Item 1. Business

Overview

We are a leading provider of products, services and solutions to the diagnostics, research, environmental, industrial and laboratory services markets. Through our advanced technologies, solutions, and services, we address critical issues that help to improve the health and safety of people and their environment.

We are a Massachusetts corporation, founded in 1947. Our headquarters are in Waltham, Massachusetts, and we market our products and services in more than 150 countries. As of December 28, 2014, we employed approximately 7,700 employees in our continuing operations. Our common stock is listed on the New York Stock Exchange under the symbol “PKI” and we are a component of the S&P 500 Index.

We maintain a website with the address http://www.perkinelmer.com. We are not including the information contained in our website as part of, or incorporating it by reference into, this annual report on Form 10-K. We make available free of charge through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports, as soon as reasonably practicable after we electronically file these materials with, or otherwise furnish them to, the Securities and Exchange Commission.

Our Strategy

Our strategy is to provide innovative products, services and solutions that drive scientific enhancements and productivity improvements in targeted high growth market segments and to develop value-added applications and solutions to foster further development and expansion of the markets we serve. To execute on our strategy and drive higher revenue growth, we focus on broadening our product and service offerings through the acquisition of innovative technology and expenditures for research and development. Our strategy includes:

•	Achieving significant growth in both of our core business segments, Human Health and Environmental Health, through strategic acquisitions and licensing;

•	Accelerating innovation through both internal research and development and third-party collaborations and alliances;

•	Strengthening our position within key markets, by expanding our product and service offerings and maintaining superior product quality;

•	Utilizing our share repurchase programs to help drive shareholder value; and

•	Attracting, retaining and developing talented and engaged employees.

Recent Developments

As part of our strategy to grow our core businesses, we have recently taken the following actions:

Strategic Business ReAlignment:

In January 2015, we approved and announced a new alignment of our businesses effective for fiscal year 2015 that is designed to enable us to both deliver complete solutions targeted towards certain end markets and to develop value-added applications and solutions to foster further expansion of those markets. As part of this realignment, our OneSource multivendor service offering business that serves the life sciences end market will be moved from our Environmental Health segment into our Human Health segment. Beginning in fiscal year 2015, we will report financial results under our Human Health and Environmental Health segments using this new alignment.

Acquisitions in Fiscal Year 2014:

Acquisition of Perten Instruments Group AB. In December 2014, we acquired all of the outstanding stock of Perten Instruments Group AB ("Perten"). Perten is a provider of analytical instruments and services for quality control of food, grain, flour and feed. We expect this acquisition to enhance our industrial, environmental and safety business by expanding our product offerings to the academic and industrial end markets. We paid the shareholders of Perten $269.9 million in cash for the stock of Perten. We have reported the operations for this acquisition within the results of our Environmental Health segment from the acquisition date.

Other acquisitions. In addition to the Perten acquisition, we completed the acquisition of two businesses in fiscal year 2014 for total consideration of $18.0 million in cash and $4.3 million of assumed debt. We reported the operations for these acquisitions within the results of our Human Health and Environmental Health segments from the acquisition dates.

Restructuring:

During fiscal year 2014, we recorded pre-tax restructuring charges of $7.7 million in our Human Health segment and $6.7 million in our Environmental Health segment related to a workforce reduction from reorganization activities. Our management approved these plans principally to realign resources to emphasize growth initiatives and to focus resources on higher growth end markets. We also recorded net pre-tax restructuring reversals of $0.8 million in our Human Health segment and $1.7 million in our Environmental Health segment related to lower than expected costs associated with workforce reductions, which were partially offset by higher than expected costs for the closure of excess facility space. In addition during fiscal year 2014, we recorded a pre-tax restructuring charge of $1.5 million in our Environmental Health segment primarily as a result of terminating various contractual commitments. This pre-tax restructuring activity has been reported as restructuring and contract termination charges and is included as a component of operating expenses from continuing operations. We expect no significant impact on future operating results or cash flows from the restructuring activities executed in fiscal year 2014.

As part of our ongoing business strategy, we also took the following actions:

Share Repurchase Program:

On October 24, 2012, our Board of Directors (our "Board") authorized us to repurchase up to 6.0 million shares of common stock under a stock repurchase program (the "Repurchase Program"). The Repurchase Program expired on October 24, 2014. On October 23, 2014, our Board authorized us to repurchase up to 8.0 million shares of common stock under a new stock repurchase program (the "New Repurchase Program"). The New Repurchase Program will expire on October 23, 2016 unless terminated earlier by our Board, and may be suspended or discontinued at any time. During fiscal year 2014, we repurchased 1.4 million shares of common stock in the open market at an aggregate cost of $61.3 million, including commissions, under these repurchase programs. As of December 28, 2014, approximately 7.4 million shares authorized by our Board under the New Repurchase Program remained available for repurchase.

Discontinued Operations:

In May 2014, our management approved the shutdown of our microarray-based diagnostic testing laboratory in the United States, which had been reported within our Human Health segment. We determined that, with the lack of adequate reimbursement from health care payers, the microarray-based diagnostic testing laboratory in the United States would need significant investment in its operations to reduce costs in order to effectively compete in the market. The shutdown of the microarray-based diagnostic testing laboratory in the United States resulted in a $0.1 million net pre-tax loss primarily related to the disposal of fixed assets, which was partially offset by the sale of a building in fiscal year 2014.

Business Segments and Products

We report our business in two segments: Human Health and Environmental Health. We performed our annual impairment testing on January 1, 2014, the annual impairment date for our reporting units, and based on the first step of the impairment process (the comparison of the fair value to the carrying value of the reporting unit to determine if the carrying value exceeds the fair value), we concluded that there was no goodwill impairment.

Human Health Segment

Our Human Health segment concentrates on developing diagnostics, tools and applications to help detect diseases earlier and more accurately and to accelerate the discovery and development of critical new therapies. Within our Human Health segment, we serve the diagnostics and research markets. Our Human Health segment generated revenue of $1,243.4 million in fiscal year 2014.

Diagnostics Market:

We provide early detection for genetic disorders from pregnancy to early childhood, as well as flat panel X-ray detectors and infectious disease testing for the diagnostics market. Our screening products are designed to provide early and accurate insights into the health of expectant mothers during pregnancy and into the health of their babies. Our instruments, reagents and software test and screen for genetic abnormalities, disorders and diseases, including Down syndrome, hypothyroidism, infertility and various metabolic conditions. Our flat panel X-ray detectors are used within X-ray imaging systems to allow physicians to make fast and accurate diagnoses of conditions ranging from broken bones to reduced blood flow in vascular systems. In addition, our flat panel X-ray detectors are used within oncology radiation therapy systems to support more accurate tumor treatment.

Research Market:

In the research market, we provide a broad suite of solutions including reagents, liquid handling systems, and detection and imaging technologies that enable scientists to improve life sciences research and drug discovery processes. These products, solutions and services enable pharmaceutical companies to create better therapeutics by helping to bring products to market

faster and more efficiently. Our research portfolio includes a wide range of systems consisting of instrumentation for automation and detection solutions, in vitro and in vivo imaging and analysis hardware and software, plus a portfolio of consumable products, including drug discovery and research reagents. We sell our research solutions to pharmaceutical, biotechnology and academic research customers globally.

Principal Products:

Our principal products for Human Health applications include the following:

Diagnostics:

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The DELFIA® Xpress screening platform, which is a complete solution for prenatal and maternal health screening, and includes a fast continuous loading system supported by kits for both first and second trimester analyses, including dried blood spot assays for prenatal screening, and clinically validated LifeCycle™ software. A Placental Growth Factor assay is used to screen pregnant women for early-onset pre-eclampsia.

•	The NeoGram™ MS/MS AAAC in vitro diagnostic kit, which is used to support detection of metabolic disorders in newborns by tandem mass spectrometry.

•	The NeoBase™ Non-derivatized MS/MS kit, which analyzes newborn blood samples for measurement of amino acids and other metabolic analytes for specific diseases.

•	The GSP® Neonatal hTSH, T4 17α-OHP, GALT IRT, BTD, PKU, Total Galactose and G6PD kits, which are used for screening congenital neonatal conditions from a drop of blood.

•	The Specimen Gate® informatics data management solution, which is designed specifically for newborn screening laboratories.

•	A PCR-based assay for quantification of trinucleotide repeats used to detect normal, intermediate, pre and full mutations associated with Fragile X.

•	The First Trimester Screen|Fß™ screening protocol, which is used to provide a first trimester prenatal aneuploidy screening service by combining ultrasound measurement of the fluid accumulation behind the neck of the fetus with maternal serum markers. It is designed to assess patient-specific risk for fetal Down syndrome, trisomy 18 and trisomy 13.

•	The XRpad® family of amorphous Silicon (a-Si) flat panel cassette X-ray detectors, which enable X-ray system manufacturers to upgrade their systems from film to digital and to produce exceptional image resolution and diagnostic capability for radiography especially when imaging small anatomical features such as bone fractures and lung nodules.

•	The prenatal BACs-on-Beads® ("BoBs®") in vitro diagnostic (“IVD”) assay for rapid prenatal testing of multiple genetic diseases and chromosomal abnormalities, which is the first IVD product from the BoBs® proprietary multiplexed bead-based technology product family.

•	ViaCord® Umbilical cord tissue stem cell banking services for the banking of stem cells harvested from umbilical cord tissue for potential therapeutic application.

•	The XRD™ family of a-Si flat panel X-ray detectors, which provide imaging for medical applications such as radiation therapy and veterinary imaging as well as industrial imaging applications including pipeline inspection, manufacturing inspection, PCB inspection and 3D Cone Beam CT.

•	The Dexela® family of CMOS flat panel X-ray detectors, which provide imaging for mammography, dental, and industrial imaging applications such as PCB inspection and 3D Cone Beam CT.

•	An expanded portfolio of molecular-based infectious disease screening technologies for blood bank and clinical laboratory settings in China. The tools include a qualitative 3-in-1 assay for the detection of hepatitis B, hepatitis C and HIV, as well as assays for other communicable diseases.

Research:

•	Radiometric detection solutions, including over 1,100 NEN® radiochemicals, the Tri-carb®, Quantulus™ GCT families of liquid scintillation analyzers, Wizard2® Gamma counters and MicroBeta2® plate based LSA, which are used for beta, gamma and luminescence counting in microplate formats utilized in research, environmental and drug discovery applications.

•	The Operetta® high content imaging system, which is used to automate imaging and analysis for cell-based assays for drug discovery and basic cellular science research laboratories.

•	The Columbus™ image data storage and analysis system, which provides a single solution to the storage and analysis of high content data from any major high content screening system helping to visualize and analyze high content images via the Internet.

•	The EnVision® Multilabel Plate Reader, which is targeted towards a wide range of high-throughput screening applications, including those using AlphaScreen®, AlphaLISA® and/or AlphaPlex™ technologies.

•	A wide range of homogeneous biochemical and cellular assay reagents, including LANCE® Ultra™ and Alpha™ Technology assay platforms, which are used for drug discovery targets such as G-protein coupled receptors (“GPCR”), kinases, antibodies and epigenetic modification enzymes.

•	A broad portfolio of recombinant GPCR and Ion Channel cell lines, including over 300 products and 120 ready-to-use frozen cell lines for a wide range of disease areas.

•	AlphaScreen®, AlphaLISA® and AlphaPlex™ research assays, including over 200 no-wash biomarker kits for both biotherapeutics and small molecule development in a variety of therapeutic areas including cancer, inflammation, metabolic disorders, neurodegeneration and virology.

•	TSA® Plus biotin kits, which can increase sensitivity of histochemistry and cytochemistry as much as 10 to 20 times.

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In vivo imaging technologies for preclinical research, including the IVIS® Spectrum™ series and the FMT® series for 3D imaging and the IVIS® Lumina™ series for 2D imaging. These technologies are designed to provide for non-invasive longitudinal monitoring of disease progression, cell trafficking and gene expression patterns in living animals and are complemented by a broad portfolio of fluorescent and bioluminescent in vivo imaging reagents that can be useful for identifying, characterizing and quantifying a range of disease biomarkers and therapeutic efficacy in living animal models.

•	Next-generation sequencing automation and nucleic acid quantitation including LabChip® separation, as well as Sciclone®, Zephyr® and JANUS® automated liquid handling workstations for library preparation.

•	JANUS® BioTx™ Workstation for automated small scale purification, which offers column, tip and plate based chromatography on a single platform.

•	Expanded assay kits utilizing AlphaLISA® technology in the area of metabolic research and for the development and safety testing of biotherapeutic drugs.

•	Lead Discovery™ powered by TIBCO® Spotfire®, which adds chemical intelligence to the TIBCO® Spotfire® business intelligence platform, enabling scientific professionals to derive new information from chemical structures relevant to experimental data.

•	The Quantitative Pathology technologies for cancer immunology research including our Opal™ multiplexed tissue staining workflow. Vectra® automated quantitative pathology imaging system and inForm® advanced image analysis software. These enable the detection, visualization and quantification of multiple cell phenotypes within the same tissue section.

•	The cell::explorer® and plate::explorer® automated workstations, which allow integration of multiple laboratory instrumentation using a centralized robotic interface, allowing higher throughput and turnkey-application focused solutions.

•	Informatics platforms including E-Notebook for Chemistry and Biology iLab™, ChemDraw®, ChemBioOffice® and Labworks® which are integrated suites that focus on the complex and varied needs of understanding and managing data for productivity and collaboration.

•	Datalytix™, a tool enabling self-service import and manipulation of relevant data into the TIBCO® Spotfire® software from scientifically significant data sources such as compound registries, biological assay repositories, LIMS and other corporate information systems.

•	ChemDraw® and Chem3D® mobile apps for the iPad® device, new chemical structure drawing and visualization apps, available in multiple languages and featuring our Flick-to-Share® technology.

•	Licensing for the exclusive, worldwide rights to the TIBCO® Spotfire® software platform in certain scientific research and development markets, and certain clinical markets through an exclusive strategic relationship with TIBCO Software, Inc.

•	Asset Genius™, an informatics-based business intelligence solution, which assists laboratories in deploying, utilizing and managing laboratory assets throughout their lifecycle.

New Products:

Significant new products introduced or acquired for Human Health applications in fiscal year 2014 include the following:

Diagnostics:

•	An expanded portfolio of medical X-ray detectors, including the XRpad® cassette sized 4336 and 4343 F Radiography detectors and the XRD™ 4343 RF combined Radiography & Fluoroscopy detector.

•	The EnLite™ Neonatal TREC™ System, a screening test for Severe Combined Immunodeficiency, which consists of EnLite™ Neonatal TREC™ reagent kits, the Victor EnLite™ instrument and EnLite™ Workstation software.

Research:

•	The Opera® Phenix™ high content screening system a platform for high speed phenotypic drug screening of complex cellular models.

•	The EnSight™ Multimode Plate Reader benchtop system, which offers well plate imaging alongside label-free and labeled detection technologies for target-based and phenotypic assays.

•	The Lamina™ multilabel slide scanner, a high throughput imaging system designed to assist research pathologists to study protein expression and the relationships between disease markers in formalin-fixed, paraffin-embedded (FFPE) tissue sections.

•	Mantra™ quantitative pathology workstation with inForm® image analysis software enables visualization, quantification and phenotyping of multiple types of immune cells simultaneously in intact FFPE tissue sections for cancer immunology research.

•	Opal™ multiplexed staining kits for amplified detection of immunohistochemistry utilized for biomarker assessment.

•	Solaris™ open air imaging platform, which is a research tool that enables translational in vivo preclinical imaging in small and large animals.

•	We collaborated with Sofie Biosciences to offer benchtop PET systems for in vivo preclinical imaging. The G4 PET/X-ray and G8 PET/CT delivers PET imaging with an intuitive user interface and efficient workflows, ensuring subject monitoring throughout preparation and imaging.

•	Quantum GX™ microCT platform is an in vivo microCT scanner that offers industry leading microCT resolution for pre-clinical imaging applications or eight second scan times for higher throughput with lower doses of radiation. With Quantum GX 3D data from the IVIS and FMT imaging platforms can be coregistered with microCT.

•	LabChip® devices for molecular diagnostics in clinical research laboratories, which use microfluidic technology to perform reproducible, high-resolution, electrophoretic separations for analyzing multiplex polymerase chain reaction products for molecular biology applications.

•	LabChip® GXII Touch™ for protein characterization in pharma and biotech research laboratories, which require analysis and recording of protein product critical quality attributes.

•	JANUS® chemagic™ Workstation, which combines magnetic bead nucleic acid isolation technology with a fully-supported automated liquid handler, enabling extraction for genomic analysis from a variety of human and veterinary blood, plasma and saliva sample types.

•	AlphaLISA® SureFire® Ultra Assays for screening therapeutic antibodies and small molecules on cultured cells or tissue lysates.

•	AlphaPlex™ reagent technology, a homogeneous, all-in-one-well multiplexing reagent system for performing ultra-sensitive immunoassay analyses.

•	CellCarrier® Ultra 384-well microplates, which are used in high content imaging applications such as phenotypic screening and three-dimensional disease model studies.

•	IVIS® Spectrum BL, a 2D and 3D optical imaging system designed to improve quantitative outcomes of bioluminescent, chemiluminescent and Cerenkov in vivo imaging.

•	High Content Profiler™ powered by TIBCO® Spotfire®, which provides automated workflows for quality control and hit classification for truly multi-parametric cellular drug screens.

•	Elements® electronic lab notebook, a cloud-based lab notebook that is delivered through a web browser to allow scientists to capture data, collaborate with colleagues, and search for results.

Brand Names:

Our Human Health segment offers additional products under various brand names, including AlphaLISA®, AlphaPlex™, AlphaScreen®, Asset Genius™, AutoDELFIA®, BACS-on-Beads®, BoBs®, cell::explorer®, Chem3D®, ChemBioOffice®, ChemDraw®, Columbus™, Datalytix™, Dexela® CMOS FPDs™, Elements®, Elsevier's Reaxys®, EnLite™, EnSight™, EnSpire®, EnVision®, Evolution™, FMT®, FragilEase™, Genoglyphix®, Geospiza®, GSP®, High Content Profiler™, iLab™, inForm®, IVIS®, JANUS®, LabChip®, LABWORKS® EZ-Reader™, LANCE®, LifeCycle™, LimsLink™, Living Image®, Mantra™, MicroBeta2® MultiPROBE®, NEN®, NTD Labs®, Nuance®, Oncoglyphix™, Opal™, Opera®, Operetta®, Pannoramic™, plate::explorer®, Quantulus™ GCT, Quantum™, Sciclone®, Search Genius™, Specimen Gate™, Tri-Carb®, TRIO™, Twister®, UltraVIEW® VoX™, VariSpec™, Vectra®, ViaCord®, VICTOR™, ViewLux®, VivoTag®, Volocity®, Wizard2®, XRD™, XRpad® and Zephyr®.

Environmental Health Segment

Our Environmental Health segment provides products, services and solutions to facilitate the creation of safer food and consumer products, more secure surroundings and efficient energy resources. Our Environmental Health segment serves the environmental, industrial and laboratory services markets. Our Environmental Health segment generated revenue of $993.8 million in fiscal year 2014.

Environmental Market:

For the environmental market, we develop and provide analytical technologies, solutions and services that enable our customers to understand the characterization and health of many aspects of our environment, including air, water, soil and food.

Our technologies are used to detect and help reduce the impact products and industrial processes may have on our environment. For example, we have solutions to help ensure compliance with regulatory standards that protect the purity of the world's water supply by detecting harmful substances, such as trace metal, organic, pesticide, chemical and radioactive contaminants.

We provide a variety of solutions that detect the presence of potentially dangerous materials, including adulterants in food such as melamine in milk, to enable our customers to protect their products against contaminants. Our solutions are also used to identify and prevent counterfeiting of medicine, toxic metals in toys and many other consumer products. Our methods and analyses are transferable throughout the supply chain so our customers are able to keep pace with industry standards as well as governmental regulations and certifications.

Industrial Market:

We provide analytical instrumentation for the industrial market which includes the chemical, petrochemical, lubricant, polymer, electronics, pharmaceutical, and food and dietary supplement industries. Our industrial instrumentation is primarily used by customers focusing on quality assurance standards.

Laboratory Services Market:

We have approximately 1,600 service personnel to support our customers throughout the world and to help them improve the productivity of their labs. Our OneSource® laboratory service business strategy is aligned with customers' needs to accelerate science as our service portfolio enables efficiency gains within their labs.

Principal Products:

Our principal products for Environmental Health applications include the following:

•	The Clarus® series of gas chromatographs, gas chromatographs/mass spectrometers and the TurboMatrix™ family of sample-handling equipment, which are used to identify and quantify compounds in the environmental, forensics, food and beverage, hydrocarbon processing/biofuels, materials testing, pharmaceutical and semiconductor industries.

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The Flexar™ series of liquid chromatography and mass spectrometry instruments, which are controlled by the Chromera® chromatography data system and incorporate an ergonomic industrial design to deliver a wide range of pressure and detector options to address the application needs of high pressure liquid chromatography laboratories. These systems are used to identify and quantify compounds for applications in the environmental, food, beverage, and pharmaceutical industries.

•	The GC SNFR™ Olfactory Port accessory to our GC product line, which provides a complete aroma characterization solution that seamlessly integrates sensory evaluation with GC and GC/MS analytical data.

•	Supra-d™ QuEChERS™ Dispersive Solid Phase Extraction solution for sample preparation in pesticide residue analysis to test the safety of fruit and vegetables.

•	The AxION® Direct Sample Analysis system, which is an innovative technology that reduces or eliminates sample preparation steps and eliminates the need for front-end gas or liquid chromatography separation for direct sample introduction to a mass spectrometer.

•	The AxION® 2 TOF MS platform, which helps companies deliver highly sensitive and accurate measurements to help ensure quality products and services to consumers across the environmental, food and pharmaceutical sectors and is used for the identification of unexpected compounds in samples, providing a high level of resolution and mass accuracy.

•	Our atomic spectroscopy family of instruments, including the AAnalyst™/PinAAcle® series of atomic absorption spectrometers, the Optima® family of inductively coupled plasma (“ICP”) optical emission spectrometers and the NexION® family of ICP mass spectrometers, which are used in the environmental and chemical industries, among others, to determine the elemental content of a sample.

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Our infrared spectroscopy family, including the Spectrum Two™ spectrometer, a compact and portable instrument which is used for high-speed infrared analysis for unknown substance identification, material qualification or concentration determination in fuel and lubricant analysis, polymer analysis and pharmaceutical and environmental applications and the Frontier™ IR and NIR spectrometers, which are designed to provide high sensitivity, flexibility to address a range of sample types and safe drug development and for determining chemical and material properties in a variety of samples, including consumer products.

•	The LAMBDA™ UV/Vis is a series of spectrophotometers, which provide sampling flexibility to enable measuring of a wide range of sample types from liquids, powders and solid materials both in regulated industries as well as QC/QA and research applications.

•	The DSC™ 8000 and 8500, which feature a second generation, power controlled double furnace designed to provide fast heating and cooling rates required to accurately understand how materials behave under different conditions.

•	The DMA™ 8000 thermal analysis system, which is used by scientists in the polymers, composites, pharmaceutical and food and beverage industries for applications ranging from simple quality control to advanced research.

•	TMA 4000, a thermomechanical analysis system enabling customers to measure expansion of small components.

•	The OilExpress™ 4 Oil Condition Monitoring Systems, which combine the high-performance Spectrum Two™ FT-IR spectrometer with an OilPrep™ oil dilution system to quickly analyze contaminants in oil.

•	OneSource® Laboratory services made up of a comprehensive portfolio of multivendor instrument management, QA/QC, lab relocation and regulatory compliance services. OneSource programs are tailored to the specific needs and goals of individual customers.

•	The DairyGuard™ Milk Powder Analyzer, an infrared spectrometer specifically developed for food suppliers and manufacturers to help ensure the safety and quality of milk powder in their supply chains.

New Products:

New products introduced or acquired for Environmental Health applications in fiscal year 2014 include the following:

•	The NexION® 350 ICP-MS, which is used for multi-elemental inorganic analyses in the environmental and chemical industries, among others, and delivers a variety of features engineered to enhance signal stability and complete nanoparticle characterization.

•	Syngistix™ Atomic Spectroscopy Software, a cross-platform instrument control solution enabling lab professionals conducting inorganic elemental analysis to work across AA, ICP and ICP-MS technologies.

•	HybridXLT™ torch, a new sample introduction component for the Optima® 8x00 ICP-OES series of spectrometers.

•	Asset Informatics and Analytics, which provides customers with insights into their laboratory operations through proprietary dashboards (powered by TIBCO® Spotfire®), business consulting services and a mobile app to allow customers to understand the performance and utilization of their laboratory assets.

•	OneSource® Scientific IT Solutions, a series of informatics-based consulting, planning and management offerings to assist in laboratory productivity.

•	OneSource® Mobile Application, which provides instant mobile access to service activity and equipment data including the ability to open a service call, check service history and view future scheduled events.

•	OneSource® Dashboard, a TIBCO SpotFire® driven interactive graphical platform providing visibility to a customer’s global asset population, service event and downtime distribution as well as key performance indicators to assist in asset operation.

•	The Elm™ air sensing network, which monitors and measures the details of air quality using a high-density deployment of nano-technology sensors. Elm™ network identifies hyper-local pollutant levels in real-time, wirelessly transmitting the data to a cloud-based system for storage, analysis and processing.

•	The DA 7250 NIR Analyzer, which measures the nutritional quality of food samples such as grains, flakes, feed pellets, powders, pastes, slurries and liquids with no sample preparation.

•	The IM 9500 Whole Grain Analyzer, which analyzes a wide range of grains and oilseeds for moisture, protein, oil and many other parameters.

Brand Names:

Our Environmental Health segment offers additional products under various brand names, including AAnalyst™, AxION®, Chromera®, Clarus®, DairyGuard™, Elm™, Flexar™, Frontier™, HyperDSC®, LAMBDA™, NexION®, OilExpress™, OilPrep™, OneSource®, Optima™, Perten®, PinAAcle®, Spectrum™, Spectrum Two™, Spotlight™, Supra-clean®, Supra-d™, Supra-poly® and Ultraspray®.

Marketing

All of our businesses market their products and services primarily through their own specialized sales forces. As of December 28, 2014, we employed approximately 3,600 sales and service representatives operating in approximately 35 countries and marketing products and services in more than 150 countries. In geographic regions where we do not have a sales and service presence, we utilize distributors to sell our products.

Raw Materials, Key Components and Supplies

Each of our businesses uses a wide variety of raw materials, key components and supplies that are generally available from alternate sources of supply and in adequate quantities from domestic and foreign sources. We generally have multi-year contracts, with no minimum purchase requirements, with certain of our suppliers. For certain critical raw materials, key components and supplies required for the production of some of our principal products, we have qualified only a limited or a single source of supply. We periodically purchase quantities of some of these critical raw materials in excess of current requirements, in anticipation of future manufacturing needs. With sufficient lead times, we believe we would be able to qualify

alternative suppliers for each of these raw materials and key components. See the applicable risk factor in “Item 1A. Risk Factors” for an additional description of this risk.

Intellectual Property

We own numerous United States and foreign patents and have patent applications pending in the United States and abroad. We also license intellectual property rights to and from third parties, some of which bear royalties and are terminable in specified circumstances. In addition to our patent portfolio, we possess a wide array of unpatented proprietary technology and know-how. We also own numerous United States and foreign trademarks and trade names for a variety of our product names, and have applications for the registration of trademarks and trade names pending in the United States and abroad. We believe that patents and other proprietary rights are important to the development of both of our reporting segments, but we also rely upon trade secrets, know-how, continuing technological innovations and licensing opportunities to develop and maintain the competitive position of both of our reporting segments. We do not believe that the loss of any one patent or other proprietary right would have a material adverse effect on our overall business or on any of our reporting segments.

In some cases, we may participate in litigation or other proceedings to defend against or assert claims of infringement, to enforce our patents or our licensors’ patents, to protect our trade secrets, know-how or other intellectual property rights, or to determine the scope and validity of our or third parties’ intellectual property rights. Litigation of this type could result in substantial cost to us and diversion of our resources. An adverse outcome in any litigation or proceeding could subject us to significant liabilities or expenses, require us to cease using disputed intellectual property or cease the sale of a product, or require us to license the disputed intellectual property from third parties.

Backlog

We believe that backlog is not a meaningful indicator of future business prospects for either of our business segments due to the short lead time required on a majority of our sales. Therefore, we believe that backlog information is not material to an understanding of our business.

Competition

Due to the wide range of our products and services, we face many different types of competition and competitors. This affects our ability to sell our products and services and the prices at which these products and services are sold. Our competitors range from large foreign and domestic organizations, which produce a comprehensive array of goods and services and that may have greater financial and other resources than we do, to small firms producing a limited number of goods or services for specialized market segments.

We compete on the basis of service level, price, technological innovation, operational efficiency, product differentiation, product availability, quality and reliability. Competitors range from multinational organizations with a wide range of products to specialized firms that in some cases have well-established market niches. We expect the proportion of large competitors to increase through the continued consolidation of competitors.

We believe we compete effectively in each of the areas in which our businesses experience competition.

Research and Development

Research and development expenditures were $121.1 million during fiscal year 2014, $132.4 million during fiscal year 2013, and $131.8 million during fiscal year 2012.

We have a broad product base, and we do not expect any single research and development project to have significant costs. We directed our research and development efforts in fiscal years 2014, 2013, and 2012 primarily toward the diagnostics and research markets within our Human Health segment, and the environmental, industrial and laboratory service and support markets within our Environmental Health segment, in order to help accelerate our growth initiatives. We expect to continue our strong investments in research and development to drive growth during fiscal year 2015, and to continue to emphasize the diagnostics and research markets within our Human Health segment, and the environmental, industrial and laboratory services markets within our Environmental Health segment.

Environmental Matters

Our operations are subject to various foreign, federal, state and local environmental and safety laws and regulations. These requirements include those governing uses, emissions and discharges of hazardous substances, the remediation of contaminated soil and groundwater, the regulation of radioactive materials, and the health and safety of our employees.

We may have liability under the Comprehensive Environmental Response Compensation and Liability Act and comparable state statutes that impose liability for investigation and remediation of contamination without regard to fault, in

connection with materials that we or our former businesses sent to various third-party sites. We have incurred, and expect to incur, costs pursuant to these statutes.

We are conducting a number of environmental investigations and remedial actions at our current and former locations and, along with other companies, have been named a potentially responsible party (“PRP”) for certain waste disposal sites. We accrue for environmental issues in the accounting period that our responsibility is established and when the cost can be reasonably estimated. We have accrued $12.3 million and $13.5 million as of December 28, 2014 and December 29, 2013, respectively, which represents our management’s estimate of the cost of the remediation of known environmental matters, and does not include any potential liability for related personal injury or property damage claims. These amounts are recorded in accrued expenses and other current liabilities. During fiscal year 2014, we recorded a benefit of $2.3 million for cost reimbursements related to a particular site, of which $1.2 million was for future monitoring and mitigation activities. During fiscal year 2013, we accrued an additional $5.7 million related to a particular site for increased monitoring and mitigation activities, of which $4.6 million was recorded in the fourth quarter of fiscal year 2013. Our environmental accrual is not discounted and does not reflect the recovery of any material amounts through insurance or indemnification arrangements. The cost estimates are subject to a number of variables, including the stage of the environmental investigations, the magnitude of the possible contamination, the nature of the potential remedies, possible joint and several liability, the time period over which remediation may occur, and the possible effects of changing laws and regulations. For sites where we have been named a PRP, our management does not currently anticipate any additional liability to result from the inability of other significant named parties to contribute. We expect that the majority of such accrued amounts could be paid out over a period of up to ten years. As assessment and remediation activities progress at each individual site, these liabilities are reviewed and adjusted to reflect additional information as it becomes available. There have been no environmental problems to date that have had, or are expected to have, a material adverse effect on our consolidated financial statements. While it is possible that a loss exceeding the amounts recorded in the consolidated financial statements may be incurred, the potential exposure is not expected to be materially different from those amounts recorded.

We may become subject to new or unforeseen environmental costs or liabilities. Compliance with new or more stringent laws or regulations, stricter interpretations of existing laws, or the discovery of new contamination could cause us to incur additional costs.

Employees

As of December 28, 2014, we employed approximately 7,700 employees in our continuing operations. Several of our subsidiaries are parties to contracts with labor unions and workers’ councils. As of December 28, 2014, we estimate that we employed an aggregate of approximately 1,500 union and workers’ council employees. We consider our relations with employees to be satisfactory.

Financial Information About Business Segments

We have included the expenses for our corporate headquarters, such as legal, tax, audit, human resources, information technology, and other management and compliance costs, as well as the activity related to the mark-to-market adjustment on postretirement benefit plans, as “Corporate” below. We have a process to allocate and recharge expenses to the reportable segments when these costs are administered or paid by the corporate headquarters based on the extent to which the segment benefited from the expenses. These amounts have been calculated in a consistent manner and are included in our calculations of segment results to internally plan and assess the performance of each segment for all purposes, including determining the compensation of the business leaders for each of our operating segments.

The table below sets forth revenue and operating income (loss) from continuing operations by operating segment for the fiscal years ended:

	December 28, 2014				December 29, 2013				December 30, 2012
	(In thousands)
Human Health
Product revenue	$	996,767			$	957,022			$	926,733
Service revenue	246,635				244,088				237,892
Total revenue	1,243,402				1,201,110				1,164,625
Operating income from continuing operations(1)	220,165				156,452				63,773
Environmental Health
Product revenue	543,308				541,048				547,941
Service revenue	450,509				415,428				392,622
Total revenue	993,817				956,476				940,563
Operating income from continuing operations(1)	109,129				97,052				111,844
Corporate
Operating loss from continuing operations(2)(3)	(118,552		)		(25,710		)		(72,497		)
Continuing Operations
Product revenue	$	1,540,075			$	1,498,070			$	1,474,674
Service revenue	697,144				659,516				630,514
Total revenue	2,237,219				2,157,586				2,105,188
Operating income from continuing operations	210,742				227,794				103,120
Interest and other expense, net	41,139				64,110				47,956
Income from continuing operations before income taxes	$	169,603			$	163,684			$	55,164

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(1)

Pre-tax impairment charges have been included in our Human Health and Environmental Health operating income from continuing operations. We had no pre-tax impairment charges in fiscal year 2014. We recognized a $0.2 million pre-tax impairment charge in our Human Health segment in fiscal year 2013. We recognized $73.4 million of pre-tax impairment charges in our Human Health segment and also recognized $0.7 million of pre-tax impairment charges in our Environmental Health segment in fiscal year 2012.

(2)	Activity related to the mark-to-market adjustment on postretirement benefit plans has been included in the Corporate operating loss from continuing operations, and in the aggregate constituted a pre-tax loss of $75.9 million in fiscal year 2014, pre-tax income of $17.6 million in fiscal year 2013, and a pre-tax loss of $31.8 million in fiscal year 2012.

(3)

Includes expenses related to litigation with Enzo Biochem, Inc. and Enzo Life Sciences, Inc. (collectively, “Enzo”). Enzo filed a complaint in 2002 alleging that we separately and together with other defendants breached distributorship and settlement agreements with Enzo, infringed Enzo's patents, engaged in unfair competition and fraud, and committed torts against Enzo by, among other things, engaging in commercial development and exploitation of Enzo's patented products and technology. We entered into a settlement agreement with Enzo dated June 20, 2014 and during fiscal year 2014 paid $7.0 million into a designated escrow account to resolve this matter, of which $3.7 million had been accrued in previous years and $3.3 million was recorded during fiscal year 2014. In addition, $3.4 million of expenses were incurred and recorded in preparation for the trial during fiscal year 2014.

Additional information relating to our reporting segments is as follows for the fiscal years ended:

	Depreciation and Amortization Expense												Capital Expenditures
	December 28, 2014				December 29, 2013				December 30, 2012				December 28, 2014				December 29, 2013				December 30, 2012
	(In thousands)												(In thousands)
Human Health	$	89,969			$	98,582			$	99,597			$	15,201			$	20,900			$	24,518
Environmental Health	24,736				25,915				23,001				12,149				16,532				14,488
Corporate	2,031				2,382				2,528				1,722				1,549				3,395
Continuing operations	116,736				126,879				125,126				29,072				38,981				42,401
Discontinued operations	$	339			$	1,590			$	1,741			$	213			$	10			$	7

	Total Assets
	December 28, 2014				December 29, 2013				December 30, 2012
	(In thousands)
Human Health	$	2,645,411			$	2,692,809			$	2,700,565
Environmental Health	1,453,683				1,213,801				1,153,444
Corporate	34,981				34,271				33,952
Net current and long-term assets of discontinued operations	—				5,831				13,801
Total assets	$	4,134,075			$	3,946,712			$	3,901,762

Financial Information About Geographic Areas

Both of our reporting segments conduct business in, and derive substantial revenue from, various countries outside the United States. During fiscal year 2014, we had $1,387.9 million in sales from our international operations, representing approximately 60% of our total sales. During fiscal year 2014, we derived approximately 50% of our international sales from our Human Health segment and approximately 50% of our international sales from our Environmental Health segment. We anticipate that sales from international operations will continue to represent a substantial portion of our total sales in the future.

We are exposed to the risks associated with international operations, including exchange rate fluctuations, regional and country-specific political and economic conditions, foreign receivables collection concerns, trade protection measures and import or export licensing requirements, tax risks, staffing and labor law concerns, intellectual property protection risks, and differing regulatory requirements. Additional geographic information is discussed in Note 23 to our consolidated financial statements included in this annual report on Form 10-K.