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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 28, 2000 REGISTRATION NO. 333-95771---------------------------------------------------------------------------------------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- AMENDMENT NO. 2 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------------- PE CORPORATION (Exact name of registrant as specified in its charter)<TABLE><S> <C> DELAWARE (State or other jurisdiction 06-1534213 of incorporation or organization) (I.R.S. Employer Identification No.)</TABLE> 761 MAIN AVENUE NORWALK, CONNECTICUT 06859-1000 (203) 762-1000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) ------------------------------ WILLIAM B. SAWCH SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY PE CORPORATION 761 MAIN AVENUE NORWALK, CONNECTICUT 06859-0001 (203) 762-1000 (Name, address, including zip code, and telephone number, including area code, of agent for service) ------------------------------ WITH COPIES TO:<TABLE><S> <C> ANDREW R. KELLER PATRICK O'BRIEN SIMPSON THACHER & BARTLETT ROPES & GRAY 425 LEXINGTON AVENUE ONE INTERNATIONAL PLACE NEW YORK, NEW YORK 10017 BOSTON, MASSACHUSETTS 02110 PHONE: (212) 455-2000 PHONE: (617) 951-7000</TABLE> ------------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon aspracticable after this Registration Statement becomes effective. If the only securities being registered on this Form are being offeredpursuant to dividend or interest reinvestment plans, please check the followingbox. / / If any of the securities being registered on this Form are to be offered ona delayed or continuous basis pursuant to Rule 415 under the Securities Act of1933, other than securities offered only in connection with dividend or interestreinvestment plans, check the following box. / / If this Form is filed to register additional securities for an offeringpursuant to Rule 462(b) under the Securities Act, please check the following boxand list the Securities Act registration statement number of the earliereffective registration statement for the same offering. / /--------- If this Form is a post-effective amendment filed pursuant to Rule 462(c)under the Securities Act, check the following box and list the Securities Actregistration statement number of the earlier effective registration statementfor the same offering. / /--------- If delivery of the prospectus is expected to be made pursuant to Rule 434,please check the following box. / / ------------------------------ CALCULATION OF REGISTRATION FEE<TABLE><CAPTION> PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE REGISTRATION FEE SECURITIES TO BE REGISTERED BE REGISTERED (1) PER UNIT (2) OFFERING PRICE (2) (2)(3)<S> <C> <C> <C> <C>PE Corporation--Celera Genomics Group Common Stock, par value $.01 per share............ 3,714,500 $242 $898,909,000 $237,311.98Rights to Purchase Series B Participating Junior Preferred Stock, par value $.01 per share(4)................................... N/A N/A N/A N/APE Corporation--PE Biosystems Group Common Stock, par value $.01 per share(5)......... N/A N/A N/A N/A</TABLE>(1) This registration statement, as originally filed with the Securities and Exchange Commission on January 31, 2000 (File Number 333-95771), covered 1,857,250 shares of Celera Genomics Group Common Stock. The number of shares of Celera Genomics Group Common Stock covered by this registration statement also includes 1,857,250 additional shares of Celera Genomics Group Common Stock represented by the two-for-one stock split that was effected on February 18, 2000.(2) Calculated pursuant to Rule 457(c) of the Securities Act of 1933, as amended, based on the average of the high and low sales prices of the Celera Genomics Group Common Stock reported on the New York Stock Exchange on February 25, 2000.(3) Represents an increase of $141,421.27 from the amount paid by the registrant on January 31, 2000, upon the initial filing of this registration statement.(4) Prior to the occurrence of certain events, the Rights to purchase Series B Participating Junior Preferred Stock, par value $.01 per share, will not be evidenced separately from the related Celera Genomics Group Common Stock. The value, if any, of the Rights is reflected in the market price of the related Celera Genomics Group Common Stock. Accordingly, no separate fee is paid.(5) This registration statement also registers an indeterminate number of shares of PE Biosystems Group Common Stock into which Celera Genomics Group Common Stock may be converted pursuant to its terms. In accordance with Rule 457(I) of the Securities Act of 1933, as amended, no separate fee is paid. ------------------------------ THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE ORDATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALLFILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATIONSTATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OFTHE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOMEEFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),MAY DETERMINE.----------------------------------------------------------------------------------------------------------------------------------------------------------------

PROSPECTUS (SUBJECT TO COMPLETION)ISSUED FEBRUARY 28, 2000THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAYNOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THESECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFERTO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESESECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

3,230,000 SHARES [LOGO] PE CORPORATION CELERA GENOMICS GROUP COMMON STOCK -----------------PE CORPORATION IS OFFERING 3,230,000 SHARES OF ITS CELERA GENOMICS STOCK. CELERAGENOMICS STOCK IS A CLASS OF OUR COMMON STOCK INTENDED TO REFLECT THEPERFORMANCE OF OUR CELERA GENOMICS BUSINESS. -------------------PE CORPORATION'S CELERA GENOMICS STOCK IS LISTED ON THE NEW YORK STOCK EXCHANGEUNDER THE SYMBOL "CRA." ON FEBRUARY 25, 2000, THE REPORTED LAST SALE PRICE OFTHE CELERA GENOMICS STOCK ON THE NEW YORK STOCK EXCHANGE WAS $250 7/8 PER SHARE. -------------------INVESTING IN THE CELERA GENOMICS STOCK INVOLVES RISKS. SEE "RISK FACTORS"BEGINNING ON PAGE 8. ----------------- PRICE $ A SHARE -------------------<TABLE><CAPTION> UNDERWRITING PRICE TO DISCOUNTS AND PROCEEDS PUBLIC COMMISSIONS TO CELERA GENOMICS ------------------- ------------------- -------------------<S> <C> <C> <C>PER SHARE................................ $ $ $TOTAL.................................... $ $ $</TABLE>PE CORPORATION HAS GRANTED THE UNDERWRITERS THE RIGHT TO PURCHASE UP TO ANADDITIONAL 484,500 SHARES TO COVER OVER-ALLOTMENTS.THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOTAPPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS ISTRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.MORGAN STANLEY & CO. INCORPORATED EXPECTS TO DELIVER THE SHARES TO PURCHASERS ON , 2000. -------------------MORGAN STANLEY DEAN WITTER GOLDMAN, SACHS & CO.SG COWEN ING BARINGS BEAR, STEARNS & CO. INC. , 2000

TABLE OF CONTENTS<TABLE><CAPTION> PAGE ----<S> <C>Prospectus Summary................... 3Risk Factors......................... 8Special Note Regarding Forward-Looking Statements......... 21Use of Proceeds...................... 21Price Range of and Dividends on Celera Genomics Group Stock........ 22Capitalization....................... 23Celera Genomics Group--Selected Combined Financial Information..... 24Celera Genomics Group--Management's Discussion and Analysis............ 25Business of the Celera Genomics Group.............................. 32</TABLE><TABLE><CAPTION> PAGE ----<S> <C>PE Corporation--Selected Consolidated Financial Information.............. 53PE Corporation--Management's Discussion and Analysis............ 55Description of Capital Stock......... 73Management and Allocation Policies... 84Certain United States Tax Consequences....................... 89Underwriters......................... 93Legal Matters........................ 95Experts.............................. 95Where You Can Find Additional Information........................ 95Index to Financial Statements........ F-1</TABLE> In this prospectus, "we," "us" and "our" refer to PE Corporation and itssubsidiaries; "Celera Genomics group," "Celera Genomics," "Celera" and the"Group" refer to PE Corporation's Celera Genomics group, and "PE Biosystemsgroup" or "PE Biosystems" refers to PE Corporation's PE Biosystems group. Youshould rely only on the information contained in this prospectus. We have notauthorized anyone to provide you with information different from that containedin this prospectus. We are offering to sell, and seeking offers to buy, sharesof common stock only in jurisdictions where offers and sales are permitted. Theinformation contained in this prospectus is accurate only as of the date of thisprospectus, regardless of the time of delivery of this prospectus or of any saleof the Celera Genomics stock.

PROSPECTUS SUMMARY THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE OR INCORPORATED BYREFERENCE IN THIS PROSPECTUS. THIS SUMMARY MAY NOT CONTAIN ALL OF THEINFORMATION THAT YOU SHOULD CONSIDER BEFORE DECIDING TO INVEST IN CELERAGENOMICS STOCK. YOU SHOULD READ THIS ENTIRE PROSPECTUS CAREFULLY, INCLUDING THE"RISK FACTORS" SECTION, THE FINANCIAL STATEMENTS AND THE NOTES TO THOSESTATEMENTS, AND THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS.UNLESS OTHERWISE INDICATED, ALL INFORMATION IN THIS PROSPECTUS ASSUMES NOEXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT OPTION. PE CORPORATION PE Corporation conducts its businesses through the Celera Genomics group andthe PE Biosystems group. PE Corporation is offering shares of its CeleraGenomics stock, a class of its common stock intended to reflect the performanceof its Celera Genomics business.CELERA GENOMICS GROUP Since its formation, Celera Genomics has become a recognized leader in thegeneration, sale and support of genomic information and enabling data managementand analysis software. Celera Genomics' customers use the information forcommercial applications in the pharmaceutical and life sciences industries. Thespecific applications include target identification, drug discovery, and drugdevelopment. Celera Genomics' mission is to become the definitive source of genomic andrelated medical and biological information. Celera's initial strategy is tocomplete the sequencing and assembly of the human genome, which will provide afoundation for advanced biological understanding. Through the use of PEBiosystems' high-throughput sequencing equipment and Celera Genomics' advancedsequencing strategies, Celera Genomics has compiled DNA sequence information inits database that covers 90% of the human genome and we believe approximately97% of all genes in the human genome are represented. As a result of Celera'ssuccessful sequencing and assembly of DROSOPHILA and the acceleratedavailability of data from public human genome sequencing efforts, Celerabelieves that it can sequence and assemble the human genome on an acceleratedbasis. Celera Genomics expects to complete the sequencing phase of the humangenome by mid-2000 and the assembly phase by the end of 2000, or one year aheadof its original schedule. Celera Genomics' progress to date has placed it well ahead of its originalschedule. Consequently, Celera Genomics intends to make significant newinvestments to aggressively expand beyond the genome and to take advantage ofwhat it believes will be substantial new market opportunities in the emergingfields of functional genomics, in particular proteomics, and personalizedhealth/medicine. Celera believes these efforts are critical to further enhancethe understanding and practical applications of genomic information. New revenueopportunities in these fields range from expansion of Celera's information andservice businesses to the licensing of proprietary discoveries resulting fromthe new information. Functional genomics is the understanding of gene and protein function andexpression. Specifically, it entails determining the location, level, and timingof expression as well as the functions of proteins and genes. Functionalgenomics should provide the pharmaceutical industry with the information to morerapidly identify high-quality, validated targets. Through proteomics, newprotein drugs may be identified or new markers discovered that will be importantto the diagnosis of disease. As a result, such capabilities should also lead toimportant discoveries that will permit better monitoring and treatment ofdiseases. Another significant opportunity is to extend the reach of genomic andfunctional genomic information to physicians and consumers through its use inthe emerging market of personalized health/medicine. Genomic information,specifically genetic variability among individuals, known as polymorphisms orSNPs, and its correlation to relevant medical and health information, will beused to develop diagnostic tests which profile the genetic make-up of anindividual. These correlations to individual genetic profiles may be animportant basis for interaction between consumers, physicians and solutionproviders, enabling 3

customized treatment and health planning. In addition, this information may havemany other applications for drug development, therapeutics and patient care. Through the use of Celera Genomics' comprehensive and flexible technologyplatform, it expects to have the capability to package and market life sciencesinformation solutions specific to the needs of customers that seek to use theinformation for commercial applications in the pharmaceutical and life sciencesindustries. Because this information will be delivered via the Internet andcustomer Intranets, Celera Genomics intends to take advantage of portalopportunities that may create e-commerce revenue opportunities. These mayinclude the promotion and sale of third party products, such as custom assaysystems, research reagents, and specialized genomic diagnostic products inconjunction with other companies such as PE Biosystems. Celera Genomics believes it has competitive advantages that differentiate itfrom other genomic companies. These advantages have enabled Celera to rapidlysequence and assemble large and complex genomes and should allow it to leveragethese capabilities to market the use of this information and discoveries in thenew business segments of functional genomics and personalized health/medicine.These advantages include the expertise of Celera's key scientific personnel, aproven sequencing strategy, the world's largest DNA sequencing and genotypingfacility, access to proprietary comprehensive genomic information, extensivesupercomputing infrastructure and bioinformatic capabilities, and Celera'sstrategic relationships and affiliations with PE Biosystems, Compaq Computer andothers. Particularly, Celera's relationship with PE Biosystems will allow it earlyaccess to important new technologies as Celera develops its functional genomicsand personalized health/medicine capabilities. Currently, technologies from PEBiosystems' pending acquisition of Third Wave Technologies and itscollaborations with Illumnia and Alcara BioSciences are expected to be used inthe area of SNP analysis. PE Biosystems' technologies in mass spectrometryshould meet the high-throughput and information requirements necessary to createthe foundation for proteomics. For fiscal 1999, the Celera Genomics group had net revenues of$12.5 million and a net loss of $44.9 million. For the six months endedDecember 31, 1999, the Celera Genomics group had net revenues of $16.6 millionand a net loss of $43.7 million. Its total assets at December 31, 1999 were$349.5 million.PE BIOSYSTEMS GROUP The PE Biosystems group is a world leader in the development, manufacture,sale, and service of instrument systems and associated consumable products forlife science research and related applications. Its products are used in variousapplications including the synthesis, amplification, purification, isolation,analysis, and sequencing of nucleic acids, proteins, and other biologicalmolecules. For fiscal 1999, the PE Biosystems group had net revenues of $1.2 billion,and income from continuing operations of $148.4 million. For the six monthsended December 31, 1999, the PE Biosystems group had net revenues of$628.2 million and income from continuing operations of $73.5 million. Its totalassets at December 31, 1999 were $1.5 billion. ------------------------ PE Corporation was incorporated in Delaware in 1998 and succeeded byrecapitalization to the business of The Perkin-Elmer Corporation in May 1999.Our principal executive offices are located at 761 Main Avenue, Norwalk,Connecticut 06859, and our telephone number is (203) 762-1000. PE Corporation'sInternet address is www.pecorporation.com and the Celera Genomic group'sInternet address is www.celera.com. The information contained on these websitesis not incorporated by reference in this prospectus. 4

THE OFFERING<TABLE><S> <C>Celera Genomics stock offered............. 3,230,000Celera Genomics stock to be outstanding after this offering..................... 55,537,172Over-allotment option..................... 484,500Use of Proceeds........................... The net proceeds we will receive from this offering are estimated to be approximately $778.9 million, assuming a public offering price of $250 7/8 per share. If the underwriters' over-allotment option is exercised in full, we estimate that the net proceeds to us would be approximately $895.9 million. We intend to use the net proceeds from this offering primarily to fund our new product and technology development activities in functional genomics, with an emphasis on proteomics, and personalized health/medicine. We will also use the net proceeds for general corporate purposes, including possible acquisitions, alliances or collaborations.New York Stock Exchange symbol............ CRA</TABLE> On January 20, 2000, we announced a two-for-one split of the Celera Genomicsstock to be distributed as a 100% stock dividend on February 18, 2000 to holdersof record on February 4, 2000. All the information in this prospectus giveseffect to the stock split. The number of shares of Celera Genomics stock to be outstanding after thisoffering does not take into account, as of December 31, 1999, 14.0 millionshares of Celera Genomics stock issuable upon the exercise of outstanding stockoptions at a weighted average exercise price of $6.88 per share. The Celera Genomics Group Common Stock is one of two classes of PECorporation common stock, the other being the PE Biosystems Group Common Stock.The Celera Genomics stock and the PE Biosystems stock are intended to providestockholders of PE Corporation with separate securities reflecting theperformance of the Celera Genomics group and the PE Biosystems group. We have not paid any cash dividends on the Celera Genomics stock, and do notanticipate paying cash dividends on the Celera Genomics stock for the forseeablefuture. The Board of Directors of PE Corporation bases its dividend policy forthe Celera Genomics stock on the financial condition and results of operationsof the Celera Genomics group, although it has no obligation under Delaware lawto do so. In determining its dividend policy with respect to the Celera Genomicsstock, the Board will rely on the separate financial statements of the CeleraGenomics group. A portion of PE Corporation's corporate assets and liabilities areattributed to each of the Celera Genomics group and the PE Biosystems group. Although the financial statements of the Celera Genomics group and the PEBiosystems group separately report assets, liabilities (including contingentliabilities) and stockholders' equity of PE Corporation attributed to each suchgroup, such attribution does not affect legal title to such assets orresponsibility for such liabilities. Holders of Celera Genomics stock and PEBiosystems stock are stockholders of PE Corporation, which continues to beresponsible for all liabilities of the Celera Genomics group and the PEBiosystems group. Financial impacts arising from either the Celera Genomicsgroup or the PE Biosystems group which affect PE Corporation's overall cost ofcapital could affect the results of operations and financial condition of bothgroups. Accordingly, the PE Corporation consolidated financial informationshould be read in connection with the Celera Genomics group financialinformation. For information concerning legal restrictions on the payment of dividends onthe Celera Genomics stock and other terms thereof and certain management andaccounting policies with respect to the Celera Genomics group, see "RiskFactors," "Description of Capital Stock" and "Management and AllocationPolicies." 5

CELERA GENOMICS GROUP SUMMARY COMBINED FINANCIAL INFORMATION The following summary combined financial information has been derived fromthe combined financial statements of the Celera Genomics group for each of thethree fiscal years in the period ended June 30, 1999 and the six month periodsended December 31, 1998 and 1999. The information set forth below should be readin conjunction with the Celera Genomics group "Management's Discussion andAnalysis" and combined financial statements and notes thereto included in thisprospectus; the PE Corporation "Management's Discussion and Analysis" includedin this prospectus; and the PE Corporation consolidated financial statements andnotes thereto contained in the PE Corporation Annual Report to Stockholders forthe year ended June 30, 1999 and in the PE Corporation Quarterly Report onForm 10-Q for the quarterly period ended December 31, 1999, each incorporatedherein by reference. The data for the six month periods ended December 31, 1998and 1999 have been derived from unaudited financial statements which, in theopinion of management, reflect all adjustments necessary for a fair presentationof results for the periods covered. On January 20, 2000, we announced a two-for-one split of the Celera Genomicsstock which was effected as a 100% stock dividend on February 18, 2000 tostockholders of record on February 4, 2000. All information in this prospectusgives effect to the stock split.<TABLE><CAPTION> FOR THE SIX MONTHS FOR THE FISCAL YEARS ENDED JUNE 30, ENDED DECEMBER 31, ------------------------------------ -------------------(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) 1997 1998 1999 1998 1999------------------------------------------------------ ---------- ---------- ---------- -------- -------- (UNAUDITED)<S> <C> <C> <C> <C> <C>SUMMARY OF OPERATIONSNet revenues..................................... $ 903 $ 4,211 $ 12,541 $ 5,631 $ 16,625Net loss......................................... (30,247) (8,315) (44,894) (12,216) (43,676) Per share of common stock Basic and diluted............................ $ (.89) $ (.84)OTHER INFORMATIONCash and cash equivalents........................ $ -- $ -- $ 71,491 $ -- $ 53,955Note receivable from the PE Biosystems group..... -- -- 150,000 310,852 150,000Working capital (deficit)........................ (421) (1,160) 192,803 308,579 152,448Capital expenditures............................. 411 3,648 94,541 17,380 19,867Total assets..................................... 2,983 6,339 344,720 338,531 349,529Total debt....................................... -- -- -- -- 46,000Group equity (deficit)........................... (3,464) (1,259) 293,867 325,060 260,297</TABLE> 6

PE CORPORATION SUMMARY CONSOLIDATED FINANCIAL INFORMATION The following summary consolidated financial information has been derivedfrom the consolidated financial statements of PE Corporation for each of thethree fiscal years in the period ended June 30, 1999 and the six month periodsended December 31, 1998 and 1999. The information set forth below should be readin conjunction with the PE Corporation "Management's Discussion and Analysis"included in this prospectus; and the PE Corporation consolidated financialstatements and notes thereto contained in the PE Corporation Annual Report toStockholders for the year ended June 30, 1999, and in the PE CorporationQuarterly Report on Form 10-Q for the quarterly period ended December 31, 1999,each incorporated herein by reference. The data for the six month periods endedDecember 31, 1998 and 1999 have been derived from unaudited financial statementswhich, in the opinion of management, reflect all adjustments necessary for afair presentation of results for the periods covered. On January 20, 2000, we announced a two-for-one split of the Celera Genomicsstock and the PE Biosystems stock which was effected as a 100% stock dividend onFebruary 18, 2000 to stockholders of record on February 4, 2000. All informationin this prospectus gives effect to the stock split.<TABLE><CAPTION> FOR THE SIX MONTHS ENDED FOR THE FISCAL YEARS ENDED JUNE 30, DECEMBER 31, ------------------------------------ -----------------------(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) 1997 1998 1999 1998 1999------------------------------------------------------ ---------- ---------- ---------- ---------- ---------- (UNAUDITED)<S> <C> <C> <C> <C> <C>SUMMARY OF OPERATIONSNet revenues.......................................... $ 768,368 $ 944,306 $1,216,897 $ 543,238 $ 616,207Income from continuing operations..................... 102,492 15,694 96,797 36,095 29,254 Per share of common stock Basic............................................. 2.16 .32 .73 Diluted........................................... 2.07 .31 .71Income (loss) from discontinued operations (net of income taxes)............................... 27,906 40,694 79,058 (4,037) --Net income............................................ 130,398 56,388 175,855 32,058 29,254 Per share of common stock Basic............................................. 2.74 1.16 .65 Diluted........................................... 2.63 1.12 .63Dividends per share................................... .68 .68 .51 .34PE BIOSYSTEMS GROUPIncome from continuing operations..................... $ 148,365 $ 73,541 Per share of common stock Basic............................................. .74 .36 Diluted........................................... .72 .34Income from discontinued operations (net of income taxes)............................... 79,058 --Net income............................................ 227,423 73,541 Per share of common stock Basic............................................. 1.13 .36 Diluted........................................... 1.10 .34Dividends per share................................... .0425 .085CELERA GENOMICS GROUPNet loss.............................................. $ (44,894) $ (43,676) Per share of common stock Basic and diluted................................. (.89) (.84)OTHER INFORMATIONCash and short-term investments....................... $ 217,222 $ 84,091 $ 308,021 $ 75,479 $ 349,481Working capital....................................... 354,742 287,991 471,350 330,015 467,966Capital expenditures.................................. 58,057 71,820 176,035 49,984 51,107Total assets.......................................... 1,006,793 1,135,276 1,519,307 1,241,051 1,681,244Long-term debt........................................ 59,152 33,726 31,452 35,548 37,102Total debt............................................ 89,068 45,825 35,363 66,839 118,351Stockholders' equity.................................. 504,270 564,248 821,525 622,229 906,264</TABLE> 7

RISK FACTORS YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE MAKING ANINVESTMENT DECISION. THE CELERA GENOMICS GROUP'S AND PE CORPORATION'S BUSINESS,FINANCIAL CONDITION OR RESULTS OF OPERATIONS COULD BE MATERIALLY ADVERSELYAFFECTED BY ANY OF THESE RISKS. THE RISKS DESCRIBED BELOW ARE NOT THE ONLY ONESFACING THE CELERA GENOMICS GROUP AND PE CORPORATION. THE TRADING PRICE OF THECELERA GENOMICS STOCK COULD DECLINE DUE TO ANY OF THESE RISKS, AND YOU MAY LOSEALL OR PART OF YOUR INVESTMENT.RISKS RELATING TO THE CELERA GENOMICS GROUP CELERA GENOMICS HAS INCURRED NET LOSSES TO DATE AND MAY NOT ACHIEVE PROFITABILITY The Celera Genomics group has accumulated net losses of $129.7 million as ofDecember 31, 1999 and expects that it will continue to incur additional netlosses for the foreseeable future. These losses may increase as Celera expandsits investments in new technology and product development, including thedevelopment of our functional genomics and personalized health/medicine efforts.As an early stage business, the Celera Genomics group faces significantchallenges in simultaneously expanding its operations, pursuing key scientificgoals and attracting customers for its information products and services. As aresult, there is a high degree of uncertainty that the Celera Genomics groupwill be able to achieve profitable operations. CELERA GENOMICS' BUSINESS PLAN IS UNIQUE AND EXPANDING No organization has ever attempted to combine in one business organizationall of the Celera Genomics group's businesses. In addition, as Celera Genomicsnears completion of the sequencing of the human genome, it is expanding itsbusiness plan to enter into new markets: functional genomics and personalizedhealth/medicine. The creation of a genomics database, and the offering offunctional genomics and personalized health/medicine databases and capabilitiestargeted at a wide variety of customers, from pharmaceutical companies touniversity researchers, has a number of risks, including pricing and volumeissues, technology and access concerns, computer security, pursuit of keyscientific goals and protection of intellectual property. The addition of thefunctional genomics and personalized health/medicine efforts will add furthercomplexity and require additional management attention and resources as thesenew markets are addressed. CELERA GENOMICS' BUSINESS PLAN DEPENDS HEAVILY ON TIMELY COMPLETION OF THE SEQUENCING AND ASSEMBLY OF THE HUMAN GENOME The Celera Genomics group's efforts to complete the sequencing and assemblyof the human genome are not yet complete. Some genomic scientists havecriticized the Celera Genomics group's sequencing strategy, known as "wholegenome shotgun sequencing," as having limitations when applied on a large scalein sequencing the human genome. Others have stated that the human genome cannotbe sequenced using whole genome shotgun sequencing. Although scientists at TheInstitute for Genomic Research have used the whole genome shotgun strategy tosequence the genomes of other organisms, the strategy has not been used tosequence a genome with the size and complexity of the human genome. Although theCelera Genomics group has been successful in sequencing and assembling theDROSOPHILA genome, once Celera is able to fully sequence the human genome, therecan be no assurance that the Celera Genomics group will be successful in itsassembly of the human genome. Celera Genomics group's ability to retain itsexisting customers and attract new customers is heavily dependent upon thecompletion of the sequencing and assembly of the human genome within theexpected time frames. In addition, completion of the sequencing and assembly ofthe human genome is essential to the functional genomics and personalizedhealth/ medicine components of Celera Genomics' business strategy in whichCelera Genomics intends to make substantial investments in the near future. As aresult, failure to complete the sequencing and assembly effort in a timelymanner may have a material adverse effect on the Celera Genomics group'sbusiness. 8

CELERA GENOMICS' REVENUE GROWTH DEPENDS ON RETAINING EXISTING AND ADDING NEW CUSTOMERS The Celera Genomics group has a small number of customers, the revenues fromwhich will offset only a small portion of its expenses. In order to generatesignificant additional revenues, the Celera Genomics group must obtainadditional customers and retain its existing customers. Celera Genomics' abilityto retain existing and add new customers depends upon successful development ofthe additional databases Celera has planned, and upon customers' continuedbelief that Celera Genomics' products can help accelerate their drug discoveryand development efforts and fundamental discoveries in biology. Althoughcustomer agreements typically have multi-year terms, there can be no assurancethat any will be renewed upon expiration. The Celera Genomics group's futurerevenues are also affected by the extent to which existing customers expandtheir agreements to include new services and database products. In some cases,the Celera Genomics group may accept milestone payments or future royalties onproducts developed by its customers as consideration for access to CeleraGenomics' databases and products in lieu of a portion of subscription fees. Sucharrangements are unlikely to produce revenue for Celera Genomics group for anumber of years, if ever, and depend heavily on the research and productdevelopment, sales and marketing and intellectual property protection abilitiesof the customer. USE OF GENOMICS INFORMATION TO DEVELOP OR COMMERCIALIZE PRODUCTS IS UNPROVEN The development of new drugs and the diagnosis of disease based on genomicinformation is unproven. Few therapeutic or diagnostic products based on genomicdiscoveries have been developed and commercialized and to date no one hasdeveloped or commercialized any therapeutic, diagnostic or agricultural productsbased on the Celera Genomic group's technologies. If the Group's customers areunsuccessful in developing and commercializing products based on the Group'sdatabases or other products or services, customers and the Group may be unableto generate sufficient revenues and its business may suffer as a result.Development of such products will be subject to risks of failure, including thatsuch products will be found to be toxic, be found to be ineffective, fail toreceive regulatory approvals, fail to be developed prior to the successfulmarketing of similar products by competitors or infringe on proprietary rightsof third parties. THE GENOMICS INDUSTRY IS INTENSELY COMPETITIVE AND EVOLVING There is intense competition among entities attempting to sequence segmentsof the human genome and identify genes associated with specific diseases anddevelop products and services based on these discoveries. Celera Genomics facescompetition in these areas from genomic, pharmaceutical, biotechnology anddiagnostic companies, academic and research institutions and government or otherpublicly-funded agencies, both in the United States and abroad. A number ofcompanies, other institutions and government-financed entities are engaged ingene sequencing, gene discovery, gene expression analysis, positional cloning,the study of genetic variation, and other genomic service businesses. Some ofthese competitors are developing databases containing gene sequence, geneexpression, genetic variation or other genomic information and are marketing orplan to market their data to pharmaceutical, biotechnology, diagnostic and othercompanies. Additional competitors may attempt to establish databases containingthis information in the future. The Celera Genomics group has licensed some ofits key technology on a non-exclusive basis, including the Human Genome Indexlicensed from The Institute for Genomic Research, and therefore such technologymay be available for license by our competitors. Competitors may also discover, characterize or develop important genes, drugtargets or leads, drug discovery technologies or drugs in advance of CeleraGenomics or its customers or which are more effective than those developed byCelera Genomics or its customers, or may obtain regulatory approvals of theirdrugs more rapidly than Celera Genomics' customers do, any of which could have amaterial adverse effect on any of Celera Genomics' similar programs. Moreover,these competitors may obtain patent protection or other intellectual propertyrights that would limit Celera Genomics' rights or its customers' ability to useCelera Genomics' products to commercialize therapeutic, diagnostic oragricultural products. 9

In addition, a customer may use the Celera Genomic group's services to developproducts that compete with products separately developed by the Group or itsother customers. Future competition will come from existing competitors as well as othercompanies seeking to develop new technologies for drug discovery based on genesequencing, target gene identification, bioinformatics and related technologies.In addition, certain pharmaceutical and biotechnology companies have significantneeds for genomic information and may choose to develop or acquire competingtechnologies to meet such needs. Celera Genomics also faces competition fromproviders of software. A number of companies have announced their intent todevelop and market software to assist pharmaceutical companies and academicresearchers in managing and analyzing their own genomic data and publiclyavailable data. CELERA GENOMICS' CURRENT AND POTENTIAL CUSTOMERS ARE PRIMARILY FROM, AND ARE SUBJECT TO RISKS FACED BY, THE PHARMACEUTICAL AND BIOTECHNOLOGY INDUSTRIES The Celera Genomics group derives a substantial portion of its revenues fromfees paid by pharmaceutical companies and larger biotechnology companies for itsinformation products and services, including Amgen Inc., Novartis Pharma AG,Pharmacia & Upjohn and Pfizer Inc. The Group expects that pharmaceuticalcompanies and larger biotechnology companies will continue to be the Group'sprimary source of revenues for the foreseeable future. As a result, the Group issubject to risks and uncertainties that affect the pharmaceutical andbiotechnology industries and to reduction and delays in research and developmentexpenditures by companies in these industries. In addition, the Celera Genomics group's future revenues may be adverselyaffected by mergers and consolidation in the pharmaceutical and biotechnologyindustries, which will reduce the number of the Group's potential customers.Large pharmaceutical and biotechnology customers could also decide to conducttheir own genomics programs or seek other providers instead of using Celera'sproducts and services. CELERA GENOMICS RELIES HEAVILY ON ITS STRATEGIC RELATIONSHIP WITH PE BIOSYSTEMS The Celera Genomics group believes that its strategic relationship with thePE Biosystems group has provided it with a significant competitive advantage inits efforts to date to sequence the human genome. Celera Genomics' timelycompletion of that work and successful extension of its business into thefunctional genomics and personalized health/medicine arenas will depend heavilyon the PE Biosystems group's ability to continue to provide leading edge,proprietary technology and products, including technologies relating to geneticanalysis, protein analysis and high-throughput screening. If PE Biosystems isunable to supply these technologies, Celera will need to obtain access toalternative technologies, which may not be available, or may only be availableon unfavorable terms. Any change in the relationship with the PE Biosystemsgroup that adversely affects the Celera Genomic group's access toPE Biosystems' technology or failure by PE Biosystems to continue to develop newtechnologies or protect its proprietary technology could adversely affect CeleraGenomic's business. INTRODUCTION OF NEW PRODUCTS MAY EXPOSE CELERA GENOMICS TO PRODUCT LIABILITY CLAIMS New products developed by Celera Genomics could expose Celera Genomics topotential product liability risks which are inherent in the testing,manufacturing and marketing of human therapeutic and diagnostic products.Product liability claims or product recalls, regardless of the ultimate outcome,could require Celera Genomics to spend significant time and money in litigationand to pay significant damages. 10

CELERA COULD INCUR LIABILITIES RELATING TO HAZARDOUS MATERIALS THAT IT USES IN ITS RESEARCH AND DEVELOPMENT ACTIVITIES Celera Genomics' research and development activities involve the controlleduse of hazardous materials, chemicals and various radioactive materials. In theevent of an accidental contamination or injury from these materials, Celeracould be held liable for damages in excess of its resources. CELERA GENOMICS' SALES CYCLE IS LENGTHY AND IT MAY SPEND CONSIDERABLE RESOURCES ON UNSUCCESSFUL SALES EFFORTS OR MAY NOT BE ABLE TO COMPLETE DEALS ON THE SCHEDULE ANTICIPATED The Celera Genomics group's ability to obtain new customers for genomicinformation products and value-added programs depends on its customers' beliefthat the Group can help accelerate their drug discovery efforts. The CeleraGenomics group's sales cycle is typically lengthy because the Group needs toeducate potential customers and sell the benefits of its products and servicesto a variety of constituencies within such companies. In addition, eachagreement involves the negotiation of unique terms. Celera may expendsubstantial funds and management effort with no assurance that an agreement willresult. Actual and proposed consolidations of pharmaceutical companies haveaffected and may in the future affect the timing and progress of the Group'ssales efforts. SCIENTIFIC AND MANAGEMENT STAFF HAVE UNIQUE EXPERTISE WHICH IS KEY TO CELERA GENOMICS' COMMERCIAL VIABILITY AND WHICH WOULD BE DIFFICULT TO REPLACE The Celera Genomics group is highly dependent on the principal members ofits scientific and management staff, particularly Dr. Venter, its President. Forthe sequencing and assembly of the human genome, the Celera Genomics groupbelieves the following members of its staff are essential: Dr. Venter; Dr. MarkAdams, Vice President for Genome Programs; and Dr. Eugene Myers, who isresponsible for the group assembling the genome. None of these individuals areparty to employment agreements, non-competition agreements or non-solicitationagreements with the Celera Genomics group. Additional members of the CeleraGenomics group's medical, scientific and bioinformatics staff are important tothe development of information, tools and services required for implementationof its business plan. The loss of any of these persons' expertise would bedifficult to replace and could have a material adverse effect on the CeleraGenomics group's ability to achieve its goals. CELERA GENOMICS' COMPETITIVE POSITION MAY DEPEND ON PATENT AND COPYRIGHT PROTECTION, WHICH MAY NOT BE SUFFICIENTLY AVAILABLE The Celera Genomics group's ability to compete and to achieve profitabilitymay be affected by its ability to protect its proprietary technology and otherintellectual property. While Celera Genomics is currently primarily dependent onrevenues from access fees to its databases and discovery and informationsystems, obtaining patent protection is likely to become more important to itsbusiness as it expands into the area of functional genomics, in that CeleraGenomics would be able to prevent competitors from making, using or selling anyof its technology for which it obtains a patent. Patent law affecting CeleraGenomics' business, particularly gene sequences, polymorphisms and proteinexpression, is uncertain, and as a result, the Group is uncertain as to itsability to prevent competitors from developing similar subject matter. Patentsmay not issue from patent applications that the Group may own or license. Inaddition, because patent applications in the United States are maintained insecrecy until patents issue, third parties may have filed patent applicationsfor technology used by Celera Genomics or covered by Celera Genomics' pendingpatent applications without Celera Genomics being aware of such applications. Moreover, the Celera Genomics group may be dependent on protecting, throughcopyright law or otherwise, its databases to prevent other organizations fromtaking information from such databases and copying and reselling it. Copyrightlaw currently provides uncertain protection regarding the copying and resale offactual data. As such, Celera Genomics is uncertain whether it could preventsuch copying or 11

resale. Changes in copyright and patent law could either expand or reduce theextent to which the Celera Genomics group and its customers are able to protecttheir intellectual property. CELERA GENOMICS' POSITION MAY DEPEND ON ITS ABILITY TO PROTECT TRADE SECRETS The Celera Genomics group relies on trade secret protection for itsconfidential and proprietary information and procedures, including proceduresrelated to sequencing genes and to searching and identifying important regionsof genetic information. The Celera Genomics group currently protects suchinformation and procedures as trade secrets. The Celera Genomics group protectsits trade secrets through recognized practices, including access control,confidentiality agreements with employees, consultants, collaborators, andcustomers, and other security measures. These confidentiality agreements may bebreached, however, and the Group may not have adequate remedies for any suchbreach. In addition, the Group's trade secrets may otherwise become known or beindependently developed by competitors. PUBLIC DISCLOSURE OF GENOMICS SEQUENCE DATA COULD JEOPARDIZE CELERA'S INTELLECTUAL PROPERTY PROTECTION AND HAVE AN ADVERSE EFFECT ON THE VALUE OF OUR PRODUCTS AND SERVICES The Celera Genomics group, the federally funded Human Genome Project andothers engaged in similar research have committed to make available to thepublic basic human sequence data. Such disclosures might limit the scope of theCelera Genomics group's claims or make subsequent discoveries by Celera or itscustomers related to full-length genes unpatentable. While the Celera Genomicsgroup believes that the publication of sequence data will not preclude it orothers from being granted patent protection on genes, there can be no assurancethat such publication has not affected and will not affect the ability of Celeraor its customers to obtain patent protection. Customers may conclude thatuncertainties of such protection decrease the value of the Celera Genomicsgroup's information products and services and as a result, Celera may berequired to reduce the fees it charges for such products and services. CELERA GENOMICS MAY INFRINGE THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES AND MAY BECOME INVOLVED IN EXPENSIVE INTELLECTUAL PROPERTY LITIGATION The intellectual property rights of biotechnology companies, includingCelera Genomics, are generally uncertain and involve complex legal, scientificand factual questions. Celera Genomics' success in the functional genomics fieldmay depend, in part, on its ability to operate without infringing on theintellectual property rights of others and to prevent others from infringing onits intellectual property rights. There has been substantial litigation regarding patents and otherintellectual property rights in Celera Genomics' industry. The Group may becomea party to patent litigation or proceedings at the U.S. Patent and TrademarkOffice to determine its patent rights with respect to third parties which mayinclude subscribers to Celera Genomics' database information services.Interference proceedings may be necessary to establish which party was the firstto discover such intellectual property. Celera Genomics may become involved inpatent litigation against third parties to enforce the Group's patent rights, toinvalidate patents held by such third parties, or to defend against such claims.The cost to Celera Genomics of any patent litigation or similar proceeding couldbe substantial, and it may absorb significant management time. If aninfringement litigation against Celera Genomics is resolved unfavorably toCelera Genomics, Celera Genomics may be enjoined from manufacturing or sellingcertain of its products or services without a license from a third party. CeleraGenomics may not be able to obtain such a license on commercially acceptableterms, or at all. The U.S. Patent and Trademark Office has issued at least one patent to athird party relating to a SNP. If patents are issued to others with respect toother important SNPs, Celera Genomics will need to obtain 12

rights to those important SNPs receive patents, use and sell related assays.Such licenses may not be available to Celera Genomics on commercially acceptableterms, or at all. CELERA GENOMICS' BUSINESS IS DEPENDENT ON THE CONTINUOUS, EFFECTIVE, RELIABLE AND SECURE OPERATION OF ITS COMPUTER HARDWARE, SOFTWARE AND INTERNET APPLICATIONS AND RELATED TOOLS AND FUNCTIONS Because the Celera Genomics group's business requires manipulating andanalyzing large amounts of data, and communicating the results of such analysisto customers via the Internet, the Group depends on the continuous, effective,reliable and secure operation of its computer hardware, software, networks,Internet servers and related infrastructure. To the extent that the Group'shardware or software malfunctions or the Group's customers' access to productsthrough the Internet is interrupted, its business could suffer. The Group'scomputer and communications hardware is protected through physical and softwaresafeguards. However, it is still vulnerable to fire, storm flood, power loss,earthquakes, telecommunications failures, physical or software break-ins andsimilar events. In addition, Celera Genomics' database products are complex andsophisticated, and as such, could contain data, design or software errors thatcould be difficult to detect and correct. Software defects could be found incurrent or future products. If the Group fails to maintain and further developthe necessary computer capacity and data to support its computational needs andits customers' drug discovery efforts, it could result in loss of or delay inrevenues and market acceptance. In addition, any sustained disruption inInternet access provided by third parties could adversely impact the Group'sbusiness. CELERA GENOMICS' RESEARCH AND PRODUCT DEVELOPMENT DEPENDS ON ACCESS TO TISSUE SAMPLES AND OTHER BIOLOGICAL MATERIALS To continue to build its database products, Celera Genomics will need accessto normal and diseased human and other tissue samples, other biologicalmaterials and related clinical and other information, which may be in limitedsupply. Celera Genomics may not be able to obtain or maintain access to thesematerials and information on acceptable terms. In addition, governmentregulation in the United States and foreign countries could result in restrictedaccess to, or use of, human and other tissue samples. If Celera Genomics losesaccess to sufficient numbers or sources of tissue samples, or if tighterrestrictions are imposed on its use of the information generated from tissuesamples, its business may be harmed. ETHICAL, LEGAL AND SOCIAL ISSUES RELATED TO THE USE OF GENETIC INFORMATION AND GENETIC TESTING MAY CAUSE LESS DEMAND FOR OUR PRODUCTS Genetic testing has raised issues regarding confidentiality and theappropriate uses of the resulting information. For example, concerns have beenexpressed towards insurance carriers and employers using such tests todiscriminate on the basis of such information, resulting in barriers to theacceptance of such tests by consumers. This could lead to governmentalauthorities calling for limits on or regulation of the use of genetic testing orprohibit testing for genetic predisposition to certain diseases, particularlythose that have no known cure. Any of these scenarios could reduce the potentialmarkets for our products. CELERA GENOMICS MAY NEED TO RAISE ADDITIONAL FUNDS IN THE FUTURE The Celera Genomics group believes that the net proceeds of this offeringtogether with existing cash and marketable securities and anticipated cash flowfrom operations will be sufficient to fund its current plans to expand itsbusiness into functional genomics and personalized health/medicine. However, theCelera Genomics group may choose to accelerate its entry into these newbusinesses, in response to competitive pressures or otherwise, or to invest innew technologies, or it may choose to raise additional capital due to marketconditions or strategic considerations even if it has sufficient funds for itscurrent operating plan. This additional financing may not be available whenneeded, or, if available, may not be available on favorable terms. If additionalfinancing is obtained through additional public or private equity offerings,existing shareholders may suffer dilution. 13

EXPECTED RAPID GROWTH IN THE NUMBER OF OUR EMPLOYEES COULD ABSORB VALUABLE MANAGEMENT RESOURCES AND BE DISRUPTIVE TO THE DEVELOPMENT OF CELERA GENOMICS' BUSINESS The Celera Genomics group expects to grow significantly, from approximately450 employees at December 31, 1999 to over 600 by June 30, 2000. This growthwill require substantial effort to hire new employees and train and integratethem in the Celera Genomics group's business and to develop and implementmanagement information systems, financial controls and facility plans. Inaddition, the Celera Genomics group will be required to create a sales andmarketing organization and expand customer support resources as sales of itsinformation products increase. The Celera Genomics group's inability to managegrowth effectively would have a material adverse effect on its future operatingresults. THE USE OF CELERA GENOMICS' PRODUCTS AND SERVICES BY ITS CUSTOMERS MAY BE SUBJECT TO GOVERNMENT REGULATION Within the field of functional genomics, the use of Celera's databaseproducts by pharmaceutical and biotechnology customers may be subject to certainU.S. Food and Drug Administration or other regulatory approvals. For example,any new drug developed by the efforts of Celera's customers as a result of theiruse of Celera's databases must undergo an extensive regulatory review process.This process can take many years and require substantial expense. Within the field of personalized health/medicine, current and future patientprivacy and health care laws and regulations issued by the FDA may limit the useof polymorphism data. To the extent that use of Celera's databases is limited oradditional costs are imposed on Celera's customers due to regulation, ourbusiness may be adversely affected. Furthermore, Celera Genomics may be directly subject to regulations as aprovider of diagnostic information. To the extent that such regulations restrictthe sale of Celera's products or impose other costs, Celera's business may bematerially adversely affected. FUTURE ACQUISITIONS MAY ABSORB SIGNIFICANT RESOURCES AND MAY BE UNSUCCESSFUL As part of the Celera Genomics group's strategy, it expects to pursueacquisitions, investments and other relationships and alliances. Acquisitionsmay involve significant cash expenditures, debt incurrence, additional operatinglosses, dilutive issuances of equity securities, and expenses that could have amaterial adverse effect on Celera Genomics' financial condition and results ofoperations. For example, to the extent that we elect to pay the purchase pricefor such acquisitions in shares of Celera Genomics stock, such issuance ofadditional shares of Celera Genomics stock may be dilutive to Celera'sstockholders. Acquisitions involve numerous other risks, including: - difficulties integrating acquired technologies and personnel into Celera's business; - diversion of management from daily operations; - inability to obtain required financing on favorable terms; - entering new markets in which Celera has little previous experience; - potential loss of key employees or customers of acquired companies; - assumption of the liabilities and exposure to unforseen liabilities of acquired companies; and - amortization of the intangible assets of acquired companies.It may be difficult for Celera to complete such transactions quickly and tointegrate such businesses efficiently into its current business. Any suchacquisitions or investments by Celera may ultimately have a negative impact onits business and financial condition. 14

CELERA GENOMICS STOCK PRICE IS HIGHLY VOLATILE The market price of Celera Genomics stock has been and may continue to behighly volatile due to the risks and uncertainties described in this section ofthe prospectus, as well as other factors, including: - conditions and publicity regarding the genomics or life sciences industries generally; - failure to complete the sequencing and assembly of human genome within expected time frames; - price and volume fluctuations in the stock market at large which do not relate to the Group's operating performance; and - comments by securities analysts, or the Group's failure to meet market expectations. The stock market has from time to time experienced extreme price and volumefluctuations that are unrelated to the operating performance of particularcompanies. In the past, companies that have experienced volatility havesometimes been the subject of securities class action litigation. If litigationwere instituted on this basis, it could result in substantial costs and adiversion of management's attention and resources. NEW INVESTORS WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION Purchasers of the Celera Genomic stock offered by this prospectus will incuran immediate and substantial dilution of approximately $232.18 per share in nettangible book value based on an assumed public offering price of $250 7/8 pershare. Additional dilution is likely to occur upon the exercise of outstandingoptions. CELERA GENOMICS HAS VERY BROAD DISCRETION AS TO THE APPLICATION OF THE PROCEEDS OF THIS OFFERING Celera Genomics has not yet determined the amount of net proceeds to be usedfor each of the purposes indicated in this prospectus. Accordingly, managementwill retain broad discretion in the allocation of the net proceeds and may alsouse a portion of the net proceeds to fund acquisitions of complementarytechnologies, products or businesses, although we have no current agreement orcommitments for any such acquisitions.RISKS RELATING TO A CAPITAL STRUCTURE WITH TWO SEPARATE CLASSES OF COMMON STOCK YOU WILL BE STOCKHOLDERS OF ONE COMPANY AND, THEREFORE, FINANCIAL EFFECTS ON ONE GROUP COULD ADVERSELY AFFECT THE OTHER Holders of Celera Genomics stock will be stockholders of PE Corporation,which consists of Celera Genomics group and PE Biosystems group. The CeleraGenomics group and the PE Biosystems group are not separate legal entities. As aresult, stockholders will continue to be subject to all of the risks of aninvestment in PE Corporation, including PE Biosystems. The risks anduncertainties that may affect the operations, performance, development, andresults of PE Biosystems businesses include but are not limited to rapidlychanging technology and dependence on new products, dependence of sales oncustomers' capital spending policies and government-sponsored research, claimsfor patent infringement, significant overseas operations, future growth strategyand earthquakes. The assets attributed to the Celera Genomics group could besubject to the liabilities of the PE Biosystems group, whether such liabilitiesarise from lawsuits, contracts or indebtedness that we attribute to the PEBiosystems group. If we are unable to satisfy the PE Biosystems group'sliabilities out of the assets attributed to it, we may be required to satisfythose liabilities with assets attributed to the Celera Genomics group. Financial effects from the PE Biosystems group that affect our consolidatedresults of operations or financial condition could, if significant, affect theresults of operations or financial condition of the Celera Genomics group andthe market price of the Celera Genomics stock. A substantial portion of theCelera 15

Genomics group's equity is represented by a $150 million demand note of the PEBiosystems group. In addition, net losses of the PE Biosystems group anddividends or distributions on, or repurchases of, PE Biosystems stock orrepurchases of certain preferred stock will reduce the funds we can pay asdividends on the Celera Genomics stock under Delaware law. For these reasons,you should read our consolidated financial information with the financialinformation we provide for each group. HOLDERS OF CELERA GENOMICS STOCK WILL HAVE LIMITED RIGHTS RELATED TO THE CELERA GENOMICS GROUP Holders of Celera Genomics stock have only the rights customarily held bycommon stockholders. They will have only the following rights related to theCelera Genomics group: - certain rights with regard to dividends and liquidation; - requirements for a mandatory dividend, redemption or conversion upon the disposition of all or substantially all of the assets of the Celera Genomics group; and - a right to vote on matters as a separate voting class in the limited circumstances provided under Delaware law, by stock exchange rules or as determined by our board of directors. We will not hold separate meetings for holders of Celera Genomics stock andPE Biosystems stock. LIMITS EXIST ON VOTING POWER OF GROUP COMMON STOCK - CELERA GENOMICS STOCK MAY NOT INITIALLY HAVE ANY INFLUENCE ON THE OUTCOME OF STOCKHOLDER VOTING PE Biosystems stock currently has a substantial majority of the voting powerof the common stock. Except in limited circumstances requiring separate classvoting, either class of common stock that is entitled to more than the number ofvotes required to approve any stockholder action could control the outcome ofsuch vote--even if the matter involves a divergence or conflict of the interestsof the holders of the Celera Genomics stock and the PE Biosystems stock. Thesematters may include mergers and other extraordinary transactions. - A CLASS OF GROUP COMMON STOCK WITH LESS THAN MAJORITY VOTING POWER CAN BLOCK ACTION IF A CLASS VOTE IS REQUIRED If Delaware law, stock exchange rules or our board of directors requires aseparate vote on a matter by the holders of either the Celera Genomics stock orthe PE Biosystems stock, those holders could prevent approval of thematter--even if the holders of a majority of the total number of votes cast orentitled to cast, voting together as a class, were to vote in favor of it. - HOLDERS OF CELERA GENOMICS STOCK CANNOT ENSURE THAT THEIR VOTING POWER WILL BE SUFFICIENT TO PROTECT THEIR INTERESTS Since the relative voting power per share of Celera Genomics stock and PEBiosystems stock will fluctuate based on the market values of the two classes ofcommon stock, the relative voting power of Celera Genomics stock could decrease.As a result, holders of shares of Celera Genomics stock cannot ensure that theirvoting power will be sufficient to protect their interests. STOCKHOLDERS MAY NOT HAVE ANY REMEDIES FOR BREACH OF FIDUCIARY DUTIES IF ANY ACTION BY DIRECTORS AND OFFICERS HAS A DISADVANTAGEOUS EFFECT ON EITHER CLASS OF COMMON STOCK Stockholders may not have any remedies if any action or decision of ourdirectors or officers has a disadvantageous effect on the Celera Genomics stockor the PE Biosystems stock compared to the other class of common stock. Recent cases in Delaware involving tracking stocks have established thatdecisions by directors or officers involving differing treatment of trackingstocks are judged under the principle known as "the 16

business judgment rule" unless self-interest is shown. In addition, principlesof Delaware law established in cases involving differing treatment of twoclasses of capital stock or two groups of holders of the same class of capitalstock provide that a board of directors owes an equal duty to all stockholdersregardless of class or series. Under these principles of Delaware law, absentabuse of discretion, a good faith business decision made by a disinterested andadequately informed board of directors, board of directors' committee or officerwith respect to any matter having different effects on holders of CeleraGenomics stock and holders of PE Biosystems stock would be a defense to anychallenge to such determination made by or on behalf of the holders of eitherclass of common stock. STOCK OWNERSHIP COULD CAUSE DIRECTORS AND OFFICERS TO FAVOR ONE GROUP OVER THE OTHER As a policy, our board of directors periodically monitors the ownership ofshares of Celera Genomics stock and shares of PE Biosystems stock by ourdirectors and senior officers as well as their option holdings and otherbenefits so that their interests are not misaligned with the two classes ofcommon stock and with their duty to act in the best interests of PE Corporationand our stockholders as a whole. However, because the actual value of theirinterests in the Celera Genomics stock and PE Biosystems stock is anticipated tovary significantly, it is possible that they could favor one group over theother due to their stock and other benefits. NUMEROUS POTENTIAL CONFLICTS OF INTEREST EXIST BETWEEN THE CLASSES OF COMMON STOCK WHICH MAY BE DIFFICULT TO RESOLVE BY OUR BOARD OR WHICH MAY BE RESOLVED ADVERSELY TO ONE OF THE CLASSES - ALLOCATION OF CORPORATE OPPORTUNITIES COULD FAVOR ONE GROUP OVER THE OTHER Our board of directors may be required to allocate corporate opportunitiesbetween the groups. In some cases, our directors could determine that acorporate opportunity, such a business that we are acquiring or a new business,should be shared by the groups or be allocated to one group over the other. Anysuch decisions could favor one group to the detriment of the other. - THE GROUPS MAY COMPETE WITH EACH OTHER TO THE DETRIMENT OF THEIR BUSINESSES The existence of two separate classes of common stock will not prevent PEBiosystems group and the Celera Genomics group from competing with each other.Any competition between the groups could be detrimental to businesses of eitheror both of the groups. Under a board of directors' policy, groups will generallynot engage in the principal businesses of the other, except for jointtransactions with each other. However, our Chief Executive Officer or our boardof directors will permit indirect competition between the groups, such as onegroup doing business with a competitor of the other group, based on his or itsgood faith business judgment that such competition is in the best interests ofPE Corporation and all of our stockholders as a whole. In addition, the groupsmay compete in a business that is not a principal business of the other group. - OUR BOARD OF DIRECTORS MAY PAY MORE OR LESS DIVIDENDS ON GROUP COMMON STOCK THAN IF THAT GROUP WERE A SEPARATE COMPANY Subject to the limitations referred to below, our board of directors has theauthority to declare and pay dividends on the Celera Genomics stock and the PEBiosystems stock in any amount and could, in its sole discretion, declare andpay dividends exclusively on the Celera Genomics stock, exclusively on the PEBiosystems stock, or on both, in equal or unequal amounts. Our board ofdirectors is not required to consider the amount of dividends previouslydeclared on each class, the respective voting or liquidation rights of eachclass or any other factor. The performance of one group may cause our board ofdirectors to pay more or less dividends on the common stock relating to theother group than if that other group was a stand-alone corporation. In addition,Delaware law and our certificate of incorporation impose limitations on theamount of dividends which may be paid on each class of common stock. 17

- PROCEEDS OF MERGERS OR CONSOLIDATIONS MAY BE ALLOCATED UNFAVORABLY Our board of directors will determine how consideration to be received byholders of common stock in connection with a merger or consolidation involvingPE Corporation is to be allocated among holders of each class of common stock.Such percentage may be materially more or less than that which might have beenallocated to such holders had our board of directors chosen a different methodof allocation. - HOLDERS OF EITHER CLASS OF COMMON STOCK MAY BE ADVERSELY AFFECTED BY A CONVERSION OF GROUP COMMON STOCK Our board of directors could, in its sole discretion and without stockholderapproval, determine to convert shares of PE Biosystems stock into shares ofCelera Genomics stock, or vice versa, at any time, including when either or bothclasses of common stock may be considered to be overvalued or undervalued. Ifour board of directors chose to issue Celera Genomics stock in exchange for PEBiosystems stock, such conversion would dilute the interests in PE Corporationof the holders of Celera Genomics stock. If the board of directors were tochoose to issue PE Biosystems stock in exchange for Celera Genomics stock, suchconversion could give holders of shares of Celera Genomics stock a greater orlesser premium than any premium that was paid or might be paid by a third-partybuyer of all or substantially all of the assets of the Celera Genomics group. - PROCEEDS OF NEWLY ISSUED CELERA GENOMICS STOCK IN THE FUTURE COULD BE ALLOCATED TO THE PE BIOSYSTEMS GROUP If and to the extent the PE Biosystems group has an equity interest in theCelera Genomics group in the form of "Celera Genomics Designated Shares" at thetime of any future sale of Celera Genomics stock, our board of directors couldallocate some or all of the proceeds of that sale to the PE Biosystems group.Any such decision could favor one group over the other group. For example, thedecision to allocate the proceeds to the PE Biosystems group may adverselyaffect the Celera Genomics group's ability to obtain funds to finance its growthstrategies. There are no Celera Genomics Designated Shares outstanding as of thedate of this prospectus. OUR BOARD MAY CHANGE OUR MANAGEMENT AND ALLOCATION POLICIES WITHOUT STOCKHOLDER APPROVAL TO THE DETRIMENT OF EITHER GROUP Our board of directors may modify or rescind our policies with respect tothe allocation of corporate overhead, taxes, debt, interest and other matters,or may adopt additional policies, in its sole discretion without stockholderapproval. A decision to modify or rescind these policies, or adopt additionalpolicies, could have different effects on holders of Celera Genomics stock andholders of PE Biosystems stock or could result in a benefit or detriment to oneclass of stockholders compared to the other class. Our board of directors willmake any such decision in accordance with its good faith business judgment thatthe decision is in the best interests of PE Corporation and all of ourstockholders as a whole. EITHER GROUP MAY FINANCE THE OTHER GROUP ON TERMS UNFAVORABLE TO ONE OF THE GROUPS From time to time, we anticipate that we will transfer cash and otherproperty between groups to finance their business activities. When this occursthe group providing the financing will be subject to the risks relating to thegroup receiving the financing. We will account for those transfers in one of thefollowing ways: - as a reallocation of pooled debt or preferred stock; - as a short-term or long-term loan between groups or as a repayment of a previous borrowing; - as an increase or decrease in the PE Biosystems group's equity interest, if any, in the Celera Genomics group; or 18

- as a sale of assets between groups. Our board of directors has not adopted specific criteria for determiningwhen we will transfer cash or other property as a loan or repayment, an increaseor decrease in equity interest or a sale of assets. These determinations,including the terms of any transactions accounted for as debt, may beunfavorable to either the group transferring or receiving the cash or otherproperty. Our board of directors expects to make these determinations, either inspecific instances or by setting generally applicable policies, afterconsidering the financing requirements and objectives of the receiving group,the investment objectives of the transferring group and the availability, costand time associated with alternative financing sources, prevailing interestrates and general economic conditions. We cannot assure you that any terms that we fix for debt will approximatethose that could have been obtained by the borrowing group if it were astand-alone corporation. THE CELERA GENOMICS GROUP MAY NOT BE FULLY REIMBURSED FOR THE PE BIOSYSTEMS GROUP'S USE OF ITS TAX BENEFITS AND COULD BE CHARGED WITH HIGHER FUTURE TAXES THAN IF IT WERE A STAND-ALONE TAXPAYER Our management and allocation policies provide that tax benefits generatedbut not used by the Celera Genomics group may be used by the PE Biosystemsgroup. The aggregate amount reimbursed to the Celera Genomics group for such usemay not exceed $75 million. All subsequent tax benefits in excess of this amountwill not be credited to the Celera Genomics group and the Celera Genomics groupwill not be reimbursed for those tax benefits, unless the Celera Genomics groupcan use those tax benefits. Accordingly, any tax benefits that can not be usedby the Celera Genomics group will not be carried forward to reduce its futuretaxes. This could result in the Celera Genomics group being charged a greaterportion of the total corporate tax liability in the future than would have beenthe case if the Celera Genomics group had retained its tax benefits. HOLDERS OF CELERA GENOMICS STOCK MAY RECEIVE LESS CONSIDERATION UPON A SALE OF ASSETS THAN IF THE CELERA GENOMICS GROUP WERE A SEPARATE COMPANY Our certificate of incorporation provides that if a disposition of all orsubstantially all of the assets of the Celera Genomics group occurs, we must,subject to certain exceptions: - distribute to holders of the Celera Genomics stock an amount equal to the net proceeds of such disposition, or - convert at a 10% premium the Celera Genomics stock into shares of PE Biosystems stock.If the Celera Genomics group were a separate, independent company and its shareswere acquired by another person, certain costs of that disposition, includingcorporate level taxes, might not be payable in connection with that acquisition.As a result, stockholders of the Celera Genomics group as a separate,independent company might receive a greater amount than the net proceeds thatwould be received by holders of Celera Genomics stock if the assets of theCelera Genomics group were sold. In addition, we can not assure you that the netproceeds per share of Celera Genomics stock will be equal to or more than themarket value per share of Celera Genomics stock prior to or after announcementof a disposition. OUR CAPITAL STRUCTURE AND VARIABLE VOTE PER SHARE MAY DISCOURAGE ACQUISITIONS OF THE CELERA GENOMICS GROUP OR CELERA GENOMICS STOCK A potential acquiror could acquire control of PE Corporation by acquiringshares of common stock having a majority of the voting power of all shares ofcommon stock outstanding. Such a majority could be obtained by acquiring asufficient number of shares of both classes of common stock or, if one class ofcommon stock has a majority of such voting power, only shares of that class.Currently, the PE Biosystems stock has a substantial majority of the votingpower. As a result, it might be possible for an acquiror to obtain control bypurchasing only shares of PE Biosystems stock. 19

DECISIONS BY DIRECTORS AND OFFICERS THAT AFFECT MARKET VALUES COULD ADVERSELY AFFECT VOTING AND CONVERSION RIGHTS The relative voting power per share of each class of common stock and thenumber of shares of one class of common stock issuable upon the conversion ofthe other class of common stock will vary depending upon the relative marketvalues of the Celera Genomics stock and the PE Biosystems stock. The marketvalue of either or both classes of common stock could be adversely affected bymarket reaction to decisions by our board of directors or our management thatinvestors perceive as affecting differently one class of common stock comparedto the other. These decisions could involve changes to our management andallocation policies, transfers of assets between groups, allocations ofcorporate opportunities and financing resources between groups and changes individend policies. INVESTORS MAY NOT VALUE CELERA GENOMICS STOCK BASED ON CELERA GENOMICS GROUP FINANCIAL INFORMATION AND POLICIES We can not assure you that investors will value the Celera Genomics stockbased on the reported financial results and prospects of the Celera Genomicsgroup or the dividend policies established by our board of directors withrespect to the Celera Genomics group.RECENT CLINTON ADMINISTRATION PROPOSAL COULD HAVE ADVERSE TAX CONSEQUENCES FORUS OR FOR HOLDERS OF CELERA GENOMICS STOCK. The Clinton Administration recently proposed legislation dealing withtracking stock such as the Celera Genomics stock. Such proposal would, amongother things, grant authority to the Internal Revenue Service to treat trackingstock as something other than stock or as stock of another entity. If thisproposal is enacted, it could have adverse tax consequences for us or forholders of Celera Genomics stock. A similar proposal was made in 1999. Congressdid not act on the 1999 proposal, and it is impossible to predict whetherCongress will act upon this proposal or any other proposal relating to trackingstock. If there are adverse U.S. federal income tax law developments, we mayconvert the Celera Genomics stock or the PE Biosystems stock into shares of theother class without any premium. The proposal of the Clinton Administrationwould be such an adverse development if it is implemented or receives certainlegislative action.PROVISIONS GOVERNING COMMON STOCK COULD DISCOURAGE A CHANGE OF CONTROL AND THEPAYMENT OF A PREMIUM FOR STOCKHOLDERS' SHARES Our stockholder rights plan could prevent stockholders from profiting froman increase in the market value of their shares as a result of a change incontrol of PE Corporation by delaying or preventing such change in control. Theexistence of two classes of common stock could also present complexities andcould, in certain circumstances, pose obstacles, financial and otherwise, to anacquiring person. In addition, certain provisions of the Delaware law, the newcertificate of incorporation and the new by-laws may also deter hostile takeoverattempts. 20

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain statements contained in this prospectus, including the "CeleraGenomics Group--Management's Discussion and Analysis" and "PECorporation--Management's Discussion and Analysis" sections, are forward-lookingand are subject to a variety of risks and uncertainties. These statements may beidentified by the use of forward-looking words or phrases such as "believe,""expect," "anticipate," "should," "planned," "estimated," and "potential," amongothers. These forward-looking statements are based on our 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 thesafe harbor, we note that a variety of factors could cause our actual resultsand experience to differ materially from the anticipated results or otherexpectations expressed in such forward-looking statements. The risks anduncertainties that may affect the operations, performance, development, andresults of our businesses include, but are not limited to, those described under"Risk Factors." USE OF PROCEEDS The net proceeds we will receive from the sale of 3,230,000 shares of CeleraGenomics stock offered by us are estimated to be approximately $778.9 million,assuming a public offering price of $250 7/8 per share and after deducting theunderwriting discounts and commissions and estimated offering expenses payableby us. If the underwriters' over-allotment option is exercised in full, weestimate that the net proceeds to us would be approximately $895.9 million. Celera intends to use the net proceeds from this offering primarily to fundits new product and technology development activities in functional genomics,with an emphasis on proteomics, and personalized health/medicine. Theseactivities will require increased investment in Celera's laboratory,computational resources, software systems and business and product developmentoperations. Celera also intends to use the net proceeds of this offering forgeneral corporate purposes, including possible acquisitions, alliances orcollaborations. Pending such uses, Celera intends to invest the net proceeds of thisoffering in interest-bearing,investment-grade securities. 21

PRICE RANGE OF AND DIVIDENDS ON CELERA GENOMICS GROUP STOCK The Celera Genomics stock is listed on the New York Stock Exchange, theNYSE, under the symbol "CRA." The following table sets forth the range of highand low closing sale prices of the Celera Genomics stock as reported on the NYSEComposite tape since May 6, 1999, the effective date of the change of PECorporation's then outstanding common stock into PE Biosystems stock and CeleraGenomics stock, two new classes of common stock. On January 20, 2000, weannounced a two-for-one split of the Celera Genomics stock to be effected in theform of a 100 percent stock dividend payable to stockholders of record onFebruary 4, 2000. The distribution date of the stock dividend was February 18,2000, and the table below gives effect to the stock split.<TABLE><CAPTION> HIGH LOW -------- --------<S> <C> <C>FISCAL YEAR ENDED JUNE 30, 1999 Fourth Quarter (from May 6, 1999)......................... $ 11 1/4 $ 7 3/32FISCAL YEAR ENDED JUNE 30, 2000 First Quarter............................................. 26 29/32 7 7/8 Second Quarter............................................ 96 13/32 15 3/16 Third Quarter (through February 25, 2000)................. 276 73</TABLE> On February 25, 2000, the reported last sale price of the Celera Genomicsstock on the NYSE was $250 7/8 per share. There were approximately 6,000 recordholders of Celera Genomics stock as of December 31, 1999. We have not paid any cash dividends on the Celera Genomics stock, and we donot anticipate paying cash dividends on the Celera Genomics stock for theforeseeable future. Our board of directors does not currently intend to pay cash dividends onthe Celera Genomics stock but reserves the right to do so at any time basedprimarily on the financial condition, results of operations and businessrequirements of the Celera Genomics group and of our company as a whole. Inmaking its dividend decisions regarding the Celera Genomics stock, our board ofdirectors will rely on the financial statements of the Celera Genomics group.See the historical financial statements of the Celera Genomics group included inthis prospectus. Future dividends on the Celera Genomics stock will be payablewhen, as and if declared by our board of directors out of the lesser of (1) allfunds of our company legally available therefor and (2) the Celera Genomicsgroup's Available Dividend Amount. The Celera Genomic group's Available DividendAmount is intended to be similar to the amount that would be legally availablefor the payment of dividends on the stock for that group under Delaware law ifthat group were a separate company. See "Description of Capital Stock--CeleraGenomics Group Stock--Dividends." 22

CAPITALIZATION The following table sets forth the capitalization of the Celera Genomicsgroup and the consolidated capitalization of PE Corporation as of December 31,1999, and as adjusted to give effect to the offering (assuming no exercise ofthe over-allotment option and a public offering price of $250 7/8). The netproceeds of the offering will be reflected entirely in the financial statementsof the Celera Genomics group and not in those of the PE Biosystems group. As amatter of policy, PE Corporation manages most financial activities on acentralized, consolidated basis. For information concerning attribution of debtand equity to the Celera Genomics group, see "Celera Genomics Group--SelectedCombined Financial Information," "Celera Genomics Group--Management's Discussionand Analysis" and "Management and Allocation Policies." The table does not include 14.0 million shares of Celera Genomics stockissuable upon the exercise of outstanding stock options at a weighted averageexercise price of $6.88 per share at December 31, 1999 after giving effect tothe two-for-one stock split distributed on February 18, 2000.<TABLE><CAPTION> AT DECEMBER 31, 1999 ---------------------- ACTUAL AS ADJUSTED(DOLLAR AMOUNTS IN MILLIONS) -------- ----------- (UNAUDITED)<S> <C> <C>CELERA GENOMICS GROUP: Short-term debt........................................... $ 46.0 $ 46.0 Group equity(a)........................................... 260.3 1,039.2 -------- -------- Total capitalization...................................... $ 306.3 1$,085.2 ======== ========PE CORPORATION: Short-term debt........................................... $ 81.2 $ 81.2 Long-term debt due after one year......................... 37.1 37.1 Stockholders' equity(b)................................... 906.3 1,685.2 -------- -------- Total capitalization...................................... $1,024.6 1$,803.5 ======== ========</TABLE>------------------------(a) If the over-allotment option is exercised in full, the Group equity, as adjusted, for the Celera Genomics group would be $1,156.2 million.(b) If the over-allotment option is exercised in full, the stockholders' equity, as adjusted, for PE Corporation would be $1,802.2 million. 23

CELERA GENOMICS GROUP SELECTED COMBINED FINANCIAL INFORMATION The following selected combined financial information has been derived fromthe combined financial statements of the Celera Genomics group for each of thefour fiscal years in the period ended June 30, 1999 and the six month periodsended December 31, 1998 and 1999. The information set forth below should be readin conjunction with the Celera Genomics group "Management's Discussion andAnalysis" and combined financial statements and notes thereto included in thisprospectus; the PE Corporation "Management's Discussion and Analysis" includedin this prospectus; and the PE Corporation consolidated financial statements andnotes thereto contained in the PE Corporation Annual Report to Stockholders forthe year ended June 30, 1999, and in the PE Corporation Quarterly Report onForm 10-Q for the quarterly period ended December 31, 1999, each incorporatedherein by reference. There is no selected combined financial information forfiscal 1995 since the Celera Genomics group commenced business in fiscal 1996.The data for the six month periods ended December 31, 1998 and 1999 have beenderived from unaudited financial statements which, in the opinion of management,reflect all adjustments necessary for a fair presentation of results for theperiods covered. On May 6, 1999, PE Corporation recapitalized its former common stock into PECorporation - Celera Genomics Group Common Stock and PE Corporation - PEBiosystems Group Common Stock. Therefore, no Celera Genomics stock was issued oroutstanding for periods prior to May 6, 1999. On January 20, 2000, the Board of Directors announced a two-for-one stocksplit of Celera Genomics stock. The two-for-one split was effected in the formof a 100% stock dividend on February 18, 2000 to stockholders of record as ofthe close of business on February 4, 2000. All Celera Genomics group share andper share data reflect this split. Items impacting the comparability of information presented for these periodsincluded acquired research and development charges of $2.1 million for fiscal1996 and $26.8 million for fiscal 1997, relating to the acquisition of ZoogenInc. in fiscal 1996 and the acquisition of GenScope and Linkage in fiscal 1997,and $5.6 million and $.6 million of charges for fiscal 1999 and the six monthsended December 31, 1998, respectively, relating to the recapitalization andtransformation of PE Corporation.<TABLE><CAPTION> FOR THE SIX MONTHS FOR THE FISCAL YEARS ENDED JUNE 30, ENDED DECEMBER 31, ----------------------------------------- -------------------(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) 1996 1997 1998 1999 1998 1999------------------------------------------------------ -------- -------- -------- -------- -------- -------- (UNAUDITED)<S> <C> <C> <C> <C> <C> <C>SUMMARY OF OPERATIONSNet revenues.................................... $ 159 $ 903 $ 4,211 $ 12,541 $ 5,631 $ 16,625Net loss........................................ (2,589) (30,247) (8,315) (44,894) (12,216) (43,676) Per share of common stock Basic and diluted........................... $ (.89) $ (.84)OTHER INFORMATIONCash and cash equivalents....................... $ -- $ -- $ -- $ 71,491 $ -- $ 53,955Note receivable from the PE Biosystems Group.... -- -- -- 150,000 310,852 150,000Working (deficit) capital....................... (340) (421) (1,160) 192,803 308,579 152,448Capital expenditures............................ 1,073 411 3,648 94,541 17,380 19,867Total assets.................................... 977 2,983 6,339 344,720 338,531 349,529Total debt...................................... -- -- -- -- -- 46,000Group equity (deficit).......................... 611 (3,464) (1,259) 293,867 325,060 260,297</TABLE> 24

CELERA GENOMICS GROUP MANAGEMENT'S DISCUSSION AND ANALYSISMANAGEMENT'S DISCUSSION OF OPERATIONS The Celera Genomics group includes the business and operations of GenScopeand AgGen. GenScope provides genomic-related contract research and discoveryservices, utilizing AFLP-based gene expression profiling technology. AgGen is aprovider of genetic analysis services for plant and animal breeding. Thepurchases of Linkage Genetics, Inc. in 1997 and Zoogen Inc. in 1996 werecombined with our applied agriculture unit to form AgGen. In fiscal 1999, thesebusinesses were integrated into the core business of providing genomicinformation and related gene discovery and genomic services. Operations prior to September 30, 1998 were principally funded from workingcapital, collaborative arrangements and contract research services. Net lossesfor fiscal 1997, 1998, and 1999 were $30.2 million, $8.3 million, and$44.9 million, respectively. Net losses for the six months ended December 31,1998 and 1999, were $12.2 million and $43.7 million, respectively. Results forthe six months ended December 31, 1998 and 1999, and the fiscal year endedJune 30, 1999 reflected the significant increase in R&D expenditures to supportthe genomic sequencing efforts. Fiscal 1999 and the six months endedDecember 31, 1998 included non-recurring before-tax costs of $4.6 million and$.6 million, respectively, incurred in connection with the recapitalization ofPE Corporation. Fiscal 1999 included $1.0 million for costs related to theacceleration of certain long-term compensation programs. Results through fiscal1998 primarily reflected the operations of GenScope and AgGen. Fiscal 1997results included charges of $26.8 million for purchased in-process research anddevelopment. The following discussion with respect to fiscal years 1997, 1998, and 1999,and the six months ended December 31, 1998 and 1999, should be read inconjunction with the Celera Genomics group's combined financial statements andrelated notes included in this prospectus and PE Corporation's consolidatedfinancial statements and related notes incorporated by reference herein; and PECorporation's "Management's Discussion and Analysis" included in thisprospectus. Historical results and percentage relationships are not necessarilyindicative of operating results for any future periods.EVENTS IMPACTING COMPARABILITYACQUISITIONS AND INVESTMENTS During the third quarter of fiscal 1999, PE Corporation acquired a 49%interest in Agrogene S.A. for $1.2 million. The investment complements theCelera Genomics group's automated DNA sequencing and genotyping services in theagricultural field. During the fourth quarter of fiscal 1997, PE Corporation acquiredLinkage, Inc., a provider of genetic analysis services in the agricultureindustry. At the acquisition date, the technological feasibility of the acquiredtechnology had not been established and the acquired technology had no futurealternative uses. The acquisition cost of $1.4 million was expensed as purchasedin-process research and development. During the third quarter of fiscal 1997, PE Corporation acquiredGenScope, Inc. for $26.8 million. GenScope, founded in 1995, represented adevelopment stage venture with no operating history. GenScope had effectively norevenues and only limited R&D contract services. At the acquisition date,technological feasibility of the acquired technology right had not beenestablished and the acquired technology right had no future alternative uses.The Celera Genomics group obtained the right to utilize AFLP-based geneexpression profiling technology in the field of human health, but did not obtainany core technology or other rights. GenScope's limited balance sheet, withassets of approximately $.2 million, had yet to deliver commercial value.Therefore, of the $26.8 million paid for GenScope, $25.4 million was charged topurchased in-process technology and $1.4 million was allocated to technologyrights attributable to GenScope's AFLP-based gene expression profilingtechnology. AFLP is an enhancement of the polymerase chain reaction ("PCR")process that allows selective analysis of any portion of genetic material 25

without the specific, prior sequence information normally required for PCR. Ofthe $25.4 million expensed as in-process research and development, $5.5 millionrepresented a contingent liability due on the issuance of a process patent fortechnology under development. Through June 30, 1999, GenScope incurredapproximately $12.2 million in additional research and development costs tofurther develop the AFLP technology in the field of human health. The CeleraGenomics group anticipates spending an additional $2.2 million in fiscal 2000 tosubstantially complete such project.RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 COMPARED WITHTHE SIX MONTHS ENDED DECEMBER 31, 1998 The Celera Genomics group reported a net loss of $43.7 million for the firstsix months of fiscal 2000, compared with a net loss of $12.2 million for thefirst six months of fiscal 1999. The increase in the net loss reflected theincreased sequencing activity and increased operating expenses required tosupport the expanded data management and software and business developmentactivities. Net revenues for the Celera Genomics group were $16.6 million for the firstsix months of fiscal 2000 compared with $5.6 million for the first six months offiscal 1999. The increased revenues were primarily a result of databasesubscription agreements initiated during the second half of fiscal 1999 and anincrease in genomics services revenues. Revenues for plant and animal genotypingservices remained essentially unchanged. R&D expenses increased $57.4 million to $70.3 million for the first sixmonths of fiscal 2000 from $12.9 million for the first six months of fiscal 1999primarily as a result of a full six months of sequencing operations andsignificantly expanded bioinformatics and software development capabilities. SG&A expenses were $17.9 million for the first six months of fiscal 2000compared with $10.6 million for the first six months of fiscal 1999. Theincrease was related to the planned scale-up in business development, marketingand administrative activities in support of the database business. Corporateexpenses and administrative shared services were $4.1 million for the first sixmonths of fiscal 2000 compared with $2.4 million for the first six months offiscal 1999. The increase is a result of corporate expenses attributable to theCelera Genomics group. See Note 1 to the Celera Genomics group's combinedfinancial statements included in this prospectus for a discussion of allocationsof corporate overhead and administrative shared services. The Celera Genomics group was allocated a non-recurring before-tax charge of$.6 million in the first six months of fiscal 1999. These costs were incurred inconnection with the recapitalization of PE Corporation. The Celera Genomicsgroup and the PE Biosystems group were each allocated 50% of the $1.2 milliontotal recapitalization costs incurred during the first six months of fiscal1999. Interest expense was $.7 million for the first six months of fiscal 2000 asa result of PE Corporation's financing of the purchase of the Rockville,Maryland facilities. Interest income was $5.1 million for the first six monthsof fiscal 2000, which was primarily attributable to interest on the$150 million note receivable from the PE Biosystems group, as well as interestreceived on cash balances. The effective income tax rate was 35% for the first six months of fiscal2000 and 34% for the first six months of fiscal 1999. Excluding special itemsfor the first six months of fiscal 1999, the effective income tax rate was 35%.See Note 1 to the Celera Genomics group's combined financial statements includedin this prospectus for a discussion of allocations of federal and state incometaxes.RESULTS OF OPERATIONS--1999 COMPARED WITH 1998 The Celera Genomics group reported a net loss of $44.9 million for fiscal1999 compared with a net loss of $8.3 million for fiscal 1998. The significantincrease in the net loss reflected the establishment and start-up of operationsto support the expanded sequencing, data management, and software developmentactivities of the business. 26

Net revenues for the Celera Genomics group were $12.5 million for fiscal1999 compared with $4.2 million for fiscal 1998. Net revenues for agriculturalgenotyping and gene discovery services were $8.4 million for fiscal 1999, anincrease of $4.5 million over the prior period. The increase included$3.2 million attributable to a three-year contract to provide expression-basedgene discovery services in the agricultural market. The contract commenced inthe first quarter of fiscal 1999. Revenues from the Celera Genomics group's newgenomic information and database products were $2.8 million for fiscal 1999,mainly from early access subscriptions. Revenues for genomics contract servicesincreased $1.0 million for fiscal 1999 as a result of increased contractresearch services using AFLP technology. R&D expenses increased $38.1 million to $48.4 million for fiscal 1999 from$10.3 million for fiscal 1998 primarily as a result of establishing andoperating the sequencing facility and computing center of the new genomicsinformation business. SG&A expenses were $28.3 million for fiscal 1999 compared with $6.7 millionfor the prior year. The increase resulted from expenses associated with thestart-up and ongoing operations of the new genomic information business.Corporate overhead and administrative shared services were $5.1 million forfiscal 1999 compared with $1.7 million for fiscal 1998. Fiscal 1999 SG&Aexpenses included $1.0 million for costs related to the acceleration of certainlong-term compensation programs as a result of the recapitalization of ourcompany and the attainment of performance targets. During fiscal 1999, the Celera Genomics group was allocated a before-taxspecial charge of $4.6 million for costs incurred in connection with therecapitalization of our company. The Celera Genomics group and the PE Biosystemsgroup were each allocated 50% of the $9.2 million total recapitalization costsincurred by our company. These costs included investment banking andprofessional fees. Interest income was $1.2 million for fiscal 1999. Interest income included$.5 million of interest on cash balances and $.7 million of interest on the$150 million note receivable from the PE Biosystems group. The effective income tax rate was 34% for fiscal 1999 and 35% for fiscal1998. See Note 1 to the Celera Genomics group combined financial statementsincluded in this prospectus for a discussion of allocations of federal and stateincome taxes.RESULTS OF OPERATIONS--1998 COMPARED WITH 1997 The Celera Genomics group reported a net loss of $8.3 million for fiscal1998 compared with a net loss of $30.2 million for the prior year, or a net lossof $3.4 million excluding the $26.8 million for purchased in-process researchand development charged in connection with the GenScope and Linkageacquisitions. Net revenues for the Celera Genomics group were $4.2 million for fiscal 1998compared with $.9 million for fiscal 1997. Revenues for genetic analysisservices increased to $3.9 million for fiscal 1998 primarily from the animalbusiness. Revenues were $.3 million in fiscal 1998 from contract researchutilizing AFLP-based gene expression profiling technology. Fiscal 1997 revenueswere entirely attributable to genetic analysis services. R&D expenses were $10.3 million for fiscal 1998 compared with $4.0 millionfor fiscal 1997. Fiscal 1997 included the operations of Linkage and GenScopefrom the date of acquisition. SG&A expenses were $6.7 million for fiscal 1998 compared with $2.2 millionfor fiscal 1997. Fiscal 1998 included $1.7 million of corporate overhead andadministrative shared services. The amount of allocated corporate overhead andshared services for fiscal 1997 was $.2 million. Fiscal 1997 included theoperations of Linkage and GenScope from the date of acquisition. 27

The effective income tax rate was 35% for both fiscal 1998 and fiscal 1997.Fiscal 1997 included a tax benefit of $1.9 million on a before-tax loss of$32.1 million. The fiscal 1997 charge of $26.8 million for acquired research anddevelopment was not deductible for tax purposes. See Note 1 to the CeleraGenomics group combined financial statements included in this prospectus for adiscussion of allocations of federal and state income taxes.MANAGEMENT'S DISCUSSION OF FINANCIAL RESOURCES AND LIQUIDITY The development of the Celera Genomics group's products and servicesrequires substantial funding. No organization has ever attempted to combine inone business organization all of the Celera Genomics group's businesses. AtSeptember 30, 1998, we allocated to the Celera Genomics group a $330 millionshort-term note receivable from the PE Biosystems group. The $330 million noterepresented an allocation of our capital to the Celera Genomics group and didnot result in the PE Biosystems group holding an equity interest in the CeleraGenomics group. Accordingly, no interest was ascribed to the note. Theallocation of capital represented management's decision to allocate a portion ofour capital to the Celera Genomics group and the remaining capital to the PEBiosystems group prior to the effective date of the recapitalization. The notereceivable was liquidated on May 28, 1999 in exchange for a portion of theproceeds received from the sale of the Analytical Instruments business and a newnote receivable from the PE Biosystems group for $150 million was established.The new note receivable was for a term of one year, bears an interest rate of 5%per annum, and is payable on demand without penalty. At December 31, 1999, theoutstanding balance of the note receivable was $150 million. PE Corporation intends to allocate tax benefits to the Celera Genomics groupfor losses incurred, resulting in up to $75 million of additional cash resourcesfor the Celera Genomics group. PE Corporation also secured financing of$46 million in the first quarter of fiscal 2000 specifically for the Rockville,Maryland facilities acquired in fiscal 1999. Management believes that theremaining balance of the $330 million funding and allocated tax benefits, andthe financing for the facilities and anticipated revenues of the Celera Genomicsgroup, should be sufficient to fund its original business objectives, which werelargely based on the sequencing and assembly of the human genome. In addition, our board of directors has adopted a financing policy,discussed in Note 1 to the Celera Genomics group combined financial statements,which will permit the PE Biosystems group to make loans to the Celera Genomicsgroup and to make equity contributions to the Celera Genomics group in exchangefor an equity interest in the Celera Genomics group.SIGNIFICANT CHANGES IN THE COMBINED STATEMENTS OF FINANCIAL POSITION Cash and cash equivalents were $54.0 million at December 31, 1999 comparedwith $71.5 million at June 30, 1999. During the first quarter of fiscal 2000, PECorporation secured financing of $46 million specifically for the purchase ofthe Celera Genomics group's Rockville, Maryland facilities. PE Corporationanticipates that the $46 million financing will remain outstanding beyond thecurrent fiscal year. At December 31, 1999 and June 30, 1999, the Celera Genomics group had a$9.4 million and $9.9 million tax benefit receivable from the PE Biosystemsgroup. These amounts represent the tax benefits for the second quarter of fiscal2000 and the fourth quarter of fiscal 1999, respectively. The tax benefitreceivable is settled on a quarterly basis. See Note 1 to the Celera Genomicsgroup combined financial statements included in this prospectus for a discussionof allocations of federal and state income taxes. Accounts receivable increased $6.5 million to $9.8 million at December 31,1999, from $3.3 million at June 30, 1999, primarily as a result of increaseddatabase subscriptions and genomics service revenue. 28

Prepaid expenses and other current assets increased $9.5 million to$13.0 million at December 31, 1999 from $3.5 million at June 30, 1999. Theincrease included a deferred tax asset of $6.6 million resulting from the CeleraGenomics group's operating losses. Net property, plant and equipment increased $100.0 million to$104.2 million at June 30, 1999 from $4.2 million at June 30, 1998. The increasewas primarily a result of significant capital expenditures to establish theCelera Genomics group's Rockville, Maryland facilities. Accounts payable decreased $5.2 million to $14.7 million at December 31,1999 from $19.9 million at June 30, 1999 primarily as a result of softwarelicense fees incurred during the fourth quarter of fiscal 1999. Accounts payableincreased by $19.4 million to $19.9 million at June 30, 1999 from $.5 million atJune 30, 1998 as a result of the Celera Genomics group establishing itsinfrastructure. The balance at June 30, 1999 included $9.0 million for capitalexpenditures, as previously described, and $5.2 million for purchases from thePE Biosystems group. Accrued salaries and wages increased $4.0 million to $4.2 million atJune 30, 1999 from $.2 million at June 30, 1998. The increase reflected thegrowth in the number of employees during fiscal 1999 and the timing of payments. Deferred revenues decreased $.2 million to $11.8 million at December 31,1999 compared with $12.0 million at June 30, 1999 due to revenue recognizedunder database subscription contracts offset by timing of payments received forsubscription and gene discovery agreements. Deferred revenues were$12.0 million at June 30, 1999 compared with $.3 million at June 30, 1998. Theincrease pertained primarily to early access subscriptions to the new genomicinformation database product. Other accrued expenses decreased $2.6 million to $6.6 million atDecember 31, 1999 compared with $9.3 million at June 30, 1999 as a result ofpayments for fiscal year-end accruals. Other accrued expenses were $9.3 millionat June 30, 1999, an increase of $8.2 million from $1.1 million at June 30,1998. At June 30, 1999, the Celera Genomics group accrued a liability of$2.5 million for its portion of costs associated with the recapitalization of PECorporation and a liability of $1.3 million for certain long-term compensationprogram costs.COMBINED STATEMENTS OF CASH FLOWS Cash used by operating activities was $46.9 million for the first six monthsof fiscal 2000 compared with $10.3 million for the same period in the prioryear. The increase in cash used by operating activities resulted primarily fromhigher net operating losses. Cash used by operating activities was$22.8 million for fiscal 1999 compared with $6.9 million for the prior year. Theincrease in cash used by operating activities resulted primarily from netoperating losses and the tax benefit receivable from the PE Biosystems group.This was offset partially by an increase of $11.7 million in deferred revenuesand an increase of $19.4 million in accounts payable. For fiscal 1998, net cashused by operating activities was $6.9 million compared with $3.1 million forfiscal 1997 reflecting higher net operating losses for fiscal 1998. Net cash used by investing activities for capital expenditures was$19.9 million for the first six months of fiscal 2000 compared with$17.4 million for the first six months of fiscal 1999. Fiscal 2000 capitalexpenditures included payments for software licenses acquired during the fourthquarter of fiscal 1999 and expenditures associated with the continueddevelopment of the laboratories, facilities, and data center at the Rockville,Maryland facilities. The capital spending for the first six months of fiscal1999 included $7.8 million of purchases for the PE Biosystems group's ABIPrism-Registered Trademark- 3700 DNA Analyzers and $.5 million for otherinstrumentation purchased from the PE Biosystems group. The Celera Genomicsgroup's investments during the first six months of fiscal 2000 includedacquisitions of the Panther-TM- technology from Molecular Applications Group anda 47.5% equity interest in Shanghai GeneCore BioTechnologies Co., Ltd. Net cashused by investing activities of $95.8 million for fiscal 1999 was comprised ofcapital expenditures of $94.5 million and an equity investment in Agrogene of$1.2 million. Capital expenditures 29

were $3.6 million for fiscal 1998. Capital expenditures increased significantlyas a result of the establishment and start-up of operations at the CeleraGenomics group's Rockville, Maryland facilities. Included in the increase was$46.3 million for land and buildings to house its headquarters and$22.9 million for improvements thereon. Additionally, the increase included$9.0 million for assets received but not yet paid, $8.1 million related to datamanagement software licenses and $.9 million for facility-related items. Fiscal1999 capital expenditures also included $8.4 million for the PE Biosystemsgroup's ABI Prism-Registered Trademark- 3700 DNA Analyzers and $1.6 million forother instrumentation purchased from the PE Biosystems group. Net cash used byinvesting activities of $3.6 million for fiscal 1998 primarily reflected ourcapital investment in the genomics services business. Net cash used by investingactivities for fiscal 1997 was $23.1 million and related to the acquisition ofGenScope in the third quarter of fiscal 1997 and Linkage in the fourth quarterof fiscal 1997. See Note 2 to the Celera Genomics group combined financialstatements included in this prospectus. Net cash provided by financing activities was $52.2 million for the firstsix months of fiscal 2000 compared with $27.7 million for same period in theprior year. During the first quarter of fiscal 2000, PE Corporation securedfinancing of $46 million specifically for the Rockville, Maryland facilities. Inthe first six months of fiscal 2000, the Celera Genomics group received$6.2 million in proceeds from employee stock option exercises. Net cash providedby financing activities for the first six months of fiscal 1999 was$27.7 million, attributable entirely to the funding of that year's operations byPE Corporation. Net cash provided by financing activities was $190.0 million forfiscal 1999 reflecting the initial capitalization of $330 million offsetpartially by the note receivable of $150 million. Net cash provided by financingactivities for fiscal 1998 was $10.5 million, attributable entirely to thefunding of that year's operations by PE Corporation.YEAR 2000 In fiscal 1997, PE Corporation initiated a worldwide program to assess theexpected impact of the Year 2000 date recognition problem on our existinginternal computer systems; our non-information technology systems, includingembedded and process control systems; our product offerings; and our significantsuppliers. The operations of the Celera Genomics group are included within thisprogram. The purpose of this program has been to ensure the event does not havea material adverse effect on our business operations. While not all possible Year 2000 date related disruption scenarios have beenexperienced, and there is a possibility of disruptions in the future, throughthe date of this prospectus, we have experienced no material disruption or othersignificant problems. We will continue to evaluate and mitigate our exposure inareas where appropriate. Based on currently available information, we continueto believe that Year 2000 related disruptions or other problems, if any, willnot have a material adverse effect on our operations or financial condition.However, we cannot be certain that Year 2000 issues will not have a materialadverse effect on PE Corporation, since the evaluation process is not yetcomplete and it is early in the Year 2000.RECENTLY ISSUED ACCOUNTING STANDARDS In June 1998, the Financial Accounting Standards Board ("FASB") issuedStatement of Financial Accounting Standards ("SFAS") No. 133, "Accounting forDerivative Instruments and Hedging Activities." The provisions of the statementrequire the recognition of all derivatives as either assets or liabilities inthe statement of financial position and the measurement of those instruments atfair value. The accounting for changes in the fair value of a derivative dependson the intended use of the derivative and the resulting designation. The CeleraGenomics group is required to implement the statement in the first quarter offiscal 2001. The Celera Genomics group currently believes the statement will nothave a material impact on its combined financial statements. 30

OUTLOOK The Celera Genomics group expects to see an expansion in the customer basefor its new genomic information and database products, with correspondingincreases in revenues throughout fiscal 2000. During the second quarter offiscal 2000, the Celera Genomics group entered into a five-year comprehensivegenomics agreement with Pfizer Inc. which includes a subscription to all ofCelera Genomics group's current database products and a collaborative genediscovery agreement. Pfizer's database subscription gives it access to fivedatabases developed by the Celera Genomics group until 2005. All of thesedatabases integrate the Celera Genomics group's proprietary information withpublicly available sources. Despite the potential for increased revenues infiscal 2000, the Celera Genomics group expects that it will continue to incursignificant operating losses for such year. Operating expenses will increase over the balance of the fiscal year as theCelera Genomics group continues to improve its sequencing throughput andinstalls additional hardware and software designed to accelerate productdevelopment and support for its information delivery systems. The Celera Genomics group recently completed the sequencing phase indeciphering the genome of DROSOPHILA, the fruit fly. In January, 2000, theCelera Genomics group announced it had compiled DNA sequence in its databasethat covers 90% of the human genome. As a result of the extensive sequencecoverage of the 23 pairs of human chromosomes and based on statistical analysis,the Celera Genomics group believes that greater than 97% of all human genes arenow represented in its database. As a result of Celera's successful sequencingand assembly of DROSOPHILA and the accelerated availability of data from publichuman genome sequencing efforts, Celera believes that it can sequence andassemble the human genome on an accelerated basis. Celera Genomics expects tocomplete the sequencing phase of the human genome by mid-2000 and the assemblyphase by the end of 2000, or one year ahead of its original schedule. Celera Genomics' progress to date has placed it well ahead of its originalschedule. Consequently, Celera Genomics intends to make significant newinvestments to expand beyond the genome and to take advantage of what itbelieves will be new market opportunities in the emerging fields of functionalgenomics, in particular proteomics, and personalized health/medicine. Newrevenue opportunities in these fields range from expansion of Celera'sinformation and service businesses to the licensing of proprietary discoveriesresulting from the new information. Celera intends to use the net proceeds from this offering primarily to fundits new product and technology development activities in functional genomics,with an emphasis on proteomics, and personalized health/medicine. Theseactivities will require increased investment in Celera's laboratory,computational resources, software systems and business and product developmentoperations. Celera also intends to use the net proceeds of this offering forgeneral corporate purposes, including possible acquisitions, alliances orcollaborations. Pending such uses, Celera intends to invest the net proceeds ofthis offering in interest-bearing, investment-grade securities. We believe that Celera Genomics' existing cash and cash equivalents and thenote receivable and tax benefit receivable from the PE Biosystems group aresufficient to fund its operating expenses and capital requirements related toits original business plan, which relates to the sequencing and assembly of thehuman genome and the development of informational products and services based onthe resultant data. While we intend to use the net proceeds of the CeleraGenomics stock offering to fund Celera's expansion into functional genomics andpersonalized health/medicine, such funds may not be sufficient to support thesenew business activities as they develop. Celera's actual future capital uses andrequirements with respect to its new activities will depend on many factors,including those discussed under "Risk Factors." 31

BUSINESS OF THE CELERA GENOMICS GROUPOVERVIEW The Celera Genomics group is engaged principally in: - the generation, sale and support of genomic, proteomic and related biological and medical information and supporting related information management and analysis software tools; - the discovery, validation and licensing of proprietary gene products, genetic markers and information concerning genetic variability and functional genomics; and - related consulting and contract research and development services. We and Dr. J. Craig Venter, a leading genomic scientist and founder of TheInstitute for Genomic Research ("TIGR"), formed the Celera Genomics business forthe purpose of generating and commercializing genomic, proteomic and relatedbiological and medical information to accelerate the understanding of biologicalprocesses and to assist pharmaceutical, biotechnology and life science researchentities in areas of research including: - new drugs and improved drug development processes; - novel genes and factors that regulate and control gene expression; - understanding basic biological processes; - interrelationships between genetic variability, disease and drug response; and - personalized health/medicine. There are three components to the Celera Genomic group's strategy ofdelivering valuable genomic, proteomic and related biological and medicalinformation in the form of an integrated information and discovery system. Thefirst component, the sequencing of the human genome, lays the foundation for thetwo additional components, functional genomics and personalized health/medicine.The system will include increasing layers of functional information, such asgene and protein expression data, comparative data from other model organisms,such as DROSOPHILA (fruit fly) and mouse, genetic variation and, ultimately,linkage to medical associations. Users of the system will have the ability toview, browse and analyze the data in an integrated way that should assistscientists and commercial enterprises in accelerating their understanding of thehuman genetic code. The Group anticipates using its genomic and proteomic dataas a platform upon which to develop related databases, software tools, andservices. The Group anticipates that this biological data, together with suchdatabases, tools and services, will become a comprehensive scientific andmedical resource for a wide range of customers, including companies in thepharmaceutical and biotechnology industries and ultimately, physicians andindividuals.INDUSTRY BACKGROUND Genomics is the study of all the genetic information of a species and itsrelationship to disease. Its use in identifying targets for drug development isa relatively new and evolving field. Industry analysts expect genomics to lead amedical "revolution" in the identification and treatment of disease based ongrowing evidence that genes play a significant role among most major diseases. The human genome governs all cellular function, which, in turn, determinesall human physiology, such as metabolism, susceptibility to disease andreactions to certain drugs. The human genome is organized into 23 pairs ofchromosomes, which include the X and Y chromosomes that determine sex. Thesechromosomes, in turn, comprise strands of DNA molecules that consist of longchains of chemical subunits, called nucleotides. There are fournucleotides--adenine, cytosine, guanine, and thymine often abbreviated withtheir first letters A, C, G, and T. DNA molecules consist of two long chains ofnucleotides bound together by base pairing of the nucleotides. Approximately3.2 billion nucleotide base pairs, or 32

6.4 billion total bases, make up the entire human genome. It is the uniquesequence of the nucleotide arrangement that determines cellular structure andfunction. Certain sequences of nucleotides, called genes, carry the specificinformation necessary to construct proteins that regulate every aspect of humanlife. Most importantly, genes not only regulate human physiology but are also animportant determinant of human health and disease pathways. Genes may containfrom several dozen to millions of nucleotides. The Celera Genomics groupbelieves the best scientific evidence to date indicates that the number of genesin the human genome is between 50,000 and 80,000, although some have estimatedthe number to be as high as 150,000. Less than 10,000 genes have been well"characterized." Some genes have been partially tagged through partial genesequencing (ESTs, also known as expressed sequence tags), although most of theseare not from regions that code for proteins and are without known function.Despite what has been discovered to date, only a limited amount is understoodabout the human genome, and significant additional discoveries are necessary todevelop a more comprehensive understanding of the genome, its genes andregulatory mechanisms. Bases that vary between any two individuals are referred to as singlenucleotide polymorphisms or SNPs. Different forms of the same gene are known asalleles. Since genes determine protein characteristics, alleles might beresponsible for differences in proteins. Most of these differences do notinfluence gene function; therefore, they have no medical significance. Forexample, alleles might lead to differences in eye color without affecting theability to see. However, some polymorphisms might be associated with diseases,proclivity to disease or predictable responses to pharmaceuticals through themodification of associated proteins. Some diseases (e.g., muscular dystrophy) are caused by DNA variation in asingle gene and are described as monogenic. There are a few thousand monogenicdiseases which have been found by studying family genetic attributes, as thesediseases frequently leave a hereditary trace. Far more common and widespreaddiseases (e.g., diabetes, cancer, obesity) which are caused by DNA variation inmore than one gene are described as polygenic. Understanding polygenic diseasesrequires the genetic analysis of a large population of unrelated individuals andthe association of polymorphisms with such environmental factors as diet,lifestyle and exposure to toxic substances. Each SNP is a potential genetic marker. Genetic linkage maps are constructedfrom patterns of genetic markers. The process of following the pattern left bygenetic markers in individuals with an inherited disease but absent inindividuals without the disease is called linkage analysis. This processrequires determining the genetic composition or "genotyping" of numerous DNAsamples from populations of healthy individuals and those diagnosed with adisease. A genotype is associated with a disease through a complex, statisticalcomparison of genetic markers. SNP analysis can be used to measure theassociation of a genotype and a disease. The use of gene maps, linkage analysis, positional cloning and genotypingare essential tools of SNP analysis. The diagnosis and treatment of monogenicdiseases have benefitted greatly from SNP analysis. Advancements in informationtechnology, high-throughput sequencing and phenotyping have enabled genomicsresearchers to pursue the study of more complex polygenic diseases.Understanding the numerous genetic and environmental factors associated withthese diseases is expected to accelerate the development of diagnostic tests,pharmaceutical therapies and prevention programs. Celera believes that the healthcare and life sciences industry will rely onSNP analysis to improve the efficacy and safety of pharmaceuticals and thedevelopment of more reliable tests for diseases with known genetic traits.Although the role of genetics in medicine is widely understood to besignificant, the information and analytical tools available to the industry havebeen limited. Celera believes that the wealth of information generated throughits sequencing operations with the application of SNP technologies will enablemanufacturers to develop and introduce a far greater volume of bettertherapeutic and diagnostic products at a lower cost and faster pace. 33

FUNCTIONAL GENOMICS The basis for understanding cellular process starts with a genome, thecomplete cataloging of genetic complements of a species. As more informationabout the genome is completed and most genes are identified, research into whichgenes are responsible for cellular functions can be accelerated. The field offunctional genomics aims to address this question by the direct identificationand characterization of various gene/protein expression patterns that modulatethe cellular process. Gene expression is the process by which a gene's coded information istranslated into the production of proteins within a cell. While all cellscontain the full set of DNA, different cells express different sets of genesdepending on cell type and environmental conditions. Certain diseases also arisefrom the "over" or "under" expression of genes. Expression is comprised of two phases: transcription and translation.Transcription is the generation of RNA, which is the message sent by DNA to makeprotein. Translation is the production of the protein from the RNA. Expressionanalysis can be performed by looking at changes in the quantity of RNA produced,or by identifying and characterizing the proteins that are translated. Further,protein formation also involves post-translational modifications. Many of thesemodifications have profound effects on the cellular differentiation,proliferation and other biological processes. A very important goal for biology and pharmaceutical research anddevelopment is to establish a direct correlation between the "sequence"information of the human genome and the "sequence" information in proteins. Thisfield is generally referred to as proteomics. Proteins are large complexmolecules that control and mediate most of the cell's activities. Success indrug discovery is a function of the amount known about the structure andfunction of a particular protein. Genomics yields novel protein drug targets by the initial identification ofthe genes that encode them. Proteomics seeks to determine what proteins arebeing made where, in what amount and under what conditions. By integrating geneand protein information together, researchers are able to trace amino acidsequences back to corresponding gene sequences. That in turn enables them totake data on the quantities of proteins present in samples and link it to thegene expression data, providing a new level of detail on how genes actuallyregulate proteins in cells. PERSONALIZED HEALTH/MEDICINE The Celera Genomics group expects that genomic information will be used todevelop molecular diagnostic tests to identify the genetic make-up ofindividuals. These diagnostic tests will contribute to a more personalizedapproach to medicine. For example, there are many types of cancer that havesimilar disease manifestations. Because these disease manifestations may besimilar between one type of cancer and another, it may be important todifferentiate between the actual type of disease rather than just the symptomsin prescribing an effective treatment. It is believed that, rather thanprescribing a drug based solely on disease manifestations, physicians will beable to use a molecular diagnostic test to help select the most effective drugwith fewer negative side effects. As a result, this approach should benefit thepatient with more customized care, reduced illness length, and ultimately,better treatment results.VALUE OF GENOMICS AND FUNCTIONAL GENOMICS The Celera Genomics group believes that the fields of genomics, functionalgenomics and personalized health/medicine will significantly benefit thefollowing areas of research: TARGET IDENTIFICATION AND DRUG DISCOVERY. One of the most important factorslimiting the development of new drugs is the limited number of known diseasetarget molecules for which new drugs can be developed. Disease target moleculesare those which can be affected by a drug and cause a subsequent, desiredbiological reaction in the body. Historically, the process of discovering newtarget molecules has been extremely slow and very expensive due to reliance ontrial and error approaches to discovery. The Celera Genomics group expectsgenomics to play a long-term role in the discovery of targets for new small 34

molecule drugs and protein drugs. A typical pharmaceutical is an organicchemical that provides therapeutic benefit by specifically interacting with aprotein in the body whose action causes or contributes to a disease. Success indrug discovery is a function of the amount known about the structure andfunction of a particular protein. Celera believes functional genomics willprovide the pharmaceutical industry and others with high-quality validatedtargets. The Celera Genomics group expects that discoveries of targets for newsmall molecule drugs and novel protein drugs will have a substantial impact onthe treatment of virtually all diseases, including cardiovascular diseases,infectious diseases, neuropsychiatric disorders, asthma, obesity, diabetes andcancers. PHARMACOGENOMICS AND DRUG DEVELOPMENT. Pharmacogenomics, an outgrowth ofgenomic research, is also a rapidly evolving field and focuses on identifyinggenetic variability factors that may affect an individual's response to aspecific drug. In the United States, approximately 2.2 million people per yearare admitted to hospitals as a result of adverse side effects from drugs; morethan 100,000 die annually from these side effects. Organ-specific geneexpression profiles for drugs already available will enable researchers to studytoxicity of new drug compounds with more certainty. In addition, gene expressiondata, combined with polymorphism information related to metabolic pathways, willprovide important indications regarding how people individually react to drugsof various dosage levels. The Celera Genomics group expects that this approachwill allow a more personalized approach to medicine that will incorporatetailoring therapeutic modalities and dosage determination to maximize efficacywith minimum toxicity in treating disease and disorder processes. In addition, pharmacogenomics may be applied to the following: - Increasing the success rate of clinical trials by improving the process of patient population selection; - Identifying new uses for existing drugs; and - "Rescuing" drugs that have failed previous drug trials by identifying more appropriate populations for using the drug; candidates for rescued drugs include those where particular sub-populations react adversely to these drugs. DIAGNOSTICS AND DISEASE MANAGEMENT. As the understanding of genetic causesof disease improves, the Celera Genomics group expects genomics and the use ofprotein markers to enhance a physician's ability to diagnose and predictsusceptibility to particular diseases. As a result, such capabilities shouldalso lead to better treatment and monitoring of diseases. Diagnostic risk assessment has historically focused on measuring generalindicators in the body, such as blood pressure and cholesterol levels. Thesemeasurements are based on general symptoms rather than the specific geneticbasis of disease. As a consequence, Celera Genomics believes that thesediagnostic tests do not address the underlying cause of disease and can resultin compromised medical care for patients and increased risk of litigation. Newdiagnostics will focus on determining an individual's risk to develop aparticular disease by looking at specific genes or proteins and anydisease-related changes in a particular patient. These new diagnostics willlikely lead to better preventative care by offering more accurate assessments ofa patient's potential risk for developing a particular disease. The Celera Genomics group expects that the risk assessment areas ofdiagnostics will benefit from its efforts. Celera Genomics expects theinformation it develops to become the cornerstone for the development of newdiagnostic tests. Protein information can be used as a marker for diseasedetection once the correlation between the appropriate protein and its level ismade with a disease. Polymorphism information should be important in developingtests to predict safety and efficacy of pharmaceuticals and individuals'susceptibility to diseases. Knowing individual genomic information including allele variation, geneexpression levels, patterns and protein expression patterns, levels andmodifications should allow physicians to prescribe more appropriate treatmentstrategies. Individuals may also want access to this information to betterunderstand the correlation between their specific genetic information and theirsusceptibility to disease. 35

GENOMIC RESEARCH EFFORTS Most early genomic research was funded under the auspices of the HumanGenome Project, a worldwide coordinated effort to sequence the human genome,undertaken largely by governments and nonprofit organizations in the UnitedStates, England, Japan, France and other nations. In the United States, mostpublic funding for the Human Genome Project has come from the NationalInstitutes of Health ("NIH") and the Department of Energy. The Human GenomeProject has generated interest in genomics and encouraged the development oftechnology for and commercial interest in genomic research. Commercialization ofgenomic research began in the early 1990's and led to the development ofprivately-funded gene discovery initiatives focused on supplementing drugdiscovery efforts within the pharmaceutical industry. After the announcement bythe Celera Genomics group of its goals, the NIH and one private foundationannounced their intention to accelerate the projected completion date forsequencing the entire human genome to 2003. The NIH subsequently announced itsdecision to reallocate funding in order to further accelerate the Human GenomeProject's sequencing effort and to attempt to achieve a "working draft" of thegenome by spring of 2000. The underlying strategy of the public effort to sequence the human genome isbased on breaking up the genome into discrete sections of DNA that are mapped tochromosomes and then sequenced one section at a time. This strategy is intendedto provide a map of the genome upon which areas can be incrementally sequenced.The Celera Genomics group believes the public approach has commerciallimitations in addition to its high cost: - The human genome sequence information will be available at a slower rate; and - It will not produce polymorphism information to support the study of genetic variability that would result from sequencing the entire genome from multiple individuals. The NIH recently announced a program relying, in part, on Human GenomeProject data to address the absence of polymorphism information. The CeleraGenomics group believes that the NIH's funded efforts to generate a significantamount of information will be limited by its sequencing and polymorphismdetection strategies. A number of companies are sequencing segments of the human genome. However,these efforts have been limited to small, targeted areas of the genome due tothe technical and financial hurdles associated with sequencing the entire humangenome. The first genomics companies generally relied on the expressed sequence tag("EST") approach, a shortcut sequencing strategy using partial gene sequences asmarkers, developed by Dr. Venter when he was at the NIH. ESTs are derived fromtissues in which individual genes are expressed and help identify specific genesthat may be involved in particular diseases. Due to the nature of the ESTapproach, the genes identified are typically more highly expressed genes. Rarelyexpressed genes that may be of more interest in studying disease are not aslikely to be identified by the EST approach. Although the EST approach has beenconsiderably faster than other methods and successful in identifying some genes,it provides only a starting point in the gene identification process. Some genomics companies use ESTs in a strategy known as "gene mapping." Genemapping refers to the process by which DNA samples are taken from members offamilies with high incidences of a particular disease. These samples are used toidentify ESTs to help locate the exact position in the genome of a gene that maybe partially or fully responsible for the disease. Gene mapping offers theadvantage of much higher certainty in associating a gene with a particulardisease, but it tends to be a considerably slower and more expensive process ofgene identification than the EST method alone. Some genomics companies offer fee-based access to their genomics databases.These databases are built primarily with data sequenced using the EST and genemapping techniques. By not sequencing the entire genome, the Celera Genomicsgroup believes these companies are not as likely to identify rarely expressedgenes, which the Celera Genomics group believes are likely to provide medicallysignificant 36

information. These companies typically require customers that access their datato share intellectual property rights on discoveries made from the data providedby the database company, regardless of the database company's involvement in adiscovery. Other companies are developing detailed maps of the human genome, but thesemaps are expected to show substantially less than all of the sequences in thegenome. These maps are being used to discover genes and their relevance tobroader patient populations. Some companies use genomic maps and specialtechniques to identify limited polymorphisms and other data to be used inpharmacogenomics. Even with the use of partial genomic information, private genomic companieshave achieved the following: - Numerous partnering and collaborative relationships with pharmaceutical companies involving significant research funding; and - Significant gene discoveries from both the EST and gene mapping methods. By focusing their efforts on identifying specific genes and disease targets,however, genomic companies have identified only a fraction of the 3%-5% of thehuman genome believed to be responsible for gene coding. Although many believethat the remaining 95% to 97% is composed of "junk" DNA, the Celera Genomicsgroup believes that gaining an understanding of the whole human genome willyield valuable biological and medical information. Such information includesnovel genes, polymorphisms and gene timing and tissue localization instructionsnot found in gene transcripts, i.e., cDNA and EST sequences. The Celera Genomicsgroup believes that it will create a foundation for discovery from the genomicinformation that cannot be discovered through the EST or gene mapping approachesalone. Moreover, the Celera Genomics group believes that by overlaying theexpression profiles for different tissues and multiple species, it canfacilitate accurate pathway identification and the determination of possiblegene function. These discoveries, in turn, should lead to a more comprehensiveunderstanding of the genome and the genomic factors influencing diseases anddrug responses in patients.CELERA GENOMICS' APPROACH TO GENOMICS AND SCIENTIFIC PROGRESS TO DATE Since the early 1990's, with the commencement of the Human Genome Project,scientists have generally believed that technology would limit the pace at whichthe entire human genome might be sequenced. The combination of the PE BiosystemsGroup's higher-throughput sequencing equipment, and the advanced sequencingstrategy techniques developed by Dr. Venter and his scientific team at TIGR, hasresulted in the Group's announcement in January 2000 that Celera had compiled90% of the human genome. The Group started sequencing of the human genome inSeptember 1999. This began after the completion of the sequencing of DROSOPHILA,Celera's first sequencing project, carried out in cooperation with the BerkeleyDropsophila Genome Project (BDGP). Drosophila was chosen because it is animportant organism for biomedical and agricultural research, and because it isbelieved that its large and complex nature would demonstrate the operationalcapability of Celera's facilities and the efficacy of the whole genome shotguntechnique in deciphering other large and complex genomes like the human genome.The DROSOPHILA genome, the largest sequenced to date and 77 times as large asthe first genome completed in 1995, was sequenced in the same period of time asthat of the first genome--four months. In the process, the utility of the wholegenome shotgun technique for gene discovery was also demonstrated. Fully 40% ofthe discovered genes had never been identified in the extensive public databasesusing the EST approach. Upon completion of the sequencing of the DROSOPHILAgenome, Celera undertook the task of using its computational approach toassemble the genome into its proper order. This task has been completed andscientific publications presenting the result and further in depth analysis areexpected to be published with the BDGP this spring. As a result of the DROSOPHILA assembly work, Celera now believes that it maynot be necessary to sequence the human genome as extensively as originallyplanned in order to achieve a highly accurate consensus genome. Celera'soriginal plan was to sequence the human genome ten times to insure accurate 37

coverage. Our experience gained from the sequencing and assembling of DROSOPHILAindicates that this level of coverage may not be required. The reduction inneeded sequence data, combined with a recent increase in publicly availablehuman genome data, has enabled Celera to accelerate its estimated completiondate for the assembly of the human genome from the end of 2001 to the end of2000. Once sequencing is completed, the Group intends to focus on the annotationand assembly of the sequencing data. The Group believes that its shotgun sequencing strategy has accelerated thediscovery of new genes, and has generated genomic information that has not yetbeen the focus of research. This information includes rarely expressed genes andthe proteins they code for and other factors, such as regulatory regions, thatcontrol gene expression. This data is forming the basis of the Group's humangenome database. Information from this database is being delivered on abi-weekly basis to the Group's current subscribers. After completion of sequencing and assembly, the Celera Genomics groupexpects to release a detailed ordered consensus human genome assembly. The datathat the Celera Genomics group releases publicly will be available, in asearchable format, via its web site. The ultimate form of data release will beaffected by, among other things, the evolution of intellectual property law andthe Celera Genomics group's assessment of the likelihood that otherorganizations may seek to obtain the Celera Genomics group's data and resell itin competition with Celera to their own customers. The Celera Genomics groupbelieves that current efforts by some companies to obtain data made publiclyavailable for the purpose of private resale may continue, and that the need toprotect the value of its information while honoring its intention to share thisdata with the research community will affect its data disclosure strategy. The Celera Genomics group believes that disclosing consensus assembledsequence data will not affect the value of its information products and servicesto customers and will encourage researchers to use its data and ultimatelybecome the Celera Genomics group's customers. The Celera Genomics group willmake available to its customers, on a subscription basis, the assets that aremost responsible for the value of its products and services: extensiveintegrated genomic information systems, including proprietary annotations,certain polymorphism information, comparative genomics information, proteinexpression information, search tools and algorithms, and assay and otherservices.BUSINESS STRATEGY The Celera Genomics group's mission is to become the definitive source ofgenomic, proteomic and related biological and medical information that willfacilitate a better understanding of human biological processes and acceleratefuture improvements in health care. The Celera Genomics group intends to use thegenomic information derived from its human genome sequencing program as aplatform upon which to develop an integrated information and discovery system. The Celera Genomics group believes that its information platform, along withthe assay and services systems it will develop, will be used by pharmaceutical,biotechnology, diagnostic and other private entities and academic and other lifescience research institutions. The Celera Genomics group will seek to make itsdiscovery and information system the fundamental resource in molecular medicinefor acceleration of the development of new drugs and targeted diagnostics. Inaddition, this information may provide the foundation for personalized medicineand be used by physicians and individuals. Key elements of the Celera Genomics group's strategy include: DEVELOPMENT OF AN INTEGRATED DISCOVERY SYSTEM BASED ON GENOMIC AND FUNCTIONAL GENOMIC INFORMATION The Celera Genomics group intends to develop an integrated informationsystem that will include the most comprehensive and integrated databases ofgenomic and related biological and medical information available. The CeleraGenomics group expects to integrate its proprietary information with information 38

from external sources. The discovery and information system will also includesoftware tools that provide the ability to view, browse and analyze thisinformation in an integrated way to facilitate discovery. The Celera Genomicsgroup also expects to offer a variety of services to customers to assist in theanalysis and interpretation of the data. The Celera Genomics group intends to supplement the base-level human genomesequence data it generates with other information to increase the value of itsinformation system. This additional information may include comparative genomicinformation and associated tissue-specific gene and protein expression profilesfrom human and other model organisms. Comparative genomic information from modelorganisms, such as DROSOPHILA and mouse, are often used as a mechanism by whichto better analyze specific areas of the genome and develop theinterrelationships of the genetic code to disease and drug response. Thisinformation, which will permit better understanding of how genes are controlledby regulatory elements, has significant implications for better molecularcontrol of genes and gene therapy. For example, the Celera Genomics group has already sequenced the DROSOPHILAgenome. This sequence information represents the first level of the CeleraGenomics group's comparative genomic information and is intended to add to theunderstanding of human genomic data, particularly in furthering theunderstanding of neurological function. DEVELOPMENT OF COMPREHENSIVE POLYMORPHIC INFORMATION FOR DRUG DEVELOPMENT AND PERSONALIZED HEALTH/MEDICINE The Celera Genomics group believes that its sequencing efforts using the DNAfrom multiple individuals will likely result in the discovery of millions ofpolymorphic sites. This level of discovery should significantly exceed theefforts of its competitors. Polymorphic sites are locations on the genome wherevariations in genetic sequence can occur and which may lead to the developmentof certain diseases or influence the effect of a drug on a patient. Scientistsbelieve that polymorphism information may be important in understanding therelationship of genetic factors to disease and how and why certain patientsreact favorably to certain drugs while others do not. Because the identificationof polymorphic sites is very difficult using current methods and few polymorphicdiscovery programs exist, the Celera Genomics group believes that thepolymorphisms it discovers will add considerable value to its integratedinformation system. Using polymorphism data from sequencing efforts, the CeleraGenomics group intends to develop information on specific associations betweengenetic variances that may predispose individuals to diseases, such as diabetes,heart disease, stroke, cancer and obesity, and their interactions with specificdrugs.COMPETITIVE ADVANTAGES The Celera Genomics group believes that it has competitive advantages thatdifferentiate it from other genomic companies. These advantages should enable itto sequence and assemble the large and complex human genome faster and moreaccurately than any other organization attempting this challenge. Afteraccomplishing this undertaking, the Celera Genomics group believes it will bewell positioned to build and market its sequences, functional genomics andpersonalized health/medicine information products and services. The competitiveadvantages that differentiate Celera's efforts from other genomics effortsinclude:EXPERTISE OF KEY SCIENTIFIC PERSONNEL The Celera Genomics group has recruited a team of leading scientists, led byDr. Venter, with substantial expertise and experience in genomics, functionalgenomics, bioinfomatics and medicine. Dr. Venter and certain of thesescientists, while employed by TIGR, participated in its sequencing of the entiregenome of the first living organism in 1995. Subsequently, TIGR sequenced andpublished the genetic maps of eleven other whole microbial genomes. The teamalso includes personnel who joined Celera from PE Biosystems, TIGR and otherrespected organizations with expertise in gene discovery, computational biologyand other technical disciplines needed for the difficult tasks of assembling andanalyzing genomic sequence data. In addition, individuals with medical expertiseare now employed by the organization to focus on the medical applications ofgenomic information. 39

PROVEN SEQUENCING STRATEGY The Celera Genomics group will continue to use the whole genome shotgunapproach to sequence the complete genomes of human and other biomedicallyimportant species. The shotgun method will be employed to create tiny, randomfragments of different lengths. These fragments are sequenced, assembled intocontiguous blocks using proven algorithms, and assigned to the correct locationin the genome. This approach was successfully employed to sequence and assemblethe DROSOPHILA genome. Having nearly fully sequenced the human genome, theCelera Genomics group will begin its efforts to assemble the human genome. TheCelera Genomics group believes its approach will produce the highest qualitydata available on the human genome.ACCESS TO COMPREHENSIVE GENOMIC SEQUENCE INFORMATION UNAVAILABLE ELSEWHERE The rapid production of genomic information by the Celera Genomics group isexpected to provide pharmaceutical and biotechnology manufacturers and thescientific research community with the ability to mine this data for novelgenomic information and to pursue intellectual property rights on potentialdiscoveries. The Celera Genomics Group plans to significantly increase the leveland quality of genomic information made available to the pharmaceutical andbiotechnology industry and to the scientific research community. As moreinformation is generated by the operations of the Group, it will develop andrefine the genomic map through a continuing process of rigorous annotation,including using EST data, to enable users to gain a better understanding of thelocation, function and interrelationships of genomic material.WORLD'S LARGEST GENOME SEQUENCING AND COMPUTATIONAL COMPLEX The Celera Genomics group has established the world's largesthigh-throughput sequencing facility, using 300 PE Biosystems 3700 DNAsequencers. Production capacity is estimated to approach two billion base pairsper month. Supporting these instruments requires the use of automation to pickapproximately 150,000 bacterial colonies per day that have human DNA splicedinto them. The whole set of processes is set up as a high capacity routineproduction facility that minimizes waste while optimizing output. The vast amount of sequence information is captured in a supercomputingfacility that was created in partnership with Compaq Computer Corporation.Celera believes this facility is one of the world's most powerful non-defensecomputing centers. This center currently houses 848 interconnected Alpha TRU 64bit processors and has 50 terabytes of disk storage capacity. The centerprovides the processing power for complex scientific applications and thecomputational capacity for analyzing sequencing output.AFFILIATION WITH PE BIOSYSTEMS PE Biosystems has extensive customer relationships in the pharmaceutical andbiotechnology industry which have proven useful to the Celera Genomics group. PEBiosystems is a global technology leader in the life sciences market for DNA andprotein synthesis and analysis. As important to the Celera Genomics group arethe technologies which PE Biosystems can supply. Examples of technologies whichthe Celera Genomics group intends to utilize in creating functional genomic andpolymorphic information from PE Biosystems include: MASS SPECTROSCOPY. PE Biosystems is the leading provider of certain keytechnologies, such as mass spectrometry that are essential to proteomics. Massspectrometry provides protein identification and characterization, as well asthe analysis of post-translational protein modifications that may hold the keyto cellular function. Current and planned mass spectrometry and tandem massspectrometry technology are expected to meet the high throughput and informationrequirements necessary to correlate the expressed protein information to thecorresponding gene sequences. 40

THIRD WAVE. In January 2000, PE Biosystems signed a definitive mergeragreement under which PE Biosystems has agreed to acquire Third WaveTechnologies, Inc. in a stock-for-stock transaction, subject to regulatoryapprovals and customary closing conditions. Third Wave has developed theinnovative Invader-Registered Trademark- nucleic acid detection technology, ahighly sensitive and accurate assay that can rapidly detect differences amonggenetic sequences important for the analysis of SNPs. The Invader assaytechnology is expected to accelerate the understanding, diagnosis and treatmentof disease by enabling rapid, large-scale testing of SNPs. This technology isexpected to be initially used with PE Biosystems' Sequence Detection Systems(SDS), a proprietary technology for real-time analysis of genetic information.It is anticipated that the Invader assays on the SDS platform should allowresearchers to: (1) accelerate experiments designed to link SNPs to diseases anddrug responses and (2) create and use thousands of individual tests needed fordrug discovery and clinical trials. These developments are expected to lead todiagnostic advances in patient profiling and personalized medicine. ILLUMINA. In November 1999, PE Biosystems and Illumina, Inc. entered into astrategic collaboration to develop and commercialize array-based systems forhigh-throughput genetic analysis. The companies will jointly develop systemsbased on Illumina's BeadArray-TM- technology and PE Biosystems' proprietaryZipCode-TM- chemistries. SNP analysis will be one of the first applications ofthe collaboration, which expects to provide pharmaceutical researchers with newtools to analyze SNP genotypes at lower cost and with superior performance. ACLARA. In April 1999, PE Biosystems and Aclara BioSciences, Inc. enteredinto a strategic collaboration to develop and commercialize microfluidicscreening systems for the cost-effective high-throughput screening of massivelibraries of drug candidates. The advanced drug-screening systems will combineAclara's proprietary microfluidic technology and microfabrication techniqueswith PE Biosystems' market-leading instrumentation and reagents. PE Biosystemshas developed multiple generations of DNA sequencers incorporating capillaryelectrophoresis and fluorescent detection. It will contribute, in addition, theseparation and systems engineering strengths of its PerSeptive Biosystemsdivision and the biological assay development and high-throughput screeningexpertise of its Tropix division. PE Biosystems also provides systems integration encompassing informatics,high-throughput screening and protein-protein interactions.COMMERCIAL APPLICATIONS; PRODUCTS AND SERVICES The Celera Genomics group expects that the use of the information itdevelops and discoveries it makes will help transform life science research byincreasing the understanding of biological processes, thus enabling scientiststo accelerate the discovery and development process. The Celera Genomics groupalso believes this information will ultimately facilitate the development ofindividual genetic profiles that will be used for personal health planning bythe medical and consumer markets. The commercial markets that the CeleraGenomics group believes will benefit from its information include pharmaceuticaldrug discovery and development, medical, consumer and other markets. The Celera Genomics group expects that its primary revenue sources will comefrom selling access to its information through subscriptions, collaborativeservices and licensing its intellectual property. For certain informationproducts, the Celera Genomics group does not expect to seek ownership ofintellectual property developed by its customers on such use. For theseproducts, this policy should promote use of its information by a wide variety ofusers and will distinguish the Celera Genomics group from other genomicscompanies that seek intellectual property rights in their customers' discoveriesbased solely upon access to those companies' database information. 41

The structure of customer subscriptions, including the databases to beoffered, functionality of the system, the access fees to be charged, theintellectual property terms, and the nature of any services provided tocustomers, will vary according to customer requirements and are expected tochange over time. The following describe the products and services that the Celera Genomicsgroup expects to offer:INFORMATION PRODUCTS The Celera Genomics group intends to build a comprehensive database thatprovides subscribers with information access over the Internet and includes thefollowing: - A set of evolving, integrated databases comprised of both genome and functional genomics information. - A comprehensive set of bioinformatics tools that allow users to search, browse, visualize and analyze information and information relationships. - The ability to integrate internal (customer) and external data sources into the overall system. - The capability to perform comparative analysis with other genomes, including those of DROSOPHILA and mouse, to permit researchers to better understand gene function and the ways in which genes and proteins operate within cells. The Celera Genomics group is currently offering or plans to offer thefollowing genome and functional genomics database options as part of the LifeScience Research System. Access to these databases will be configurable to allowfor multiple product configurations and pricing plans targeted to specificcustomer needs. DROSOPHILA GENOME DATABASE. The first complete sequence of available datagenerated by the Celera Genomics group's sequencing activity is the DROSOPHILAgenome. Scientists have widely studied DROSOPHILA, which has been shown to sharesimilar genes with humans. This new genomic information will allow comparisonsof both sequences and genes for the drug discovery process. The content of theDROSOPHILA database includes DNA sequence information and assemblies of thegenome generated by the Celera Genomics group. Over time, the Celera Genomicsgroup intends to supplement this data with data obtained from other accessibleresources. The database will include, at a minimum, the following annotations:DNA and protein matches, gene predictions, predicted gene function, identifiedprotein domains, EST matches and marker locations on chromosome maps. HUMAN GENE INDEX. The Celera Genomics group expects that this database willrepresent the most current view available of the set of human genes. It will bethe extension of the TIGR Human Gene Index, which has been in development atTIGR for over three years and licensed to the Celera Genomics group on anon-exclusive basis. The database will be derived from transcripts derived fromgenomic sequences, assemblies of ESTs and related data used to develop the ESTs.This database is expected to contain an extensive network of links to othersources of biological information, including information from mapping data,genomic sequences, expression data and the Human Genome Project's databases. HUMAN GENOME DATABASE. Celera Genomics believes this information base willbe a foundation for developing an information and discovery source thatultimately links genomic data to relevant biological and medical information.The Celera Genomics group currently has over 90% of the human genome in itsdatabases and anticipates completion of sequencing by mid 2000. The process ofassembling the genome is expected to be completed by the end of 2000. Inaddition, Celera intends to incorporate existing data from third party sources.Concurrent with the sequencing project, separate teams will be designated forannotating specific chromosomes. The Human Genome Database is expected toinclude the same types of annotations as those of the DROSOPHILA genome. 42

MOUSE GENOME DATABASE. Celera intends to begin sequencing the mouse genomein early summer of 2000 and expects to complete its work by the end of 2000.Celera believes that the mouse is a very important model organism for studyinggene function, having been the subject of extensive genetic studies. Inaddition, mice are available with specific genes disabled, allowing furtherfunctional characterization. These genes can be easily correlated with theirhuman counterparts and thus can be used to study human health. The Mouse GenomeDatabase is expected to contain the same types of annotations as those of thehuman and DROSOPHILA genomes. In addition, the mouse and human genomes will beoverlaid to allow comparative studies of their respective structures, thefunctions of their genes, and their common regulatory mechanisms. FUNCTIONAL GENOMICS DATABASES GENE EXPRESSION DATABASES. These databases are expected to consist of humanand animal gene expression information to provide rapid, in-depth analysis ofwhere genes are expressed and in what quantities. This will include theGeneTag-TM- rat database, which is the largest rat gene database in the world.It contains over 40,000 identified unique GeneTags-TM-. Celera Genomics believesthe rat is an important model organism for studying drug toxicity inpharmaceutical discovery and development. HUMAN PROTEIN DATABASE. The Celera Genomics group plans for this database torepresent the most comprehensive view of protein expression in humans. Proteindata is expected to be available for whole tissues, cellular and sub-cellularfractions from several individuals. Celera Genomics believes this informationwill become a foundation of protein reference information to which comparativestudies in various disease states and aging studies can be compared. This datawill be correlated to provide an enhanced understanding of key biologicalprocesses, from gene to function. SNP DATABASE. The Celera Genomics group believes that as it continues tosequence the DNA from multiple individuals it will likely discover millions ofSNP sites. Celera believes this level of discovery will significantly exceed theefforts of its competitors. SNP sites are locations on the genome wherevariations in genetic sequence can occur and which may lead to the developmentof certain diseases or influence the effect of a drug on a patient. Scientistsbelieve that polymorphism information is important in understanding therelationship of genetic factors to disease and how and why certain patientsreact favorably to certain drugs while others do not. Because the identificationof polymorphic sites is very difficult using current methods and few polymorphicdiscovery programs exist, the Celera Genomics group believes that the SNPs itdiscovers will add considerable value to its integrated information system. GENOTYPE/PHENOTYPE DATABASE. Celera Genomics expects the development of aninformation base that links SNP information to phenotype information to be a keyasset for both therapeutic development and medical and diagnostic applicationsand will enable personalized health planning. Celera intends to work with majorclinical centers to collect individual genetic profiles and correlate them withmedical and phenotype information. This information is expected to become areference source for understanding drug safety, drug toxicity, and geneticsusceptibility to disease, and should serve as important diagnostic markers. Theassay systems that the Celera Genomics group intends to use will be flexiblesystems that allow for this study of genetic variances at various levels ofdetail. The Celera Genomics group believes that through its relationship withthe PE Biosystems group and early access to its developing technologies, it willbe able to reduce the cost of this technology to a level that will permitwidespread application of polymorphism studies and diagnostics.PERSONALIZED HEALTH/MEDICINE The Celera Genomics group expects that genomic information will be used todevelop molecular diagnostic tests to identify the genetic make-up ofindividuals. These diagnostic tests will contribute to a more personalizedapproach to medicine. For example, there are many types of cancer that havesimilar disease manifestations. Because these disease manifestations may besimilar between one type of cancer 43

and another, it may be important to differentiate between the actual type ofdisease rather than just the disease manifestations in prescribing an effectivetreatment. It is believed that, rather than prescribing a drug based solely ondisease manifestations, physicians will be able to use a molecular diagnostictest to help select the most effective drug with fewer negative side effects. Asa result, this approach should benefit the patient with more customized care,reduced illness length, and ultimately, better treatment results. Celera believes that the consumer market is evolving towards a morepro-active, self-directed approach to both medical and non-medical healthcare.This shift is evidenced by the growing number of consumers seeking informationfrom health based internet portals that are building eBusiness networks toconnect consumers, physicians, solution providers and payers. This evolution tomore self-directed health care is creating more informed and prepared consumersand Celera is positioned to augment this trend. Celera believes that an important component of pro-active, self-directedhealth care will be knowledge of individual genetic profiles. These profiles armconsumers with actionable information that will result in personalized healthplans tailored to their specific health characteristics. Celera believes thatconsumers and physicians equipped with this knowledge will be able to anticipatehealth issues and then target the most effective health solutions (e.g. diet andfitness programs, monitoring, treatments) to optimize the individual's healthand well-being. It is believed that the genetic profile information that Celera intends todevelop provides a key basis for interactions and transactions between theconsumer, physicians and solution providers. Consumer controlled access to thisinformation by physicians and solution providers will enable more effective andefficient application of health solutions that may ultimately result in reducedhealth care costs. Further, Celera anticipates that the aggregation of theidentified genetic profiles will provide pharmaceutical and biotechnologycompanies with a rich demographic database to enhance the research process.Celera intends to make this information available to these communities undervarious conditions that will provide revenues to the company.VALUE ADDED SERVICE PROGRAMS The Celera Genomics group believes that its investment in staff andtechnology and its integrated information systems should permit it to expand itsbusiness into providing value added service programs. These additional areas mayinclude licensing of proprietary intellectual property rights from its owndiscovery efforts and collaborative endeavors and establishment of collaborativerelationships to develop information related to specific customer needs. The Celera Genomics group intends to conduct its own discovery initiativesas part of its analysis of genomic and functional genomic information generatedthrough its efforts. The Celera Genomics group currently intends to pursueintellectual property protection on such discoveries. If the Celera Genomicsgroup is successful in making novel discoveries and generally establishingintellectual property rights, it expects to license most of its discoveriesbroadly. The Celera Genomics group may also enter into other collaborativearrangements with customers to develop information specific to a particularcustomer's interest. Such arrangements could involve an extensive populationgenetics study on behalf of a pharmaceutical company or the sequencing ofcertain plant, animal or insect genomes on behalf of customers. In addition,customers may build proprietary gene expression databases using GeneTag-TM-sequencing technology through a collaborative arrangement. These arrangementsmay also include providing customers biological materials, such as full lengthcDNA clones, and sequencing of clones of novel genes. The Celera Genomics groupanticipates that the terms of these collaborative arrangements will generallyprovide for up-front license fees, research fees and Celera or joint ownershipof any discoveries or royalties and milestone payments. In addition, theintention of such collaborations will be to incorporate information generatedduring the research into Celera's databases. 44

Celera anticipates offering the following services: GENE DISCOVERY. Through its expertise in sequencing and bioinformatics,Celera offers programs to SNP to discover novel genes of interest. FULL LENGTH CLONING. Celera Genomics is creating a high-throughput facilityfor the generation of full-length cDNA's for pharmaceutically relevant genes.This capability is expected to increase the value of the intellectual propertyfiled on genes and be a valuable tool for Celera's subscribers to developbiological assays for specific gene targets. GENE EXPRESSION. GeneTag-TM- technology provides the Celera Genomics groupwith additional capabilities in the field of gene discovery. This provides geneexpression profiling technology that simultaneously discovers novel genes,including rarely-expressed genes, and monitors known genes for applications suchas molecular toxicology, gene discovery and pharmacagenomics. PROTEIN EXPRESSION SERVICES AND ANALYSIS. The proposed development of ahigh-throughput facility for protein expression is intended to provide thecapability to perform specific research programs for customers wanting tocompare Celera's reference information to specific development projects. Celeraintends to create comprehensive analysis capabilities for proteins. Thesecapabilities will be utilized within customer programs and Celera intends toanalyze the protein reference information as it is generated to identify andseek intellectual property protection on diagnostic markers, novel genes andtherapeutic proteins. The study of protein-protein interactions can also be usedto help identify protein function. They can be elucidated in a number of ways,including computational methods (co-evolution analysis, conservation of domains,etc.) or laboratory studies (correlated expression levels of mRNA or protein).In addition, the ability to generate antibodies to any protein coded by thegenome will also expedite the identification of specific protein complexes andtheir functions. These methods, along with comparative genomics techniquescorrelating protein function across species, are expected to allow researchersto map out the biological pathways in any given cell in the body. HUMAN POLYMORPHISM SERVICES AND ANALYSIS. Celera intends to use theinformation it creates on polymorphisms combined with high-throughput genotypingtechnology to provide services to detect and analyze individual genome profiles.Celera has the capability of performing high-throughput sequencing of specificgenes or genomic regions across populations of interest. INFORMATICS SERVICES. Celera believes that the quantity of genomics andrelated data and the application of sophisticated bioinformatics tools willdrive users of this information to require knowledge management, computing andstorage solutions. Celera, with its strategic partners, will be in a uniqueposition to supply customized combinations of bioinformatics tools and computerbandwidth to users of our information.INTELLECTUAL PROPERTY Through its internal research programs and collaborative programs CeleraGenomics group anticipates that it will develop an ever-increasing portfolio ofintellectual property. Celera Genomics group intends to license suchintellectual property to customers for some combination of license fees,milestones and royalty payments.CUSTOMERS Currently, the Celera Genomics group offers its information products on asubscription basis for multiple year subscriptions. Celera Genomics group'smajor customers for its integrated information and discovery systems includeAmgen, Novartis, Pharmacia & Upjohn and Pfizer. These customers have access toCelera's base product offering of our Drosophila Genome Database, Human GeneIndex and Human 45

Genome Database. Certain contracts also provide for future access to a MouseGenome and SNP database products. As additional databases are made available,the Group's subscribers will be offered such additional information on anincremental fee basis. The subscriptions to Celera's databases also includeaccess to associated bioinformatics systems and tools for viewing, browsing andanalyzing genomic information. The following table sets forth certaininformation relating to our key customer subscription agreements.<TABLE><CAPTION> DROSOPHILA GENOME HUMAN GENE HUMAN GENOME MOUSE GENOME SNPSUBSCRIBER DATABASE INDEX DATABASE DATABASE DATABASE---------- ----------- ------------ --------------- -------------- ---------<S> <C> <C> <C> <C> <C>Amgen............................................ X X X XNovartis......................................... X X X XPharmacia & Upjohn............................... X X XPfizer........................................... X X X X X</TABLE> Amgen, Novartis and Pfizer have also contracted with Celera forcollaborative services. These include specialized research activities whereCelera will focus on specific scientific programs such as gene discovery,full-length cloning and sequencing. For such colloborative services and, in somecases, for exclusive or non-exclusive licenses to developed intellectualproperty, these customers provide the Celera Genomics group with variouscombinations of research fees, up-front payments, research and developmentmilestone payments and royalties in the event of commercial sales. The next phase of Celera's business development will focus on leveraging thelife science information solutions available from its integrated informationsystem. The expanded efforts will be to focus in the following areas: UNIQUE AND EVOLVING CONTENT. Additional genomic and functional genomicsdatabases will be offered, as they become available. ANALYSIS TOOLS. Celera anticipates broadening its analysis capability byincorporating more sophisticated search, query and navigation software tools. SERVICES. Celera anticipates providing additional scientific and knowledgemanagement, hosting and computing services as part of its product offerings. The Celera Genomics group believes the customers in this phase are alsolikely to be pharmaceutical, biotechnology and agricultural companies. Targetedcustomers will also include universities and other research institutions withsubstantial genomic research interests. Celera will offer databasesubscriptions, but they will be packaged solutions at different price points ascustomer needs evolve.COLLABORATIONS AND OTHER GENOMICS PROGRAMS COLLABORATIONS GEMINI. Celera has entered into a research collaboration with GeminiResearch Limited to discover genes and genetic polymorphisms associated withcommon, chronic, age-related diseases. The collaboration combines Celera's DNAsequence information and computational gene discovery capabilities with Gemini'sclinical genetics approach. Celera and Gemini intend to commercialize theresults of the collaboration by jointly licensing the rights to discoveries tothird parties in the development of gene-based therapeutics and diagnosticproducts. Both parties will share in revenues received from licensing fees,milestone payments and royalties resulting from the collaboration. RHONE-POULENC. Celera has also entered into a three-year agreement withRhone-Poulenc Rorer to identify therapeutic targets for a variety of humandiseases, including asthma, cancer and cardiovascular disorders, by applyingCelera's proprietary GeneTag-TM- technology to Rhone-Poulenc's disease model 46

systems. The agreement includes up front fees as well as milestones androyalties to Celera in connection with the commercialization of any drugsresulting from this collaboration. This agreement was entered into prior toCelera's database subscription offerings, and as such is strictly acollaborative research agreement without access to Celera's proprietaryinformation. RHOBIO. Celera has formed a three-year agreement with RhoBio SA, a jointventure between Rhone Poulenc Agro and Biogemna, to use expression studies todiscover genes related to traits of importance in maize. This agreement providesCelera with a combination of technology access fees, research and developmentmilestone payments and royalties resulting from sales of any products developedthrough this research-based alliance. STRATEGIC ALLIANCES AND ACQUISITIONS PARACEL. Celera has acquired or entered into arrangements which willenhance our bioinformatic capabilities. The Group will collaborate withParacel Inc. on the development of high-resolution informatics tools. Scientistsfrom both companies will focus on EST clustering and whole genome data miningcapabilities, while leveraging technology for sequencing quality estimation andsimilarity searching. These tools and hardware provided by Paracel are used inour scaled up gene discovery process. PANTHER TECHNOLOGY. Celera has acquired the Panther technology from theMolecular Applications Group. Panther is a software tool designed for rapid andaccurate determination of gene and protein function. As a part of the agreement,a key group of bioinformatics experts who developed the technology have joinedCelera. SHANGHAI GENECORE. Celera acquired a 47.5% equity interest in ShanghaiGenecore Biotechnologies Co. Ltd. Shanghai Genecore is a genomic service companyproviding services in China in the areas of nucleotide synthesis, DNAsequencing, bioinformatics analysis and mutation detection. This acquisitionprovides Celera with access to ongoing research collaborations with governmentagencies and research institutions and access to a broad customer base ofacademic institutions and biopharmaceutical companies.RAW MATERIALS The Celera Genomic group's operations require a variety of raw materials,such as chemical and biochemical materials, and other supplies, some of whichare occasionally in short supply. The Celera Genomics group depends on the PEBiosystems group for several critical materials, including reagents andcapillary arrays, required for sequencing. For certain of these materials, thePE Biosystems group is the sole supplier, and for other materials the CeleraGenomics group believes that the PE Biosystems group provides the highestquality materials available. Any interruption in the availability of thesematerials could adversely affect and, in come cases, shut down sequencingoperations.PATENTS, LICENSES AND FRANCHISES The Celera Genomics group's business and competitive position is dependent,in part, upon its ability to protect its database information, proprietary genesequence methods, software technology and the novel genes it identifies. TheCelera Genomics group's commercial success will be affected by, but is notdirectly dependent on, the ability to obtain patent protection on genes,polymorphisms and proteins discovered by it and/or by the Celera Genomicsgroup's customers on their own behalf and by collaborators. The Celera Genomicsgroup plans to seek intellectual property protection, including copyrightprotection, for the information and discovery system including its content, thesoftware and methods it creates to manage, store, analyze and search novelinformation. 47

The Celera Genomics group's current plan is to apply for patent protectionupon the identification of candidate novel genes, novel gene fragments and theirbiological function or utility. Although obtaining patent protection based onpartial gene sequences might enhance the Celera Genomics group's business, theCelera Genomics group does not believe that its commercial success will bematerially dependent on its ability to do so. Depending on the nature of thearrangement, when gene discovery or analysis is performed on behalf of customersor collaborators, any resulting patent rights will be owned solely by Celera,jointly owned by the Celera Genomics group and the customer or collaborator, orowned solely by the customer or collaborator. If a gene product is developed,the Celera Genomics group anticipates it will receive various forms ofconsideration including license fees, milestone payments and royalty payments onsales of the gene product and related products. Celera will use a combination of strategies in order to protect itsintellectual property assets involving SNP discovery, validation andfunctionation. Celera recognizes that many of the intellectual property laws aredirectly suitable for application to SNP discoveries while other protections maynot be available or extend to cover SNP-based discoveries. During sequencing and early assembly phase of human genome, Celera willmaintain proprietary protection of its SNP discoveries using a combination ofconfidential treatment of the information /access control and establishing thebeginning of a patent portfolio. During later stages of assembly and geneannotation, Celera may seek broader patent protections of its discoveries. Suchan approach will be utilized to establish commercial applications and patentableutility for such SNP discoveries. The granting of patents on genomic discoveries is uncertain worldwide and iscurrently under review and revision in many countries. Moreover, publication ofinformation concerning partial gene sequences prior to the time that the CeleraGenomics group applies for patent protection based on the full-length genesequences or different partial gene sequences in the same gene may affect theCelera Genomics group's ability to obtain patent protection. Certain courtdecisions suggest that disclosure to the applicable agency of a partial sequencemay not be sufficient to allow or support the patentability of a full-lengthsequence and that patent claims to a partial sequence may not cover afull-length sequence inclusive of that partial sequence. Currently, the U.S.Patent and Trademark Office requires an adequate disclosure of a specific andsubstantial utility, such as gene function, in order to support thepatentability of a gene sequence. In January 1997, TIGR, in collaboration with the National Center forBiological Information, disclosed full-length DNA sequences assembled from ESTsavailable in publicly accessible databases or sequenced at TIGR. The NationalHuman Genome Research Institute also plans to release sequence information tothe public. Such disclosures might limit the scope of the Celera Genomicsgroup's claims or make subsequent discoveries related to full-length genesunpatentable. While the Celera Genomics group believes that the publication ofsequence data will not preclude it or others from being granted patentprotection on genes, there can be no assurances that such publication has notaffected and will not affect the ability to obtain patent protection. The Celera Genomics group can not ensure that any changes to, orinterpretations of, the patent laws will not adversely affect its patentposition. The Celera Genomics group anticipates that there will be significantlitigation in the industry regarding genomic patent and other intellectualproperty rights. If the Celera Genomics group becomes involved in suchlitigation, it could consume a substantial portion of the Celera Genomicsgroup's resources, and Celera Genomics may not prevail ultimately. If CeleraGenomics does not prevail in a patent litigation dispute, it may be required topay damages or royalties or to take measures to avoid any future infringement,or Celera may not be able to stop a competitor from making, using, or sellingsimilar products or technology. The Celera Genomics group also intends to rely on trade secret protectionfor its confidential and proprietary information. The Celera Genomics groupbelieves it has developed proprietary procedures for sequencing and analyzinggenes and for assembling the genes in their naturally occurring order. Inaddition, the Celera Genomics group believes it has developed novel methods forsearching and identifying 48

particularly important regions of genetic information or whole genes ofinterest. The Celera Genomics group currently protects these methods andprocedures as trade secrets and has sought patent protection for some of theproprietary methods. The Celera Genomics group has taken security measures to protect itsdatabases concerning genes identified by it, including entering confidentialityagreements with employees and academic collaborators who are provided or haveaccess to confidential or proprietary information. The Celera Genomics groupcontinues to explore ways to further enhance the security for its data,including copyright protection for its databases.COMPETITION The Celera Genomics group's principal competitors will be those public andprivate entities that are currently or intend to become involved in providinggenomic sequences, polymorphism information, gene expression, protein expressionand related analysis capabilities in such areas as genetic variability and drugtarget discovery. The Celera Genomics group's market and financial success willbe dependent, in large part, upon its ability to maintain a competitive positionin each of these areas. Entities with which the Celera Genomics group will bedirectly competing in certain segments include Curagen, Gene Logic,Genset, Inc., Incyte Pharmaceuticals, Inc., Affymetrix, MillenniumPharmaceuticals, Genaissance Pharmaceuticals Inc., Orchid Biocomputer and theSNP Consortium. The SNP consortium is a non-profit collaboration that wasestablished in April 1999 and is supported by a group of ten majorpharmaceutical companies, the Wellcome Trust, IBM and Motorola, Inc. Its missionis to develop up to 300,000 SNPs of which 150,000 will be mapped to within100,000 base pair of their actual location. To date, about 9,000 have beenmapped with low resolution. The SNP Consortium's objective is to develop, patentand make public a group of 300,000 SNPs over the next two years. There are alsoseveral small public and private companies with which the Celera Genomics groupwill indirectly compete in particular lines of business, such as in genediscovery and the development of drug targets. In addition, some of the CeleraGenomics group's potential customers, such as pharmaceutical companies, maychoose to develop technologies and information similar to those offered by theCelera Genomics group. In addition, a customer may use the Celera Genomicsgroup's services to develop products that compete with products separatelydeveloped by the Group or its other customers. Finally, new technologies thatimprove the gene analysis and discovery process may emerge over time and couldcompete with those being developed by the Celera Genomics group, or otherwiseaffect its business strategy. The Celera Genomics group does not believe it is competing with the U.S.government's efforts to sequence the human genome, and has sought to coordinateits efforts with those funded by the U.S. government. The acceleration of theHuman Genome Project may assist the Celera Genomics group in its own sequencingand assembly effort.RESEARCH AND DEVELOPMENT The Celera Genomics group is actively engaged in basic and applied researchand development programs designed to develop new products. Research anddevelopment expenditures for the Celera Genomics group totaled $70.3 million forthe six months ended December 31, 1999, $48.4 million in fiscal 1999 and$10.3 million in fiscal 1998. The Celera Genomics group's new products will originate from three sources:internal research and development programs, external collaborative efforts oralliances, and business and technology acquisitions.ENVIRONMENTAL MATTERS Celera Genomics group is subject to federal, state, and local laws andregulations regulating the discharge of materials into the environment, orotherwise relating to the protection of the environment, in those jurisdictionswhere the Celera Genomics group operates or maintains facilities. The Celera 49

Genomics group believes any liability and compliance with all environmentalregulations will have no material effect on its business, and no materialcapital expenditures are expected for environmental control.EMPLOYEES The Celera Genomics group had approximately 450 employees as ofDecember 31, 1999. None of the Celera Genomics group's employees are subject tocollective bargaining agreements.PROPERTIES The Celera Genomics group's headquarters are in Rockville, Maryland, whereits administrative facilities, sequencing facility, laboratories, andbioinformatics facilities are located. The headquarters are located in twoadjacent buildings in Rockville, Maryland with approximately 220,000 squarefeet. The Celera Genomics group also subleases from PE Biosystems Groupapproximately 30,000 square feet in Foster City, California, which subleaseexpires in January, 2008, and leases space in Davis, California, from thirdparties as follows: approximately 13,000 square feet, which lease expires inJune 2001, and 15,000 square feet, which lease expires in July 2000.LEGAL PROCEEDINGS PE Corporation has been named as a defendant in several legal actions,including patent, commercial, and environmental, arising from the conduct ofnormal business activities. Although the amount of any liability that mightarise with respect to any of these matters cannot be accurately predicted, theresulting liability, if any, will not in the opinion of management have amaterial adverse effect on the financial statements of the Celera Genomics groupor PE Corporation. The holders of Celera Genomics stock are stockholders of PE Corporation andwill continue to be subject to all of the risks associated with an investment inPE Corporation, including any legal proceeding and claims affecting the PEBiosystems Group.SCIENTIFIC STAFF AND MANAGEMENT The Celera Genomics group's senior scientific staff and management includethe following persons: J. CRAIG VENTER, PH.D., President and Chief Scientific Officer, was thefounder and President of TIGR, a not-for-profit genomics research institution,from 1992 until August 1998. He also was a scientific founder of Human GenomeSciences, Inc. Dr. Venter has been Chief Scientific Officer at TIGR sinceAugust 1998, and remains Chairman of the Board of TIGR since being appointed in1992. Prior to 1992, he was a Section Chief and a Lab Chief in the NationalInstitute of Neurological Disorders and Strokes at the NIH. At the NIH,Dr. Venter developed the EST method, a new strategy for gene discovery. Usingthis method at TIGR, Dr. Venter and other TIGR scientists discovered andpublished one half of all human genes that have been sequenced. Using newalgorithms developed at TIGR, TIGR developed the whole genome shotgun methodthat led TIGR to completing the first three genomes ever sequenced. MARK ADAMS, PH.D., Vice President for Genome Programs, was Director of DNASequencing at TIGR from 1992 until August 1998 and Director of EukaryoticGenomes from 1996 to 1998. Prior to joining TIGR, Dr. Adams was a post doctoralfellow in Dr. Venter's lab at NIH and is a co-developer of the EST method ofsequencing. He also participates in projects devoted to sequencing andcharacterization of other eukaryotic and prokaryotic genomes. PETER BARRETT, PH.D., Executive Vice President and Chief Business Officer,was Vice President, Corporate Planning and Business Development of PECorporation from 1995 to 1998. Dr. Barrett was a member of the team of corporateofficers responsible for PE Corporation's direction and management, focusing onstrategic planning, mergers and acquisitions, and new business development forlife science businesses. Dr. Barrett joined PE Corporation in 1979 and has helda number of managerial positions in 50

the United States and Europe, including executive management in our company'slife science business from 1990 to 1995. SAMUEL BRODER, M.D., Executive Vice President and Chief Medical Officer, wasSenior Vice President for Research and Development at IVAX Corporation, from1995 until August 1998. Dr. Broder was the Presidentially-appointed director ofthe National Cancer Institute ("NCI") at NIH, which had over 2,000 employees andan annual budget of more than $2 billion, from 1989 to 1995. His laboratoryplayed a major role in the discovery or development of several marketed drugs.As NCI director, he initiated and directed several large-scale clinical studiesin the prevention, diagnosis and treatment of cancer. UGO D. DEBLASI, Vice President of Finance was Corporate Controller for PECorporation from December 1996 until January 1999. Before joining Celera,Mr. DeBlasi had 10 years of experience in PE's Corporation's finance group inpositions of increasing responsibility. During his tenure, Mr. DeBlasi worked onmajor acquisitions and divestitures, financial system implementations, and wasresponsible for accounting, public and management reporting, andPE Corporation's planning and budgeting functions worldwide. KATHY GIACALONE, Vice President of Human Resources, joined Celera with10 years of experience in managing various aspects of the human resourcesfunction at Marriott Corporation. Most recently, she served as Director ofStrategic Staffing and Communications at Host Marriott Services, a $1.3 billioncompany, where she aligned staffing and communications functions with thecompany's business initiatives. Prior to that, she held positions of increasingresponsibility in human resources planning and development, career development,employment practices, and unemployment compensation. Before joining Marriott,Ms. Giacalone spent 10 years at The Frick Company in Westbury, NY, a managementconsulting firm, where she held various positions in operations management. EUGENE W. MYERS, JR., PH.D., Vice President of Informatics Research, was aprofessor and scientist at University of Arizona from 1983 until 2000 working inthe field of computational biology. His work has focused primarily on developingefficient sequence analysis and sequence assembly algorithms, and he co-proposeduse of the whole genome shotgun approach for sequencing the human genome in1996. Dr. Myers is also widely known for being one of the co-developers ofBLAST, one of the most widely used analysis tools for genomics. JAMES M. PECK, Vice President of Product Development joined Celera fromLEXIS-NEXIS, a pioneer in on-line research, where he held various positions from1990 until January 2000, including Vice President of Electronic Publishing. AtLEXIS-NEXIS, Mr. Peck, developed both internal and end-user softwareapplications. Most recently, Mr. Peck led the development of Lexis.com legalresearch system and Lexis' intranet based knowledge management tools. Mr. Peckalso held positions at General Motors Corporation in Detroit. MARSHALL PETERSON, Vice President of Infrastructure Technology, was aprogram manager at Digital Equipment Corporation responsible for complex missioncritical systems implementations for its customers. Prior to this, he was asolutions architect and project manager responsible for developing andimplementing hardware and software solutions for a variety of industries,including manufacturing, defense and finance. The applications included processcontrol and monitoring, document management, management information andmessaging, as well as flight and battlefield simulations. HAMILTON O. SMITH, M.D., Senior Director of DNA Resources, was Professor ofMolecular Biology and Genetics at the Johns Hopkins School of Medicine untilmid-1998. He is best known for the discovery of the first Type II restrictionenzyme, for which he received a Nobel Prize in 1968, soon after joining theHopkins faculty. He has made a number of contributions to nucleic acidbiochemistry and microbial genetics. In the past 20 years, he and his laboratoryco-workers have isolated and characterized more than a dozen genes involved inthe DNA transformation mechanism of the bacterium, HAEMOPHILUS INFLUENZAE. Hewas also a part time investigator at TIGR from 1997 to 1998, prior to joiningthe Celera Genomics group. 51

SCIENTIFIC ADVISORY BOARD The Celera Genomics group's scientific advisory board consists of thefollowing persons: ARTHUR L. CAPLAN, PH.D., is a renowned scholar and leading authority onethical issues surrounding biomedical advances and scientific discovery. Since1994 Dr. Caplan has served as Director of the Center for Bioethics and asTrustee Professor of Bioethics at the University of Pennsylvania. He is, inaddition, Professor of Molecular and Cellular Engineering, Professor ofPhilosophy and Chief, Division of Bioethics, University of Pennsylvania MedicalCenter. Dr. Caplan is Chairman of the Advisory Committee to the U.S. Departmentof Health and Human Services, Centers for Disease Control and the U.S. Food andDrug Administration. ARNOLD J. LEVINE, PH.D., is a cancer biologist and is President ofRockefeller University. Previously, Dr. Levine was the Harry C. Wiess Professorof the Life Sciences at Princeton University, where he founded the University'smolecular biology department during a 12-year tenure that saw the departmentgrow to include two research laboratories and 35 faculty members. Prior to hiswork at Princeton, Dr. Levine was chairman at SUNY/Stony Brook School ofMedicine. Dr. Levine is also a director of PE Corporation. VICTOR A. MCKUSICK, M.D., is University Professor of Medical Genetics at TheJohns Hopkins University and a physician at Johns Hopkins Hospital. Previously,he was Director of the Division of Medical Genetics in the Department ofMedicine at The Johns Hopkins University School of Medicine. Dr. McKusick iseditor-in-chief of the journal "Medicine" and founding editor of "Genomics", theinternational journal of gene mapping and nucleotide sequencing emphasizinganalyses of the human and other complex genomes. He served as founder presidentof The Human Genome Organization from 1988 to 1990. RICHARD J. ROBERTS, PH.D., Chairman of the Scientific Advisory Board, is aresearch director at New England Biolabs in Beverly, Massachusetts. He wasawarded the Nobel Prize for Physiology Medicine in 1993 and is a leading pioneerin the applications of computer methods in protein and nucleic acid sequenceanalysis. From 1972 to 1992, Dr. Roberts held a series of senior researchpositions at Cold Spring Harbor Laboratory. MELVIN I. SIMON, PH.D., is chairman and professor, Division of Biology, atCalifornia Institute of Technology with which he has been associated since 1982.Previously, he was with the University of California, San Diego where he servedas assistant professor, associate professor, and professor in the Department ofBiology from 1965 to 1982. Dr. Simon serves on a number of boards includingthose of the Agouron Institute where he is chairman. NORTON D. ZINDER, PH.D., is the John D. Rockefeller, Jr. professor and headof the Laboratory of Genetics of The Rockefeller University. An internationallyacclaimed expert in molecular biology, Dr. Zinder was first chairman of theNIH's Program Advisory Committee on the Human Genome.PE CORPORATION MANAGEMENT Because the Celera Genomics group and the PE Biosystems group are part of PECorporation, overall responsibility for the management and operation of eachgroup resides in the board of directors and management of PE Corporation. Inparticular, PE Corporation has established an Executive Committee which hasoverall responsibility, subject to the direction of the board of directors, forthe management and strategic direction of the Celera Genomics group and the PEBiosystems group. The current members of that committee are: TONY L. WHITE, Chairman, President and Chief Executive Officer, PECorporation. MICHAEL W. HUNKAPILLER, PH.D., Senior Vice President and President, PEBiosystems Group. KENNETH D. NOONAN, PH.D., Senior Vice President, Corporate Development, PECorporation. WILLIAM B. SAWCH, Senior Vice President, General Counsel and Secretary, PECorporation. JOYCE A. SZIEBERT, Vice President, Human Resources, PE Corporation. J. CRAIG VENTER, PH.D., Senior Vice President and President, Celera GenomicsGroup. DENNIS L. WINGER, Senior Vice President and Chief Financial Officer, PECorporation. 52

PE CORPORATION SELECTED CONSOLIDATED FINANCIAL INFORMATIONThe following selected consolidated financial information has been derived fromthe consolidated financial statements of PE Corporation for each of the fivefiscal years in the period ended June 30, 1999 and the six month periods endedDecember 31, 1998 and 1999. The information set forth below should be read inconjunction with the PE Corporation "Management's Discussion and Analysis"included in this prospectus; and the PE Corporation consolidated financialstatements and notes thereto contained in the PE Corporation Annual Report toStockholders for the year ended June 30, 1999, and in the PE CorporationQuarterly Report on Form 10-Q for the quarterly period ended December 31, 1999,each incorporated herein by reference. The data for the six month periods endedDecember 31, 1998 and 1999 have been derived from unaudited financial statementswhich, in the opinion of management, reflect all adjustments necessary for afair presentation of results for the periods covered. On May 6, 1999, PE Corporation recapitalized its former common stock into PECorporation--PE Biosystems Group Common Stock and PE Corporation--CeleraGenomics Group Common Stock. Therefore, neither the PE Biosystems stock nor theCelera Genomics stock was issued or outstanding for the periods prior to May 6,1999. On June 17, 1999, the Board of Directors announced a two-for-one split of PEBiosystems stock. The two-for-one stock split was effected in the form of a 100%stock dividend paid to stockholders of record as of the close of business onJuly 12, 1999. All PE Biosystems group share and per share data reflect thissplit. On January 20, 2000, the Board of Directors announced a two-for-one stocksplit of PE Biosystems stock and Celera Genomics stock. The two-for-one stocksplits were effected in the form of a 100% stock dividend distributed onFebruary 18, 2000 to stockholders of record as of the close of business onFebruary 4, 2000. All PE Biosystems group and Celera Genomics group share andper share data reflect this split. A number of items affect the comparability of this information. Before-taxamounts include: - Restructuring and other special charges of $15.5 million for fiscal 1995, $17.5 million for fiscal 1996, $48.1 million for fiscal 1998, $6.1 million for fiscal 1999, and $2.0 million for the six months ended December 31, 1998; - A restructuring reserve adjustment of $9.2 million for fiscal 1999 relating to excess fiscal 1998 restructuring liabilities; - Gains on investments of $20.8 million for fiscal 1995, $11.7 million for fiscal 1996, $64.9 million for fiscal 1997, $1.6 million for fiscal 1998, $6.1 million for fiscal 1999, and $25.8 million for the six months ended December 31, 1999; - Acquired research and development charges of $33.9 million for fiscal 1996 and $26.8 million for fiscal 1997, and $28.9 million for fiscal 1998; - Charges for the impairment of assets of $9.9 million for fiscal 1996, $.7 million for fiscal 1997, and $14.5 million for fiscal 1999; - Tax benefit and valuation allowance reductions of $22.2 million for fiscal 1999; - A charge of $3.5 million for a donation to PE Corporation's charitable foundation for fiscal 1999; - Charges of $9.2 million relating to the recapitalization of PE Corporation for fiscal 1999 and $1.2 million for the six months ended December 31, 1998; and - Charges relating to the acceleration of certain long-term compensation programs as a result of the attainment of performance targets of $10.1 million for fiscal 1999 and $21.6 million for the six months ended December 31, 1999. 53

PE CORPORATION SELECTED CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)<TABLE><CAPTION> FOR THE SIX MONTHS ENDED FOR THE FISCAL YEARS ENDED JUNE 30, DECEMBER 31,(DOLLAR AMOUNTS IN THOUSANDS ---------------------------------------------------------- -----------------------EXCEPT PER SHARE AMOUNTS) 1995 1996 1997 1998 1999 1998 1999------------------------------------------- -------- -------- ---------- ---------- ---------- ---------- ---------- (UNAUDITED)<S> <C> <C> <C> <C> <C> <C> <C>SUMMARY OF OPERATIONSNet revenues............................... $543,945 $642,218 $ 768,368 $ 944,306 $1,216,897 $ 543,238 $ 616,207Income from continuing operations.......... 38,569 1,310 102,492 15,694 96,797 36,095 29,254 Per share of common stock Basic.................................. .87 .03 2.16 .32 .73 Diluted................................ .85 .03 2.07 .31 .71Income (loss) from discontinued operations (net of income taxes).................... 7,738 (37,833) 27,906 40,694 79,058 (4,037) --Net income (loss).......................... 46,307 (36,523) 130,398 56,388 175,855 32,058 29,254 Per share of common stock Basic.................................. 1.04 (.80) 2.74 1.16 .65 Diluted................................ 1.02 (.77) 2.63 1.12 .63Dividends per share........................ .68 .68 .68 .68 .51 .34PE BIOSYSTEMS GROUPIncome from continuing operations.......... $ 148,365 $ 73,541 Per share of common stock Basic.................................. .74 .36 Diluted................................ .72 .34Income from discontinued operations (net of income taxes).................... 79,058 --Net income................................. 227,423 73,541 Per share of common stock Basic.................................. 1.13 .36 Diluted................................ 1.10 .34Dividends per share........................ .0425 .085CELERA GENOMICS GROUPNet loss................................... $ (44,894) $ (43,676) Per share of common stock Basic and diluted...................... (.89) (.84)OTHER INFORMATIONCash and short-term investments............ $103,826 $121,145 $ 217,222 $ 84,091 $ 308,021 $ 75,479 $ 349,481Working capital............................ 256,607 229,639 354,742 287,991 471,350 330,015 467,966Capital expenditures....................... 33,891 28,198 58,057 71,820 176,035 49,984 51,107Total assets............................... 797,970 809,856 1,006,793 1,135,276 1,519,307 1,241,051 1,681,244Long-term debt............................. 64,524 33,694 59,152 33,726 31,452 35,548 37,102Total debt................................. 123,224 89,801 89,068 45,825 35,363 66,839 118,351Stockholders' equity....................... 369,807 373,727 504,270 564,248 821,525 622,229 906,264</TABLE> 54

PE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSISMANAGEMENT'S DISCUSSION OF CONTINUING OPERATIONS The following discussion with respect to fiscal years 1997, 1998 and 1999,and the six months ended December 31, 1998 and 1999 should be read in connectionwith the information presented in the PE Corporation selected consolidatedfinancial information included in this prospectus and the financial statementsand related notes in the PE Corporation Annual Report to Stockholders onForm 10-K for the fiscal year ended June 30, 1999, and in the PE CorporationQuarterly Report on Form 10-Q for the quarter ended December 31, 1999, eachincorporated herein by reference. Historical results and percentagerelationships are not necessarily indicative of operating results for any futureperiods. Throughout the following discussion of operations we refer to the impact onour reported results of the movement in foreign currency exchange rates from onereporting period to another as "foreign currency translation."DISCONTINUED OPERATIONS Effective May 28, 1999, we completed the sale of our Analytical Instrumentsbusiness to EG&G, Inc. Analytical Instruments, formerly a unit of our PEBiosystems group, develops, manufactures, markets, sells and services analyticalinstruments used in a variety of markets. As part of the sale, the rights to the"Perkin-Elmer" name were transferred to EG&G. The aggregate consideration we received was $425 million, consisting of$275 million in cash and one-year secured promissory notes in the aggregateprincipal amount of $150 million which bear interest at a rate of 5% per annum.We recognized a net gain on disposal of discontinued operations of$100.2 million, net of $87.8 million of income taxes. The transaction is subjectto post-closing adjustments pursuant to the terms of the agreement with EG&G. Amounts previously reported for Analytical Instruments have beenreclassified and stated as discontinued operations. See Note 15 to PECorporation's consolidated financial statements included in our 1999 AnnualReport to Stockholders.EVENTS IMPACTING COMPARABILITYACQUISITIONS, INVESTMENTS, AND DISPOSITIONS On January 22, 1998, we acquired PerSeptive Biosystems, Inc. The acquisitionwas accounted for as a pooling of interests and, accordingly, our financialresults were restated to include the combined operations. We acquired Molecular Informatics, Inc. and a 14.5% interest, andapproximately 52% of the voting rights, in Tecan AG during the second quarter offiscal 1998, and GenScope, Inc. during the third quarter of fiscal 1997. Theresults of operations for these acquisitions, each of which was accounted for asa purchase, have been included in the consolidated financial statements sincethe date of each respective acquisition. During the fourth quarter of fiscal1999, we divested our interest in Tecan. A before-tax gain of $1.6 million wasrecognized on the sale. A discussion of significant acquisitions, investments and dispositions isprovided in Note 2 to the PE Corporation's consolidated financial statementsincluded in our 1999 Annual Report to Stockholders.RESTRUCTURING AND OTHER SPECIAL CHARGES For the six month period ended December 31, 1998 and for the fiscal yearended June 30, 1999, non-recurring before-tax costs of $1.2 million and$9.2 million, respectively, were incurred in connection 55

with the recapitalization of PE Corporation. See Note 1 to the PE Corporation'sconsolidated financial statements included in our 1999 Annual Report toStockholders for a discussion of the recapitalization. During fiscal 1998, $48.1 million of before-tax charges were recorded forrestructuring and other merger costs to integrate PerSeptive into PE Corporationfollowing the acquisition. The objectives of the integration plan were to lowerPerSeptive's cost structure by reducing excess manufacturing capacity, achievebroader worldwide distribution of PerSeptive's products, and combine sales,marketing, and administrative functions. The charge included: $33.9 million forrestructuring 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. Additionalmerger-related period costs of $6.1 million for fiscal 1999, $1.5 million forfiscal 1998, and $2.0 million for the first six months of fiscal 1999 wereincurred for training, relocation, and communication in connection with theintegration. During the fourth quarter of fiscal 1999, we completed the restructuringactions. The costs to implement the program were $9.2 million below the$48.1 million charge recorded for fiscal 1998. As a result, during the fourthquarter of fiscal 1999, we recorded a $9.2 million reduction of charges requiredto implement the fiscal 1998 plan. A discussion of our restructuring program isprovided in Note 10 to the PE Corporation's consolidated financial statementsincluded in our 1999 Annual Report to Stockholders.ACQUIRED RESEARCH AND DEVELOPMENT During fiscal 1998 and 1997, we recorded charges of $28.9 million and$26.8 million, respectively, for purchased in-process research and developmentin connection with certain acquisitions. See Note 2 to the PE Corporation'sconsolidated financial statements included in our 1999 Annual Report toStockholders. In the second quarter of fiscal 1998, we expensed $28.9 million of theMolecular Informatics acquisition cost as in-process research and development,representing 53.6% of the purchase price. This amount was attributed to andsupported by a discounted probable cash flow analysis on a project-by-projectbasis. At the acquisition date, the technological feasibility of the acquiredtechnology had not been established and the acquired technology had no futurealternative uses. We attributed approximately 10% of the in-process research and developmentvalue to BioLIMS, a software system that manages data, initiates analysisprograms, and captures the results in a centralized, relational database forsequencing instruments; 6% to GA SFDB, a client-side add-on product to severalexisting gene sequencing instruments; 38% to BioMERGE, a client-servermanagement and integration system that organizes proprietary, public andthird-party results in a single relational database for the drug discovery andgenomic research markets; 9% to BioCLINIC, a client-server management andintegration system that organizes proprietary, public and third-party resultsgenerated from DNA and protein sequence analysis in a single database for theclinical trials phase of drug development; and 37% to SDK, an open architecturesoftware platform from which all of Molecular Informatics' future softwareapplications were expected to be derived. As of the acquisition date, all of the major functionality for BioLIMS 2.0had been completed and the product was subsequently released in September 1998.As of the acquisition date, BioLIMS 3.0 was in the design and scoping phase. Asof the acquisition date, GA SFDB was in early alpha phase and had been completedconcurrent with the development of BioLIMS 2.0 and was released inSeptember 1998. As of the acquisition date, BioMERGE's 3.0 functional scope wasdefined and the requirements assessment had been completed and was subsequentlyreleased in November 1998. As of the acquisition date, the BioCLINIC productrequirements had been specified and discussions had begun with two potentialcustomers to begin the specific software modifications. Development efforts wereterminated in April 1998 due to unsuccessful marketing efforts. As of theacquisition date, the SDK requirements assessment had been completed and thefunctional scope had been defined. 56

We attributed $11.8 million of the purchase price to core technology andexisting products, primarily related to the BioMERGE product. We applied arisk-adjusted discount to the project's cash flows of 20% for existingtechnology and 23% for in-process technology. The risk premium of 3% forin-process technologies was determined by management based on the associatedrisks of releasing these in-process technologies versus the existingtechnologies for the emerging bioinformatics software industry. The significantrisks associated with these products include the limited operating history ofMolecular Informatics, uncertainties surrounding the market acceptance of suchin-process products, competitive threats from other bioinformatics companies andother risks. Management is primarily responsible for estimating the fair valueof such existing and in-process technology. During the third quarter of fiscal 1997, we acquired GenScope for$26.8 million. GenScope, founded in 1995, represented a development stageventure with no operating history. GenScope had effectively no revenues and onlylimited R&D contract services. At the acquisition date, technologicalfeasibility of the acquired technology right had not been established and theacquired technology right had no future alternative uses. We obtained the rightto utilize AFLP-based gene expression profiling technology in the field of humanhealth, but did not obtain any core technology or other rights. GenScope'slimited balance sheet, with assets of approximately $.2 million, had yet todeliver commercial value. Accordingly, we recorded a charge of $25.4 millionattributable to the in-process technology purchased. We based this amount uponthe early development stage of this life science business acquired, thetechnological hurdles to apply this technology to the field of human health andthe underlying cash flow projections. The acquisition represented the purchaseof development stage technology, not at the time considered commercially viablein the health care applications that we intend to pursue. Our intent was tofirst develop the technology into a set of molecular screening tools for use inthe enhancement of pharmaceutical product development. We allocated$1.4 million of the purchase price to technology rights attributable toGenScope's AFLP-based gene expression profiling technology. AFLP is anenhancement of the polymerase chain reaction ("PCR") process that allowsselective analysis of any portion of genetic material without the specific,prior sequence information normally required for PCR. Of the $25.4 millionexpensed as in-process research and development, $5.5 million represented acontingent liability due on the issuance of a process patent for technologyunder development. Through June 30, 1999, we incurred approximately $12.2 million in additionalresearch and development costs to further develop the AFLP technology in thefield of human health. We anticipate spending an additional $2.2 million infiscal 2000 to substantially complete such project. Such costs approximate thoseanticipated at the date of acquisition.ASSET IMPAIRMENT During the fourth quarter of fiscal 1999, we incurred a $14.5 million chargeto cost of sales for the impairment of intangible assets associated with theMolecular Informatics business. This impairment resulted primarily from adecline in management's assessment of future cash flows from this business whichincluded the discontinuance of certain product lines in the fourth quarter. During fiscal 1997, a $.7 million charge was recorded to cost of sales forthe write-down of certain impaired assets. See Note 1 to PE Corporation's consolidated financial statements included inour 1999 Annual Report to Stockholders.GAIN ON INVESTMENTS Fiscal 1997, 1998, 1999, and the six months ended December 31, 1999 includedbefore-tax gains of $64.9 million, $1.6 million, $4.5 million, and $25.8million, respectively, related to the sale and release of contingencies onminority equity investments. As previously described, fiscal 1999 also includeda 57

before-tax gain of $1.6 million related to the sale of our interest in Tecan.See Note 2 to PE Corporation's consolidated financial statements included in our1999 Annual Report to Stockholders.OTHER EVENTS IMPACTING COMPARABILITY During the fourth quarter of fiscal 1999, a $10.1 million charge wasrecorded to selling, general and administrative expenses for costs related tothe acceleration of certain long-term compensation programs as a result of therecapitalization of our company and the attainment of performance targets. During the fourth quarter of fiscal 1999, we made a $3.5 million donation toour company's charitable foundation, which supports educational and othercharitable programs. The charge was recorded to selling, general andadministrative expenses. The effective income tax rate for fiscal 1999 included certain tax benefitand valuation allowance reductions of $22.2 million. See Note 4 to PECorporation's consolidated financial statements included in our 1999 AnnualReport to Stockholders. During the second quarter of fiscal 2000, PE Corporation recorded abefore-tax charge of $21.6 million in selling, general and administrativeexpenses, for costs related to the acceleration of certain long-termcompensation programs as a result of the attainment of performance targets.RESULTS OF CONTINUING OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1999COMPARED WITH THE SIX MONTHS ENDED DECEMBER 31, 1998 PE Corporation reported income from continuing operations of $29.3 millionfor the first six months of fiscal 2000 compared with $36.1 million for thefirst six months of fiscal 1999. On a segment basis, the PE Biosystems groupreported income from continuing operations of $73.5 million for the first sixmonths of fiscal 2000 compared with $49.1 million for the first six months offiscal 1999. On a comparable basis, excluding the special items previouslydescribed and Tecan, income from continuing operations increased 44.4% to$73.5 million for the first six months of fiscal 2000 compared with$50.9 million for the prior period. This increase is attributable to the growthin net revenues and lower operating expenses as a percent of net revenues.Partially offsetting the lower operating expenses were increased non-operatingcosts related to the PE Biosystems group's foreign currency management program.The Celera Genomics group reported a net loss of $43.7 million for the first sixmonths of fiscal 2000, compared with a net loss of $12.2 million for the firstsix months of fiscal 1999. The increase in the net loss reflected the increasedsequencing activity and increased operating expenses required to support theexpanded data management and software and business development activities. Net revenues for PE Corporation were $616.2 million for the first six monthsof fiscal 2000 compared with $543.2 million for first six months of fiscal 1999,an increase of 13.4%. On a segment basis, net revenues for the PE Biosystemsgroup increased 14.8% to $628.2 million for the first six months of fiscal 2000,compared with $547.4 million for the prior year. The Celera Genomics groupreported net revenues of $16.6 million for the first six months of fiscal 2000,compared with $5.6 million for the first six months of fiscal 1999. Net revenues for the PE Biosystems group, excluding the results of Tecan forthe prior year, increased 28.2% compared with the prior year. The effects offoreign currency translation increased net revenues by approximately$2.4 million compared with the prior year. Revenues from leased instruments andshipments of consumables and project materials to the Celera Genomics group were$28.6 million for the first six months of fiscal 2000, or 4.6% of the PEBiosystems group's net revenues. For the first six months of fiscal 1999,revenues from shipments of instruments and consumables to the Celera Genomicsgroup were $9.8 million. Geographically, excluding the net revenues of Tecan forthe first six months of fiscal 1999, the PE Biosystems group reported revenuegrowth in all regions for the first six months of fiscal 2000 compared with thefirst six months of fiscal 1999. Revenues increased 29.9% in the United States,21.2% in 58

Europe, 31% in the Far East and 60.3% in Latin America and other markets,compared with the first six months of the prior fiscal year. Increased demandfor genetic analysis products, sequence detection systems, and polymerase chainreaction product lines was the primary contributor. Net revenues for the Celera Genomics group were $16.6 million for the firstsix months of fiscal 2000 compared with $5.6 million for the first six months offiscal 1999. The increased revenues were primarily a result of databasesubscription agreements initiated during the second half of fiscal 1999 and anincrease in genomics services revenues. Revenues for plant and animal genotypingservices remained essentially unchanged with the prior year. Gross margin as a percentage of net revenues for PE Corporation was 54.6%for the first six months of fiscal 2000 compared with 55.3% for the first sixmonths of fiscal 1999. Excluding Tecan for the prior year, the gross margin as apercentage of net revenues was 53.7%. Gross margin for the PE Biosystems groupas a percentage of net revenues was 53.4% for the first six months of fiscal2000 compared with 55.3% for the first six months of fiscal 1999. SG&A expenses for PE Corporation were $201.5 million for the first sixmonths of fiscal 2000 compared with $163.2 million for the first six months offiscal 1999. On a segment basis, SG&A expenses were $183.6 million, includingthe long-term compensation charge, and $152.6 million for the first six monthsof fiscal 2000 and 1999, respectively, for the PE Biosystems group, and$17.9 million and $10.6 million for the first six months of fiscal 2000 and1999, respectively, for the Celera Genomics group. SG&A expenses for the PE Biosystems group, excluding the long-termcompensation charge for the current year and Tecan from the prior year,increased 20.2% for the first six months of fiscal 2000 compared with the firstsix months of the prior year. This increase was due to higher planned expenses,reflecting the growth in sales. As a percentage of net revenues, excluding thelong-term compensation charge and Tecan, SG&A expenses were 25.8% for the firstsix months of fiscal 2000 compared with 27.5% for the prior year. The Celera Genomics group's SG&A expenses increased $7.3 million for thefirst six months of fiscal 2000 compared with the first six months of the prioryear. The increase related to the planned scale-up in business development,marketing and administrative activities in support of the database business. R&D expenses for PE Corporation increased to $117.4 million for the firstsix months of fiscal 2000 compared with $77.1 million for the prior year. R&Dexpenses for the PE Biosystems group were $63.4 million for the first six monthsof fiscal 2000 compared with $65.6 million for the prior year. Excluding Tecan,R&D expenses increased 11% compared with second quarter of the prior year. As apercentage of net revenues, excluding Tecan, R&D expenses were 10.1% for thefirst six months of fiscal 2000 compared with 11.6% for the first six months ofthe prior year. The prior year's R&D expense level was higher as a percentage ofsales due to the release of new products introduced later in fiscal 1999. TheCelera Genomics group's R&D expenses increased $57.4 million to $70.3 millionfor the first six months of fiscal 2000 from $12.9 million for the first sixmonths of fiscal 1999 primarily as a result of a full six months of sequencingoperations and significantly expanded bioinformatics and software developmentcapabilities. PE Corporation incurred merger-related period costs of $2.0 million for thefirst six months of fiscal 1999 for training, relocation, and communication inconnection with the integration of PerSeptive into the PE Biosystems group. Seenote 10 to PE Corporation's consolidated financial statements included inPE Corporation's 1999 Annual Report to Stockholders. During the first six monthsof fiscal 1999, we recorded a non-recurring charge of $1.2 million for costsincurred in connection with the recapitalization of PE Corporation. Operating income was $17.5 million for the first six months of fiscal 2000compared with $56.8 million for the first six months of the prior year. On asegment basis, operating income for the PE Biosystems group increased to$88.5 million for the first six months of fiscal 2000 compared with$82.1 million for the first six months of the prior year. On a comparable basis,excluding the special items previously described 59

and Tecan, operating income increased 49.2% for the first six months of fiscal2000 compared with the first six months of the prior year. The PE Biosystemsgroup benefited from increased revenues primarily as a result of strong demandfor several new products introduced over the past year. The PE Biosystems groupalso benefited from lower operating expenses as a percentage of net revenues,partially as a result of slower than planned ramp-up in staffing. Operatingincome as a percentage of net revenues, excluding the special items and Tecan,increased to 17.5% for the first six months of fiscal 2000 compared with 15.1%for the first six months of the prior year. Operating loss for the Celera Genomics group was $71.6 million for the firstsix months of fiscal 2000 compared with $18.5 million for the first six monthsof fiscal 1999. The increase in the operating loss reflected the increase insequencing activity and increased operating expenses required to support theexpanded data management and software and business development activities. We recognized a before-tax gain of $25.8 million in the second quarter offiscal 2000 related to the sale of a portion of PE Corporation's interest in aminority equity investment. Interest expense was $1.3 million for the first six months of fiscal 2000compared with $2.1 million for the prior year. This decrease was primarily dueto lower average interest rates. Interest income was $9.6 million for the firstsix months of fiscal 2000 compared with $.7 million for the prior year, whichincluded interest on the note receivable from EG&G relating to the sale of theAnalytical Instruments business. The increase was also due to higher cashbalances and higher interest rates. Other expense, net for PE Corporation for the first six months of fiscal2000 was $8.9 million, primarily related to costs associated with a portion ofour traditional foreign currency management program that provides hedge coveragefor projected cash flows. Other expense, net was $.5 million for the first sixmonths of fiscal 1999, which related to costs associated with a portion of ourtraditional foreign currency hedging program offset by income from a legalsettlement. Our effective income tax rate was 32% for the first six months of fiscal2000 compared with 19% for the prior year. Excluding special items in fiscal2000 and fiscal 1999, and Tecan in fiscal 1999, the effective income tax ratewas 24% for the first six months of 2000 compared with 18% for the prior year. In the first six months of fiscal 1999, minority interest expense of$8.2 million was recognized relating to our 14.5% financial interest in Tecan.RESULTS OF CONTINUING OPERATIONS--1999 COMPARED WITH 1998 We reported income from continuing operations of $96.8 million for fiscal1999 compared with $15.7 million for fiscal 1998. On a segment basis, the PEBiosystems group reported income from continuing operations of $148.4 millionfor fiscal 1999 compared with $24.0 million for fiscal 1998 and the CeleraGenomics group reported a net loss of $44.9 million for fiscal 1999, comparedwith $8.3 million for fiscal 1998. Income from continuing operations for PE Corporation, on a comparable basisexcluding the special items previously described, increased 4.0% to$91.4 million for fiscal 1999 compared with $87.9 million for fiscal 1998. On asegment basis, the PE Biosystems group, excluding the special items, reported anincrease of 44.8% in income from continuing operations for fiscal 1999 comparedwith the prior year. Excluding the fiscal 1999 special items allocated to theCelera Genomics group of $4.6 million for costs incurred in connection with therecapitalization and $1.0 million for costs related to the acceleration ofcertain compensation programs, the Celera Genomics group reported a net loss of$39.6 million compared with $8.3 million for fiscal 1998. Net revenues were $1,216.9 million for fiscal 1999 compared with$944.3 million for fiscal 1998, an increase of 28.9%. On a segment basis, netrevenues for the PE Biosystems group increased 30.0% to 60

$1,221.7 million for fiscal 1999, compared with $940.1 million for the prioryear. The Celera Genomics group reported net revenues of $12.5 million forfiscal 1999, compared with $4.2 million for fiscal 1998. Net revenues for the PE Biosystems group, excluding the results of Tecan,increased 25.9% compared with the prior year. The effects of foreign currencytranslation increased net revenues by less than 1% compared with the prior year.Net revenues from shipments to the Celera Genomics group were $17.3 million forfiscal 1999 and represented less than 2% of the group's net revenues. There wereno revenues to the Celera Genomics group for fiscal 1998. Geographically,excluding the net revenues of Tecan, the PE Biosystems group reported revenuegrowth in all regions for fiscal 1999 compared with the prior year. Revenuesincreased 32.5% in the United States, 19.5% in Europe, 20.9% in the Far East and12.6% in Latin America and other markets, compared with the prior year. Demandfor the PE Biosystems group's new ABI Prism-Registered Trademark- 3700 DNAAnalyzer, which began shipping in the second quarter of fiscal 1999, was strong.Shipments for sequence detection systems and liquid chromatography/massspectrometry ("LC/MS") products also contributed to the growth. Net revenues for the Celera Genomics group increased $8.3 million for fiscal1999 compared with the prior year. Revenues for contract research servicesincreased $4.5 million, relating primarily to expression-based gene discoveringservices in the agricultural market, and $2.8 million from the group's newgenomic information and database products, mainly from early accesssubscriptions. Gross margin for PE Corporation as a percentage of net revenues was 54.1%for fiscal 1999, compared with 54.3% for the prior year. The PE Biosystemsgroup's fiscal 1999 gross margin included $14.5 million for the impairment ofintangible assets associated with the Molecular Informatics business. Fiscal1998 gross margin included $4.1 million of inventory-related write-offsassociated with the rationalization of certain product lines in connection withthe acquisition of PerSeptive. On a comparable basis, excluding the specialitems for both years, gross margin as a percentage of net revenues was 55.1% forfiscal 1999 and 54.5% for fiscal 1998. The improved gross margin was primarilythe result of a change in product mix. Increased unit sales of reagents tosupport genetic analysis systems, increased royalty revenues, and continueddemand in instrument sales of higher margin genetic analysis product offeringscontributed to the growth. SG&A expenses for PE Corporation were $364.1 million for fiscal 1999,compared with $283.4 million for fiscal 1998, an increase of 28.5%. On a segmentbasis, SG&A expenses were $335.9 million compared with $276.7 million for fiscal1999 and 1998, respectively, for the PE Biosystems group, and $28.3 millioncompared with $6.7 million for fiscal 1999 and 1998, respectively, for theCelera Genomics group. SG&A expenses for the PE Biosystems group, excluding Tecan, increased 15.6%for fiscal 1999 compared with the prior year. Fiscal 1999 expenses included acharge of $9.1 million for costs related to the acceleration of certainlong-term compensation programs as a result of the recapitalization ofPE Corporation and the attainment of performance targets. Fiscal 1999 expensesalso included $3.5 million for a contribution to our charitable foundation whichsupports educational and other charitable programs. On a comparable basis,excluding the special items, SG&A expenses increased 10.8%. This increase wasdue to higher planned expenses, reflecting the growth in sales and orders. As apercentage of net revenues, excluding Tecan and the special items, SG&A expenseswere 25.9% for fiscal 1999 compared with 29.4% for the prior year. The Celera Genomics group's SG&A expenses increased $21.5 million for fiscal1999 compared with the prior year. The increase was primarily related to thestart-up and ongoing operations of the new genomic information business. SG&Aexpenses for fiscal 1999 included $1.0 million for costs related to theacceleration of certain compensation programs as a result of therecapitalization of PE Corporation and the attainment of performance targets. R&D expenses for PE Corporation were $179.3 million for fiscal 1999 comparedwith $115.8 million for fiscal 1998, an increase of 54.9%. R&D expenses for thePE Biosystems group increased 26.6% 61

compared with the prior year to $133.5 million for fiscal 1999. Excluding Tecan,expenses increased 19.5% compared with the prior year in support of theintroduction of new products and the acceleration of product development. As apercentage of net revenues, excluding Tecan, R&D expenses were 10.7% for fiscal1999 compared with 11.2% for the prior year. The Celera Genomics group's R&Dexpenses increased to $48.4 million for fiscal 1999 compared with $10.3 millionfor fiscal 1998, primarily as a result of establishing and operating thesequencing facility and computing center of the new genomic informationbusiness. During fiscal 1998, $48.1 million of before-tax charges were recorded forrestructuring and other merger costs to integrate PerSeptive into the PEBiosystems group following the acquisition. The objectives of the integrationplan were to lower PerSeptive's cost structure by reducing excess manufacturingcapacity, achieve broader worldwide distribution of PerSeptive's products, andcombine sales, marketing, and administrative functions. The charge included:$33.9 million for restructuring the combined operations; $8.6 million fortransaction costs; and $4.1 million of inventory-related write-offs, recorded incost of sales, associated with the rationalization of certain product lines.Additional merger-related period costs of $6.1 million for fiscal 1999 and$1.5 million for fiscal 1998 were incurred for training, relocation, andcommunication costs. The $33.9 million restructuring charge included $13.8 million forseverance-related costs and workforce reductions of approximately 170 employees,consisting of 114 employees in production labor and 56 employees in sales andadministrative support. The remaining $20.1 million represented facilityconsolidation and asset-related write-offs that included: $11.7 million forcontract and lease terminations and facility-related expenses in connection withthe reduction of excess manufacturing capacity; $3.2 million for dealertermination payments, sales office consolidations, and consolidation of salesand administrative support functions; and $5.2 million for the write-off ofcertain tangible and intangible assets and the termination of certaincontractual obligations. Transaction costs of $8.6 million includedacquisition-related investment banking and professional fees. During the fourth quarter of fiscal 1999, we completed the restructuringactions. The costs to implement the program were $9.2 million below the$48.1 million charge recorded for fiscal 1998. As a result, during the fourthquarter of fiscal 1999, the PE Biosystems group recorded a $9.2 millionreduction of charges required to implement the fiscal 1998 plan. See Note 10 toPE Corporation's consolidated financial statements included in our 1999 AnnualReport to Stockholders. During fiscal 1999, we recorded a before-tax special charge of $9.2 millionfor costs incurred in connection with the recapitalization of PE Corporation.These costs included investment banking and professional fees. On a segmentbasis the PE Biosystems group and the Celera Genomics group were each allocated50% of the total costs. Fiscal 1998 included $28.9 million of purchased in-process research anddevelopment associated with our company's acquisition of Molecular Informaticsfor the PE Biosystems group.OPERATING INCOME<TABLE><CAPTION>(DOLLAR AMOUNTS IN MILLIONS) 1998 1999------------------------------------------------------------ -------- --------<S> <C> <C>Operating income before special items....................... $117.6 $142.8 Asset impairment.......................................... -- (14.5) Long-term compensation programs........................... -- (10.1) Charitable foundation contribution........................ -- (3.5) Restructuring and other merger costs, net................. (48.1) 3.1 Recapitalization costs.................................... -- (9.2) Acquired research and development......................... (28.9) -- ------ ------Operating income............................................ $ 40.6 $108.6 ====== ======</TABLE> 62

Operating income for PE Corporation increased to $108.6 million for fiscal1999 compared with $40.6 million for fiscal 1998. On a comparable basisexcluding the special items previously described, operating income increased21.4% to $142.8 million for fiscal 1999 compared with $117.6 million for theprior year. On a segment basis, operating income for the PE Biosystems group increasedto $187.9 million for fiscal 1999 compared with $53.4 million for the prioryear. On a comparable basis, excluding the results of Tecan and the specialitems previously described, operating income increased 60.7% for fiscal 1999compared with the prior year. The PE Biosystems group benefited from increasedrevenues, higher gross margins, and lower operating expenses as a percentage ofnet revenues. Higher operating income from sequencing, mapping systems, andLC/MS products were the primary contributors. The effects of currencytranslation for the PE Biosystems group increased operating income by less than1% for fiscal 1999 compared with the prior year. Operating income as apercentage of net revenues, excluding the results of Tecan and the specialitems, increased to 17.6% for fiscal 1999 compared with 13.8% for the prioryear. Operating loss for the Celera Genomics group was $68.8 million for fiscal1999 compared with $12.8 million for fiscal 1998. Excluding the $4.6 million ofspecial charges for costs incurred in connection with the recapitalization andthe $1.0 million of costs related to the acceleration of certain long-termcompensation programs, the operating loss was $63.2 million for fiscal 1999. For fiscal 1999 and 1998, the PE Biosystems group recorded gains of$4.5 million and $1.6 million, respectively, on the sale and release ofcontingencies on minority equity investments. Fiscal 1999 also included a gainof $1.6 million related to the sale of our interest in Tecan. Interest expense was $3.8 million for fiscal 1999 compared with$4.9 million for the prior year. This decrease was primarily due to therefinancing of PerSeptive's 8 1/4% Convertible Subordinated Notes (the"PerSeptive Notes") and lower average interest rates. Interest income was$2.9 million for fiscal 1999 compared with $5.9 million for the prior year,primarily because of lower average cash balances during the year. Other income, net for fiscal 1999 was $.5 million compared with$3.1 million for the prior year. Fiscal 1999 other income, net primarily relatedto the revaluation of foreign exchange contracts and a legal settlement thatwere partially offset by the loss on the disposal of certain assets and othernon-operating costs. The other income, net for fiscal 1998 resulted from a gainon the sale of certain operating and non-operating assets. The effective income tax rate was 4% for fiscal 1999 and 54% for fiscal1998. Excluding Tecan and the special items, the effective income tax rate was25% for fiscal 1999 and 24% for fiscal 1998. The effective income tax rate forfiscal 1999 included the release of valuation allowances of $17.4 million. Thevaluation allowance was reduced because management believes, now that the saleof the Analytical Instruments business has been completed, that it is morelikely than not that the deferred tax assets to which the valuation allowancerelated will be realized. An analysis of the differences between the federalstatutory income tax rate and the effective tax rate is provided in Note 4 to PECorporation's consolidated financial statements included in our 1999 AnnualReport to Stockholders. The PE Biosystems group incurred minority interest expense of $13.4 millionfor fiscal 1999 and $5.6 million for fiscal 1998 relating to our 14.5% financialinterest in Tecan. As previously indicated, we divested our interest in Tecanduring the fourth quarter of fiscal 1999.RESULTS OF CONTINUING OPERATIONS--1998 COMPARED WITH 1997 We reported income from continuing operations of $15.7 million for fiscal1998 compared with $102.5 million for the prior year. On a comparable basis,excluding the special items previously described, income from continuingoperations was $87.9 million for fiscal 1998 compared with $73.7 million forfiscal 1997. 63

On a segment basis, the PE Biosystems group reported income from continuingoperations of $24.0 million for fiscal 1998 compared with $132.7 million forfiscal 1997. On a comparable basis, excluding the special items previouslydescribed, income from continuing operations increased 23.2% to $95.0 millionfor fiscal 1998 compared with $77.1 million for fiscal 1997. The Celera Genomicsgroup reported a net loss of $8.3 million for fiscal 1998 compared with$30.2 million for the prior year, or $3.4 million excluding the $26.8 millionfor purchased research and development charged in connection with the GenScopeacquisition. Net revenues for PE Corporation were $944.3 million for fiscal 1998 comparedwith $768.4 million for the prior year, an increase of $22.9%. On a segmentbasis, net revenues for the PE Biosystems group were $940.1 million for fiscal1998 compared with $767.5 million for fiscal 1997, an increase of 22.5%. CeleraGenomics group's net revenues increased from $.9 million for fiscal 1997 to$4.2 million for fiscal 1998, primarily related to AgGen. Net revenues for the PE Biosystems group, excluding Tecan, increased 15.9%compared with the prior year. The effects of currency translation decreased netrevenues by approximately $33 million, or 4%, compared with the prior year, asthe U.S. dollar strengthened against most European and Far Eastern currencies.On a worldwide basis, excluding Tecan and the effects of currency translation,revenues would have increased approximately 20% compared with the prior year.Increased demand for genetic analysis, LC/MS, and polymerase chain reactionproduct lines was the primary contributor. All geographic markets for the PEBiosystems group reported increased revenues over the prior year. ExcludingTecan, net revenues in the United States, Europe, and the Far East increased24.0%, 10.7%, and 4.6%, respectively. Before the effects of currencytranslation, and excluding Tecan, revenues in Europe and the Far East would haveincreased approximately 18% and 14%, respectively, compared with the prior year.The PE Biosystems group believes slower Japanese government funding in thesecond half of fiscal 1998 and the lack of a supplemental budget, which added tofiscal 1997 revenues, contributed to a lower growth rate of only 3% in theJapanese market. Gross margin for PE Corporation as a percentage of net revenues was 54.3%for fiscal 1998 compared with 53.0% for fiscal 1997. The PE Biosystems group'sfiscal 1998 gross margin included $4.1 million of inventory-related write-offsassociated with the rationalization of certain product lines in connection withthe acquisition of PerSeptive. Fiscal 1997 included a charge of $.7 million forthe write-down of certain other assets. Excluding the special items, grossmargin as a percentage of net revenues increased to 54.5% for fiscal 1998.Benefits realized from the sale of higher-margin genetic analysis products andincreased royalty revenues in the United States more than offset the negativeeffects of currency translation. SG&A expenses for PE Corporation were $283.4 million for fiscal 1998compared with $229.9 million for fiscal 1997, an increase of 23.3%. On a segmentbasis, the PE Biosystems group's SG&A expenses increased to $276.7 million forfiscal 1998 compared with $227.7 million for the prior year. The 21.5% increasein expenses, or 14.7% excluding Tecan, was due to higher planned worldwideselling and marketing expenses commensurate with the substantially higherrevenue and order growth. Before the effects of currency translation andexcluding Tecan, SG&A expenses increased approximately 18% compared with theprior year. As a percentage of net revenues, SG&A expenses for the PE Biosystemsgroup were essentially unchanged at 29.4% for fiscal 1998 compared with 29.7%for the prior year. SG&A expenses for the Celera Genomics group increased from$2.2 million for fiscal 1997 to $6.7 million for fiscal 1998, primarilyreflecting the operations of the AgGen and GenScope businesses. R&D expenses for PE Corporation increased to $115.8 million for fiscal 1998from $82.1 million for fiscal 1997. On a segment basis, R&D expenses for the PEBiosystems group of $105.5 million increased 35.0% over the prior year, or 27.7%excluding Tecan. R&D spending increased 40.6%, or 33.3% excluding Tecan, overthe prior year as the PE Biosystems group continued its product developmentefforts and preparation for new product launches. As a percentage of netrevenues, the PE Biosystems group's R&D expenses increased to 11.2% comparedwith 10.2% for the prior year. Celera Genomics group's R&D 64

expenses were $10.3 million for fiscal 1998 compared with $4.0 million forfiscal 1997. Fiscal 1997 included the operations of GenScope and Linkage fromthe dates of acquisition. During fiscal 1998, $48.1 million of before-tax charges were recorded forrestructuring and other merger costs to integrate PerSeptive into the PEBiosystems group following the acquisition. Additional merger-related periodcosts of $1.5 million for training, relocation, and communication costs wererecognized in the third and fourth quarters of fiscal 1998. Fiscal 1998 included $28.9 million of purchased in-process research anddevelopment associated with the acquisition of Molecular Informatics for the PEBiosystems group. Fiscal 1997 included a charge of $26.8 million for in-processresearch and development, related to the acquisitions of GenScope and Linkagefor the Celera Genomics group.OPERATING INCOME<TABLE><CAPTION>(DOLLAR AMOUNTS IN MILLIONS) 1997 1998------------------------------------------------------------ -------- --------<S> <C> <C>Operating income before special items....................... $ 95.7 $117.6 Asset impairment.......................................... (.7) -- Restructuring and other merger costs...................... -- (48.1) Acquired research and development......................... (26.8) (28.9) ------ ------Operating income............................................ $ 68.2 $ 40.6 ====== ======</TABLE> Operating income for PE Corporation was $40.6 million for fiscal 1998compared with $68.2 million for fiscal 1997. On a comparable basis, excludingthe items previously described, operating income increased to $117.6 million forfiscal 1998 compared with $95.7 million for the prior year, an increase of22.9%. On a segment basis, operating income for the PE Biosystems group decreasedto $53.4 million for fiscal 1998 compared with $100.3 million for fiscal 1997.Excluding the special charges for restructuring and other merger costs, acquiredresearch and development, and the impairment of assets, operating incomeincreased $29.4 million, or 29.1%, primarily as a result of increased volume andimproved margins. A 23.5% increase in operating income from higher-marginsequencing and mapping systems was the primary contributor. Excluding Tecan,operating income before special items increased 21.6% compared with the prioryear. Before the effects of currency translation and excluding Tecan, fiscal1998 operating income increased 38.5% compared with the prior year.Geographically, excluding Tecan, fiscal 1998 operating income before specialitems increased 48.0% in the United States, 20.1% in the Far East, and 8.0% inEurope compared with fiscal 1997. As a percentage of net revenues, operatingincome before special items increased to 13.9% for fiscal 1998 compared with13.2% for the prior year. Operating loss for the Celera Genomics group was $12.8 million for fiscal1998 compared with $32.1 million for fiscal 1997. On a comparable basis,excluding the $26.8 million charge for acquired research and development, theoperating loss for fiscal 1997 was $5.3 million. For fiscal 1998 and 1997, the PE Biosystems group recorded gains of$1.6 million and $64.9 million, respectively, on the sale and release ofcontingencies on minority equity investments. See Note 2 to PE Corporation'sconsolidated financial statements included in our 1999 Annual Report toStockholders. Interest expense was $4.9 million for fiscal 1998 compared with$5.9 million for the prior year. The decrease was primarily due to therefinancing of the PerSeptive Notes together with slightly lower outstandingdebt 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 fundthe PE Biosystems group's continued investments and acquisitions, as well asfrom lower interest rates. 65

Other income, net for fiscal 1998 of $3.1 million, primarily related to thesale of certain operating and non-operating assets, compared with other income,net of $1.9 million for the prior year. Our effective income tax rate was 54% for fiscal 1998 and 26% for fiscal1997. Excluding Tecan in fiscal 1998, and special items in fiscal 1998 andfiscal 1997, the effective income tax rate was 24% for fiscal 1998 compared with27% for fiscal 1997. Increased earnings in low tax jurisdictions reduced our taxrate for fiscal 1998. An analysis of the differences between the federalstatutory income tax rate and the effective rate is provided in Note 4 to PECorporation's consolidated financial statements included in our 1999 AnnualReport to Stockholders. Minority interest expense of $5.6 million was recognized in fiscal 1998, bythe PE Biosystems group, relating to our 14.5% financial interest in Tecan. SeeNote 2 to PE Corporation's consolidated financial statements included in our1999 Annual Report to Stockholders.MARKET RISK The PE Biosystems group operates internationally, with manufacturing anddistribution facilities in various countries throughout the world. For the firstsix months of fiscal 2000 and fiscal 1999, the PE Biosystems group derivedapproximately 49% of its revenues from countries outside of the United States.Results continue to be affected by market risk, including fluctuations inforeign currency exchange rates and changes in economic conditions in foreignmarkets. Our risk management strategy utilizes derivative financial instruments,including forwards, swaps, purchased options, and synthetic forward contracts tohedge certain foreign currency and interest rate exposures, with the intent ofoffsetting losses and gains that occur on the underlying exposures with gainsand losses, respectively, on the derivatives. We do not use derivative financialinstruments for trading or other speculative purposes, nor are we a party toleveraged derivatives. At December 31, 1999, outstanding hedge contracts coveredapproximately 75% of the estimated exposures related to foreign currency cashflows to be realized over the next nine months. The outstanding hedges were acombination of forward, option, and synthetic forward contracts maturing overthe next nine months. We performed sensitivity analyses as of December 31, 1999 and June 30, 1999.Assuming a hypothetical adverse change of 10% in foreign exchange rates inrelation to the U.S. Dollar at December 31, 1999, we calculated a hypotheticalloss of $9.0 million when comparing the change in fair value of both the foreigncurrency contracts outstanding and the underlying exposures being hedged atDecember 31, 1999. Performing the same hypothetical calculation at June 30,1999, we calculated a hypothetical loss of $6.1 million. These hypotheticalanalyses exclude the impact of foreign currency translation on our operations.Actual gains and losses in the future could, however, differ materially fromthese analyses, based on changes in the timing and amount of foreign currencyexchange rate movements, actual exposures and hedges. Interest rate swaps are used to hedge underlying debt obligations. In fiscal1997, we executed an interest rate swap, allocated to the PE Biosystems group,in conjunction with our entering into a five-year Japanese Yen debt obligation.Under the terms of the swap agreement, we pay a fixed rate of interest at 2.1%and receive a floating LIBOR interest rate. At December 31, 1999, the notionalamount of indebtedness covered by the interest rate swap was Yen 3.8 billion or$37.1 million. The maturity date of the swap coincides with the maturity of theYen loan in March 2002. A change in interest rates would have no impact on ourreported interest expense and related cash payments because the floating ratedebt and fixed rate swap contract have the same maturity and are based on thesame rate index.MANAGEMENT'S DISCUSSION OF FINANCIAL RESOURCES AND LIQUIDITY The following discussion of financial resources and liquidity focuses on theConsolidated Statements of Financial Position and the Consolidated Statements ofCash Flows of PE Corporation. 66

Cash and cash equivalents were $349.5 million at December 31, 1999,$308.0 million at June 30, 1999, and $82.9 million at June 30, 1998, with totaldebt of $118.4 million at December 31, 1999, $35.4 million at June 30, 1999, and$45.8 million at June 30, 1998. Working capital was $468.0 million at December 31, 1999, $471.4 million atJune 30, 1999, and $288.0 million at June 30, 1998. Excluding the current netassets of discontinued operations at June 30, 1998, working capital was$148.0 million. Debt to total capitalization increased to 12% at December 31, 1999 from 4%at June 30, 1999 as a result of an increase in loans payable. Debt to totalcapitalization decreased to 4% at June 30, 1999 from 8% at June 30, 1998, as aresult of a decrease in loans payable. During the first quarter of fiscal 2000,we secured financing of $46 million specifically for the purchase of the CeleraGenomic group's Rockville, Maryland facilities. We anticipate that the$46 million financing will remain outstanding beyond the current fiscal year.The increase in loans payable for the PE Biosystems group is primarily a resultof our decision to discontinue our receivables factoring program in a foreignsubsidiary.SIGNIFICANT CHANGES IN THE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Effective May 28, 1999, we completed the sale of our Analytical Instrumentsbusiness to EG&G. The aggregate consideration received by our company was$425 million, consisting of $275 million in cash and one-year secured promissorynotes in the aggregate principal amount of $150 million which bear interest at arate of 5% per annum. Accounts receivable increased by $78.1 million and the inventory balanceincreased by $12.7 million from June 30, 1998 to June 30, 1999. On a comparablebasis, excluding Tecan from the June 30, 1998 balances, accounts receivable andinventory levels increased by $99.6 million and $22.4 million, respectively,from June 30, 1998 to June 30, 1999, reflecting the growth in net revenues andbacklog of the PE Biosystems group. Prepaid expenses and other current assets increased to $79.3 million atJune 30, 1999 from $62.0 million at June 30, 1998, or $57.2 million excludingTecan. The increase of $22.1 million, excluding Tecan, was related primarily togrowth in non-trade receivables, royalties and prepaid dealer commissions. Other long-term assets increased $51.4 million to $300.9 million atDecember 31, 1999 from $249.5 million at June 30, 1999, primarily as a result ofa net increase in value of our minority equity investments. Other long-termassets decreased to $249.5 million at June 30, 1999 from $264.1 million atJune 30, 1998. Excluding Tecan from the June 30, 1998 balance, other long-termassets increased $32.8 million. The change was primarily a result of a$9.4 million increase in prepaid pension assets, a net $17.0 million increase inour equity investments, a $15.6 million increase in non-current deferred taxasset, offset by the write-off of $14.5 million of impaired intangible assetsassociated with the Molecular Informatics business. We reduced our total deferred tax asset and related valuation allowance from$115.5 million and $62.8 million at June 30, 1998 to $112.1 million and$37.5 million at June 30, 1999. This resulted in an overall increase to thetotal deferred tax asset after valuation allowance of $21.9 million. Thevaluation allowance relates primarily to foreign and domestic tax losscarryforwards, domestic tax credit carryforwards and other domestic deferred taxassets. A portion of the valuation allowance is attributable to tax loss andcredit carryforwards and other deferred tax assets which we acquired as part ofthe purchase of PerSeptive in fiscal 1998. In evaluating our need for avaluation allowance, we considered all available positive and negative evidence,including historical information supplemented by information about future years.We evaluate the need for the valuation allowance periodically for eachtax-paying component in each tax jurisdiction. The following factorssignificantly influenced our conclusion regarding the need for a valuationallowance: (1) the limitation under the Internal Revenue Code on the amount ofannual 67

utilization of domestic loss carryforwards and credits of PerSeptive, and(2) the various expiration dates of the foreign loss carryforwards. Accounts payable decreased $20.0 million to $145.1 million at December 31,1999 from $165.1 million at June 30, 1999. Payments for higher purchases made inthe fourth quarter of fiscal 1999, which were made to support increasedproduction and operating requirements, contributed to the decrease. Accountspayable increased to $165.1 million at June 30, 1999 from $119.6 million atJune 30, 1998. Excluding Tecan from the June 30, 1998 balance, accounts payableincreased $50.0 million. The increase resulted primarily from higher purchasesto support production and operating requirements of the PE Biosystems group andthe rapid progress in establishing the infrastructure of the Celera Genomicsgroup. Accrued salaries and wages increased $14.6 million to $62.1 million atDecember 31, 1999 from $47.5 million at June 30, 1999. The increase reflects theaccrual of the charge for the acceleration of certain long-term compensationprograms as a result of the attainment of performance targets, partially offsetby the timing of recurring payments. Accrued salaries and wages increased$17.5 million to $47.5 million at June 30, 1999 from $30.0 million at June 30,1998. Excluding Tecan from the June 30, 1998 balance, accrued salaries and wagesincreased $20.7 million reflecting the timing of payments for both groups andthe increased headcount of the Celera Genomics group. Accrued taxes on income increased $48.4 million to $128.3 million atJune 30, 1999 from $79.9 million at June 30, 1998. Excluding Tecan from theJune 30, 1998 balance, accrued taxes on income increased $52.2 million as aresult of the tax on the gain from the sale of the Analytical Instrumentsbusiness in foreign tax jurisdictions. Other accrued expenses increased by $55.4 million to $177.9 million atJune 30, 1999 from $122.5 million at June 30, 1998. Excluding Tecan from theJune 30, 1998 balance, other accrued expenses increased by $61.7 million as aresult of higher warranty and installation accruals, reflecting the increase involume of the PE Biosystems group, an increase in deferred revenues, and higherbenefit and certain compensation accruals of both groups. At June 30, 1998, $43.8 million of minority interest was recognized inconnection with Tecan. During the fourth quarter of fiscal 1999 we divested ourinterest in Tecan.CONSOLIDATED STATEMENTS OF CASH FLOWS Net cash used by operating activities from continuing operations was$16.0 million for the first six months of fiscal 2000 compared with net cashprovided by operating activities of $15.9 million for the same period in fiscal1999. For the first six months of fiscal 2000, income related cash flow was morethan offset by higher payments to suppliers and payments of certain compensationaccruals, as well as higher prepaid expenses and other current assets. Operating activities from continuing operations generated $69.1 million ofcash for fiscal 1999 compared with $68.1 million for fiscal 1998 and$73.4 million for fiscal 1997. For fiscal 1999, higher income-related cash flowand increased operating liabilities were only partially offset by cash used foroperating assets. Net cash used by investing activities from continuing operations was$31.5 million for the first six months of fiscal 2000 compared with$35.1 million for the first six months of fiscal 1999. In the first six monthsof fiscal 2000, PE Corporation had capital expenditures of $51.1 million.Capital expenditures were $31.2 million for the PE Biosystems group, whichincluded $4.3 million related to improvement of its information technologyinfrastructure, and $19.9 million for the Celera Genomics group. Investmentsduring the first six months of fiscal 2000 included minority investments inIllumina, Inc. and Epoch Pharmaceuticals, Inc. for the PE Biosystems group. TheCelera Genomics group's investments during the first six months of fiscal 2000included acquisitions of the Panther-TM- technology from Molecular ApplicationsGroup and a 47.5% equity interest in Shanghai GeneCore BioTechnologies Co., Ltd.In the 68

first six months of fiscal 2000, we realized approximately $31.1 million fromthe sale of a portion of a minority investment. In the first six months offiscal 1999, we generated $14.3 million in net cash proceeds from the sale ofcertain non-operating assets. The fiscal 1999 cash proceeds were more thanoffset by capital expenditures of $50.0 million, which included $4.7 millionrelated to improvement of our information technology infrastructure, and$17.5 million for the acquisition of a corporate airplane. For fiscal 1999, net cash provided by investing activities from continuingoperations was $154.1 million, compared with net cash used of $129.3 million forfiscal 1998. During fiscal 1999, we generated $325.8 million in net cashproceeds from the sale of various assets. Net cash proceeds included$275.0 million from the sale of the Analytical Instruments business,$30.0 million from the sale of Tecan, and $20.8 million from the sale ofminority equity investments and certain non-operating assets. The proceeds werepartially offset by $176.0 million of capital expenditures. Fiscal 1999 capitalexpenditures were $92.1 million for the PE Biosystems group, which included$12.9 million as part of the strategic program to improve our informationtechnology infrastructure, $17.5 million for the acquisition of an airplane, and$10.6 million of capital equipment leased to the Celera Genomics group. Capitalexpenditures for the Celera Genomics group were $94.5 million for fiscal 1999.The capital expenditures included $46.3 million for the purchase of land andbuildings in Rockville, Maryland and $22.9 million for improvements thereon. Forfiscal 1999, $5.3 million was used for various acquisitions and investments. SeeNote 2 to PE Corporation's consolidated financial statements included in our1999 Annual Report to Stockholders. For fiscal 1998, net cash used by investing activities from continuingoperations was $129.3 million compared with net cash provided by investingactivities of $24.7 million for fiscal 1997. During fiscal 1998, the PEBiosystems group generated $19.5 million in net cash proceeds from the sale ofassets and $9.7 million from the collection of a note receivable. The proceedswere more than offset by $71.8 million of capital expenditures by our company,which included $33.7 million as part of the strategic program to improve ourinformation technology infrastructure, and $98.0 million for acquisitions andinvestments, primarily Tecan and Molecular Informatics. For fiscal 1997, we generated $99.7 million in net cash proceeds from thesale of our equity interests in Etec Systems, Inc. and MillenniumPharmaceuticals, Inc. and from the sale of certain other non-operating assets.These proceeds were partially offset by $5.0 million used for acquisitions and$58.1 million for capital expenditures that included $9.5 million forinformation technology infrastructure improvements and $12.1 million for theacquisition of an airplane. Net cash used by discontinued operations was $7.4 million for the first sixmonths of fiscal 2000 compared with $26.4 million for the first six months offiscal 1999. The fiscal 2000 use of $7.4 million was for transaction-relatedpayments and other cash outlays associated with the divestiture of theAnalytical Instruments business. We expect additional cash outlays over thebalance of the fiscal year. Net cash provided by financing activities was $93.9 million for the firstsix months of fiscal 2000 compared with $40.6 million for the prior period. Forthe first six months of fiscal 2000, we received $27.7 million in proceeds fromemployee stock option exercises compared with $37.9 million in fiscal 1999.Loans payable increased $75.0 million in the first six months of fiscal 2000compared with an increase of $15.6 million for the prior year. The first sixmonths of fiscal 1999 included a payment of $5.3 million for the retirement offoreign debt. Net cash provided by financing activities was $43.6 million for fiscal 1999compared with net cash used of $37.7 million for fiscal 1998. For fiscal 1999,we received $96.4 million of proceeds from employee stock option plan exercisescompared with $33.6 million for fiscal 1998. Fiscal 1999 included $2.2 millionfor the purchase of shares of common stock for treasury. No shares wererepurchased during fiscal 1998. Dividends paid were $34.2 million for fiscal1999 and $39.1 million for fiscal 1998. Reduction in loans payable and principalpayments on long-term debt were $16.4 million for fiscal 1999, compared with 69

$32.2 million for fiscal 1998. The fiscal 1998 principal payment on long-termdebt included $24.7 million for the redemption of PerSeptive's 8 1/4 %Convertible Subordinated Notes due 2001. During fiscal 1997, we generated $1.8 million from the sale of equity putwarrants and $33.6 million of proceeds from employee stock plan exercises. Thesewere offset by stockholder dividends of $29.5 million. Fiscal 1997 included$25.1 million for the purchase of shares of common stock for treasury. Purchasesof common stock for treasury were made in support of various stock plans. During fiscal 1999, we made cash payments of $8.1 million for obligationsrelated to restructuring plans and other merger costs. Restructuring liabilitiesremaining at June 30, 1999 were $5.8 million for the fiscal 1998 plan. SeeNote 10 to PE Corporation's consolidated financial statements included in our1999 Annual Report to Stockholders. The funding for the remaining restructuringliabilities will be from current cash balances and funds generated fromoperating activities. We believe our cash and short-term investments, funds generated fromoperating activities, and available borrowing facilities are sufficient toprovide for our anticipated financing needs over the next two years. At December31, 1999, we had unused credit facilities totaling $354 million.IMPACT OF INFLATION AND CHANGING PRICES Inflation and changing prices are continually monitored. We attempt tominimize the impact of inflation by improving productivity and efficiencythrough continual review of both manufacturing capacity and operating expenselevels. When operating costs and manufacturing costs increase, we attempt torecover such costs by increasing, over time, the selling price of our productsand services. We believe the effects of inflation have been appropriatelymanaged and therefore have not had a material impact on our historic operationsand resulting financial position.YEAR 2000 In fiscal 1997, we initiated a worldwide program to assess the expectedimpact of the Year 2000 date recognition problem on our existing internalcomputer systems; our non-information technology systems, including embedded andprocess control systems; our product offerings; and our significant suppliers.The purpose of this program has been to ensure the event does not have amaterial adverse effect on our business operations. While not all possible Year 2000 date related disruption scenarios have beenexperienced, and there is a possibility of disruptions in the future, throughthe date of this prospectus, we have experienced no material disruption or othersignificant problems. We will continue to evaluate and mitigate our exposure inareas where appropriate. Based on currently available information, we continueto believe that Year 2000 related disruptions or other problems, if any, willnot have a material adverse effect on our operations or financial condition.However, we cannot be certain that Year 2000 issues will not have a materialadverse effect on PE Corporation, since the evaluation process is not yetcomplete and it is early in the Year 2000.EURO CONVERSION A single currency called the euro was introduced in Europe on January 1,1999. Eleven of the fifteen member countries of the European Union agreed toadopt the euro as their common legal currency on that date. Fixed conversionrates between these participating countries' existing currencies (the "legacycurrencies") and the euro were established as of that date. The legacycurrencies are scheduled to remain legal tender as denominations of the eurountil at least January 1, 2002, but not later than July 1, 2002. During thistransition period, parties may settle transactions using either the euro or aparticipating country's legal currency. 70

PE Corporation is currently evaluating the impact the euro conversion mayhave on its computer and financial systems, business processes, market risk, andprice competition. PE Corporation does not expect this conversion to have amaterial impact on its results of operations, financial position, or cash flows.RECENTLY ISSUED ACCOUNTING STANDARDS In June 1998, the Financial Accounting Standards Board ("FASB") issuedStatement of Financial Accounting Standards ("SFAS") No. 133, "Accounting forDerivative Instruments and Hedging Activities." The provisions of the statementrequire the recognition of all derivatives as either assets or liabilities inthe statement of financial position and the measurement of those instruments atfair value. The accounting for changes in the fair value of a derivative dependson the intended use of the derivative and the resulting designation. We arerequired to implement the statement in the first quarter of fiscal 2001. We arecurrently analyzing the statement to determine the impact, if any, on theconsolidated financial statements. We continue to apply APB No. 25 in accounting for our stock-basedcompensation plans. Accordingly, no compensation expense has been recognized forthese plans, as all options have been issued at fair value. The effect ofaccounting for such plans at fair value, under SFAS No. 123, "Accounting forStock Based Compensation," would be to decrease fiscal 1999 income fromcontinuing operations by $23.1 million. The effect of accounting for such plansat fair value would be to decrease the PE Biosystems group's fiscal 1999 incomefrom continuing operations by $.20 per diluted share, and to increase the CeleraGenomics group's fiscal 1999 net loss by $.10 per diluted share. The method usedto determine the fair value is the Black-Scholes option pricing model.Accordingly, changes in dividend yield, volatility, interest risks and optionlife could have a material effect on the fair value. See Note 8 to theconsolidated financial statements included in our 1999 Annual Report toStockholders for a more detailed discussion regarding the accounting forstock-based compensation at fair value.OUTLOOK The PE Biosystems group expects to continue to grow and maintainprofitability for fiscal 2000 on the strength of robust demand and several newproducts. Fiscal 2000 will focus on growing product lines across a broad arrayof base technologies and exploring the needs of evolving markets. As publicfunding for basic life science research continues to expand and more progress ismade in uncovering structured genomic information, pharmaceutical companies,recognizing the opportunity that this information may provide, are placinggreater emphasis on research and development in these areas. PE Biosystemsshould continue to benefit from its customers' needs for more efficient and costeffective systems that can analyze and commercialize the volume of genomicinformation being created. Sales of the PE Biosystems group's genetic analysis systems are increasinglymoving beyond the basic research markets to a wider group of commercialcustomers and public agencies. The PE Biosystems group also should benefit inspring 2000 from shipments of new high throughput screening products such as theFMAT-TM- 8100 HTS System, the NorthStar-TM- HTS Workstation, and the ABIPrism-TM- 6700 Automated Nucleic Acid Workstation, now that the final versionshave been shipped to test site customers. Additionally, the PE Biosystems groupshould also benefit from new products expected to be introduced during thisperiod for drug characterization, as well as instruments and software for drugscreening. On January 24, 2000, PE Corporation announced the signing of a definitivemerger agreement under which the PE Biosystems group has agreed to acquire ThirdWave Technologies, Inc. in a stock-for-stock transaction. The transaction, whichhas been approved by the Boards of Directors of both companies, is structured asa tax-free pooling of interests. All of the equity of Third Wave will beexchanged for an aggregate of approximately 1,972,000 shares of PECorporation-PE Biosystems Group Common Stock, before giving effect to thetwo-for-one stock dividend declared January 20, 2000 for distribution onFebruary 18, 2000. The transaction is subject to customary closing conditionsand regulatory approvals. Third Wave has developed theInvader-Registered Trademark- nucleic acid (DNA and RNA) detection technology.The Invader-Registered Trademark- assays detect differences among geneticsequences important for the analysis of SNPs. SNPs are 71

single genetic code changes thought to account for individual differencesranging from predispositions for certain diseases to particular responses todrug treatment. This technology will be used with the PE Biosystems group'sSequence Detection Systems, a proprietary technology for real-time analysis ofgenetic information. We remain concerned about adverse currency effects because approximately 49%of the PE Biosystems group's revenues were derived from regions outside theUnited States for fiscal 1999. The Celera Genomics group expects to see an expansion in the customer basefor the new genomic information and database products, with correspondingincreases in revenues throughout fiscal 2000. During the second quarter offiscal 2000, the Celera Genomics group entered into a five-year comprehensivegenomics agreement with Pfizer Inc. which includes a subscription to all ofCelera Genomics group's current database products and a collaborative genediscovery agreement. Pfizer's database subscription gives it access to fivedatabases developed by the Celera Genomics group until 2005. All of thesedatabases integrate the Celera Genomics group's proprietary information withpublicly available sources. Despite the potential for increased revenues infiscal 2000, the Celera Genomics group expects that it will continue to incursignificant operating losses for such year. Operating expenses will increase over the balance of the fiscal year as theCelera Genomics group continues to improve its sequencing throughput andinstalls additional hardware and software designed to accelerate productdevelopment and support for its information delivery systems. The Celera Genomics group recently completed the sequencing phase indeciphering the genome of DROSOPHILA, the fruit fly. In January, 2000, theCelera Genomics group announced it had compiled DNA sequence in its databasethat covers 90% of the human genome. As a result of the extensive sequencecoverage of the 23 pairs of human chromosomes and based on statistical analysis,the Celera Genomics group believes that greater than 97% of all human genes arenow represented in its database. As a result of Celera's successful sequencingand assembly of DROSOPHILA and the accelerated availability of data from publichuman genome sequencing efforts, Celera believes that it can sequence andassemble the human genome on an accelerated basis. Celera Genomics expects tocomplete the sequencing phase of the human genome by mid-2000 and the assemblyphase by the end of 2000, or one year ahead of its original schedule. Celera Genomics' progress to date has placed it well ahead of its originalschedule. Consequently, Celera Genomics intends to make significant newinvestments to expand beyond the genome and to take advantage of what itbelieves will be new market opportunities in the emerging fields of functionalgenomics, in particular proteomics, and personalized health/medicine. Newrevenue opportunities in these fields range from expansion of Celera'sinformation and service businesses to the licensing of proprietary discoveriesresulting from the new information. Celera intends to use the net proceeds from this offering primarily to fundits new product and technology development activities in functional genomics,with an emphasis on proteomics, and personalized health/medicine. Theseactivities will require increased investment in Celera's laboratory,computational resources, software systems and business and product developmentoperations. Celera also intends to use the net proceeds of this offering forgeneral corporate purposes, including possible acquisitions, alliances orcollaborations. Pending such uses, Celera intends to invest the net proceeds ofthis offering in interest-bearing, investment-grade securities. We believe that Celera Genomics' existing cash and cash equivalents and thenote and tax benefit receivable from the PE Biosystems group are sufficient tofund its operating expenses and capital requirements related to its originalbusiness plan, which relates to the sequencing and assembly of the human genomeand the development of informational products and services based on theresultant data. While we intend to use the net proceeds of the Celera Genomicsstock offering to fund Celera's expansion into functional genomics andpersonalized health/medicine, such funds may not be sufficient to support thesenew business activities as they develop. Celera's actual future capital uses andrequirements with respect to its new activities will depend on many factors,including those discussed under "Risk Factors." 72

DESCRIPTION OF CAPITAL STOCK The following is a description of the terms of the capital stock of PECorporation. This description does not purport to be complete and is qualifiedin its entirety by reference to PE Corporation's Certificate of Incorporationwhich has been incorporated by reference as an exhibit to the registrationstatement of which this prospectus is a part.GENERAL Our certificate of incorporation authorizes us to issue 735,000,000 sharesof stock as follows: 500,000,000 shares of a class of common stock, designatedas PE Corporation--PE Biosystems group common stock, 225,000,000 shares of aclass of common stock, designated as PE Corporation--Celera Genomics groupcommon stock, and 10,000,000 shares of preferred stock. Shares of each class ofstock have a par value of $.01 per share. We will be able to issue shares ofpreferred stock in series, without stockholder approval. Of the 10,000,000authorized shares of preferred stock, our board of directors has designated atotal of 80,000 shares of two series of participating junior preferred stock foruse in connection with our stockholder rights plan. See "--Rights Agreement." As of February 25, 2000, there were no shares of preferred stock, 52,360,307shares of Celera Genomics stock and 207,430,616 shares of PE Biosystems stockissued and outstanding.CELERA GENOMICS GROUP STOCK DIVIDENDS Dividends on the Celera Genomics stock will be limited to an amount notgreater than the Available Dividend Amount for the Celera Genomics group. TheAvailable Dividend Amount for the Celera Genomics group is intended to besimilar to the amount that would be legally available for the payment ofdividends on the Celera Genomics stock if the group were a separate company. Incalculating the Available Dividend Amount for the Celera Genomics group, theamount of net income or loss of PE Corporation that is attributed to the CeleraGenomics group in accordance with generally accepted accounting principles willbe reduced by any unused federal tax benefits in excess of $75 million generatedby the Celera Genomics group from July 1, 1998. See "Management and AllocationPolicies--Taxes" and Note 1 to the Celera Genomics group combined financialstatements included in this prospectus. Delaware law limits the amount of distributions on our capital stock to ourlegally available funds, which are determined on the basis of our entirecompany, and not only the respective groups. As a result, the amount of legallyavailable funds will reflect the amount of any net losses of each group, anydistributions on Celera Genomics stock, PE Biosystems stock or any preferredstock and any repurchases of Celera Genomics stock, PE Biosystems stock orcertain preferred stock. Dividend payments on the Celera Genomics stock could beprecluded because legally available funds of PE Corporation are not availableunder Delaware law, even though the Available Dividend Amount test for theCelera Genomics group was met. We can not assure you that there will be anAvailable Dividend Amount for the Celera Genomics group or, if met, that PECorporation will have available funds to pay such a dividend. Subject to the prior payment of dividends on any outstanding shares ofpreferred stock and the limitations described above, our board of directors willbe able, in its sole discretion, to declare and pay dividends exclusively on thePE Biosystems stock, exclusively on the Celera Genomics stock or on both, inequal or unequal amounts. In making its dividend decisions, our board ofdirectors will not be required to take into account the relative availabledividend amounts for the two groups, the amount of prior dividends declared oneither class, the respective voting or liquidation rights of either class or anyother factor. 73

CONVERSION AND REDEMPTION MANDATORY DIVIDEND, REDEMPTION OR CONVERSION OF COMMON STOCK IF DISPOSITIONOF CELERA GENOMICS GROUP ASSETS OCCURS. If we sell, transfer, assign orotherwise dispose of, in one transaction or a series of related transactions,all or substantially all of the properties and assets attributed to CeleraGenomics group (a "disposition"), we are required, except as described below,to: - pay a dividend in cash and/or securities or other property to the holders of shares of Celera Genomics stock having a fair value equal to the net proceeds of the disposition; - if the disposition involves all, but not merely substantially all, of such properties and assets, redeem all outstanding shares of Celera Genomics stock in exchange for cash and/or securities or other property having a fair value equal to the net proceeds of the disposition; - if the disposition involves substantially all, but not all, of such properties and assets, redeem that number of whole shares of Celera Genomics stock as have in the aggregate an average market value, during the period of ten consecutive trading days beginning on the 26th trading day immediately succeeding the consummation date, closest to the net proceeds of the disposition; and the redemption price will be cash and/or securities or other property having a fair value equal to such net proceeds; or - convert each outstanding share of Celera Genomics stock into a number of shares of PE Biosystems stock equal to 110% of the ratio of the average market value of one share of Celera Genomics stock to the average market value of one share of PE Biosystems stock during the 10-trading day period beginning on the 26th trading day following the disposition date. We may only pay a dividend or redeem shares of Celera Genomics stock as setforth above if we have legally available funds under Delaware law and the amountto be paid to holders is less than or equal to the available dividend amount forthe Celera Genomics group. We are required to pay such dividend or complete suchredemption or conversion on or prior to the 95th trading day following thedisposition. For purposes of determining whether a disposition has occurred,"substantially all of the properties and assets" attributed to the CeleraGenomics group means a portion of such properties and assets: - that represents at least 80% of the then fair value of the properties and assets attributed to the Celera Genomics group; or - from which were derived at least 80% of the aggregate revenues of the Celera Genomics group for the immediately preceding twelve fiscal quarterly periods. The "net proceeds" of a disposition means an amount equal to what remains ofthe gross proceeds of the disposition after any payment of, or reasonableprovision is made as determined by our board of directors for: - any taxes payable by us, or which would have been payable but for the utilization of tax benefits attributable to the PE Biosystems group, in respect of the disposition or in respect of any resulting dividend or redemption; - any transaction costs, including, without limitation, any legal, investment banking and accounting fees and expenses; and - any liabilities of or attributed to the Celera Genomics group, including, without limitation, any liabilities for deferred taxes, any indemnity or guarantee obligations incurred in connection with the disposition or otherwise, any liabilities for future purchase price adjustments and any preferential amounts plus any accumulated and unpaid dividends in respect of the preferred stock attributed to the Celera Genomics group. 74

We may elect to pay the dividend or redemption price in connection with adisposition either in the same form as the proceeds of the disposition werereceived or in any other combination of cash, securities or other property thatour board of directors or, in the case of securities that have not been publiclytraded for a period of at least 15 months, an independent investment bankingfirm, determines will have an aggregate market value of not less than the fairvalue of the net proceeds. THE FOLLOWING ILLUSTRATION DEMONSTRATES THE PROVISIONS REQUIRING A MANDATORYDIVIDEND, REDEMPTION OR CONVERSION IF A DISPOSITION OCCURS. If: - 50 million shares of Celera Genomics stock and 200 million shares of PE Biosystems stock were outstanding, - the net proceeds of the disposition of substantially all, but not all, of the assets of the Celera Genomics group equals $500 million, and - the average market values of the Celera Genomics stock and the PE Biosystems stock during the 10-trading day valuation period were $100 and $75 per share, respectively,then we could do any of the following:(1) pay a dividend to the holders of shares of Celera Genomics stock equal to:<TABLE><C> <C> <S> = net proceeds -------------------------number of outstanding shares of Celera Genomics stock = $10 per share $500 million ------------------------- 50 million shares</TABLE>(2) redeem for $100 per share a number of shares of Celera Genomics stock equal to:<TABLE><C> <C> <S> = net proceeds ------------------------- average market value of Celera Genomics stock = 5,000,000 shares $500 million ------------------------- $100 per share</TABLE>(3) convert each outstanding share of Celera Genomics stock into a number of shares of PE Biosystems stock equal to:<TABLE><C> <C> <S> <C>1.1 x average market value = of Celera Genomics stock ------------------------- average market value of PE Biosystems stock1.1 x $100 per share = 1.46667 shares ------------------------- $75 per share</TABLE> EXCEPTIONS TO THE DIVIDEND, REDEMPTION OR CONVERSION REQUIREMENT IF ADISPOSITION OCCURS. We are not required to take any of the above actions forany disposition of all or substantially all of the properties and 75

assets attributed to the Celera Genomics group in a transaction or series ofrelated transactions that results in our receiving for such properties andassets primarily equity securities of any entity which: - acquires such properties or assets or succeeds to the business conducted with such properties or assets or controls such acquirer or successor; and - is primarily engaged or proposes to engage primarily in one or more businesses similar or complementary to the businesses conducted by the Celera Genomics group prior to the disposition, as determined by our board of directors.The purpose of this exception is to enable us technically to "dispose" ofproperties or assets of the Celera Genomics group to other entities engaged orproposing to engage in businesses similar or complementary to those of theCelera Genomics group without requiring a dividend on, or a conversion orredemption of, the Celera Genomics stock, so long as we hold an equity interestin that entity. A joint venture in which we own a direct or indirect equityinterest is an example of such an acquirer. We are not required to control thatentity, whether by ownership or contract provisions. We are also not required to effect a dividend, redemption or conversion ifthe disposition is: - of all or substantially all of our properties and assets in one transaction or a series of related transactions in connection with our dissolution, liquidation or winding up and the distribution of our assets to stockholders; - on a pro rata basis, such as in a spin-off, to the holders of all outstanding shares of the Celera Genomics stock; or - made to any person or entity controlled by us, as determined by our board of directors. NOTICES IF DISPOSITION OF CELERA GENOMICS GROUP ASSETS OCCURS. Not laterthan the 20th trading day after the consummation of a disposition, we willannounce publicly by press release: - the estimated net proceeds of the disposition; - the number of shares outstanding of Celera Genomics stock; and - the number of shares of Celera Genomics stock into or for which convertible securities are then convertible, exchangeable or exercisable and the conversion, exchange or exercise price thereof. Not earlier than the 36th trading day and not later than the 40th tradingday after the consummation of the disposition, we will announce publicly bypress release whether we will pay a dividend or redeem shares of common stockwith the net proceeds of the disposition or convert the shares of CeleraGenomics stock into PE Biosystems stock. We are required to cause to be mailed to each holder of shares of CeleraGenomics stock the additional notices and other information required by ourcertificate of incorporation. CONVERSION OF CELERA GENOMICS STOCK AT OUR OPTION AT ANY TIME. Our board ofdirectors may at any time convert each share of Celera Genomics stock into anumber of shares of PE Biosystems stock equal to 110% of the ratio of theaverage market values of the Celera Genomics stock to the PE Biosystems stockover a 20-trading day period. We will calculate the ratio as of the fifthtrading day prior to the date we mail the conversion notice to holders. However, if a Tax Event occurs at any time, a factor of 100% rather than110% will be applied to the ratio of the average market values. This means thatthe holders of Celera Genomics stock will not receive any premium in suchconversion. 76

"Tax Event" means the receipt by PE Corporation of an opinion of its taxcounsel that, as a result of: - any amendment to, or change in, the laws or regulations interpreting such laws of the United States or any political subdivision or taxing authority, including any announced proposed change by an applicable legislative committee or its chair in such laws or by an administrative agency in such regulations, or - any official or administrative pronouncement, action or judicial decision interpreting or applying such laws or regulations,it is more likely than not that for United States federal income tax purposes: - PE Corporation or our stockholders are, or, at any time in the future, will be subject to tax upon the issuance of shares of either Celera Genomics stock or PE Biosystems stock, or - either Celera Genomics stock or PE Biosystems stock is not or, at any time in the future, will not be treated solely as stock of PE Corporation.For purposes of rendering such an opinion, tax counsel will assume that anylegislative or administrative proposals will be adopted or enacted as proposed. These provisions allow us the flexibility to recapitalize the two classes ofcommon stock into one class of common stock that would, after suchrecapitalization, represent an equity interest in all of our businesses. Theoptional conversion or redemption could be exercised at any future time if ourboard of directors determines that, under the facts and circumstances thenexisting, an equity structure consisting of two classes of common stock was nolonger in the best interests of all of our stockholders. Such exchange could beexercised, however, at a time that is disadvantageous to the holders of one ofthe classes of common stock. See "Risk Factors--Stockholders may not have anyremedies for breach of fiduciary duties if any action by directors and officershas a disadvantageous effect on either class of common stock" and "--Numerouspotential conflicts of interest exist between the classes of common stock whichmay be difficult to resolve by our board or which may be resolved adversely toone of the classes." Many factors could affect the market values of the Celera Genomics stock orthe PE Biosystems stock, including our results of operations and those of eachof the groups, trading volume and general economic and market conditions. Marketvalues could also be affected by decisions by our board of directors or ourmanagement that investors perceive to affect differently one class of commonstock compared to the other. These decisions could include changes to ourmanagement and allocation policies, transfers of assets between groups,allocations of corporate opportunities and financing resources between thegroups and changes in dividend policies. THE FOLLOWING ILLUSTRATION DEMONSTRATES THE CALCULATION OF THE NUMBER OFSHARES ISSUABLE UPON CONVERSION OF CELERA GENOMICS STOCK INTO SHARES OF PEBIOSYSTEMS STOCK AT OUR OPTION. If: - a Tax Event has not occurred, - 50 million shares of Celera Genomics stock and 200 million shares of PE Biosystems stock were outstanding immediately prior to a conversion, and - the average market value of one share of the Celera Genomics stock and of one share of PE Biosystems stock over the 20-trading day valuation period was $100 and $75, respectively,then each share of Celera Genomics stock could be converted into 1.46667 sharesof PE Biosystems stock based on the following calculation:<TABLE><C> <C> <C> <S>1.1 x $100 = 1.46667 shares ---- $75</TABLE> 77

REDEMPTION IN EXCHANGE FOR STOCK OF SUBSIDIARY. Our board of directors mayredeem on a pro rata basis all of the outstanding shares of Celera Genomicsstock for shares of the common stock of one or more of our wholly-ownedsubsidiaries which own all of the assets and liabilities attributed to theCelera Genomics group. We may redeem shares of common stock for subsidiary stockonly if we have legally available funds under Delaware law. These provisions are intended to give us increased flexibility with respectto spinning-off the assets of the Celera Genomics group by transferring theassets of that group to one or more wholly-owned subsidiaries and redeeming theshares of Celera Genomics stock in exchange for stock of such subsidiary orsubsidiaries. As a result of any such redemption, or a redemption of the PEBiosystems stock under a similar provision for that stock, holders of each classof common stock would hold securities of separate legal entities operating indistinct lines of business. Such a redemption could be authorized by our boardof directors at any time in the future if it determines that, under the factsand circumstances then existing, an equity structure comprised of the CeleraGenomics stock and the PE Biosystems stock is no longer in the best interests ofall of our stockholders as a whole. SELECTION OF SHARES FOR REDEMPTION. If less than all of the outstandingshares of Celera Genomics stock are to be redeemed, we will redeem such sharesproportionately from among the holders of outstanding shares of Celera Genomicsstock or by such method as may be determined by our board of directors to beequitable. FRACTIONAL INTERESTS; TRANSFER TAXES. We will not be required to issuefractional shares of any capital stock or any fractional securities to anyholder of Celera Genomics stock upon any conversion, redemption, dividend orother distribution described above. If a fraction is not issued to a holder, wewill pay cash instead of such fraction. We will pay all documentary, stamp or similar issue or transfer taxes thatmay be payable in respect of the issue or delivery of any shares of capitalstock and/or other securities on conversion or redemption of shares. VOTING RIGHTS The entire voting power of our stockholders is vested in the holders ofcommon stock, who are entitled to vote on any matter on which our stockholdersare entitled to vote, except as otherwise required by our board of directors orprovided by law or stock exchange rules, by the terms of any outstandingpreferred stock or by any provision our certificate of incorporation restrictingthe power to vote on a specified matter to other stockholders. Holders of Celera Genomics stock and PE Biosystems stock vote as a singleclass on each matter on which holders of common stock are generally entitled tovote. On all matters as to which both Celera Genomics stock and PE Biosystemsstock vote together as a single class, each share of Celera Genomics stock willhave a number of votes equal to the quotient of the average market value of ashare of Celera Genomics stock over the 20-trading day period ending on the 10thtrading day prior to the record date for determining the holders of common stockentitled to vote, divided by the average market value of a share of PEBiosystems stock over the same period, while each share of PE Biosystems stockwill have one vote. Accordingly, the relative per share voting rights of the PE Biosystems stockand the Celera Genomics stock will fluctuate depending on changes in therelative market values of shares of such classes of common stock. The PE Biosystems stock currently has a substantial majority of the votingpower because the aggregate market value of the outstanding shares of PEBiosystems stock is substantially greater than the aggregate market value of theoutstanding shares of Celera Genomics stock. 78

We will set forth the number of outstanding shares of PE Biosystems stockand Celera Genomics stock in our Annual Report on Form 10-K and our QuarterlyReports on Form 10-Q filed under the Securities Exchange Act of 1934. We willdisclose in any proxy statement for a stockholders' meeting the number ofoutstanding shares and per share voting rights of the Celera Genomics stock. If shares of only Celera Genomics stock are outstanding, each share willhave one vote. If Celera Genomics stock is entitled to vote as a separate classwith respect to any matter, each share will, for purpose of such vote, have onevote on such matter. Fluctuations in the relative voting rights of the Celera Genomics stock andthe PE Biosystems stock could influence an investor interested in acquiring andmaintaining a fixed percentage of the voting power of our stock to acquire suchpercentage of both classes of common stock, and would limit the ability ofinvestors in one class to acquire for the same consideration relatively more orless votes per share than investors in the other class. The holders of Celera Genomics stock and PE Biosystems stock will not haveany rights to vote separately as a class on any matter coming before ourstockholders, except for certain limited class voting rights provided underDelaware law. In addition to the approval of the holders of a majority of thevoting power of all shares of common stock voting together as a single class,the approval of a majority of the outstanding shares of the Celera Genomicsstock or the PE Biosystems stock, voting as a separate class, would be requiredunder Delaware law to approve any amendment to our certificate of incorporationthat would change the par value of the shares of the class or alter or changethe powers, preferences or special rights of the shares of such class so as toaffect them adversely. As permitted by Delaware law, our certificate ofincorporation provides that an amendment to our certificate of incorporationthat increases or decreases the number of authorized shares of Celera Genomicsstock or PE Biosystems stock will only require the approval of the holders of amajority of the voting power of all shares of common stock, voting together as asingle class, and will not require the approval of the holders of the class ofcommon stock affected by such amendment, voting as a separate class. THE FOLLOWING ILLUSTRATION DEMONSTRATES THE CALCULATION OF THE NUMBER OFVOTES EACH SHARE OF CELERA GENOMICS STOCK WOULD BE ENTITLED ON ALL MATTERS ONWHICH HOLDERS OF CELERA GENOMICS STOCK AND PE BIOSYSTEMS STOCK VOTE AS A SINGLECLASS. If the average market value for the 20-trading day valuation period was$100 for the Celera Genomics stock and $75 for the PE Biosystems stock, eachshare of PE Biosystems stock would have one vote and each share of CeleraGenomics stock would have 1.333 votes based on the following calculation:<TABLE> <C> <C> <S> $100 = 1.333 votes ---- $75</TABLE>Assuming 200 million shares of PE Biosystems stock and 50 million shares ofCelera Genomics stock were outstanding, the shares of PE Biosystems stock wouldrepresent approximately 75% of our total voting power and the shares of CeleraGenomics stock would represent approximately 25% of our total voting power. LIQUIDATION Under our certificate of incorporation, in the event of our dissolution,liquidation or winding up, after payment or provision for payment of the debtsand other liabilities and full preferential amounts to which holders of anypreferred stock are entitled, regardless of the group to which such shares ofpreferred stock were attributed, the holders of Celera Genomics stock and PEBiosystems stock will be entitled to receive our assets remaining fordistribution to holders of common stock on a per share basis in proportion tothe liquidation units per share of such class. Following the effectiveness ofthe two-for-one stock split 79

distributed on February 18, 2000 each share of Celera Genomics stock has .0725liquidation units and each share of PE Biosystems stock has 0.25 liquidationunits. The number of liquidation units to which each share of Celera Genomics stockis entitled will not be changed without the approval of holders of the class ofcommon stock adversely affected except as described below. As a result, theliquidation rights of the holders of the respective classes of common stock maynot bear any relationship to the relative market values or the relative votingrights of the two classes. No holder of PE Biosystems stock will have any special right to receivespecific assets of the PE Biosystems group and no holder of Celera Genomicsstock will have any special right to receive specific assets of the CeleraGenomics group in the case of our dissolution, liquidation or winding up. Neither a merger nor consolidation of PE Corporation into or with any othercorporation, nor any sale, transfer or lease of all or any part of our assets,will, alone, be deemed a liquidation or winding up of PE Corporation, or causethe dissolution of PE Corporation, for purposes of these liquidation provisions. DETERMINATIONS BY THE BOARD OF DIRECTORS Any determinations made in good faith by our board of directors under anyprovision described under "Description Capital Stock," and any determinationswith respect to any group or the rights of holders of shares of Celera Genomicsstock or PE Biosystems stock, will be final and binding on all of ourstockholders, subject to the rights of stockholders under applicable Delawarelaw and under the federal securities laws. PREEMPTIVE RIGHTS The holders of the Celera Genomics stock will not have any preemptive rightsor any rights to convert their shares into any other securities of PECorporation.CELERA GENOMICS DESIGNATED SHARES The PE Biosystems group may hold in the future an equity interest in theCelera Genomics group in the form of "Celera Genomics Designated Shares" as aresult of future contributions of cash or property to the Celera Genomics groupdescribed below. Our board of directors could create Celera Genomics DesignatedShares if it determines that (1) the Celera Genomics group requires additionalequity capital to finance its business and (2) the PE Biosystems group shouldsupply that capital. Celera Genomics Designated Shares are authorized shares of Celera Genomicsstock that are not issued and outstanding, but which our board of directors,pursuant to the management and allocation policies, may from time to time issuewithout allocating the proceeds or other benefits of such issuance to the CeleraGenomics group. The Celera Genomics Designated Shares are not eligible toreceive dividends and can not be voted. The number of Celera Genomics Designated Shares are currently zero but fromtime to time will be: - increased by a number equal to the quotient obtained by dividing (1) the fair value of all cash or other property that PE Biosystems group contributes to the Celera Genomics group by (2) the average market value of Celera Genomics stock over the 20-trading day period immediately prior to the date of contribution; - decreased by a number equal to the quotient obtained by dividing (1) the fair value of all cash or other property that Celera Genomics group transfers to the PE Biosystems group to reduce the number of Celera Genomics Designated Shares by (2) the average market value of Celera Genomics stock over the 20-trading day period immediately prior to the date of transfer; 80

- decreased by the number of newly issued shares of Celera Genomics stock, the proceeds of which have been allocated to the PE Biosystems group, or issued as a dividend or distribution or by reclassification, exchange or otherwise to holders of PE Biosystems stock; and - adjusted as appropriate to reflect subdivisions and combinations of the Celera Genomics stock and dividends or distributions of shares of Celera Genomics stock to holders of Celera Genomics stock and other reclassifications of Celera Genomics stock.PE BIOSYSTEMS STOCKDIVIDENDS The holders of shares of PE Biosystems stock shall be paid dividends in amanner similar to that described above under "Celera Group Stock--Dividends."CONVERSION AND REDEMPTION The holders of shares of PE Biosystems stock shall have conversion andredemption rights similar to those described above under "Celera GroupStock--Conversion and Redemption," except as noted below. REDEMPTION FOR STOCK OF A SUBSIDIARY. As discussed above, our board ofdirectors may redeem on a pro rata basis all of the outstanding shares of PEBiosystems Stock or Celera Genomics stock for shares of common stock of one ormore of our wholly-owned subsidiaries which own all of the assets or liabilitiesattributed to the relevant group. If at the time of any such redemption of PEBiosystems stock, the PE Biosystems group is entitled to Celera GenomicsDesignated Shares, we will also issue an equal number of shares of CeleraGenomics stock either to (1) the holders of PE Biosystems stock or (2) one ormore of those PE Biosystems group subsidiaries.VOTING RIGHTS The holders of shares of PE Biosystems stock have the voting rightsdescribed above under the caption "Celera Genomics Stock--Voting Rights," exceptthat each share of PE Biosystems stock will have one vote on all matters as towhich both classes of common stock vote together as a simple class.LIQUIDATION In the event of our liquidation, dissolution or termination, the holders ofshares of PE Biosystems stock are entitled to receive funds in the amountsdescribed above under "Celera Genomics Stock--Liquidation," except that eachshare of PE Biosystems stock will have 0.25 liquidation unit.RIGHTS AGREEMENT We have issued participating preferred stock purchase rights (the "existingrights") to all holders of Celera Genomics stock under our rights agreementdated as of April 28, 1999 with our rights agent, BankBoston, N.A. Each existingright entitles the holder to purchase shares of participating junior preferredstock as follows: - one right for every four shares of PE Biosystems stock (a "PE Biosystems Right"), which will allow holders to purchase shares of Series A participating junior preferred stock of PE Corporation if a "distribution date" occurs; and - one right for every two shares of Celera Genomics stock (a "Celera Genomics Right"), which will allow holders to purchase shares of Series B participating junior preferred stock of PE Corporation if a "distribution date" occurs.We refer to the PE Biosystems Rights and the Celera Genomics Rights as the"Rights." 81

A "distribution date" will occur upon the earlier of: - the tenth day after a public announcement that a person or group of affiliated or associated persons other than us or our employee benefit plans (an "acquiring person") has acquired beneficial ownership of (1) 15% or more of the shares of PE Biosystems stock then outstanding or (2) 15% or more of the shares of Celera Genomics stock then outstanding; or - the tenth business day or a later day determined by our board of directors following the commencement of a tender or exchange offer that would result in such person or group beneficially owning such number of shares.Until the distribution date, the Rights will be transferred only with the commonstock. Following the distribution date, holders of Rights will be entitled topurchase from PE Corporation: - in the case of a PE Biosystems Right, one one-thousandth of a share of Series A participating junior preferred stock at a purchase price of $425, subject to adjustment (the "Series A Purchase Price"); and - in the case of a Celera Genomics Right, one one-thousandth of a share of Series B participating junior preferred stock at a purchase price of $125, subject to adjustment (the "Series B Purchase Price"). If any person or group becomes an acquiring person: - a PE Biosystems Right will entitle its holder to purchase, at the Series A Purchase Price, a number of shares of PE Biosystems stock with a market value equal to twice the Series A Purchase Price; and - a Celera Genomics Right will entitle its holder to purchase, at the Series B Purchase Price, a number of shares of Celera Genomics stock with a market value equal to twice the Series B Purchase Price. In certain circumstances after the Rights have been triggered, we mayexchange the Rights, other than Rights owned by an acquiring person, at anexchange ratio of one share of PE Biosystems stock per PE Biosystems Right andone share of Celera Genomics stock per Celera Genomics Right. If, following the time a person becomes an acquiring person: - PE Corporation is acquired in a merger or other business combination transaction and PE Corporation is not the surviving Corporation; - any person consolidates or merges with PE Corporation and all or part of the common stock is converted or exchanged for securities, cash or property of any other person; or - 50% or more of PE Corporation's assets or earnings power is sold or transferred,each PE Biosystems Right and each Celera Genomics Right will entitle its holderto purchase, for the Series A Purchase Price or Series B Purchase Price, anumber of shares of common stock of the surviving entity in any such merger,consolidation or other business combination or the purchaser in any such sale ortransfer with a market value equal to twice the Series A Purchase Price orSeries B Purchase Price. The Rights will expire on April 28, 2009 unless we extend or terminate themas described below. At any time until a person becomes an acquiring person, our board ofdirectors may redeem all of the Rights at a price of $.01 per Right. On theredemption date, the right to exercise the Rights will terminate and the onlyright of the holders of Rights will be to receive this price. A holder of a Right will not have any rights as a stockholder of PECorporation, including the right to vote or to receive dividends, until a Rightis exercised. 82

At any time prior to the time that any person becomes an acquiring person,we may, without the approval of any holders of Rights, supplement or amend anyprovision of the rights agreement in any manner, whether or not such supplementor amendment is adverse to any holders of the Rights. From and after the time aperson becomes an acquiring person, we may, without the approval of any holdersof Rights, supplement or amend the rights agreement: - to cure any ambiguity, - to correct or supplement any provision that may be defective or inconsistent, or - in any manner that we may deem necessary or desirable and which does not adversely affect the interests of the holders of Rights, other than an acquiring person. Our rights agreement contains provisions designed to prevent the inadvertenttriggering of the Rights. For example, it gives a person who has inadvertentlyacquired 15% or more of the outstanding shares of a class of common stock anddoes not have any intention of changing or influencing the control of PECorporation the opportunity to sell a sufficient number of shares so that suchacquisition would not trigger the Rights. In addition, the Rights will not betriggered and a divestiture of shares will not be required by our repurchase ofshares of common stock outstanding which could raise the proportion of sharesheld by a person to over the applicable 15% threshold. However, any person whoexceeds such threshold as a result of our stock repurchases will trigger theRights if such person subsequently acquires any additional shares of commonstock. 83

MANAGEMENT AND ALLOCATION POLICIES Because the Celera Genomics group and the PE Biosystems group are each partof a single company, PE Corporation has also carefully considered a number ofother issues with respect to the financing of the Celera Genomics group and thePE Biosystems group, including competition between groups, inter-group businesstransactions, access to technology and know-how and corporate opportunities andthe allocation of debt, corporate overhead, interest, taxes and other chargesbetween the Celera Genomics group and the PE Biosystems group. Our board ofdirectors and management have established policies to separate the business andoperations of the Celera Genomics group from those of the PE Biosystems groupand to operate each group on a stand-alone basis. The financial statements ofthe Celera Genomics group reflect the application of these management andallocation policies adopted by the board of directors. These policies, which aresummarized below, establish guidelines to allocate costs and charges between thetwo groups on an objective basis and, except as described below, help ensurethat transactions between the Celera Genomics group and the PE Biosystems groupare made on terms that approximate the terms that could be obtained fromunaffiliated third parties. Our board of directors may modify or rescind these policies, or may adoptadditional policies, in its sole discretion, although it has no present plans todo so. A board of directors' decision to modify or rescind such policies, oradopt additional policies could have different effects upon holders of CeleraGenomics stock and holders of PE Biosystems stock or could result in a benefitor detriment to one class of stockholders compared to the other class. Our boardof directors would make any such decision in accordance with its good faithbusiness judgment that such decision is in the best interests of PE Corporationand all of our stockholders as a whole. Under Delaware law, absent an abuse ofdiscretion, a director or officer will be deemed to have satisfied his or herfiduciary duties to PE Corporation and our stockholders if that person isdisinterested and acts in accordance with his or her good faith businessjudgment in the interests of PE Corporation and all of our stockholders as awhole.MANAGEMENT Each of the Celera Genomics group and the PE Biosystems group has separatemanagement teams to ensure that the efforts of each team of managers are focusedon the business and operations for which they have responsibility.COMMON STOCK OWNERSHIP OF DIRECTORS AND SENIOR OFFICERS As a policy, our board of directors periodically monitors the ownership ofshares of Celera Genomics stock and shares of PE Biosystems stock by ourdirectors and senior officers as well as their option holdings and otherbenefits so that their interests are not misaligned with the two classes ofcommon stock and with their duty to act in the best interests of PE Corporationand our stockholders as a whole. However, because of the differences in tradingvalues between the Celera Genomics stock and the PE Biosystems stock, the actualvalue of their interests in the Celera Genomics stock and PE Biosystems stockwill vary significantly. Accordingly, it is possible that directors or seniorofficers could favor one group over the other due to their stock and otherbenefits.FINANCING ACTIVITIES We manage most financial activities on a centralized basis. These activitiesinclude the investment of surplus cash and the issuance and repurchase of anydebt or preferred stock. If we transfer cash or other property allocated to onegroup to the other group, we will account for such transfer in one of thefollowing ways, as determined by our board of directors: - As a reallocation of "pooled" debt or preferred stock, as described under "Company Debt and Preferred Stock" below; 84

- As a short-term or long-term loan from one group to the other, or as a repayment of a previous borrowing, as described under "Inter-Group Loans" below; - As an increase or decrease in the number of Celera Genomics Designated Shares, as described under "Future Equity Contributions to be Reflected as Celera Genomics Designated Shares" below; or - As a sale of assets between the two groups. There are no specific criteria to determine which of the foregoing will beapplied to a particular transfer of cash or property from one group to theother. Our board of directors will make these determinations, in the exercise ofits business judgment based on all relevant circumstances, including thefinancing needs and objectives of the receiving group, the investment objectivesof the transferring group, the availability, cost and time associated withalternative financing sources, prevailing interest rates and general economicconditions. We will make all transfers of material assets from one group to theother on a fair value basis for the foregoing purposes, as determined by ourboard of directors. See "--Transfers of Assets Between Groups." Although we may allocate our debt and preferred stock between groups, thedebt and preferred stock will remain our obligations and all of our stockholderswill be subject to the risks associated with those obligations. See "RiskFactors--You will be stockholders of one company and, therefore, financialeffects on one group could adversely affect the other." COMPANY DEBT AND PREFERRED STOCK. We will allocate our debt between thegroups or, if we so determine, in its entirety to a particular group. We willallocate preferred stock, if issued, in a similar manner. We refer to such debtand preferred stock as being "pooled." Cash allocated to one group that is used to repay pooled debt or redeempooled preferred stock will decrease such group's allocated portion of thepooled debt or preferred stock. Cash or other property allocated to one groupthat is transferred to the other group will, if so determined by our board ofdirectors, decrease the transferring group's allocated portion of the pooleddebt or preferred stock and, correspondingly, increase the recipient group'sallocated portion of the pooled debt or preferred stock. Pooled debt will bear interest for group financial statement purposes at arate equal to the weighted average interest rate of the debt calculated on aquarterly basis and applied to the average pooled debt balance during theperiod. Preferred stock, if issued and if pooled in a manner similar to thepooled debt, will bear dividends for group financial statement purposes at arate based on the weighted average dividend rate of the preferred stocksimilarly calculated and applied. Any expense related to increases in pooleddebt or preferred stock will be reflected in the weighted average interest ordividend rate of such pooled debt or preferred stock as a whole. If we allocate debt for a particular financing in its entirety to one group,that debt will bear interest for group financial statement purposes at the ratethat we determine. If we allocate preferred stock in its entirety to one group,we will charge the dividend cost to that group in a similar manner. If theinterest or dividend cost is higher than our actual cost, the other group willreceive a credit for an amount equal to the difference as compensation for theuse of our credit capacity. Any expense related to debt or preferred stock thatis allocated in its entirety to a group will be allocated in whole to thatgroup. INTER-GROUP LOANS. Cash or other property that we allocate to one groupthat is transferred to the other group, could, if so determined by our board ofdirectors, be accounted for either as a short-term loan or as a long-term loan.Short-term loans will bear interest at a rate equal to the weighted averageinterest rate of our pooled debt. If we do not have any pooled debt, our boardof directors will determine the rate of interest for such loan. Our board ofdirectors will establish the terms on which long-term loans between the groupswill be made, including interest rate, amortization schedule, maturity andredemption terms. 85

FUTURE EQUITY CONTRIBUTIONS TO BE REFLECTED AS CELERA GENOMICS DESIGNATEDSHARES. Cash or other property that we allocate to the PE Biosystems group thatis contributed as additional equity to the Celera Genomics group will increasethe number of Celera Genomics Designated Shares. Cash or other property that weallocate to the Celera Genomics group that is transferred to the PE Biosystemsgroup will, if so determined by our board of directors, decrease the number ofCelera Genomics Designated Shares. EQUITY ISSUANCES AND REPURCHASES AND DIVIDENDS. We will reflect allfinancial effects of issuances and repurchases of shares of Celera Genomicsstock or shares of PE Biosystems stock entirely in the financial statements ofthat group except as described in the next sentence. We will reflect allfinancial effects of issuances of additional shares of Celera Genomics stock,which have been reflected as a reduction in the number of Celera GenomicsDesignated Shares, entirely in the financial statements of the PE Biosystemsgroup. We will reflect financial effects of dividends or other distributions on,and purchases of, shares of Celera Genomics stock or PE Biosystems stockentirely in the respective financial statements of the Celera Genomics group andthe PE Biosystems group.COMPETITION BETWEEN GROUPS Neither the PE Biosystems group nor the Celera Genomics group will engage ineach other's principal businesses, except for joint transactions with eachother. Joint transactions may include joint ventures or other collaborativearrangements to develop, market, sell and support new products and services.Third parties may also participate in such joint transactions. See "--Transfersof Assets Between Groups--Joint Transactions." The terms of any jointtransactions will be determined by our chief executive officer or, inappropriate circumstances, our board of directors. Our chief executive officer or, in appropriate circumstances, our board ofdirectors will make decisions whether to permit indirect competition between thegroups. Indirect competition could occur if and when: - one group uses products of third parties in that group's products rather than using the other group's products; - a third party uses a product of one group in the third party's products which compete with the other group's products; or - a group licenses technology allocated to that group to a third party that is a competitor of the other group. The groups may compete in a business which is not a principal business ofthe other group.TRANSFERS OF ASSETS BETWEEN GROUPS Our certificate of incorporation permits the transfer of assets betweengroups without stockholder approval. Our board of directors has determined thatall such transfers will be made at fair value, as determined by our board ofdirectors, except as described below. The consideration for such transfers maybe paid by one group to the other in cash or other consideration, as determinedby our board of directors. Our board of directors has adopted specific policies for the sale ofproducts and services between groups and joint transactions with each other andthird parties as set forth below. SALES OF PRODUCTS AND SERVICES BETWEEN GROUPS. A group will sell products orservices to the other group on terms that would be available from third partiesin commercial transactions. If terms for such transactions are not availablefrom a third party, the purchasing group will (1) pay for such products at fair value as determined by our board of directors and (2) pay for such services at fair value, as determined by our board of directors, or at the cost, including overhead, of the selling group. 86

For fiscal 1999, the Celera Genomics group's R&D expenses included$15.2 million for purchases of instruments, lease payments on instruments andthe purchase of consumables, and $2.1 million of contracted R&D services fromthe PE Biosystems group. JOINT TRANSACTIONS. The groups may from time to time engage in transactionsjointly, including with third parties, as described under "--Competition BetweenGroups." Research and development and other services performed by one group fora joint venture or other collaborative arrangement will be charged at fairvalue, as determined by our board of directors.ACCESS TO TECHNOLOGY AND KNOW-HOW Each group will have free access to all of our technology and know-how,excluding products and services of the other group, that may be useful in thatgroup's business, subject to obligations and limitations applicable to PECorporation and to such exceptions that our board of directors may determine.The groups will consult with each other on a regular basis concerning technologyissues that affect both groups.REVIEW OF CORPORATE OPPORTUNITIES Our board of directors will review any matter which involves the allocationof a corporate opportunity to either the Celera Genomics group or the PEBiosystems group or in part to the Celera Genomics group and in part to the PEBiosystems group. In accordance with Delaware law, our board of directors willmake its determination with regard to the allocation of any such opportunity andthe benefit of such opportunity in accordance with their good faith businessjudgment of the best interests of PE and all of our stockholders as a whole.Factors that our board of directors would consider in making this allocationinclude: - whether a particular corporate opportunity is principally related to the business of the Celera Genomics group or the PE Biosystems group; - whether one group, because of its managerial or operational expertise, will be better positioned to undertake the corporate opportunity; and - existing contractual agreements and restrictions.FINANCIAL STATEMENTS; ALLOCATION MATTERS We prepare financial statements in accordance with generally acceptedaccounting principles, consistently applied, for the Celera Genomics group andthe PE Biosystems group, and these financial statements, taken together,comprise all of the accounts included in the PE Corporation consolidatedfinancial statements. The financial statements of each of the Celera Genomicsgroup and the PE Biosystems group reflect the financial condition, results ofoperations and cash flows of the businesses included therein. Group financial statements also include allocated portions of the PECorporation debt, interest, corporate overhead and costs of administrativeshared services and taxes. We make these allocations for the purpose ofpreparing each group's financial statements; however, holders of Celera Genomicsstock and PE Biosystems stock will continue to be subject to all of the risksassociated with an investment in PE corporation and all of our businesses,assets and liabilities.CORPORATE OVERHEAD AND ADMINISTRATIVE SHARED SERVICES We allocate a portion of our corporate overhead to the Celera Genomics groupand the PE Biosystems group based upon the use of services by that group.Corporate overhead includes costs of our executive management, human resources,legal, accounting and auditing, tax, treasury, strategic planning 87

and environmental services functions. We allocate in a similar manner a portionof our costs of administrative shared services, such as information technologyservices. Where determinations based on use alone are not practical, we will useother methods and criteria that we believe are equitable and provide areasonable estimate of the cost attributable to the groups.TAXES We will determine the federal income taxes of PE Corporation and oursubsidiaries which own assets allocated between the groups on a consolidatedbasis. We allocate consolidated federal income tax provisions and related taxpayments or refunds between the groups based principally on the taxable incomeand tax credits directly attributable to each group. Such allocations willreflect each group's contribution, whether positive or negative, to PECorporation's consolidated federal taxable income and the consolidated federaltax liability and tax credit position. We will credit tax benefits that cannotbe used by the group generating those benefits but can be used on a consolidatedbasis to the group that generated such benefits. Inter-group transactions willbe treated as taxed as if each group was a stand-alone company. Tax benefitsgenerated by the Celera Genomics group commencing July 1, 1998, which can thenbe utilized on a consolidated basis, will be credited to the Celera Genomicsgroup up to a maximum amount of $75 million. Through December 31, 1999,$39.5 million has been credited to the Celera Genomics group. Had the groups filed separate tax returns, the provision for income taxesand net income or loss for each group would not have differed from the amountsreported in the groups' statements of income for the year ended June 30, 1999 orfor the six month periods ended December 31, 1998 and 1999. However, the amountsof current and deferred taxes and taxes payable or refundable allocated to eachgroup in these historical financial statements may differ from those that wouldhave been allocated to each group had they filed separate income tax returns. Depending on the tax laws of the respective jurisdictions, we calculatestate and local income taxes on either a consolidated or combined basis or on aseparate corporation basis. We will allocate state income tax provisions andrelated tax payments or refunds determined on a consolidated or combined basisbetween the groups based on their respective contributions to such consolidatedor combined state taxable incomes. We will allocate state and local income taxprovisions and related tax payments which we determine on a separate corporationbasis between the groups in a manner designed to reflect the respectivecontributions of the groups to the corporation's separate state or local taxableincome. 88

CERTAIN UNITED STATES TAX CONSEQUENCES The following discussion is a summary of the material United States federalincome tax consequences of the ownership of Celera Genomics stock. Thisdiscussion is based on the Internal Revenue Code of 1986, as amended (the"Code"), Treasury Department regulations, published positions of the InternalRevenue Service (the "IRS") and court decisions now in effect, all of which aresubject to change. In particular Congress could enact legislation affecting thetreatment of stock with characteristics similar to Celera Genomics stock, or theTreasury Department could issue regulations that change current law. Any futurelegislation or regulations could apply retroactively to the offering of CeleraGenomics stock. This discussion deals only with Celera Genomics stock held as a capitalasset. This discussion does not represent a detailed description of the U.S.federal income tax consequences applicable to you if you are subject to specialtreatment under the U.S. federal income tax laws (including if you are a dealerin securities or currencies, a financial institution, an insurance company, atax-exempt organization, a person holding the Celera Genomics stock as part of ahedging, integrated or conversion transaction, constructive sale or straddle, atrader in securities that has elected the mark-to-market method of accountingfor your securities or a U.S. person whose "functional currency" is not the U.S.dollar). YOU SHOULD CONSULT YOUR OWN TAX ADVISOR WITH REGARD TO THE APPLICATIONOF THE FEDERAL INCOME TAX LAWS, AS WELL AS TO THE APPLICABILITY AND EFFECT OFANY STATE, LOCAL OR FOREIGN TAX LAWS TO WHICH YOU MAY BE SUBJECT. In the opinion of Simpson Thacher & Bartlett, our counsel, for federalincome purposes, Celera Genomics stock will be considered stock of PECorporation. Accordingly, for federal income tax purposes, we believe that wewill not recognize any income, gain or loss as a result of the issuance ofCelera Genomics stock. No ruling has been sought from the IRS. The IRS has announced that it willnot issue advance rulings on the classification of an instrument whose dividendrights are determined by reference to the earnings of a segregated portion ofthe issuing corporation's assets, including assets held by a subsidiary. SimpsonThacher & Bartlett's opinion is not binding on the IRS. In addition, there areno court decisions or other authorities bearing directly on the classificationof instruments with characteristics similar to those of Celera Genomics stock.It is possible, therefore, that the IRS could assert that the issuance of theCelera Genomics stock could result in taxation to us. Simpson Thacher &Bartlett, however, is of the opinion that the IRS would not prevail in such anassertion. The Clinton Administration recently proposed legislation dealing withtracking stock such as the Celera Genomics stock. Such proposal would, amongother things, grant authority to the IRS to treat tracking stock as somethingother than stock or as stock of another entity. If this proposal is enacted, itcould have adverse tax consequences for us or for holders of Celera Genomicsstock. A similar proposal was made in 1999. Congress did not act on the 1999proposal, and it is impossible to predict whether Congress will act upon thisproposal or any other proposal relating to tracking stock. Under our certificateof incorporation, we may convert the Celera Genomics stock or the PE Biosystemsstock into shares of the other class without any premium if, based on the legalopinion of our tax counsel, it is more likely than not as a result of theenactment of legislative changes or administrative proposals or changes that weor our stockholders will be subject to tax upon issuances of Celera Genomicsstock or PE Biosystems stock or such stock will not be treated as stock of PECorporation. Under current law, such an exchange should qualify as a tax-freerecapitalization such that no gain or loss is required to be recognized by us orby holders of the stock to be exchanged. 89

BACKUP WITHHOLDING Certain non-corporate holders of Celera Genomics stock could be subject tobackup withholding at a rate of 31% on the payment of dividends on or proceedsfrom the sale of such stock. Backup withholding will apply only if thestockholder: - fails to furnish its taxpayer identification number ("TIN"), which, for an individual would be his or her social security number; - furnishes an incorrect TIN; - is notified by the IRS that it has failed to properly report payments of interest or dividends; or - under certain circumstances, fails to certify under penalties of perjury that it has furnished a correct TIN and has not been notified by the IRS that it is subject to backup withholding for failure to report payments of interest or dividends. Stockholders should consult their tax advisors regarding their qualificationfor exemption from backup withholding and the procedures for obtaining suchexemption if applicable. The amount of any backup withholding from a payment toa holder of Celera Genomics stock will be allowed as a credit against suchstockholder's federal income tax liability and may entitle such holder to arefund, provided that the required information is furnished to the IRS.CERTAIN UNITED STATES TAX CONSEQUENCES TO NON-UNITED STATES HOLDERS The following is a summary of the material United States federal income andestate tax consequences of the ownership and disposition of Celera Genomicsstock to Non-United States holders. This discussion does not deal with allaspects of United States income and estate taxation and does not deal withforeign, state and local tax consequences that may be relevant to Non-UnitedStates holders in light of their personal circumstances. Furthermore, thisdiscussion is based on the Code, Treasury regulations, published positions ofthe IRS and court decisions now in effect, all of which are subject to change.Each prospective Non-United States holder should consult its own tax advisorwith regard to the application of the federal income tax laws, as well as to theapplicability and effect of any state, local or foreign tax laws to which it maybe subject. As used in this section, a "United States holder" means a beneficial ownerof stock that is: - a citizen or resident of the United States; - a corporation or partnership created or organized in or under the laws of the United States or any political subdivision of the United States; - an estate the income of which is subject to United States federal income taxation regardless of its source; - a trust that: - is subject to the supervision of a court within the United States and the control of one or more United States persons; or - has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person. A "Non-United States holder" is a holder that is not a United States holder.DIVIDENDS Generally, any dividend paid to a Non-United States holder will be subjectto United States withholding tax either at a rate of 30% of the gross amount ofthe dividend or at a lesser applicable treaty 90

rate. However, dividends that are effectively connected with the conduct of atrade or business within the United States and, where a tax treaty applies, thatare attributable to a United States permanent establishment are not subject tothe withholding tax but instead are subject to United States federal income taxon a net income basis at applicable graduated individual or corporate rates. Certain certification and disclosure requirements must be complied with inorder to be exempt from withholding under the effectively connected incomeexemption. Any effectively connected dividends received by a foreign corporationmay, under certain circumstances, be subject to an additional "branch profitstax" at a 30% rate or a lesser applicable treaty rate. Until January 1, 2001, dividends paid to an address outside the UnitedStates are presumed to be paid to a resident of that country, unless the payerhas knowledge to the contrary, for purposes of the withholding tax discussedabove and, under the current interpretation of the United States Treasuryregulations, for purposes of determining the applicability of a tax treaty rate.However, under United States Treasury regulations, if you wish to claim thebenefit of an applicable treaty rate and avoid backup withholding, as discussedbelow, for dividends paid after December 31, 2000, you will be required tosatisfy applicable certification and other requirements. If you are eligible for a reduced treaty rate of United States withholdingtax pursuant to an income tax treaty, you may obtain a refund of any excessamounts withheld by filing an appropriate claim for refund with the InternalRevenue Service.GAIN ON DISPOSITION OF COMMON STOCK If you are a Non-United States holder, you will generally not be subject toUnited States federal income tax with respect to gain recognized on a sale orother disposition of Celera Genomics stock unless: - the gain is effectively connected with a trade or business in the United States and, where a tax treaty provides, the gain is attributable to a United States permanent establishment; - if you are an individual and hold Celera Genomics stock as a capital asset, you are present in the United States for 183 or more days in the taxable year of the sale or other disposition and certain other conditions are met; or - we are or have been a "United States real property holding corporation" for United States federal income tax purposes. We believe that we are not, and do not anticipate becoming, a "United Statesreal property holding corporation" for United States federal income taxpurposes. If we were to become a United States real property holdingcorporation, so long as Celera Genomics stock continues to be regularly tradedon an established securities market, you would be subject to federal income taxon any gain from the sale or other disposition of such stock only if youactually or constructively owned, during the five-year period preceding suchdisposition, more than 5% of Celera Genomics stock. Special rules may apply to certain Non-United States holders, such as"controlled foreign corporations," "passive foreign investment companies,""foreign personal holding companies" and corporations that accumulate earningsto avoid federal income tax, that are subject to special treatment under theCode. These entities should consult their own tax advisors to determine theUnited States federal, state, local and other tax consequences that may berelevant to them.BACKUP WITHHOLDING AND INFORMATION REPORTING We must report annually to the Internal Revenue Service and to you theamount of dividends paid to you and the tax withheld with respect to thesedividends, regardless of whether withholding was required. Copies of theinformation returns reporting the dividends and withholding may also be madeavailable to 91

the tax authorities in the country in which you reside under the provisions ofan applicable income tax treaty. Under current law, backup withholding at the rate of 31% generally will notapply to dividends paid to you at an address outside the United States, unlessthe payer has knowledge that you are a United States person. Under the finalregulations effective December 31, 2000, however, you will be subject to backupwithholding unless applicable certification requirements are met. Payment of the proceeds of a sale of Celera Genomics stock within the UnitedStates or conducted through certain U.S. related financial intermediaries issubject to both backup withholding and information reporting unless you certifyunder penalties of perjury that you are a Non-U.S. Holder, and the payer doesnot have actual knowledge that you are a United States person, or you otherwiseestablish an exemption. Any amounts withheld under the backup withholding rules may be allowed as arefund or a credit against your United States federal income tax liabilityprovided the required information is furnished to the Internal Revenue Service.ESTATE TAX Common stock held by an individual Non-United States holder at the time ofdeath will be included in that holder's gross estate for United States federalestate tax purposes, unless an applicable estate tax treaty provides otherwise. 92

UNDERWRITERS Under the terms and subject to the conditions contained in an underwritingagreement dated the date of this prospectus, the underwriters named below, forwhom Morgan Stanley & Co. Incorporated, Goldman, Sachs & Co., SG CowenSecurities Corporation, ING Barings LLC and Bear, Stearns & Co. Inc. are actingas representatives, have severally agreed to purchase, and PE Corporation hasagreed to sell to them, severally, the number of shares of Celera Genomics stockindicated below.<TABLE><CAPTION> NUMBER OFNAME SHARES---- -----------<S> <C>Morgan Stanley & Co. Incorporated...........................Goldman, Sachs & Co.........................................SG Cowen Securities Corporation.............................ING Barings LLC.............................................Bear, Stearns & Co. Inc..................................... ----------- Total................................................. 3,230,000 ===========</TABLE> The underwriters are offering the shares of Celera Genomics stock subject totheir acceptance of the shares from PE Corporation and subject to prior sale.The underwriting agreement provides that the obligations of the severalunderwriters to pay for and accept delivery of the shares of Celera Genomicsstock offered by this prospectus are subject to the approval of certain legalmatters by their counsel and to certain other conditions. The underwriters areobligated to take and pay for all of the shares of Celera Genomics stock offeredby this prospectus if any such shares are taken. However, the underwriters arenot required to take or pay for the shares covered by the underwritersover-allotment option described below. The underwriters initially propose to offer part of the shares of CeleraGenomics stock directly to the public at the public offering price listed on thecover page of this prospectus and part to certain dealers at a price thatrepresents a concession not in excess of $ a share under the publicoffering price. Any underwriter may allow, and such dealers may reallow, aconcession not in excess of $ a share to other underwriters or tocertain dealers. After the initial offering of the shares of Celera Genomicsstock, the offering price and other selling terms may from time to time bevaried by the representatives. PE Corporation has granted to the underwriters an option, exercisable for30 days from the date of this prospectus, to purchase up to an aggregate of484,500 additional shares of Celera Genomics stock at the public offering pricelisted on the cover page of this prospectus, less underwriting discounts andcommissions. The underwriters may exercise this option solely for the purpose ofcovering overallotments, if any, made in connection with the offering of theshares of Celera Genomics stock offered by this prospectus. To the extent theoption is exercised, each underwriter will become obligated, subject to certainconditions, to purchase about the same percentage of the additional shares ofCelera Genomics stock as the number listed next to the underwriter's name in thepreceding table bears to the total number of shares of Celera Genomics stocklisted next to the names of all underwriters in the preceding table. If theunderwriters' option is exercised in full, the total price to the public wouldbe $ , the total underwriters' discounts and commissions would be$ and total proceeds to PE Corporation would be $ . 93

Each of PE Corporation and the directors and certain executive officers hasagreed that, without the prior written consent of Morgan Stanley & Co.Incorporated on behalf of the underwriters, it will not, during the periodending 90 days after the date of this prospectus: - offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of directly or indirectly, any shares of Celera Genomics stock or any securities convertible into or exercisable or exchangeable for Celera Genomics stock (other than shares of PE Biosystems stock); or - enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Celera Genomics stock, whether any transaction described above is to be settled by delivery of Celera Genomics stock or such other securities, in cash or otherwise.The restrictions described in this paragraph do not apply to: - the sale of shares to the underwriters; - the issuance by PE Corporation of shares of Celera Genomics stock in connection with acquisitions under certain circumstances; - the issuance by PE Corporation of shares of Celera Genomics stock upon the exercise of an option or a warrant or the conversion of a security outstanding on the date of this prospectus of which the underwriters have been advised in writing; - transactions by any person other than PE Corporation relating to shares of Celera Genomics stock or other securities acquired in open market transactions after the completion of the offering of the shares; - the issuance by PE Corporation of additional options to purchase Celera Genomics stock under its existing stock option plans, provided such options are not exercisable during such 90-day period; or - the issuance by PE Corporation of shares of Celera Genomics stock under its employee and director stock purchase plans. In order to facilitate the offering of the Celera Genomics stock, theunderwriters may engage in transactions that stabilize, maintain or otherwiseaffect the price of the Celera Genomics stock. Specifically, the underwritersmay over-allot in connection with the offering, creating a short position in theCelera Genomics stock for their own account. In addition, to coverover-allotments or to stabilize the price of the Celera Genomics stock, theunderwriters may bid for, and purchase, shares of Celera Genomics stock in theopen market. Finally, the underwriting syndicate may reclaim selling concessionsallowed to an underwriter or a dealer for distributing the Celera Genomics stockin the offering, if the syndicate repurchases previously distributed CeleraGenomics stock in transactions to cover syndicate short positions, instabilization transactions or otherwise. Any of these activities may stabilizeor maintain the market price of the Celera Genomics stock above independentmarket levels. The underwriters are not required to engage in these activities,and may end any of these activities at any time. PE Corporation and the underwriters have agreed to indemnify each otheragainst certain liabilities, including liabilities under the Securities Act. From time to time, Morgan Stanley & Co. Incorporated, Goldman, Sachs & Co.,SG Cowen Securities Corporation and Bear, Stearns & Co. Inc. have provided, andmay continue to provide, investment banking services to PE Corporation for whichthey have received customary compensation. 94

LEGAL MATTERS The validity of the issuance of the Celera Genomics Stock will be passedupon for PE Corporation by Simpson Thacher & Bartlett, New York, New York.Certain legal matters will be passed upon for the underwriters by Ropes & Gray,Boston, Massachusetts. EXPERTS The consolidated financial statements of PE Corporation and the combinedfinancial statements of the PE Biosystems group as of June 30, 1999 and 1998 andfor each of the three years in the period ended June 30, 1999, incorporated inthis Prospectus by reference to the Annual Report on Form 10-K for the yearended June 30, 1999 and the combined financial statements of the Celera Genomicsgroup as of June 30, 1999 and 1998 and for each of the three years in the periodended June 30, 1999 included in this prospectus, have been so incorporated inreliance on the reports of PricewaterhouseCoopers LLP, independent accountants,given on the authority of said firm as experts in auditing and accounting. WHERE YOU CAN FIND ADDITIONAL INFORMATION A registration statement on Form S-3 with respect to the Celera Genomicsstock offered hereby (together with any amendments, exhibits and schedulesthereto) has been filed with the Securities and Exchange Commission under theSecurities Act. This prospectus does not contain all of the informationcontained in such registration statement on Form S-3, certain portions of whichhave been omitted pursuant to the rules and regulations of the Securities andExchange Commission. For further information with respect to PE Corporation, theCelera Genomics group and the Celera Genomics stock offered hereby, reference ismade to the registration statement on Form S-3. Statements contained in thisprospectus regarding the contents of any contract or any other documents are notnecessarily complete and, in each instance, reference is hereby made to the copyof such contract of document filed as an exhibit to the Annual Report onForm 10-K or to the registration statement on Form S-3. The registrationstatement may be inspected without charge at the Securities and ExchangeCommission's principal office in Washington D.C., and copies of all of any partthereof may be obtained from the Public Reference section, Securities andExchange Commission, Washington D.C., 20549, upon payment of prescribed fees. We also file annual, quarterly and special reports, proxy statements andother information with the SEC. You may read and copy any reports, statements orother information we file with the SEC at its Public Reference Room at JudiciaryPlaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the publicreference facilities maintained by the Commission at 75 Park Place, New York,New York 10007, and Northwestern Atrium Center, 500 West Madison Street, Suite1400, Chicago, Illinois 60661. Please call the SEC at 1-800-SEC-0330 for furtherinformation about the public reference rooms. Our SEC filings are available tothe public over the Internet at the SEC's web site at http://www.sec.gov. Ourstock is listed on the New York Stock Exchange. You can inspect and copy ourreports and other information at the offices of the New York StockExchange, Inc., 20 Broad Street, New York, New York 10005. You can also obtainadditional information at the PE Corporation website at www.pecorporation.comand the Celera Genomics group website at www.celera.com. The SEC allows us to "incorporate by reference" the information we file withit, which means that we can disclose important information to you by referringyou to those documents. The information incorporated by reference is animportant part of this prospectus, and information that we file later with theSEC will automatically update and supersede this information. We incorporate by reference our documents listed below and any futurefilings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of theExchange Act, prior to the termination of this offering: (a) Annual Report on Form 10-K for the fiscal year ended June 30, 1999. 95

(b) Quarterly Report on Form 10-Q for the quarter ended September 30, 1999. (c) Quarterly Report on Form 10-Q for the quarter ended December 31, 1999. (d) The descriptions of our common stock and rights to purchase participating junior preferred stock set forth in our registration statements filed pursuant to Section 12 of the Exchange Act and any amendment or report filed for purpose of updating any of those descriptions. We undertake no obligation to publicly update any forward-lookingstatements, whether as a result of new information, future events or otherwise.You are advised, however, to consult any further disclosures we make on relatedsubjects in our 10-Q, 8-K and 10-K reports to the Securities and ExchangeCommission. Also note that we provide a cautionary discussion of risks anduncertainties relevant to our business in the "Risk Factors" section of thisprospectus. These are factors that we think could cause our actual results todiffer materially from expected results. Other factors besides those listed herecould also adversely affect us. This discussion is provided as permitted by thePrivate Securities Litigation Reform Act of 1995. We will provide you, without charge, on your written or oral request, a copyof any or all of the information incorporated by reference in this prospectus,other than exhibits to such information (unless such exhibits are specificallyincorporated by reference into the information that this prospectusincorporates). Requests for such copies should be directed to the Secretary, PECorporation, 761 Main Avenue, Norwalk, Connecticut 06859 (telephone:203-762-1000). 96

INDEX TO FINANCIAL STATEMENTS<TABLE><CAPTION> PAGE --------<S> <C>Celera Genomics Group Report of Independent Accountants......................... F-2 Combined Statements of Operations for the Years Ended June 30, 1997, 1998, and 1999, and for the Six Months Ended December 31, 1998 and 1999 (unaudited)............ F-3 Combined Statements of Financial Position at June 30, 1998 and 1999, and at December 31, 1999 (unaudited).......... F-4 Combined Statements of Cash Flows for the Years Ended June 30, 1997, 1998, and 1999, and for the Six Months Ended December 31, 1998 and 1999 (unaudited)............ F-5 Combined Statements of Group Equity at June 30, 1996, 1997, 1998, and 1999, and December 31, 1999 (unaudited)............................................. F-6 Notes to Combined Financial Statements.................... F-7</TABLE> F-1

REPORT OF INDEPENDENT ACCOUNTANTSTo the Stockholders and Board of Directors ofPE CorporationIn our opinion, the accompanying combined statements of financial position andthe related combined statements of operations, of group equity, and of cashflows present fairly, in all material respects, the financial position of theCelera Genomics group of PE Corporation at June 30, 1999 and 1998, and theresults of its operations and its cash flows for each of the three fiscal yearsin the period ended June 30, 1999, in conformity with generally acceptedaccounting principles. These financial statements are the responsibility of themanagement of PE Corporation; our responsibility is to express an opinion onthese financial statements based on our audits. We conducted our audits of thesestatements in accordance with generally accepted auditing standards whichrequire that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements, assessing the accounting principlesused and significant estimates made by management, and evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for the opinion expressed above.As described above and more fully in Note 1 to the Celera Genomics groupcombined financial statements, the Celera Genomics group is a group ofPE Corporation; accordingly, the combined financial statements of the CeleraGenomics group should be read in conjunction with the audited financialstatements of PE Corporation./s/ PricewaterhouseCoopers LLPPricewaterhouseCoopers LLPStamford, ConnecticutJuly 30, 1999, except as to the stocksplit which is as of February 18, 2000 F-2

CELERA GENOMICS GROUP COMBINED STATEMENTS OF OPERATIONS<TABLE><CAPTION> FOR THE SIX MONTHS FOR THE YEARS ENDED JUNE 30, ENDED DECEMBER 31,(DOLLAR AMOUNTS IN THOUSANDS ------------------------------ -------------------EXCEPT PER SHARE AMOUNTS) 1997 1998 1999 1998 1999------------------------------------------- -------- -------- -------- -------- -------- (UNAUDITED)<S> <C> <C> <C> <C> <C>NET REVENUES............................... $ 903 $ 4,211 $ 12,541 $ 5,631 $ 16,625COSTS AND EXPENSES.........................Research and development................... 3,976 10,279 48,448 12,937 70,333Selling, general and administrative........ 2,228 6,725 28,255 10,606 17,932Special charges............................ -- -- 4,616 573 --Acquired research and development.......... 26,801 -- -- -- -- -------- -------- -------- -------- --------OPERATING LOSS............................. (32,102) (12,793) (68,778) (18,485) (71,640)Interest expense........................... -- -- -- -- 661Interest income............................ -- -- 1,245 -- 5,107 -------- -------- -------- -------- --------LOSS BEFORE INCOME TAXES................... (32,102) (12,793) (67,533) (18,485) (67,194)Benefit for income taxes................... 1,855 4,478 22,639 6,269 23,518 -------- -------- -------- -------- --------NET LOSS................................... $(30,247) $ (8,315) $(44,894) $(12,216) $(43,676) ======== ======== ======== ======== ========NET LOSS PER SHARE (SEE NOTE 1) Basic and diluted...................... $ (.89) $ (.84)</TABLE> SEE ACCOMPANYING NOTES TO THE CELERA GENOMICS GROUP COMBINED FINANCIAL STATEMENTS. F-3

CELERA GENOMICS GROUP COMBINED STATEMENTS OF FINANCIAL POSITION<TABLE><CAPTION> AT JUNE 30, AT ------------------- DECEMBER 31,(DOLLAR AMOUNTS IN THOUSANDS) 1998 1999 1999------------------------------------------------------------ -------- -------- ------------ (UNAUDITED)<S> <C> <C> <C>ASSETSCurrent assets Cash and cash equivalents................................. $ -- $ 71,491 $ 53,955 Note receivable from the PE Biosystems group (see Note 6)................................................. -- 150,000 150,000 Tax benefit receivable from the PE Biosystems group (see Note 1)................................................. -- 9,935 9,413 Accounts receivable....................................... 756 3,276 9,788 Prepaid expenses and other current assets................. 138 3,454 13,017 -------- -------- --------Total current assets........................................ 894 238,156 236,173Property, plant and equipment, net.......................... 4,198 104,192 109,043Other long-term assets...................................... 1,247 2,372 4,313 -------- -------- --------TOTAL ASSETS................................................ $ 6,339 $344,720 $349,529 ======== ======== ========LIABILITIES AND GROUP EQUITYCurrent liabilities Loans payable............................................. $ -- $ -- $ 46,000 Accounts payable.......................................... 488 19,861 14,711 Accrued salaries and wages................................ 236 4,179 4,542 Deferred revenues......................................... 250 12,032 11,826 Other accrued expenses.................................... 1,080 9,281 6,646 -------- -------- --------Total current liabilities................................... 2,054 45,353 83,725Other long-term liabilities................................. 5,544 5,500 5,507 -------- -------- --------Total liabilities........................................... 7,598 50,853 89,232 -------- -------- --------Commitments and contingencies (see Note 9)Group equity (deficit)...................................... (1,259) 293,867 260,297 -------- -------- --------TOTAL LIABILITIES AND GROUP EQUITY.......................... $ 6,339 $344,720 $349,529 ======== ======== ========</TABLE> SEE ACCOMPANYING NOTES TO THE CELERA GENOMICS GROUP COMBINED FINANCIAL STATEMENTS. F-4

CELERA GENOMICS GROUP COMBINED STATEMENTS OF CASH FLOWS<TABLE><CAPTION> FOR THE SIX MONTHS FOR THE YEARS ENDED JUNE 30, ENDED DECEMBER 31, ------------------------------ -------------------(DOLLAR AMOUNTS IN THOUSANDS) 1997 1998 1999 1998 1999-------------------------------------------- -------- -------- -------- -------- -------- (UNAUDITED)<S> <C> <C> <C> <C> <C>OPERATING ACTIVITIESNet loss.................................... $(30,247) $(8,315) $(44,894) $(12,216) $(43,676)Adjustments to reconcile net loss to net cash used by operating activities Depreciation and amortization........... 241 650 3,757 659 10,966 Deferred income taxes................... -- -- -- -- (6,615) Long-term compensation programs......... -- -- 2,802 -- -- Acquired research and development....... 26,801 -- -- -- --Changes in operating assets and liabilities (Increase) decrease in tax benefit receivable from the PE Biosystems group................................... -- -- (9,935) (4,325) 522 Increase in accounts receivable........... (379) (354) (2,520) (182) (6,512) Increase in prepaid expenses and other assets.................................. (82) (4) (3,458) (112) (2,051) Increase in accounts payable and other liabilities............................. 581 1,151 31,496 5,873 479 -------- ------- -------- -------- --------NET CASH USED BY OPERATING ACTIVITIES....... (3,085) (6,872) (22,752) (10,303) (46,887) -------- ------- -------- -------- --------INVESTING ACTIVITIESAdditions to property, plant and equipment................................. (411) (3,648) (94,541) (17,380) (19,867)Acquisitions and investments, net........... (22,676) -- (1,236) -- (3,000) -------- ------- -------- -------- --------NET CASH USED BY INVESTING ACTIVITIES....... (23,087) (3,648) (95,777) (17,380) (22,867) -------- ------- -------- -------- --------FINANCING ACTIVITIESNet change in loans payable................. -- -- -- -- 46,000Net cash allocated from the PE Biosystems group..................................... 26,172 10,520 188,535 27,683 --Proceeds from stock issued for Celera Genomics group stock plans................ -- -- 1,485 -- 6,218 -------- ------- -------- -------- --------NET CASH PROVIDED BY FINANCING ACTIVITIES... 26,172 10,520 190,020 27,683 52,218 -------- ------- -------- -------- --------NET CHANGE IN CASH AND CASH EQUIVALENTS..... -- -- 71,491 -- (17,536)CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD.................................... -- -- -- -- 71,491 -------- ------- -------- -------- --------CASH AND CASH EQUIVALENTS END OF PERIOD..... $ -- $ -- $ 71,491 $ -- $ 53,955 ======== ======= ======== ======== ========</TABLE> SEE ACCOMPANYING NOTES TO THE CELERA GENOMICS GROUP COMBINED FINANCIAL STATEMENTS. F-5

CELERA GENOMICS GROUP COMBINED STATEMENTS OF GROUP EQUITY<TABLE><CAPTION> ACCUMULATED GROUP(DOLLAR AMOUNTS IN THOUSANDS) OTHER DEFICIT EQUITY------------------------------------------------------------ -------- ----------- --------<S> <C> <C> <C>BALANCE AT JUNE 30, 1996.................................... $ 3,200 $ (2,589) $ 611Net loss.................................................... -- (30,247) (30,247)Net cash allocated from the PE Biosystems group............. 26,172 -- 26,172 -------- --------- --------BALANCE AT JUNE 30, 1997.................................... 29,372 (32,836) (3,464)Net loss.................................................... -- (8,315) (8,315)Net cash allocated from the PE Biosystems group............. 10,520 -- 10,520 -------- --------- --------BALANCE AT JUNE 30, 1998.................................... 39,892 (41,151) (1,259)Net loss.................................................... -- (44,894) (44,894)Net cash allocated from the PE Biosystems group............. 8,535 -- 8,535Allocated capital from the PE Biosystems group.............. 330,000 -- 330,000Issuances under Celera Genomics group stock plans........... 1,485 -- 1,485 -------- --------- --------BALANCE AT JUNE 30, 1999.................................... 379,912 (86,045) 293,867Net loss.................................................... -- (43,676) (43,676)Issuances under Celera Genomics group stock plans........... 6,218 -- 6,218Other....................................................... 3,888 -- 3,888 -------- --------- --------BALANCE AT DECEMBER 31, 1999 (UNAUDITED).................... $390,018 $(129,721) $260,297 ======== ========= ========</TABLE> SEE ACCOMPANYING NOTES TO THE CELERA GENOMICS GROUP COMBINED FINANCIAL STATEMENTS. F-6

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 1 ACCOUNTING POLICIES AND PRACTICESBASIS OF PRESENTATION The PE Corporation ("PE" or the "Company") is comprised of two separatebusiness segments in continuing operations: the Celera Genomics group and the PEBiosystems group. The Celera Genomics group is engaged principally in thegeneration, sale and support of genomic information databases and relatedinformation management and analysis software; discovery, validation andlicensing of proprietary gene products, genetic markers and informationregarding genetic variability; and related consulting and contract research anddevelopment services. The PE Biosystems group manufactures and marketsbiochemical instrument systems and associated consumable products for lifescience research and related applications.RECAPITALIZATION On May 6, 1999, The Perkin-Elmer Corporation was merged into a subsidiary ofPE Corporation, a new Delaware corporation. The recapitalization of the Companyresulted in the issuance of two new classes of common stock called PECorporation-Celera Genomics Group Common Stock ("Celera Genomics stock") and PECorporation-PE Biosystems Group Common Stock ("PE Biosystems stock"). CeleraGenomics stock is intended to reflect separately the performance of the CeleraGenomics business ("Celera Genomics group"), and PE Biosystems stock is intendedto reflect separately the performance of the established PE Biosystems' lifesciences and the discontinued Analytical Instruments businesses ("PE Biosystemsgroup"). Each share of common stock of The Perkin-Elmer Corporation wasconverted into 0.5 of a share of Celera Genomics stock and one share of PEBiosystems stock. The combined financial statements of the Celera Genomics group and the PEBiosystems group (individually referred to as a "group") comprise all of theaccounts included in the corresponding consolidated financial statements of theCompany. Intergroup transactions between the Celera Genomics group and the PEBiosystems group have not been eliminated in the Celera Genomics group combinedfinancial statements but have been eliminated in the PE Corporation consolidatedfinancial statements. The Celera Genomics group and the PE Biosystems groupcombined financial statements have been prepared on a basis that managementbelieves to be reasonable and appropriate and reflect (1) the financialposition, results of operations, and cash flows of businesses that comprise eachof the groups, with all significant intragroup transactions and balanceseliminated, (2) in the case of the Celera Genomics group combined financialstatements, corporate assets and liabilities of the Company and relatedtransactions identified with the Celera Genomics group, including allocatedportions of the Company's debt and selling, general and administrative costs,and (3) in the case of the PE Biosystems group combined financial statements,all other corporate assets and liabilities and related transactions of theCompany, including allocated portions of the Company's debt and selling, generaland administrative costs. Holders of Celera Genomics stock and PE Biosystems stock are stockholders ofthe Company. The Celera Genomics group and the PE Biosystems group are notseparate legal entities. As a result, stockholders are subject to all of therisks associated with an investment in the Company and all of its businesses,assets, and liabilities. The issuance of Celera Genomics stock and PE Biosystemsstock and the allocations of assets and liabilities between the Celera Genomicsgroup and the PE Biosystems group did not result in a distribution or spin-offof any assets or liabilities of the Company or otherwise affect ownership of anyassets or responsibility for the liabilities of the Company or any of itssubsidiaries. The assets the Company attributes to one group could be subject tothe liabilities of the other group, whether such liabilities arise fromlawsuits, contracts or indebtedness attributable to the other group. If theCompany is unable to satisfy one group's liabilities out of assets attributed toit, the Company may be required to satisfy these liabilities with assetsattributed to the other group. F-7

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 1 ACCOUNTING POLICIES AND PRACTICES (CONTINUED) Financial effects arising from one group that affect the Company's resultsof operations or financial condition could, if significant, affect the resultsof operations or financial condition of the other group and the market price ofthe class of common stock relating to the other group. Any net losses of theCelera Genomics group or the PE Biosystems group and dividends or distributionson, or repurchases of, Celera Genomics stock or PE Biosystems stock orrepurchases of preferred stock of the Company will reduce the assets of theCompany legally available for payment of dividends. The management and allocation policies applicable to the preparation of thefinancial statements of the Celera Genomics group and the PE Biosystems groupmay be modified or rescinded, or additional policies may be adopted, at the solediscretion of the Board of Directors at any time without approval of thestockholders. The Celera Genomics group's combined financial statements reflectthe application of the management and allocation policies adopted by the Boardto various corporate activities, as described below. The Celera Genomics group'scombined financial statements should be read in conjunction with the Company'sconsolidated financial statements.FINANCING ACTIVITIES As a matter of policy, the Company manages most financial activities of theCelera Genomics group and the PE Biosystems group on a centralized basis. Theseactivities include the investment of surplus cash, the issuance and repayment ofshort-term and long-term debt and the issuance and repayment of any preferredstock. As the financing activities of the Celera Genomics group were notsignificant for any of the periods prior to the recapitalization, all historicalcash and debt balances for those periods presented were allocated to the PEBiosystems group. The Board has adopted the following financing policy which will affect thecombined statements of the Celera Genomics group and the PE Biosystems group. The Company will allocate the Company's debt between the Celera Genomicsgroup and the PE Biosystems group ("pooled debt") or, if the Company sodetermines, in its entirety to a particular group. The Company will allocatepreferred stock, if issued, in a similar manner. Cash allocated to one group that is used to repay pooled debt or redeempooled preferred stock will decrease such group's allocated portion of thepooled debt or preferred stock. Cash or other property allocated to one groupthat is transferred to the other group will, if so determined by the Board,decrease the transferring group's allocated portion of the pooled debt orpreferred stock and, correspondingly, increase the recipient group's allocatedportion of the pooled debt or preferred stock. Pooled debt will bear interest for group financial statement purposes at arate equal to the weighted average interest rate of the debt calculated on aquarterly basis and applied to the average pooled debt balance during theperiod. Preferred stock, if issued and if pooled in a manner similar to thepooled debt, will bear dividends for group financial statement purposes at arate based on the weighted average dividend rate of the preferred stocksimilarly calculated and applied. Any expense related to increases in pooleddebt or preferred stock will be reflected in the weighted average interest ordividend rate of such pooled debt or preferred stock as a whole. If the Company allocates debt for a particular financing in its entirety toone group, that debt will bear interest for group financial statement purposesat the rate determined by the Board. If the Company allocates preferred stock inits entirety to one group, the Company will charge the dividend cost to thatgroup in a similar manner. If the interest or dividend cost is higher than theCompany's actual cost, the other group will receive a credit for an amount equalto the difference as compensation for the use of the F-8

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 1 ACCOUNTING POLICIES AND PRACTICES (CONTINUED)Company's credit capacity. Any expense related to debt or preferred stock of theCompany that is allocated in its entirety to a group will be allocated in wholeto that group. Cash or other property that the Company allocates to one group that istransferred to the other group, could, if so determined by the Board, beaccounted for either as a short-term loan or as a long-term loan. Short-termloans will bear interest at a rate equal to the weighted average interest rateof the Company's pooled debt. If the Company does not have any pooled debt, theBoard will determine the rate of interest for such loan. The Board willestablish the terms on which long-term loans between the groups will be made,including interest rate, amortization schedule, maturity and redemption terms. Although the Company may allocate its debt and preferred stock betweengroups, the debt and preferred stock will remain obligations of the Company andall stockholders of the Company will be subject to the risks associated withthose obligations. In addition, cash allocated to the PE Biosystems group may be contributed tothe Celera Genomics group in exchange for an equity interest in the CeleraGenomics group.ALLOCATION OF CORPORATE OVERHEAD AND ADMINISTRATIVE SHARED SERVICES A portion of the Company's corporate overhead (such as executive management,human resources, legal, accounting, auditing, tax, treasury, strategic planningand environmental services) has been allocated to the Celera Genomics groupbased upon the use of services by that group. A portion of the Company's costsof administrative shared services (such as information technology services) hasbeen allocated in a similar manner. Where determination based on use alone isnot practical, other methods and criteria were used that management believes areequitable and provide a reasonable estimate of the cost attributable to theCelera Genomics group. The total of these allocations was $.2 million,$1.7 million, $5.1 million, $2.4 million and $4.1 million for fiscal 1997, 1998,and 1999, and the six months ended December 31, 1998 and 1999 (unaudited),respectively. It is not practicable to provide a detailed estimate of theexpenses which would be recognized if the Celera Genomics group were a separatelegal entity.ALLOCATION OF FEDERAL AND STATE INCOME TAXES The federal income taxes of the Company and its subsidiaries which ownassets allocated between the groups are determined on a consolidated basis.Consolidated federal income tax provisions and related tax payments or refundsare allocated between the groups based principally on the taxable income and taxcredits directly attributable to each group. Such allocations reflect eachgroup's contribution (positive or negative) to the Company's consolidatedfederal taxable income and the consolidated federal tax liability and tax creditposition. Tax benefits that cannot be used by the group generating thosebenefits but can be used on a consolidated basis are credited to the group thatgenerated such benefits. Intergroup transactions are taxed as if each group werea stand alone company. Tax benefits generated by the Celera Genomics groupcommencing July 1, 1998, which then can be utilized on a consolidated basis,will be credited to the Celera Genomics group up to a maximum limit of$75 million. The Celera Genomics group generated $22.6 million of tax benefitsfor the year ended June 30, 1999. Had the groups filed separate tax returns, the provision (benefit) forincome taxes and net income (loss) for each group would not have differed fromthe amounts reported in the groups' combined statements of operations for theyears ended June 30, 1997, 1998, and 1999. However, the amount of current anddeferred taxes and taxes payable or refundable allocated to each group in thesehistorical combined financial statements may differ from those that would havebeen allocated to each group had they filed separate income tax returns. F-9

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 1 ACCOUNTING POLICIES AND PRACTICES (CONTINUED) Depending on the tax laws of the respective jurisdictions, state and localincome taxes are calculated on either a consolidated or combined basis betweenthe groups based on their respective contribution to such consolidated orcombined state taxable incomes. State and local income tax provisions andrelated tax payments or refunds which are determined on a separate corporationbasis will be allocated between the groups in a manner designed to reflect therespective contributions of the groups to the Company's separate or localtaxable income. The discussion of the Celera Genomics group's income taxes (see Note 3)should be read in conjunction with the Company's consolidated financialstatements and the notes thereto included in PE Corporation's 1999 Annual Reportto Stockholders.TRANSFERS OF ASSETS BETWEEN GROUPS Transfers of assets can be made between groups without stockholder approval.Such transfers will be made at fair value, as determined by the Company's Boardof Directors. The consideration for such transfers may be paid by one group tothe other in cash or other consideration, as determined by the Company's Boardof Directors.DIVIDENDS For purposes of the historical (periods prior to the recapitalization)combined financial statements of the Celera Genomics group and the PE Biosystemsgroup, all dividends declared and paid by the Company were allocated to the PEBiosystems group.PRINCIPLES OF COMBINATION The Celera Genomics group's combined financial statements have been preparedin accordance with generally accepted accounting principles and, taken togetherwith the PE Biosystems group's combined financial statements, comprise all theaccounts included in the corresponding consolidated financial statements of theCompany. Intergroup transactions between the Celera Genomics group and the PEBiosystems group have not been eliminated in the Celera Genomics group'scombined financial statements but have been eliminated in the PE Corporationconsolidated financial statements. The combined financial statements of eachgroup reflect the financial condition, results of operations, and cash flows ofthe businesses included therein. The combined financial statements of the CeleraGenomics group include the assets and liabilities of the Company specificallyidentified with or allocated to the Celera Genomics group. The preparation ofthe combined financial statements in conformity with generally acceptedaccounting principles requires management to make estimates and assumptions thataffect the reported amounts of assets and liabilities, disclosure of contingentassets and liabilities at the date of the financial statements, and the reportedamounts of revenues and expenses during the reporting periods. Actual resultscould differ from those estimates. Certain amounts in the combined financialstatements and notes have been reclassified for comparative purposes.UNAUDITED INTERIM FINANCIAL STATEMENTS The accompanying unaudited combined interim financial statements reflect, inthe opinion of the Celera Genomics group's management, all adjustments which arenecessary for a fair statement of the results for the interim periods. All suchadjustments are of a normal recurring nature. These interim results are,however, not necessarily indicative of the results to be expected for a fullyear. The Celera Genomics group's combined financial statements should be readin conjunction with the Company's consolidated financial statements included inForm 10-Q for the quarterly period ended December 31, 1999, incorporated hereinby reference. F-10

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 1 ACCOUNTING POLICIES AND PRACTICES (CONTINUED)RECENT ACCOUNTING STANDARDS In June 1998, the Financial Accounting Standards Board ("FASB") issuedStatement of Financial Accounting Standards ("SFAS") No. 133, "Accounting forDerivative Instruments and Hedging Activities." The provisions of the statementrequire the recognition of all derivatives as either assets or liabilities inthe statement of financial position and the measurement of those instruments atfair value. The accounting for changes in the fair value of a derivative dependson the intended use of the derivative and the resulting designation. The CeleraGenomics group is required to implement the statement in the first quarter offiscal 2001. The Celera Genomics group currently believes the statement will nothave a material impact on its combined financial statements.EARNINGS PER SHARE Earnings per share information prior to the recapitalization is omitted fromthe Celera Genomics group's Combined Statements of Operations because CeleraGenomics stock was not part of the capital structure of the Company until fiscal1999. Basic loss per share is computed by dividing net loss for the period bythe weighted average number of shares of Celera Genomics stock outstanding.Diluted loss per share is computed by dividing net loss for the period by theweighted average number of shares of Celera Genomics stock outstanding includingthe dilutive effect of Celera Genomics stock equivalents. The table below presents a reconciliation of basic and diluted loss pershare:<TABLE><CAPTION> FOR THE FOR THE YEAR ENDED SIX MONTHS ENDED(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) JUNE 30, 1999 DECEMBER 31, 1999------------------------------------------------------------ ------------- ----------------- (UNAUDITED)<S> <C> <C>Weighted average number of common shares used in the calculation of basic loss per share....................... 50,200 51,695Common stock equivalents.................................... -- -- -------- --------Shares used in the calculation of diluted loss per share.... 50,200 51,695 ======== ========Net loss used in the calculation of basic and diluted loss per share................................................. $(44,894) $(43,676) ======== ========Basic and diluted net loss per share........................ $ (.89) $ (.84) ======== ========</TABLE> The reconciliation for fiscal 1997 and 1998 and the six months endedDecember 31, 1998 is omitted since Celera Genomics stock was not part of thecapital structure of the Company. Options and warrants to purchase 11.2 million and 14.0 million shares ofCelera Genomics stock were outstanding at June 30, 1999 and December 31, 1999(unaudited), respectively, but were not included in the computation of dilutedloss per share because the effect was antidilutive. On January 20, 2000, the Board of Directors announced a two-for-one split ofCelera Genomics stock. The two-for-one stock split will be effected in the formof a 100% stock dividend payable on February 18, 2000 to stockholders of recordas of the close of business on February 4, 2000. All Celera Genomics share andper share data reflect this split.CASH AND CASH EQUIVALENTS Cash equivalents consist of highly liquid debt instruments, time deposits,and certificates of deposit with original maturities of three months or less. F-11

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 1 ACCOUNTING POLICIES AND PRACTICES (CONTINUED)INVESTMENTS The Company's investment in Agrogene is accounted for on the equity method.PROPERTY, PLANT AND EQUIPMENT, AND DEPRECIATION Property, plant and equipment are recorded at cost and consisted of thefollowing at June 30, 1998 and 1999:<TABLE><CAPTION>(DOLLAR AMOUNTS IN MILLIONS) 1998 1999------------------------------------------------------------ -------- --------<S> <C> <C>Land........................................................ $ -- $ 10.0Buildings and leasehold improvements........................ 4.2 66.4Machinery and equipment..................................... 1.7 33.3 ------ ------Property, plant and equipment, at cost...................... 5.9 109.7Accumulated depreciation and amortization................... 1.7 5.5 ------ ------Property, plant and equipment, net.......................... $ 4.2 $104.2 ====== ======</TABLE> Major renewals and improvements that significantly add to productivecapacity or extend the life of an asset are capitalized. Repairs, maintenance,and minor renewals and improvements are expensed when incurred. Provisions for depreciation of owned property, plant and equipment are basedupon the expected useful lives of the assets and computed primarily by thestraight-line method. Leasehold improvements are amortized over their estimateduseful lives or the term of the applicable lease, whichever is less, using thestraight-line method. Internal-use software costs are amortized primarily overthe expected useful lives, not to exceed seven years. Machinery and equipment included $8.1 million of data management softwarelicenses at June 30, 1999. There were no corresponding amounts at June 30, 1998.INTANGIBLE ASSETS The excess of purchase price over the net asset value of companies acquiredis amortized on a straight-line method over periods not exceeding 40 years.Purchased technology rights are amortized using the straight-line method overtheir expected useful lives. There was no goodwill at June 30, 1998. At June 30, 1999, and December 31,1999 (unaudited), other long-term assets included goodwill, net of accumulatedamortization, of $.9 million and $1.8 million, respectively. Accumulatedamortization of goodwill was $.1 million at June 30, 1999 and December 31, 1999. At June 30, 1998 and 1999, and December 31, 1999 (unaudited), otherlong-term assets included purchased technology rights, net of accumulatedamortization, of $1.2 million, $1.1 million, and $1.5 million, respectively.Accumulated amortization of purchased technology rights was $.2 million,$.3 million and $.3 million at June 30, 1998 and 1999, and December 31, 1999(unaudited), respectively.REVENUES Subscription fees for access to the Company's genome databases arerecognized ratably over the contracted period in accordance with the provisionsof the contract. Contract research service revenues are earned and recognizedgenerally on a percentage of completion or as contract research costs areincurred according to the provisions of the underlying agreement. In someinstances revenue recognition may be F-12

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 1 ACCOUNTING POLICIES AND PRACTICES (CONTINUED)contingent upon the achievement of certain milestones at each anniversary date.Amounts received in advance of performance are recorded as deferred revenue.RESEARCH AND DEVELOPMENT Costs incurred for internal, contract and grant-sponsored research anddevelopment are expensed when incurred. Grant-sponsored research and developmentexpense was $.2 million for the year ended June 30, 1999.SUPPLEMENTAL CASH FLOW INFORMATION Significant non-cash investing and financing activities were as follows:<TABLE><CAPTION> FOR THE SIX MONTHS ENDED DECEMBER 31, FISCAL(DOLLAR AMOUNTS IN MILLIONS) 1999 1998 1999------------------------------------------------------------ -------- -------- -------- (UNAUDITED)<S> <C> <C> <C>Interest.................................................... -- -- $ .7Capital expenditures liability.............................. $ 8.9 -- --Note receivable from the PE Biosystems group................ $150.0 $310.9 --</TABLE>NOTE 2 ACQUISITIONSGENSCOPE, INC. During the third quarter of fiscal 1997, the Company acquiredGenScope, Inc., for $26.8 million. GenScope, founded in 1995, represented adevelopment stage venture with no operating history. GenScope had effectively norevenues and only limited R&D contract services. At the acquisition date,technological feasibility of the acquired technology right had not beenestablished and the acquired technology right had no future alternative uses.The Company obtained the right to utilize AFLP-based gene expression profilingtechnology in the field of human health, but did not obtain any core technologyor other rights. GenScope's limited balance sheet, with assets of approximately$.2 million, had yet to deliver commercial value. Accordingly, the Companyrecorded a charge of $25.4 million attributable to the in-process technologypurchased. The Company based this amount upon the early development stage ofthis life science business acquired, the technological hurdles to apply thistechnology to the field of human health and the underlying cash flowprojections. The acquisition represented the purchase of development stagetechnology, not at the time considered commercially viable in the health careapplications that the Company intends to pursue. The Company's intent was tofirst develop the technology into a set of molecular screening tools for use inthe enhancement of pharmaceutical product development. The Company allocated$1.4 million of the purchase price to technology rights attributable toGenScope's AFLP-based gene expression profiling technology. AFLP is anenhancement of the polymerase chain reaction ("PCR") process that allowsselective analysis of any portion of genetic material without the specific,prior sequence information normally required for PCR. Of the $25.4 millionexpensed as in-process research and development, $5.5 million represented acontingent liability due on the issuance of a process patent for technologyunder development. F-13

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 2 ACQUISITIONS (CONTINUED)OTHER ACQUISITIONS The Company acquired Linkage Genetics, Inc., a provider of genetic analysisservices in the agriculture industry, during the fourth quarter of fiscal 1997.At the acquisition date, the technological feasibility of the acquiredtechnology had not been established and the acquired technology had no futurealternative uses. The cash acquisition cost of $1.4 million was accounted for asa purchase. The entire acquisition cost was expensed as purchased in-processresearch and development. During the third quarter of fiscal 1999, the Company acquired a 49% interestin Agrogene S.A., an agricultural DNA testing laboratory in France for $1.2million. The investment complements the Celera Genomics group's automated DNAsequencing and genotyping services in the agricultural field. The excess of costover net assets acquired of $1.0 million is being amortized on a straight-linebasis over a 3 year period. During the second quarter of fiscal 2000, the Celera Genomics group acquiredthe Panther-TM- technology from Molecular Applications Group. Panther-TM- is asoftware tool designed for rapid and accurate determination of gene and proteinfunction. As part of the agreement, members of the Molecular Applications Groupresearch team who developed the Panther-TM- technology became employees of theCelera Genomics group. The cost of this acquisition was $2.5 million. The net assets and results of operations for all of the above acquisitionswere accounted for under the purchase method and have been included in thecombined financial statements of the Celera Genomics group since the date ofeach acquisition. The pro forma effect of these acquisitions, individually or inthe aggregate, on the Celera Genomics group combined financial statements wasnot significant. During the second quarter of fiscal 2000, the Celera Genomics group acquireda 47.5% equity interest in Shanghai GeneCore BioTechnologies Co., Ltd. from AxysPharmaceuticals, Inc. The PE Biosystems group also owns a 47.5% equity interestin Shanghai GeneCore. Shanghai GeneCore is a genomics service company withexpertise in nucleotide synthesis, DNA sequencing, bioinformatics analysis, andmutation detection. Shanghai GeneCore has ongoing research collaborations withseveral Chinese government agencies and research institutes. This investmentwill be accounted for under the equity method of accounting.NOTE 3 INCOME TAXES The income tax benefit included the Celera Genomics group's allocatedportion of the Company's consolidated provision for income taxes. Loss before income taxes, consisting of losses generated in the UnitedStates, for fiscal 1997, 1998, 1999, and the six months ended December 31, 1998and 1999 (unaudited), was $32.1 million, $12.8 million, $67.5 million,$18.5 million and $67.2 million, respectively. The current domestic income taxbenefit for fiscal 1997, 1998, 1999, and the six months ended December 31, 1998and 1999 (unaudited), was $1.9 million, $4.5 million, $22.6 million,$6.3 million and $23.5 million, respectively. F-14

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 3 INCOME TAXES (CONTINUED) A reconciliation of the federal statutory tax to the Celera Genomics group'stax benefit for fiscal 1997, 1998, and 1999 is set forth in the following table:<TABLE><CAPTION>(DOLLAR AMOUNTS IN MILLIONS) 1997 1998 1999------------------------------------------------------------ -------- -------- --------<S> <C> <C> <C>Federal statutory rate...................................... 35% 35% 35%Tax at federal statutory rate............................... $11.2 $ 4.5 $23.6Recapitalization costs...................................... -- -- (1.6)Acquired research and development........................... (9.3) -- --Miscellaneous............................................... -- -- .6 ----- ----- -----Benefit for income taxes.................................... $ 1.9 $ 4.5 $22.6 ===== ===== =====</TABLE>NOTE 4 RETIREMENT AND OTHER BENEFITSPENSION The Company maintains or sponsors a pension plan that covers certainemployees of the Celera Genomics group. Pension benefits earned are generallybased on years of service and compensation during active employment. Pensionplan assets are administered by a trustee and are principally invested in equityand fixed income securities. The funding of the pension plan is determined inaccordance with statutory funding requirements. The Company's domestic pension plans cover a substantial portion of the U.S.employees. During fiscal 1999, the plan was amended to terminate the accrual ofbenefits under the plan as of June 30, 2004 and to improve the benefit forparticipants who retire between the ages of 55 and 60. The pension plan is notavailable to employees hired on or after July 1, 1999. Pension expense, consisting primarily of service cost, allocated to theCelera Genomics group was less than $.1 million for fiscal 1997, $.1 million forfiscal 1998, and $.1 million for fiscal 1999.RETIREE HEALTH CARE AND LIFE INSURANCE BENEFITS The postretirement plan provides certain health care and life insurancebenefits to domestic employees hired prior to January 1, 1993, who retire andsatisfy certain service and age requirements. Generally, medical coverage pays astated percentage of most medical expenses, reduced for any deductible and forpayments made by Medicare or other group coverage. The cost of providing thesebenefits is shared with retirees. The plan is unfunded. The postretirementbenefit expense allocated to the Celera Genomics group was not material forfiscal 1997, 1998, and 1999. Amounts allocated to the Celera Genomics group wereless than $.05 million for all periods presented.SAVINGS PLAN The Company provides a 401(k) savings plan, for domestic employees, withautomatic Company contributions of 2% of eligible compensation and adollar-for-dollar matching contribution of up to 4% of eligible compensation.The Company contributions allocated to the Celera Genomics group for fiscal1997, 1998, and 1999 were $.1 million, $.2 million and $.5 million,respectively. F-15

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 4 RETIREMENT AND OTHER BENEFITS (CONTINUED)POSTEMPLOYMENT BENEFITS The Company provides certain postemployment benefits to eligible employees.These benefits generally include severance, disability, and medical-relatedcosts paid after employment but before retirement.NOTE 5 SEGMENT, GEOGRAPHIC, AND CUSTOMER INFORMATIONBUSINESS SEGMENTS AND GEOGRAPHIC In fiscal 1999, the Celera Genomics group adopted SFAS No. 131, "Disclosuresabout Segments of an Enterprise and Related Information." The statementestablished annual and interim reporting standards for an enterprise's operatingsegments and related disclosures about its products and services, geographicareas, and major customers. The adoption of the statement did not affect theresults of operations or financial position of the Celera Genomics group. The Celera Genomics group operates in one business segment, which is engagedprincipally in the generation, sale and support of genomic information databaseand related information management and analysis software; discovery, validationand licensing of proprietary gene products, genetic markers and informationconcerning genetic variability; and related consulting and contract research anddevelopment services. The Celera Genomics group operates primarily in the UnitedStates.CUSTOMER INFORMATION Revenues from any single customer, comprising 10% or more of the totalrevenues of the Celera Genomics group, were $.2 million, $.4 million, and$3.1 million, for fiscal 1997, 1998, and 1999, respectively.NOTE 6 GROUP EQUITY AND NOTE RECEIVABLE Celera Genomics stock represents a separate class of the Company's commonstock. Additional shares of Celera Genomics stock may be issued from time totime upon exercise of stock options or at the discretion of the Company's Boardof Directors. There were no repurchases of Celera Genomics stock for fiscal1999.NOTE RECEIVABLE FROM THE PE BIOSYSTEMS GROUP The initial capitalization of the Celera Genomics group included a$330 million short-term note receivable from the PE Biosystems group establishedat September 30, 1998. The $330 million note represented an allocation of theCompany's capital to the Celera Genomics group and did not result in the PEBiosystems group holding an equity interest in the Celera Genomics group.Accordingly, no interest was ascribed to the note. The allocation of capitalrepresented management's decision to allocate a portion of the Company's capitalto the Celera Genomics group and the remaining capital to the PE Biosystemsgroup prior to the effective date of the recapitalization. The group financialstatements do not include any intergroup equity interests. The note receivablewas liquidated on May 28, 1999 in exchange for a portion of the proceedsreceived from the sale of the Analytical Instruments business and a new notereceivable from the PE Biosystems group for $150 million was established. Thenew note receivable is for a term of one-year, bears an interest rate of 5% perannum, and is payable on demand without penalty. At December 31, 1999(unaudited), the outstanding balance of the note receivable was $150 million. F-16

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 6 GROUP EQUITY AND NOTE RECEIVABLE (CONTINUED)TAX BENEFIT RECEIVABLE FROM THE PE BIOSYSTEMS GROUP The Company reimburses the Celera Genomics group for tax benefits generatedwhich then can be utilized on a consolidated basis. These reimbursements areintended to provide additional cash resources to the Celera Genomics group up toa maximum of $75 million. For fiscal 1999 and the six months ended December 31,1999 (unaudited), the Celera Genomics group generated reimbursable tax benefitsof $22.6 million and $16.9 million, respectively. At June 30, 1999 andDecember 31, 1999 (unaudited), the tax benefit receivable was $9.9 million and$9.4 million, respectively.THIRD PARTY EQUITY TRANSACTION On June 30, 1999, the Company granted an option to purchase 2.6 millionshares of Celera Genomics group stock to a third party and entered into a oneyear non-compete agreement with such party. The fair value of such optionapproximated $7.2 million and will be amortized over the life of the non-competeagreement.STOCK PURCHASE WARRANTS On January 22, 1998, the Company acquired PerSeptive Biosystems, Inc. Theacquisition was accounted for as a pooling of interests, and the PE Biosystemsgroup's financial results were restated to include the combined operations. As aresult of the merger each outstanding warrant for shares of PerSeptive commonstock was converted into warrants for the number of shares of the Company'scommon stock that would have been received by the holder if such warrants hadbeen exercised immediately prior to the effective time of the merger. As a result of the recapitalization, each outstanding warrant for shares ofPerSeptive common stock was further converted into warrants to acquire .1926share of Celera Genomics stock and .7704 share of PE Biosystems stock. Thewarrants are not separately exercisable into solely Celera Genomics stock or PEBiosystems stock. The exercise price and expiration date of each warrant werenot affected by the recapitalization. At June 30, 1999 and December 31, 1999 (unaudited), there were warrantsoutstanding to purchase 215,196 shares of PE Biosystems stock and 53,800 sharesof Celera Genomics stock at an exercise price of $16.44. The warrants expire inSeptember, 2003.STOCKHOLDERS' PROTECTION RIGHTS PLAN In connection with the recapitalization, the Company adopted a newStockholder Rights Plan (the "Rights Agreement") to protect stockholders againstabusive takeover tactics. Under the Rights Agreement, the Company will issue oneright for each share of Celera Genomics stock (a "Celera Genomics Right"), whichwill allow holders to purchase one-thousandth of a share of a newly designatedSeries B participating junior preferred stock of the Company at a purchase priceof $125, subject to adjustment (the "Series B Purchase Price"), and one rightfor each share of PE Biosystems stock (a "PE Biosystems Right"), which willallow holders to purchase one-thousandth of a share of a newly designatedSeries A participating junior preferred stock of the Company at a purchase priceof $425, subject to adjustment (the "Series A Purchase Price"). A Celera Genomics Right or PE Biosystems Right will be exercisable only if aperson or group ("Acquiring Person"): (a) acquires 15% or more of the shares ofCelera Genomics stock then outstanding F-17

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 6 GROUP EQUITY AND NOTE RECEIVABLE (CONTINUED)or 15% or more of the shares of PE Biosystems stock then outstanding or(b) commences a tender offer that would result in such person or group owningsuch number of shares. If any person or group becomes an Acquiring Person, each Celera GenomicsRight and each PE Biosystems Right will entitle its holder to purchase, for theSeries B Purchase Price or the Series A Purchase Price, a number of shares ofthe related class of common stock of the Company having a market value equal totwice such purchase price. If following the time a person or group becomes an Acquiring Person, theCompany is acquired in a merger or other business combination transaction andthe Company is not the surviving corporation; any person consolidates or mergeswith the Company and all or part of the common stock is converted or exchangedfor securities, cash or property of any other person; or 50% or more of theCompany's assets or earnings power is sold or transferred, each Celera GenomicsRight and each PE Biosystems Right will entitle its holder to purchase, for theSeries B Purchase Price or Series A Purchase Price, a number of shares of commonstock of the surviving entity in any such merger, consolidation or businesscombination or the purchaser in any such sale or transfer having a market valueequal to twice the Series A Purchase Price or Series B Purchase Price. The rights are redeemable at the Company's option at one cent per right to aperson or group becoming an Acquiring Person.CAPITAL STOCK The Company's authorized capital stock consists of 225 million shares of PECorporation-Celera Genomics Group Common Stock, 500 million shares of PECorporation-PE Biosystems Group Common Stock and 10 million shares of PECorporation preferred stock. Of the 10 million shares of preferred stock atJune 30, 1999, the Company had designated 80,000 shares of two series ofparticipating junior preferred stock in connection with the Company'sstockholders' protection rights plan as previously described.NOTE 7 STOCK PLANSSTOCK OPTION PLANS Under the Company's stock option plans, officers and other key employees maybe, and directors are, granted options, each of which allows for the purchase ofexisting common stock at a price of not less than 100% of fair market value atthe date of grant. Prior to the recapitalization, most option grants had atwo-year vesting schedule, whereby 50% of the option grant vested at the end ofeach year from the date of grant. The Board of Directors has extended thatschedule for most options granted subsequent to the recapitalization whereby 25%will vest annually, resulting in 100% vesting after four years. Optionsgenerally expire ten years from the date of grant. F-18

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 7 STOCK PLANS (CONTINUED) Transactions relating to the stock option plans are summarized as follows:<TABLE><CAPTION> PE CORPORATION -------------------------- WEIGHTED NUMBER OF AVERAGE OPTIONS EXERCISE PRICE --------- --------------<S> <C> <C>FISCAL 1997Outstanding at June 30, 1996................................ 3,822,535 $34.05Granted..................................................... 1,595,528 $59.78Exercised................................................... 1,167,179 $29.73Cancelled................................................... 95,281 $43.17 --------- ------Outstanding at June 30, 1997................................ 4,155,603 $45.03Exercisable at June 30, 1997................................ 2,254,052 $35.24FISCAL 1998Granted..................................................... 1,997,041 $70.41Exercised................................................... 780,994 $34.76Cancelled................................................... 154,686 $71.42 --------- ------Outstanding at June 30, 1998................................ 5,216,964 $55.51Exercisable at June 30, 1998................................ 2,936,389 $43.12FISCAL 1999Granted..................................................... 37,000 $86.61Exercised................................................... 1,549,364 $45.74Cancelled................................................... 108,914 $67.92 --------- ------Outstanding at May 5, 1999.................................. 3,595,686 $60.23Exercisable at May 5, 1999.................................. 2,639,696 $55.43</TABLE> F-19

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 7 STOCK PLANS (CONTINUED)<TABLE><CAPTION> CELERA GENOMICS GROUP --------------------------- WEIGHTED NUMBER OF AVERAGE OPTIONS EXERCISE PRICE ---------- --------------<S> <C> <C>FISCAL 1999Outstanding at May 6, 1999.................................. 3,595,686 $5.52Granted..................................................... 7,952,036 $8.72Exercised................................................... 281,788 $5.25Cancelled................................................... 132,606 $6.67 ---------- -----Outstanding at June 30, 1999................................ 11,133,328 $7.81Exercisable at June 30, 1999................................ 3,636,232 $6.39</TABLE> As a result of the recapitalization, each outstanding stock option under theCompany's stock option plans was converted into separately exercisable optionsto acquire one share of PE Biosystems stock and 0.5 of a share of CeleraGenomics stock. The exercise price for the resulting PE Biosystems stock optionsand Celera Genomics stock options was calculated by multiplying the exerciseprice under the original option from which they were converted by a fraction,the numerator of which was the opening price of PE Biosystems stock or CeleraGenomics stock, as the case may be, on May 6, 1999 (the first date such stockswere traded on the New York Stock Exchange) and the denominator of which was thesum of such PE Biosystems stock and Celera Genomics stock prices. However, theaggregate intrinsic value of the options was not increased, and the ratio of theexercise price per option to the market value per share was not reduced. Inaddition, the vesting provision and option periods of the original grants hasremained the same on conversion. The following table summarizes information regarding options outstanding andexercisable for the Celera Genomics group at June 30, 1999:<TABLE><CAPTION> WEIGHTED AVERAGE ---------------------- CONTRACTUAL LIFE NUMBER OF REMAINING EXERCISE(OPTION PRICES PER SHARE) OPTIONS IN YEARS PRICE------------------------------------------------------------ --------- ----------- --------<S> <C> <C> <C>Options Outstanding At $.37--$12.10........................................... 1,200,588 5.1 $ 3.48 At $12.11--$15.13......................................... 1,923,568 7.8 $ 6.70 At $15.14--$17.12......................................... 7,304,928 9.5 $ 8.56 At $17.13--$30.26......................................... 704,244 9.8 $10.50Options Exercisable At $.37--$12.10........................................... 1,157,532 5.1 $ 3.49 At $12.11--$15.13......................................... 1,046,264 7.8 $ 6.57 At $15.14--$17.12......................................... 1,410,040 9.5 $ 8.55 At $17.13--$30.26......................................... 22,396 9.8 $11.33</TABLE>1999 STOCK INCENTIVE PLANS The PE Corporation/PE Biosystems Group 1999 Stock Incentive Plan (the "PEBiosystems plan") and the PE Corporation/Celera Genomics Group 1999 StockIncentive Plan (the "Celera Genomics plan") were approved in April 1999. TheCelera Genomics plan authorizes grants of stock options, stock awards F-20

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 7 STOCK PLANS (CONTINUED)and performance shares with respect to Celera Genomics stock. The PE Biosystemsplan authorizes grants of stock options, stock awards and performance shareswith respect to PE Biosystems stock. Directors and certain officers and keyemployees with responsibilities involving both the PE Biosystems group and theCelera Genomics group may be granted awards under both incentive plans in amanner which reflects their responsibilities. The Board of Directors believesthat granting participants awards tied to performance of the group in which theparticipants work and, in certain cases the other group, is in the best interestof the Company and its stockholders.EMPLOYEE STOCK PURCHASE PLAN The Employee Stock Purchase Plan offers domestic and certain foreignemployees the right to purchase shares of Celera Genomics stock and/or PEBiosystems stock on a quarterly basis. The purchase price in the United Statesis equal to the lower of 85% of the average market price of such class of commonstock on the offering date or 85% of the average market price of the applicableclass of common stock on the last day of the purchase period. Provisions of theplan for employees in foreign countries vary according to local practice andregulations. Common stock issued under the Employee Stock Purchase Plan during fiscal1997, 1998, and 1999 totaled 111,000 shares, 174,000 shares, and 168,000 shares,respectively, of PE Corporation (predecessor) common stock. Additionally, 24,000shares of Celera Genomics stock and 98,000 shares of PE Biosystems stock wereissued during fiscal 1999.DIRECTOR STOCK PURCHASE AND DEFERRED COMPENSATION PLAN The Company has a Director Stock Purchase and Deferred Compensation Planthat requires non-employee directors of the Company to apply at least 50% oftheir annual retainer to the purchase of common stock. Purchases of CeleraGenomics stock and PE Biosystems stock are made in a ratio approximately equalto the number of shares of Celera Genomics stock and PE Biosystems stockoutstanding. The purchase price is the fair market value on the date ofpurchase. At June 30, 1999, the Company had approximately 86,000 shares ofCelera Genomics stock and approximately 170,000 shares of PE Biosystems stockavailable for issuance.RESTRICTED STOCK As part of the Company's stock incentive plans, key employees may be, andnon-employee directors are, granted shares of restricted stock that will vestwhen certain continuous employment/service restrictions and/or specifiedperformance goals are achieved. The fair value of shares granted is generallyexpensed over the restricted periods, which may vary depending on the estimatedachievement of performance goals. As a result of the recapitalization, each share of restricted stock held wasredesignated as 0.5 of a share of Celera Genomics stock and one share of PEBiosystems stock. Restricted stock granted prior to the recapitalization to keyemployees and non-employee directors during fiscal 1997, 1998, and 1999 totaled42,000 shares, 4,350 shares, and 42,900 shares, respectively, of PE Corporation(predecessor) common stock. F-21

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 7 STOCK PLANS (CONTINUED)PERFORMANCE UNIT BONUS PLAN The Company has a Performance Unit Bonus Plan whereby employees may beawarded performance units in conjunction with an equal number of stock options.A performance unit represents the right to receive a cash or stock payment fromthe Company at a specified date in the future. The amount of the payment isequal to the fair market value of a share of common stock on the date of thegrant. The performance units vest upon shares of the Company's common stockattaining and maintaining specified stock price levels for a specified period,and are payable on or after a specified future date subject to continuedemployment through the date of payment. As of June 30, 1999 two series ofperformance units totaling 498,399 units had been granted under the plan.Compensation expense, pertaining to the first of the series, for the CeleraGenomics group was $.3 million for fiscal 1999. At June 30, 1999, all stock price targets applicable to the first series ofperformance units, totaling 294,499 units, net of cancellations, units initiallygranted to members of senior management under the plan had been attained and theCompany became obligated to make payments under the plan. In recognition of theefforts of the participants in reaching these performance targets and the changein the underlying securities of the Company as a result of the recapitalizationof the Company, the Board of Directors decided to accelerate these payments tofiscal year 2000. The related stock options were not accelerated. Compensationexpense recognized by the Celera Genomics group as a result of the accelerationof these payments totaled $1.0 million for fiscal 1999.ACCOUNTING FOR STOCK-BASED COMPENSATION Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued toEmployees," is applied in accounting for stock-based compensation plans.Accordingly, no compensation expense has been recognized for its stock optionand employee stock purchase plans, as all options have been issued at fairmarket value. Pro forma net income and earnings per share information, as required by SFASNo. 123, "Accounting for Stock-Based Compensation," have been determined foremployee stock plans under the statement's fair value method. The fair value ofthe options was estimated at grant date using a Black-Scholes option pricingmodel with the following weighted average assumptions for the Celera Genomicsgroup:<TABLE><CAPTION>FOR THE YEAR ENDED JUNE 30, 1999------------------------------------------------------------ --------<S> <C>Dividend yield.............................................. --%Volatility.................................................. 34.40%Risk-free interest rates.................................... 5.0%Expected option life in years............................... 5.23</TABLE> For purposes of pro forma disclosure, the estimated fair value of theoptions is amortized to expense over the options' vesting period. F-22

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 7 STOCK PLANS (CONTINUED) Pro forma information for the Celera Genomics group for fiscal 1999 ispresented below:<TABLE><CAPTION>(DOLLAR AMOUNTS IN MILLIONS EXCEPT PER SHARE AMOUNTS) 1999------------------------------------------------------------ --------<S> <C>Net loss As reported............................................... $(44.9) Pro forma................................................. $(47.5)Basic and diluted loss per share As reported............................................... $ (.89) Pro forma................................................. $ (.95)</TABLE> For the fiscal years ended June 30, 1997 and 1998, the net loss was$30.2 million and $8.3 million, respectively. Pro forma information for fiscal1997 and 1998 is omitted since Celera Genomics stock was not part of the capitalstructure of the Company. The weighted average fair value of PE Corporation options granted was$20.17, $24.83, and $33.54 per share for fiscal 1997, 1998, and 1999,respectively. The weighted average fair value of Celera Genomics options grantedwas $4.13 for fiscal 1999. Since Celera Genomics stock and PE Biosystems were not part of the capitalstructure of the Company prior to May 6, 1999, there were no stock optionsoutstanding prior to that date. Therefore, the pro forma effect of CeleraGenomics stock options is not representative of what the effect will be infuture years.NOTE 8 RELATED PARTY TRANSACTIONSSALES OF PRODUCTS AND SERVICES BETWEEN GROUPS A group will sell products or services to the other group on terms thatwould be available from third parties in commercial transactions. If terms forsuch transaction are not available, the purchasing group will pay fair value asdetermined by the Board of Directors for such products and services or at thecost (including overhead) of the selling group. For fiscal 1999, R&D expensesincluded $15.2 million for purchases of instruments, lease payments oninstruments and the purchase of consumables, and $2.1 million of contracted R&Dservices from the PE Biosystems group. For the six months ended December 31,1999, R&D expenses included $25.5 million for lease payments on instruments andthe purchase of consumables and project materials and $.5 million for R&Dservices contracted from the PE Biosystems group.ACCESS TO TECHNOLOGY AND KNOW-HOW Each group will have free access to all Company technology and know-how(excluding products and services of the other group) that may be useful in thatgroup's business, subject to obligations and limitations applicable to theCompany and to such exceptions that the Board of Directors may determine. Thegroups will consult with each other on a regular basis concerning technologyissues that affect both groups. The costs of developing this technology remainin the group responsible for its development. F-23

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 9 COMMITMENTS AND CONTINGENCIES Future minimum payments at June 30, 1999 under non-cancelable operatingleases for real estate and equipment were as follows:<TABLE><CAPTION>(DOLLAR AMOUNTS IN MILLIONS)------------------------------------------------------------<S> <C>2000........................................................ $20.72001........................................................ 18.32002........................................................ 1.62003........................................................ --2004........................................................ --2005 and thereafter......................................... -- ----- Total................................................... $40.6 =====</TABLE> Rental expense was $.1 million for fiscal 1997, $.3 million for fiscal 1998,and $8.5 million for fiscal 1999. Loans payable consisted of $46 million of commercial paper with an averageinterest rate of 5.65% at December 31, 1999. On March 13, 1998, the Company filed a patent infringement action againstAmerican Pharmacia Biotech, Inc. ("Amersham") and Molecular Dynamics, Inc. inthe United States District Court for the Northern District of California. TheCompany asserts that two of its patents (U.S. 5,207,886 and U.S. 4,811,218) areinfringed by reason of Molecular Dynamics' and Amersham's sale of certain DNAanalysis systems (e.g., the MegaBACE 1000 System). In response, the defendantshave asserted various affirmative defenses and several counterclaims, includingthat the Company is infringing two patents (U.S. 5,091,652 and U.S. 5,459,325)owned by or licensed to Molecular Dynamics by selling the ABI PRISM(R) 377 DNASequencing Systems. On April 2, 1998, Amersham filed a patent infringement action against theCompany in the United States District Court for the Northern District ofCalifornia. The complaint alleges that the Company is directly, contributorilyor by inducement infringing U.S. Patent No. 5,688,648 ("the '648 patent"),entitled "Probes Labeled with Energy Transfer Coupled Dyes." The complaint seeksdeclaratory judgment that the use of the PE BigDye(TM) Primer and BigDye(TM)Terminator kits would infringe the '648 patent, as well as injunctive andmonetary relief. The Company answered the complaint, alleging that the '648patent is invalid and that the Company has not infringed the '648 patent. On May 21, 1998, Amersham filed a patent infringement action against theCompany in the United States District Court for the Southern District of NewYork. The complaint alleges that the Company is infringing, contributing to theinfringement and inducing the infringement of U.S. Patent No. 4,707,235 ("the'235 patent") entitled "Electrophoresis Method and Apparatus having ContinuousDetection Means." The complaint seeks injunctive and monetary relief. TheCompany answered the complaint, alleging that the '235 patent is invalid andthat the Company does not infringe the '235 patent. The Company has been named as a defendant in several legal actions,including patent, commercial, and environmental, arising from the conduct ofnormal business activities. Although the amount of any liability that mightarise with respect to any of these matters cannot be accurately predicted, theresulting liability, if any, will not in the opinion of management have amaterial adverse effect on the financial statements of the Celera Genomics groupor the Company. F-24

NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 9 COMMITMENTS AND CONTINGENCIES (CONTINUED) The holders of Celera Genomics stock are stockholders of the Company andwill continue to be subject to all of the risks associated with an investment inthe Company, including any legal proceeding and claims affecting the PEBiosystems group.NOTE 10 QUARTERLY FINANCIAL INFORMATION(UNAUDITED) The following is a summary of quarterly financial results:<TABLE><CAPTION> FIRST SECOND THIRD FOURTH QUARTER QUARTER QUARTER QUARTER(DOLLAR AMOUNTS IN MILLIONS EXCEPT PER SHARE -------------- -------------- -------------- --------------AMOUNTS) 1998 1999 1998 1999 1998 1999 1998 1999-------------------------------------------- ------ ------ ------ ------ ------ ------ ------ ------<S> <C> <C> <C> <C> <C> <C> <C> <C>Net revenues.......................... $ .6 $ 3.9 $ 1.2 $ 1.7 $ 1.3 $ 1.8 $ 1.1 $ 5.1Operating loss........................ (1.4) (5.6) (2.1) (12.9) (3.6) (19.3) (5.7) (31.0)Net loss.............................. (.9) (3.6) (1.4) (8.6) (2.3) (12.8) (3.7) (19.9)Net loss per share Basic and diluted................... $ (.39)Price range of common stock High................................ $ 11(1/4) Low................................. $ 7(3/32)</TABLE> There were no dividends on Celera Genomics stock for the periods presented. Fiscal 1999 price ranges are for the period from May 6, 1999 throughJune 30, 1999. On May 6, 1999, The Perkin-Elmer Corporation was merged into PECorporation, a new Delaware corporation. The recapitalization of the Companyresulted in the issuance of two new classes of common stock called PECorporation-Celera Genomics Group Common Stock and PE Corporation-PE BiosystemsGroup Common Stock.EVENTS IMPACTING COMPARABILITY--FISCAL 1999 Second, third, and fourth quarter results included before-tax costs of$.6 million, $.8 million, and $3.2 million, respectively in connection with therecapitalization of the Company. Fourth quarter results also included before-taxcosts of $1.0 million for the Company's long-term compensation programs. Theaggregate after-tax effect of these items increased second, third, and fourthquarter net loss by $.6 million, $.8 million, and $3.9 million, respectively,and increased fourth quarter net loss by $.08 per diluted share.NOTE 11 SUBSEQUENT EVENT On January 31, 2000, the Company filed a registration statement with theSecurities and Exchange Commission for a follow-on public offering of1.6 million shares of its PE Corporation-Celera Genomics Group Common Stock. TheCompany will also grant the underwriters a 15% over-allotment option. The numberof shares to be sold does not reflect the two-for-one stock split of PECorporation-Celera Genomics Group Common Stock, discussed in Note 1. F-25

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PART II INFORMATION NOT REQUIRED IN PROSPECTUSITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The estimated expenses payable by the Company in connection with thisoffering are as follows:<TABLE><S> <C>SEC registration fee........................................ $ 237,300Stock exchange listing fees................................. 50,000National Association of Securities Dealers filing fee....... 37,000Accounting fees and expenses................................ 125,000Legal fees and expenses..................................... 300,000Printing and engraving expenses............................. 200,000Transfer Agent's fees and expenses.......................... 2,400Blue sky expenses and fees.................................. 5,000Miscellaneous expenses...................................... 63,300 ---------- Total..................................................... $1,020,000 ==========</TABLE>ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the Delaware General Corporation Law (the "DGCL") permits thecompany's board of directors to indemnify any person against expenses (includingattorneys' fees), judgments, fines and amounts paid in settlement actually andreasonably incurred by him or her in connection with any threatened, pending orcompleted action (except settlements or judgments in derivative suits), suit orproceeding in which such person is made a party by reason of his or her being orhaving been a director, officer, employee or agent of the company, in termssufficiently broad to permit such indemnification under certain circumstancesfor liabilities (including reimbursement for expenses incurred) arising underthe Securities Act of 1933, as amended (the "Securities Act"). The DGCL providesthat indemnification pursuant to its provisions is not exclusive of other rightsof indemnification to which a person may be entitled under any by-law,agreement, vote of stockholders or disinterested directors, or otherwise. Our certificate of incorporation and by-laws provide for indemnification ofits directors and officers to the fullest extent permitted by law. As permitted by sections 102 and 145 of the DGCL, our certificate ofincorporation eliminates a director's personal liability for monetary damages tothe company and its stockholders arising from a breach or alleged breach of adirector's fiduciary duty except for liability under section 174 of the DGCL,for liability for any breach of the director's duty of loyalty to the company orits stockholders, for acts or omissions not in good faith or which involveintentional misconduct or a knowing violation of law or for any transactionwhich the director derived an improper personal benefit. The directors and officers of our company are covered by insurance policiesindemnifying against certain liabilities, including certain liabilities arisingunder the Securities Act which might be incurred by them in such capabilitiesand against which they cannot be indemnified by the company.ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.<TABLE><CAPTION>EXHIBITNUMBER DESCRIPTION------- -----------<S> <C> 1.1 Form of Underwriting Agreement.</TABLE> II-1

<TABLE><CAPTION>EXHIBITNUMBER DESCRIPTION------- -----------<S> <C> 4.1* Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1999 (Commission file number 1-4389)). 4.2* Rights Agreement between Registrant and BankBoston, N.A. (incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-4 (No. 333-67797)). 5.1 Opinion of Simpson Thacher & Bartlett as to the legality of the securities. 8.1 Opinion of Simpson Thacher & Bartlett regarding tax matters. 23.1 Consent of PricewaterhouseCoopers LLP. 23.2 Consent of Simpson Thacher & Bartlett (included in Exhibit 5.1). 24.1* Power of Attorney.</TABLE>------------------------ * Previously filed.ITEM 17. UNDERTAKINGS. (a) The undersigned registrant hereby undertakes that, for purposes ofdetermining any liability under the Securities Act of 1933, each filing of theregistrant's annual report pursuant to Section 13(a) or Section 15(d) of theSecurities Exchange Act of 1934 (and, where applicable, each filing of anemployee benefit plan's annual report pursuant to Section 15(d) of theSecurities Exchange Act of 1934) that is incorporated by reference in theregistration statement shall be deemed to be a new registration statementrelating to the securities offered therein, and the offering of such securitiesat that time shall be deemed to be the initial bona fide offering thereof. (b) Insofar as indemnification for liabilities arising under the SecuritiesAct of 1933 may be permitted to directors, officers and controlling persons ofthe registrant pursuant to the foregoing provisions, or otherwise, theregistrant has been advised that in the opinion of the Securities and ExchangeCommission such indemnification is against public policy as expressed in the Actand is, therefore, unenforceable. In the event that a claim for indemnificationagainst such liabilities (other than the payment by the registrant of expensesincurred or paid by a director, officer or controlling person of the registrantin the successful defense of any action, suit or proceeding) is asserted by suchdirector, officer or controlling person in connection with the securities beingregistered, the registrant will, unless in the opinion of its counsel the matterhas been settled by controlling precedent, submit to a court of appropriatejurisdiction the question whether such indemnification by it is against publicpolicy as expressed in the Act and will be governed by the final adjudication ofsuch issue. (c) The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-2

SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrantcertifies that it has reasonable grounds to believe that it meets all of therequirements for filing on Form S-3 and has duly caused this Amendment No. 2 toits registration statement to be signed on its behalf by the undersigned,thereunto duly authorized, in the City of Norwalk, State of Connecticut, onFebruary 28, 2000.<TABLE><S> <C> <C> PE CORPORATION By: /s/ WILLIAM B. SAWCH ----------------------------------------- Name: William B. Sawch Title: Senior Vice President, General Counsel and Secretary</TABLE> Pursuant to the requirements of the Securities Act of 1933, thisRegistration Statement has been signed by the following persons in thecapacities and on the dates indicated.<TABLE><CAPTION> SIGNATURE TITLE DATE --------- ----- ----<C> <S> <C> Chairman of the Board of Directors, /s/ TONY L. WHITE* President and Chief Executive ---------------------------------- Officer (principal executive February 28, 2000 Tony L. White officer) /s/ DENNIS L. WINGER* Senior Vice President and Chief ---------------------------------- Financial Officer (principal February 28, 2000 Dennis L. Winger financial officer) /s/ VIKRAM JOG* Corporate Controller (principal ---------------------------------- accounting officer) February 28, 2000 Vikram Jog /s/ RICHARD H. AYERS* Director ---------------------------------- February 28, 2000 Richard H. Ayers /s/ JEAN-LUC BELINGARD* Director ---------------------------------- February 28, 2000 Jean-Luc Belingard /s/ ROBERT H. HAYES* Director ---------------------------------- February 28, 2000 Robert H. Hayes /s/ ARNOLD J. LEVINE* Director ---------------------------------- February 28, 2000 Arnold J. Levine</TABLE> II-3

<TABLE><CAPTION> SIGNATURE TITLE DATE --------- ----- ----<C> <S> <C> /s/ THEODORE E. MARTIN* Director ---------------------------------- February 28, 2000 Theodore E. Martin /s/ GEORGES C. ST. LAURENT, JR.* Director ---------------------------------- February 28, 2000 Georges C. St. Laurent, Jr. /s/ CAROLYN W. SLAYMAN* Director ---------------------------------- February 28, 2000 Carolyn W. Slayman /s/ ORIN R. SMITH* Director ---------------------------------- February 28, 2000 Orin R. Smith /s/ JAMES R. TOBIN* Director ---------------------------------- February 28, 2000 James R. Tobin</TABLE><TABLE><S> <C> <C> <C>*By: /s/ WILLIAM B. SAWCH ----------------------------- William B. Sawch Attorney-in-Fact</TABLE> II-4

EXHIBIT TABLE<TABLE><CAPTION> EXHIBIT NUMBER DESCRIPTION--------------------- -----------<C> <S> 1.1 Form of Underwriting Agreement. 4.1* Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1999 (commission file number 1-4389)). 4.2* Rights Agreement between Registrant and BankBoston, N.A. (incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-4 (No. 333-67797)). 5.1 Opinion of Simpson Thacher & Bartlett as to the legality of the securities. 8.1 Opinion of Simpson Thacher & Bartlett regarding tax matters. 23.1 Consent of PricewaterhouseCoopers LLP. 23.2 Consent of Simpson Thacher & Bartlett (included in Exhibit 5.1). 24.1* Power of Attorney.</TABLE>------------------------* Previously filed.

Exhibit 1.1 DRAFT OF 2/26/00 _________________ SHARES PE CORPORATION CELERA GENOMICS GROUP COMMON STOCK, $.01 PAR VALUE UNDERWRITING AGREEMENT ____ .____, 2000

___________, 2000Morgan Stanley & Co. IncorporatedGoldman, Sachs & Co.SG Cowen Securities CorporationING Barings LLCBear, Stearns & Co. Inc.c/o Morgan Stanley & Co. Incorporated1585 BroadwayNew York, New York 10036Dear Sirs and Mesdames: PE CORPORATION , a Delaware corporation (the "COMPANY"), proposes toissue and sell to the several Underwriters named in Schedule I hereto (the"UNDERWRITERS") ____________ shares of its PE Corporation -- Celera GenomicsGroup Common Stock, $.01 par value (the "FIRM SHARES"). The Company alsoproposes to issue and sell to the several Underwriters not more than anadditional ____________ shares of its PE Corporation -- Celera Genomics GroupCommon Stock, $.01 par value (the "ADDITIONAL SHARES"), if and to the extentthat you shall have determined to exercise, on behalf of the Underwriters, theright to purchase such shares of common stock granted to the Underwriters inSection 2 hereof. The Firm Shares and the Additional Shares are hereinaftercollectively referred to as the "SHARES." The shares of PE Corporation -- CeleraGenomics Group Common Stock, $.01 par value, of the Company to be outstandingafter giving effect to the sales contemplated hereby are hereinafter referred toas the "CELERA GENOMICS STOCK." It is understood that the Celera Genomics Stock is intended to reflectthe performance of the Celera Genomics Group, the Company's genomics business.For purposes of this Agreement, the term "Celera Genomics Group" shall have themeaning given to that term in the Prospectus. It is further understood that theCompany will allocate all of the net proceeds from the sale of the Shares to theCelera Genomics Group. The Company has filed with the Securities and Exchange Commission (the"COMMISSION") a registration statement on Form S-3 (File No. 333-95771),including a prospectus, relating to the Shares. The registration statement asamended at the time it becomes effective, including the information (if any)deemed to be part of the registration statement at the time of effectivenesspursuant to Rule 430A under the Securities Act of 1933, as amended (the"SECURITIES ACT"), is hereinafter referred to as the "REGISTRATION STATEMENT";the prospectus in the form first used to confirm sales of Shares is hereinafter

referred to as the "PROSPECTUS." The term "preliminary prospectus" as used inthis Agreement shall mean each preliminary prospectus included in theRegistration Statement prior to the time it becomes effective. Unless otherwiseindicated, any reference herein to the Registration Statement, the Prospectus orthe preliminary prospectus shall include all documents incorporated therein byreference. If the Company has filed an abbreviated registration statement toregister additional shares of Celera Genomics Stock pursuant to Rule 462(b)under the Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then anyreference herein to the term "REGISTRATION STATEMENT" shall be deemed to includesuch Rule 462 Registration Statement. 1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrantsto and agrees with each of the Underwriters that: (1) The Registration Statement has become effective; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission. (2) (i) Each document, if any, filed or to be filed pursuant to the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and incorporated by reference in the Prospectus complied, or will comply when so filed, in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder, (ii) the Registration Statement, when it became effective, did not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) the Registration Statement and the Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder and (iv) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in the Registration Statement or the Prospectus based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through you expressly for use therein. (3) The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the State of Delaware, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company. (4) Each subsidiary of the Company has been duly incorporated, is validly existing as a corporation, or other form of organization with limited liability, in good standing under the laws of the jurisdiction of its incorporation, has the corporate (or equivalent) power and authority to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent 3

that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; all of the issued shares of the Company's subsidiaries have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company (other than directors qualifying or nominee shares), free and clear of all liens, encumbrances, equities or claims. Except for the entities listed on EXHIBIT A hereto (the "SIGNIFICANT SUBSIDIARIES"), none of the Company's subsidiaries is material to the business of the Celera Genomics Group as described in the Prospectus. (5) This Agreement has been duly authorized, executed and delivered by the Company. (6) The authorized capital stock of the Company conforms as to legal matters to the description thereof contained in the Prospectus. (7) The shares of Celera Genomics Stock outstanding prior to the issuance of the Shares have been duly authorized and are validly issued, fully paid and non-assessable. (8) The Shares have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable, and the issuance of such Shares will not be subject to any preemptive or similar rights. (9) The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement will not contravene any provision of applicable law or the certificate of incorporation or by-laws of the Company or any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any subsidiary, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, except such as may be required by the securities or Blue Sky laws of the various states and the foreign securities laws in connection with the offer and sale of the Shares. (10) There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of either the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group from that set forth in the Prospectus (exclusive of any amendments or supplements thereto subsequent to the date of this Agreement). (11) There are no legal or governmental proceedings pending or threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject that are required to be described in the Registration Statement or the Prospectus and are not so described, or any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required. (12) Each preliminary prospectus filed as part of the registration statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder. 4

(13) The Company is not and, after giving effect to the offering and sale of the Shares and the application of the proceeds thereof as described in the Prospectus, will not be an "investment company" as such term is defined in the Investment Company Act of 1940, as amended. (14) The Company and its subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (including, without limitation, all laws and regulations relating to biohazardous substances) ("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a material adverse effect on either the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group. (15) There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which would, singly or in the aggregate, have a material adverse effect on either the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group. (16) Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, (i) none of the Company, any of its subsidiaries or the Celera Genomics Group has incurred any material liability or obligation, direct or contingent, nor entered into any material transaction not in the ordinary course of business; (ii) the Company has not purchased any of its outstanding capital stock, nor declared, paid or otherwise made any dividend or distribution of any kind on its capital stock other than ordinary and customary dividends; and (iii) there has not been any material change in the capital stock, short-term debt or long-term debt of either the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group, except in each case as described in the Prospectus. (17) The Company and its subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of either the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group, in each case free and clear of all liens, encumbrances and defects except such as are described in the Prospectus or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or such subsidiary; and any real or personal property and buildings held under lease by the Company or any of its subsidiaries are held by such entity under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by such entity, in each case except as described in the Prospectus. (18) The Company and its subsidiaries own or possess adequate licenses or other rights to use the patents and patent applications, copyrights, trademarks, service marks, trade names, technology and know-how (including trade secrets and other unpatented and/or unpatentable proprietary rights) necessary in any material respect to conduct their business in the 5

manner described in the Prospectus (collectively, the "COMPANY INTELLECTUAL PROPERTY"); neither the Company nor any of its subsidiaries is obligated to pay a royalty, grant a license, or provide other consideration to any third party in connection with the Company Intellectual Property other than as disclosed in the Prospectus or as would not have a material adverse effect on the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group, and neither the Company nor any of its subsidiaries has received any notice of infringement or conflict with (and the Company does not know of any infringement of conflict with) asserted rights of others with respect to the Company Intellectual Property which could reasonably be expected to result in any material adverse effect on the condition, financial or otherwise, or in the earnings, business or operations of either the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group; and, except as disclosed in the Prospectus, the discoveries, inventions, products or processes of the Company and its subsidiaries referred to in the Prospectus do not, to the knowledge of the Company, infringe or conflict with any right or patent of any third party, or any discovery, invention, product or process which is the subject of a patent application filed by any third party, known to the Company, which infringement or conflict could reasonably be expected to result in any material adverse effect on the condition, financial or otherwise, or in the earnings, business or operations of either the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group. No third party, including any academic or governmental organization, possesses rights to the Company Intellectual Property which, if exercised, could reasonably be expected to result in any material adverse effect on the ability of either the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group to conduct its respective business in the manner described in the Prospectus. (19) In connection with the filing of all patent applications filed or caused to be filed by the Company and its subsidiaries with the United States Patent and Trademark Office (the "PTO") and applicable foreign and international patent authorities (the "COMPANY PATENT APPLICATIONS"), the Company conducted reasonable investigations of the published literature and patent references relating to the inventions claimed in such applications; to the best of the Company's knowledge, it has complied with the PTO's duty of candor and disclosure for the Company Patent Applications and has made no misrepresentation in the Company Patent Applications; the Company is unaware of any facts material to a determination of patentability regarding the Company Patent Applications not called to the attention of the PTO; the Company is unaware of any facts not called to the attention of the PTO which would preclude the grant of a patent for the Company Patent Applications; and the Company has no knowledge of any facts which would materially conflict with the Company's or its subsidiary's, as applicable, ownership rights to the Company Patent Applications. (20) No material labor dispute with the employees of the Company and its subsidiaries exists, except as described in or contemplated by the Prospectus, or, to the knowledge of the Company, is imminent; and the Company is not aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors that could result in any material adverse effect on either the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group. (21) The Company and its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the business in which they are engaged (including, without limitation, the aspects of its business involving biohazardous substances); neither the Company nor its subsidiaries have been refused any insurance coverage sought or applied for; and the Company has no reason to believe that it and its subsidiaries will not be able to renew its existing insurance coverage as and 6

when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue their business at a cost that could not have a material adverse effect on either the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group. (22) The Company possesses all material certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct its business, including without limitation, all such certificates, authorizations and permits required by the United States Food and Drug Administration (the "FDA") or any other federal, state or foreign agencies or bodies engaged in the regulation of pharmaceuticals or biohazardous substances, and the Company has not received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, could result in a material adverse effect on either the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group. The Company is in compliance in all material respects with all applicable federal, state, local and foreign laws, regulations, orders and decrees, including without limitation, all regulations prescribed by the FDA or any other federal, state or foreign agencies or bodies engaged in the regulation of pharmaceuticals or biohazardous substances, except where noncompliance would not, singly or in the aggregate, have a material adverse effect on either the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group. (23) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (24) PricewaterhouseCoopers LLP are, and during the periods covering their report included in the Registration Statement and the Prospectus were, independent accountants with respect to the Company as required by the Securities Act. The financial statements of the Company and the Celera Genomics Group (together with the related notes thereto) included in the Registration Statement present fairly the financial position and results of operations of each of the Company and the Celera Genomics Group at the respective dates and for the respective periods to which they apply, subject to normal year-end adjustments. Such financial statements (together with the related notes thereto) have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved except as otherwise stated therein. (25) The Shares are duly listed and admitted and authorized for trading on each of the New York Stock Exchange and the Pacific Exchange, in each case subject to official notice of issuance. (26) Except for the June 30, 1999 PE Corporation/Celera Genomics Group Stock Option Agreement with The Institute for Genomic Research, there are no contracts, agreements or understandings between the Company and any person, granting such person the right to require the Company to file a registration statement under the Securities Act with respect to any securities of the Company or to require the Company to include such securities with the Shares registered pursuant to the Registration Statement. 7

(27) The businesses, assets and properties identified in the Prospectus as comprising the businesses, assets and properties of the Celera Genomics Group constitute all of the material businesses, assets and properties actually used in the business of the Celera Genomics Group. (28) Each material contract, agreement and license to which the Company or any of its subsidiaries is bound is legal, valid, binding, enforceable, and in full force and effect. Neither the Company and its subsidiaries nor, to the Company's knowledge, any other party is in breach or default with respect to any such contract, agreement and license and, to the Company's knowledge, no event has occurred which with notice or lapse of time would constitute a breach or default, or permit termination, modification, or acceleration, under any such contract, agreement or license. Neither the Company and its subsidiaries nor, to the Company's knowledge, any other party has repudiated any provision of any such contract, agreement or license. (29) The Company has reviewed its operations and that of its subsidiaries to evaluate the extent to which the business or operations of the Company or any of its subsidiaries have been or will be affected by the Year 2000 Problem (that is, any significant risk that computer hardware or software applications used by the Company and its subsidiaries will not, in the case of dates or time periods occurring after December 31, 1999, function at least as effectively as in the case of dates or time periods occurring prior to January 1, 2000); as a result of such review, (i) the Company has no reason to believe, and does not believe, that (A) there are any issues related to the Company's preparedness to address the Year 2000 Problem that are of a character required to be described or referred to in the Registration Statement or Prospectus which have not been accurately described in the Registration Statement or Prospectus or (B) the Year 2000 Problem has had or will have a material adverse effect on the condition, financial or otherwise, or on the earnings, business or operations of either the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group or result in any material loss or interference with the business or operations of the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group; and (ii) the Company reasonably believes, after due inquiry, that the suppliers, vendors, customers or other material third parties used or served by the Company and such subsidiaries are addressing or will address the Year 2000 Problem in a timely manner, except to the extent that a failure to address the Year 2000 Problem by any supplier, vendor, customer or material third party would not have a material adverse effect on the condition, financial or otherwise, or on the earnings, business or operations of either the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group. 2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees to sellto the several Underwriters, and each Underwriter, upon the basis of therepresentations and warranties herein contained, but subject to theconditions hereinafter stated, agrees, severally and not jointly, to purchasefrom the Company the respective number of Firm Shares set forth in Schedule Ihereto opposite its name at $________ a share (the "PURCHASE PRICE"). On the basis of the representations and warranties contained in thisAgreement, and subject to its terms and conditions, the Company agrees to sellto the Underwriters the Additional Shares, and the Underwriters shall have aone-time right to purchase, severally and not jointly, up to ___________Additional Shares at the Purchase Price. If you, on behalf of the Underwriters,elect to exercise such option, you shall so notify the Company in writing notlater than 30 days after the date of this Agreement, which notice shall specifythe number of Additional Shares to be purchased by the Underwriters and the dateon which such shares are to be purchased. Such date may be the same as theClosing Date (as defined 8

below) but not earlier than the Closing Date, earlier than one business dayafter the date of such notice, or later than ten business days after the date ofsuch notice. Additional Shares may be purchased as provided in Section 4 hereofsolely for the purpose of covering over-allotments made in connection with theoffering of the Firm Shares. If any Additional Shares are to be purchased, eachUnderwriter agrees, severally and not jointly, to purchase the number ofAdditional Shares (subject to such adjustments to eliminate fractional shares asyou may determine) that bears the same proportion to the total number ofAdditional Shares to be purchased as the number of Firm Shares set forth inSchedule I hereto opposite the name of such Underwriter bears to the totalnumber of Firm Shares. The Company hereby agrees that, without the prior written consent ofMorgan Stanley & Co. Incorporated on behalf of the Underwriters, it will not,during the period ending 90 days after the date of the Prospectus, (i) offer,pledge, sell, contract to sell, sell any option or contract to purchase,purchase any option or contract to sell, grant any option, right or warrant topurchase, lend, or otherwise transfer or dispose of, directly or indirectly, anyshares of Celera Genomics Stock or any securities convertible into orexercisable or exchangeable for Celera Genomics Stock or (ii) enter into anyswap or other arrangement that transfers to another, in whole or in part, any ofthe economic consequences of ownership of the Celera Genomics Stock, whether anysuch transaction described in clause (i) or (ii) above is to be settled bydelivery of Celera Genomics Stock or such other securities, in cash orotherwise. The foregoing sentence shall not apply to (A) the Shares to be soldhereunder, (B) the issuance by the Company of shares of Celera Genomics Stockupon the exercise of an option or warrant or the conversion of a securityoutstanding on the date hereof described in the Registration Statement or ofwhich the Underwriters have been advised in writing, (C) the issuance of optionsto purchase Celera Genomics Stock pursuant to the PE Corporation /CeleraGenomics Group 1999 Stock Incentive Plan, provided such options are notexercisable during the period ending 90 days after the date of the Prospectus,(D) the issuance of shares pursuant to the PE Corporation 1993 Director StockPurchase and Deferred Compensation Plan, (E) the issuance of shares of CeleraGenomics Stock pursuant to the Company's Employee Stock Purchase Plans as suchplans are in effect on the date hereof, or (F) the issuance by the Company ofany securities (and the agreement by the Company to provide such securities) asfull or partial consideration in connection with any future acquisitions orstrategic investments of the Celera Genomics Group or securities of the Companyissuable upon exercise or conversion of such securities, provided that thepersons to whom such securities are issued execute a "lock-up" agreementsubstantially in the form of EXHIBIT A covering the period ending 90 days afterthe date of the Prospectus. It is expressly understood that the Company's PECorporation -- PE Biosystems Group Common Stock, $.01 par value per share, shallnot be considered a security "convertible into or exercisable or exchangeablefor" Celera Genomics Stock for purposes of this paragraph and shall nototherwise be covered by this paragraph. 3. TERMS OF PUBLIC OFFERING. The Company is advised by you that theUnderwriters propose to make a public offering of their respective portions ofthe Shares as soon after the Registration Statement and this Agreement havebecome effective as in your judgment is advisable. The Company is furtheradvised by you that the Shares are to be offered to the public initially at$_______ a share (the "PUBLIC OFFERING PRICE") and to certain dealers selectedby you at a price that represents a concession not in excess of $_______ a shareunder the Public Offering Price, and that any Underwriter may allow, and suchdealers may reallow, a concession, not in excess of $______ a share, to anyUnderwriter or to certain other dealers. 4. PAYMENT AND DELIVERY. Payment for the Firm Shares shall be made tothe Company in Federal or other funds immediately available in New York Cityagainst delivery of such Firm Shares for the respective accounts of the severalUnderwriters at 10:00 a.m., New York City time, on ___________, 2000, or at suchother time on the same or such other date, not later than __________, 2000, asshall be designated in writing by you. The time and date of such payment arehereinafter referred to as the 9

"CLOSING DATE". The Closing of the offering and sale of the Firm Shares will beheld at the offices of Ropes & Gray, 885 Third Avenue, Suite 2740, New York, NewYork 10022-4834. Payment for any Additional Shares shall be made to the Company inFederal or other funds immediately available in New York City against deliveryof such Additional Shares for the respective accounts of the severalUnderwriters at 10:00 a.m., New York City time, on the date specified in thenotice described in Section 2 or at such other time on the same or on such otherdate, in any event not later than ________, 2000, as shall be designated inwriting by you. The time and date of such payment are hereinafter referred to asthe "OPTION CLOSING DATE". The Closing of the offering and sale of theAdditional Shares will be held at the offices of Ropes & Gray, 885 Third Avenue,Suite 2740, New York, New York 10022-4834. Certificates for the Firm Shares and Additional Shares shall be indefinitive form and registered in such names and in such denominations as youshall request in writing not later than one full business day prior to theClosing Date or the Option Closing Date, as the case may be. The certificatesevidencing the Firm Shares and Additional Shares shall be delivered to you onthe Closing Date or the Option Closing Date, as the case may be, for therespective accounts of the several Underwriters, with any transfer taxes payablein connection with the transfer of the Shares to the Underwriters duly paid,against payment of the Purchase Price therefor. 5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of theCompany to sell the Shares to the Underwriters and the several obligations ofthe Underwriters to purchase and pay for the Shares on the Closing Date and theOption Closing Date, as the case may be, are subject to the condition that theRegistration Statement shall have become effective not later than ________ (NewYork City time) on the date hereof. The several obligations of the Underwriters are subject to thefollowing further conditions: (1) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date and the Option Closing Date, as the case may be: (1) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any of the Company's securities by any "nationally recognized statistical rating organization," as such term is defined for purposes of Rule 436(g)(2) under the Securities Act; and (2) there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations of either the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group from that set forth in the Prospectus (exclusive of any amendments or supplements thereto subsequent to the date of this Agreement) that, in your judgment, is material and adverse and that makes it, in your judgment, impracticable to market the Shares on the terms and in the manner contemplated in the Prospectus. (2) The Underwriters shall have received on the Closing Date and the Option Closing Date, as the case may be, a certificate, dated such date and signed by an executive officer of the Company, to the effect set forth in Section 5(a)(i) above and to the effect that the 10

representations and warranties of the Company contained in this Agreement are true and correct as of such date and that the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before such date. The officer signing and delivering such certificate may rely upon the best of his or her knowledge as to proceedings threatened. (3) The Underwriters shall have received on the Closing Date and the Option Closing Date, as the case may be, an opinion of William B. Sawch, Esq., Senior Vice President, General Counsel and Secretary of the Company, dated such date, to the effect that: (1) the Company is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; (2) each Significant Subsidiary of the Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; (3) all of the issued shares of capital stock of each Significant Subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly by the Company, free and clear of all liens, encumbrances, equities or claims; (4) such counsel does not know of any legal or governmental proceedings pending or threatened that are required to be described in the Registration Statement or the Prospectus and are not so described, or of any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement or incorporated by reference therein that are not described or filed as required; (5) to such counsel's knowledge, the Company and its subsidiaries (A) are in compliance with any and all applicable Environmental Laws, (B) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (C) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a material adverse effect on either the Company and its subsidiaries, taken as a whole, or the Celera Genomics Group; and (6) such counsel has no reason to believe that the Registration Statement, as of its effective date (including the documents filed pursuant to the Exchange Act and 11

incorporated by reference in the Registration Statement and the Prospectus (the "INCORPORATED DOCUMENTS") on file with the Commission on such effective date), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading or that the Prospectus (including the Incorporated Documents) as of the Closing Date or the Option Closing Date, as the case may be, contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that in each case such counsel expresses no belief with respect to the financial statements or schedules or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Incorporated Documents. (4) The Underwriters shall have received on the Closing Date and the Option Closing Date, as the case may be, an opinion of Simpson Thacher & Bartlett, outside counsel for the Company, dated such date, to the effect that: (1) the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware and has the corporate power and authority to conduct its business as described in the Prospectus; (2) the authorized capital stock of the Company, including the Celera Genomics Stock, conforms as to legal matters to the description thereof contained in the Prospectus; (3) the shares of Celera Genomics Stock outstanding prior to the issuance of the Shares have been duly authorized and are validly issued, fully paid and non-assessable; (4) the Shares have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable, and the issuance of such Shares will not be subject to any preemptive right under Delaware law or the Company's Certificate of Incorporation; (5) this Agreement has been duly authorized, executed and delivered by the Company; (6) the issue and sale of the Shares by the Company and the compliance by the Company with all of the provisions of the Underwriting Agreement will not breach or result in a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument filed or incorporated by reference as an exhibit to the Registration Statement, nor will such action violate the Certificate of Incorporation or By-laws of the Company or any federal or New York statute or the Delaware General Corporation Law or any rule or regulation that has been issued pursuant to any federal or New York statute or the Delaware General Corporation Law or any order known to such counsel issued pursuant to any federal or New York statute or the Delaware General Corporation Law by any court or governmental agency or body or court having jurisdiction over the Company or any of its subsidiaries or any of their properties; (7) no consent, approval, authorization, order, registration or qualification of or with any federal or New York governmental agency or body or any Delaware 12

governmental agency or body acting pursuant to the Delaware General Corporation Law or, to such counsel's knowledge, any federal or New York court or any Delaware court acting pursuant to the Delaware General Corporation Law is required for the issue and sale of the Shares by the Company and the compliance by the Company with all of the provisions of this Agreement, except for the registration under the Securities Act of the Shares, and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws or foreign securities laws in connection with the purchase and distribution of the Shares by the Underwriters; (8) the statements (A) in the Prospectus under the captions "Business -- Legal Proceedings," "Description of Capital Stock," "Management and Allocation Policies," and "Underwriters" (but only with respect to the description of the Underwriting Agreement set forth therein) and (B) in the Registration Statement Item 15, in each case insofar as such statements purport to constitute summaries of the legal matters, documents or proceedings referred to therein, constitute accurate summaries of such legal matters, documents and proceedings and fairly summarize the matters referred to therein; (9) the opinions of such counsel and statements set forth in the Prospectus under the caption "Certain United States Tax Consequences," insofar as such statements purport to constitute summaries of the legal matters, documents or proceedings referred to therein, constitute accurate summaries of such legal matters, documents and proceedings and fairly summarize the matters referred to therein; (10) the Company is not an "investment company" as such term is defined in the Investment Company Act of 1940, as amended; (11) the Registration Statement has become effective and, to such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission; and (12) such counsel (A) is of the opinion that the Registration Statement and the Prospectus as of the effective date of the Registration Statement, complied as to form in all material respects with the requirements of the Act and the applicable rules and regulations of the Commission thereunder and that the Incorporated Documents complied as to form when filed in all material respects with the requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder, except that in each case such counsel expresses no opinion with respect to the financial statements or schedules or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Incorporated Documents, and (B) has no reason to believe that the Registration Statement, as of its effective date (including the Incorporated Documents on file with the Commission on such effective date), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading or that the Prospectus (including the Incorporated Documents) as of the Closing Date or the Option Closing Date, as the case may be, contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that in each case such counsel expresses no belief with respect to the financial statements or 13

schedules or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Incorporated Documents. (5) The Underwriters shall have received on the Closing Date and the Option Closing Date, as the case may be, an opinion of Ropes & Gray, counsel for the Underwriters, dated such date, in a form satisfactory to the Underwriters. With respect to Section 5(c)(vi) above, William B. Sawch, Esq., may state that his belief is based upon his participation in the preparation of the Registration Statement and Prospectus and any amendments or supplements thereto and documents incorporated by reference and review and discussion of the contents thereof, but is without independent check or verification except as specified. With respect to Section 5(d)(xii) above, Simpson Thacher & Bartlett may state that their opinion and belief are based upon their participation in the preparation of the Registration Statement and Prospectus and any amendments or supplements thereto and documents incorporated by reference and review and discussion of the contents thereof, but are without independent check or verification except as specified. The opinions of William B. Sawch, Esq. and Simpson Thacher & Bartlett in Sections 5(c) and 5(d) above shall be rendered to the Underwriters at the request of the Company and shall so state therein. (6) The Underwriters shall have received, on each of the date hereof, the Closing Date and the Option Closing Date, a letter dated such date, in form and substance satisfactory to the Underwriters, from PricewaterhouseCoopers LLP, independent public accountants, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained or incorporated by reference in the Registration Statement and the Prospectus; PROVIDED that the letter delivered on the Closing Date shall use a "cut-off date" not earlier than the date hereof. (7) The "lock-up" agreements, each substantially in the form of EXHIBIT B hereto, between you and certain officers and directors of the Company and certain officers of the Celera Genomics Group relating to sales and certain other dispositions of shares of Celera Genomics Stock or certain other securities, delivered to you on or before the date hereof, shall be in full force and effect on the Closing Date and the Option Closing Date, as the case may be. The several obligations of the Underwriters to purchase Additional Shares hereunder are subject to the delivery to you on the Option Closing Date of such other documents as you may reasonably request with respect to the good standing of the Company, the due authorization and issuance of the Additional Shares and other matters related to the issuance of the Additional Shares. 6. COVENANTS OF THE COMPANY. In further consideration of the agreementsof the Underwriters herein contained, the Company covenants with eachUnderwriter as follows: (1) To furnish you, without charge, __________ signed copies of the Registration Statement (including exhibits thereto and, if requested by you, documents incorporated by reference) and for delivery to each other Underwriter a conformed copy of the Registration Statement (without exhibits thereto but, if requested by you, including documents incorporated by reference) and to furnish to you in New York City, without charge, prior to 10:00 a.m. New York City time on the business day next succeeding the date of this Agreement and during the period 14

mentioned in Section 6(c) below, as many copies of the Prospectus, any documents incorporated by reference, and any supplements and amendments thereto or to the Registration Statement as you may reasonably request. The terms "supplement" and "amendment" or "amend" as used in this Agreement shall include all documents subsequently filed by the Company with the Commission pursuant to the Exchange Act that are deemed to be incorporated by reference in the Prospectus. (2) Before amending or supplementing the Registration Statement or the Prospectus, to furnish to you a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which you reasonably object, and to file with the Commission within the applicable period specified in Rule 424(b) under the Securities Act any prospectus required to be filed pursuant to such Rule. (3) If, during such period after the first date of the public offering of the Shares as in the opinion of counsel for the Underwriters the Prospectus is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to the dealers (whose names and addresses you will furnish to the Company) to which Shares may have been sold by you on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with law. (4) To endeavor to qualify the Shares for offer and sale under the securities or Blue Sky laws of such jurisdictions as you shall reasonably request; PROVIDED that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction. (5) To make generally available to the Company's security holders and, upon your request, to you as soon as practicable an earning statement covering the twelve-month period ending March 31, 2001 that satisfies the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder. 7. EXPENSES. Whether or not the transactions contemplated in thisAgreement are consummated or this Agreement is terminated, the Company agrees topay or cause to be paid all expenses incident to the performance of itsobligations under this Agreement, including: (i) the fees, disbursements andexpenses of the Company's counsel and the Company's accountants in connectionwith the registration and delivery of the Shares under the Securities Act andall other fees or expenses in connection with the preparation and filing of theRegistration Statement, any preliminary prospectus, the Prospectus andamendments and supplements to any of the foregoing, including all printing costsassociated therewith, and the mailing and delivering of copies thereof to theUnderwriters and dealers, in the quantities hereinabove specified, (ii) allcosts and expenses related to the transfer and delivery of the Shares to theUnderwriters, including any transfer or other taxes payable thereon, (iii) thecost of printing or producing any Blue Sky memorandum in connection with theoffer and sale of the Shares under state securities laws and all expenses inconnection with the qualification of the Shares for offer and sale under statesecurities laws as 15

provided in Section 6(d) hereof, including filing fees and the reasonable feesand disbursements of counsel for the Underwriters in connection with suchqualification and in connection with the Blue Sky memorandum, (iv) all filingfees and the reasonable fees and disbursements of counsel to the Underwritersincurred in connection with the review and qualification of the offering of theShares by the National Association of Securities Dealers, Inc., (v) all costsand expenses incident to listing the Shares on the New York Stock Exchange, (vi)the cost of printing certificates represen ting the Shares, (vii) the costs andcharges of any transfer agent, registrar or depositary, (viii) the costs andexpenses of the Company relating to investor presentations on any "road show"undertaken in connection with the marketing of the offering of the Shares,including, without limitation, expenses associated with the production of roadshow slides and graphics, fees and expenses of any consultants engaged inconnection with the road show presentations with the prior approval of theCompany, travel and lodging expenses of the representatives and officers of theCompany and any such consultants, and the cost of any aircraft chartered inconnection with the road show, and (ix) all other costs and expenses incident tothe performance of the obligations of the Company hereunder for which provisionis not otherwise made in this Section. It is understood, however, that except asprovided in this Section, Section 8 entitled "Indemnity and Contribution", andthe last paragraph of Section 10 below, the Underwriters will pay all of theircosts and expenses, including fees and disbursements of their counsel, stocktransfer taxes payable on resale of any of the Shares by them and anyadvertising expenses connected with any offers they may make. 8. INDEMNITY AND CONTRIBUTION. (1) The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through you expressly for use therein; PROVIDED, HOWEVER, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Underwriter from whom the person asserting any such losses, claims, damages or liabilities purchased Shares, or any person controlling such Underwriter, if a copy of the Prospectus (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Underwriter to such person, if required by law so to have been delivered, at or prior to the written confirmation of the sale of the Shares to such person, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such losses, claims, damages or liabilities, unless such failure is the result of noncompliance by the Company with Section 6(a) hereof. (2) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to such Underwriter, but only with reference to information relating to such 16

Underwriter furnished to the Company in writing by such Underwriter through you expressly for use in the Registration Statement, any preliminary prospectus, the Prospectus or any amendments or supplements thereto. (3) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 8(a), or 8(b) such person (the "INDEMNIFIED PARTY") shall promptly notify the person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by Morgan Stanley & Co. Incorporated, in the case of parties indemnified pursuant to Section 8(a), and by the Company, in the case of parties indemnified pursuant to Section 8(b). The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (4) To the extent the indemnification provided for in Section 8(a) or 8(b) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Shares or (ii) if the allocation provided by clause (i) of this sentence is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) of this sentence but also the relative fault of the Company on the one hand and of the Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Shares shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Shares (before deducting expenses) received by the Company and the total underwriting discounts and commissions received by the Underwriters, in each case 17

as set forth in the table on the cover of the Prospectus, bear to the aggregate Public Offering Price of the Shares. The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Underwriters' respective obligations to contribute pursuant to this Section 8 are several in proportion to the respective number of Shares they have purchased hereunder, and not joint. (5) The Company and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 8 were determined by PRO RATA allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in Section 8(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. (6) The indemnity and contribution provisions contained in this Section 8 and the representations, warranties and other statements of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter or by or on behalf of the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Shares. 9. TERMINATION. This Agreement shall be subject to termination bynotice given by you to the Company, if (a) after the execution and delivery ofthis Agreement and prior to the Closing Date (i) trading generally shall havebeen suspended or materially limited on or by, as the case may be, any of theNew York Stock Exchange, the American Stock Exchange, the National Associationof Securities Dealers, Inc., the Chicago Board of Options Exchange, the ChicagoMercantile Exchange or the Chicago Board of Trade, (ii) trading of anysecurities of the Company shall have been suspended on any exchange or in anyover-the-counter market, (iii) a general moratorium on commercial bankingactivities in New York shall have been declared by either Federal or New YorkState authorities or (iv) there shall have occurred any outbreak or escalationof hostilities or any change in financial markets or any calamity or crisisthat, in your judgment, is material and adverse and (b) in the case of any ofthe events specified in clauses (i) through (iv) above, such event, singly ortogether with any other such event, makes it, in your judgment, impracticable tomarket the Shares on the terms and in the manner contemplated in the Prospectus. 10. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall becomeeffective upon the execution and delivery hereof by the parties hereto. 18

If, on the Closing Date or the Option Closing Date, as the case may be,any one or more of the Underwriters shall fail or refuse to purchase Shares thatit has or they have agreed to purchase hereunder on such date, and the aggregatenumber of Shares which such defaulting Underwriter or Underwriters agreed butfailed or refused to purchase is not more than one-tenth of the aggregate numberof the Shares to be purchased on such date, the other Underwriters shall beobligated severally in the proportions that the number of Firm Shares set forthopposite their respective names in Schedule I bears to the aggregate number ofFirm Shares set forth opposite the names of all such non-defaultingUnderwriters, or in such other proportions as you may specify, to purchase theShares which such defaulting Underwriter or Underwriters agreed but failed orrefused to purchase on such date; PROVIDED that in no event shall the number ofShares that any Underwriter has agreed to purchase pursuant to this Agreement beincreased pursuant to this Section 10 by an amount in excess of one-ninth ofsuch number of Shares without the written consent of such Underwriter. If, onthe Closing Date, any Underwriter or Underwriters shall fail or refuse topurchase Firm Shares and the aggregate number of Firm Shares with respect towhich such default occurs is more than one-tenth of the aggregate number of FirmShares to be purchased, and arrangements satisfactory to you and the Company forthe purchase of such Firm Shares are not made within 36 hours after suchdefault, this Agreement shall terminate without liability on the part of anynon-defaulting Underwriter or the Company. In any such case either you or theCompany shall have the right to postpone the Closing Date, but in no event forlonger than seven days, in order that the required changes, if any, in theRegistration Statement and in the Prospectus or in any other documents orarrangements may be effected. If, on the Option Closing Date, any Underwriter orUnderwriters shall fail or refuse to purchase Additional Shares and theaggregate number of Additional Shares with respect to which such default occursis more than one-tenth of the aggregate number of Additional Shares to bepurchased, the non-defaulting Underwriters shall have the option to (i)terminate their obligation hereunder to purchase Additional Shares or (ii)purchase not less than the number of Additional Shares that such non-defaultingUnderwriters would have been obligated to purchase in the absence of suchdefault. Any action taken under this paragraph shall not relieve any defaultingUnderwriter from liability in respect of any default of such Underwriter underthis Agreement. If this Agreement shall be terminated by the Underwriters, or any ofthem, because of any failure or refusal on the part of the Company to complywith the terms or to fulfill any of the conditions of this Agreement, or if forany reason the Company shall be unable to perform its obligations under thisAgreement (other than as a result of an event specified in clause (i), (iii) or(iv) of Section 9(a) hereof), the Company will reimburse the Underwriters orsuch Underwriters as have so terminated this Agreement with respect tothemselves, severally, for all out-of-pocket expenses (including the fees anddisbursements of their counsel) reasonably incurred by such Underwriters inconnection with this Agreement or the offering contemplated hereunder. If thisAgreement shall be terminated because of a default by any Underwriter orUnderwriters, the Company shall not be obligated to reimburse any defaultingUnderwriter for any such expenses. 11. COUNTERPARTS. This Agreement may be signed in two or morecounterparts, each of which shall be an original, with the same effect as if thesignatures thereto and hereto were upon the same instrument. 12. APPLICABLE LAW. This Agreement shall be governed by and construedin accordance with the internal laws of the State of New York. 13. HEADINGS. The headings of the sections of this Agreement have beeninserted for convenience of reference only and shall not be deemed a part ofthis Agreement. 19

[Underwriting Agreement] Very truly yours, PE CORPORATION By: -------------------------- Name: Title:Accepted as of the date hereofMorgan Stanley & Co. IncorporatedGoldman, Sachs & Co.SG Cowen Securities CorporationING Barings LLCBear Stearns & Co. Inc.Acting severally on behalf of themselves and the several Underwriters named in Schedule I hereto.By: Morgan Stanley & Co. Incorporated By: -------------------------- Name: Title:

SCHEDULE I<TABLE><CAPTION> Number of Firm Shares Underwriter To Be Purchased ----------- ---------------<S> <C>Morgan Stanley & Co. IncorporatedGoldman, Sachs & Co.SG Cowen Securities CorporationING Barings LLCBear, Stearns & Co. Inc.[NAMES OF OTHER UNDERWRITERS] -------------Total......................................................... -------------</TABLE>

EXHIBIT A SIGNIFICANT SUBSIDIARIESThe Perkin Elmer Corporation (New York, USA)GenScope, Inc. (Delaware, USA)

EXHIBIT B [FORM OF LOCK-UP LETTER] ______________ ___, 2000Morgan Stanley & Co. IncorporatedGoldman, Sachs & Co.SG Cowen Securities CorporationING Barings LLCBear, Stearns & Co. Inc.c/o Morgan Stanley & Co. Incorporated1585 BroadwayNew York, New York 10036Dear Sirs and Mesdames: The undersigned understands that Morgan Stanley & Co. Incorporated("MORGAN STANLEY") proposes to enter into an Underwriting Agreement (the"UNDERWRITING AGREEMENT") with PE Corporation, a Delaware corporation (the"COMPANY"), providing for the public offering (the "PUBLIC OFFERING") by theseveral Underwriters, including Morgan Stanley (the "UNDERWRITERS"), of up to____________ shares (the "SHARES") of the Company's PE Corporation -- CeleraGenomics Group Common Stock, $.01 par value (the "CELERA GENOMICS STOCK"). To induce the Underwriters that may participate in the Public Offeringto continue their efforts in connection with the Public Offering, theundersigned hereby agrees that, without the prior written consent of MorganStanley on behalf of the Underwriters, it will not, during the period commencingon the date hereof and ending 90 days after the date of the final prospectusrelating to the Public Offering (the "PROSPECTUS"), (1) offer, pledge, sell,contract to sell, sell any option or contract to purchase, purchase any optionor contract to sell, grant any option, right or warrant to purchase, lend, orotherwise transfer or dispose of, directly or indirectly, any shares of CeleraGenomics Stock or any securities convertible into or exercisable or exchangeablefor Celera Genomics Stock or (2) enter into any swap or other arrangement thattransfers to another, in whole or in part, any of the economic consequences ofownership of the Celera Genomics Stock, whether any such transaction describedin clause (1) or (2) above is to be settled by delivery of Celera Genomics Stockor such other securities, in cash or otherwise. The foregoing sentence shall notapply to transactions relating to shares of Celera Genomics Stock or othersecurities acquired in open market transactions after the completion of thePublic Offering. In addition, the undersigned agrees that, without the priorwritten consent of Morgan Stanley on behalf of the Underwriters, it will not,during the period commencing on the date hereof and ending 90 days after thedate of the Prospectus, make any demand for or exercise any right with respectto, the registration of any shares of Celera Genomics Stock or any securityconvertible into or exercisable or exchangeable for Celera Genomics Stock. It isexpressly understood that the Company's PE Corporation -- PE Biosystems GroupCommon Stock, $.01 par value per share, shall not be considered a security"convertible into or exercisable or exchangeable for" Celera Genomics Stock forpurposes of this paragraph and shall not otherwise be covered by this paragraph.

Whether or not the Public Offering actually occurs depends on a numberof factors, including market conditions. Any Public Offering will only be madepursuant to an Underwriting Agreement, the terms of which are subject tonegotiation between the Company and the Underwriters. Very truly yours, ------------------------- (Name)

Exhibit 5.1 SIMPSON THACHER & BARTLETT [LETTERHEAD] February 18, 2000PE Corporation561 Main AvenueNorwalk, Connecticut 06859-0001Ladies and Gentlemen: We have acted as counsel to PE Corporation, a Delaware corporation (the"Company"), in connection with the Registration Statement on Form S-3 (the"Registration Statement") filed by the Company with the Securities andExchange Commission under the Securities Act of 1933, as amended (the "Act"),relating to the issuance by the Company of 3,714,500 shares of itsPE Corporation - Celera Genomics Group common stock, par value $.01 per share(together with any additional shares of such stock that may be issued by theCompany pursuant to Rule 462(b) (as prescribed by the Commission pursuant tothe Act) in connection with the offering described in the RegistrationStatement (the "Shares") and the related Rights to Purchase Series BParticipating Junior Preferred Stock, par value $.01 per share (the "Rights"). We have examined (i) the Registration Statement, (ii) a form of the sharecertificate and (iii) a form of the Rights certificate. We also have examinedthe originals, or duplicates or certified or conformed copies, of suchrecords, agreements, instruments and other documents and have made such otherand further investigations as we have deemed relevant and necessary inconnection with the opinions expressed herein. As to questions of factmaterial to

SIMPSON THACHER & BARTLETT PE Corporation -2- February 18, 2000this opinion, we have relied upon certificates of public officials and ofofficers and representatives of the Company. In such examination, we have assumed the genuineness of all signatures,the legal capacity of natural persons, the authenticity of all documentssubmitted to us as originals, the conformity to original documents of alldocuments submitted to us as duplicates or certified or conformed copies, andthe authenticity of the originals of such latter documents. Based upon the foregoing, and subject to the qualifications andlimitations stated herein, we are of the opinion that, when the Board ofDirectors of the Company (the "Board") has taken all necessary corporateaction to authorize and approve the issuance of the Shares and Rights andupon payment of the price and delivery in accordance with the applicabledefinitive underwriting agreement approved by the Board, the Shares andRights will be validly issued, fully paid and nonassessable. We are members of the Bar of the State of New York, and we do not expressany opinion herein concerning any law other than the Delaware GeneralCorporation Law. We hereby consent to the filing of this opinion letter as Exhibit 5 tothe Registration Statement and to the use of our name under the caption"Legal Matters" in the Prospectus included in the Registration Statement. Very truly yours, SIMPSON THACHER & BARTLETT

Exhibit 8.1 SIMPSON THACHER & BARTLETT [LETTERHEAD] February 18, 2000PE Corporation761 Main AvenueNorwalk, Connecticut 06859Ladies and Gentlemen: We have acted as special counsel to PE Corporation, a Delawarecorporation (the "Company"), in connection with the Registration Statement onForm S-3 filed by the Company with the Securities and Exchange Commission onJanuary 31, 2000 (the "Registration Statement") which provides for the publicoffering of up to 3,174,500 shares of Celera Genomics Group Common Stock. Allcapitalized terms used in this opinion letter and not otherwise definedherein shall have the meaning ascribed to such terms in the prospectus (the"Prospectus") that is part of the Registration Statement. In delivering this opinion letter, we have reviewed and relied upon theProspectus. In addition, we have examined such other documents, and have madesuch other and further investigations, as we have deemed relevant andnecessary as a basis for the opinion hereinafter set forth. In suchexamination, we have assumed the authenticity of all documents submitted tous as originals and the conformity to original documents of all copies ofdocuments submitted to us. We have also assumed that the offering of theCelera Genomics Group Common Stock will be consummated in the mannerdescribed in the Prospectus.

SIMPSON THACHER & BARTLETTPE Corporation -2- February 18, 2000 Our examination of the Prospectus has, consistent with the nature of ourengagement, not included a review or investigation of the informationconcerning the Company set forth therein or any other information set forththerein, and, accordingly, we express no opinion or view with respect thereto. Based upon the foregoing, and subject to the qualifications andlimitations stated herein, we hereby confirm (i) our opinions set forth in theProspectus under the caption "Certain United States Tax Consequences" and(ii) that the statements set forth in the Prospectus under such caption,insofar as they purport to constitute summaries of matters of United Statesfederal tax law and regulations or legal conclusions with respect thereto,constitute accurate summaries of the matters described therein in allmaterial respects. Our opinion is based upon the Internal Revenue Code of 1986, as amended,the Treasury regulations promulgated thereunder and other relevantauthorities and law, all as in effect on the date hereof. Consequently,future changes in the law may cause the tax treatment of the transactionreferred to herein to be materially different from that described above. We are members of the Bar of the State of New York, and we do notexpress any opinion herein concerning any law other than the federal law ofthe United States.

SIMPSON THACHER & BARTLETTPE Corporation -3- February 18, 2000 We hereby consent to the filing of this opinion letter as Exhibit 8.1 tothe Registration Statement and to the use of our name in the Prospectus underthe captions "Certain United States Tax Consequences" and "Legal Matters". Very truly yours, SIMPSON THACHER & BARTLETT

EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this RegistrationStatement on Form S-3 of PE Corporation of our reports dated July 30, 1999relating to the combined financial statements of PE Biosystems Group, thecombined financial statements of Celera Genomics Group and the consolidatedfinancial statements of PE Corporation, which appear in the 1999 Annual Reportto Stockholders of PE Corporation, which is incorporated by reference in PECorporation's Annual Report on Form 10-K for the year ended June 30, 1999. Wealso consent to the incorporation by reference of our reports dated July 30,1999 relating to the Financial Statement Schedules, which appears in such AnnualReport on Form 10-K. We also consent to the reference to us under the heading"Experts" in such Registration Statement.PricewaterhouseCoopers LLPStamford, ConnecticutFebruary 24, 2000

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