................................     186,575        66,652     119,724
</TABLE>

     The Company's Technical Services segment and former Department of Energy
segment are presented as discontinued operations and, therefore, are not
included in the preceding table. The results for the periods presented included
certain nonrecurring items which are discussed in the Management's Discussion
and Analysis section of this document.

     Additional information relating to the Company's operating segments is as
follows:

<TABLE>
<CAPTION>
                                           DEPRECIATION AND
                                         AMORTIZATION EXPENSE             CAPITAL EXPENDITURES
                                     -----------------------------    -----------------------------
(IN THOUSANDS)                        2000       1999       1998       2000       1999       1998
--------------                       -------    -------    -------    -------    -------    -------
<S>                                  <C>        <C>        <C>        <C>        <C>        <C>
Life Sciences......................  $17,719    $ 6,189    $ 5,059    $16,239    $ 7,465    $ 5,415
Optoelectronics....................   25,967     34,430     25,615     34,242     21,155     17,256
Instruments........................   23,940     17,292     10,573      8,266      6,555      8,382
Fluid Sciences.....................   10,663      7,093      6,042     10,895      4,515     10,325
Other..............................      859      1,111      1,221        956      1,402      3,111
                                     -------    -------    -------    -------    -------    -------
  Continuing operations............  $79,148    $66,115    $48,510    $70,598    $41,092    $44,489
                                     =======    =======    =======    =======    =======    =======
  Discontinued operations..........       --    $   841    $ 1,869         --    $ 1,341    $ 2,033
                                     =======    =======    =======    =======    =======    =======
</TABLE>

<TABLE>
<CAPTION>
                                                                    TOTAL ASSETS
                                                              ------------------------
(IN THOUSANDS)                                                   2000          1999
--------------                                                ----------    ----------
<S>                                                           <C>           <C>
Life Sciences...............................................  $  600,168    $  125,025
Optoelectronics.............................................     512,395       448,453
Instruments.................................................     816,916       854,452
Fluid Sciences..............................................     123,096       102,421
Other.......................................................     207,604       184,289
                                                              ----------    ----------
                                                              $2,260,179    $1,714,640
                                                              ==========    ==========
</TABLE>

                                        60
<PAGE>   62
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following geographic area information for continuing operations
includes sales based on location of external customer and net property, plant
and equipment based on physical location:

<TABLE>
<CAPTION>
                                                                      SALES
                                                       ------------------------------------
(IN THOUSANDS)                                            2000          1999         1998
--------------                                         ----------    ----------    --------
<S>                                                    <C>           <C>           <C>
U.S. ................................................  $  797,587    $  661,609    $447,793
United Kingdom.......................................     111,676        71,493      47,794
Germany..............................................     102,439        98,787      67,647
Japan................................................      77,119        73,567      28,306
France...............................................      61,416        50,282      35,329
Italy................................................      55,563        56,433      17,565
Other Non-U.S. ......................................     489,467       350,958     209,948
                                                       ----------    ----------    --------
                                                       $1,695,267    $1,363,129    $854,382
                                                       ==========    ==========    ========
</TABLE>

<TABLE>
<CAPTION>
                                                              NET PROPERTY, PLANT AND
                                                                     EQUIPMENT
                                                              ------------------------
(IN THOUSANDS)                                                   2000          1999
--------------                                                ----------    ----------
<S>                                                           <C>           <C>
U.S. .......................................................   $160,732      $133,812
Finland.....................................................     26,356        17,277
Canada......................................................     19,051        14,718
Germany.....................................................     14,137        21,570
United Kingdom..............................................     12,836        13,282
Other Non-U.S. .............................................     41,648        27,375
                                                               --------      --------
                                                               $274,760      $228,034
                                                               ========      ========
</TABLE>

     Effectively all of the sales and net property, plant and equipment of the
discontinued operations (consisting of the Technical Services segment and former
DOE segment) were U.S. based.

NOTE 24.  QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

     Selected quarterly financial information follows:

<TABLE>
<CAPTION>
                                              FIRST      SECOND     THIRD      FOURTH
(IN THOUSANDS EXCEPT PER SHARE DATA)         QUARTER    QUARTER    QUARTER    QUARTER       YEAR
------------------------------------         --------   --------   --------   --------   ----------
<S>                                          <C>        <C>        <C>        <C>        <C>
2000
Sales......................................  $402,286   $398,705   $431,863   $462,413   $1,695,267
Operating income (loss) from continuing
  operations...............................    35,888     51,465     30,702     68,520      186,575
Income (loss) from continuing operations
  before income taxes......................    27,313     43,530     17,608     56,038      144,489
Income (loss) from continuing operations...    16,243     31,120      2,080     36,624       86,067
Net income.................................    16,243     35,573      2,080     36,624       90,520
Basic earnings (loss) per share:
  Continuing operations....................       .34        .63        .04        .80         1.75
  Net income...............................       .34        .72        .04        .80         1.84
Diluted earnings (loss) per share:
  Continuing operations....................       .32        .61        .04        .75         1.68
  Net income...............................       .32        .70        .04        .75         1.77
Cash dividends per common share............       .14        .14        .14        .14          .56
</TABLE>

                                        61
<PAGE>   63
                       PERKINELMER, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                              FIRST      SECOND     THIRD      FOURTH
(IN THOUSANDS EXCEPT PER SHARE DATA)         QUARTER    QUARTER    QUARTER    QUARTER       YEAR
------------------------------------         --------   --------   --------   --------   ----------
<S>                                          <C>        <C>        <C>        <C>        <C>
Market price of common stock:
  High.....................................     79.25      68.75     107.00     119.13       119.13
  Low......................................     39.06      50.00      62.13      89.06        39.06
  Close....................................     66.50      66.14     104.38     105.00       105.00
1999
Sales......................................  $243,217   $304,258   $388,413   $427,241   $1,363,129
Operating income (loss) from continuing
  operations...............................    17,028      1,940       (328)    48,012       66,652
Income (loss) from continuing operations
  before income taxes......................    12,396     (4,257)    (8,932)    45,663       44,870
Income (loss) from continuing operations...     8,042     (2,725)    (5,801)    28,855       28,371
Net income.................................    14,087      3,617    103,773     32,839      154,316
Basic earnings (loss) per share:
  Continuing operations....................       .18       (.06)      (.13)       .62          .62
  Net income...............................       .31        .08       2.27        .71         3.39
Diluted earnings (loss) per share:
  Continuing operations....................       .18       (.06)      (.13)       .61          .61
  Net income...............................       .31        .08       2.27        .69         3.31
Cash dividends per common share............       .14        .14        .14        .14          .56
Market price of common stock:
  High.....................................     30.19      36.25      39.94      45.00        45.00
  Low......................................     25.50      26.50      31.50      36.63        25.50
  Close....................................     26.75      35.75      38.75      41.69        41.69
</TABLE>

                                        62
<PAGE>   64

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of PerkinElmer, Inc.:

     We have audited the accompanying consolidated balance sheets of
PerkinElmer, Inc. (a Massachusetts corporation) and subsidiaries as of December
31, 2000 and January 2, 2000 and the related consolidated statements of income,
stockholders' equity and cash flows for the years ended December 31, 2000,
January 2, 2000, and January 3, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of PerkinElmer,
Inc. and subsidiaries as of December 31, 2000 and January 2, 2000, and the
results of their operations and their cash flows for the years ended December
31, 2000, January 2, 2000 and January 3, 1999 in conformity with accounting
principles generally accepted in the United States.

/s/ ARTHUR ANDERSEN LLP
---------------------------------------------------------
Boston, Massachusetts
January 25, 2001

                                        63
<PAGE>   65

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     a) DIRECTORS

     The information required by this Item with respect to Directors is
contained in the Company's 2001 Proxy Statement for the Annual Meeting of
Stockholders to be held on April 24, 2001 (the "2001 Proxy Statement") under the
captions "Election of Directors" and "Information Relative to the Board of
Directors and Certain of its Committees" and is herein incorporated by
reference. The 2001 Proxy Statement, in definitive form, was filed
electronically with the Securities and Exchange Commission in Washington, D.C on
March 12, 2001.

     b) EXECUTIVE OFFICERS

     The information required by this item with respect to Executive Officers is
contained in Part I of this Report.

ITEM 11.  EXECUTIVE COMPENSATION

     The information required by this Item is contained under the captions
"Summary Compensation Table" up to and including "Aggregated Option Exercises in
Last Fiscal Year and Fiscal Year-End Value Option Values" and Notes thereto in
the 2001 Proxy Statement, and is herein incorporated by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this Item is contained under the captions
"Security Ownership of Certain Beneficial Owners" and "Security Ownership of
Management" in the 2001 Proxy Statement, and is herein incorporated by
reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this Item is contained under the caption
"Certain Transactions" in the 2001 Proxy Statement, and is herein incorporated
by reference.

                                        64
<PAGE>   66

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) DOCUMENTS FILED AS PART OF THIS REPORT:

     1.  FINANCIAL STATEMENTS

        Included in Part II, Item 8:

           Consolidated Income Statements for the Three Years Ended December 31,
2000

           Consolidated Balance Sheets at December 31, 2000

          Consolidated Statements of Stockholders' Equity for the Three Years
          Ended
          December 31, 2000

          Consolidated Statements of Cash Flows for the Three Years Ended
          December 31, 2000

           Notes to Consolidated Financial Statements

           Report of Independent Public Accountants

     2.  FINANCIAL STATEMENT SCHEDULES

        Report of Independent Public Accountants on Financial Statement
        Schedules

        Schedule II -- Valuation and Qualifying Accounts

     Financial statement schedules, other than those above, are omitted because
of the absence of conditions under which they are required or because the
required information is given in the financial statements or notes thereto.

     Separate financial statements of the Registrant are omitted since it is
primarily an operating company, and since all subsidiaries included in the
consolidated financial statements being filed, in the aggregate, do not have
minority equity interests and/or indebtedness to any person other than the
Registrant or its consolidated subsidiaries in amounts which together exceed
five percent of total consolidated assets.

     3.  EXHIBITS

<TABLE>
<S>      <C>
  3.1    The Company's Restated Articles of Organization were filed
         with the Commission on March 30, 1999 as Exhibit 3.1 to the
         Company's Annual Report on Form 10-K and are herein
         incorporated by reference.
  3.2    Articles of Amendment to the Company's Restated Articles of
         Organization were filed with the Commission on November 5,
         1999 as Exhibit 3 to the Report on Form 8-K and are herein
         incorporated by reference.
  3.3    The Company's By-Laws as amended and restated by the Board
         of Directors on April 27,1999 were filed with the Commission
         on March 28, 2000 as Exhibit 3.3 to the Company's Annual
         Report on Form 10-K for the fiscal year ended January 2,
         2000 and are herein incorporated by reference.
  4.1    Specimen Certificate of the Company's Common Stock, $1 par
         value, was filed with the Commission on November 5, 1999 as
         Exhibit 4 to the Report on Form 8-K and is incorporated
         herein by reference.
  4.2    Form of Indenture dated June 28, 1995 between the Company
         and the First National Bank of Boston, as Trustee, was filed
         with the Commission as Exhibit 4.1 to EG&G's Registration
         Statement on Form S-3, File No. 33-59675 and is herein
         incorporated by reference.
  4.3    Form of Senior Indenture, dated August 7, 2000, between the
         Company and Bank One Trust Company, N.A., as Trustee, was
         filed with the Commission as Exhibit 4.1 to the Company's
         Registration Statement on Form S-3, File No. 333-71069, and
         is incorporated herein by reference.
  4.4    Form of Supplemental Indenture, dated August 7, 2000,
         between the Company and Bank One Trust Company, N.A., as
         Trustee, was filed with the Commission on August 4, 2000 as
         Exhibit 4.1 to the Company's Report on Form 8-K, and is
         incorporated herein by reference.
  4.5    Amended and Restated Rights agreement dated as of January
         30, 2001 between the Company and Mellon Investor Services
         LLC, as Rights Agent, is attached hereto as Exhibit 4.5.
*10.1    The Company's Supplemental Executive Retirement Plan revised
         as of April 19, 1995 was filed as Exhibit 10.1 to the
         Company's Annual Report on Form 10-K for the fiscal year
         ended December 31, 1995, and is herein incorporated by
         reference.
</TABLE>

                                        65
<PAGE>   67
<TABLE>
<S>      <C>
*10.2    The Company's 1999 INCENTIVE PLAN was filed with the
         Commission on April 2, 1999 as Exhibit B to the Company's
         Definitive Proxy Statement on Schedule 14A and is herein
         incorporated by reference.
 10.3    $100,000,000 Competitive Advance and Revolving Credit
         Facility Agreement (referred to as the "Credit Agreement")
         dated as of March 2, 2001 among the Company, the Lenders
         Named Herein and The Chase Manhattan Bank as Administrative
         Agent, is attached hereto as Exhibit 10.3.
 10.4    $300,000,000 364-Day Amended and Restated Competitive
         Advance and Revolving Credit Facility Agreement dated as of
         March 2, 2001 among the Company, the Lenders Named Herein
         and The Chase Manhattan Bank as Administrative Agent is
         attached hereto as Exhibit 10.4.
*10.5    Employment Contracts:
         (1) Employment contract between Gregory L. Summe and the
         Company dated January 8, 1998, as amended by an amendment
             dated November 5, 1999, was filed as Exhibit 10.5 (a) to
             the Company's Annual Report on Form 10-K for the fiscal
             year ended January 2, 2000 and is herein incorporated by
             reference. Said contract was further amended by a Second
             Amendment dated March 3, 2000 which is attached hereto
             as Exhibit 10.5(a).
         (2) Employment contract between Robert F. Friel and the
         Company dated November 18, 1999 is attached hereto as
             Exhibit 10.5(b).
         (3) Employment contract between Terrance L. Carlson and the
             Company dated June 1, 1999.
         (4) Employment contract between Richard F. Walsh and the
             Company dated July 1999.
         (5) Employment contract between Robert A. Barrett and the
             Company dated July 23, 1999.
         (6) Employment contract between Patrik Dahlen and the
             Company dated October 1, 1999.
         (7) Employment contract between John J. Engel and the
             Company dated December 1, 1999.
         (8) Employment contract between Stephen P. DeFalco and the
             Company dated October 23, 2000.
         Except for the name of the officer in the employment
         contracts identified by numbers 2 through and including 8
         the form of said employment contracts is identical in all
         material respects. The employment contract, as amended,
         identified by number 1 is substantially similar to the
         contracts identified by numbers 2 through 8 although that it
         provides for a longer contract term, three years as opposed
         to one year. The employment contract between Robert F. Friel
         and the Company is representative of the employment
         contracts of the executive officers listed in numbers 2
         through and including 8 and is attached hereto as Exhibit
         10.5(b).
*10.6    The Company's 1982 INCENTIVE STOCK OPTION PLAN was filed as
         Exhibit 4(v) to the Company's Registration Statement on Form
         S-8, File No. 33-36082 and is herein incorporated by
         reference.
*10.7    The Company's 1992 STOCK OPTION PLAN was filed as Exhibit
         4(vi) to EG&G's Registration Statement on Form S-8, File No.
         333-32059 and is herein incorporated by reference.
*10.8    The Company's 1998 EMPLOYEE STOCK PURCHASE PLAN was filed
         with the Commission on March 30, 1999 as Exhibit 10.8 to the
         Company's Annual Report on Form 10-K and is herein
         incorporated by reference.
 21      Subsidiaries of the Registrant is attached hereto as Exhibit
         21.
 23      Consent of Independent Public Accountants (appears on
         signature page).
 24      Power of Attorney (appears on signature page).
</TABLE>

---------------
* This exhibit is a management contract or compensatory plan or arrangement
  required to be filed as an Exhibit pursuant to Item 14(c) of Form 10-K.

(b) REPORTS ON FORM 8-K

     None.

(c) PROXY STATEMENT

     The Company's 2001 Proxy Statement, in definitive form, was filed
electronically on March 12, 2001, with the Securities and Exchange Commission in
Washington, D.C. pursuant to the Commission's Rule 14a-6.

                                        66
<PAGE>   68

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                                  ON SCHEDULES

To PerkinElmer, Inc.:

     We have audited in accordance with auditing standards generally accepted in
the United States, the consolidated financial statements of PerkinElmer, Inc.
included in this Form 10-K and have issued our report thereon dated January 25,
2001. Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. Schedule II is the responsibility of the
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. The schedule has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion,
fairly states in all material respects the financial data required to be set
forth therein in relation to the basic financial statements taken as a whole.

/s/ ARTHUR ANDERSEN LLP
----------------------------------
Arthur Andersen LLP
Boston, Massachusetts
January 25, 2001

                                        67
<PAGE>   69

                                  SCHEDULE II

                       PERKINELMER, INC. AND SUBSIDIARIES

                       VALUATION AND QUALIFYING ACCOUNTS
                  FOR THE THREE YEARS ENDED DECEMBER 31, 2000
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                          BALANCE AT                                              BALANCE
                                         BEGINNING OF                  CHARGES/                   AT END
DESCRIPTION                                  YEAR        PROVISIONS    WRITEOFFS     OTHER        OF YEAR
-----------                              ------------    ----------    ---------    --------      -------
<S>                                      <C>             <C>           <C>          <C>           <C>
RESERVE FOR DOUBTFUL ACCOUNTS
Year Ended January 3, 1999.............    $ 4,710        $ 1,084      $   (960)    $   (434)(a)  $ 4,400
Year Ended January 2, 2000.............    $ 4,400        $ 2,569      $ (1,302)    $  7,261(b)   $12,928
Year Ended December 31, 2000...........    $12,928        $ 5,957      $ (3,165)    $   (742)(c)  $14,978
ACCRUED RESTRUCTURING COSTS
Year Ended January 3, 1999.............    $ 3,025        $50,027      $(23,483)    $  5,000(d)   $34,569
Year Ended January 2, 2000.............    $34,569        $11,520(f)   $(32,525)    $ 28,195(e)   $41,759
Year Ended December 31, 2000...........    $41,759        $ 4,105(h)   $(22,300)    $ 29,780(g)   $53,344
</TABLE>

---------------
(a) Includes reserves for doubtful accounts of $1,371 related to companies
    acquired in 1998.

(b) Includes reserve for doubtful accounts of $6,500 related to AI acquired in
    1999.

(c) Includes reserve for doubtful accounts of $1,888 related to a company
    acquired in 2000.

(d) Represents accrued restructuring costs of $5,000 related to Lumen acquired
    in 1998.

(e) Represents accrued restructuring costs of $28,195 related to AI acquired in
    1999.

(f) Includes a $23,500 restructuring charge related to the 1999 plan and an
    $11,980 reversal related to the 1998 plan.

(g) Includes approximately $24 million, net and $4 million related to the
    acquisitions of AI and NEN, respectively.

(h) Includes $15.1 million related to the 2000 plan and net reversals related to
    the 1998 and 1999 plans totaling $11 million.

                                        68
<PAGE>   70

                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

     As independent public accountants, we hereby consent to the incorporation
by reference of our reports dated January 25, 2001, included in this Form 10-K,
into Registration Statements previously filed by PerkinElmer, Inc. on,
respectively, Form S-8, File No. 2-98168; Form S-8, File No. 33-36082; Form S-8,
File No. 33-35379; Form S-8, File No. 33-49898; Form S-8, File No. 33-57606;
Form S-8, File No. 33-54785; Form S-8, File No. 33-62805; Form S-8, File No.
333-8811; Form S-8, File No. 333-32059; Form S-8, File No. 333-32463; Form S-3,
File No. 33-59675; Form S-8, File No. 333-50953; Form S-8, File No. 333-56921;
Form S-8, File No. 333-58517; Form S-8, File No. 333-61615; Form S-8, File No.
333-65367; Form S-8, File No. 333-69115; Form S-8, File No. 333-70977; Form S-3,
File No. 333-71069; Form S-8, File No. 333-81759; Form S-4, File No. 333-91535
and Form S-8, File No. 333-30150.

/s/ ARTHUR ANDERSEN LLP
---------------------------------------------------------
Arthur Andersen LLP
Boston, Massachusetts
March 26, 2001

                               POWER OF ATTORNEY

     We, the undersigned officers and directors of PerkinElmer, Inc., hereby
severally constitute Gregory L. Summe, and Terrance L. Carlson, and each of them
singly, our true and lawful attorneys with full power to them, and each of them
singly, to sign for us and in our names, in the capacities indicated below, this
Annual Report on Form 10-K and any and all amendments to said Annual Report on
Form 10-K, and generally to do all such things in our name and behalf in our
capacities as officers and directors to enable PerkinElmer, Inc. to comply with
the provisions of the Securities Exchange Act of 1934, and all requirements of
the Securities and Exchange Commission, hereby rectifying and confirming signed
by our said attorneys, and any and all amendments thereto.

     Witness our hands on the date set forth below.

                                   SIGNATURES

     PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.

                                       PERKINELMER, INC.

<TABLE>
<CAPTION>
                     SIGNATURE                                       TITLE                        DATE
                     ---------                                       -----                        ----
<S>                                                  <C>                                     <C>
By: /s/ GREGORY L. SUMME                             Chairman of the Board, Chief Executive  March 26, 2001
                                                     Officer and President (Principal
--------------------------------------------------   Executive Officer)
    Gregory L. Summe

By: /s/ ROBERT F. FRIEL                              Senior Vice President and Chief         March 26, 2001
                                                     Financial Officer (Principal Financial
--------------------------------------------------   Officer and Principal Accounting
    Robert F. Friel                                  Officer)
</TABLE>

                                        69
<PAGE>   71

     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATE INDICATED:

<TABLE>
<CAPTION>
                     SIGNATURE                                       TITLE                        DATE
                     ---------                                       -----                        ----
<S>                                                  <C>                                     <C>
By: /s/ TAMARA J. ERICKSON                           Director                                March 26, 2001
--------------------------------------------------
    Tamara J. Erickson

By: /s/ KENT F. HANSEN                               Director                                March 26, 2001
--------------------------------------------------
    Kent F. Hansen

By: /s/ JOHN F. KEANE                                Director                                 March 26,2001
--------------------------------------------------
    John F. Keane

By: /s/ NICHOLAS A. LOPARDO                          Director                                March 26, 2001
--------------------------------------------------
    Nicholas A. Lopardo

By: /s/ GRETA E. MARSHALL                            Director                                March 26, 2001
--------------------------------------------------
    Greta E. Marshall

By: /s/ GABRIEL SCHMERGEL                            Director                                March 26, 2001
--------------------------------------------------
    Gabriel Schmergel

By: /s/ MICHAEL C. RUETTGERS                         Director                                March 26, 2001
--------------------------------------------------
    Michael C. Ruettgers

By: /s/ GREGORY L. SUMME                             Director                                March 26, 2001
--------------------------------------------------
    Gregory L. Summe

By: /s/ JOHN LARKIN THOMPSON                         Director                                March 26, 2001
--------------------------------------------------
    John Larkin Thompson

By: /s/ G. ROBERT TOD                                Director                                March 26, 2001
--------------------------------------------------
    G. Robert Tod
</TABLE>

                                        70
<PAGE>   72

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                            EXHIBIT NAME
-------                           ------------
<S>       <C>
 3.1      The Company's Restated Articles of Organization were filed
          with the Commission on March 30, 1999 as Exhibit 3.1 to the
          Company's Annual Report on Form 10-K for the fiscal year
          ended January 3, 1999 and are herein incorporated by
          reference.
 3.2      Articles of Amendment to the Company's Restated Articles of
          Organization were filed with the Commission on November 5,
          1999 as Exhibit 3 to the Company's Report on Form 8-K and
          are herein incorporated by reference.
 3.3      The Company's By-Laws as amended and restated by the Board
          of Directors on April 27, 1999 were filed with the
          Commission on March 28, 2000 as Exhibit 3.3 to the Company's
          Annual Report on Form 10-K for the fiscal year ended January
          2, 2000 and are herein incorporated by reference.
 4.1      Specimen Certificate of the Company's Common Stock, $1 par
          value, was filed with the Commission on November 5, 1999 as
          Exhibit 4 to the Company's Report on Form 8-K and is herein
          incorporated by reference.
 4.2      Form of Indenture dated June 28,1995 between the Company and
          the First National Bank of Boston, as Trustee, was filed
          with the Commission as Exhibit 4.1 to the Company's
          Registration Statement on Form S-3, File No. 33-59675 and is
          herein incorporated by reference.
 4.3      Form of Senior Indenture, dated August 7, 2000, between the
          Company and Bank One Trust Company, N.A., as Trustee, was
          filed with the Commission as Exhibit 4.1 to the Company's
          Registration Statement on Form S-3, File No. 333-71069, and
          is incorporated herein by reference.
 4.4      Form of Supplemental Indenture, dated August 7, 2000,
          between the Company and Bank One Trust Company, N.A., as
          Trustee, was filed with the Commission on August 4, 2000 as
          Exhibit 4.1 to the Company's Report on Form 8-K, and is
          incorporated herein by reference.
 4.5      Amended and Restated Rights Agreement dated as of January
          30, 2001 between the Company and Mellon Investor Services
          LLC, as Rights Agent, is attached hereto as Exhibit 4.5.
10.1      The Company's Supplemental Executive Retirement Plan revised
          as of April 19, 1995 was filed as Exhibit 10.1 to the
          Company's Annual Report on Form 10-K for the fiscal year
          ended December 31, 1995, and is herein incorporated by
          reference.
10.2      The Company's 1999 INCENTIVE PLAN was filed with the
          Commission on April 2, 1999 as Exhibit B to the Company's
          Definitive Proxy Statement on Schedule 14A and is herein
          incorporated by reference.
10.3      $100,000,000 Competitive Advance and Revolving Credit
          Facility Agreement dated as of March 2, 2001 among the
          Company, the Lenders Named Herein and The Chase Manhattan
          Bank as Administrative Agent is attached hereto as Exhibit
          10.3.
10.4      $300,000,000 364-Day Amended and Restated Competitive
          Advance and Revolving Credit Facility Agreement dated as of
          March 2, 2001 among the Company, the Lenders Named Herein
          and The Chase Manhattan Bank as Administrative Agent, is
          attached hereto as Exhibit 10.4.
10.5(a)   Employment Contract between the Company and Gregory L. Summe
          dated January 8, 1998, as amended by an amendment dated
          November 5, 1999, was filed with the Commission on March 28,
          2000 as Exhibit 10.5(a) to the Company's Annual Report on
          Form 10-K for the fiscal year ended January 2, 2000 and is
          herein incorporated by reference. Said contract was further
          amended by a Second Amendment dated March 3, 2001 which is
          attached hereto as Exhibit 10.5(a).
10.5(b)   Employment Contract between the Company and Robert F. Friel
          dated November 18, 1999 is attached hereto as Exhibit
          10.5(b).
10.6      The Company's 1982 INCENTIVE STOCK OPTION PLAN was filed as
          Exhibit 4(v) to the Company's Registration Statement on Form
          S-8, File No. 33-36082 and is herein incorporated by
          reference.
10.7      The Company's 1992 STOCK OPTION PLAN was filed as Exhibit
          4(vi) to the Company's Registration Statement on Form S-8,
          File No. 333-32059 and is herein incorporated by reference.
</TABLE>
<PAGE>   73

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                            EXHIBIT NAME
-------                           ------------
<S>       <C>
10.8      The Company's 1998 EMPLOYEE STOCK PURCHASE PLAN was filed
          with the Commission on March 30, 1999 as Exhibit 10.8 to the
          Company's Annual Report on Form 10-K and is herein
          incorporated by reference.
21        Subsidiaries of the Registrant is attached hereto as Exhibit
          21.
23        Consent of Independent Public Accountants (appears on
          signature page).
24        Power of Attorney (appears on signature page).
</TABLE>
</TEXT>
</DOCUMENT>
