SECURITIES AND EXCHANGE COMMISSION
                   WASHINGTON, D.C.  20549

                          FORM 10-K
     [ X ] Annual Report Pursuant To Section 13 Or 15(d)
           Of The Securities Exchange Act Of 1934
           For the Fiscal Year Ended June 30, 1998

                             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 1-4389

                The Perkin-Elmer Corporation
   (Exact name of registrant as specified in its charter)
             NEW YORK                      06-0490270
   (State or other jurisdiction of     (I.R.S. Employer
     incorporation or organization)       Identification No.)

   761 Main Avenue, Norwalk, Connecticut     06859-0001
   (Address of principal executive offices)  (Zip Code)

Registrant's telephone number, including area code:  203-762-1000


Securities registered pursuant to Section 12(b) of the Act:

                                 Name of each exchange
        Title of class            on which registered

    Common Stock (par value     New York Stock Exchange
       $1.00 per share)         Pacific Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

                         Title of class

                        Class G Warrants

      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.

                   X      Yes              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]

       As  of  September  9,  1998,  49,395,010  shares   of
Registrant's   Common  Stock  were  outstanding,   and   the
aggregate market value of shares of such Common Stock (based
upon  the  average  sales price) held by non-affiliates  was
approximately $ 2,999,205,733.

             DOCUMENTS INCORPORATED BY REFERENCE
Annual Report to Shareholders for Fiscal Year ended June 30,
                 1998 - Parts I, II, and IV.
  Proxy Statement for Annual Meeting of Shareholders dated
                September 9, 1998 - Part III.

PART I Item 1. BUSINESS (a) General Development of Business. The Perkin-Elmer Corporation was incorporated in 1939 under the laws of the State of New York. Together with its consolidated subsidiaries, The Perkin-Elmer Corporation (hereinafter collectively referred to as "Registrant" or the "Corporation") develops, manufactures, and markets life science systems and analytical instruments used in the pharmaceutical, biotechnology, environmental testing, food, forensics, agriculture, and chemical manufacturing industries. Registrant's industry segments are described in Item 1.(c) below. On November 21, 1997, Registrant acquired Molecular Informatics, Inc., a developer of bioinformatics software for the pharmaceutical, biotechnology, agrochemical, forensics, and human identification markets. On December 29, 1997, Registrant acquired approximately 52% of the voting rights and approximately 14.5% of the equity of Tecan AG, a Swiss company. Tecan AG manufactures and distributes laboratory automation systems for use in life science and analytical applications. On January 22, 1998, Registrant acquired PerSeptive Biosystems, Inc. ("PerSeptive"). PerSeptive manufactures a variety of products for use in the discovery, development, and production of biopharmaceutical products. On May 9, 1998, Registrant, Dr. J. Craig Venter, and The Institute for Genomic Research ("TIGR") announced that they had signed letters of intent to form a new genomics company: Celera Genomics Corporation. The goal of Celera is to become a primary source of genomic and medical information to enable scientists to develop a better understanding of human health and to facilitate the discovery of therapeutics and diagnostics. The initial focus is a plan to substantially complete the sequencing of the human genome in three years. Results of operations for Celera were not material for fiscal 1998. On September 8, 1998, Registrant announced that it had engaged consultants to explore strategic alternatives for Registrant's Analytical Instruments Division. Options to be explored include selling the business, spinning the division off as a separate company, and retaining the division as part of the Corporation. A decision with respect to the various alternatives is expected by early in calendar year 1999. Page 2

(b) Financial Information About Industry Segments. A summary of net sales to unaffiliated customers, operating income, and identifiable assets attributable to each of the Registrant's industry segments for the fiscal years ended June 30, 1998, 1997, and 1996 is incorporated herein by reference to Note 6 on Pages 50-52 of the Annual Report to Shareholders for the fiscal year ended June 30, 1998. (c) Narrative Description of Business. Registrant develops, manufactures, and markets, on a worldwide basis, life science, and analytical instrument systems used in such markets as pharmaceutical, biotechnology, environmental testing, food, forensics, agriculture, and chemical manufacturing. The Registrant's operations are comprised of three business segments: its life sciences division, known as PE Biosystems; its traditional Analytical Instruments business; and the recently formed Celera Genomics Corporation. Results of operations for Celera were not material for fiscal 1998. PE BIOSYSTEMS Registrant's PE Biosystems Division develops, manufactures, markets, sells, and services a wide range of biochemical analytical instrument systems and products for the biotechnology market, consisting of instruments, associated reagents, consumables, and information management tools. All living organisms are composed of cells that contain deoxyribonucleic acid ("DNA"). DNA contains information that is used by cells as a blueprint for the organism. The characteristics of any living thing essentially are determined by the information in DNA. The components of DNA, called genes, are further derived from combinations of four different substances and usually contain between 1,000 and 100,000 instances of these substances. The entire set of genes, called the genome, may contain between 4 million (simple bacteria) and 3 billion (human) instances or more. Combining DNA from different existing organisms (plants, animals, insects, bacteria, etc.) results in modified organisms with a combination of traits from the parents. Scientists are now able to identify the specific genes for many desirable traits and transfer only those genes into another organism. Desirable traits found in nature can theoretically be transferred into any chosen organism. An organism genetically engineered in this way is called transgenic. Genetic engineering is being used in many practical situations. One application of this technology is the development of transgenic plants that are resistant to certain insects or viruses. The genes for these traits have been incorporated into the plants from other unrelated plants, bacteria, or viruses by genetic engineering techniques. Another use is in gene therapy, where, for example, defective DNA in bone marrow cells is supplemented with a copy of normal DNA, and the repaired cells are then used by the body to generate cells with normal DNA. Page 3

Another application is pharmaceutical production. Drugs such as insulin for diabetics, growth hormone for individuals with pituitary dwarfism, and tissue plasminogen activator for heart attack victims, as well as animal drugs like the growth hormones, bovine or porcine somatotropin, are being produced by the fermentation of transgenic bacteria that have received the appropriate human, cow, or pig gene. In addition to genetic engineering, DNA information is also used in diagnostic applications. Individuals within any given species, breed, or hybrid line can usually be identified by minor differences in their DNA sequences. Scientists can diagnose viral, bacterial, or fungal infections, distinguish between closely related individuals, or map the locations of specific genes along the vast length of the DNA molecules in the cells. Registrant's PE Biosystems Division -- consisting of Applied Biosystems, PerSeptive Biosystems, PE Informatics, Tropix, and PE GenScope -- provides the tools that enable scientists to implement these applications. Applied Biosystems Applied Biosystems develops, manufactures, and markets systems and services for polymerase chain reaction ("PCR"), DNA sequencing, genetic analysis, protein analysis, nucleic acid synthesis, and peptide synthesis. These systems and services are used in both research and commercial applications in purifying, analyzing, synthesizing, and sequencing proteins and genetic material. Registrant's Applied Biosystems' offerings can be broadly classified into the following areas: 1. Genetic Analysis. Genetic analysis primarily uses electrophoresis techniques for separating molecules based on their differential mobility in an electric field. Registrant's genetic analysis products generally perform both DNA sequencing and fragment analysis. DNA sequencing is used to determine the exact order of nucleotides that make up DNA. This is done through the fluorescent tagging of bases, each with a different colored tag. The tagged fragments are then run through an electrophoresis gel and are detected at the bottom of the gel. Registrant's DNA sequencing systems include a sequencer expandable to 96 lanes, a single- lane capillary sequencer, and sequencing reagents. A newly developed product, the 3700 DNA Analyzer is scheduled for production shipments during fiscal year 1999. This product is designed to enable applications requiring tens of thousands of samples produced weekly by combining proven capillary electrophoresis hardware and separation polymer chemistry with new detection technology and automation. It is expected to be the enabling technology for the sequencing of the human genome by Celera Genomics Corporation, as discussed below. DNA fragment analyzers are used to determine the size, quantity, or pattern of DNA fragments generated by PCR amplification or other means. Typically this is done by using fluorescently tagged PCR primers to generate labeled PCR products that are then analyzed electrophoretically. Fragment analysis applications include gene mapping and forensic typing using microsatellite markers, single-strand conformation polymorphism ("SSCP") Page 4

analysis to screen for unknown mutations within genes, and oligonucleotide ligation assay ("OLA") analysis to detect known mutations within characterized genes. 2. PCR Products. PCR allows for the amplification of genetic material that otherwise is of insufficient quantity to be detected, by producing enough copies of the material of interest to conduct numerous studies. PCR products include 24, 48, and 96 sample amplification systems; a combination PCR preparation and DNA sequencing system; a combination PCR and PCR detection system; and various reagents. 3. DNA Synthesizers. DNA synthesizers build synthetic DNA, which is used for DNA sequencing primers and is also used in drug discovery applications. Registrant currently markets several models of synthesizers. Registrant also provides custom synthesis, in which oligonucleotides are made to order and shipped to customers. 4. PNA. Registrant has an exclusive license for technology to manufacture and sell peptide nucleic acid ("PNA") for molecular biology research and, subject to certain limited reservations, for other applications. PNA is a synthetic mimic of the DNA molecule with a modified uncharged peptide-like "backbone." The unique chemical structure of PNA enhances its affinity and specificity as a DNA or RNA probe. PerSeptive PerSeptive develops, manufactures, and markets products for the purification, analysis and synthesis of biomolecules. A variety of synthesis, purification, and analysis procedures are conducted in each stage in the discovery, development, and production of a biopharmaceutical product. Synthesis involves the creation and replication of multiple compounds that can be identical or subtly differentiated by as little as one amino acid. Purification involves the isolation and separation of a target biomolecule from other substances, such as contaminants, without destroying the biological activity of the biomolecule. Analysis involves techniques used to measure the quantity of a biomolecule, to identify its biological characteristics, and to assess the nature and quantity of contaminants. PerSeptive's products can be broadly classified into the following categories: 1. Mass Spectrometry Biospectrometry. PerSeptive owns a significant body of technology relating to biological mass spectrometry ("Biospectrometry"). Although there are many different kinds of mass spectrometers, most instruments are defined by differences in two subsystems. One is the ionization source that creates the ionic species, and the other is the detection system. Biomolecular analysis using mass spectrometry has been limited to date by the inability of mass spectrometers to resolve (identify) large biomolecules as well as the high cost and difficulty of use of mass spectrometry. PerSeptive believes that its Matrix-Assisted, Laser Desorption Ionization Time-of-Flight Mass Spectrometry ("MALDI- TOF/MS") technology overcomes the deficiencies of mass spectrometry for biomolecular analysis. Liquid Chromatography/Mass Spectrometry ("LC/MS"). LC/MS is a two stage analysis system which enables the separation of a complex mixture and then the quantitation and/or identification of the compounds in the mixture. The component of the sample are first Page 5

separated in the chromatography stage and then the mass spectrometer performs a molecular analysis, profiling each molecule by its mass to charge ratio. 2. Perfusion Chromatography. PerSeptive's patented Perfusion Chromatography process and media, which use proprietary flow-through particles, separate biomolecules 10 to 1,000 times faster than conventional liquid chromatography ("LC") or high pressure liquid chromatography ("HPLC") and achieve the same or better levels of purity. Prior to the invention of Perfusion Chromatography, it was generally accepted in the chromatography industry that the slow speed of diffusion was an inherent limitation to the potential speed of chromatography. 3. ImmunoDetection. PerSeptive has developed novel immunoassays that can be performed in a flow-through column format ("ImmunoDetection"). ImmunoDetection permits target molecule detection in seconds or minutes -- far faster than conventional immunoassay techniques, which require several hours to complete. ImmunoDetection also takes advantage of the higher degree of automation available in chromatography instruments, as compared with immunoassay instruments, and can produce results with much lower margins of error. 4. Protein Synthesis and Analysis. Protein sequencers provide information about the amino acids that make up a given protein by chemically disassembling the protein and analyzing the components. Peptide synthesizers build peptides from amino acids through successive reactions that involve the addition of the next amino acid, removal of the groups in order to prevent unwanted side reactions, activation to ready the growing chain for the next amino acid addition, and, finally, repeating the cycle until the desired peptide is produced. The synthetically produced peptides are used in understanding antibody reactions and as potential drugs or drug analogs. 5. Superparamagnetic Bead-Based Separations. PerSeptive owns technology relating to magnetic separations particles and processes. Magnetic separations enable biomedical researchers to improve the speed, purity, and yield of many common laboratory protocols, including separation of cell populations and isolation and purification of nucleic acids. Researchers can perform techniques based on magnetic separation either manually or with automated instruments. 6. Purification Products. PerSeptive's purification products can be incorporated readily into any stage of the development process of a biopharmaceutical product and offer productivity advantages over conventional counterparts. Companies using conventional purification technology usually make several significant changes in materials, equipment, and processes in moving from the development stage to commercial manufacture. As a result, an integrated line of purification products is expected to enhance productivity by reducing or eliminating these costly and time-consuming changes. Moreover, because the U.S. Food and Drug Administration ("FDA") must approve significant changes in manufacturing processes, an integrated line of purification products may simplify and expedite the process of obtaining approvals from the FDA. Page 6

PE Informatics Registrant's PE Informatics business develops, markets, and distributes bioinformatics software. Principal markets include agricultural analysis, agrochemical, automotive industries, petrochemical industries, clinical, and biological analysis industries, environmental testing and monitoring, materials research, food quality management, pharmaceutical, and semiconductors. The products provide a comprehensive software system researchers can use to manage and analyze genome data and include software solutions for science and medical professionals who analyze gene sequences in an effort to discover and develop drugs, perform clinical trials, and perform molecular diagnostics. These systems are necessary to meet the demand to manage, integrate, and analyze the vast amounts of information related to bioscience discovery processes. Bioinformatics is a new science that enables researchers to transform massive amounts of data into an organized knowledge database. Customers are typically attempting breakthroughs in gene mapping, drug discovery, drug development, and molecular diagnostics and these products provide the vehicles for transforming raw data into the organized body of knowledge that enables those breakthrough discoveries. The business is dedicated to the development of infrastructure software for pharmaceutical, biotechnology, and agrochemical industries that perform genome data collection and management, gene mapping, drug discovery, and clinical and diagnostic genetic research. PE Informatics currently provides genomic data management products directed toward both discovery and development. Discovery oriented products include: 1. BioMerge. A product that allows research groups to store, retrieve, and analyze genetic information. The system consists of an advanced, object-oriented relational database and a group of programs that organize public, proprietary, and third-party data in a single database. The system provides for editing and annotating sequence data and for tracking change history of the databases. 2. BioLIMS. A product that manages automated DNA sequencing for Registrant's Applied Biosystems products. Sequence analysis results are entered into a central database and allows automated genetic information management, from data acquisition to assembled contiguous sequences. 3. SQL GT. A product for sample tracking and sample management for high throughput laboratories. Development oriented products include: 1. SQL Lims. A product designed to optimize information processing and provide information management tools for the analytical laboratory. It provides tools for automating the laboratory's data acquisition, processing, and archiving functions as well as management information to aid in the planning and control of laboratory resources. 2. TurboChrom. The TurboChrom Client/Server Chromatography Data System delivers distributed computing resources across an entire organization, while managing key data processes centrally. It enables users throughout an enterprise to access required Page 7

information and to work collaboratively regardless of geography, function, or local desktop environment. Financial results from sales of SQL GT, SQL Lims and TurboChrom products are currently reported in the Analytical Instruments segment for the fiscal years covered by the Annual Report to Shareholders for the fiscal year ended June 30, 1998. Tropix Tropix develops, manufactures, and markets chemiluminescent substrates and related products for the life sciences market. Tropix also licenses its technology to companies selling bioanalytical and clinical diagnostic test kits. Chemiluminescence is the conversion of chemical energy stored within a molecule into light. Chemiluminescent enzyme substrates are used that emit light in the presence of a target substance that is "labeled," or connected to an enzyme. The amount of light produced is proportional to the amount of substrate or enzyme-labeled sample present. The light lasts for a sufficiently long time to be measured with instrumentation or photographic film. The substrates enable the detection of extremely small amounts of virtually any biological substance that can be detected. Chemiluminescent technology is used in life science research and commercial applications including drug discovery and development, gene function study, molecular biology, and immunology research. Another major use of this technology includes clinical diagnostic tests for diseases, including early detection of certain cancer markers. Tropix operates a facility devoted to drug discovery services for the pharmaceutical, biotech, and agricultural markets. The services offered are custom assay development using proprietary technologies and high-throughput screening services with an initial capacity of 100,000 assays per day. PE GenScope PE GenScope offers customers advanced genomics technologies including gene expression profiling, gene discovery, high throughput DNA sequencing, complementary DNA ("cDNA") cloning, and bioinformatics, to accelerate their drug discovery and development efforts. PE GenScope has exclusive worldwide rights to AFLP (TM) technology for human and animal healthcare applications. AFLP technology was invented and patented by Keygene n.v. of The Netherlands as a DNA fingerprinting technique for use in genomics-based plant breeding programs and offers substantial advantages over other gene fingerprinting techniques. This technique is an enhancement of PCR that allows selective analysis of any portion of genetic material without the specific, prior sequence information normally required for PCR. PE GenScope products include gene expression profiling technology that simultaneously discovers novel genes and monitors known genes for applications such as molecular toxicology, gene discovery, and pharmacogenomics. PE GenScope also offers software and bioinformatics services which allow clients to access vast amounts of proprietary data via a secure Internet or Intranet connection, allowing them to rapidly analyze and distribute information from public and private sources throughout their global research and development organizations. Page 8

Joint Venture Registrant is engaged in the manufacture and sale of mass spectrometry instrument systems in a joint venture, Perkin-Elmer Sciex Instruments. These products are sold by both the PE Biosystems and Analytical Instruments Divisions. ANALYTICAL INSTRUMENTS Registrant's Analytical Instruments segment, consisting of Registrant's Analytical Instruments Division, develops, manufactures, markets, sells, and services analytical instrument systems. The principal markets for Registrant's Analytical Instrument products and services include: agricultural analysis, automotive industries, petrochemical industries, clinical, and biological analysis industries, environmental testing and monitoring, materials research, food quality management, pharmaceutical, and semiconductors. Analytical chemistry is the science of experimentally determining the elemental, chemical, and physical characteristics that make up a particular sample. Analytical instruments are the tools used to perform analytical chemistry. These systems detect, identify, and measure changes in properties of solids, liquids, and gases. For example, certain types of analytical instruments are targeted toward determining chemical composition; others are used to study molecular structure; and still others measure physical characteristics. Analytical instruments are also used for testing and analysis applications, both inside and outside of laboratories. The use of analytical instruments is widespread in the life science, pharmaceutical, food, chemicals, petrochemicals, material science, and environmental industries, as well as in academic research. Registrant's Analytical Instruments' products tend to vary significantly in terms of their technologies, test methodologies, applications, performance, and cost. Moreover, there is rarely any overlap of instruments across categories of inorganic elements/organic compound/attribute level. That is, an instrument can be applied for use in analyzing elements, compounds, or attributes, but typically not more than one of these applications. Registrant's Analytical Instruments' products can be broadly classified into four categories: 1. Chromatography. Chromatography instruments are designed to analyze complex mixtures by first separating them into their components and then measuring them quantitatively. Registrant offers two types of chromatography products: liquid (LC) and gas (GC). 2. Inorganic Analysis. These instruments are intended for analysis of inorganic elements such as lead, mercury, arsenic, or gold in a wide variety of samples from oils and water to geological materials. Registrant offers three types of inorganic analysis products: atomic absorption spectrometers; inductively coupled plasma optical emission spectrometers; and inductively coupled plasma/mass spectrometers. These inductively coupled plasma/mass spectrometers are provided by the joint venture, Perkin-Elmer Sciex Instruments, referred to previously. 3. Organic Analysis. These instruments are designed to provide qualitative and quantitative information for molecular and organic compounds in the broadest range of samples. Page 9

Registrant's organic analysis products include: infrared and near infrared spectrometers; thermal analyzers; ultraviolet, visible, and near infrared spectrometers; fluorescence spectrometers; analytical balances; and polarimeters. 4. Laboratory Information Management Systems. These systems provide data handling and data management for analytical laboratories. CELERA GENOMICS CORPORATION Registrant, Dr. J. Craig Venter, and TIGR announced on May 9, 1998 that they had signed letters of intent relating to the formation of a new genomics company now established as Celera Genomics Corporation. Its strategy will be centered on a plan to substantially complete the sequencing of the human genome in three years. The new company's goal is to become a primary source of genomic and associated medical information that will be used by scientists to develop a better understanding of the biological processes in humans and to deliver improved healthcare. Using DNA analysis technology developed by Registrant's PE Biosystems Division, applied to sequencing strategies pioneered by Dr. Venter and others at TIGR, Celera will operate a genomics sequencing facility with an expected capacity greater than that of the current combined world output. Concurrently, Celera also intends to build the scientific expertise and informatics tools necessary to extract biological knowledge from genomic data, including the discovery of new genes, development of polymorphism assay systems, and databases for the scientific community. Registrant believes that this information has significant commercial value and that Celera can provide this information more rapidly and more accurately than is currently possible. MARKETING AND DISTRIBUTION Registrant's PE Biosystems and Analytical Instruments businesses employ similar marketing and distribution practices. In the United States, Registrant markets the largest portion of its products directly through its own sales and distribution organizations, although certain products are marketed through independent distributors and sales representatives. Sales to major markets outside of the United States are generally made by the Registrant's foreign based sales and service staff, although some sales are made directly from the United States to foreign customers. In certain foreign countries, sales are made through various representative and distributorship arrangements. Registrant owns or leases sales and service offices in strategic regional locations in the United States and in foreign countries through its foreign sales subsidiaries and distribution operations. None of Registrant's products are distributed through retail outlets. RAW MATERIALS There are no specialized raw materials that are particularly essential to the operation of Registrant's business. Registrant's manufacturing operations require a wide variety of raw materials, electronic and mechanical components, chemical and biochemical materials, and other supplies, some of which are occasionally found to be in short supply. Registrant has multiple commercial sources for most components and supplies but is dependent on single sources for a limited number of such items, in which case Registrant normally secures long-term supply Page 10

contracts. In certain cases, discontinuances of certain sources could temporarily interrupt Registrant's business in the PE Biosystems segment. PATENTS, LICENSES, AND FRANCHISES Registrant has pursued a policy of seeking patent protection in the United States and other countries for developments, improvements, and inventions originating within its organization that are incorporated in Registrant's products or that fall within its fields of interest. Certain licenses under patents have been granted to, and received from, other entities. Registrant has certain rights from the Roche Group under patents relating to PCR, one of which patents expire in 2004. Registrant also has rights under a patent issued to the California Institute of Technology relating to DNA sequencing, which patent expires in 2009. In Registrant's opinion, however, no other single patent or license, or group of patents or licenses, or any franchise, is material to its business as a whole or to either industry segment. From time to time, Registrant has asserted that various competitors and others are infringing Registrant's patents; and similarly, from time to time, others have asserted that Registrant was infringing patents owned by them. In most cases, such claims are settled by mutual agreement on a satisfactory basis and result in the granting of licenses by Registrant or the granting of licenses to Registrant. SEASONAL FLUCTUATIONS Neither of Registrant's industry segments is subject to pronounced seasonal fluctuations. BACKLOG Registrant's total recorded backlog at June 30, 1998 was $208.6 million, consisting of $116.1 million and $92.5 million for Registrant's PE Biosystems and Analytical Instrument segments, respectively. At June 30, 1997 Registrant's total recorded backlog was $176.4 million, with $86.2 million and $90.2 million for Registrant's PE Biosystems and Analytical Instrument segements, respectively. It is Registrant's general policy to include in backlog only purchase orders or production releases that have firm delivery dates within one year. Recorded backlog may not result in sales because of cancellation or other factors. It is anticipated that all orders included in the current backlog will be delivered before the close of fiscal year 1999. UNITED STATES GOVERNMENT SALES No material portion of either of Registrant's industry segments is subject to re-negotiation of profits or termination of contracts or subcontracts at the election of the United States Government. COMPETITION The industry segments in which Registrant operates are highly competitive and are characterized by the application of advanced technology. There are numerous companies that specialize in, and a number of larger companies that devote a significant portion of their resources to, the development, manufacture, and sale of products that compete with those manufactured or sold by Registrant. Many of Registrant's competitors are well-known manufacturers with a high degree of technical proficiency. In addition, competition is intensified by the ever-changing nature Page 11

of the technologies in the industries in which Registrant is engaged. The markets for Registrant's products are characterized by specialized manufacturers that often have strength in narrow segments of these markets. While the absence of reliable statistics makes it difficult to determine Registrant's relative market position in its industry segments, Registrant is confident it is one of the principal manufacturers in its fields, marketing a broad line of life science systems and analytical instruments. In addition to competing in terms of the technology that Registrant offers, Registrant competes in terms of price, application requirements, service, and quality. RESEARCH, DEVELOPMENT, AND ENGINEERING Registrant is actively engaged in basic and applied research, development, and engineering programs designed to develop new products and to improve existing products. During fiscal years 1998, 1997, and 1996, Registrant spent $161.0 million, $120.9 million, and $113.7 million, respectively, on company-sponsored research, development, and engineering activities. ENVIRONMENTAL MATTERS Registrant is subject to federal, state, and local laws and regulations regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, in those jurisdictions where Registrant operates or maintains facilities. Registrant is currently a party to environmental legal actions as disclosed in Item 3 below. Registrant believes any liability, and compliance with all environmental regulations will have no material effect on its business, and no material capital expenditures are expected for environmental control. EMPLOYEES As of June 30, 1998, Registrant employed 7,188 persons worldwide. None of Registrant's United States employees is subject to collective bargaining agreements. (d) Financial Information About Foreign and Domestic Operations and Export Sales. A summary of net revenues to unaffiliated customers, operating income, and identifiable assets attributable to each of Registrant's geographic areas and export sales for the fiscal years 1998, 1997, and 1996 is incorporated herein by reference to Note 6 on Pages 50 - 52 of the Annual Report to Shareholders for the fiscal year ended June 30, 1998. Registrant's consolidated net revenues to unaffiliated customers in countries other than the United States for the fiscal years 1998, 1997, and 1996 were $880.2 million, $841.2 million, and $779.9 million, or 57.5%, 61.3%, and 62.4%, respectively, of Registrant's consolidated net revenues. All of the Registrant's manufacturing facilities outside the continental United States are located in Germany, the United Kingdom, Japan, and Singapore. There are currently no material foreign exchange controls or similar limitations restricting the repatriation to the United States of capital or earnings from operations outside the United States. Page 12

(e) Discontinued Operations. On September 30, 1994, Registrant sold Metco, comprising its Material Sciences segment, headquartered in Westbury, New York, to Sulzer Inc., a wholly owned subsidiary of Sulzer, Ltd., Winterthur, Switzerland. The selected financial data presents Registrant's Material Sciences segment as a discontinued operation. Item 2. PROPERTIES Listed below are the principal facilities of Registrant as of June 30, 1998. Registrant considers all facilities listed below to be reasonably appropriate for the purpose(s) for which they are used, including manufacturing, research and development, and administrative purposes. All properties are maintained in good working order and, except for those held for sale or lease, are substantially utilized on the basis of at least one shift. None of the leased facilities is leased from an affiliate of Registrant. Facilities are grouped within the business segment which is the principal user. Approximate PE BIOSYSTEMS Owned or Expiration Date Floor Area Location Leased Date of Leases In Sq.Ft. Davis, CA Leased 1999 13,365 Foster City, CA * Leased 1999-2007 543,000 San Jose, CA Owned 81,000 Bedford, MA Leased 2000 28,000 Framingham, MA Leased 2009 196,000 Santa Fe, NM Leased 1998-2005 14,000 Houston, TX Leased 1999 21,000 Salt Lake City, UT Leased 1999 8,000 Warrington, England Owned 22,000 Singapore Leased 1999 30,000 ANALYTICAL INSTRUMENTS Approximate Owned or Expiration Date Floor Area Location Leased Date of Leases In Sq.Ft. Irvine, CA Owned 22,000 Norwalk, CT Owned 402,000 Wilton, CT Owned 221,000 Beaconsfield, England Owned 70,000 Beaconsfield, England Leased 2005 8,000 Llantrisant, Wales Leased ** 113,000 Meersburg, Germany Leased 2001 24,000 Ueberlingen, Germany Owned 60,000 Ueberlingen, Germany Leased 2001 121,000 * Comprising 3 principal facilities totaling 330,000 square feet, and additional facilities totaling 213,000 square feet. ** Leased on a month-to-month basis as the facility is being closed. In addition to the facilities listed above, Registrant leases space in certain industrial centers for use as regional sales and service offices, technical demonstration centers, and warehouses. Registrant also owns undeveloped land in Vacaville, California; and Ueberlingen, Germany. Page 13

In addition to the properties used by Registrant in its operations, Registrant owns a facility in Wilton, Connecticut (approximately 42,000 square feet) leased to a third-party on a long-term basis. Item 3. LEGAL PROCEEDINGS Registrant has been named as a defendant in various legal actions arising from the conduct of its normal business activities. Although the amount of any liability that might arise with respect to any of these matters cannot be accurately predicted, the resulting liability, if any, will not, in the opinion of management of Registrant, have a material adverse effect on the consolidated financial statements of Registrant. Registrant was one of approximately 125 third-party defendants named in a third-party complaint dated February 19, 1993 in United States of America v. Davis et al., which is pending in the United States District Court for the District of Rhode Island. The third-party plaintiffs, who were named as defendants and potentially responsible parties in the Government's initial complaint, sought equitable contribution and indemnification in the event they were found liable for remediation costs relating to the removal of hazardous substances from a site located in Smithfield, Rhode Island. (Such costs initially were estimated by the Government to be $27.8 million, but most recent estimates of such costs appear to be in the $40 million range.) All but one of the third-party plaintiffs settled with the Government for a total of approximately $6 million, and a trial on the question of the remaining third-party plaintiff's liability to the Government resulted in an April 22, 1995 Memorandum and Order in which the Court found such plaintiff, United Technologies Corporation, liable as a "generator" of hazardous wastes deposited at the site. Thereafter, the Court permitted United Technologies Corporation to proceed with its claims against third parties. Approximately one-half of the third-party claims have been settled. The claim against Registrant was brought to trial in late spring 1998. The Court has not yet issued a decision. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter was submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year covered by this report. PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS (a) Market Information. The principal United States market where Registrant's Common Stock is traded is the New York Stock Exchange, although such stock is also traded on the Pacific Stock Exchange. The following information, which appears in Registrant's Annual Report to Shareholders for the fiscal year ended June 30, 1998, is hereby incorporated by reference in this Form 10-K: the high and low sales prices of Registrant's Common Stock for each quarterly period during the fiscal years 1998 and 1997 (Note 13, Page 61 of the Annual Report to Shareholders for the fiscal year ended June 30, 1998). Page 14

(b) Holders. On September 9, 1998, the approximate number of holders of Common Stock of Registrant was 6,895. The approximate number of holders is based upon the actual number of holders registered in the books of Registrant at such date and does not include holders of shares in "street name" or persons, partnerships, associations, corporations, or other entities identified in security position listings maintained by depository trust companies. The calculation of the number of shares of Registrant's Common Stock held by non- affiliates shown on the cover of this Form 10-K was made on the assumption that there were no affiliates other than executive officers and directors. (c) Dividends. The amount of quarterly dividends during fiscal years 1998 and 1997 (Note 13, Page 61 of Registrant's Annual Report to Shareholders for the fiscal year ended June 30, 1998) is hereby incorporated by reference in this Form 10-K. (d) Sale of Unregistered Securities Registrant has sold no securities during the fiscal year ended June 30, 1998 that were not registered under the Securities Act of 1933. Item 6. SELECTED FINANCIAL DATA Registrant hereby incorporates by reference in this Form 10-K, Page 29 of Registrant's Annual Report to Shareholders for the fiscal year ended June 30, 1998. Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Registrant hereby incorporates by reference in this Form 10-K, Pages 30 - 38 of Registrant's Annual Report to Shareholders for the fiscal year ended June 30, 1998. Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Registrant hereby incorporates by reference in this Form 10-K, Page 35 and Note 12 on Pages 58-60 of Registrant's Annual Report to Shareholders for the fiscal year ended June 30, 1998. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following financial statements and the supplementary financial information included in Registrant's Annual Report to Shareholders for the fiscal year ended June 30, 1998 are incorporated by reference in this Form 10-K: the Consolidated Financial Statements and the report thereon of PricewaterhouseCoopers LLP dated July 31, 1998, and Pages 39-62 of said Annual Report, including Note 13, Page 61, which contains unaudited quarterly financial information. Page 15

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Registrant has not changed its public accounting firm within 24 months prior to June 30, 1998, the date of Registrant's most recent financial statements. There have been no unresolved disagreements on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure. PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (a) Identification and Background of Directors. Registrant hereby incorporates by reference in this Form 10-K, Pages 1-3 of Registrant's Proxy Statement dated September 9, 1998, in connection with its Annual Meeting of Shareholders to be held on October 15, 1998. (b) Identification of Executive Officers. The following is a list of Registrant's executive officers, their ages, and their positions and offices with the Registrant, as of September 9, 1998. Name Age Present Positions and Year First Elected Noubar B. Afeyan 36 Vice President (1998) Manuel A. Baez 56 Senior Vice President and President, Analytical Instruments Division (1996) Peter Barrett 45 Vice President (1994), Executive Vice President, Celera Genomics Corporation.(1998) Ugo D. DeBlasi 36 Corporate Controller (1997) Ronald D. Edelstein 49 Vice President and Chief Information Officer (1998) Elaine J. Heron 50 Vice President (1995), General Manager Applied Biosystems (1998) Michael W. Hunkapiller 49 Senior Vice President (1998); President, PE Biosystems Division (1994) Joseph E. Malandrakis 53 Vice President (1993), General Manager, PerSeptive Biosystems (1998) William B. Sawch 43 Senior Vice President, General Counsel and Secretary (1993) Tony L. White 52 Chairman, President, and Chief Executive Officer (1995) Dennis L. Winger 50 Senior Vice President and Chief Financial Officer (1997) Each of the foregoing named officers was either elected at the last organizational meeting of the Board of Directors held on October 16, 1997 or elected by the Board since that date. The term of each officer will expire on October 15, 1998, the date of the next scheduled organizational meeting of the Board of Directors, unless renewed for another year. (c) Identification of Certain Significant Employees. Not applicable. (d) Family Relationships. To the best of Registrant's knowledge and belief, there is no family relationship between any of Registrant's directors, executive officers, or persons nominated or chosen by Registrant to become a director or an executive officer. Page 16

(e) Business Experience. With respect to the business experience of Registrant's directors and persons nominated to become directors, Registrant hereby incorporates by reference in this Report on Form 10-K Pages 1-3 of Registrant's Proxy Statement dated September 9, 1998, in connection with its Annual Meeting of Shareholders to be held on October 15, 1998. With respect to the executive officers of Registrant, each such officer has been employed by Registrant or a subsidiary in one or more executive or managerial capacities for at least the past five years, with the exception of Dr. Afeyan, Mr. Baez, Mr. Edelstein, Dr. Heron, Mr. White, and Mr. Winger. Dr. Afeyan was elected Vice President of Registrant on February 19, 1998. Prior to his employment by Registrant in January 1998, Dr. Afeyan founded PerSeptive, a manufacturer of products for use in the discovery, development and production of biopharmaceutical products, in 1987. PerSeptive was acquired by Registrant in January 1998. Before founding PerSeptive, he served as Technology Transfer Officer for the Biotechnology Process Engineering Center at The Massachusetts Institute of Technology which conducts biotechnology research and education. Mr. Baez was elected Senior Vice President of Registrant on June 20, 1996. Prior to his employment by Registrant in June 1996, Mr. Baez was employed by Baxter International Inc., a manufacturer of health care products and instruments, for 22 years, most recently as Executive Vice President, International. Mr. Edelstein was elected Vice President of Registrant on June 18, 1998. Prior to his employment by Registrant in June 1998, Mr. Edelstein served as Vice President and Chief Information Officer of Witco Corporation, a manufacturer of specialty chemicals, for seven years. Dr. Heron was elected Vice President of Registrant on December 21, 1995. She was most recently appointed Vice President and General Manager of Registrant's Applied Biosystems business in July 1998. Previously Dr. Heron served as Vice President, Worldwide Sales, Service, and Marketing since December 1995. She had served as Vice President of Marketing at Affymetrix, Inc., a supplier of genetic analysis equipment, for the year prior to this appointment and previously was Director of Marketing for Applied Biosystems beginning in 1990. Mr. White was elected Chairman, President, and Chief Executive Officer of Registrant in September 1995. Prior to his joining Registrant, he was Executive Vice President and a member of the Office of the Chief Executive of Baxter International Inc. He also served as Group Vice President of Baxter International Inc. from 1986 to 1992. Mr. White is also a director of C.R. Bard, Inc. and Ingersoll-Rand Company. Mr. Winger was elected Senior Vice President and Chief Financial Officer on October 16, 1997. Prior to his employment by Registrant in September 1997, Mr. Winger was employed by Chiron Corporation, which conducts research and development in the fields of biological proteins, gene therapy and combinatorial chemistry, where he was Senior Vice President, Finance and Administration, and Chief Financial Officer since 1989. (f) Involvement in Certain Legal Proceedings. To the best of Registrant's knowledge and belief, none of Registrant's directors, persons nominated to become directors, or executive officers has been involved in any proceedings during Page 17

the past five years that are material to an evaluation of the ability or integrity of such persons to be directors or executive officers of Registrant. (g) Compliance with Section 16(a) of the Securities Exchange Act of 1934. Information concerning compliance with Section 16(a) of the Securities Exchange Act of 1934 is incorporated by reference to Page 7 of Registrant's Proxy Statement dated September 9, 1998, in connection with its Annual Meeting of Shareholders to be held on October 15, 1998. Item 11. EXECUTIVE COMPENSATION Registrant hereby incorporates by reference in this Form 10-K, Pages 8-10 and 12-17 of Registrant's Proxy Statement dated September 9, 1998, in connection with its Annual Meeting of Shareholders to be held on October 15, 1998. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (a) Security Ownership of Certain Beneficial Owners. Registrant hereby incorporates by reference in this Form 10-K, Page 6 of Registrant's Proxy Statement dated September 9, 1998, in connection with its Annual Meeting of Shareholders to be held on October 15, 1998. (b) Security Ownership of Management. Information concerning the security ownership of management is hereby incorporated by reference to Pages 2-3 and 7 of Registrant's Proxy Statement dated September 9, 1998, in connection with its Annual Meeting of Shareholders to be held on October 15, 1998. (c) Changes in Control. Registrant knows of no arrangements, including any pledge by any person of securities of Registrant, the operation of which may at a subsequent date result in a change in control of Registrant. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS None. PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) 1. Financial Statements. The following consolidated financial statements, together with the report thereon of PricewaterhouseCoopers LLP dated July 31, 1998, appearing on Pages 39-62 of Registrant's Page 18

Annual Report to Shareholders for the fiscal year ended June 30, 1998, are incorporated by reference in this Form 10-K. With the exception of the aforementioned information and that which is specifically incorporated in Parts I and II, the Annual Report to Shareholders for the fiscal year ended June 30, 1998 is not to be deemed filed as part of this report on Form 10-K. Annual 10-K Page Report No. Page No. Consolidated Statements of Operations - fiscal years 1998, 1997, and 1996................ -- 39 Consolidated Statements of Financial Position at June 30, 1998 and 1997....................... -- 40 Consolidated Statements of Cash Flows - fiscal years 1998, 1997, and 1996................ -- 41 Consolidated Statements of Shareholders' Equity - fiscal years 1998, 1997, and 1996................ -- 42 Notes to Consolidated Financial Statements.......................... -- 43-61 Report of Management.................. -- 62 Report of PricewaterhouseCoopers LLP.. -- 62 (a) 2. Financial Statement Schedule. The following additional financial data should be read in conjunction with the consolidated financial statements in said Annual Report to Shareholders for the fiscal year ended June 30, 1998. Schedules not included with this additional financial data have been omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto. Annual 10 -K Report Page No. Page No. Report of Independent Accountants on Financial Statement Schedule 25 -- Schedule II - Valuation and Qualifying Accounts and Reserves 26 -- Page 19

(a) 3. Exhibits. Exhibit No. 2(1) Agreement dated April 18, 1994 between Sulzer Inc. and The Perkin-Elmer Corporation, as amended through August 31, 1994 (incorporated by reference to Exhibit 2(4) to Annual Report on Form 10-K of the Corporation for fiscal year ended June 30, 1994 (Commission file number 1- 4389)). 2(2) Agreement and Plan of Merger, dated August 23, 1997, among the Registrant, Seven Acquisition Corp. and PerSeptive Biosystems, Inc. (incorporated by reference to Exhibit 2 to Current Report on Form 8-K of the Corporation dated August 23, 1997 (Commission file number 1-4389)). 2(3) Stock Option Agreement, dated as of August 23, 1997, between the Company and PerSeptive Biosystems, Inc. (incorporated by reference to Exhibit 10 to the Company's Current Report on Form 8-K dated August 23, 1997 (Commission File No. 1-4389)). 3(i) Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 4.1 to the Corporation's Registration Statement on Form S-3 (No. 333-39549)). 3(ii) Amended and Restated By-laws of the Corporation, as amended through July 15, 1993 (incorporated by reference to Exhibit 3(ii) to Annual Report on Form 10-K of the Corporation for fiscal year ended June 30, 1993 (Commission file number 1-4389)). 4(1) Three Year Credit Agreement dated June 1, 1994, among Morgan Guaranty Trust Company, certain banks named in such Agreement, and the Corporation, as amended July 20, 1995 (incorporated by reference to Exhibit 4(1) to Annual Report on Form 10-K of the Corporation for fiscal year ended June 30, 1995 (Commission file number 1- 4389)). 4(2) Amendment dated March 31, 1996 to the Three Year Credit Agreement dated June 1, 1994, among Morgan Guaranty Trust Company, certain banks named in such Agreement, and the Corporation, as amended July 20, 1995 (incorporated by reference to Exhibit 4(2) to Annual Report on Form 10-K of the Corporation for fiscal year ended June 30, 1997 (Commission file number 1-4389)). 4(3) Shareholder Protection Rights Agreement dated April 30, 1989, between The Perkin-Elmer Corporation and The First National Bank of Boston (incorporated by reference to Exhibit 4 to Current Report on Form 8-K of the Corporation dated April 20, 1989 (Commission file number 1-4389)). 10(1) The Perkin-Elmer Corporation 1984 Stock Option Plan for Key Employees, as amended through May 21, 1987 (incorporated by reference to Exhibit 28(c) to Post Effective Amendment No. 1 to the Corporation's Registration Statement on Form S-8 (No. 2-95451)).* 10(2) The Perkin-Elmer Corporation 1988 Stock Incentive Plan for Key Employees (incorporated by reference to Exhibit 10(4) to Annual Report on Form 10-K of the Corporation for the fiscal year ended July 31, 1988 (Commission file number 1-4389)).* 10(3) The Perkin-Elmer Corporation 1993 Stock Incentive Plan for Key Employees (incorporated by reference to Exhibit 99 to the Corporation's Registration Statement on Form S- 8 (No. 33-50847)).* 10(4) The Perkin-Elmer Corporation 1996 Stock Incentive Plan (incorporated by reference to Exhibit 99 to the Corporation's Registration Statement on Form S-8 (No. 333-15189)).* 10(5) The Perkin-Elmer Corporation 1996 Employee Stock Purchase Plan (incorporated by reference to Exhibit 99 to the Corporation's Registration Statement on Form S-8 (No. 333-15259)).* 10(6) The Perkin-Elmer Corporation 1997 Stock Incentive Plan (incorporated by reference to Exhibit 99 to the Company's Registration Statement on Form S-8 (No. 333- 38713)).* 10(7) PerSeptive Biosystems, Inc. 1989 Stock Plan, as amended August 1, 1991 (incorporated by reference to Exhibit 3(i) of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1998 (Commission File No. 1-4389)).* 10(8) PerSeptive Biosystems, Inc. 1992 Stock Plan, as amended January 20, 1997 (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q of PerSeptive Biosystems, Inc. for the fiscal quarter ended March 29, 1997 (Commission File No. 0-20032)).* Page 20

10(9) Molecular Informatics, Inc. 1997 Equity Ownership Plan (incorporated by reference to Exhibit 99 to the Corporation's Registration Statement on Form S-8 (No. 333-42683)).* 10(10) Agreement dated September 12, 1995, between Registrant and Tony L. White (incorporated by reference to Exhibit 10(21) to Annual Report on Form 10-K of the Corporation for the fiscal year ended June 30, 1995 (Commission file number 1-4389)).* 10(11) Agreement dated June 3, 1996, between Registrant and Manuel A. Baez (incorporated by reference to Exhibit 10(10) to Annual Report on Form 10-K of the Corporation for the fiscal year ended June 30, 1997 (Commission file number 1-4389)).* 10(12) Deferred Compensation Contract dated September 15, 1994, between Registrant and Michael W. Hunkapiller (incorporated by reference to Exhibit 10(7) to Annual Report on Form 10-K of the Corporation for the fiscal year ended June 30, 1995 (Commission file number 1- 4389)).* 10(13) Change of Control Agreement dated September 12, 1995 between Registrant and Tony L. White (incorporated by reference to Exhibit 10(16) to Annual Report on Form 10- K of the Corporation for the fiscal year ended June 30, 1995 (Commission file number 1-4389)).* 10(14) Employment Agreement dated November 16, 1995, between Registrant and Michael W. Hunkapiller (incorporated by reference to Exhibit 10(11) to Annual Report on Form 10- K of the Corporation for fiscal year ended June 30, 1996 (Commission file number 1-4389)).* 10(15) Employment Agreement dated June 20, 1996, between Registrant and Manuel A. Baez (incorporated by reference to Exhibit 10(14) to Annual Report on Form 10- K of the Corporation for the fiscal year ended June 30, 1997 (Commission file number 1-4389)).* 10(16) Employment Agreement dated November 16, 1995, between Registrant and William B. Sawch.* 10(17) Employment Agreement dated September 25, 1997, between Registrant and Dennis L. Winger.* 10(18) Letter Agreement dated June 24, 1997, between Registrant and Dennis L. Winger.* 10(19) Deferred Compensation Contract dated July 15, 1993 between Registrant and William B. Sawch.* 10(20) Pledge Agreement and Promissory Note between Registrant and Michael W. Hunkapiller (incorporated by reference to Exhibit 10 to Quarterly Report on Form 10-Q of the Corporation for the quarter ended March 31, 1996 (Commission file number 1-4389)). 10(21) Contingent Compensation Plan for Key Employees of The Perkin-Elmer Corporation, as amended through August 1, 1990 (incorporated by reference to Exhibit 10(5) to Annual Report on Form 10-K of the Corporation for the fiscal year ended July 31, 1992 (Commission file number 1-4389)).* 10(22) The Perkin-Elmer Corporation Supplemental Retirement Plan as amended through August 1, 1991 (incorporated by reference to Exhibit 10(6) to Annual Report on Form 10-K of the Corporation for the fiscal year ended July 31, 1991 (Commission file number 1-4389)).* 10(23) The Excess Benefit Plan of The Perkin-Elmer Corporation dated August 1, 1984, as amended through June 30, 1993 (incorporated by reference to Exhibit 10(17) to Annual Report on Form 10-K of the Corporation for the fiscal year ended June 30, 1993 (Commission file number 1- 4389)).* 10(24) 1993 Director Stock Purchase and Deferred Compensation Plan as amended June 19, 1997 (incorporated by reference to Exhibit 10(18) to Annual Report on Form 10- K of the Corporation for the fiscal year ended June 30, 1997 (Commission file number 1-4389)).* 10(25) The Division Long-Term Incentive Plan of The Perkin- Elmer Corporation dated July 1, 1996 (incorporated by reference to Exhibit 10(20) to Annual Report on Form 10- K of the Corporation for the fiscal year ended June 30, 1997 (Commission file number 1-4389)).* 10(26) The Performance Unit Bonus Plan of The Perkin-Elmer Corporation (incorporated by reference to Exhibit 10(21) to Annual Report on Form 10-K of the Corporation for the fiscal year ended June 30, 1997 (Commission file number 1-4389)).* 10(27) The Estate Enhancement Plan of The Perkin-Elmer Corporation (incorporated by reference to Exhibit 10(22) to Annual Report on Form 10-K of the Corporation for the fiscal year ended June 30, 1997 (Commission file number 1-4389)). 10(28) Deferred Compensation Plan, as amended and restated effective as of January 1, 1998 (incorporated by reference to Exhibit 4 to the Company's Registration Statement on Form S-8 (No. 333-45187)).* Page 21

11 Computation of Net Income (Loss) per Share for the three years ended June 30, 1998 (incorporated by reference to Note 1 to Consolidated Financial Statements of Annual Report to Shareholders for the fiscal year ended June 30, 1998). 13 Annual Report to Shareholders for 1998 (to the extent incorporated herein by reference). 21 List of Subsidiaries. 23 Consent of PricewaterhouseCoopers LLP. 27 Financial Data Schedule. * Management contract or compensatory plan or arrangement. Note: None of the Exhibits listed in Item 14(a) 3 above, except Exhibit 23, is included with this Form 10-K Annual Report. Registrant will furnish a copy of any such Exhibit upon written request to the Secretary at the address on the cover of this Form 10-K Annual Report accompanied by payment of $3.00 U.S. for each Exhibit requested. (b) Reports on Form 8-K. Registrant filed Amendment No. 1 to Form 8-K on April 6, 1998, responding to Items 2 and 7 on Form 8-K dated January 22, 1998. The amendment included the following financial statements: Consolidated Balance Sheets at December 27, 1997 and September 30, 1997 Consolidated Statements of Operations for the Three months ended December 27, 1997 and December 28, 1996 Consolidated Statements of Cash Flows for the Three months ended December 27, 1997 and December 28, 1996 Notes to Unaudited Consolidated Financial Statements Introduction to Unaudited Pro Forma Condensed Combined Financial Statements Unaudited Pro Forma Condensed Combined Statements of Financial Position at December 31, 1997 Unaudited Pro Forma Condensed Combined Statements of Operations for the Six months ended December 31, 1997 Unaudited Pro Forma Condensed Combined Statements of Operations for the Six months ended December 31, 1996 Unaudited Pro Forma Condensed Combined Statements of Operations for the fiscal years ended June 30, 1997, 1996 and 1995 Notes to Unaudited Pro Forma Condensed Combined Financial Statements Page 22

SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. THE PERKIN-ELMER CORPORATION By /s/ William B. Sawch William B. Sawch Vice President, General Counsel and Secretary Date: September 21, 1998 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Registrant and in the capacities and on the dates indicated. /s/ Tony L. White September 22, 1998 Tony L. White Chairman of the Board of Directors, President and Chief Executive Officer (Principal Executive Officer) /s/ Dennis L. Winger September 21, 1998 Dennis L. Winger Senior Vice President and Chief Financial Officer (Principal Financial Officer) /s/ Ugo D. DeBlasi September 22, 1998 Ugo D. DeBlasi Corporate Controller (Principal Accounting Officer) /s/ Joseph F. Abely, Jr. September 16, 1998 Joseph F. Abely, Jr. Director Page 23

/s/ Richard H. Ayers September 17, 1998 Richard H. Ayers Director /s/ Jean-Luc Belingard September 17, 1998 Jean-Luc Belingard Director /s/ Robert H. Hayes September 17, 1998 Robert H. Hayes Director /s/ Georges C. St. Laurent, Jr. September 16, 1998 Georges C. St. Laurent, Jr. Director /s/ Carolyn W. Slayman September 17, 1998 Carolyn W. Slayman Director /s/ Orin R. Smith September 17, 1998 Orin R. Smith Director Page 24

REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE To the Board of Directors of The Perkin-Elmer Corporation Our audits of the consolidated financial statements referred to in our report dated July 31, 1998, appearing on Page 62 of the 1998 Annual Report to Shareholders of The Perkin-Elmer Corporation (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedule listed in Item 14(a)2 of this Form 10-K. In our opinion, the Financial Statement Schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Stamford, Connecticut July 31, 1998 Page 25

THE PERKIN-ELMER CORPORATION VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FOR THE FISCAL YEARS ENDED JUNE 30, 1998, 1997, AND 1996 (Amounts in thousands) ALLOWANCE FOR DOUBTFUL ACCOUNTS Balance at June 30,1995........................ $ 10,648 Charged to income in fiscal year 1996.......... 2,365 Deductions from reserve in fiscal year 1996.... (3,782) Balance at June 30, 1996....................... 9,231 Charged to income in fiscal year 1997.......... 1,187 Deductions from reserve in fiscal year 1997.... (3,011) Balance at June 30, 1997 (1)................... 7,407 Charged to income in fiscal year 1998.......... 4,673 Acquired businesses (2)........................ 495 Deductions from reserve in fiscal year 1998.... (3,298) Balance at June 30, 1998 (1)................... $ 9,277 (1) Deducted in the Consolidated Statements of Financial Position from accounts receivable. (2) See Note 2 to the Consolidated Financial Statements. SCHEDULE II Page 26

CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-39549) and Form S-8 (Nos. 2-95451, 33-25218, 33-44191, 33-50847, 33- 50849, 33-58778, 333-15189, 333-152259, 333-38713, 333- 38881, 333-42683, and 333-45187) of The Perkin-Elmer Corporation of our report dated July 31, 1998, appearing on page 62 of the Annual Report to Shareholders which is incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report on the Financial Statement Schedule, which appears on page 25 of this Form 10-K. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Stamford, Connecticut September 25, 1998 EXHIBIT 23 Page 27

EXHIBIT INDEX Exhibit Number Description 10(16) Employment Agreement dated November 16, 1995, between Registrant and William B. Sawch. 10(17) Employment Agreement dated September 25, 1997, between Registrant and Dennis L. Winger. 10(18) Letter Agreement dated June 24, 1997, between Registrant and Dennis L. Winger. 10(19) Deferred Compensation Contract dated July 15, 1993 between Registrant and William B. Sawch. 13 Annual Report to Shareholders for the fiscal year ended June 30, 1998 (to the extent incorporated herein by reference). 21 List of Subsidiaries. 23 Consent of PricewaterhouseCoopers LLP. 27 Financial Data Schedule. Page 28




                      EMPLOYMENT AGREEMENT


          AGREEMENT entered into as of November 16, 1995, between

THE PERKIN-ELMER CORPORATION, a New York corporation having its

principal place of business at Norwalk, Connecticut (the

"Company") and William B. Sawch residing at 146 Lyons Plains

Road, Weston, Connecticut  06883 (the "Employee").

          WHEREAS, the Employee has rendered and/or will render

valuable services to the Company and it is regarded essential by

the Company that it have the benefit of Employee's services in

future years; and

          WHEREAS, the Board of Directors of the Company believes

that it is essential that, in the event of the possibility of a

Change in Control of the Company (as defined herein), the

Employee be able to continue his attention and dedication to his

duties and to assess and advise the Board of Directors of the

Company (the "Board") whether such proposals would be in the best

interest of the Company and its shareholders without distraction

regarding any uncertainty concerning his future with the Company;

and

          WHEREAS, the Employee is willing to agree to continue

to serve the Company in the future;

          NOW, THEREFORE, it is mutually agreed as follows:

          1.  Employment.  The Company agrees to employ Employee,

and the Employee agrees to serve as an employee of the Company or

one or more of its subsidiaries after a Change of Control during

the Period of Employment (as those terms are defined in Section 2


                          Page 1

hereof) in such executive capacity as Employee served immediately prior to the Change in Control which caused the commencement of the Period of Employment. The Employee also agrees to serve during the Period of Employment, if elected or appointed thereto, as a Director of the Board of Directors of the Company and as a member of any committee of the Board of Directors. Notwith- standing anything to the contrary herein, the Period of Employment shall not commence and the Employee shall not be entitled to any rights, benefits, or payments hereunder unless and until a Change in Control has occurred. 2. Definitions. (a) Cause. During the Period of Employment, "Cause" means termination upon (i) the willful and continued failure by the Employee to perform substantially his duties with the Company (other than any such failure resulting from the Employee's incapacity due to physical or mental illness) after a demand for a substantial performance is delivered to the Employee by the Chief Executive Officer of the Company ("CEO") which specifically identifies the manner in which the CEO believes that the Employee has not substantially performed his duties, or (ii) the willful engaging by the Employee in illegal conduct which is materially and demonstrably injurious to the Company. For purposes of this Section 2(a), no act, or failure to act, on the part of the Employee shall be considered "willful" unless done, or omitted to be done, by the Employee in bad faith and without reasonable belief that the Employee's action or omission was in, or not Page 2

opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Employee in good faith and in the best interests of the Company. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than three quarters of the entire membership of the Board at a meeting of the Board called and held for that purpose (after reasonable notice to the Employee and an opportunity for him, together with counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Employee was guilty of the conduct set forth above in (i) or (ii) of this Section 2(a) and specifying the particulars thereof in detail. (b) Cash Compensation. "Cash Compensation" shall mean the sum of (i) Employee's Base Salary (determined in accordance with the provisions of Section 4(a) hereof) and (ii) Executive's incentive compensation (provided for under Section 4(b) hereof), which shall be an amount equal to the greatest of (x) the average of the amount of Employee's incentive compensation for the last three completed fiscal years immediately prior to the Employee's termination of employment (whether or not such years occurred during the Period of Employment), (y) the target amount of such Page 3

Employee's incentive compensation for the fiscal year in which his termination of employment occurs or (z) the Employee's target amount for the fiscal year in which the Change in Control occurs. (c) Change in Control. "Change in Control" means the occurrence of any of the following: an event that would be required to be reported (assuming such event has not been "previously reported") in response to Item 1(a) of the Current Report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred at such time as (i) any "person" within the meaning of Section 14(d) of the Securities Exchange Act of 1934 becomes the "beneficial owner" as defined in Rule 13d-3 thereunder, directly or indirectly, of more than 25% of the Company's Common Stock; (ii) during any two-year period, individuals who constitute the Board of Directors of the Company (the "Incumbent Board") as of the beginning of the period cease for any reason to constitute at least a majority thereof, provided that any person becoming a director during such period whose election or nomination for election by the Company's stockholders was approved by a vote of at least three quarters of the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination) shall be, for purposes of this clause (ii), considered as though such person were a member of the Incumbent Board; or (iii) the Page 4

approval by the Company's stockholders of the sale of all or substantially all of the stock or assets of the Company. (d) Disability. "Disability" means the absence of the Employee from his duties with the Company on a full-time basis for one hundred eighty (180) consecutive days as a result of incapacity due to physical or mental illness. (e) Good Reason. During the Period of Employment, "Good Reason" means: (i) an adverse change in the status of the Employee (other than any such change primarily attributable to the fact that the Company may no longer be publicly owned) or position(s) as an officer of the Company as in effect immediately prior to the Change in Control or the assignment to the Employee of any duties or responsibilities which, in his reasonable judgment, are inconsistent with such status or position(s), or any removal of the Employee from or any failure to reappoint or reelect him to such position(s) (except in connection with the termination of the Employee's employment for Cause, Disability, or upon attaining age 65 or upon taking early retirement under any of the Company's retirement plans, or as a result of death or by the Employee other than for Good Reason); (ii) a reduction by the Company after a Change in Control in the Employee's Base Salary; (iii) a material reduction after a Change in Control in the Employee's total annual compensation; provided, however, that for these purposes a reduction for any year of over 10% of Page 5

total compensation measured by the preceding year without a substantially similar reduction to all other executives participating in incentive compensation plans shall be considered "material"; and the failure of the Company to adopt or renew a stock option plan or to grant amounts of restricted stock or stock options, which are consistent with the Company's prior practices, to the Employee shall also be considered a material reduction, unless the Employee participates in substitute programs that provide substantially equivalent economic value to the Employee; (iv) the failure by the Company to continue in effect any Benefit Plan (as hereinafter defined) in which Employee was participating at the time of the Change in Control (or Benefit Plans providing Employee with at least substantially similar benefits) other than as a result of the normal expiration of any such Benefit Plan in accordance with its terms as in effect at the time of the Change in Control, or the taking of any action, or the failure to act, by the Company which would adversely affect Employee's continued participation in any such Benefit Plans on at least as favorable a basis to Employee as is the case immediately prior to the Change in Control or which would materially reduce Employee's benefits in the future under any of such Benefit Plans or deprive Employee of any material benefit enjoyed by Employee immediately prior to the Change in Control; (v) the failure by the Company after a Change in Control to provide and credit Employee with the number of paid Page 6

vacation days to which Employee was then entitled in accordance with the Company's normal vacation policy as in effect immediately prior to the Change in Control; or (vi) the Company's requiring the Employee after a Change in Control to be based more than fifty miles from the Employee's principal place of business immediately prior to the Change in Control except for required travel on the Company's business to an extent substantially consistent with the business travel obligations which he undertook on behalf of the Company prior to the Change in Control. (f) Period of Employment. (i) "Period of Employment" means, subject to the provisions of Section 2(f)(ii), the period of thirty-six (36) months commencing on the date of a Change in Control (as defined in Section 2(c) hereof) and the period of any extension or extensions thereof in accordance with the terms of this Section. The Period of Employment shall be extended automatically by one week for each week in which the Employee's employment continues after the date of a Change in Control. (ii) Notwithstanding the provisions of Section 2(f)(i) hereof, the Period of Employment shall terminate upon the occurrence of the earliest of (A) the Employee's attainment of age 65, or the election by the Employee to retire early from the Company under any of its retirement plans, (B) the death of the Employee, (C) the Disability of the Employee or (D) a termination of Employee's employment by the Company for Cause or by the Employee without Good Reason. Page 7

(g) Termination Date. "Termination Date" means the date on which the Period of Employment terminates. 3. Duties During the Period of Employment. While employed by the Company during the Period of Employment, the Employee shall devote his full business time, attention, and best efforts to the affairs of the Company and its subsidiaries; provided, however, that the Employee may engage in other activities, such as activities involving charitable, educational, religious, and similar types of organizations, speaking engagements, membership on the board of directors of other organizations, and similar types of activities to the extent that such other activities do not prohibit the performance of his duties under this Agreement, or inhibit or conflict in any material way with the business of the Company and its subsidiaries. 4. Current Cash Compensation. (a) Base Salary. The Company will pay to the Employee while employed by the Company during the Period of Employment an annual base salary ("Base Salary") in an amount determined by the Board of Directors or its Compensation Committee which shall never be less than the greater of (i) the Employee's Base Salary prior to the commencement of the Period of Employment or (ii) his Base Salary during the preceding year of the Period of Employment; provided, however, that it is agreed between the parties that the Company shall review annually the Employee's Base Salary, and in light of such review may, in the discretion Page 8

of the Board of Directors or its Compensation Committee, increase such Base Salary taking into account the Employee's responsi- bilities, inflation in the cost of living, increase in salaries of executives of other corporations, performance by the Employee, and other pertinent factors. The Base Salary shall be paid in substantially equal biweekly installments while Employee is employed by the Company. (b) Incentive Compensation. While employed by the Company during the Period of Employment, the Employee shall continue to participate in such of the Company's incentive compensation programs for executives as the Employee participated in prior to the commencement of the Period of Employment. Any amount awarded to the Employee under such programs shall be paid to Employee in accordance with the terms thereof. 5. Employee Benefits. (a) Vacation and Sick Leave. The Employee shall be entitled during the Period of Employment to a paid annual vacation of not less than twenty (20) business days during each calendar year while employed by the Company and to reasonable sick leave. (b) Regular Reimbursed Business Expenses. The Company shall reimburse the Employee for all expenses and disbursements reasonably incurred by the Employee in the performance of his duties during the Period of Employment. (c) Employment Benefit Plans or Arrangements. While employed by the Company, Employee shall be entitled to Page 9

participate in all employee benefit plans, programs, or arrangements ("Benefit Plans") of the Company, in accordance with the terms thereof, as in effect from time to time, which provide benefits to senior executives of the Company. For purposes of this Agreement, Benefit Plans shall include, without limitation, any compensation plan such as an incentive, deferred, stock option or restricted stock plan, or any employee benefit plan such as a thrift, pension, profit sharing, pre-tax savings, medical, dental, disability, salary continuation, accident, life insurance plan, or a relocation plan or policy, or any other plan, program, or policy of the Company intended to benefit employees. 6. Termination of Employment. (a) Termination by the Company for Cause or Termination by the Employee Other Than for Good Reason. If during the Period of Employment the Company terminates the employment of the Employee for Cause or if the Employee terminates his employment other than for Good Reason the Company shall pay the Employee (i) the Employee's Base Salary through the end of the month in which the Termination Date occurs, (ii) any incentive compensation payable to him pursuant to Section 4(b) hereof, including a pro rata share for any partial year, (iii) any accrued vacation pay, and (iv) benefits payable to him pursuant to the Company's Benefit Plans as provided in Section 5(c) hereof through the end of the month in which the Termination Date occurs. The amounts and benefits set forth in clauses (i), Page 10

(ii), (iii) and (iv) of the preceding sentence shall hereinafter be referred to as "Accrued Benefits." (b) Termination by the Company Without Cause or by the Employee for Good Reason. If during the Period of Employment the Company terminates the Employee's employment with the Company without Cause or the Employee terminates his employment with the Company for Good Reason, the Company will pay to Employee all Accrued Benefits and, in addition, pay or provide to the Employee the following: (i) within thirty (30) days after the date of termination, a lump sum equal to the greater of (A) the Employee's Cash Compensation for the remainder of the Period of Employment or (B) two times the Employee's Cash Compensation; (ii) for the greater of two years or the remainder of the Period of Employment immediately following the Employee's date of termination, the Employee and Employee's family shall continue to participate in any Benefit Plans of the Company (as defined in Section 5(c) hereof) in which Employee or Employee's family participated at any time during the one-year period ending on the day immediately preceding Employee's termination of employment, provided that (a) such continued participation is possible under the terms of such Benefit Plans, and (b) the Employee continues to pay contributions for Page 11

such participation at the rates paid for similar participation by active Company employees in similar positions to that held by the Employee immediately prior to the date of termination. If such continued participation is not possible, the Company shall provide, at its sole cost and expense, substantially identical benefits to the Employee plus pay an additional amount to the Employee equal to the Employee's liability for federal, state and local income taxes on any amounts includible in the Employee's income by virtue of the terms of this Section 6(b)(ii) so that Employee does not have to personally pay any federal, state and local income taxes by virtue of the terms of this Section 6(b)(ii); (iii) three additional years of service credit under the Company's Non-Qualified Plans and, for purposes of such plans, Employee's final average pay shall be deemed to be his Cash Compensation for the year in which the date of termination occurs; (iv) the Company shall take all reasonable actions to cause any Company restricted stock ("Restricted Stock") granted to Employee to become fully vested and any options to purchase Company stock ("Options") granted to Employee to become fully exercisable, and in the event the Company cannot Page 12

effect such vesting or acceleration within sixty (60) days, the Company shall pay within thirty (30) days thereafter to Employee (i) with respect to each Option, an amount equal to the product of (x) the number of unvested shares subject to such Option, multiplied by (y) the excess of the fair market value of a share of Company common stock on the date of Employee's termination of employment, over the per share exercise price of such Option and (ii) with respect to each unvested share of Restricted Stock an amount equal to the fair market value of a share of Company common stock on the date of Employee's termination of employment. Except as provided in the following sentence, the amounts payable to the Employee under this Section 6(b) shall be absolutely owing and shall not be subject to reduction or mitigation as a result of employment of the Employee elsewhere after the date of termination. Notwithstanding any provision herein to the contrary, the benefits described in clauses (i), (ii) and (iii) of this Section 6(b) shall only be payable with respect to the period ending upon the earlier of (i) the end of the period specified in each such clause or (ii) Employee's attainment of age 65. 7. Gross-Up. In the event any amounts due to the Employee under this Agreement after a Change in Control, under the terms of any Benefit Plan, or otherwise payable by the Page 13

Company or an affiliate of the Company are subject to excise taxes under Section 4999 of the Internal Revenue Code of 1986, as amended ("Excise Taxes"), the Company shall pay to the Employee, in addition to any other payments due under other provisions of this Agreement, an amount equal to the amount of such Excise Taxes plus the amount of any federal, state and local income or other taxes and Excise Taxes attributable to all amounts, including income taxes, payable under this Section 7, so that after payment of all income, Excise and other taxes with respect to the amounts due to the Employee under this Agreement, the Employee will retain the same net after tax amount with respect to such payments as if no Excise Taxes had been imposed. 8. Governing Law. This Agreement is governed by, and is to be construed and enforced in accordance with, the laws of the State of Connecticut. If under such laws any portion of this Agreement is at any time deemed to be in conflict with any applicable statute, rule, regulation, or ordinance, such portion shall be deemed to be modified or altered to conform thereto or, if that is not possible, to be omitted from this Agreement, and the invalidity of any such portion shall not affect the force, effect, and validity of the remaining portion hereof. 9. Notices. All notices under this Agreement shall be in writing and shall be deemed effective when delivered in person (in the Company's case, to its Secretary) or seventy-two (72) hours after deposit thereof in the U.S. mail, postage prepaid, for delivery as registered or certified mail -- addressed, in the Page 14

case of the Employee, to the Employee at Employee's residential address, and in the case of the Company, to its corporate headquarters, attention of the Secretary, or to such other address as the Employee or the Company may designate in writing at any time or from time to time to the other party. In lieu of personal notice or notice by deposit in the U.S. mail, a party may give notice by telegram, fax or telex. 10. Miscellaneous. This Agreement shall supersede the prior Employment Agreement dated November 21, 1991, with the Employee. This Agreement may be amended only by a subsequent written agreement of the Employee and the Company. This Agreement shall be binding upon and shall inure to the benefit of the Employee, the Employee's heirs, executors, administrators, beneficiaries, and assigns and to the benefit of the Company and its successors. Notwithstanding anything in this Agreement to the contrary, nothing herein shall prevent or interfere with the ability of the Company to terminate the employment of the Employee prior to a Change in Control nor be construed to entitle Employee to be continued in employment prior to a Change in Control and this Agreement shall terminate if Employee or the Company terminates Employee's employment prior to a Change in Control. Similarly, nothing herein shall prevent the Employee from retiring under any of the Company's retirement plans and receiving the corresponding benefits thereunder consistent with the treatment of other Company employees. Page 15

11. Fees and Expenses. The Company shall pay all reasonable legal fees and related expenses incurred by the Employee in connection with this Agreement following a Change in Control of the Company, including without limitation, all such fees and expenses, if any, incurred in connection with: (i) contesting or disputing, any termination of the Employee's employment hereunder; or (ii) the Employee seeking to obtain or enforce any right or benefit provided by the Agreement. 12. Arbitration. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Connecticut by three arbitrators in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction; provided, however, that the Employee shall be entitled to be paid as if his or her employment continued during the pendency of any dispute or controversy arising under or in connection with this Agreement. The Company shall bear all costs and expenses arising in connection with any arbitration pursuant to this Section 12. Page 16

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the year and day first above written. THE PERKIN-ELMER CORPORATION By: /s/ Tony L. White Tony L. White Chairman, President and Chief Executive Officer ATTEST: By: /s/ Michael J. McPartland Michael J. McPartland Vice President ACCEPTED AND AGREED: /s/ W.B. Sawch William B. Sawch Page 17





                      EMPLOYMENT AGREEMENT


           AGREEMENT  entered  into as  of  September  25,  1997,

between  THE  PERKIN-ELMER CORPORATION, a  New  York  corporation

having  its  principal place of business at Norwalk,  Connecticut

(the  "Company") and Dennis L. Winger, residing  at  19  Prospect

Ridge,   Quail  Ridge  Unit  56,  Ridgefield,  CT    06877   (the

"Employee").

           WHEREAS, the Employee has rendered and/or will  render

valuable services to the Company and it is regarded essential  by

the  Company  that it have the benefit of Employee's services  in

future years; and

          WHEREAS, the Board of Directors of the Company believes

that  it is essential that, in the event of the possibility of  a

Change  in  Control  of  the  Company (as  defined  herein),  the

Employee be able to continue his attention and dedication to  his

duties  and  to assess and advise the Board of Directors  of  the

Company (the "Board") whether such proposals would be in the best

interest  of the Company and its shareholders without distraction

regarding any uncertainty concerning his future with the Company;

and

           WHEREAS, the Employee is willing to agree to  continue

to serve the Company in the future;

          NOW, THEREFORE, it is mutually agreed as follows:

          1.  Employment.  The Company agrees to employ Employee,

and the Employee agrees to serve as an employee of the Company or

one  or more of its subsidiaries after a Change of Control during


                          Page 1

the Period of Employment (as those terms are defined in Section 2 hereof) in such executive capacity as Employee served immediately prior to the Change in Control which caused the commencement of the Period of Employment. The Employee also agrees to serve during the Period of Employment, if elected or appointed thereto, as a Director of the Board of Directors of the Company and as a member of any committee of the Board of Directors. Notwith- standing anything to the contrary herein, the Period of Employment shall not commence and the Employee shall not be entitled to any rights, benefits, or payments hereunder unless and until a Change in Control has occurred. 2. Definitions. (a) Cause. During the Period of Employment, "Cause" means termination upon (i) the willful and continued failure by the Employee to perform substantially his duties with the Company (other than any such failure resulting from the Employee's incapacity due to physical or mental illness) after a demand for a substantial performance is delivered to the Employee by the Chief Executive Officer of the Company ("CEO") which specifically identifies the manner in which the CEO believes that the Employee has not substantially performed his duties, or (ii) the willful engaging by the Employee in illegal conduct which is materially and demonstrably injurious to the Company. For purposes of this Section 2(a), no act, or failure to act, on the part of the Employee shall be considered "willful" unless done, or omitted to be done, by the Employee in bad faith and without reasonable Page 2

belief that the Employee's action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Employee in good faith and in the best interests of the Company. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than three quarters of the entire membership of the Board at a meeting of the Board called and held for that purpose (after reasonable notice to the Employee and an opportunity for him, together with counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Employee was guilty of the conduct set forth above in (i) or (ii) of this Section 2(a) and specifying the particulars thereof in detail. (b) Cash Compensation. "Cash Compensation" shall mean the sum of (i) Employee's Base Salary (determined in accordance with the provisions of Section 4(a) hereof) and (ii) Employee's incentive compensation (provided for under Section 4(b) hereof), which shall be an amount equal to the greatest of (x) the average of the amount of Employee's incentive compensation for the last three completed fiscal years immediately prior to the Employee's termination of employment (whether or not such years occurred Page 3

during the Period of Employment), (y) the target amount of such Employee's incentive compensation for the fiscal year in which his termination of employment occurs or (z) the Employee's target amount for the fiscal year in which the Change in Control occurs. (c) Change in Control. "Change in Control" means the occurrence of any of the following: an event that would be required to be reported (assuming such event has not been "previously reported") in response to Item 1(a) of the Current Report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred at such time as (i) any "person" within the meaning of Section 14(d) of the Securities Exchange Act of 1934 becomes the "beneficial owner" as defined in Rule 13d-3 thereunder, directly or indirectly, of more than 25% of the Company's Common Stock; (ii) during any two-year period, individuals who constitute the Board of Directors of the Company (the "Incumbent Board") as of the beginning of the period cease for any reason to constitute at least a majority thereof, provided that any person becoming a director during such period whose election or nomination for election by the Company's stockholders was approved by a vote of at least three quarters of the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination) shall be, for purposes of this clause (ii), considered as though Page 4

such person were a member of the Incumbent Board; or (iii) the approval by the Company's stockholders of the sale of all or substantially all of the stock or assets of the Company. (d) Disability. "Disability" means the absence of the Employee from his duties with the Company on a full-time basis for one hundred eighty (180) consecutive days as a result of incapacity due to physical or mental illness. (e) Good Reason. During the Period of Employment, "Good Reason" means: (i) an adverse change in the status of the Employee (other than any such change primarily attributable to the fact that the Company may no longer be publicly owned) or position(s) as an officer of the Company as in effect immediately prior to the Change in Control or the assignment to the Employee of any duties or responsibilities which, in his reasonable judgment, are inconsistent with such status or position(s), or any removal of the Employee from or any failure to reappoint or reelect him to such position(s) (except in connection with the termination of the Employee's employment for Cause, Disability, or upon attaining age 65 or upon taking early retirement under any of the Company's retirement plans, or as a result of death or by the Employee other than for Good Reason); (ii) a reduction by the Company after a Change in Control in the Employee's Base Salary; (iii) a material reduction after a Change in Control in the Employee's total annual compensation; provided, however, Page 5

that for these purposes a reduction for any year of over 10% of total compensation measured by the preceding year without a substantially similar reduction to all other executives participating in incentive compensation plans shall be considered "material"; and the failure of the Company to adopt or renew a stock option plan or to grant amounts of restricted stock or stock options, which are consistent with the Company's prior practices, to the Employee shall also be considered a material reduction, unless the Employee participates in substitute programs that provide substantially equivalent economic value to the Employee; (iv) the failure by the Company to continue in effect any Benefit Plan (as hereinafter defined) in which Employee was participating at the time of the Change in Control (or Benefit Plans providing Employee with at least substantially similar benefits) other than as a result of the normal expiration of any such Benefit Plan in accordance with its terms as in effect at the time of the Change in Control, or the taking of any action, or the failure to act, by the Company which would adversely affect Employee's continued participation in any such Benefit Plans on at least as favorable a basis to Employee as was the case immediately prior to the Change in Control or which would materially reduce Employee's benefits in the future under any of such Benefit Plans or deprive Employee of any material benefit enjoyed by Employee immediately prior to the Change in Control; Page 6

(v) the failure by the Company after a Change in Control to provide and credit Employee with the number of paid vacation days to which Employee was then entitled in accordance with the Company's normal vacation policy as in effect immediately prior to the Change in Control; or (vi) the Company's requiring the Employee after a Change in Control to be based more than fifty miles from the Employee's principal place of business immediately prior to the Change in Control except for required travel on the Company's business to an extent substantially consistent with the business travel obligations which he undertook on behalf of the Company prior to the Change in Control. (f) Period of Employment. (i) "Period of Employment" means, subject to the provisions of Section 2(f)(ii), the period of thirty-six (36) months commencing on the date of a Change in Control (as defined in Section 2(c) hereof) and the period of any extension or extensions thereof in accordance with the terms of this Section. The Period of Employment shall be extended automatically by one week for each week in which the Employee's employment continues after the date of a Change in Control. (ii) Notwithstanding the provisions of Section 2(f)(i) hereof, the Period of Employment shall terminate upon the occurrence of the earliest of (A) the Employee's attainment of age 65, or the election by the Employee to retire early from the Company under any of its retirement plans, (B) the death of the Employee, (C) the Disability of the Employee or (D) a termination Page 7

of Employee's employment by the Company for Cause or by the Employee without Good Reason. (g) Termination Date. "Termination Date" means the date on which the Period of Employment terminates. 3. Duties During the Period of Employment. While employed by the Company during the Period of Employment, the Employee shall devote his full business time, attention, and best efforts to the affairs of the Company and its subsidiaries; provided, however, that the Employee may engage in other activities, such as activities involving charitable, educational, religious, and similar types of organizations, speaking engagements, membership on the board of directors of other organizations, and similar types of activities to the extent that such other activities do not prohibit the performance of his duties under this Agreement, or inhibit or conflict in any material way with the business of the Company and its subsidiaries. 4. Current Cash Compensation. (a) Base Salary. The Company will pay to the Employee while employed by the Company during the Period of Employment an annual base salary ("Base Salary") in an amount determined by the Board of Directors or its Compensation Committee which shall never be less than the greater of (i) the Employee's Base Salary prior to the commencement of the Period of Employment or (ii) his Base Salary during the preceding year of the Period of Employment; provided, however, that it is agreed between the Page 8

parties that the Company shall review annually the Employee's Base Salary, and in light of such review may, in the discretion of the Board of Directors or its Compensation Committee, increase such Base Salary taking into account the Employee's responsi- bilities, inflation in the cost of living, increase in salaries of executives of other corporations, performance by the Employee, and other pertinent factors. The Base Salary shall be paid in substantially equal biweekly installments while Employee is employed by the Company. (b) Incentive Compensation. While employed by the Company during the Period of Employment, the Employee shall continue to participate in such of the Company's incentive compensation programs for executives as the Employee participated in prior to the commencement of the Period of Employment. Any amount awarded to the Employee under such programs shall be paid to Employee in accordance with the terms thereof. 5. Employee Benefits. (a) Vacation and Sick Leave. The Employee shall be entitled during the Period of Employment to a paid annual vacation of not less than twenty (20) business days during each calendar year while employed by the Company and to reasonable sick leave. (b) Regular Reimbursed Business Expenses. The Company shall reimburse the Employee for all expenses and disbursements reasonably incurred by the Employee in the performance of his duties during the Period of Employment. Page 9

(c) Employment Benefit Plans or Arrangements. While employed by the Company, Employee shall be entitled to participate in all employee benefit plans, programs, or arrangements ("Benefit Plans") of the Company, in accordance with the terms thereof, as in effect from time to time, which provide benefits to senior executives of the Company. For purposes of this Agreement, Benefit Plans shall include, without limitation, any compensation plan such as an incentive, deferred, stock option or restricted stock plan, or any employee benefit plan such as a thrift, pension, profit sharing, pre-tax savings, medical, dental, disability, salary continuation, accident, life insurance plan, or a relocation plan or policy, or any other plan, program, or policy of the Company intended to benefit employees. 6. Termination of Employment. (a) Termination by the Company for Cause or Termination by the Employee Other Than for Good Reason. If during the Period of Employment the Company terminates the employment of the Employee for Cause or if the Employee terminates his employment other than for Good Reason the Company shall pay the Employee (i) the Employee's Base Salary through the end of the month in which the Termination Date occurs, (ii) any incentive compensation payable to him pursuant to Section 4(b) hereof, including a pro rata share for any partial year, (iii) any accrued vacation pay, and (iv) benefits payable to him pursuant to the Company's Benefit Plans as provided in Page 10

Section 5(c) hereof through the end of the month in which the Termination Date occurs. The amounts and benefits set forth in clauses (i), (ii), (iii) and (iv) of the preceding sentence shall hereinafter be referred to as "Accrued Benefits." (b) Termination by the Company Without Cause or by the Employee for Good Reason. If during the Period of Employment the Company terminates the Employee's employment with the Company without Cause or the Employee terminates his employment with the Company for Good Reason, the Company will pay to Employee all Accrued Benefits and, in addition, pay or provide to the Employee the following: (i) within thirty (30) days after the date of termination, a lump sum equal to the greater of (A) the Employee's Cash Compensation for the remainder of the Period of Employment or (B) two times the Employee's Cash Compensation; (ii) for the greater of two years or the remainder of the Period of Employment immediately following the Employee's date of termination, the Employee and Employee's family shall continue to participate in any Benefit Plans of the Company (as defined in Section 5(c) hereof) in which Employee or Employee's family participated at any time during the one-year period ending on the day immediately preceding Employee's termination of employment, provided that (a) such continued participation is Page 11

possible under the terms of such Benefit Plans, and (b) the Employee continues to pay contributions for such participation at the rates paid for similar participation by active Company employees in similar positions to that held by the Employee immediately prior to the date of termination. If such continued participation is not possible, the Company shall provide, at its sole cost and expense, substantially identical benefits to the Employee plus pay an additional amount to the Employee equal to the Employee's liability for federal, state and local income taxes on any amounts includible in the Employee's income by virtue of the terms of this Section 6(b)(ii) so that Employee does not have to personally pay any federal, state and local income taxes by virtue of the terms of this Section 6(b)(ii); (iii) three additional years of service credit under the Company's Non-Qualified Plans and, for purposes of such plans, Employee's final average pay shall be deemed to be his Cash Compensation for the year in which the date of termination occurs; (iv) the Company shall take all reasonable actions to cause any Company restricted stock ("Restricted Stock") granted to Employee to become fully vested and any options to purchase Company stock Page 12

("Options") granted to Employee to become fully exercisable, and in the event the Company cannot effect such vesting or acceleration within sixty (60) days, the Company shall pay within thirty (30) days thereafter to Employee (i) with respect to each Option, an amount equal to the product of (x) the number of unvested shares subject to such Option, multiplied by (y) the excess of the fair market value of a share of Company common stock on the date of Employee's termination of employment, over the per share exercise price of such Option and (ii) with respect to each unvested share of Restricted Stock an amount equal to the fair market value of a share of Company common stock on the date of Employee's termination of employment. Except as provided in the following sentence, the amounts payable to the Employee under this Section 6(b) shall be absolutely owing and shall not be subject to reduction or mitigation as a result of employment of the Employee elsewhere after the date of termination. Notwithstanding any provision herein to the contrary, the benefits described in clauses (i), (ii) and (iii) of this Section 6(b) shall only be payable with respect to the period ending upon the earlier of (i) the end of the period specified in each such clause or (ii) Employee's attainment of age 65. Page 13

7. Gross-Up. In the event any amounts due to the Employee under this Agreement after a Change in Control, under the terms of any Benefit Plan, or otherwise payable by the Company or an affiliate of the Company are subject to excise taxes under Section 4999 of the Internal Revenue Code of 1986, as amended ("Excise Taxes"), the Company shall pay to the Employee, in addition to any other payments due under other provisions of this Agreement, an amount equal to the amount of such Excise Taxes plus the amount of any federal, state and local income or other taxes and Excise Taxes attributable to all amounts, including income taxes, payable under this Section 7, so that after payment of all income, Excise and other taxes with respect to the amounts due to the Employee under this Agreement, the Employee will retain the same net after tax amount with respect to such payments as if no Excise Taxes had been imposed. 8. Governing Law. This Agreement is governed by, and is to be construed and enforced in accordance with, the laws of the State of Connecticut. If under such laws any portion of this Agreement is at any time deemed to be in conflict with any applicable statute, rule, regulation, or ordinance, such portion shall be deemed to be modified or altered to conform thereto or, if that is not possible, to be omitted from this Agreement, and the invalidity of any such portion shall not affect the force, effect, and validity of the remaining portion hereof. 9. Notices. All notices under this Agreement shall be in writing and shall be deemed effective when delivered in person Page 14

(in the Company's case, to its Secretary) or seventy-two (72) hours after deposit thereof in the U.S. mail, postage prepaid, for delivery as registered or certified mail -- addressed, in the case of the Employee, to the Employee at Employee's residential address, and in the case of the Company, to its corporate headquarters, attention of the Secretary, or to such other address as the Employee or the Company may designate in writing at any time or from time to time to the other party. In lieu of personal notice or notice by deposit in the U.S. mail, a party may give notice by telegram, fax or telex. 10. Miscellaneous. This Agreement may be amended only by a subsequent written agreement of the Employee and the Company. This Agreement shall be binding upon and shall inure to the benefit of the Employee, the Employee's heirs, executors, administrators, beneficiaries, and assigns and to the benefit of the Company and its successors. Notwithstanding anything in this Agreement to the contrary, nothing herein shall prevent or interfere with the ability of the Company to terminate the employment of the Employee prior to a Change in Control nor be construed to entitle Employee to be continued in employment prior to a Change in Control and this Agreement shall terminate if Employee or the Company terminates Employee's employment prior to a Change in Control. Similarly, nothing herein shall prevent the Employee from retiring under any of the Company's retirement plans and receiving the corresponding benefits thereunder consistent with the treatment of other Company employees. Page 15

11. Fees and Expenses. The Company shall pay all reasonable legal fees and related expenses incurred by the Employee in connection with this Agreement following a Change in Control of the Company, including without limitation, all such fees and expenses, if any, incurred in connection with: (i) contesting or disputing, any termination of the Employee's employment hereunder; or (ii) the Employee seeking to obtain or enforce any right or benefit provided by the Agreement. 12. Arbitration. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Connecticut by three arbitrators in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction; provided, however, that the Employee shall be entitled to be paid as if his or her employment continued during the pendency of any dispute or controversy arising under or in connection with this Agreement. The Company shall bear all costs and expenses arising in connection with any arbitration pursuant to this Section 12. Page 16

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the year and day first above written. THE PERKIN-ELMER CORPORATION By: /s/ Tony L. White Tony L. White Chairman, President and Chief Executive Officer ATTEST: By: /s/ W.B. Sawch William B. Sawch Vice President General Counsel & Secretary ACCEPTED AND AGREED: /s/ Dennis L. Winger Dennis L. Winger Page 17

                                        The Perkin-Elmer Corporation
                                        Norwalk, Connecticut 06859


                                        Michael J. McPartland
                                        Vice President
                                        Human Resources


June 24, 1997







Mr. Dennis Winger
2828 Jackson Street
San Francisco, CA 94115

Dear Dennis:

This will confirm our offer to you of a position as Senior
Vice President, Finance and Chief Financial Officer.  At the
Board of Directors meeting, following your date of hire, it
will be recommended that you be elected a Senior Vice
President and Officer of the Corporation.  In this position,
you will report to Tony L.  White.  Reporting to you will be
Ugo DeBlasi, Corporate Controller; John Ostaszewski,
Assistant Treasurer; John Ryan, Vice President, Tax; John
McBennett, Vice President, Audit; Charles Poole, Vice
President, Investor Relations; and John Hill, Vice
President, Information Technology.

The annual starting salary for the position is $375,000.
Your salary will be reviewed annually, beginning in August,
1998.  In addition, you will be recommended to the
Management resources Committee of the Board as a participant
in our Contingent Compensation Program.  As a member of the
program, you are eligible to earn a bonus award of 60% of
your salary for achieving target-level performance.  In FY
98, you will participate with full share potential based on
Corporate performance.

As Chief Financial Officer, you will be eligible along with
the CEO for an annual cash flow related Restricted Stock
Award.  Upon achieving target performance, that Award would
provide you with 1,500 shares of Perkin-Elmer stock.  At 10%
over target performance, this increases to a maximum award
of 3,000 shares.  Obviously at 90% of target performance,
there is no award.  Details of this Award will be set forth
in a separate agreement.

Mr. Dennis Winger June 24, 1997 Page 2 We will recommend to the Board that you be granted a 50,000 share stock option at the Board meeting following your date of hire. The option grant will be valued according to the average market price of the stock on that day. Each year, you will be eligible for a stock option grant. At current guidelines used by the Board, this would be an annual grant of 25,000 shares. Also, subject to Board approval, will be the establishment of a change-of-control contract giving you certain rights and salary payments if such a situation arises. Details of these programs will be furnished in separate letters after the Board meeting. You will also be eligible to receive 30,000 performance based options. These options will be equally divided in 5,000 share increments with performance targets of $80 / $87 / $94 / $101 / $108 / $115. These shares vest when the target price is achieved for a 90 day period. There is an additional vesting requirement of three year active employment which must be satisfied. Enclosed is a copy of the briefing paper which we provided to the Board describing this program. In addition to the foregoing, the position offered to you entitles you to an annual car allowance of $15,000, financial planning and tax preparation assistance from a provider of your choice and four weeks annual vacation. The usual range of other benefits is also included. I have enclosed a copy of our Employee Guidebook which outlines our benefit programs. As we discussed, we propose protecting your gain of $1,270,000 in Chiron equity in the following manner: - A $250,000 cash payment at the time you join Perkin- Elmer. - A separate grant of 15,000 Perkin-Elmer options with a four year vesting period. If at the end of the four year vesting period, the aggregate appreciation of the options does not equal $1,000,000 (gross), the Company will provide a cash bonus to ensure that you receive $1.0M in pre tax gain. Obviously, if the aggregate appreciation of this option grant exceeds $1.0M, you will forgo any further payment.

Mr. Dennis Winger June 24, 1997 Page 3 In some instances, your awards will be made subject to shareholder approval of the shares to support the grant. If for some reason we fail to receive that approval, we would be prepared to honor our commitments with cash payments. Although Connecticut will be your principal residence, we understand that you will maintain a residence in California. In order to assist you in this living arrangement, we will reimburse reasonable travel expenses for your wife to accompany you between California and Connecticut. Dennis, we hope that you will accept this offer and join Perkin-Elmer. Speaking personally, I look forward to working with you and offer you my full support and cooperation in the fulfillment of your responsibilities. The other members of the management team are also very enthusiastic about the prospect of having you as a colleague. Please do not hesitate to call me at my office (203-761- 5451) or my home (203-259-6012), if you have any questions. Sincerely, /s/ Michael J. McPartland /jk cc: T.L. White

The Perkin-Elmer Corporation Norwalk, Connecticut 068599 July 21, 1997 Amended August 11, 1997 Tony L. White Chairman and President Chief Executive Officer Mr. Dennis Winger 2828 Jackson Avenue San Francisco, CA 94115 Dear Dennis: This will confirm our conversation of today. The following additions and clarifications to your offer letter of June 24 will be applicable in the event of your determination for any reason other than cause. 1. Regarding the 15,000 share option on page 2 (last ). The one million dollars guarantee would vest 25% per year for 4 years beginning with your first anniversary as a Perkin-Elmer employee. 2. Should you be terminated for anything other than cause within the first two years, you could expect two years of base pay and continuation of health benefits. This commitment will be extended annually, unless either party gives six months' notice of intent not to renew. 3. Your initial payment of $250,000 will be earned and paid after you have completed two weeks employment with the company. Dennis, we are delighted you have accepted this position and we look forward to getting the start date finalized and starting to work with you. My best to Barbara. Sincerely, /s/ Tony L. White Tony L. White



                 DEFERRED COMPENSATION CONTRACT





     AGREEMENT entered into as of July 15, 1993, between THE

PERKIN-ELMER CORPORATION, a New York corporation having its

principal place of business at Norwalk, Connecticut (hereinafter

referred to as the "Company") and William B. Sawch, of 146 Lyons

Plain Road, Weston, Connecticut  06883 (hereinafter referred to

as the "Employee").

     WHEREAS, the Employee has rendered valuable service to the

Company, and it is regarded as essential by the Company that it

shall have the benefit of his services during future years, and

     WHEREAS, it is the desire of the Company to assist the

Employee in providing for the contingencies of death and old age

dependency, and

     WHEREAS, it appears desirable to provide for retirement at

an age prior to the current normal retirement age of 65 years in

appropriate cases so as to facilitate an orderly succession in

senior management positions of the Company.

     NOW, THEREFORE, it is hereby mutually agreed as follows:

     (1)  Should the Employee still be in the employ of the

Company at age 65, the Company (beginning on a date to be

determined by the Company but within 6 months from the Employee's

retirement date) will pay him $25,000 each year for a continuous

period of 10 years.  Payment of this amount shall be made in

quarterly installments on the first day of the fiscal quarters of

the Company.


Should the Employee be in the employ of the Company at age 65 and thereafter die before the entire said 10 annual payments have been paid, the unpaid balance of the 10 annual payments will continue to be paid by the Company to that person designated by the Employee in a written notice of election as the Employee's beneficiary hereunder (hereinafter referred to as the "Beneficiary"). The Employee may change such designation at any time by giving the Company written notice of such intent; and such change shall become effective only upon being received and acknowledged by the Company. If the Beneficiary shall die after receiving benefits under this Agreement and further payments are payable, such further payments shall be paid to the estate of the Beneficiary. If the Employee shall survive the Beneficiary without designating another Beneficiary, any payments hereunder shall be paid to the estate of the Employee. The Employee may elect in writing at any time prior to his normal retirement date one of the following optional forms of payment in lieu of the normal form of payment set forth above, with the annual value of such optional form of payment being actuarially reduced from such normal form of payment; provided, however, that such optional forms of payment are not available to an Employee in the event he dies or terminates his employment and is covered by Paragraphs (2), (4), (5), or (6) of this Agreement: page 2

Option 1. Reduced annual payments payable during his life with the provision that if he shall not survive a period of ten years, such reduced annual payments shall continue to be paid after the death of the Employee and during the remainder of such ten-year period to the Beneficiary. Option 2. Reduced annual payments payable during his life, with the provision that after his death such reduced annual payments shall continue during the life of, and shall be paid to the Beneficiary (provided the Beneficiary survives the Employee). Option 3. Reduced annual payments payable during his life, with the provision that after his death annual payments equal to 50% of such reduced annual payments shall continue during the life of, and shall be paid to, the Beneficiary (provided the Beneficiary survives the Employee). Option 4. Reduced annual payments payable to the Employee during his life. Notwithstanding any contrary provisions herein, the Employee may not change his Beneficiary in Options 2 and 3, above, after the Employee has begun to receive payments hereunder. (2) Should the Employee die before age 65 while in the employ of the Company, the Company (beginning on a date to be determined by the Company but within 6 months from the date of death) will pay the Beneficiary $25,000 each year for a continuous period of 10 years. Payment of this amount shall be Page 3

made in quarterly installments on the first day of the fiscal quarters of the Company. (3) If the Employee shall retire on or after age 60 and before age 65, with the written consent or at the request of the Company, payments will be made by the Company in the amount and in the manner provided in Paragraph (1) to commence within 6 months of the date of retirement. (4) Should the Employee's employment be terminated at any time after the date hereof and prior to his attaining age 60, with the written consent or by the act of the Company, the Company will make payments in the manner provided in Paragraph (1) to commence when the Employee attains age 60 or the date of his prior death in an amount determined by multiplying the benefit set forth in Paragraph (1) by a fraction, the numerator of which shall be the number of whole months or major part thereof from the date hereof to the date of termination of employment, and the denominator of which shall be the number of whole months or major part thereof from the date hereof to the date he attains age 60. (5) Unless the Company shall consent in writing, the Employee, if his employment be terminated other than by death or disability or as provided in Paragraphs (3) or (4) prior to his attaining age 65, shall forfeit all right to benefits hereunder and the Company shall have no liability for any payment to the Page 4

Employee or the Beneficiary. Notwithstanding any other provision of this Agreement, if within three years of a Change in Control the employment of the Employee is terminated by the Employee for Good Reason or by the Company without Cause, then the Company will pay Employee the amount referred to in Paragraph (1) of this Agreement within 60 days of such termination of employment. For purposes hereof: (a) A "Change in Control" shall have occurred if (i) any "person" within the meaning of Section 14 (d) of the Securities Exchange Act of 1934 becomes the "beneficial owner" as defined in Rule 13d-3 thereunder, directly or indirectly, of more than 25% of the Company's Common Stock, (ii) any "person" acquires by proxy or otherwise, other than pursuant to solicitations by the Incumbent Board (as hereinafter defined), the right to vote more than 35% of the Company's Common Stock for the election of directors, for any merger or consolidation of the Company or for any other matter or question, (iii) during any two-year period, individuals who constitute the Board of Directors of the Company (the "Incumbent Board") as of the beginning of the period cease for any reason to constitute at least a majority thereof, provided that any person becoming a director during such period whose election or nomination for election by the Company's stockholders was approved by a vote of at least three-quarters of the Incumbent Board (either by a specific vote or by approval Page 5

of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination) shall be, for purposes of this clause (iii), considered as though such person were a member of the Incumbent Board, or (iv) the Company's Stockholders approve the sale of all or substantially all of the assets of the Company. (b) Termination by the Company of the employment of the Employee for "Cause" shall mean termination upon (i) the willful and continued failure by the Employee to perform substantially his duties with the Company (other than any such failure resulting from the Employee's incapacity due to physical or mental illness) after a demand for substantial performance is delivered to the employee by the Chairman of the Board or President of the Company which specifically identifies the manner in which such executive believes that the Employee has not substantially performed his duties, or (ii) the willful engaging by the Employee in illegal conduct which is materially and demonstrably injurious to the Company. For purposes of this subparagraph (b), no act or failure to act on the part of the Employee shall be considered "willful" unless done, or omitted to be done, by the Employee in bad faith and without reasonable belief that the Employee's action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon Page 6

the advice of counsel for the Company shall conclusively presumed to be done, or omitted to be done, by the Employee in good faith and in the best interests of the Company. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution, duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for that purpose (after reasonable notice to the employee and an opportunity for him, together with his counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Employee was guilty of the conduct set forth in sections (i) or (ii) of this subparagraph (b) and specifying the particulars thereof in detail. (c) Termination by the employee of employment for "Good Reason" shall mean termination based on: (i) an adverse change in the status of the Employee (other than any such change primary attributable to the fact that the Company may no longer be publicly owned) or the Employee's position(s) as an officer of the Company as in effect immediately prior to the Change in Control, or the assignment to the Employee of any duties or responsibilities which, in his reasonable judgment, are inconsistent with such status or position(s), or any removal of the Employee from, or any failure to reappoint Page 7

or reelect him to, such position(s) (except in connection with the termination of the Employee's employment for Cause, total disability, or retirement on or after attaining age 65 or as a result of death or by the Employee other than for Good Reason); (ii) a reduction by the Company in the Employee's base salary as in effect immediately prior to the Change in Control; (iii) a material reduction in the Employee's total annual compensation; a reduction for any year of over 10% of total compensation measured by the preceding year without a substantially similar reduction to other executives shall be considered "material"; provided, however, the failure of the Company to adopt or renew a stock option plan or to grant stock options to the Employee shall not be considered a reduction; and (iv) the Company's requiring the employee to be more than fifty miles from Norwalk, Connecticut, except for required travel on the Company's business to an extent substantially consistent with the business travel obligations which he undertook on behalf of the Company prior to the Change in Control. (6) In the event the Employee shall become disabled so that he is unable to perform his duties as an employee and so that he is entitled to benefits under a long range disability insurance program made available by the Company, or so that he would have been eligible for such benefits had he elected to insure himself thereunder, the Company will make payments as provided in Paragraph (1) above to commence at age 65. Page 8

In the event the Employee should die at any time after becoming disabled and before attaining age 65, payments as provided in this Paragraph (6) will be made to the Beneficiary commencing as of the date of the Employee's death. (7) The Company has or may procure a policy or policies of life insurance upon the life of the Employee to aid it in meeting its obligations under this Agreement. It is understood, however, that such policy or policies held by the Company and the proceeds therefrom shall be treated as the general assets of the Company; that they shall in no way represent any vested, secured, or preferred interest of the Employee or his beneficiaries under this Agreement; and that the Company shall be under no obligation either to procure or to continue life insurance in force upon the life of the Employee. The employee hereby agrees that he already has or will submit to a physical examination and answer truthfully and completely without mental reservation or concealment any question or request for information by any insurance company in connection with the issuance of any policy procured by the Company under this Paragraph. (7). In the event the Employee fails to do soor in the event the Employee dies by suicide, and the liability of the insurer under such policy is restricted as a result of such failure or suicide, then the Company shall thereby be released from all of its obligations under Paragraph (2) above. Page 9

(8) If the Company shall procure any policy or policies of life insurance in accordance with Paragraph (7) above and shall have the option of including in any such policy an accidental death or so-called "double indemnity" provision, the Company will so advise the Employee and, if the Employee requests and agrees to pay any additional premium resulting therefrom, will include in the policy such accidental death or double indemnity provisions as may be available and will further provide or cause to be provided that any benefit payable under or by reason of such provisions shall be paid as a death benefit to the beneficiary designated by the Employee hereunder; provided that in the event the Employee shall cease to pay such additional premium the Company may cancel any accidental death or double indemnity provision; and further provided that the inclusion of such a provision shall in no way affect the Company's right to cancel or otherwise dispose of the policy, even though such action may have the effect of terminating such provision. (9) If during a period of 10 years from the termination of his employment with the Company the Employee shall: engage in a business competitive with any business activity engaged in by the Company at any time while he was employed; enter into the service of any organization so engaged in such business (or any subsidiary or affiliate of such an organization); or personally engage in or enter the service of any organization that is Page 10

engaged in consulting work or research or development or engineering activities for any organization so engaged in such business (or any subsidiary or affiliate of such an organization), then any liability of the Company to make any further payments hereunder shall cease. The investment of funds by the Employee in securities of a corporation listed on a recognized stock exchange shall not be considered to be a breach of this Paragraph. (10) The Company may in its sole discretion grant the Employee a leave of absence for a period not to exceed one year during which time the Employee will be considered to be still in the employ of the Company for the purposes of this Agreement. (11) The Company in its sole discretion and without the consent of the Employee, his estate, his beneficiaries, or any other person claiming through or under him, may commute any payments which are due hereunder at the rate of 4% per annum to a lump sum and pay such lump sum to the Employee or to the beneficiary or beneficiaries entitled to receive payment at the date of commutation, and such payment shall be a full discharge of the Company's liabilities hereunder. The Company may also in its sole discretion and without the consent of any other person accelerate the payment of any of the sums payable hereunder. (12) The right to receive payments under this Agreement shall not be assignable or subject to anticipation, nor shall Page 11

such right be subject to garnishment, attachment, or any other legal process of creditors of the Employee or of any person or persons designated as beneficiaries hereunder except to the extent that this provision may be contrary to law. (13) This Agreement creates no rights in the Employee to continue in the employ of the Company for any length of time nor does it create any rights in the Employee or obligations on the part of the Company other than those set forth herein. (14) If the Company, or any corporation surviving or resulting from any merger or consolidation to which the Company may be a party or to which substantially all the assets of the Company shall be sold or otherwise transferred, shall at any time be merged or consolidated with or into any other corporation or corporations or shall otherwise transfer substantially all its assets to another corporation, the terms and provisions of this Agreement shall be binding upon and inure to the benefit of the corporation surviving or resulting from such merger or consolidation or to which such assets shall be so sold or otherwise transferred. Except as herein provided, this Agreement shall not be assignable by the Company or the Employee. This Agreement is solely between the Company and the Employee. The Employee and his beneficiaries shall have recourse only against the Company for enforcement, and the Agreement shall be binding upon the beneficiaries, heirs, executors, and administrators of the Employee and upon the successors and assigns of the Company. Page 12

This Agreement has been made, executed, and delivered in the State of Connecticut; and shall be governed in accordance with the laws thereof. IN WITNESS WHEREOF, the parties hereto have set their hands and affixed the seal of the Corporation as of the date first written above. THE PERKIN-ELMER CORPORATION By: /s/ Gaynor N. Kelley Gaynor N. Kelley Chairman and Chief Executive Officer ATTEST: /s/ Charles J. Heinzer By: ACCEPTED AND AGREED: By /s/ W.B. Sawch (B) kec/208/1 Page 13

I hereby designate the estate of Wm B. Sawch , my , as beneficiary under my Deferred Compensation Contract between The Perkin-Elmer Corporation and myself. /s/ W.B. Sawch 8/4/93 Date

SELECTED FINANCIAL DATA                 The Perkin-Elmer Corporation

<TABLE>
<CAPTION>
(Dollar amounts in thousands except per share amounts)
For the years ended June 30,                      1998          1997          1996         1995         1994
Financial Operations                          <C>           <C>           <C>           <C>          <C>
Net revenues                                 $ 1,531,165   $ 1,373,282   $ 1,248,967   $ 1,152,935  $ 1,070,522
Income from operations before special items      127,133       116,602        77,995        63,548       54,647
  Per diluted share of common stock                 2.53          2.33          1.67          1.40         1.15
Special items, net of taxes                      (70,745)       13,796      (114,518)      (17,241)     (14,681)
Income (loss) from continuing operations          56,388       130,398       (36,523)       46,307       39,966
  Per share of common stock
    Basic                                           1.16          2.74          (.80)         1.04          .87
    Diluted                                         1.12          2.63          (.80)         1.02          .84
Discontinued operations                                                                                 (22,851)
Net income (loss)                                56,388        130,398       (36,523)       46,307       17,115
  Per share of common stock
    Basic                                           1.16          2.74          (.80)         1.04          .37
    Diluted                                         1.12          2.63          (.80)         1.02          .36
Dividends per share                                  .68           .68           .68           .68          .68
Other information
Cash and short-term investments              $    84,091   $   217,222   $    121,145  $   103,826  $    50,605
Working capital                                  287,991       354,741        229,639      256,607      171,068
Capital expenditures                             116,708        69,822         44,309       50,191       46,588
Total assets                                   1,334,474     1,238,749      1,062,979    1,027,051    1,021,746
Long-term debt                                    33,726        59,152         33,694       64,524       61,500
Total debt                                        45,825        89,068         89,801      123,224      145,052
Shareholders' equity                             564,248       504,270        373,727      369,807      364,123

</TABLE>

Results  for  fiscal  1998, 1997, 1996,  and 1995 included net before-
tax  restructuring  and  other merger costs of  $48.1  million,  $13.0
million, $89.1 million, and $38.5 million,  respectively,  and before-
tax  gains  related  to  investments  of $1.6 million, $64.9  million,
$11.7 million, and $20.8  million, respectively.  Other special  items
affecting  comparability  included acquired research  and  development
charges  of  $28.9  million, $26.8 million, $33.9  million, and  $14.7
million for fiscal 1998, 1997, 1996,and 1994, respectively; before-tax
charges  for the impairment of assets of $7.5 million and $9.9 million
for fiscal 1997 and 1996, respectively; and a $22.9 million charge for
discontinued operations in fiscal 1994.


                             Page 29

Management's Discussion and Analysis Management's Discussion of Operations The following discussion should be read in conjunction with the consolidated financial statements and related notes included on pages 39 through 61. Historical results and percentage relationships are not necessarily indicative of operating results for any future periods. Events Impacting Comparability Acquisitions and Investments. On January 22, 1998, The Perkin-Elmer Corporation (the Company) acquired PerSeptive Biosystems, Inc. (PerSeptive). The acquisition has been accounted for as a pooling of interests and, accordingly, the Company's financial results have been restated to include the combined operations. The Company acquired Molecular Informatics, Inc. (Molecular Informatics) and a 14.5% interest, and approximately 52% of the voting rights, in Tecan AG (Tecan) during the second quarter of fiscal 1998, and GenScope, Inc. (GenScope) during the third quarter of fiscal 1997. The results of operations for the above acquisitions, each of which was accounted for as a purchase, have been included in the consolidated financial statements since the date of each respective acquisition. A discussion of the Company's significant acquisitions and investments is provided in Note 2. Restructuring and Other Merger Costs. During fiscal 1998, the Company recorded $48.1 million of before-tax charges, or $.87 per diluted share after-tax, for restructuring and other merger costs to integrate PerSeptive into the Company. The charge included $4.1 million of inventory-related write-offs, recorded in cost of sales, associated with the rationalization of certain product lines. The objectives of the integration plan are to lower PerSeptive's cost structure by reducing excess manufacturing capacity, achieve broader worldwide distribution of PerSeptive's products, and combine sales, marketing, and administrative functions. In fiscal 1997 and 1996, the Company implemented restructuring actions primarily targeted to improve the profitability and cash flow performance of the Analytical Instruments Division (Analytical Instruments). The fiscal 1997 plan focused on the transition from a highly vertical manufacturing operation to one that relies more on outsourcing functions not considered core competencies. The fiscal 1996 plan was a broad program designed to reduce administrative and manufacturing overhead and improve operating efficiency, primarily in Europe and the United States. The before-tax charges associated with the implementation of these actions were $24.2 million, or $.31 per diluted share after-tax, in fiscal 1997, and $71.6 million, or $1.35 per diluted share after-tax, in fiscal 1996. Fiscal 1997 also reflected an $11.2 million before-tax, or $.13 per diluted share after- tax, reduction of charges associated with the fiscal 1996 plan. Also in fiscal 1996, a before-tax charge of $17.5 million, or $.38 per diluted share after-tax, was recorded by PerSeptive for restructuring actions and other related costs. A complete discussion of the Company's restructuring programs is provided in Note 10. Acquired Research and Development. During fiscal 1998, 1997, and 1996, the Company recorded charges for purchased in-process research and development in connection with certain acquisitions for the PE Biosystems Division (PE Biosystems). The charges recorded in fiscal 1998, 1997, and 1996 were $28.9 million, $26.8 million, and $33.9 million, or $.57, $.54, and $.72 per diluted share after-tax, respectively (see Note 2). Impairment of Assets. Cost of sales for fiscal 1997 included $7.5 million, or $.13 per diluted share after-tax, for the write-down of goodwill and other assets. The fiscal 1997 charge, as a result of adopting 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," included $5.6 million to write-down goodwill associated with the fiscal 1995 acquisition of Photovac Inc. and $1.9 million of other assets associated primarily with Analytical Instruments. In fiscal 1996, the Company recorded a before-tax cost of sales charge of $9.9 million, or $.21 per diluted share after-tax, for the impairment of certain production assets associated with the realignment of the product offerings of PerSeptive (see Note 1). Gain on Investments. Fiscal 1998, 1997, and 1996 included before-tax gains of $1.6 million, $64.9 million, and $11.7 million, respectively, related to the sale and release of contingencies on minority equity investments. The fiscal 1998, 1997, and 1996 after-tax gains per diluted share were $.03, $1.15, and $.19, respectively (see Note 2). Results of Operations - 1998 Compared with 1997 The Company reported net income of $56.4 million, or $1.12 per diluted share, for fiscal 1998, compared with net income of $130.4 million, or $2.63 per diluted share, for fiscal 1997. On a comparable basis, excluding the special items previously described, net income increased 9.0% to $127.1 million for fiscal 1998 compared with $116.6 million for fiscal 1997, and earnings per diluted share increased 8.6% to $2.53 for fiscal 1998 from $2.33 for fiscal 1997. Excluding the effects of currency translation and special items, earnings per diluted share would have increased approximately 25% compared with the prior year. Net revenues were $1,531.2 million for fiscal 1998, compared with $1,373.3 million for fiscal 1997, an increase of 11.5%. Excluding Tecan, revenues increased 7.8% compared with the prior year. The effects of currency translation decreased net revenues by approximately $68 million, or 5%, compared with the prior year, as the U.S. dollar strengthened against most European and Far Eastern currencies. Geographically, the Company reported revenue growth in all regions compared with the prior year. The United States reported the strongest growth with revenues increasing 22.3%, or 18.6% excluding Tecan, benefiting from growth in both the PE Biosystems and Analytical Instruments business segments. Revenues increased 5.4% in Europe, 1% in the Far East, and 14.9% in other markets, specifically Latin America, where revenues Page 30

increased 36% compared with the prior year. Excluding Tecan, revenues remained essentially unchanged in Europe and the Far East compared with the prior year. Before the effects of currency translation and excluding Tecan, revenues would have increased approximately 8% in Europe, 9% in the Far East, and 19% in other markets. Growth in the Far East market was adversely affected by the economic turmoil in the Pacific Rim and the weakening of the Japanese Yen. Net revenues by business segment (Dollar amounts in millions) 1998 1997 PE Biosystems $ 921.8 $ 749.2 Analytical Instruments 609.4 624.1 $ 1,531.2 $ 1,373.3 On a business segment basis, net revenues of PE Biosystems, the Company's life science division, which includes PE Applied Biosystems, PerSeptive, Molecular Informatics, Tropix, GenScope, and Tecan, increased 23.0% to $921.8 million for fiscal 1998 compared with $749.2 million for the prior year. Excluding Tecan, revenues increased 16.3% over the prior year. The negative effects of a strong U.S. dollar reduced the division's revenues by approximately $33 million, or 4%. On a worldwide basis, excluding Tecan and the effects of currency translation, revenues would have increased approximately 21% compared with the prior year. Increased demand for genetic analysis, liquid chromatography/mass spectrometry (LC/MS), and polymerase chain reaction (PCR) product lines was the primary contributor. All geographic markets reported increased revenues over the prior year. Excluding Tecan, net revenues in the United States, Europe, and the Far East increased 25.3%, 10.2%, and 4.5%, respectively. Before the effects of currency translation, and excluding Tecan, revenues in Europe and the Far East would have increased approximately 18% and 14%, respectively, compared with the prior year. The Company believes slower Japanese government funding in the second half of fiscal 1998 and the lack of a supplemental budget, which added to fiscal 1997 revenues, contributed to a lower growth rate of only 3% in the Japanese market. Net revenues for Analytical Instruments were $609.4 million for fiscal 1998 compared with $624.1 million for the prior year, a decrease of 2.4%. The effects of currency translation decreased net revenues by approximately $35 million, or 6%. Excluding currency effects, revenues would have increased approximately 3%. Increased revenues of chromatography products, primarily data handling and LIMS (Laboratory Information Management Systems), were more than offset by lower demand for organic and inorganic products. Geographically, revenues in the United States and other markets increased 6.5% and 10.1%, respectively. Revenues in Latin America, included in other markets, increased 25% compared with the prior year. Revenues in Europe and the Far East decreased 7.5% and 9.6%, respectively; however, excluding the effects of currency translation, revenues in the Europe and the Far East remained essentially unchanged compared with fiscal 1997. Gross margin as a percentage of net revenues was 50.9% for fiscal 1998 compared with 49.5% for fiscal 1997. Fiscal 1998 gross margin included $4.1 million of inventory-related write-offs associated with the rationalization of certain product lines in connection with the acquisition of PerSeptive, and fiscal 1997 included a charge of $7.5 million for the impairment of assets associated primarily with Analytical Instruments. Excluding the special items, fiscal 1998 gross margin increased to 51.2% of revenues compared with 50.1% for fiscal 1997. Benefits realized by PE Biosystems from the sale of higher-margin genetic analysis products, increased royalty revenues in the United States, and cost savings resulting from Analytical Instruments' restructuring actions more than offset the negative effects of currency translation. Selling, general, and administrative (SG&A) expenses were $459.6 million for fiscal 1998 compared with $416.3 million for the prior year. The 10.4% increase in expenses, or 6.7% excluding Tecan, was due to higher planned worldwide selling and marketing expenses for PE Biosystems, commensurate with the substantially higher revenue and order growth. Before the effects of currency translation and Tecan, SG&A expenses increased 10.6% compared with the prior year. SG&A expenses for Analytical Instruments decreased 3.3% compared with the prior year, primarily because of lower expenses in Europe resulting in part from the restructuring plans. As a percentage of net revenues, SG&A expenses for the Company remained essentially unchanged from the prior year at 30%. Research, development, and engineering (R&D) expenses of $152.2 million increased 25.9% over the prior year, or 21.2% excluding Tecan. R&D spending in PE Biosystems increased 37.0%, or 29.8% excluding Tecan, over the prior year as the Company continued its product development efforts and preparation for new product launches in this segment. The division's spending accounted for 71% of the Company's R&D expenses. R&D expenses for Analytical Instruments remained essentially unchanged compared with the prior year. As a percentage of net revenues, the Company's R&D expenses increased to 9.9% compared with 8.8% for the prior year. During fiscal 1998, the Company recorded $48.1 million of charges for restructuring and other merger costs to integrate PerSeptive into the Company following the acquisition (see Note 10). The objectives of the integration plan are to lower PerSeptive's cost structure by reducing excess manufacturing capacity, achieve broader worldwide distribution of PerSeptive's products, and combine sales, marketing, and administrative functions. The charge included: $33.9 million for restructuring the combined operations; $8.6 million for transaction costs; and $4.1 million of inventory-related write-offs, recorded in cost of sales, associated with the rationalization of certain product lines. Additional non-recurring acquisition costs of $1.5 million for training, relocation, and communication costs were recognized as period expenses in the third and fourth quarters and were classified as other merger-related costs. The Page 31

Company expects to incur an additional $6.5 million to $8.5 million of acquisition-related costs for training, relocation, and communication in fiscal 1999. These costs will be recognized as period expenses when incurred and will be classified as other merger costs. The $33.9 million restructuring charge includes $13.8 million severance-related costs and workforce reductions of approximately 170 employees, consisting of 114 employees in production labor and 56 employees in sales and administrative support. The remaining $20.1 million represents facility consolidation and asset-related write-offs and includes: $11.7 million for contract and lease terminations and facility related expenses in connection with the reduction of excess manufacturing capacity; $3.2 million for dealer termination payments, sales office consolidations, and consolidation of sales and administrative support functions; and $5.2 million for the write-off of certain tangible and intangible assets and the termination of certain contractual obligations. These restructuring actions are expected to be substantially completed by the end of fiscal 1999. Transaction costs of $8.6 million include acquisition-related investment banking and professional fees. As of June 30, 1998, approximately 12 employees were separated under the plan and the actions are proceeding as planned. The restructuring plan actions announced in the fourth quarter of fiscal 1997 have been proceeding as planned. These actions focused on the transition of Analytical Instruments from a highly vertical manufacturing operation to one that relies more on outsourcing functions not considered core competencies. The plan also included actions to finalize consolidation of sales and administrative support, primarily in Europe (see Note 10). For the year ended June 30, 1998, the Company achieved approximately $9 million in before-tax savings attributable to this plan, and expects to achieve approximately $19 million in succeeding fiscal years. Fiscal 1998 included $28.9 million of purchased in-process research and development associated with the acquisition of Molecular Informatics. In fiscal 1997, the Company recorded a charge of $26.8 million primarily for in-process research and development related to the acquisition of GenScope. Operating income decreased to $94.5 million for fiscal 1998 compared with $103.0 million for the prior year. Excluding special items, operating income increased 14.1% to $171.4 million for fiscal 1998 compared with $150.3 million for fiscal 1997. Excluding Tecan and special items, operating income increased by 9% compared with the prior year. On a comparable basis excluding special items, Tecan, and the effects of currency translation, operating income would have increased 26% compared with the prior year. The effects of currency translation decreased operating income by approximately $25 million compared with the prior year. A combination of revenue growth in PE Biosystems and reduced expense levels, contributed to the improvement. Operating income by business segment PE Analytical (Dollar amounts in millions) Biosystems Instruments 1998 Segment income $ 150.8 $ 57.4 Restructuring and other merger costs (48.1) Acquired R&D (28.9) Operating income $ 73.8 $ 57.4 1997 Segment income $ 125.4 $ 56.1 Restructuring (13.0) Acquired R&D (26.8) Impairment of assets (.7) (6.8) Operating income $ 97.9 $ 36.3 Operating income for PE Biosystems decreased to $73.8 million for fiscal 1998 compared with $97.9 million for fiscal 1997. Excluding the special charges for restructuring and other merger costs, acquired research and development, and the impairment of assets, operating income increased $25.4 million, or 20.3%, primarily as a result of increased volume and improved margins. Excluding Tecan, operating income increased 14.5% compared with the prior year. Before the effects of currency translation and excluding Tecan, fiscal 1998 operating income increased 28.1% compared with the prior year. Geographically, fiscal 1998 segment income increased 39% in the United States, 20% in the Far East, and 17% in Europe compared with fiscal 1997. A 23.5% increase in operating income from higher-margin sequencing and mapping systems was the primary contributor. Excluding the effects of currency translation, segment income would have increased approximately 34%. As a percentage of net revenues, segment income, before special items, remained essentially unchanged compared with the prior year. Operating income for Analytical Instruments increased to $57.4 million for fiscal 1998 compared with $36.3 million for fiscal 1997. Operating income for the division, excluding the fiscal 1997 charges for restructuring costs and impairment of assets, increased by 2.3% compared with the prior year. Lower expense levels resulting from cost control and the actions of the restructuring programs were essentially offset by lower sales volume. Excluding currency effects, segment income would have increased approximately 17%. As a percentage of net revenues, segment income before special items increased to 9.4% for fiscal 1998 from 9.0% for fiscal 1997. In fiscal 1998 and 1997, the Company recorded gains of $1.6 million and $64.9 million, respectively, on the sale and release of contingencies on minority equity investments (see Note 2). Interest expense was $4.9 million for fiscal 1998 compared with $5.9 million for the prior year. This decrease was primarily due to the refinancing of PerSeptive's 8 - 1/4% Convertible Subordinated Page 32

Notes (the PerSeptive Notes) together with slightly lower outstanding debt balances and lower average interest rates. Interest income was $5.9 million for fiscal 1998 compared with $8.8 million for the prior year, primarily because of lower cash balances resulting from the use of cash to fund the Company's continued investments and acquisitions in the life sciences segment, as well as from lower interest rates. Other income, net for fiscal 1998 of $3.5 million, primarily related to the sale of certain operating and non-operating assets, compared with other income, net of $1.8 million for the prior year. The Company's effective tax rate was 38.4% for fiscal 1998 and 24.5% for fiscal 1997. Excluding Tecan in fiscal 1998, and special items in fiscal 1998 and fiscal 1997, the effective income tax rate was 25% for fiscal 1998 compared with 21% for fiscal 1997. The rate for fiscal 1997 was favorably impacted by PerSeptive's utilization of loss carryforwards. An analysis of the differences between the federal statutory income tax rate and the effective rate is provided in Note 4. Minority interest expense of $5.6 million was recognized in fiscal 1998 relating to the Company's 14.5% financial interest in Tecan (see Note 2). Results of Operations - 1997 Compared with 1996 The Company reported net income of $130.4 million, or $2.63 per diluted share, for fiscal 1997 compared with a net loss of $36.5 million, or $.80 per diluted share, for fiscal 1996. On a comparable basis, excluding the special items previously described, net income and earnings per diluted share increased 49.5% and 39.5%, respectively. Net revenues for fiscal 1997 were $1,373.3 million, an increase of 10% over the $1,249.0 million reported for fiscal 1996. The effects of currency rate movements decreased net revenues by approximately $45 million, or 4%, as the U.S. dollar strengthened against the Japanese Yen and certain European currencies. All geographic markets experienced revenue growth for fiscal 1997. Net revenues in the United States increased 13.4% over the prior year, benefiting from growth in both PE Biosystems and Analytical Instruments. Net revenues in Europe and the Far East increased 8.6% and 8.2%, respectively, as higher revenues from PE Biosystems were partially offset by decreases in Analytical Instruments revenues. In Europe, a 26.3% increase in revenues from PE Biosystems was partially offset by a 2.3% decline in Analytical Instruments' revenues. In the Far East, a 16.3% increase in PE Biosystems revenues was partially offset by a 2.3% decrease in Analytical Instruments' revenues. Excluding currency effects, total revenues in Europe and the Far East would have increased approximately 13% and 18%, respectively. Net revenues by business segment (Dollar amounts in millions) 1997 1996 PE Biosystems $ 749.2 $ 618.4 Analytical Instruments 624.1 630.6 $ 1,373.3 $ 1,249.0 Including currency effects, which reduced reported revenues by approximately $25 million, or 4%, net revenues of PE Biosystems increased 21.2% over fiscal 1996. Net revenues in the United States, Europe, and the Far East increased 20.7%, 26.3%, and 16.3%, respectively. Increased demand for genetic analysis, LC/MS, and the PCR product lines was the primary contributor. Analytical Instruments experienced a 1% decline in net revenues compared with the prior year. Currency rate movements reduced revenues by approximately $20 million, or 3%. While revenues in the United States increased 2.5%, this was offset by a decrease of 2.3% in both Europe and the Far East. Excluding the effects of currency translation, revenues in Europe and the Far East would have increased approximately 2% and 4%, respectively. Gross margin as a percentage of net revenues was 49.5% for fiscal 1997 compared with 47.7% for fiscal 1996. Excluding the $7.5 million and $9.9 million charges for impaired assets, recorded in cost of sales, for fiscal 1997 and 1996, respectively, gross margin was 50.1% compared with 48.5%. Both divisions experienced improved gross margin for fiscal 1997. PE Biosystems' improvement was the result of the overall unit volume increase and product mix. The benefits realized from the fiscal 1996 restructuring plan, combined with a more favorable product mix, contributed to an improved gross margin for Analytical Instruments. SG&A expenses were $416.3 million for fiscal 1997 compared with $380.4 million for fiscal 1996, an increase of 9.4%. Lower expense levels resulting from cost controls and the actions of the restructuring programs in Analytical Instruments were more than offset by increased expenses of 20.5% in PE Biosystems and costs for the Company's restricted stock and performance-based compensation programs, including a long-term divisional plan that was effective for fiscal 1997. The total expense for the restricted stock, performance- based programs, and long-term division plan was $26.3 million and $11.8 million for fiscal 1997 and 1996, respectively. As a percentage of net revenues, SG&A expenses for the Company remained essentially unchanged at approximately 30% for both fiscal 1997 and fiscal 1996. R&D expenses were $120.9 million for fiscal 1997 compared with $113.7 million for fiscal 1996. R&D spending in PE Biosystems increased 29.2% over the prior year as the Company continued its product development efforts for the bioresearch markets. In fiscal 1997, Analytical Instruments recorded a 20.9% decrease in R&D Page 33

expenditures, which reflected the objectives of restructuring actions and product line reviews. Operating income for fiscal 1997 was $103.0 million compared with an operating loss of $21.5 million for fiscal 1996. Fiscal 1997 and 1996 included charges of $26.8 million and $33.9 million, respectively, for acquired research and development related to acquisitions for PE Biosystems. Fiscal 1997 and 1996 also included charges for restructuring of $13.0 million and $89.1 million, respectively. On a comparable basis, excluding special items in both years, operating income increased 34.9% compared with the prior year. During the fourth quarter of fiscal 1997, the Company announced a follow-on phase to Analytical Instruments' profit improvement program. The restructuring cost for this action was $24.2 million and included $19.4 million for costs focused on further improving the operating efficiency of manufacturing facilities in the United States, Germany, and the United Kingdom. These actions were designed to transition Analytical Instruments from a highly vertical manufacturing operation to one that relies more on outsourcing functions not considered core competencies. The restructuring charge also included $4.8 million to finalize the consolidation of sales and administrative support, primarily in Europe, where seventeen facilities were closed. The workforce reductions under this action totaled approximately 285 employees in production labor and 25 employees in sales and administrative support. The charge included $11.9 million for severance - related costs. The $12.3 million provided for facility consolidation and asset-related write-offs included $1.2 million for lease termination payments and $11.1 million for the write-off of machinery, equipment, and tooling associated with the functions to be outsourced. The fiscal 1996 restructuring charge included $71.6 million for the first phase of Analytical Instruments' profit improvement plan. In connection with the program, the division was reorganized into three vertically integrated, fiscally accountable operating units, a distribution center in Holland was established to centralize the European infrastructure for shipping, administration, and related functions, and a program was implemented to eliminate excess production capacity in Germany. The charge included $37.8 million for worldwide workforce reductions of approximately 390 positions in manufacturing, sales and support, and administrative functions. The charge also included $33.8 million for facility consolidation costs and asset-related write-offs associated with the discontinuation of various product lines. In the fourth quarter of fiscal 1997, the Company finalized the actions associated with this program. The costs to implement the program were $11.2 million less than the $71.6 million charge recorded in fiscal 1996. As a result, during the fourth quarter of fiscal 1997, the Company recorded an $11.2 million reduction of charges required to implement the fiscal 1996 program. Fiscal 1996 also included a restructuring charge of $17.5 million for restructuring actions and other related costs associated with PerSeptive. Operating income (loss) by business segment PE Analytical (Dollar amounts in millions) Biosystems Instruments 1997 Segment income $ 125.4 $ 56.1 Restructuring (13.0) Acquired R&D (26.8) Impairment of assets (.7) (6.8) Operating income $ 97.9 $ 36.3 1996 Segment income $ 107.2 $ 28.7 Restructuring (17.5) (71.6) Acquired R&D (33.9) Impairment of assets (9.9) Operating income (loss) $ 45.9 $ (42.9) Operating income for PE Biosystems, excluding special items, increased $18.2 million, or 17.0%, as a result of increased volume and improved margin. All geographic markets contributed to the improved segment income. An increase in operating income from high-margin sequencing systems was the primary contributor. The strongest growth was in Europe, where fiscal 1997 segment income increased 33% compared with fiscal 1996. Excluding currency translation effects, segment income would have increased approximately 27%. As a percentage of net revenues, segment income decreased to 16.7% for fiscal 1997 from 17.3% for fiscal 1996. Operating income for Analytical Instruments, excluding the charges for restructuring and impairment of assets, increased to $56.1 million for fiscal 1997 from $28.7 million for fiscal 1996. As a percentage of net revenues, segment income increased to 9.0% for fiscal 1997 from 4.6% for fiscal 1996. The cost savings realized from the restructuring actions and cost controls were the primary reasons for the improvement. Compared with the prior year, operating income in Europe decreased 2.9% resulting primarily from the effects of a stronger U.S. dollar and was more than offset by improvements in other geographic areas, primarily the United States. In fiscal 1997 and 1996, the Company recorded before-tax gains of $64.9 million and $11.7 million, respectively, on the sale and release of contingencies on minority equity investments. Interest expense was $5.9 million for fiscal 1997 compared with $8.4 million for fiscal 1996. Lower average borrowing levels for fiscal 1997 and lower weighted average interest rates on short-term debt accounted for the reduction in interest costs. As a result of maintaining higher cash and cash equivalent balances, interest income increased by $3.5 million to $8.8 million for fiscal 1997. Other income, net was $1.8 million for fiscal 1997 compared with other expense, net of $2.1 million for fiscal 1996. The fiscal 1997 amount consisted primarily of a fourth quarter gain on the sale of real estate. The effective income tax rate for fiscal 1997 was 24.5%. Fiscal 1996 incurred a provision of $21.6 million on a before-tax Page 34

loss of $15.0 million. Both years were impacted by special items. The charges for acquired research and development were not deductible for tax purposes. Additionally, the fiscal 1996 charge for restructuring and the fiscal 1997 charge for impairment of assets were only partially deductible, and no tax benefit was recognized for PerSeptive's fiscal 1996 net operating loss, which resulted in a significant increase in the tax rate for the fiscal year. In the fourth quarter of fiscal 1997, the Company reduced its deferred tax valuation allowance, resulting in the recognition of a $50.0 million deferred tax benefit. The benefit resulting from the valuation allowance release was substantially offset by a fourth quarter accrual for tax costs related to gains on foreign reorganizations. Market Risk The Company operates internationally, with manufacturing and distribution facilities in various countries throughout the world. The Company derived approximately 57% of its revenues from countries outside of the United States for fiscal 1998. Results continue to be affected by market risk, including fluctuations in foreign currency exchange rates and changes in economic conditions in foreign markets. The Company's risk management strategy utilizes derivative financial instruments, including forwards, swaps, purchased options, and synthetic forward contracts to hedge certain foreign currency and interest rate exposures, with the intent of offsetting losses and gains that occur on the underlying exposures with gains and losses on the derivatives. The Company does not use derivative financial instruments for trading or other speculative purposes, nor is the Company a party to leveraged derivatives. At June 30, 1998, outstanding hedge contracts covered approximately 80% of the estimated foreign currency exposures related to cross-currency cash flows to be realized in fiscal 1999. The outstanding hedges were a combination of forward, option, and synthetic forward contracts maturing in fiscal 1999. The Company performed a sensitivity analysis as of June 30, 1998 assuming a hypothetical 10% adverse movement in foreign currency exchange rates applied to its outstanding hedge contracts and associated exposures. The analysis indicated that such a market movement would not have had a material effect on the Company's consolidated financial position, results of operations, or cash flows. Actual gains and losses in the future could, however, differ materially from this analysis, based on changes in the timing and amount of foreign currency exchange rate movements and the Company's actual exposures and hedges. Interest rate swaps are used to hedge underlying debt obligations. In fiscal 1997, the Company executed an interest rate swap in conjunction with its entering into a five-year Japanese Yen debt obligation. Under the terms of the swap agreement, the Company pays a fixed rate of interest at 2.1% and receives a floating LIBOR interest rate. At June 30, 1998, the notional amount of indebtedness covered by the interest rate swap was Yen 3.8 billion ($27.0 million). The maturity date of the swap coincides with the maturity of the Yen loan in March 2002. Based on the Company's overall interest rate exposure at June 30, 1998, including derivative and other interest rate sensitive instruments, a near-term change in interest rates would not materially affect the consolidated financial position, results of operations, or cash flows of the Company. Further discussion of the Company's foreign currency and interest rate management activities is provided in Note 12. Management's Discussion of Financial Resources and Liquidity The following discussion of financial resources and liquidity focuses on the Consolidated Statements of Financial Position (page 40) and the Consolidated Statements of Cash Flows (page 41). The Company's financial position at June 30, 1998 was strong, with cash and cash equivalents totaling $82.9 million compared with $213.0 million at June 30, 1997, and total debt of $45.8 million at June 30, 1998 compared with $89.1 million at June 30 1997. The decrease in cash was primarily a result of expenditures related to acquisitions for PE Biosystems, cash outlays associated with restructuring actions, and expenditures for the Company's strategic program to improve its information technology infrastructure. Working capital was $288.0 million at June 30, 1998 compared with $354.7 million at June 30, 1997. Debt to total capitalization decreased to 8% at June 30, 1998 from 15% at June 30, 1997. The decrease was attributable to the prepayment of long-term debt. Significant Changes in the Consolidated Statements of Financial Position Accounts receivable and inventory balances increased from June 30, 1997 to June 30, 1998 by $41.0 million and $25.4 million,respectively. Excluding Tecan, accounts receivable and inventory balances increased by $19.5 million and $15.6 million, respectively, from June 30, 1997 to June 30, 1998, reflecting the growth in PE Biosystems. Other long-term assets increased to $279.5 million at June 30, 1998 from $192.1 million at June 30, 1997. The change included $70.9 million of intangible assets associated with the acquisition of Tecan and Molecular Informatics, $11.5 million of minority equity investments for PE Biosystems, and a $10.2 million increase in prepaid pension asset, partially offset by the sale of certain non-operating assets. Total short-term and long-term borrowings were $45.8 million at June 30, 1998 compared with $89.1 million at June 30, 1997. The decrease was due in part to the redemption of PerSeptive's 8 - 1/4% Convertible Subordinated Notes Due 2001 on March 23, 1998. The redemption price was $1,055.81 per $1,000 principal amount of the PerSeptive Notes, which represented the redemption premium and aggregate principal plus accrued and unpaid interest to the redemption date. The aggregate outstanding principal amount of the PerSeptive Notes was $27.2 million at March 23, 1998. A total of $26.1 million was paid in cash, representing $24.7 million of principal and $1.4 million of accrued interest and premium relating to the PerSeptive Notes. Additionally, $2.5 million of the Page 35

principal amount of the PerSeptive Notes was converted by the holders thereof into 35,557 shares of the Company's common stock. Accounts payable increased $33.9 million to $165.3 million at June 30, 1998 from $131.4 million at June 30, 1997. The increase resulted from higher purchases to support production and operating requirements. At June 30, 1998, $43.8 million of minority interest was recognized in connection with Tecan. Statements of Cash Flows Operating activities generated $78.2 million of cash in fiscal 1998 compared with $113.2 million in fiscal 1997 and $90.9 million in fiscal 1996. In fiscal 1998, higher income-related cash flow was more than offset by a net increase in operating assets and liabilities. The increase related primarily to PE Biosystems, reflecting the division's continued growth. Net cash used by investing activities was $169.9 million in fiscal 1998 compared with net cash provided by investing activities of $13.4 million in fiscal 1997. During fiscal 1998, the Company generated $19.5 million in net cash proceeds from the sale of assets and $9.7 million from the collection of a note receivable. The proceeds were more than offset by $116.7 million of capital expenditures and $98.0 million for acquisitions and investments, primarily Tecan and Molecular Informatics (see Note 2). For fiscal 1997, the Company generated $99.7 million in net cash proceeds from the sale of its equity interests in Etec Systems, Inc. and Millennium Pharmaceuticals, Inc. and from the sale of certain other non-operating assets. These proceeds were partially offset by the $27.7 million used for acquisitions, primarily GenScope (see Note 2), and $69.8 million for capital expenditures. In fiscal 1996, $119.2 million of cash was used for acquisitions and $44.3 million was used for capital expenditures. This was partially offset by $102.3 million of cash proceeds generated from the sale of minority equity investments and non-operating assets. Fiscal 1998 capital expenditures were $116.7 million: $72.6 million for PE Biosystems, $42.9 million for Analytical Instruments, and $1.2 million for corporate. The Company's expenditures included $65.9 million as part of the strategic program to improve its information technology infrastructure. Capital expenditures for fiscal 1997 totaled $69.8 million: $42.1 million for PE Biosystems, $14.1 million for Analytical Instruments, and $13.6 million for corporate. Fiscal 1997 expenditures included $11.1 million for information technology infrastructure improvements and $12.1 million for the acquisition of a corporate airplane. Net cash used by financing activities was $37.7 million for fiscal 1998, $15.9 million for fiscal 1997, and $22.2 million for fiscal 1996. During fiscal 1998, proceeds from employee stock plan exercises were $33.6 million. This was more than offset by shareholder dividend payments and the redemption of the PerSeptive Notes. During fiscal 1997, the Company generated $1.8 million from the sale of equity put warrants (see Note 7) and $33.6 million in proceeds from employee stock plan exercises, compared with $65.0 million from employee stock plan exercises in fiscal 1996. This was more than offset by shareholder dividends of approximately $29 million for both fiscal 1997 and 1996, and for the purchase of common stock for treasury. During fiscal 1997, .4 million shares were repurchased at a cost of $25.1 million, compared with .8 million shares at a cost of $41.0 million in fiscal 1996. Common stock purchases for treasury were made in support of the Company's various stock plans. No shares were repurchased during fiscal 1998. As previously mentioned, the Company recorded before-tax restructuring charges and other merger costs of $48.1 million, $24.2 million, and $89.1 million in fiscal 1998, 1997, and 1996, respectively. Fiscal 1997 also included an $11.2 million before-tax reduction of charges associated with the fiscal 1996 restructuring plan. During fiscal 1998, the Company made cash payments of $39.5 million for obligations related to restructuring plans and other merger costs. Liabilities remaining at June 30, 1998 were $26.9 million and $4.4 million for the fiscal 1998 and 1997 plans, respectively (see Note 10). The funding for the remaining restructuring liabilities will be from current cash balances, including realized benefits from the restructuring activities. The Company believes its cash and short-term investments, funds generated from operating activities, and available borrowing facilities are sufficient to provide for its anticipated financing needs over the next two years. At June 30, 1998, the Company had unused credit facilities totaling $343 million. Impact of Inflation and Changing Prices Inflation and changing prices are continually monitored. The Company attempts to minimize the impact of inflation by improving productivity and efficiency through continual review of both manufacturing capacity and operating expense levels. When operating costs and manufacturing costs increase, the Company attempts to recover such costs by increasing, over time, the selling price of its products and services. The Company believes the effects of inflation have been appropriately managed and therefore have not had a material impact on its historic operations and resulting financial position. Year 2000 In fiscal 1997, the Company initiated a worldwide program to assess the expected impact of the Year 2000 date recognition problem on its existing internal computer systems, including embedded and process- control systems, product offerings, and significant suppliers. The purpose of this program is to ensure the event does not have a material adverse effect on the Company's business operations. Regarding the Company's existing internal computer systems, the program involves a mix of purchasing new systems and modifying existing systems, with the emphasis on replacement of applications developed in-house. Replacement projects are currently underway, and are anticipated to be substantially completed for all business- critical systems in the United States by December 31, 1998, and worldwide by December 31, 1999. The program focuses largely on replacement of applications that, for reasons other than Year 2000 noncompliance, had been previously selected for replacement. The replacement projects, which began in fiscal 1997,are expected to offer improved functionality and commonality over current systems, while at the same time addressing the Year 2000 problem. Page 36

With respect to the Company's current product offerings, the program involves performing an inventory of current products, assessing their compliance status, and constructing a remediation plan where appropriate. Progress has been made in each of these three phases and the Company expects its product offerings to be Year 2000 compliant by December 31, 1999. The program also addresses the Year 2000 compliance efforts of the Company's significant suppliers, vendors, and third-party interface systems. As part of this analysis, the Company is seeking written assurances from these suppliers, vendors, and third parties that they will be Year 2000 compliant. While the Company has begun such efforts, there can be no assurance that the systems of other companies with which the Company deals, or on which the Company's systems rely will be timely converted, or that any such failure to convert by another company could not have a material adverse effect on the Company. The Company has not fully determined the extent to which the Company's interface systems may be impacted by third parties' systems, which may not be Year 2000 compliant. The Company's preliminary estimate of the total cost for this multi- year program covering 3-4 years is approximately $150 million. This includes amounts previously budgeted for information technology infrastructure improvements and estimates of remediation costs on components not yet fully assessed. Incremental spending has not been and is not expected to be material because most Year 2000 compliance costs will be met with amounts that are normally budgeted for procurement and maintenance of the Company's information systems, production and facilities equipment. The redirection of spending to implement Year 2000 compliance plans may in some instances delay productivity improvements. The Company has also engaged a consulting firm to provide periodic assessments of the Company's Year 2000 project plans and progress. Because of the importance of addressing the Year 2000 problem, the Company has created a Year 2000 business continuity planning team to review and develop, by April 1999, business contingency plans to address any issues that may not be corrected by implementation of the Company's Year 2000 compliance plan in a timely manner. If the Company is not successful in implementing its Year 2000 compliance plan, or there are delays in and/or increased costs associated with implementing such changes, the Year 2000 problem could have a material adverse impact on the Company's consolidated results of operations and financial condition. Recently Issued Accounting Standards In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities." The provisions of the statement require the recognition of all derivatives as either assets or liabilities in the statement of financial position and the measurement of those instruments at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. The Company is required to implement the statement in the first quarter of fiscal 2000. The Company is currently analyzing the statement to determine the impact, if any, on the consolidated financial statements. The FASB issued the following Statement of Financial Accounting Standards, which will become effective for the Company's fiscal 1999 financial statements: SFAS No. 132, "Employers' Disclosures about Pensions and other Postretirement Benefits," which requires additional disclosures relating to a company's pension and postretirement benefit plans; SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information," which requires certain financial and descriptive information about a company's reportable operating statements; and SFAS No. 130, "Reporting Comprehensive Income," which requires disclosure of comprehensive income and its components, as defined. The adoption of these new accounting standards may require additional disclosures but should not have a material effect, if any, on the consolidated financial statements of the Company. Outlook As the underlying demand for life science products continues to grow, PE Biosystems is expected to continue to grow and maintain profitability on the strength of robust demand and several new products to be introduced, primarily during the second and third quarters of fiscal 1999. New products planned for fiscal 1999 include the ultra-high-throughput model 3700 genetic analysis system; the next generation LC/MS instruments, which should reach full production in fiscal 1999; and several applied genetic kits, including one for HIV. The Company continues to expand this business through increased internal development efforts as well as acquisitions, strategic equity investments, and other collaborations. The acquisitions, investments, and collaborations in PerSeptive, Tecan, Molecular Informatics, Hyseq, Inc., Biometric Imaging, Inc., and GenScope are indicators of the Company's continued focus on this business segment. While the Company expects to realize benefits from these acquisitions, integration is complex. For Analytical Instruments, revenue growth is expected in the low single digits for fiscal 1999. The fiscal 1997 restructuring actions are expected to continue to increase the profitability and cash flow of the division. Adverse currency effects remain a concern for the Company because approximately 57% of its revenues are derived from markets outside the United States. These adverse effects could continue if the relationship of the U.S. dollar to certain major European and Far Eastern currencies is maintained at current levels, or could worsen if the U.S. dollar continues to strengthen. The Company has absorbed negative currency impacts of approximately $.38, $.19, and $.04 per diluted share for fiscal 1998, 1997, and 1996, respectively. The Company expects its currency and economic exposures in Southeast Asia to be reduced from fiscal 1998 levels. However, the Japanese Yen remains weak, and further U.S. dollar strengthening could impact future results. On May 9, 1998, the Company, Dr. J. Craig Venter, and The Institute for Genomic Research (TIGR) announced that they had signed letters of intent relating to the formation by the Company and Dr. Venter of a new genomics company. The strategy of the new company, Celera Genomics Corporation, will be centered on a plan to substantially complete the sequencing of the human genome in three years. The Company is currently reviewing several structural alter- Page 37

natives for the new company and has not yet determined the financial impact on the Company. Forward Looking Statements Certain statements contained in this annual report, including the Outlook section, are forward looking and are subject to a variety of risks and uncertainties. These statements may be identified by the use of forward looking words or phrases such as "believe," "expect," "anticipate," "should," "planned," "estimated," and "potential," among others. These forward looking statements are based upon the Company's current expectations. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for such forward looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause the Company's actual results and experience to differ materially from the anticipated results or other expectations expressed in such forward looking statements. The risks and uncertainties that may affect the operations, performance, development, and results of the Company's business include, but are not limited to: Dependence on New Products and Rapid Technological Change. The life sciences and analytical instrumentation markets are characterized by rapid technological change, complexity, and uncertainty regarding the development of new high technology products. The Company's future success will depend on its ability to enhance its current products and to develop and introduce, on a timely and cost effective basis, new products that address the evolving needs of its customers. In addition, the transition from existing products to new products could adversely affect the Company's future operating results. Substantial Competition. The Company expects substantial competition in the future with respect to existing and planned products and especially with respect to efforts to develop and introduce products in new markets. New product announcements, pricing changes, strategic alliances, and other actions by competitors could adversely affect the Company's market share or render its products obsolete or non- competitive. Customers' Capital Spending Policies. The Company's customers include pharmaceutical, environmental, research, and chemical companies. Any decrease in capital spending or change in spending policies of these companies could have a significant effect on the demand for the Company's products. Patents, Proprietary Technology, and Trade Secrets. The Company's ability to compete may be affected by its ability to protect proprietary technology and intellectual property rights, and to obtain necessary licenses on commercially reasonable terms. Changes in the interpretation of copyright or patent law could expand or reduce the extent to which the Company and its competitors are able to protect their intellectual property or require changes in the designs of products, which could have an adverse effect on the Company. Government Sponsored Research. A substantial portion of the Company's sales are to universities or research laboratories whose funding is dependent upon both the level and timing of funding from government sources. The timing and amount of revenues from these sources may vary significantly due to budgetary pressures, particularly in the United States and Japan, that may result in reduced allocations to government agencies that fund research and development activities. Key Employees. The Company is highly dependent on the principal members of its management and scientific staff. The Company believes that its future success will depend in large part upon its ability to attract and retain highly skilled personnel. Currency Exchange Risks; International Sales and Operations. The Company's reported and anticipated operating results and cash flows are subject to fluctuations due to material changes in foreign currency exchange rates that are beyond the Company's control. International sales and operations may also be adversely affected by the imposition of governmental controls, export license requirements, restrictions on the export of critical technology, political and economic instability, trade restrictions, changes in tariffs and taxes, difficulties in staffing and managing international operations, and general economic conditions. Potential Difficulties in Implementing Business Strategy. The Company's strategy to integrate and develop acquired businesses or strategic investments involves a number of elements that management may not be able to implement as expected. For example, The Company may encounter operational difficulties in the integration of manufacturing or other facilities, and advances resulting from the integration of technologies may not be achieved as successfully or as rapidly anticipated, if at all. Other Risks. Other risks and uncertainties that may affect the operations, performance, development, and results of the business include: (1) the development of new sequencing strategies and the commercialization of information derived from sequencing operations; (2) the impact of earthquakes on the Company, since a significant portion of the Company's life science operations are located near major California earthquake faults; and (3) other factors which may be described from time to time in the Company's filings with the Securities and Exchange Commission. Future Performance. Although the Company believes it has the product offerings and resources needed for continuing success, future revenue and margin trends cannot be reliably predicted and may cause the Company to adjust its operations. Factors external to the Company can result in volatility of the Company's common stock price. Because of the foregoing factors, recent trends should not be considered reliable indicators of future stock prices or financial results. Page 38

CONSOLIDATED STATEMENTS OF OPERATIONS The Perkin-Elmer Corporation <TABLE> <CAPTION> (Dollar amounts in thousands except per share amounts) For the years ended June 30, 1998 1997 1996 <S> <C> <C> <C> Net revenues $ 1,531,165 $ 1,373,282 $ 1,248,967 Cost of sales 752,045 693,343 653,427 Gross margin 779,120 679,939 595,540 Selling, general and administrative 459,635 416,305 380,390 Research, development and engineering 152,202 120,875 113,680 Restructuring and other merger costs 43,980 13,000 89,054 Acquired research and development 28,850 26,801 33,878 Operating income (loss) 94,453 102,958 (21,462) Gain on investments 1,605 64,850 11,704 Interest expense 4,905 5,859 8,444 Interest income 5,938 8,826 5,376 Other income (expense), net 3,511 1,846 (2,140) Income (loss) before income taxes 100,602 172,621 (14,966) Provision for income taxes 38,617 42,223 21,557 Minority interest 5,597 Net income (loss) $ 56,388 $ 130,398 $ (36,523) Net income (loss) per share: Basic $ 1.16 $ 2.74 $ (0.80) Diluted $ 1.12 $ 2.63 $ (0.80) </TABLE> See accompanying notes to consolidated financial statements. Page 39

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION The Perkin-Elmer Corporation <TABLE> <CAPTION> (Dollar amounts in thousands) At June 30, 1998 1997 <S> <C> <C> Assets Current assets Cash and cash equivalents $ 82,865 $ 213,028 Short-term investments 1,226 4,194 Accounts receivable, less allowances for doubtful accounts of $9,277 ($7,407 - 1997) 374,898 333,915 Inventories 240,031 214,618 Prepaid expenses and other current assets 97,116 83,576 Total current assets 796,136 849,331 Property, plant and equipment, net 258,800 197,367 Other long-term assets 279,538 192,051 Total assets $ 1,334,474 $ 1,238,749 Liabilities and shareholders' equity Current liabilities Loans payable $ 12,099 $ 29,916 Accounts payable 165,289 131,413 Accrued salaries and wages 48,999 48,183 Accrued taxes on income 79,860 98,307 Other accrued expenses 201,898 186,771 Total current liabilities 508,145 494,590 Long-term debt 33,726 59,152 Other long-term liabilities 184,598 180,737 Total liabilities 726,469 734,479 Minority interest 43,757 Commitments and contingencies (see Note 11) Shareholders' equity Capital stock Preferred stock $1 par value: 1,000,000 shares authorized; none issued Common stock $1 par value: 180,000,000 shares authorized; shares issued 1998 - 50,148,384 and 1997 - 50,122,390 50,148 50,122 Capital in excess of par value 379,974 374,423 Retained earnings 190,966 167,482 Foreign currency translation adjustments (7,799) (5,052) Unrealized (loss) gain on investments (1,363) 3,086 Minimum pension liability adjustment (351) (705) Treasury stock, at cost (shares: 1998 - 831,213; 1997 - 1,795,563) (47,327) (85,086) Total shareholders' equity 564,248 504,270 Total Liabilities and shareholders' equity $ 1,334,474 $ 1,238,749 </TABLE> See accompanying notes to consolidated financial statements. Page 40

CONSOLIDATED STATEMENTS OF CASH FLOWS The Perkin-Elmer Corporation <TABLE> <CAPTION> (Dollar amounts in thousands) For the years ended June 30, 1998 1997 1996 <S> <C> <C> <C> Operating activities Net income (loss) $ 56,388 $ 130,398 $ (36,523) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 53,126 43,879 51,770 Long-term compensation programs 8,062 11,678 5,072 Deferred income taxes 12,892 (37,799) (13,110) Gains from the sale of assets (3,052) (66,636) (11,704) Provision for restructured operations and other merger costs 48,080 13,000 89,054 Acquired research and development 28,850 26,801 33,878 Impairment of assets 7,500 9,906 Changes in operating assets and liabilities: Increase in accounts receivable (26,637) (68,313) (33,141) (Increase) decrease in inventories (24,975) 5,198 (11,225) Increase in prepaid expenses and other assets (48,298) (3,662) (8,959) Increase (decrease) in accounts payable and other liabilities (26,277) 51,151 15,890 Net cash provided by operating activities 78,159 113,195 90,908 Investing activities Additions to property, plant and equipment (net of disposals of $15,588, $6,188 and $4,927, respectively) (101,120) (63,634) (39,382) Acquisitions and investments, net (97,998) (27,676) (119,189) Proceeds from the sale of assets, net 19,496 99,710 102,318 Proceeds from the collection of notes receivable 9,673 4,978 Proceeds from short-term investments 5,773 Net cash (used) provided by investing activities (169,949) 13,378 (50,480) Financing activities Net change in loans payable (6,797) (4,914) (17,040) Proceeds from long-term debt 31,033 Principal payments on long-term debt (25,449) (22,908) Dividends (39,072) (29,459) (29,095) Purchases of common stock for treasury (25,126) (41,028) Proceeds from issuance of equity put warrants 1,846 Proceeds from stock issued for stock plans 33,629 33,637 64,954 Net cash used by financing activities (37,689) (15,891) (22,209) Elimination of PerSeptive results from July 1, 1997 to September 30, 1997 (see Note 1) 2,590 Effect of exchange rate changes on cash (3,274) 1,601 (2,699) Net change in cash and cash equivalents (130,163) 112,283 15,520 Cash and cash equivalents beginning of year 213,028 100,745 85,225 Cash and cash equivalents end of year $ 82,865 $ 213,028 $ 100,745 </TABLE> See accompanying notes to consolidated financial statements. Page 41

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY The Perkin-Elmer Corporation <TABLE> <CAPTION> Foreign Unrealized Minimum Common Capital In Currency Gain Pension Stock $1.00 Excess Of Retained Translation (Loss) on Liability Treasury Stock (Dollar amounts and shares in thousands) Par Value Par Value Earnings Adjustments Investments Adjustment At Cost Shares <S> <C> <C> <C> <C> <C> <C> <C> <C> Balance at June 30, 1995 $ 48,760 $ 311,043 $ 142,741 $ 10,030 $ - $(34,445) $(108,322) (3,490) Net loss (36,523) Cash dividends declared (29,095) Share repurchases (41,028) (800) Shares issued under stock plans 45 1,336 (5,627) 51,202 1,559 Tax benefit related to employee stock options 5,280 Minimum pension liability adjustment 5,080 Restricted stock plan 4,079 993 30 Unrealized gain on investments, net 23,175 Foreign currency translation adjustments (10,957) Common stock issuances for acquisitions 1,077 34,796 Other 144 1,920 (1,977) Balance at June 30, 1996 50,026 358,454 69,519 (927) 23,175 (29,365) (97,155) (2,701) Net income 130,398 Cash dividends declared (29,536) Share repurchases (25,126) (428) Shares issued under stock plans 61 2,065 (1,459) 31,615 1,146 Tax benefit related to employee stock options 4,568 Minimum pension liability adjustment 28,660 Restricted stock plan 6,098 5,580 187 Sale of equity investment (23,245) Unrealized gain on investments, net 3,156 Sale of equity put warrants 1,846 Foreign currency translation adjustments (4,125) Other 35 1,392 (1,440) Balance at June 30, 1997 50,122 374,423 167,482 (5,052) 3,086 (705) (85,086) (1,796) Net income 56,388 Cash dividends declared (31,604) Shares issued under stock plans 26 1,358 (3,468) 37,759 965 Tax benefit related to employee stock options 2,335 Minimum pension liability adjustment 354 Restricted stock plan 1,858 (136) Unrealized loss on investments, net (4,449) Foreign currency translation adjustments (2,747) Elimination of PerSeptive results from July 1, 1997 to September 30, 1997 (see Note 1) 2,590 Other (286) Balance at June 30, 1998 $ 50,148 $ 379,974 $ 190,966 $ (7,799) $ (1,363) $ (351) $ (47,327) (831) </TABLE> See accompanying notes to consolidated financial statements. Page 42

Notes to Consolidated Financial Statements Note 1 Accounting Policies and Practices Principles of Consolidation. The consolidated financial statements include the accounts of all majority-owned subsidiaries of The Perkin- Elmer Corporation (PE or the Company). 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, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Certain amounts in the consolidated financial statements and notes have been reclassified for comparative purposes. On January 22, 1998, the Company acquired PerSeptive Biosystems, Inc. (PerSeptive). The acquisition has been accounted for as a pooling of interests and, accordingly, the Company's financial results have been restated to include the combined operations (see Note 2). The Company's fiscal year ended June 30 and PerSeptive's fiscal year ended September 30. The fiscal 1998 Consolidated Statements of Operations combined the Company's operating results for the year ended June 30, 1998 with PerSeptive's operating results for the nine months ended June 30, 1998 and the three months ended September 30, 1997 (PerSeptive's fiscal 1997 fourth quarter). The fiscal 1997 and 1996 Consolidated Statements of Operations combined the Company's results of operations for the years ended June 30, 1997 and 1996 with PerSeptive's results of operations for the fiscal years ended September 30, 1997 and 1996, respectively. In order to conform PerSeptive to a June 30 fiscal year-end in fiscal 1998, PerSeptive's results of operations for the three months ended September 30, 1997 have been included in the Company's Consolidated Statements of Operations for the fiscal years ended June 30, 1998 and 1997. Recently Issued Accounting Standards. In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities." The provisions of the statement require the recognition of all derivatives as either assets or liabilities in the statement of financial position and the measurement of those instruments at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. The Company is required to implement the statement in the first quarter of fiscal 2000. The Company is currently analyzing the statement to determine the impact, if any, on the consolidated financial statements. Earnings per Share. During the second quarter of fiscal 1998, the Company adopted SFAS No. 128, "Earnings per Share." The statement establishes new standards for computing and presenting earnings per share and requires presentation of basic and diluted earnings per share on the face of the income statement. Basic earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding. Diluted earnings per share is computed similarly to the Company's previously disclosed amounts by dividing net income for the period by the weighted average number of common shares outstanding including the dilutive effect of common stock equivalents. Earnings per share amounts for all prior periods have been restated to conform with the provisions of this statement. The table below presents a reconciliation of basic and diluted earnings (loss) per share for the following fiscal years: (Amounts in thousands except per share amounts) 1998 1997 1996 Weighted average number of common shares used in the calculation of basic earnings (loss) per share 48,560 47,517 45,859 Common stock equivalents 1,592 1,996 Shares used in the calculation of diluted earnings (loss) per share 50,152 49,513 45,859 Net income (loss) used in the calculation of basic and diluted earnings (loss) per share $ 56,388 $ 130,398 $ (36,523) Net income (loss) per share Basic $ 1.16 $ 2.74 $ (.80) Diluted $ 1.12 $ 2.63 $ (.80) Options and warrants to purchase 1.4 million, .2 million, and 2.1 million shares of the Company's common stock were outstanding at June 30, 1998, 1997, and 1996, respectively, but were not included in the computation of diluted earnings per share because the effect was antidilutive. Foreign Currency. Assets and liabilities of foreign operations, where the functional currency is the local currency, are translated into U.S. dollars at the fiscal year-end exchange rates. The related translation adjustments are recorded as a separate component of shareholders' equity. Foreign currency revenues and expenses are translated using monthly average exchange rates prevailing during the year. Foreign currency transaction gains and losses, as well as translation adjustments of foreign operations where the functional currency is the U.S. dollar, are included in net income. Derivative Financial Instruments. The Company uses derivative financial instruments to offset exposure to market risks arising from changes in foreign currency exchange rates and interest rates. Derivative financial instruments currently utilized by the Page 43

Company include foreign currency forward contracts, synthetic forward contracts, foreign currency options, and an interest rate swap (see Note 12). Cash, Short-Term Investments, and Marketable Securities. Cash equivalents consist of highly liquid debt instruments, time deposits, and certificates of deposit with original maturities of three months or less. Time deposits and certificates of deposit with original maturities of three months to one year are classified as short-term investments. Short-term investments, which include marketable securities, are recorded at cost, which generally approximates market value. Accounts Receivable. The Company periodically sells accounts receivable arising from business conducted in Japan. During fiscal 1998, 1997, and 1996, the Company received cash proceeds of $111.9 million, $82.9 million, and $83.0 million, respectively, from the sale of such receivables. The Company believes it has adequately provided for any risk of loss that may occur under these arrangements. Investments. The equity method of accounting is used for investments in joint ventures that are 50% owned or less. Minority equity investments are classified as available-for-sale and carried at market value in accordance with SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities." Inventories. Inventories are stated at the lower of cost (on a first- in, first-out basis) or market. Inventories at June 30, 1998 and 1997 included the following components: (Dollar amounts in millions) 1998 1997 Raw materials and supplies $ 62.6 $ 40.3 Work-in-process 16.9 18.0 Finished products 160.5 156.3 Total inventories $ 240.0 $ 214.6 Property, Plant, and Equipment and Depreciation. Property, plant and equipment are recorded at cost and consisted of the following at June 30, 1998 and 1997: (Dollar amounts in millions) 1998 1997 Land $ 21.8 $ 23.1 Buildings and leasehold improvements 171.9 156.2 Machinery and equipment 316.7 266.9 Property, plant and equipment, at cost 510.4 446.2 Accumulated depreciation and amortization 251.6 248.8 Property, plant and equipment, net $ 258.8 $ 197.4 Major renewals and improvements that significantly add to productive capacity or extend the life of an asset are capitalized. Repairs, maintenance and minor renewals, and improvements are expensed when incurred. Machinery and equipment included capitalized internal-use software, primarily related to the Company's worldwide strategic program to improve its information technology infrastructure, of $77.0 million and $11.1 million at June 30, 1998 and 1997, respectively. Provisions for depreciation of owned property, plant and equipment are based upon the expected useful lives of the assets and computed primarily by the straight-line method. Leasehold improvements are amortized over their estimated useful lives or the term of the applicable lease, whichever is less, using the straight-line method. Internal-use software costs are amortized primarily over the expected useful lives, not to exceed seven years. Capitalized Software. Internal software development costs incurred from the time technological feasibility of the software is established until the software is ready for its intended use are capitalized and included in other long-term assets. Research and development costs and other computer software maintenance costs related to software development are expensed as incurred. The costs are amortized using the straight-line method over a maximum of three years or the expected life of the product, whichever is less. At June 30, 1998, capitalized software costs, net of accumulated amortization, were $9.0 million. Amounts were not material at June 30, 1997. Intangible Assets. The excess of purchase price over the net asset value of companies acquired is amortized on a straight-line method over periods not exceeding 40 years. Patents and trademarks are amortized using the straight-line method over their expected useful lives. At June 30, 1998 and 1997, other long-term assets included goodwill, net of accumulated amortization, of $84.5 million and $32.7 million, respectively. Accumulated amortization of goodwill was $17.4 million and $14.0 million at June 30, 1998 and 1997, respectively. Asset Impairment. The Company periodically reviews all long-lived assets for impairment in accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." Assets are written down to the net realizable value when the carrying costs exceed this amount. In fiscal 1997, the Company recorded a $7.5 million cost of sales charge to write-down $5.6 million of goodwill associated with the fiscal 1995 acquisition of Photovac Inc. and $1.9 million of other assets primarily associated with the Analytical Instruments Division. In fiscal 1996, the Company recorded a cost of sales charge of $9.9 million for the impairment of certain production assets associated with the realignment of the product offerings of PerSeptive. The impairment losses were determined based upon estimated future cash flows and fair values. Page 44

Revenues. Revenues are recorded at the time of shipment of products or performance of services. Revenues from service contracts are recorded as deferred service contract revenues and reflected in net revenues over the term of the contract, generally one year. Research, Development and Engineering. Research, development and engineering costs are expensed when incurred. Income Taxes. The Company accounts for certain income and expense items differently for financial reporting and income tax purposes. Deferred tax assets and liabilities are determined based on differences between the financial reporting and the tax basis of assets and liabilities, and are measured by applying enacted tax rates to taxable years in which the differences are expected to reverse. Supplemental Cash Flow Information. Cash paid for interest and income taxes for the fiscal years ended June 30, 1998, 1997, and 1996 was as follows: (Dollar amounts in millions) 1998 1997 1996 Interest $ 5.7 $ 6.0 $ 8.9 Income taxes $ 60.5 $ 31.3 $ 15.0 Note 2 Acquisitions and Dispositions PerSeptive Biosystems, Inc. The merger (the Merger) of Seven Acquisition Corp., a wholly-owned subsidiary of the Company, and PerSeptive was consummated on January 22, 1998. PerSeptive develops, manufactures, and markets an integrated line of proprietary consumable products and advanced instrumentation systems for the purification, analysis, and synthesis of biomolecules. As a result of the Merger, PerSeptive, which was the surviving corporation of the Merger, became a wholly-owned subsidiary of the Company on that date. Each outstanding share of PerSeptive common stock was converted into shares of the Company's common stock at an exchange ratio equal to 0.1926. Accordingly, the Company issued 4.6 million shares of its common stock for all outstanding shares of PerSeptive common stock. Each outstanding option and warrant for shares of PerSeptive common stock was converted into options and warrants for the number of shares of the Company's common stock that would have been received if such options and warrants had been exercised immediately prior to the effective time of the Merger. All shares of Series A Redeemable Convertible Preferred Stock of PerSeptive outstanding immediately prior to the effective time of the Merger were converted in accordance with their terms into shares of PerSeptive common stock which were then converted into shares of the Company's common stock. As a result of the Merger, PerSeptive's 8-1/4% Convertible Subordinated Notes Due 2001 (the PerSeptive Notes) became convertible into shares of the Company's common stock. On March 23, 1998, the Company redeemed the PerSeptive Notes for a total of $26.1 million representing $24.7 million of principal and $1.4 million of accrued interest and premium relating to the PerSeptive Notes. Additionally, $2.5 million of the principal amount of the PerSeptive Notes was converted by the holders thereof into 35,557 shares of the Company's common stock. The Merger qualified as a tax-free reorganization and has been accounted for as a pooling of interests. Accordingly, the Company's financial results have been restated to include the combined operations. Combined and separate results of the Company and PerSeptive during the periods preceding the Merger were as follows: (Dollar amounts in millions) Perkin-Elmer PerSeptive Adjustment Combined Six months ended December 31,1997 (unaudited) Net revenues $ 639.3 $ 52.6 $ 691.9 Net income (loss) $ 32.2 $ (5.4) $ .6 $ 27.4 Fiscal year ended June 30, 1997 Net revenues $ 1,276.8 $ 96.5 $ 1,373.3 Net income $ 115.2 $ 15.2 $ 130.4 Fiscal year ended June 30, 1996 Net revenues $ 1,162.9 $ 86.1 $ 1,249.0 Net income (loss) $ 13.9 $ (50.4) $ (36.5) The adjustment for the six months ended December 31, 1997 reflects the inclusion of PerSeptive's operating results within the Company's consolidated tax provision. There were no material intercompany transactions between the Company and PerSeptive during any period presented. Tecan AG. The Company acquired a 14.5% interest and approximately 52% of the voting rights in Tecan AG (Tecan) in December 1997. Tecan is a world leader in the development and manufacturing of automated sample processors, liquid handling systems, and microplate photometry. Used in research, industrial, and clinical markets, these products provide automated solutions for pharmaceutical drug discovery, molecular biology, genomic testing, and clinical diagnostics. The acquisition cost was $53.2 million in cash and was accounted for as a purchase with a minority interest of $41.3 million. The excess purchase price over the fair market value of the underlying assets was $46.2 million and is being amortized over fifteen years. Page 45

Molecular Informatics, Inc. During the second quarter of fiscal 1998, the Company acquired Molecular Informatics, Inc. (Molecular Informatics), a leader in the development of infrastructure software for the pharmaceutical, biotechnology, and agrochemical industries as well as for applied markets such as forensics and human identification. The acquisition cost was $53.9 million and was accounted for as a purchase. In connection with the acquisition, $28.9 million was expensed as purchased in-process research and development and $24.7 million was allocated to goodwill and other intangible assets. Goodwill of $9.0 million is being amortized over ten years, and other intangible assets of $15.7 million are being amortized over periods of four to seven years. Biometric Imaging, Inc. During fiscal 1998, the Company acquired a minority equity interest in Biometric Imaging, Inc. for $4.0 million. The Company and Biometric Imaging, Inc. are collaborating on the development and manufacturing of a high-throughput screening system for use by pharmaceutical research companies to accelerate the drug discovery process. The Company received exclusive worldwide marketing rights for products developed for that market. Biometric Imaging products are designed to help ensure the integrity of transfused products, optimize cell therapy procedures, and monitor disease progression and the efficacy of therapy. GenScope, Inc. During the third quarter of fiscal 1997, the Company acquired GenScope, Inc., (GenScope) a company solely engaged in the development of gene expression technology, for $26.8 million. The acquisition represented the purchase of development stage technology not at the time considered commercially viable in the health care applications that the Company intends to pursue. As a result, $25.4 million of the acquisition cost was allocated to purchased in-process research and development and was expensed in the third quarter of fiscal 1997. Other Acquisitions. During the fourth quarter of fiscal 1998, the Company made a minority equity investment of $2.5 million in ACLARA BioSciences, Inc. The companies are collaborating on the development of advanced genetic analysis systems. The Company entered into a strategic partnership with Hyseq, Inc., acquiring a minority equity interest for an initial cash investment of $5.0 million, during the fourth quarter of fiscal 1997. Hyseq, Inc. applies proprietary DNA array technology to develop gene-based therapeutic product candidates and diagnostic products and tests. In the first quarter of fiscal 1998, the Company increased its investment by $5.0 million. The Company acquired Linkage Genetics, Inc., a provider of genetic services in the agriculture industry, during the fourth quarter of fiscal 1997. The cash acquisition cost of $1.4 million was accounted for as a purchase. The entire acquisition cost was expensed as purchased in-process research and development. In fiscal 1996, the Company acquired Zoogen, Inc., a leading provider of genetic analysis services; Tropix, Inc., a world leader in the development, manufacture, and sale of chemiluminescent detection technology and a minority equity interest in Paracel, Inc., a provider of information filtering technologies for a total cost, net of cash acquired, of $42.5 million. In connection with these and other life science acquisitions, $33.9 million of purchased in-process research and development was expensed in fiscal 1996. The net assets and results of operations for the above acquisitions accounted for under the purchase method have been included in the consolidated financial statements since the date of each acquisition. The pro forma effect of these acquisitions, individually or in the aggregate, on the Company's consolidated financial statements was not significant. Dispositions Millennium Pharmaceuticals, Inc. During fiscal 1998, the Company recorded a before-tax gain of $1.6 million in connection with the release of previously existing contingencies on shares of Millennium Pharmaceuticals, Inc. (Millennium) common stock. During fiscal 1997, the Company recognized a before-tax gain of $27.5 million associated with the sale of approximately 50% of its investment in Millennium and the release of previously existing contingencies. The gain included $25.9 million from the Company's exchange of a 34% equity interest in ChemGenics Pharmaceuticals, Inc. for an approximate 6% equity interest in Millennium. Etec Systems, Inc. In fiscal 1997, the Company completed the sale of its entire equity interest in Etec Systems, Inc. Before-tax gains of $37.4 million and $11.7 million were recognized for fiscal 1997 and 1996, respectively. Net cash proceeds from the sales were $45.8 million and $16.6 million for fiscal 1997 and 1996, respectively. Page 46

Note 3 Debt and Lines of Credit There were no domestic borrowings outstanding at June 30, 1998 or 1997. Foreign loans payable and long-term debt at June 30, 1998 and 1997 are summarized below: (Dollar amounts in millions) 1998 1997 Loans payable Notes payable, banks $ 12.1 $ 23.1 Current portion of convertible subordinated notes 6.8 Total loans payable $ 12.1 $ 29.9 Long-term debt Yen loan $ 27.0 $ 33.6 Convertible subordinated notes 20.4 Other 6.7 5.2 Total long-term debt $ 33.7 $ 59.2 The weighted average interest rates at June 30, 1998 and 1997 for notes payable to foreign banks were 1.8% and 3.6%, respectively. On March 23, 1998, the Company redeemed Perseptive's 8 1/4% convertible subordinated notes (see Note 2). During the third quarter of fiscal 1997, the Company replaced its Yen 2.8 billion loan, which matured in February 1997, with a Yen 3.8 billion variable rate long-term loan which matures in March 2002. Through an interest rate swap agreement (see Note 12), the effective interest rate for the new loan is 2.1% compared with 3.3% for the previous loan. On June 1, 1994, the Company entered into a $100 million three year revolving credit agreement. The agreement was amended in fiscal 1996 to extend the maturity an additional three years to June 1, 2000. Commitment and facility fees are based on leverage and interest coverage ratios. Interest rates on amounts borrowed vary depending on whether borrowings are undertaken in the domestic or Eurodollar markets. There were no borrowings under the facility at June 30, 1998 or 1997. At June 30, 1998, the Company had unused credit facilities for short- term borrowings from domestic and foreign banks in various currencies totaling $343 million. Under various debt and credit agreements, the Company is required to maintain certain minimum net worth and interest coverage ratios. There are no maturities of long-term debt scheduled for fiscal 1999, 2000, 2001, or 2003. The Yen 3.8 billion loan matures in fiscal 2002. Note 4 Income Taxes Income (loss) before income taxes for fiscal 1998, 1997, and 1996 is summarized below: (Dollar amounts in millions) 1998 1997 1996 United States $ (3.9) $ 121.0 $ (28.5) Foreign 104.5 51.6 13.5 Total $ 100.6 $ 172.6 $ (15.0) The components of the provision for income taxes for fiscal 1998, 1997, and 1996 consisted of the following: (Dollar amounts in millions) 1998 1997 1996 Currently payable: Domestic $ .1 $ 56.2 $ 10.4 Foreign 25.6 23.8 24.3 Total currently payable 25.7 80.0 34.7 Deferred: Domestic 11.0 (41.0) (4.4) Foreign 1.9 3.2 (8.7) Total deferred 12.9 (37.8) (13.1) Total provision for income taxes $ 38.6 $ 42.2 $ 21.6 Significant components of deferred tax assets and liabilities at June 30, 1998 and 1997 are summarized below: (Dollar amounts in millions) 1998 1997 Deferred tax assets: Intangibles $ 5.8 $ 6.4 Inventories 7.9 8.4 Postretirement and postemployment benefits 35.0 35.7 Other reserves and accruals 40.0 54.3 Tax credit and loss carryforwards 50.1 50.9 Subtotal 138.8 155.7 Valuation allowance (71.7) (78.6) Total deferred tax assets 67.1 77.1 Deferred tax liabilities: Inventories .5 .5 Millennium equity transaction 4.3 Other reserves and accruals 7.9 6.1 Total deferred tax liabilities 8.4 10.9 Total deferred tax assets, net $ 58.7 $ 66.2 Page 47

A reconciliation of the federal statutory tax to the Company's tax provision for fiscal 1998, 1997, and 1996 is set forth in the following table: (Dollar amounts in millions) 1998 1997 1996 Federal statutory rate 35% 35% 35% Tax at federal statutory rate $ 35.2 $ 60.4 $ (5.2) State income taxes (net of federal benefit) .3 .2 (1.5) Effect on income from foreign operations 6.7 42.6 14.7 Effect on income from foreign sales corporation (7.5) (4.8) (3.2) Acquired research and Development 10.1 9.4 11.9 Restructuring and other merger costs 5.2 Domestic temporary differences for which benefit is recognized (11.1) (60.6) (12.7) Benefit of loss not recognized/ (utilization of net operating losses) (7.6) 16.9 Other (.3) 2.6 .7 Total provision for income taxes $ 38.6 $ 42.2 $ 21.6 At June 30, 1998, the Company had a U.S. alternative minimum tax credit carryforward of $4.9 million with an indefinite carryforward period. The Company's subsidiary, PerSeptive, has domestic loss carryforwards of approximately $64 million that will expire between the years 2003 and 2012. The amount of these net operating loss carryforwards that can be utilized annually to offset future taxable income or tax liability has been limited under the Internal Revenue Code as a result of the acquisition. The Company also has loss carryforwards of approximately $38 million in various foreign countries with varying expiration dates. U.S. income taxes have not been provided on approximately $144 million of net unremitted earnings from foreign subsidiaries since the Company intends to permanently reinvest substantially all of such earnings in the operations of the subsidiaries. These earnings include income from manufacturing operations in Singapore, which is tax exempt through the year 2004. In those instances where the Company expects to remit earnings, the effect on the results of operations, after considering available tax credits and amounts previously accrued, was not significant. The Company and its subsidiaries are subject to tax examinations in various U.S. and foreign jurisdictions. The Company believes that adequate tax payments have been made and adequate accruals have been recorded for all years. Note 5 Retirement and Other Benefits Pension Plans. The Company maintains or sponsors pension plans that cover substantially all worldwide employees. Pension benefits earned are generally based on years of service and compensation during active employment. However, the level of benefits and terms of vesting vary among the plans. Pension plan assets are administered by trustees and are principally invested in equity and fixed income securities. The funding of pension plans is determined in accordance with statutory funding requirements. The total worldwide pension expense for all employee pension plans was $14.0 million, $15.1 million, and $15.2 million for fiscal 1998, 1997, and 1996, respectively. The components of net pension expense are set forth in the following tables: (Dollar amounts in millions) 1998 1997 1996 Domestic Plans Service cost $ 9.0 $ 8.0 $ 7.6 Interest cost 41.3 37.0 33.0 Actual return on assets (40.5) (35.6) (32.1) Net amortization and deferral (1.8) (1.0) (1.4) Net pension expense $ 8.0 $ 8.4 $ 7.1 Foreign Plans Service cost $ 2.7 $ 2.7 $ 3.2 Interest cost 5.9 6.3 6.7 Actual return on assets (5.7) (3.5) (4.0) Net amortization and deferral 3.1 1.2 2.2 Net pension expense $ 6.0 $ 6.7 $ 8.1 Page 48

The following table sets forth the funded status of the plans and amounts recognized in the Company's Consolidated Statements of Financial Position at June 30, 1998 and 1997: Domestic Plans Assets Exceed Accumulated Accumulated Benefits Benefits Exceed Assets (Dollar amounts in millions) 1998 1997 1998 1997 Plan assets at fair value $ 559.4 $ 474.2 $ - $ - Projected benefit obligation 544.5 475.0 12.2 10.7 Plan assets greater (less) than projected benefit obligation 14.9 (.8) (12.2) (10.7) Unrecognized items Net actuarial loss 33.4 43.3 2.8 1.7 Prior service cost (4.7) (5.5) 2.6 3.0 Net transition (asset) obligation (4.8) (7.2) .4 .5 Minimum pension liability adjustment (4.1) (3.8) Prepaid (accrued) pension expense $ 38.8 $ 29.8 $(10.5) $ (9.3) Actuarial present value of accumulated benefits $ 530.4 $ 470.2 $ 10.5 $ 9.3 Accumulated benefit obligation related to vested benefits $ 522.0 $ 461.7 $ 9.5 $ 8.0 A minimum pension liability adjustment is required when the actuarial present value of accumulated benefits exceeds plan assets and accrued pension liabilities. The minimum liability adjustment, less allowable intangible assets, net of tax benefit, is reported as a reduction of shareholders' equity and totaled $.4 million and $.7 million at June 30, 1998 and 1997, respectively. Foreign Plans Assets Exceed Accumulated Accumulated Benefits Benefits Exceed Assets (Dollar amounts in millions) 1998 1997 1998 1997 Plan assets at fair value $ 36.2 $ 32.0 $ - $ - Projected benefit obligation 36.9 30.3 62.0 64.9 Plan assets greater (less) than projected benefit obligation (.7) 1.7 (62.0) (64.9) Unrecognized items Net actuarial (gain) loss 6.6 3.2 (5.1) (2.5) Prior service cost 1.3 1.5 Net transition (asset) obligation (1.5) (1.9) 3.4 4.0 Prepaid (accrued) pension expense $ 5.7 $ 4.5 $(63.7) $(63.4) Actuarial present value of accumulated benefits $ 33.7 $ 28.0 $ 55.3 $ 56.1 Accumulated benefit obligation related to vested benefits $ 33.6 $ 27.8 $ 52.4 $ 52.5 The following actuarial assumptions were used in accounting for the defined benefit plans: 1998 1997 Domestic Plans: Assumptions Discount rate 8% 8 1/2% Compensation increase 4% 4% Long-term rate of return 8 1/2 - 9 1/4% 8 1/2 - 9 1/4% Foreign Plans: Assumptions Discount rate 5 1/2 - 6 3/4% 6 - 8% Compensation increase 3 1/2 - 4 1/2% 3 1/2 - 4 1/2% Long-term rate of return 6 1/2 - 9 1/2% 6 1/2 - 9 1/2% Savings Plan. The Company provides a 401(k) savings plan, for most domestic employees, with automatic Company contributions of 2% of eligible compensation and a dollar-for-dollar matching contribution of up to 4% of eligible compensation. The Company's contributions to this plan were $10.7 million, $9.6 million, and $7.4 million for fiscal 1998, 1997, and 1996, respectively. Page 49

Retiree Health Care and Life Insurance Benefits. The Company provides certain health care and life insurance benefits to domestic employees hired prior to January 1, 1993, who retire and satisfy certain service and age requirements. Generally, medical coverage pays a stated percentage of most medical expenses, reduced for any deductible and for payments made by Medicare or other group coverage. The cost of providing these benefits is shared with retirees. The plan is unfunded. The following table sets forth the accrued postretirement benefit liability recognized in the Company's Consolidated Statements of Financial Position at June 30, 1998 and 1997: (Dollar amounts in millions) 1998 1997 Actuarial present value of postretirement benefit obligation Retirees $ 60.7 $ 60.6 Fully eligible active participants 1.4 1.0 Other active participants 10.3 9.7 Accumulated postretirement benefit obligation (APBO) 72.4 71.3 Unrecognized net gain 21.5 24.4 Accrued postretirement benefit liability $ 93.9 $ 95.7 The net postretirement benefit cost for fiscal 1998 and 1997 included the following components: (Dollar amounts in millions) 1998 1997 Service cost $ .6 $ .6 Interest cost 5.7 5.8 Amortization of unrecognized gain (1.4) (1.3) Net postretirement benefit cost $ 4.9 $ 5.1 The discount rate used in determining the APBO was 8% in fiscal 1998 and 8.5% in fiscal 1997. The assumed health care cost trend rate used for measuring the APBO was divided into two categories: 1998 1997 Participants under age 65 9.6% 10.3% Participants age 65 and over 7.4% 7.7% Both rates were assumed to decline to 5.5% over seven and eight years in fiscal 1998 and 1997, respectively. If the health care cost trend rate were increased 1%, the APBO, as of June 30, 1998, would have increased 11%. The effect of this change on the aggregate of service and interest cost for fiscal 1998 would be an increase of 10%. Postemployment Benefits. The Company provides certain postemployment benefits to eligible employees. These benefits generally include severance, disability, and medical-related costs paid after employment but before retirement. Note 6 Business Segments and Geographic Area Information Business Segments. The Company is comprised of three separate segments: PE Biosystems, Analytical Instruments, and the recently formed Celera Genomics Corporation. PE Biosystems includes PE Applied Biosystems, PerSeptive, Molecular Informatics, Tropix, GenScope, and Tecan. PE Biosystems manufactures and markets biochemical instrument systems and associated consumable products for life science research and related applications. These automated systems are used for synthesis, amplification, purification, isolation, analysis, and sequencing of nucleic acids, proteins, and other biological molecules. Analytical Instruments manufactures and markets equipment and systems used for determining the composition and molecular structure of chemical substances, both organic and inorganic, and systems for data handling and data management. Through a joint venture, the Company manufactures mass spectrometry instrument systems that are sold in the PE Biosystems and Analytical Instruments segments. During the fourth quarter of fiscal 1998, Celera Genomics Corporation was formed by the Company and Dr. J. Craig Venter of The Institute for Genomic Research. The new company's strategy is focused on a plan to become the definitive source of genomic information that will be used to develop a better understanding of biological processes in humans. The plan is to substantially complete the sequencing of the human genome over the next three years. The company intends to build the scientific expertise and informatics tools necessary to extract biological knowledge from genomic data. Results were not material for fiscal 1998. Geographic Areas. Revenues between geographic areas are primarily comprised of the sale of products by the Company's manufacturing units. The revenues reflect the rules and regulations of the respective governing tax authorities. Net revenues and operating profits are reported in the region of destination. Operating income is determined by deducting from net revenues the related costs and operating expenses attributable to the region. Research, development and engineering expenses are reflected in the area where the activity was performed. Identifiable assets include all assets directly identified with those geographic areas. Corporate assets include cash and short-term investments, deferred tax assets, property, plant, and equipment, and other assets that are corporate in nature. Export net revenues for fiscal 1998, 1997, and 1996 were $50.7 million, $51.3 million, and $50.0 million, respectively. Page 50

Business Segments <TABLE> <CAPTION> PE Analytical (Dollar amounts in millions) Biosystems Instruments Corporate Consolidated <S> <C> <C> <C> <C> 1998 Net revenues $ 921.8 $ 609.4 $ - $ 1,531.2 Segment income (loss) $ 150.8 $ 57.4 $ (36.7) $ 171.5 Restructuring and other merger costs (48.1) (48.1) Acquired research and development (28.9) (28.9) Operating income (loss) $ 73.8 $ 57.4 $ (36.7) $ 94.5 Identifiable assets $ 719.2 $ 426.0 $ 189.3 $ 1,334.5 Capital expenditures $ 72.6 $ 42.9 $ 1.2 $ 116.7 Depreciation and amortization $ 33.5 $ 17.7 $ 1.9 $ 53.1 1997 Net revenues $ 749.2 $ 624.1 $ - $ 1,373.3 Segment income (loss) $ 125.4 $ 56.1 $ (31.2) $ 150.3 Restructuring charge (13.0) (13.0) Acquired research and development (26.8) (26.8) Impairment of assets (.7) (6.8) (7.5) Operating income (loss) $ 97.9 $ 36.3 $ (31.2) $ 103.0 Identifiable assets $ 504.0 $ 384.5 $ 350.2 $ 1,238.7 Capital expenditures $ 42.1 $ 14.1 $ 13.6 $ 69.8 Depreciation and amortization $ 23.6 $ 18.6 $ 1.7 $ 43.9 1996 Net revenues $ 618.4 $ 630.6 $ - $ 1,249.0 Segment income (loss) $ 107.2 $ 28.7 $ (24.5) $ 111.4 Restructuring charge (17.5) (71.6) (89.1) Acquired research and development (33.9) (33.9) Impairment of assets (9.9) (9.9) Operating income (loss) $ 45.9 $ (42.9) $ (24.5) $ (21.5) Identifiable assets $ 435.6 $ 401.6 $ 225.8 $ 1,063.0 Capital expenditures $ 30.1 $ 13.6 $ .6 $ 44.3 Depreciation and amortization $ 22.7 $ 28.7 $ .4 $ 51.8 </TABLE> Page 51

Geographic Areas <TABLE> <CAPTION> United Far Other (Dollar amounts in millions) States Europe East Countries Corporate Consolidated <S> <C> <C> <C> <C> <C> <C> 1998 Total revenues $ 732.7 $ 679.7 $ 419.2 $ 103.6 $ - $ 1,935.2 Transfers between geographic areas (81.7) (132.6) (157.1) (32.6) (404.0) Revenues to unaffiliated customers $ 651.0 $ 547.1 $ 262.1 $ 71.0 $ $ 1,531.2 Income (loss) $ 27.1 $ 108.9 $ 65.6 $ 6.6 $ (36.7) $ 171.5 Restructuring and other merger costs (26.2) (21.7) (.2) (48.1) Acquired research and development (28.9) (28.9) Operating income (loss) $ (28.0) $ 87.2 $ 65.4 $ 6.6 $ (36.7) $ 94.5 Identifiable assets $ 630.5 $ 377.6 $ 100.4 $ 36.7 $ 189.3 $ 1,334.5 1997 Total revenues $ 599.3 $ 663.6 $ 407.7 $ 83.5 $ - $ 1,754.1 Transfers between geographic areas (67.2) (144.6) (147.3) (21.7) (380.8) Revenues to unaffiliated customers $ 532.1 $ 519.0 $ 260.4 $ 61.8 $ $ 1,373.3 Income (loss) $ 3.2 $ 101.3 $ 68.6 $ 8.4 $ (31.2) $ 150.3 Restructuring charge (5.2) (5.9) (.9) (1.0) (13.0) Acquired research and development (26.8) (26.8) Impairment of assets (1.9) (5.6) (7.5) Operating income (loss) $ (30.7) $ 95.4 $ 67.7 $ 1.8 $ (31.2) $ 103.0 Identifiable assets $ 462.5 $ 280.2 $ 117.1 $ 28.7 $ 350.2 $ 1,238.7 1996 Total revenues $ 529.7 $ 606.7 $ 365.2 $ 79.3 $ - $ 1,580.9 Transfers between geographic areas (60.6) (128.8) (124.6) (17.9) (331.9) Revenues to unaffiliated customers $ 469.1 $ 477.9 $ 240.6 $ 61.4 $ $ 1,249.0 Income (loss) $ (18.1) $ 73.7 $ 70.9 $ 9.4 $ (24.5) $ 111.4 Restructuring charge (29.9) (59.2) (89.1) Acquired research and development (33.9) (33.9) Impairment of assets (9.9) (9.9) Operating income (loss) $ (91.8) $ 14.5 $ 70.9 $ 9.4 $ (24.5) $ (21.5) Identifiable assets $ 433.5 $ 269.7 $ 103.4 $ 30.6 $ 225.8 $ 1,063.0 </TABLE> Page 52

Note 7 Shareholders' Equity Treasury Stock. Common stock purchases have been made in support of the Company's various stock plans and as part of a general share repurchase authorization. The general share repurchase authorization was rescinded by the Board of Directors in fiscal 1998. There were no share purchases in fiscal 1998. During fiscal 1997 and 1996, the Company purchased .4 million and .8 million shares, respectively, to support various stock plans. Stock Purchase Warrants. As a result of the Merger with PerSeptive, each outstanding warrant for shares of PerSeptive common stock was converted into warrants for the number of shares of the Company's common stock that would have been received by the holder if such warrants had been exercised immediately prior to the effective time of the Merger. At June 30, 1998, the following warrants to purchase common stock were outstanding: Number of Exercise Expiration Shares Price Date Class C 4,097 $ 37.95 March 1999 Class E 8,065 $ 171.34 December 1998 Class F 10,266 $ 39.56 October 2002 Class G 53,799 $ 65.73 September 2003 Equity Put Warrants. During the first quarter of fiscal 1997, the Company sold in a private placement 600,000 put warrants on shares of its common stock. Each warrant obligated the Company to purchase the shares from the holder, at specified prices, if the closing price of the common stock was below the exercise price on the maturity date. The cash proceeds from the sale of the put warrants were $1.8 million and have been included in capital in excess of par value. During fiscal 1997, all 600,000 warrants expired unexercised. No equity put warrants were sold in fiscal 1998. Shareholders' Protection Rights Plan. The Company has a Shareholders' Protection Rights Plan designed to protect shareholders against abusive takeover tactics by declaring a dividend of one right on each outstanding share of common stock. Each right entitles shareholders to buy one one-hundredth of a newly issued share of participating preferred stock having economic and voting terms similar to those of one share of common stock at an exercise price of $90, subject to adjustment. The rights will be exercisable only if a person or a group: (a) acquires 20% or more of the Company's shares or (b) commences a tender offer that will result in such person or group owning 20% or more of the Company's shares. Before that time, the rights trade with the common stock, but thereafter they become separately tradeable. Upon exercise, after a person or a group acquires 20% or more of the Company's shares, each right (other than rights held by the acquiring person) will entitle the shareholder to purchase a number of shares of preferred stock of the Company having a market value of two times the exercise price. If the Company is acquired in a merger or other business combination, each right will entitle the shareholder to purchase at the then exercise price a number of shares of common stock of the acquiring company having a market value of two times such exercise price. If any person or group acquires between 20% and 50% of the Company's shares, the Company's Board of Directors may, at its option, exchange one share of the Company's common stock for each right. The rights are redeemable at the Company's option at one cent per right prior to a person or group becoming an acquiring person. Common Stock. In October 1997, the Company's shareholders approved an increase in the number of authorized shares of the Company's common stock from 90 million to 180 million. Note 8 Stock Plans Stock Option Plans. Under the Company's stock option plans, officers and other key employees may be, and directors are, granted options, each of which allows for the purchase of common stock at a price of not less than 100% of fair market value at the date of grant. Under the normal vesting requirements, 50% of the options are exercisable after one year and 100% after two years. Options generally expire ten years from the date of grant. Transactions relating to the stock option plans of the Company are summarized below: Number Weighted Of Average Options Exercise Price Fiscal 1996 Outstanding at June 30, 1995 4,597,214 $ 29.97 Granted 820,495 $ 46.43 Exercised 1,393,807 $ 29.48 Cancelled 201,367 $ 34.17 Outstanding at June 30, 1996 3,822,535 $ 34.05 Exercisable at June 30, 1996 2,544,100 $ 30.17 Fiscal 1997 Granted 1,595,528 $ 59.78 Exercised 1,167,179 $ 29.73 Cancelled 95,281 $ 43.17 Outstanding at June 30, 1997 4,155,603 $ 45.03 Exercisable at June 30, 1997 2,254,052 $ 35.24 Fiscal 1998 Granted 1,997,041 $ 70.41 Exercised 780,994 $ 34.76 Cancelled 154,686 $ 71.42 Outstanding at June 30, 1998 5,216,964 $ 55.51 Exercisable at June 30, 1998 2,936,389 $ 43.12 Page 53

At June 30, 1998, 241,437 shares remained available for option grant. The following table summarizes information regarding options outstanding and exercisable at June 30, 1998: Weighted Average Contractual Life Number of Remaining Exercise (Option prices per share) Options in Years Price Options outstanding At $ 2.04 - $ 29.95 448,472 4.2 $ 20.93 At $30.25 - $ 59.75 2,038,936 7.0 $ 40.87 At $60.06 - $ 85.69 2,713,648 9.3 $ 71.83 At $90.86 - $163.55 15,908 5.4 $120.86 Options exercisable At $ 2.04 - $ 29.95 448,472 4.2 $ 20.93 At $30.25 - $ 59.75 1,992,736 6.9 $ 40.53 At $60.06 - $ 83.69 479,273 8.7 $ 72.07 At $90.86 - $163.55 15,908 5.4 $120.86 Employee Stock Purchase Plan. The Employee Stock Purchase Plan offers domestic and certain foreign employees the right to purchase, over a certain period, shares of common stock on an annual offering date. The purchase price in the United States is equal to the lower of 85% of the average market price of the common stock on the offering date or 85% of the average market price of the common stock on the last day of the purchase period. Provisions of the plan for employees in foreign countries vary according to local practice and regulations. Common stock issued under the Employee Stock Purchase Plan during fiscal 1998, 1997, and 1996 totaled 174,000 shares, 111,000 shares, and 77,000 shares, respectively. At June 30, 1998, 499,000 shares remained available for issuance. Director Stock Purchase and Deferred Compensation Plan. The Company has a Director Stock Purchase and Deferred Compensation Plan that requires non-employee directors of the Company to apply at least 50% of their annual retainer to the purchase of common stock. The purchase price is the fair market value on the first business day of the third month of each fiscal quarter. At June 30, 1998, approximately 87,000 shares were available for issuance. Restricted Stock. As part of the Company's stock incentive plans, key employees may be, and non-employee directors are, granted shares of restricted stock that will vest when certain continuous employment/service restrictions and/or specified performance goals are achieved. The fair value of shares granted is generally expensed over the restricted periods, which may vary depending on the estimated achievement of performance goals. Restricted stock granted to key employees and non-employee directors during fiscal 1998, 1997, and 1996 totaled 4,350 shares, 42,000 shares and 185,000 shares (155,000 of which were subject to shareholder approval in fiscal 1997), respectively. Compensation expense recognized for these awards was $1.8 million, $11.7 million, and $5.1 million in fiscal 1998, 1997, and 1996, respectively. Performance Unit Bonus Plan. The Company has a Performance Unit Bonus Plan whereby employees may be awarded performance units in conjunction with an equal number of stock options. The performance units vest upon shares of the Company's common stock attaining and maintaining specified stock price levels for a specified period, and are payable on or after June 26, 2000. As of June 30, 1998, 324,500 performance units were outstanding. Compensation expense recognized for these awards totaled $6.3 million in fiscal 1998. Accounting for Stock-Based Compensation. The Company applies Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," in accounting for its stock-based compensation plans. Accordingly, no compensation expense has been recognized for its stock option and employee stock purchase plans, as all options have been issued at fair market value. Pro forma net income and earnings per share information, as required by SFAS No. 123, "Accounting for Stock-Based Compensation," has been determined for employee stock plans under the statement's fair value method. The fair value of the options was estimated at grant date using a Black-Scholes option pricing model with the following weighted average assumptions: For the years ended June 30, 1998 1997 1996 Dividend yield .94% .85% .89% Volatility 27.00% 29.07% 35.32% Risk-free interest rates 5.64% 6.42% 6.24% Expected option life in years 5.70 5.12 4.87 Page 54

For purposes of pro forma disclosure, the estimated fair value of the options is amortized to expense over the options' vesting period. The Company's pro forma information for the years ended June 30, 1998, 1997, and 1996 is presented below: (Dollar amounts in millions, except per share amounts) 1998 1997 1996 Net income (loss) As reported $ 56.4 $ 130.4 $ (36.5) Pro forma $ 25.4 $ 120.2 $ (38.9) Basic earnings (loss) per share As reported $ 1.16 $ 2.74 $ (.80) Pro forma $ .52 $ 2.53 $ (.85) Diluted earnings (loss) per share As reported $ 1.12 $ 2.63 $ (.80) Pro forma $ .51 $ 2.43 $ (.85) Fiscal 1998 pro forma net income includes compensation expense of $9.8 million, or $.19 per diluted share after-tax, owing to the immediate vesting of options as a result of the acquisitions of PerSeptive and Molecular Informatics. The weighted average fair value of options granted was $24.83,$20.17, and $16.58 per share for fiscal 1998, 1997, and 1996, respectively. Note 9 Additional Information Selected Accounts. The following table provides the major components of selected accounts of the Consolidated Statements of Financial Position: (Dollar amounts in millions) At June 30, 1998 1997 Other long-term assets Goodwill $ 84.5 $ 32.7 Other 195.0 159.4 Total other long-term assets $ 279.5 $ 192.1 Other accrued expenses Deferred service contract revenues $ 54.8 $ 45.1 Accrued pension liabilities 17.5 17.9 Restructuring provisions 31.3 33.3 Other 98.3 90.5 Total other accrued expenses $ 201.9 $ 186.8 Other long-term liabilities Accrued pension liabilities $ 62.7 $ 62.3 Accrued postretirement benefits 87.4 91.2 Other 34.5 27.2 Total other long-term liabilities $ 184.6 $ 180.7 Related Party Transactions. One of the Company's directors is an employee of the Roche Group, a pharmaceutical manufacturer and strategic partner of the Company in the biotechnology field. The Company made payments to the Roche Group and its affiliates, for the purchase of reagents and consumables, of $72.5 million, $68.2 million, and $59.7 million in fiscal 1998, 1997 and 1996, respectively. Page 55

Note 10 Restructuring and Other Merger Costs The Company initiated a restructuring plan in fiscal 1998 for actions associated with the acquisition of PerSeptive. In fiscal 1997 and 1996, restructuring actions were undertaken primarily to improve the profitability and cash flow performance of Analytical Instruments. Fiscal 1996 also included a charge by PerSeptive for restructuring actions and other related costs. The before-tax charges associated with the implementation of these restructuring plans were $48.1 million, $24.2 million, and $89.1 million for fiscal 1998, 1997, and 1996, respectively. In addition, fiscal 1997 reflected an $11.2 million before-tax reduction of charges required to implement the fiscal 1996 Analytical Instruments' plan. Fiscal 1998. During fiscal 1998, the Company recorded a $48.1 million before-tax charge for restructuring and other merger costs to integrate PerSeptive into the Company following the acquisition. The objectives of this plan are to lower PerSeptive's cost structure by reducing excess manufacturing capacity, achieve broader worldwide distribution of PerSeptive's products, and combine sales, marketing, and administrative functions. The charge included: $33.9 million for restructuring the combined operations; $8.6 million for transaction costs; and $4.1 million of inventory-related write-offs, recorded in costs of sales, associated with the rationalization of certain product lines. Additional non-recurring acquisition costs of $1.5 million for training, relocation, and communication were recognized as period expenses in the third and fourth quarters of fiscal 1998, and classified as other merger-related costs. The Company expects to incur an additional $6.5 million to $8.5 million of acquisition- related costs for training, relocation, and communication in fiscal 1999. These costs will be recognized as period expenses when incurred and will be classified as other merger costs. The $33.9 million restructuring charge includes $13.8 million for severance-related costs and workforce reductions of approximately 170 employees, consisting of 114 employees in production labor and 56 employees in sales and administrative support. The remaining $20.1 million represents facility consolidation and asset-related write-offs and includes: $11.7 million for contract and lease terminations and facility related expenses in connection with the reduction of excess manufacturing capacity; $3.2 million for dealer termination payments, sales office consolidations, and consolidation of sales and administrative support functions; and $5.2 million for the write-off of certain tangible and intangible assets and the termination of certain contractual obligations. These restructuring actions are expected to be substantially completed by the end of fiscal 1999. Transaction costs of $8.6 million include acquisition-related investment banking and professional fees. As of June 30, 1998, approximately 12 employees were separated under the plan, and the actions are proceeding as planned. The following table details the major components of the fiscal 1998 restructuring provision: Facility Consolidation And Asset Related (Dollar amounts in millions) Personnel Write-offs Total Provision: Reduction of excess European manufacturing capacity $ 5.1 $ 11.7 $ 16.8 Consolidation of sales and administrative support 8.7 3.2 11.9 Other 5.2 5.2 Total provision $ 13.8 $ 20.1 $ 33.9 Fiscal 1998 activity: Reduction of excess European manufacturing capacity $ - $ .4 $ .4 Consolidation of sales and administrative support .3 1.2 1.5 Other 5.1 5.1 Total fiscal 1998 activity $ .3 $ 6.7 $ 7.0 Balance at June 30, 1998: Reduction of excess European manufacturing capacity $ 5.1 $ 11.3 $ 16.4 Consolidation of sales and administrative support 8.4 2.0 10.4 Other .1 .1 Balance at June 30, 1998 $ 13.5 $ 13.4 $ 26.9 Fiscal 1997. During the fourth quarter of fiscal 1997, the Company announced a follow-on phase to Analytical Instruments' profit improvement program begun by the Company in fiscal 1996. The cost for this action was $24.2 million before-tax, and included $19.4 million for costs focused on further improving the operating efficiency of manufacturing facilities in the United States, Germany, and the United Kingdom. These actions were designed to help transition Analytical Instruments from a highly vertical manufacturing operation to one that relies more on outsourcing functions not considered core competencies. The restructuring charge also included $4.8 million to finalize the consolidation of sales and administrative support, primarily in Europe, where seventeen facilities were closed. The workforce reductions under this plan total approximately 285 employees in production labor and 25 employees in sales and administrative support. The charge included $11.9 million for severance-related costs. The $12.3 million provided for facility Page 56

consolidation and asset-related write-offs included $1.2 million for lease termination payments and $11.1 million for the write-off of machinery, equipment, and tooling associated with those functions to be outsourced. The following table details the major components of the fiscal 1997 restructuring provision: Facility Consolidation And Asset Related (Dollar amounts in millions) Personnel Write-offs Total Provision: Changes in manufacturing operations $ 9.6 $ 9.8 $ 19.4 Consolidation of sales and administrative support 2.3 2.5 4.8 Total provision $ 11.9 $ 12.3 $ 24.2 Fiscal 1997 activity: Changes in manufacturing operations $ .1 $ 4.6 $ 4.7 Consolidation of sales and administrative support Total fiscal 1997 activity $ .1 $ 4.6 $ 4.7 Fiscal 1998 activity: Changes in manufacturing operations $ 7.8 $ 4.9 $ 12.7 Consolidation of sales and administrative support 1.3 1.1 2.4 Total fiscal 1998 activity $ 9.1 $ 6.0 $ 15.1 Balance at June 30, 1998: Changes in manufacturing operations $ 1.7 $ .3 $ 2.0 Consolidation of sales and administrative support 1.0 1.4 2.4 Balance at June 30, 1998 $ 2.7 $ 1.7 $ 4.4 Fiscal 1996. The fiscal 1996 before-tax restructuring charge of $71.6 million was the first phase of a plan focused on improving the profitability and cash flow performance of Analytical Instruments. In connection with the plan, the division was reorganized into three vertically integrated, fiscally accountable operating units; a distribution center in Holland was established to centralize the European infrastructure for shipping, administration, and related functions; and a program was implemented to eliminate excess production capacity in Germany. The charge included $37.8 million for worldwide workforce reductions of approximately 390 positions in manufacturing, sales and support, and administrative functions. The charge also included $33.8 million for facility consolidation and asset-related write-offs associated with the discontinuation of various product lines. In fiscal 1996, the Company transferred the development and manufacturing of certain analytical instrument product lines from its facility in Germany to other sites, primarily in the United States. The facility in Germany remains the principal site for the development of atomic absorption products. In fiscal 1996, a distribution center in Holland was established to provide an integrated sales, shipment, and administration support infrastructure for the Company's European operations and to integrate certain operating and business activities. The European distribution center includes certain administrative, financial, and information systems functions previously transacted at individual locations throughout Europe. In the fourth quarter of fiscal 1997, the Company finalized actions associated with the restructuring plan announced in fiscal 1996. The costs to implement the program were $11.2 million below the $71.6 million charge recorded in fiscal 1996. As a result, during the fourth quarter of fiscal 1997, the Company recorded an $11.2 million reduction of charges required to implement the fiscal 1996 plan. The following table details the major components of the $71.6 million fiscal 1996 restructuring provision: Facility Consolidation And Asset Related (Dollar amounts in millions) Personnel Write-offs Total Provision: Reduction of excess European manufacturing capacity $ 19.7 $ 23.0 $ 42.7 Reduction of European distribution and adminstrative capacity 11.5 6.0 17.5 Other worldwide workforce reductions and facility closings 6.6 4.8 11.4 Total provision $ 37.8 $ 33.8 $ 71.6 Fiscal 1996 activity: Reduction of excess European manufacturing capacity $ 2.1 $ 6.7 $ 8.8 Reduction of European distribution and administrative capacity 1.6 .7 2.3 Other worldwide workforce reductions and facility closings 1.9 1.6 3.5 Total fiscal 1996 activity $ 5.6 $ 9.0 $ 14.6 Page 57

Fiscal 1997 activity: Reduction of excess European manufacturing capacity $ 10.9 $ 6.6 $ 17.5 Adjustment to decrease liabilities originally accrued for excess European manufacturing capacity 4.7 6.5 11.2 Reduction of European distribution and administrative capacity 6.2 4.4 10.6 Other worldwide workforce reductions and facility closings 1.9 2.0 3.9 Total fiscal 1997 activity $ 23.7 $ 19.5 $ 43.2 Fiscal 1998 activity: Reduction of excess European manufacturing capacity $ 2.0 $ 3.2 $ 5.2 Reduction of European distribution and administrative capacity 3.7 .9 4.6 Other worldwide workforce reductions and facility closings 2.8 1.2 4.0 Total fiscal 1998 activity $ 8.5 $ 5.3 $ 13.8 Balance at June 30, 1998 $ - $ - $ - A before-tax charge of $17.5 million was also recognized by PerSeptive for restructuring actions and other related costs in fiscal 1996. As of June 30, 1998, all costs associated with the 1996 restructuring plans have been incurred. Note 11 Commitments and Contingencies Future minimum payments at June 30, 1998 under non-cancelable operating leases for real estate and equipment were as follows: (Dollar amounts in millions) 1999 $ 25.0 2000 18.9 2001 16.1 2002 13.9 2003 12.6 2004 and thereafter 61.2 Total $ 147.7 Rental expense was $33.7 million in fiscal 1998, $32.0 million in fiscal 1997, and $33.9 million in fiscal 1996. On July 10, 1998, the Company entered into a ten year non-cancelable lease for a facility for Celera Genomics Corporation in Rockville, Maryland, effective August 1, 1998. Total lease payments over the ten year period will be approximately $22 million. In fiscal 1997, the Company entered into a fifteen year non-cancelable lease for a facility in Foster City, California, effective July 1, 2000. Total lease payments over the fifteen year period will be approximately $42 million. The Company has been named as a defendant in several legal actions, including patent, commercial, and environmental, arising from the conduct of its normal business activities. Although the amount of any liability that might arise with respect to any of these matters cannot be accurately predicted, the resulting liability, if any, will not in the opinion of management have a material adverse effect on the financial statements of the Company. Note 12 Financial Instruments Derivatives. The Company utilizes foreign exchange forward, option, and synthetic forward contracts and an interest rate swap agreement to manage foreign currency and interest rate exposures. The principal objective of these contracts is to minimize the risks and/or costs associated with global financial and operating activities. The Company does not use derivative financial instruments for trading or other speculative purposes, nor is the Company a party to leveraged derivatives. Page 58

Foreign Currency Risk Management. Foreign exchange forward, option, and synthetic forward contracts are used primarily to hedge reported and anticipated cash flows resulting from the sale of products in foreign locations. Option contracts outstanding at June 30, 1998 were purchased at a cost of $4.1 million. Under these contracts, the Company has the right, but not the obligation, to purchase or sell foreign currencies at fixed rates at various maturity dates. These contracts are utilized primarily when the amount and/or timing of the foreign currency exposures are not certain. Synthetic forward contracts outstanding at June 30, 1998 were purchased having no up- front cost. Under these contracts, the Company may participate in some favorable currency movements but is protected against adverse currency changes. These contracts are used as an alternative to options to reduce the cost of the Company's hedging program. At June 30, 1998 and 1997, the Company had forward, option, and synthetic forward contracts outstanding for the sale and purchase of foreign currencies at fixed rates as summarized in the table below: 1998 1997 (Dollar amounts in millions) Sale Purchase Sale Purchase Japanese Yen $ 109.2 $ - $ 83.5 $ - French Francs 28.3 .2 18.1 Australian Dollars 10.8 13.7 German Marks 28.3 1.9 13.4 2.3 Italian Lira 38.0 1.4 5.6 1.2 British Pounds 29.2 19.6 8.3 Swiss Francs 10.5 4.0 5.4 Swedish Krona 11.9 2.4 Danish Krona 10.3 1.7 Other 44.7 5.1 5.8 Total $ 321.2 $ 32.2 $ 149.6 $ 11.8 Foreign exchange contracts are accounted for as hedges of firm commitments and anticipated foreign currency transactions. With respect to firm commitments, unrealized gains and losses are deferred and included in the basis of the transaction underlying the commitment. Gains and losses on foreign currency transactions are recognized in income and offset the foreign exchange losses and gains, respectively, on the related transactions. The amount of the contracts covering anticipated transactions is marked to market and recognized in income. Interest Rate Risk Management. In fiscal 1997, the Company entered into an interest rate swap in conjunction with a five year Japanese Yen debt obligation (see Note 3). The interest rate swap agreement involves the payment of a fixed rate of interest and the receipt of a floating rate of interest without the exchange of the underlying notional loan principal amount. Under this contract, the Company will make fixed interest payments of 2.1% while receiving interest at a LIBOR floating rate. No other cash payments will be made unless the contract is terminated prior to maturity, in which case the amount to be paid or received in settlement is established by agreement at the time of termination. The agreed upon amount usually represents the net present value at the then existing interest rates of the remaining obligation to exchange payments under the terms of the contract. Based on the level of interest rates prevailing at June 30, 1998, the fair value of the Company's floating rate debt approximated its carrying value. There would be a payment of $.9 million to terminate the related interest rate swap contract, which would equal the unrealized loss. Unrealized gains or losses on debt or interest rate swap contracts are not recognized for financial reporting purposes unless the debt is retired or the contracts are terminated prior to maturity. A change in interest rates would have no impact on the Company's reported interest expense and related cash payments because the floating rate debt and fixed rate swap contract have the same maturity and are based on the same interest rate index. Concentrations of Credit Risk. The forward contracts, options, synthetic forwards, and swaps used by the Company in managing its foreign currency and interest rate exposures contain an element of risk that the counterparties may be unable to meet the terms of the agreements. However, the Company minimizes such risk exposure by limiting the counterparties to a diverse group of highly rated major domestic and international financial insti- Page 59

tutions with which the Company has other financial relationships. The Company is exposed to potential losses in the event of non-performance by these counterparties; however, the Company does not expect to record any losses as a result of counterparty default. The Company does not require and is not required to place collateral for these financial instruments. Fair Value. The fair value of foreign currency forward, option (net of fees), and synthetic forward contracts, as well as interest rate swaps, is estimated based on quoted market prices of comparable contracts and reflects the amounts the Company would receive (or pay) to terminate the contracts at the reporting date. The following table presents notional amounts and fair values of the Company's derivatives at June 30, 1998 and 1997: 1998 1997 Notional Fair Notional Fair (Dollar amounts in millions) Amount Value Amount Value Forward contracts $ 179.2 $ 2.8 $ 114.0 $ (3.7) Purchased options $ 112.7 $ 1.6 $ 47.4 $ .7 Synthetic forwards $ 61.5 $ 1.9 Interest rate swap $ 27.0 $ (.9) $ 33.6 $ .2 The following methods are used in estimating the fair value of other significant financial instruments held or owed by the Company. Cash and short-term investments approximate their carrying amount due to the duration of these instruments. Fair values of minority equity investments and notes receivable are estimated based on quoted market prices, if available, or quoted market prices of financial instruments with similar characteristics. The fair value of debt is based on the current rates offered to the Company for debt of similar remaining maturities. The following table presents the carrying amounts and fair values of the Company's other financial instruments at June 30, 1998 and 1997: 1998 1997 Carrying Fair Carrying Fair (Dollar amounts in millions) Amount Value Amount Value Cash and short-term investments $ 84.1 $ 84.1 $ 217.2 $ 217.2 Minority equity investments $ 29.2 $ 29.2 $ 22.6 $ 22.6 Note receivable $ 7.2 $ 7.2 Short-term debt $ 12.1 $ 12.1 $ 29.9 $ 29.9 Long-term debt $ 33.7 $ 34.6 $ 59.2 $ 59.0 Net unrealized gains and losses on minority equity investments are reported as a separate component of shareholders' equity. The Company reported an unrealized holding loss of $1.4 million at June 30, 1998 and a $3.1 million unrealized holding gain at June 30, 1997. Page 60

Note 13 Quarterly Financial Information (Unaudited) The following is a summary of quarterly financial results: <TABLE> <CAPTION> First Quarter Second Quarter Third Quarter Fourth Quarter (Dollar amounts in millions except per share amounts) 1998 1997 1998 1997 1998 1997 1998 1997 <S> <C> <C> <C> <C> <C> <C> <C> <C> Net revenues $ 322.7 $ 296.8 $ 369.2 $ 354.0 $ 390.8 $ 348.8 $ 448.5 $ 373.7 Gross margin 157.4 144.8 190.2 174.3 199.2 178.5 232.3 182.3 Net income (loss) 21.4 28.6 6.0 73.6 (7.0) 9.3 36.0 18.9 Net income (loss) per basic share .45 .61 .12 1.56 (.14) .20 .73 .39 Net income (loss) per diluted share .43 .59 .12 1.49 (.14) .19 .71 . 38 Events Impacting Comparability: Fiscal 1998. First and fourth quarter results included before-tax gains of $.8 million in each quarter, or $.02 and $.01 per diluted share after-tax, respectively, relating to the Company's release of contingencies on minority equity investments (see Note 2). Second quarter results included a $28.9 million before-tax charge, or $.57 per diluted share after-tax, for acquired research and development(see Note 2). Third and fourth quarter results included before-tax charges for restructuring and other merger costs of $47.0 million and $1.1 million, respectively, or $.85 and $.02 per diluted share after-tax, respectively (see Note 10). In the third quarter the Company also recognized one-time royalty revenues and capitalized certain legal expenses relating to the successful defense of certain patents. The net effect of these items increased third quarter net income by approximately $4.2 million, $.08 per diluted share. Fiscal 1997. First and second quarter results included before-tax gains of $11.3 million and $26.1 million, or $.21 and $.38 per diluted share after-tax, respectively, from the sale of the Company's remaining equity interest in Etec Systems, Inc. (see Note 2). Second, third, and fourth quarter results included before-tax gains of $25.9 million, $.8 million, and $.8 million, or $.52, $.02, and $.02 per diluted share after-tax, respectively, relating to the sale and release of contingencies on minority equity investments (see Note 2). Third quarter results included a $25.4 million before-tax charge, or $.51 per diluted share after-tax, for acquired research and development (see Note 2). Fourth quarter results included a net restructuring charge of $13.0 million, or $.18 per diluted share after-tax (see Note 10); a $1.4 million before-tax charge, or $.03 per diluted share after-tax, for acquired research and development (see Note 2); and a $7.5 million before-tax charge, or $.13 per diluted share after-tax, for asset impairment (see Note 1). In addition, the Company recognized deferred royalty income, other miscellaneous income, and certain compensation-related expenses. The net effect of these items increased fourth quarter net income by approximately $5.0 million, or $.10 per diluted share. Stock Prices and Dividends 1998 1997 Stock Prices High Low High Low First Quarter $ 86 1/8 $ 72 1/8 $ 58 1/8 $ 44 1/4 Second Quarter $ 74 $ 59 1/4 $ 61 7/8 $ 52 1/2 Third Quarter $ 76 $ 55 13/16 $ 77 1/8 $ 57 7/8 Fourth Quarter $ 75 1/8 $ 58 11/16 $ 81 1/8 $ 60 3/8 Dividends per share 1998 1997 First Quarter $ .17 $ .17 Second Quarter .17 .17 Third Quarter .17 .17 Fourth Quarter .17 .17 Total dividends per share $ .68 $ .68 Page 61

REPORT OF MANAGEMENT To The Shareholders of The Perkin-Elmer Corporation Management is responsible for the accompanying consolidated financial statements, which have been prepared in conformity with generally accepted accounting principles. In preparing the financial statements, it is necessary for management to make informed judgments and estimates which it believes are in accordance with generally accepted accounting principles appropriate in the circumstances. Financial information presented elsewhere in this annual report is consistent with that in the financial statements. In meeting its responsibility for preparing reliable financial statements, the Company maintains a system of internal accounting controls designed to provide reasonable assurance that assets are safeguarded and transactions are properly recorded and executed in accordance with corporate policy and management authorization. The Company believes its accounting controls provide reasonable assurance that errors or irregularities which could be material to the financial statements are prevented or would be detected within a timely period. In designing such control procedures, management recognizes judgements are required to assess and balance the costs and expected benefits of a system of internal accounting controls. Adherence to these polices and procedures is reviewed through a coordinated audit effort of the Company's internal audit staff and independent accountants. The Audit Committee of the Board of Directors is comprised solely of outside directors and is responsible for overseeing and monitoring the quality of the Company's accounting and auditing practices. The independent accountants and internal auditors have full and free access to the Audit Committee and meet periodically with the committee to discuss accounting, auditing, and financial reporting matters. /s/ Dennis L. Winger Dennis L. Winger Senior Vice President and Chief Financial Officer /s/ Tony L. White Tony L. White Chairman, President and Chief Executive Officer REPORT OF INDEPENDENT ACCOUNTANTS To the Shareholders and Board of Directors of The Perkin-Elmer Corporation In our opinion, the accompanying consolidated statements of financial position and the related consolidated statements of operations, of shareholders' equity, and of cash flows present fairly, in all material respects, the financial position of The Perkin-Elmer Corporation and its subsidiaries at June 30, 1998 and 1997, and the results of their operations and their cash flows for each of the three fiscal years in the period ended June 30, 1998, in conformity with generally accepted accounting principles. 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 of these statements in accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP July 31, 1998 Page 62 </TABLE>

        SUBSIDIARIES OF THE PERKIN-ELMER CORPORATION

                                                       State or
                                                       Jurisdiction
                                                       of Incorporation
   Name                                                or Organization
                         EXHIBIT 21
                    LIST OF SUBSIDIARIES
PKN Overseas Corporation                               (New York, USA)
  Perkin-Elmer Pty Limited                             (Australia)
  Perkin-Elmer (Canada) Ltd.                           (Canada)
    Perkin-Elmer Sciex *                               (Canada)
  Perkin-Elmer Taiwan Corporation                      (Delaware, USA)
  Perkin-Elmer (Thailand) Limited                      (Thailand)
  Perkin-Elmer AG                                      (Switzerland)
  Perkin-Elmer Japan Co. Ltd.                          (Japan)
  Perkin-Elmer SA                                      (France)
  Perkin-Elmer (Sweden) AB                             (Sweden)
    Perkin-Elmer AB                                    (Sweden)
       Perkin-Elmer OY                                 (Finland)
  Perkin-Elmer Holding BV                              (The Netherlands)
    Perkin-Elmer Holdings Limited                      (UK)
      Tecan AG **                                      (Switzerland)
      Perkin-Elmer (UK) Pension Trustees Limited       (UK)
      Perkin-Elmer Limited                             (UK)
        Spartan Ltd.                                   (Channel Isles)
          Listronagh Company                           (Ireland)
      Applied Biosystems Ltd.                          (UK)
    Perkin-Elmer BV                                    (The Netherlands)
      Perkin-Elmer Europe BV                           (The Netherlands)
    Perkin-Elmer Belgium NV                            (Belgium)
    Perkin-Elmer Sro                                   (Czech Republic)
    Perkin-Elmer Hungaria Kft                          (Hungary)
    Perkin-Elmer Polska Spolka zoo                     (Poland)
    Perkin-Elmer Genscope GmbH                         (Switzerland)
      Perkin-Elmer GenScope Belgium BVBA               (Belgium)
  Joint Stock Company Perkin-Elmer AO                  (Russia)
  Perkin-Elmer Instruments Asia Pte. LTD               (Singapore)
    Perkin-Elmer Instruments (Malaysia) SDN. BHD.      (Malaysia)
    Perkin-Elmer Instruments (Philippines) Corporation (Philippines)
  Perkin-Elmer Holding GmbH                            (Germany)
    Perkin-Elmer South Africa (PTY) Limited            (South Africa)
    Bodenseewerk Perkin-Elmer GmbH                     (Germany)
    Perkin-Elmer GmbH                                  (Austria)
  Perkin-Elmer Italia SpA                              (Italy)
  Perkin-Elmer Hong Kong, Ltd.                         (Hong Kong)`
  Perkin-Elmer Analytical and Biochemical
    Instruments (Beijing) Co., Ltd.                    (China)
  Perkin-Elmer de Centro America, S.A.                 (Costa Rica)
  Perkin-Elmer Industria e Comercio Ltda.              (Brazil)


                          Page 1

State or Jurisdiction of Incorporation Name or Organization Perkin-Elmer International, Inc. (Delaware, USA) Perkin-Elmer Egypt (Egypt) Perkin-Elmer de Argentina S.R.L. (Argentina) Perkin-Elmer Korea Corporation (Delaware, USA) Perkin-Elmer de Mexico SA (Mexico) Perkin-Elmer Overseas Ltd. (Cayman Islands) Perkin-Elmer Colombia Limitada (Colombia) Perkin-Elmer Chile Limitada (Chile) PECO Insurance Company Limited (Bermuda) Perkin-Elmer China, Inc. (Delaware, USA) Perkin-Elmer FSC, Inc. (U.S.Virgin Islands) Perkin-Elmer Hispania SA (Spain) Hitachi Perkin-Elmer, Ltd. (Inactive) ** (Japan) Tropix, Inc. (Delaware, USA) GenScope, Inc. (Delaware, USA) PE AgGen, Inc. (Utah, USA) Applied Biosystems GmbH (Germany) PerSeptive Biosystems, Inc. (U.S. Corp.) PerSeptive Biosystems GmbH (Germany) Nihon PerSeptive KK (Japan) PerSeptive International Holdings (Delaware, USA) PerSeptive Biosystems (France) Ltd. (Delaware, USA) PerSeptive Biosystems (UK) Ltd. (UK) PerSeptive Biosystems (Canada) Ltd. (Canada) PerSeptive Technologies II Corporation (Delaware, USA) GC Biotechnologies LLC *** (Delaware, USA) Celera Genomics Corporation **** (Delaware, USA) Note: Persons directly owned by subsidiaries of The Perkin- Elmer Corporation are indented and listed below their immediate parent. * 50% ownership ** 52% voting *** 49% ownership **** 80% ownership

              CONSENT OF INDEPENDENT ACCOUNTANTS



     We  hereby consent to the incorporation by reference in
the  Registration Statements on Form S-3 (No. 333-39549) and
Form  S-8  (Nos. 2-95451, 33-25218, 33-44191, 33-50847,  33-
50849,  33-58778,  333-15189,  333-152259,  333-38713,  333-
38881,   333-42683,  and  333-45187) of   The   Perkin-Elmer
Corporation of our report dated July 31, 1998, appearing  on
page  62  of  the  Annual  Report to Shareholders  which  is
incorporated  in this Annual Report on Form 10-K.   We  also
consent  to the incorporation by reference of our report  on
the  Financial Statement Schedule, which appears on page  25
of this Form 10-K.



/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP







Stamford, Connecticut
September 25, 1998


<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
the Consolidated Statement of Operations for the Twelve Months Ended
June 30, 1998 and the Consolidated Statement of Financial Position at
June 30, 1998 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          JUN-30-1998
<PERIOD-END>                               JUN-30-1998
<CASH>                                          82,865
<SECURITIES>                                         0
<RECEIVABLES>                                  384,175
<ALLOWANCES>                                   (9,277)
<INVENTORY>                                    240,031
<CURRENT-ASSETS>                               796,136
<PP&E>                                         510,430
<DEPRECIATION>                               (251,630)
<TOTAL-ASSETS>                               1,334,474
<CURRENT-LIABILITIES>                          508,145
<BONDS>                                              0
<COMMON>                                        50,148
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<OTHER-SE>                                     514,100
<TOTAL-LIABILITY-AND-EQUITY>                 1,334,474
<SALES>                                      1,531,165
<TOTAL-REVENUES>                             1,531,165
<CGS>                                          752,045
<TOTAL-COSTS>                                  752,045
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                 4,673
<INTEREST-EXPENSE>                               4,905
<INCOME-PRETAX>                                100,602
<INCOME-TAX>                                  (38,617)
<INCOME-CONTINUING>                             56,388
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    56,388
<EPS-PRIMARY>                                     1.16
<EPS-DILUTED>                                     1.12
        


</TABLE>