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 the 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 January 3, 2016, we employed approximately 8,000 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 develop and deliver innovative products, services and solutions in high-growth markets that utilize our knowledge and expertise to address customers’ critical needs and drive scientific breakthroughs. To execute on our strategy and accelerate revenue growth, we focus on broadening our offerings through both the acquisition of innovative technology and investment in 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:

We realigned our organization at the beginning of fiscal year 2015 to enable us to both deliver complete solutions targeted towards certain end markets and develop value-added applications and solutions to foster further expansion of those markets. OneSource, our multivendor laboratory service business that serves the life sciences end market, was moved from our Environmental Health segment into our Human Health segment. The results reported for fiscal year 2015 reflect this new alignment of our operating segments. Financial information in this report relating to fiscal years 2014 and 2013 has been retrospectively adjusted to reflect this change to our operating segments.

Acquisitions in Fiscal Year 2015:

We completed the acquisition of five businesses in fiscal year 2015 for a total consideration of $77.1 million, in cash. The acquired businesses included Vanadis Diagnostics AB (“Vanadis”), which was acquired for total consideration of $35.1 million in cash, as further described in Note 21 to our consolidated financial statements included in this annual report on Form 10-K, and other acquisitions for an aggregate consideration of $42.0 million in cash. We have a potential obligation to pay the shareholders of Vanadis additional contingent consideration of up to $93.0 million, which at closing had an estimated fair value of $56.9 million. We reported the operations for all of these acquisitions within the results of our Human Health and Environmental Health segments from the acquisition dates.

Restructuring:

During fiscal year 2015, we recorded pre-tax restructuring charges of $4.4 million in our Human Health segment and $13.2 million in our Environmental Health segment related to a workforce reduction from restructuring 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 pre-tax restructuring reversals of $2.3 million in our Human Health segment and $3.9 million in our Environmental Health segment related to lower than expected costs associated with workforce reductions. In fiscal year 2015, we also recorded a pre-tax restructuring charge of $2.0 million in our Human Health segment relating to the closure of excess facility space and a pre-tax restructuring charge of $0.1 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 2015.

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

Share Repurchase Program:

On October 23, 2014, our Board of Directors (our "Board") authorized us to repurchase up to 8.0 million shares of common stock under a stock repurchase program (the "Repurchase Program"). The 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 2015, we repurchased 1.5 million shares of common stock in the open market at an aggregate cost of $72.0 million, including commissions, under the Repurchase Program. As of January 3, 2016, 5.9 million shares remained available for repurchase under the Repurchase Program. From January 4, 2016 through February 25, 2016, we repurchased 2.4 million shares of common stock in the open market at an aggregate cost of $109.7 million, including commissions, under the Repurchase Program.

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, 2015, 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.

We realigned our organization at the beginning of fiscal year 2015 to enable us to both deliver complete solutions targeted towards certain end markets and develop value-added applications and solutions to foster further expansion of those markets. OneSource, our multivendor laboratory service business that serves the life sciences end market, was moved from our Environmental Health segment into our Human Health segment. The results reported for fiscal year 2015 reflect this new alignment of our operating segments. Financial information in this report relating to fiscal years 2014 and 2013 has been retrospectively adjusted to reflect this change to our operating segments.

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 $1,376.6 million in fiscal year 2015.

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 breast cancer. 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 support pharmaceutical and biotech companies, and academic institutions globally in creating 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 for use in vitro and ex vivo, as well as in vivo imaging and analysis hardware and software, plus a range of consumable products, such as drug discovery and research reagents. In addition, our OneSource laboratory service business is aligned with customers' needs to accelerate science by enabling efficiency gains within their labs.

Principal Products:

Our principal products and services for Human Health applications include the following:

Diagnostics:

•	The DELFIA® Xpress screening platform, a complete solution for prenatal and maternal health screening, and includes a fast continuous loading system. It is supported by kits for both first and second trimester analyses for prenatal screening and clinically validated LifeCycle™ software.

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

•	The NeoBase™ Non-derivatized MS/MS kit 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 are used for screening congenital neonatal conditions from a drop of blood.

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

•	The XRpad® family of amorphous silicon (a-Si) flat panel cassette X-ray detectors enables 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.

•	ViaCord® umbilical cord blood banking services for the banking of stem cells harvested from umbilical cord blood, for potential therapeutic application.

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

•	The Dexela® family of CMOS flat panel X-ray detectors provides imaging for orthopedic surgery, 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:

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Phenoptics™ quantitative pathology research solutions provide oncologists and cancer immunologists a new way to visualize and measure tumor cells and multiple immune-cell phenotypes simultaneously in FFPE tissue by combining the power of Opal™ multiplexed immunohistochemistry reagents with the Mantra™ or Vectra® 3 Multispectral Imaging System, enabling visualization and analysis of complex cell interactions in ways that are difficult to achieve with other methods.

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

•	The Opera® Phenix™ high content screening system is used for sensitive and high speed phenotypic drug screening of complex cellular models.

•	The Operetta® high content imaging system 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 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 EnSight™ multimode plate reader benchtop system offers well plate imaging alongside label-free and labeled detection technologies for target-based and phenotypic assays.

•	The EnVision® multilabel plate reader 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 cell based assay reagents, including LANCE® Ultra™ and Alpha™ Technology assay platforms are used for the detection of drug discovery targets such as G-protein coupled receptors (“GPCR”), kinases, biomarkers and the modification of epigenetic 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 drug discovery and development in a variety of therapeutic areas including cancer, inflammation, metabolic disorders, neurodegeneration and virology.

•	TSA® Plus biotin kits 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, including the Spectrum™ BL for 2D and 3D optical 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.

•	The G4 PET/X-ray and G8 PET/CT preclinical imaging systems deliver 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.

•	Automated liquid handling platforms (JANUS®, Sciclone® and Zephyr®) that offer a choice of automated solutions in genomics, biotherapeutics, high throughput screening and high content analysis to assist life science research from bench to clinic.

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

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

•	The LabChip GXII Touch provides a means of characterizing multiple protein product attributes for research labs through QC.

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

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

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

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

•	ChemDraw® and Chem3D® mobile apps for the iPad® device, chemical structure drawing and visualization apps, available in multiple languages and feature 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.

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OneSource® Laboratory Services, 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 and offer a series of informatics-based consulting, planning and management offerings to assist in laboratory productivity and the optimization of complex Information Technology platforms.

•	OneSource® Mobile Application 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 provides visibility to a customer’s global asset population, service event and downtime distribution, as well as key performance indicators to assist in asset operation.

New Products:

Significant new products introduced or acquired for Human Health applications in fiscal year 2015 include the following:

Diagnostics:

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

Research:

•	Opal® 5, 6, and 7 color multiplexed staining kits for amplified detection of immunohistochemistry utilized for multiple biomarker assessment in a single FFPE tumor cross section.

•	Vectra® 3 and inForm® software providing the power of multiplexed biomarker imaging and quantitative analysis, all within a familiar digital workflow to accelerate cancer immunology research.

•	Alpha SureFire® Ultra Multiplex Assays for the rapid, sensitive and quantitative detection of phosphoproteins from cells, combined with the measurement of the total amount of the same protein in a single well.

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

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

•	Signals™ for Translational, a cloud-based data management, aggregation and analysis platform, integrates experimental and clinical research data from many sources and relates the data to scientifically meaningful concepts. The platform also enables support for the complete precision medicine workflow, from data acquisition to biomarker discovery and validation.

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Clinical Data Review analytical solution provides medical monitors, safety review teams, biostatisticians, data managers, pharmacologists, and others who analyze clinical data, a powerful advanced analytics solution for overcoming data review challenges. The solution enhances clinical data management and medical review workflows, allowing organizations to make informed decisions on the safety and efficacy of therapeutics earlier in their development.

Brand Names:

Our Human Health segment offers additional products under various brand names, including AlphaLISA®, AlphaPlex™, AlphaScreen®, AlphaLISA®, Alpha SureFire®, AutoDELFIA®, BACS-on-Beads®, BoBs®, Cell carrier™, cell::explorer®, Chem3D®, ChemDraw®, ChemOffice®, Columbus™, Datalytix™, Dexela® CMOS FPDs™, Elements®, EnLite™, EnSight™, EnSpire®, EnVision®, Evolution™, EZ-Reader™, FMT®, FragilEase™, Genoglyphix®, Geospiza®, GSP®, High Content Profiler™, iLab™, inForm®, IVIS®, JANUS®, LabChip®, LANCE®, LifeCycle™, LimsLink™, Living Image®, Mantra™, MicroBeta2® MultiPROBE®, NEN®, Nuance®, OneSource®, Opal®, Opera®, Operetta®, Pannoramic™, Phenoptics™, plate::explorer®, Quantulus™ GCT, Quantum™, Sciclone®, Signals™ for Translational, Specimen Gate®, Tri-Carb®, TRIO™, Twister®, VariSpec™, Vectra®, ViaCord®, VICTOR™, VivoTag®, Volocity®, Wizard2®, XRD™, XRpad® and Zephyr®.

Environmental Health Segment

Our Environmental Health segment provides products, services and solutions to facilitate a cleaner and safer environment, including the creation of secure food and consumer products. Our Environmental Health segment serves the environmental, industrial and laboratory services market, and generated revenue of $885.7 million in fiscal year 2015.

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 and soil.

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, including trace metals such as lead, and organic pollutants such as pesticides and benzene. We provide the tools needed to test functionality, meet quality specifications and safety standards, and innovate for next generation products.

We provide a variety of solutions that confirm food quality, including the level of moisture in grain or detecting the presence of potentially dangerous contaminants, such as lead and mercury in milk. Our solutions can also be used to identify the origin of food products such as olive oil, which helps prevent counterfeiting. 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, electronics, energy, food, lubricant, petrochemical and polymer industries. Our industrial instrumentation is primarily used by customers focusing on quality assurance standards.

Laboratory Services Market:

We have approximately 1,200 service personnel in our Environmental Health segment to support our customers in the laboratory services market throughout the world and to help them improve the productivity of their labs.

Principal Products:

Our principal products and services 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 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 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.

•	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 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, 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. This family also includes the Frontier™ IR and NIR spectrometers designed to provide high sensitivity and 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, a series of spectrophotometers that provide sampling flexibility to enable measuring of a wide range of sample types, including liquids, powders and solid materials, both in regulated industries as well as QC/QA and research applications.

New Products:

New products introduced or acquired for Environmental Health applications in fiscal year 2015 include the following:

•	The Altus® UPLC® and HPLC advanced liquid chromatography systems providing high throughput and resolution chromatographic separations.

•	The PinAAcle® 500 is a fully-integrated, flame-only atomic absorption spectrometer that can be coupled with a FAST Flame sample automation accessory and is used by laboratories to determine elemental content of a sample.

•	The Spotlight™ FT-IR Microscope System, a high performance microscopy platform, designed for scientists whose samples demand high sensitivity and simple analysis and workflows, for use in product defect analysis, impurity identification, forensics and academic research.

•	The LAMBDA™ 265 365 465 UV/Vis Systems benchtop UV/Vis instruments offering a variety of spectral bandwidths to accommodate a wide range of analytical functions related to materials testing, QA/QC and R&D.

•	The Perten® DA 7250 NIR Analyzer, a diode array based NIR instrument that analyzes samples of grains, flakes, pellet powders, pastes, slurries and liquids and can determine moisture, protein, fat, ash, starch and many other parameters.

•	The Torion® T-9 portable GC/MS, a fast person-portable GC/MS system, enabling rapid detection and actionable results to potentially hazardous and emergency environmental conditions.

Brand Names:

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

Marketing

All of our businesses market their products and services primarily through their own specialized sales forces. As of January 3, 2016, we employed approximately 3,700 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 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 for a majority of our sales. Therefore, we believe that backlog information is not material to an understanding of our business.

Competition

Due to the range and diversity of our products and services, we face many different types of competition and competitors. Our competitors range from 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 more narrowly focused 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 positions. We expect the proportion of large competitors to increase through the continued consolidation of competitors.

Research and Development

Research and development expenditures were $125.9 million during fiscal year 2015, $121.1 million during fiscal year 2014, and $132.4 million during fiscal year 2013.

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 2015, 2014 and 2013 primarily toward the diagnostics and research markets within our Human Health segment, and the environmental, industrial and laboratory service 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 2016, 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 $11.8 million and $12.3 million as of January 3, 2016 and December 28, 2014, 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. 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 January 3, 2016, we employed approximately 8,000 employees in our continuing operations. Several of our subsidiaries are parties to contracts with labor unions and workers’ councils. As of January 3, 2016, we estimate that we employed an aggregate of approximately 1,600 union and workers’ council employees. We consider our relations with employees to be satisfactory.

Financial Information About Business Segments

We realigned our organization at the beginning of fiscal year 2015 to enable us to both deliver complete solutions targeted towards certain end markets and develop value-added applications and solutions to foster further expansion of those markets. OneSource, our multivendor laboratory service business that serves the life sciences end market, was moved from our Environmental Health segment into our Human Health segment. The results reported for fiscal year 2015 reflect this new alignment of our operating segments. Financial information in this report relating to fiscal years 2014 and 2013 has been retrospectively adjusted to reflect this change to our operating 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:

	January 3, 2016				December 28, 2014				December 29, 2013
	(In thousands)
Human Health
Product revenue	$	976,451			$	996,767			$	957,022
Service revenue	400,193				387,456				368,872
Total revenue	1,376,644				1,384,223				1,325,894
Operating income from continuing operations(1)	251,743				233,689				168,794
Environmental Health
Product revenue	576,187				543,308				541,048
Service revenue	309,528				309,688				290,644
Total revenue	885,715				852,996				831,692
Operating income from continuing operations	89,544				95,605				84,710
Corporate
Operating loss from continuing operations(2)(3)	(55,153		)		(118,552		)		(25,710		)
Continuing Operations
Product revenue	$	1,552,638			$	1,540,075			$	1,498,070
Service revenue	709,721				697,144				659,516
Total revenue	2,262,359				2,237,219				2,157,586
Operating income from continuing operations	286,134				210,742				227,794
Interest and other expense, net	42,119				41,139				64,110
Income from continuing operations before income taxes	$	244,015			$	169,603			$	163,684

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(1)	Legal costs for a particular case in our Human Health segment were $0.8 million for fiscal year 2015. We also recognized a $0.2 million pre-tax impairment charge in our Human Health segment in fiscal year 2013. Both of these items have been included in operating income from continuing operations in our Human Health segment.

(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 $12.4 million in fiscal year 2015, a pre-tax loss of $75.9 million in fiscal year 2014, and pre-tax income of $17.6 million in fiscal year 2013.

(3)

Includes expenses related to litigation with Enzo Biochem, Inc. and Enzo Life Sciences, Inc. (collectively, “Enzo”). Enzo filed a complaint in 2002 that alleged 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
	January 3, 2016				December 28, 2014				December 29, 2013				January 3, 2016				December 28, 2014				December 29, 2013
	(In thousands)												(In thousands)
Human Health	$	81,335			$	92,604			$	100,941			$	16,091			$	16,922			$	22,999
Environmental Health	29,213				22,101				23,556				10,352				10,428				14,433
Corporate	1,459				2,031				2,382				3,189				1,722				1,549
Continuing operations	112,007				116,736				126,879				29,632				29,072				38,981
Discontinued operations	$	—			$	339			$	1,590			$	—			$	213			$	10

	Total Assets
	January 3, 2016				December 28, 2014				December 29, 2013
	(In thousands)
Human Health	$	2,778,835			$	2,737,824			$	2,724,254
Environmental Health	1,358,963				1,361,270				1,182,356
Corporate	28,497				28,482				28,441
Net current and long-term assets of discontinued operations	—				—				5,831
Total assets	$	4,166,295			$	4,127,576			$	3,940,882

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 2015, we had $1,346.0 million in sales from our international operations, representing approximately 60% of our total sales. During fiscal year 2015, 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.