Management's Discussion and Analysis General On November 11, 1993, the Company's Board of Directors approved a plan to divest operations of the Company's Instrumentation Divisions, which served primarily the chromatography and bioscience markets. These divisions, which represented separate product lines with separate customers, have been accounted for as discontinued operations. The Company sold these divisions in the third quarter of 1994 and realized a net loss upon their disposition. The consolidated statement of income in 1993 included the results of discontinued operations through November 11, 1993. The following discussion on results of operations applies to continuing operations. Results of Operations Consolidated net sales increased 12 percent in 1994 to $497 million. Sales growth rates, measured both in local currencies and in U.S. dollars, are summarized in the table below. Sales growth rates Sales growth rates measured in local currencies measured in U.S. dollars 1994 1993 1992 1994 1993 1992 Americas 8% 6% (1%) 8% 6% (1%) Europe 6% 4% 9% 7% (7%) 12% Asia/Pacific 16% 10% (6%) 21% 18% (2%) Consolidated 10% 6% 1% 12% 4% 3% Sales growth, excluding foreign exchange impact, increased to 10 percent in 1994 from 6 percent in 1993. This performance was led by the electronics/industrial market which grew by 28 percent. In the Americas, sales growth increased to 8 percent in 1994 from 6 percent in 1993; and in Europe, sales grew 6 percent in 1994 from 4 percent in 1993. Sales in Japan grew 10 percent in 1994 from 2 percent in 1993; while sales in the rest of Asia increased by 53 percent. Electronics/industrial was the strongest market in each geography, with particular impact in Korea and Japan. Sales to the pharmaceutical/biotechnology market grew more slowly in 1994 due to reduced spending by pharmaceutical customers in the Americas and to a recessionary economy and a more difficult regulatory environment in Europe and Japan. The lab/research market showed sales growth in the Americas, Europe and Japan, and was particularly strong in Asia. Laboratory water products also grew across all geographies, with strongest performance in Europe and Japan. The effect of foreign exchange rates on sales was 2 percent favorable in 1994, compared to 2 percent unfavorable in 1993 and 2 percent favorable in 1992. A weaker dollar will benefit, and a stronger dollar will affect adversely, future operations. However, the Company is unable to predict future currency fluctuations and to quantify their effect on income. Price changes and inflation have not significantly affected the comparability of sales during the past three years. Gross Margins were 57.2 percent in 1994, 56.5 percent in 1993, and 54.2 percent in 1992. Excluding the charges for EPA settlements and the accrual of costs associated with increasing the efficiency of our manufacturing operations in 1992, margins in 1992 were 56.3 percent. The improvement in margins in 1994 as compared to 1993 and 1992 resulted from significantly increased production volume in the Company's electronics/industrial plants as well as continued cost reduction activities in all of the Company's manufacturing operations. Selling, General and Administrative (S,G&A) expenses, excluding the effects of foreign exchange, grew 8 percent in 1994, 6 percent in 1993 and 10 percent in 1992. S,G&A spending was higher in the second half of 1994 than in the first half as the Company invested in sales and marketing programs to support future sales growth. Research and Development Expenses decreased slightly in 1994 compared to a 6 percent increase in 1993 and a marginal increase in 1992. The Company continued to fund all major programs in 1994. Other Expense in 1994 reflects a non-recurring charge of $10.8 million to settle litigation which arose from the Company's sale of its Process Water Division in 1989. The litigation was settled in the fourth quarter of 1994. Other expense in 1992 reflects the loss taken on the sale of the Company's environmental testing business Resource Analysts, Inc. (RAI), in 1992. Net Interest Expense in 1994 was significantly lower than in 1993 and 1992, primarily due to interest earned on the net proceeds received from the divested businesses; a lower interest rate on the refinanced $100 million long-term note; and an overall lower level of net short-term borrowings. The Provision for Income Taxes was 22.5 percent of pre-tax income in 1994, the same effective rate as in 1993 and 1992. The Company continues to benefit from low tax rates in Puerto Rico and Ireland and tax incentives attributable to its U.S. export operations. 25 The Net Loss on Disposal of Discontinued Operations reflects the after-tax loss of the disposition of the Company's Instrumentation Divisions, which were concluded in the third quarter of 1994. Extraordinary Loss on Early Extinguishment of Debt reflects the after-tax cost recorded by the Company in the fourth quarter of 1993 to pre-pay its $100 million note, which bore interest at 9.2 percent and was callable in 1995. In March 1994, the Company issued and sold a new $100 million note bearing interest at 6.78 percent. Earnings Per Share for the past three years include a number of charges resulting from either specific transactions or adoption of new accounting pronouncements. Earnings per share from continuing operations adjusted for these events are summarized as follows: 1994 1993 1992 Earnings from continuing operations after accounting changes and charges $2.18 $1.62 $1.07 SFAS #106 Charges - cumulative impact - - .19 Charges .30 .13 .34 Earnings from continuing operations before accounting changes and charges $2.48 $1.75 $1.60 The charge in 1994 resulted from the settlement of litigation relating to the Company's sale of the its Process Water Division in 1989. The charge in 1993 resulted from the early extinguishment of the Company's long-term debt. The charges in 1992 resulted from providing for the settlement of all known environmental disputes with the Environmental Protection Agency (EPA), the sale of Resource Analysts, Inc., and an additional charge taken to cover costs of increasing the efficiencies of the Company's manufacturing operations. Legal Proceedings The potential settlement amount of all environmental claims against all participants at hazardous waste ("Superfund") sites in which the Company has been named a potentially responsible party by the EPA is significant. It is unlikely, however, that the Company's share of these costs will have a material impact on the financial condition of the Company. The Company is only one of many potentially responsible parties named at each site. Additionally, in certain instances the Company believes that its insurance will cover a portion of the costs incurred. In 1992, the EPA unexpectedly proposed settlements for several of these sites. Based on these proposed settlements and all other information available to management, the Company recorded a provision of $5.8 million in cost of sales in 1992, which, in management's best estimate, will be sufficient to satisfy all known claims by the EPA. No individual settlement to date has had a material impact on the Company's financial condition. Capital Resources and Liquidity In 1994, the Company generated $49 million of cash from continuing operations, compared to generating $34 million in 1993 and expending $14 million in 1992. Cash provided by operations continues to be the Company's primary source of funding working capital requirements. In addition to the increase in net income from continuing operations of $14.1 million in 1994 as compared to 1993, the Company received a tax refund of $14.0 million in 1994. These sources of cash were partially offset by an increase in accounts receivable of $14.7 million in 1994 compared to an increase of $5.4 million in 1993. In addition, inventories increased $1.9 million in 1994 compared to a decrease of $6.4 million in 1993. Capital expenditures by continuing operations were lower in 1994 than in 1993 and 1992 as the Company spent less on facility expansions and information technology systems. The Company expects capital expenditures in 1995 to be in line with capital spending in 1994 and 1993. At December 31, 1994, the Company had no significant commitments for capital expenditures. In 1994, the Company paid a total of $15.4 million in non- recurring financing- related transactions; $5.1 million was used to pre-pay the Company's $100 million notes payable due in 1998, while $10.3 million was used to close out the Company's yen currency swap. In addition, the Company had $258 million of net proceeds from the sale of its Waters Chromatography and Bioscience divisions in 1994. The Company spent $293 million, net of stock option receipts, to repurchase 6.1 million shares of its common stock in 1994, primarily pursuant to a Dutch Auction Self Tender completed in the third quarter and an ongoing open market share repurchase program. In the fourth quarter of 1994, the Company announced a $100 million open market share repurchase program and spent $78 million in share repurchases. In early 1995, the Company announced plans to spend an additional $50 million on open market share repurchases. The Company has $30.2 million of cash and short-term investments on hand at the end of 1994 which, along with the Company's strong financial position, provides a high degree of flexibility in financing future requirements. Dividends The quarterly dividend was increased in the second quarter of 1994 from $0.14 to $0.15 per share. Dividends paid in 1994 were $15.8 million. 26 Consolidated Statements of Income Millipore Corporation Year ended December 31 (In thousands except per share data) 1994 1993 1992 Net sales $ 497,252 $ 445,366 $ 427,188 Cost of sales 212,675 193,575 195,462 Gross profit 284,577 251,791 231,726 Selling, general and administrative expenses 159,591 145,647 142,701 Research and development expenses 34,327 34,952 32,953 Operating income 90,659 71,192 56,072 Other expense (10,800) - (2,415) Interest income 4,091 4,069 6,888 Interest expense (7,035) (12,038) (14,692) Income from continuing operations before income taxes 76,915 63,223 45,853 Provision for income taxes 17,306 14,225 10,317 Income from continuing operations before extraordinary item and cumulative effect of change in accounting principle 59,609 48,998 35,536 Earnings (loss) from discontinued operations - (10,851) 2,715 Net loss on disposal of discontinued operations (3,400) - - Income before extraordinary item and cumulative effect of change in accounting principle 56,209 38,147 38,251 Extraordinary item - loss on early extinguishment of debt - 3,544 - Cumulative effect of change in accounting for postretirement benefits other than pensions - - 5,068 Net income $ 56,209 $ 34,603 $ 33,183 Income per share Income from continuing operations$ 2.18 $ 1.75 $ 1.26 Net income per common share $ 2.05 $ 1.24 $ 1.17 Weighted average common shares outstanding 27,363 27,951 28,242 27 Consolidated Balance Sheets Millipore Corporation December 31 (In thousands) 1994 1993 Assets Current assets: Cash $2,898 $2,140 Short-term investments 27,338 38,502 Accounts receivable (less allowance for doubtful accounts of $4,968 in 1994 and $3,063 in 1993) 136,944 113,795 Inventories 71,209 65,187 Other current assets 5,351 12,790 Receivables arising from sale of businesses 15,064 - Net current assets of discontinued operations - 138,687 Total current assets 258,804 371,101 Property, plant and equipment, net 187,525 194,895 Intangible assets (less accumulated amortization of $1,597 in 1994 and $1,169 in 1993) 5,177 2,769 Deferred income taxes 58,123 40,792 Other assets 18,024 11,349 Net long-term assets of discontinued operations - 99,647 Total assets $527,653 $720,553 Liabilities and Shareholders' Equity Current liabilities: Notes payable and current portion of long-term debt $ 56,289 $ 65,560 Accounts payable and accrued expenses 63,860 57,505 Accrued divestiture costs 16,470 - Dividends payable 3,500 3,921 Accrued retirement plan contributions 5,987 6,356 Accrued and deferred income taxes payable 12,049 4,894 Total current liabilities 158,155 138,236 Long-term debt 100,231 102,047 Other liabilities 18,990 19,116 Accrued divestiture costs 29,000 - Commitments and contingent liabilities - - Shareholders' equity: Common stock, par value $1.00 per share, 80,000 shares authorized. 28,494 and 28,344 shares issued as of December 31, 1994 and 1993, respectively 28,494 28,344 Additional paid-in capital 23,603 16,803 Retained earnings 458,579 434,988 Translation adjustments 5,147 (7,624) 515,823 472,511 Less: Treasury stock at cost, 5,361 and 341 shares as of December 31, 1994 and 1993, respectively (294,546) (11,357) Total shareholders' equity 221,277 461,154 Total liabilities and shareholders' equity $527,653 $720,553 Consolidated Statements of Shareholders' Equity 28 Millipore Corporation Year ended December 31, 1992, 1993 and 1994 (In thousands) Additional Total Common Stock Paid-in Retained Translation Treasury Stock Shareholders' Shares Par Value Capital Earnings Adjustments Shares Cost Equity Balance at January 1, 1992 28,344 $28,344 $15,743 $398,643 $21,766 0 $0 $464,496 Net income 33,183 33,183 Cash dividends declared, $0.51 per share (14,376) (14,376) Treasury stock acquired (484) (16,777) (16,777) Stock options exercised (889) 111 4,033 3,144 Employees' stock purchase plan proceeds 2 3 120 122 U.S. tax benefit from stock plan activity 781 781 Translation adjustments (17,738) (17,738) Balance at December 31, 1992 28,344 $28,344 $16,524 $416,563 $4,028 (370) $(12,624) $452,835 Net income 34,603 34,603 Cash dividends declared, $0.55 per share (15,396) (15,396) Treasury stock acquired (112) (3,427) (3,427) Stock options exercised (899) 104 3,468 2,569 Employees' stock purchase plan proceeds (32) 10 353 321 Incentive plan awards 161 22 721 882 Stock Awards (12) 5 152 140 U.S. tax benefit from stock plan activity 279 279 Translation adjustments (11,652) (11,652) Balance at December 31, 1993 28,344 $28,344 $16,803 $434,988 $(7,624) (341) $(11,357) $461,154 Net income 56,209 56,209 Cash dividends declared, $0.59 per share (15,381) (15,381) Treasury stock acquired (400) (6,148) (334,702) (335,102) Stock options exercised 101 101 4,848 (15,479) 1,072 48,898 38,368 Employees' stock purchase plan proceeds 49 49 2,352 (1,712) 47 2,120 2,809 Incentive plan awards (54) 8 431 377 Stock Awards 8 1 64 72 Translation adjustments 12,771 12,771 Balance at December 31, 1994 28,494 $28,494 $23,603 $458,579 $5,147 (5,361)$(294,546) $221,277 29 Consolidated Statements of Cash Flows Millipore Corporation Year ended December 31 (In thousands) 1994 1993 1992 Cash Flows From Operating Activities: Net income $56,209 $34,603 $33,183 Adjustments to reconcile net income to net cash provided by continuing operations Net loss (income) from discontinued operations - 10,851 (2,715) Net loss on disposal of discontinued operations3,400 - - Depreciation and amortization 27,604 23,775 23,507 Deferred income tax provision (2,227) (1,745) 225 Extraordinary item-loss on extinguishment of debt - 3,544 - Change in operating assets and liabilities: (Increase) decrease in accounts receivable (14,672) (5,440) 8,348 (Increase) decrease in inventories (1,894) 6,398 (8,269) Decrease in other current assets 1,427 763 1,276 (Increase) in other assets (3,413) (1,981) (16,003) Increase (decrease) in accounts payable and accrued expenses 2,876 3,740 (2,475) (Decrease) increase in accrued retirement plan contributions (269) (104) 600 Increase (decrease) in accrued income taxes 6,123 (1,002) (2,111) Income tax refund received 14,035 - - Other (3,334) 53 11,898 Net cash provided by continuing operations 85,865 73,455 47,464 Net cash provided by discontinued operations - 8,708 4,691 Net cash provided by operating activities 85,865 82,163 52,155 Cash Flows From Investing Activities: Net proceeds from sales of businesses 257,899 - - Additions to property, plant and equipment, ne t (21,009) (24,469) (33,906) Net investing activities of discontinued businesses - (9,357) (11,018) Net cash provided by (used in) investing activities 236,890 (33,826) (44,924) Cash Flows From Financing Activities: Treasury stock acquired (334,702) (3,427) (16,777) Issuance of treasury stock under stock plans 33,876 3,912 3,266 Cash paid to extinguish long-term debt (5,088) - - Common stock issued 7,350 - - Cash paid to close out foreign currency swap (10,287) - - Net change in short-term debt (9,539) (59,887) 20,137 Net change in long-term debt (1,820) (1,222) (2,988) Dividends paid (15,802 (15,108) (14,093) Net cash used for financing activities (336,012) (75,732) (10,455) Effect of foreign exchange rates on cash and short-term investments 2,851 (2,414) (2,765) Net decrease in cash and short-term investments (10,406) (29,809) (5,989) Cash and short-term investments on January 1 40,642 70,451 76,440 Cash and short-term investments on December 31 $ 30,236 $ 40,642 $ 70,451 30 Notes to Consolidated Financial Statements (In thousands except per share data) Note A - Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. All material intercompany balances and transactions have been eliminated. Translation of Foreign Currencies For all of the Company's foreign subsidiaries, except Brazil, assets and liabilities are translated at exchange rates prevailing on the balance sheet date, revenues and expenses are translated at average exchange rates prevailing during the period, and elements of shareholders' equity are translated at historical rates. Any resulting translation gains and losses are reported separately in shareholders' equity. For the Company's subsidiary in Brazil, where inflation is very high, the translation is the same except that inventories, cost of sales, property, plant and equipment, and depreciation are translated at historical rates. Resulting translation gains and losses for this subsidiary are included in income. Net losses from foreign currency transactions and translations of $644 in 1994, $867 in 1993, and $1,767 in 1992 were included in selling, general and administrative expenses. Short-term Investments Short-term investments consist primarily of government securities and certificates of deposit and are carried at cost plus accrued interest, which approximates market value. Inventories The Company values all of its inventories manufactured in the United States at the lower of cost or market, principally on a last-in, first-out (LIFO) basis. Inventories manufactured outside of the United States are valued on a first-in, first-out (FIFO) basis. Property, Plant and Equipment Property, plant and equipment is recorded at cost. Expenditures for maintenance and repairs are charged to expense while the costs of significant improvements are capitalized. Depreciation on assets acquired before January 1, 1989 generally is provided using accelerated methods over the estimated useful lives of the assets. Assets acquired after January 1, 1989 primarily are depreciated using straight-line methods. Upon retirement or sale, the cost of assets disposed and the related accumulated depreciation are eliminated and related gains or losses reflected in income. Intangible Assets Intangible assets consist primarily of goodwill and licenses. Intangible assets are amortized on a straight-line basis over appropriate periods not exceeding 15 years. Income Taxes In 1992, the Company adopted the provisions of SFAS #109 "Accounting for Income Taxes". As discussed more fully in Note H, deferred income taxes under SFAS #109 are determined on the liability method. The Company provides deferred income taxes only on the unremitted earnings of foreign and Puerto Rican subsidiaries which are expected to be repatriated. Treasury Stock Treasury stock is recorded at its cost on the date acquired and is relieved at its weighted average cost upon reissuance. The excess of the cost over proceeds of treasury stock reissued is charged to retained earnings. Net Income Per Common Share Net income per common share is calculated by dividing the net income for the period by the weighted average number of common shares outstanding for the period. Postretirement Benefits Other Than Pensions In 1992, the Company adopted the provisions of SFAS #106 "Employers' Accounting for Postretirement Benefits Other than Pensions". This new standard, discussed more fully in Note L requires that the expected cost of retiree health benefits be expensed during the years employees render service rather than the Company's prior practice of recognizing these costs on a cash basis. Revenue Recognition Sales of products and services are recorded based on product shipment or performance of services. Reclassifications Certain reclassifications have been made to prior years' financial statements to conform with the 1994 presentation. 31 Note B - Discontinued Operations On November 11, 1993, the Company's Board of Directors approved a plan to divest operations of the Company's Instrumentation Divisions, which served primarily chromatography and bioscience markets. Accordingly, the operating results of these businesses through November 11, 1993 have been reclassified as discontinued operations in the accompanying consolidated financial statements. The operating results of these businesses subsequent to November 11, 1993 were deferred until the divestitures were completed. The results of the discontinued operations included in the accompanying consolidated statements of income are summarized as follows: 1993 1992 through 11/11/93 Net sales $279,303 $349,813 Pre-tax income (loss) $(14,001) $5,632 Provision (credit) for income taxes (3,150) 1,267 Cumulative effect of change in accounting for post- retirement benefits - 1,650 Net income (loss) $ (10,851) $ 2,715 Earnings (loss) per share $ (0.38) $ 0.10 The operating results for 1993 are for the period ended November 11, 1993, the date the divestiture plan was approved. In the first quarter of 1993, the Company recorded a restructuring charge of $13,000 to cover costs associated with reorganizing and restructuring the Company's chromatography division into more market-focused customer-oriented business units. The restructuring charge covered the cost of severance and other personnel- related items resulting from the reorganization. On August 18, 1994, the Company sold its Waters Chromatography Division to Waters Holdings, Inc. for $330,000 in cash and $10,000 in stock. On August 23, 1994, the Company sold certain assets of its non-membrane bioscience business to PerSeptive BioSystems, Inc. for $10,000 in cash and four thousand shares of preferred stock redeemable in four equal annual installments of $10,000. The stock proceeds received from each sale have been recorded at their fair value at the date of receipt. Both sales were recorded in the third quarter of 1994 and resulted in a combined pre-tax loss of $5,667 ($3,400 or $0.13 per share net of income taxes) which included estimated costs to be incurred in connection with the divestitures as well as pre-tax operating losses of $4,189 generated by the Instrumentation Divisions from November 11, 1993 through the completion of the divestitures. The Company received approximately $258,000 in cash proceeds from the disposition after related expenses in 1994. In accordance with each respective sales agreement, the Company retained and will collect certain customer accounts receivable balances generated by sales of Instrumentation Division products prior to the completion of the divestitures; such balances were applied against the cash proceeds specified in the sales agreements. These amounts have been classified in Receivables arising from sales of businesses in the accompanying consolidated balance sheets. Note B - Discontinued Operations (continued) Accruals associated with the divestitures consist primarily of costs to be incurred in providing future general and administrative support services for the divested businesses as specified in the sales agreements, costs associated with abandoning facilities operated under long-term leases, and employee costs. These accruals have been separately classified in both current and long-term liabilities in the consolidated balance sheets based on management's estimates of when such liabilities will be settled. Net current and long-term assets of discontinued operations as of December 31, 1993 consisted primarily of accounts receivable, inventory, property, plant and equipment, intangibles, and accounts payable, and were classified separately in the accompanying consolidated balance sheets. Note C - Inventories Inventories at December 31 consisted of the following: 1994 1993 Raw materials $ 19,895 $ 18,782 Work in process 8,992 7,852 Finished goods 42,322 38,553 $ 71,209 $ 65,187 The value of inventories determined using the LIFO cost method was $45,473 or 64 percent of the total at December 31, 1994 and $47,097 or 72 percent of the total at December 31, 1993. If these inventories had been valued using the FIFO cost method, they would have been $46,776 at December 31, 1994 and $48,847 at December 31, 1993. 32 Note D - Property, Plant and Equipment Property, plant and equipment at December 31 consisted of the following: 1994 1993 Land $ 7,445 $ 6,966 Leasehold improvements 9,054 16,108 Buildings and improvements 113,359 108,054 Production and other equipment 206,261 206,207 Construction in progress 16,442 20,631 352,561 357,966 Less: accumulated depreciation and amortization 165,036 163,071 $ 187,525 $ 194,895 Note E - Notes Payable and Current Portion of Long-term Debt Short-term borrowings and related lines of credit at December 31 are summarized as follows: 1994 1993 Notes payable and current portion of long-term debt: Notes payable $ 56,116 $ 64,942 Current portion of long-term debt 173 618 $ 56,289 $ 65,560 Unused lines of credit $174,409 $240,755 Average amount outstanding at month-end during the year $46,340 $109,477 Maximum month-end amount outstanding during the year $74,672 $135,887 Weighted average interest rate during the year 4.2% 4.3% Weighted average interest rate at year-end 5.5% 4.5% Notes payable generally consist of renewable, uncollateralized borrowings under lines of credit that are denominated in various currencies and bear interest at prevailing rates. Note F - Long-term Debt Long-term debt at December 31 consisted of the following: 1994 1993 Notes payable due in 2004 $100,000 $100,000 Other notes payable with average interest of 11.2% in 1994 and 5.9% in 1993, due through 1997 404 2,665 100,404 102,665 Less: Current portion (173) (618) Long-term debt $100,231 $102,047 In the fourth quarter of 1993, the Company entered into an agreement to retire its 9.2 percent $100,000 notes payable before their call date of March 30, 1995. Accordingly, the Company recorded an extraordinary charge of $5,906 ($3,544 net of income taxes or $0.13 per share) in December, 1993 to reflect the cost of extinguishing the notes. In March, 1994, the Company issued $100,000 of 6.78 percent notes due in 2004. Interest is payable semi-annually on these notes in March and September. Long-term debt, including current portion, matures as follows: Year ended December 31, 1995 $ 173 Year ended December 31, 1996 160 Year ended December 31, 1997 71 Year ended December 31, 1998 0 Year ended December 31, 1999 0 Years subsequent to December 31, 1999 $ 100,000 Certain notes contain covenants relating to maintenance of current asset levels, cash dividends and limitations on long-term debt. The Company is in compliance with all such covenants. The Company capitalized interest costs associated with the construction of certain assets of $890 in 1994, $1,301 in 1993, and $1,561 in 1992. Interest paid on debt during 1994, 1993, and 1992 amounted to $8,946, $13,356, and $16,637, respectively. 33 As of December 31, 1993, the Company had partially hedged its foreign currency net asset exposure by entering into a currency swap which was to mature in 1995. Under the terms of the original swap, the Company exchanged $100,000 of dollar debt service obligations for foreign obligations of 9,936,000 yen and 33,193 DM. In January, 1994, the Company closed out the yen-denominated swap and simultaneously exchanged $80,000 of dollar debt service obligations for a yen denominated obligation of 8,760,000 yen, which bears interest at a rate of 4.49 percent. This swap matures in 2004. The Company's foreign currency obligations had effective weighted average interest rates of 5.18 and 6.02 percent in 1994 and 1993 respectively. The effects of foreign currency exchange rate fluctuations resulting from these swap agreements are included in translation adjustments and in transaction gains/losses. Unrealized losses on these swap agreements of $9,327 at December 31, 1994 and $8,020 at December 31, 1993 are included in other assets in the consolidated balance sheets. Note G - Foreign Exchange In the fourth quarter of 1993, the Company entered into forward exchange contracts to reduce the impact of foreign currency fluctuations on certain transactions in 1994. A loss of $960 was realized on these contracts and was recorded in cost of sales in 1994. During 1994, the Company has again entered into forward exchange contracts to reduce the impact of foreign currency fluctuations on certain transactions. The gains or losses on these contracts will be included in income when the operating revenues and expenses related to the underlying transactions are recognized. Contracts open at December 31, 1994, aggregating $26,000, have an unrealized loss of $467. All open contracts have maturities which do not exceed fifteen months. Note H - Income Taxes The Company has provided for income taxes on both continuing and discontinued operations according to the provisions of SFAS #109 "Accounting for Income Taxes" which the Company adopted in 1992. Data related to the provisions for income taxes are summarized as follows: 1994 1993 1992 Domestic and foreign income before income taxes: Domestic $23,042 $16,690 $27,077 Foreign 48,206 32,532 24,408 71,248 49,222 51,485 Less: (Income) loss from discontinued operations - 14,001 (5,632) loss on disposal of discontinued operations 5,667 - - Income from continuing operations before income taxes $76,915 $63,223 $45,853 Domestic and foreign provisions for income taxes: Domestic $(1,894) $(2,781) $ 2,842 Foreign 16,433 13,356 8,242 State 500 500 500 15,039 11,075 11,584 Less: portion applied to discontinued operations 2,267 3,150 (1,267) $17,306 $14,225 $10,317 Current and deferred provisions for income taxes: Current $28,800 $12,820 $11,359 Deferred (13,761) (1,745) 225 $15,039 $11,075 $11,584 Summary of the differences between the Company's consolidated effective tax rate and the United States statutory federal income tax rate: U.S. statutory income tax rate 35.0% 35.0% 34.0% Puerto Rico tax rate benefits (6.0) (11.9) (9.8) Ireland tax rate benefits (4.0) (1.1) (1.7) Excess foreign over U.S. tax rate - 5.6 - State income tax, net of federal income tax benefit .5 .7 .6 Foreign Sales Corporation income not taxed (3.0) (4.6) (4.1) Other - (1.2) 3.5 Effective tax rate applicable to operations 22.5% 22.5% 22.5% 34 Net deferred tax assets result from temporary differences in the recognition of revenues and expenses for financial statement and income tax purposes. Components of the net deferred tax assets are as follows: 1994 1993 Intercompany and inventory related transaction $6,861 $18,698 Postretirement benefits other than pensions 3,271 4,435 Tax credits (including foreign tax credits on unremitted earnings) 33,056 21,800 Divestiture related costs 30,850 - U.S. net operating loss carryforwards - 14,001 Other, net 3,475 1,248 77,513 60,182 Valuation allowance (19,390) (19,390) Net deferred tax asset $ 58,123 $ 40,792 The valuation allowance is provided primarily against foreign tax credits which can be utilized against future taxable income in the United States after the utilization of other carryforwards and expire no later than 1996. The reduction in tax expense attributable to tax exemptions on the Company's operations in Puerto Rico was $3,673 in 1994, $5,843 in 1993, and $5,035 in 1992 or $0.13, $0.21, and $0.18, per share, respectively. Tax exemptions relating to these operations are effective through 2004. Income taxes paid during 1994, 1993, and 1992 were $25,296, $15,185, and $18,634 respectively. During 1994 the Internal Revenue Service ("IRS") completed its examination of the Company's federal income tax returns pertaining to its U.S. and Puerto Rican operations for the years 1985-1990. Note I - Legal Proceedings The Company has been notified in a number of instances that the United States Environmental Protection Agency (EPA) has determined that a release or a substantial threat of a release of hazardous substances (Release) as defined in Section 101 of the Comprehensive Environmental Response Compensation and Liability Act of 1980 as amended by the Superfund Amendments and Reauthorization Act of 1986 (the so-called "Superfund" law) has occurred at certain sites to which chemical wastes generated by the manufacturing operations of the Company have been sent. These notifications typically also allege that the Company may be a potentially responsible party under the law with respect to any remedial action needed to control or prevent any such Release. Under the law the EPA may undertake remedial action and responsible parties may be liable, without regard to fault or negligence, for all costs incurred. In several of these instances the EPA has issued a proposal for remedial action it considers necessary to protect the environment. In each instance the Company was only one of a large number of corporations and entities which received such notification, and anticipates that any ultimate liability for remedial costs will be shared by others. In 1992, the EPA unexpectedly proposed settlements for several of these sites. Based on those proposed settlements and all other information available to management, the Company recorded a provision of $5,800 in cost of sales which, in management's best estimate will be sufficient to satisfy all known claims by the EPA. The Company has paid a total of $14,028 to date to satisfy environmental claims. The aggregate of further potential liabilities is not expected to have a material adverse effect on the Company's financial condition. Eastern Enterprises filed a lawsuit against the Company alleging misrepresentations made in connection with its 1989 purchase of the Company's Process Water Division. This lawsuit was settled in the fourth quarter of 1994 at a total cost of $10,800, which included a $9,000 payment to Eastern Enterprises and $1,800 of related costs incurred by the Company. The cost of settlement is included in Other expense in the accompanying consolidated statement of income. Note J - Leases Lease agreements cover sales offices, warehouse space, computers and automobiles. These leases have expiration dates through 2006. Certain land and building leases contain renewal options for periods ranging from five to ten years and purchase options at fair market value. Rental expense was $8,545 in 1994, $10,878 in 1993, and $8,880 in 1992. At December 31, 1994 future minimum rents payable under noncancelable leases with initial terms exceeding one year were as follows: 1995 $7,642 1996 6,588 1997 5,350 1998 3,685 1999 2,634 2000 - 2006 12,533 35 Note K - Stock Plans Stock Option Plan Under the Company's Combined Stock Option Plan, stock options to purchase Millipore common stock may be granted to employees. The plan provides that the option price per share may not be less than the fair market value of the stock at the time the option is granted and that options must expire not later than 10 years from the date of grant. Plan data are summarized as follows: 1994 1993 1992 Option shares: Outstanding at beginning of period 2,720 2,431 2,207 Issued during period 267 516 510 Exercised during period (1,167) (100) (111) Canceled during period (61) (127) (175) Outstanding at end of period 1,759 2,720 2,431 Exercisable at end of period 1,044 1,536 1,254 Shares available for granting of options at end of period 672 879 270 Average price of outstanding options at end of period $35.92 $33.34 $32.70 Average price of exercised options during the period $32.60 $24.51 $28.22 Non-Employee Director Stock Option Plan In 1990, a stock option plan for Non-Employee Directors was approved by the Company's shareholders. Under this plan, stock options to purchase up to 100 shares of Millipore common stock may be granted to non-employee directors of the Company. The plan provides that the option price per share may not be less then the fair market value of the stock at the time the option is granted. At December 31, 1994, 63 options have been issued and 52 are outstanding. Employees' Stock Purchase Plan Under the Company's Employees' Stock Purchase Plan, all employees of the Company and its subsidiaries who have 90 days continuous service prior to the beginning of the plan year, May 1, may purchase shares of Millipore common stock by payroll deduction. The purchase price per share during the plan year is the lesser of the fair market value of the common stock at the time of purchase or on May 1. In 1994, 1993, and 1992 shares issued under the plan were 96, 10, and 3, respectively. As of December 31, 1994, 21 shares of Millipore common stock were available for sale to employees under the plan. Incentive Plan for Senior Management Under this plan, Millipore common stock is awarded to key members of senior management at no cost to them. The stock cannot be sold, assigned, transferred or pledged during a restriction period which is normally four years. Shares are subject to forfeiture should employment terminate during the restriction period. The stock issued under the plan is recorded at its fair market value on the award date; the related deferred compensation is amortized to selling, general and administrative expenses over the restriction period. At the end of 1994, 1993, and 1992, 77, 133, and 114 shares, respectively, were outstanding under the plan. Plan expense was $790 in 1994, $833 in 1993, and $924 in 1992. As of December 31, 1994, 70 shares of Millipore common stock were available for future awards under this plan. Note L - Employee Retirement Plans Participation and Savings Plan The Millipore Corporation Employees' Participation and Savings Plan (Participation and Savings Plan), maintained for the benefit of all full- time U.S. employees, combines both a defined contribution plan (Participation Plan) and an employee savings plan (Savings Plan). Contributions to the Participation Plan are allocated among the U.S. employees of the Company who have completed at least two years of continuous service on the basis of the compensation they received during the year for which the contribution is made. The Savings Plan allows employees with one year of continuous service to make certain tax-deferred voluntary contributions which the company matches with a 25 percent contribution (50 percent contribution for employees with 10 years of service). Total expense under the Participation and Savings Plan was $6,089 in 1994, $8,679 in 1993, and $8,520 in 1992. Retirement Plan The Company's Retirement Plan for Employees of Millipore Corporation (Retirement Plan) is a defined benefit plan for all U.S. employees which provides benefits to the extent that assets of the Participation Plan, described above, do not provide guaranteed retirement income levels. 36 Guaranteed retirement income levels are determined based on years of service and salary level as integrated with Social Security benefits. Employees are eligible under the Retirement Plan after one year of continuous service and are vested after 5 years of service. For accounting purposes, the Company uses the projected unit credit method of actuarial valuation. The actuarial method for funding purposes is the entry age normal method. The Company contributes annually to the Retirement Plan, subject to Internal Revenue Service and ERISA funding limitations. No contributions were required for 1994 and 1993. The following table summarizes the funded status of the plan and amounts reflected in the Company's consolidated balance sheets at December 31. The projected benefit obligation was calculated using discount and investment return rates of 8.5 and 8.0 percent, respectively, in 1994 and 7.5 percent in 1993, and a salary progression rate of 6 percent in both years. Plan assets are invested primarily in common stock, mutual funds and money market funds. The Company recognized a curailment loss of $91 in the third quarter of 1994 as a result of its divestitures. Such amount was included as part of the net loss on disposal of discontinued operations. 1994 1993 Actuarial present value of benefit obligations: Accumulated benefit obligation, including vested benefits of $2,761 on December 31, 1994 and $2,804 on December 31, 1993 $ 2,911 $ 2,983 Projected benefit obligation for service rendered to date $(4,076) $(5,003) Plan assets at fair value 5,436 5,663 Plan assets in excess of projected benefit obligation 1,360 660 Unrecognized net actuarial loss 2,772 3,069 Unrecognized prior service cost 132 413 Unrecognized net asset being amortized over 16.7 years (663) (747) Prepaid pension cost included in financial statements $ 3,601 $3,395 Net pension income includes the following components Service cost $ 376 $ 393 Interest cost (361) (358) Return on plan assets 36 430 Amortization and deferral 246 (131) Net pension income $ 297 $ 334 Postretirement Benefits Other Than Pensions The Company sponsors several unfunded defined benefit postretirement plans covering all U.S. employees. The plans provide medical and life insurance benefits and are, depending on the plan; either contributory or non- contributory. As discussed in Note A, the Company adopted the provisions of SFAS #106 "Employers' Accounting for Postretirement Benefits Other Than Pensions" effective January 1, 1992. In adopting this standard, the Company recorded in the final quarter of 1992 a one-time, non-cash charge againsst earnings from continuing operations of $7,678 before taxes and $5,068 after taxes, or $0.19 per share. The Company recognized $4,007 as a settlement in the third quarter of 1994 as a result of its divestitures. The settlement was included as part of the net loss on disposal of discontinued operations. Net periodic postretirement benefit cost included the following components: 1994 1993 Service cost benefits attributed to service during the year $ 610 $ 754 Interest cost on accumulated postretirement benefit obligation 662 787 Net amortization and deferral (62) (15) Net periodic postretirement benefit cost $ 1,210 $ 1,526 Summary information on the Company's plans as of December 31 is as follows: 1994 1993 Accumulated postretirement benefit obligation: Retirees and dependents $ (3,100) $ (3,520) Fully eligible active plan participants (444) (478) Other active plan participants (3,089) (8,171) Accrued postretirement benefit cost (6,633) (12,169) Unrecognized gain from past experience different from that assumed and from changes in assumptions (2,713) (361) Accrued postretirement benefit obligation $(9,346) $(12,530) 37 The discount rate used in determining the accumulated postretirement benefit obligation was 8.5 percent as of December 31,1994 and 7.5 percent as of December 31, 1993. The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation was 10 percent in 1994, declining gradually to 5.5 percent over 9 years, remaining level thereafter. If the health care cost trend rate assumptions were increased by 1 percent, the accumulated postretirement benefit obligation as of December 31, 1994 would be increased by $987 while the aggregate of the service and interest cost components of net periodic postretirement benefit cost for 1994 would be increased by $245. Note M - Business Segment Information Industry Segments The Company operates in one industry segment. Using primarily membrane technology, the Company develops, manufactures and markets products used for analysis and purification. Geographical Segments The Company operates in the geographical segments indicated in the table below. Sales are reflected in the segment from which the sales are made. The Americas segment includes North and South America. The European region includes Western and Central Europe, Russia, the Middle East and Africa. The Asia/Pacific region includes Japan, Korea, Taiwan, Hong Kong, China, Southeast Asia and Australia. Transfer sales between geographical areas are generally made at a discount from list price. Operating profits for each geographical segment exclude general corporate expenses. Identifiable assets consist of those assets utilized within each respective geographic segment and exclude cash and short-term investments and receivables arising from sale of businesses, which are classified as corporate assets. Americas Europe Pacific Eliminations Total 1994 Sales: Unaffiliated customers $180,569 $154,196 $160,781 $495,546 Unaffiliated export: Pacific customers 806 806 European customers 900 900 Total unaffiliated 182,275 154,196 160,781 497,251 Transfer between areas 77,877 25,767 6,246 (109,890) - Total sales $260,152 $179,963 $167,027 $(109,890) $497,251 Operating profits $ 54,301 $ 23,908 $ 24,879 $103,088 General corporate expenses (12,429) Other expense (10,800) Interest expense, net (2,944) Income from continuing operations before income taxes $ 76,915 Identifiable assets $331,730 $187,132 $144,890 $(181,285) $482,467 Corporate assets 45,186 Total assets $527,653 1993 Sales: Unaffiliated customers $168,800 $145,485 $128,840 $443,125 Unaffiliated export: Pacific customers 977 977 European customers 1,264 1,264 Total unaffiliated 171,041 145,485 128,840 445,366 Transfer between areas 85,438 24,513 6,162 (116,113) - Total sales $256,479 $169,998 $135,002 $(116,113) $445,366 38 Operating profits $ 23,180 $ 36,902 $ 27,731 $ 87,813 General corporate expenses (16,621) Interest expense, net (7,969) Income from continuing operations before income taxes $ 63,223 Identifiable assets $284,750 $138,326 $141,442 $(122,941) $441,577 Corporate assets 40,642 Net current assets of discontinued operations 138,687 Net long term assets of discontinued operations 99,647 Total assets $720,553 1992 Sales: Unaffiliated customers $159,458 $154,200 $108,923 $422,581 Unaffiliated export: Pacific customers 908 908 European customers 3,699 3,699 Total unaffiliated 164,065 154,200 108,923 427,188 Transfer between areas 80,944 23,391 7,360 (111,695) - Total sales $245,009 $177,591 $116,283 $(111,695) $427,188 Operating profits $ 23,715 $ 40,962 $ 7,186 $ 71,863 General corporate expenses (15,791) Interest expense, net (7,804) Loss on sale of business (2,415) (2,415) Income from continuing operations before income taxes $ 45,853 Identifiable assets $271,894 $178,224 $116,175 $(125,560) $440,733 Corporate assets 70,451 Net current assets of discontinued operations 147,480 Net long term assets of discontinued operations 106,194 Total assets $764,858 Report of Independent Accountants To the Shareholders and Directors of Millipore Corporation: We have audited the accompanying consolidated balance sheets of Millipore Corporation as of December 31, 1994 and 1993, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 1994. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Millipore Corporation at December 31, 1994 and 1993, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 1994 in conformity with generally accepted accounting principles. As discussed in Notes A, H and L to the consolidated financial statements, the Company changed its method of accounting for postretirement benefits other than pensions and its accounting for income taxes in 1992. Boston, Massachusetts Coopers & Lybrand L.L.P. January 26, 1995 39 Eleven-year Summary of Operations Millipore Corporation (In thousands except per share) 1994 1993 1992 1991 1990 Net sales $497,252 $445,366 $427,188 $415,075 $380,983 Cost of sales 212,675 193,575 195,462 194,557 170,049 Gross profit 284,577 251,791 231,726 220,518 210,934 Selling, general and administrative expenses 159,591 145,647 142,701 129,593 117,214 Research and development expenses 34,327 34,952 32,953 32,633 29,538 Restructuring charge - - - - 17,103 Operating income 90,659 71,192 56,072 58,292 47,079 Other Income (expense) (10,800) - (2,415) - - Interest income 4,091 4,069 6,888 6,182 6,723 Interest expense (7,035) (12,038) (14,692) (13,984) (10,418) Income from continuing operations before income taxes 76,915 63,223 45,853 50,490 43,384 Provision for income taxes excluding non-recurring 17,306 14,225 10,317 14,570 13,629 tax benfit Nonrecurring tax - - - - - benefit Income from continuing 59,609 48,998 35,536 35,920 29,755 operations Earnings (loss) from discontinued operations - (10,851) 2,715 18,645 (6,678) Loss on disposal of discontinued operations (3,400) - - - - Income before extraordinary item and cumulative effect of change in 56,209 38,147 38,251 54,565 23,077 accounting principle Extraordinary item-loss on early extinguishment - 3,544 - - - of debt Cumulative effect of change in accounting for postretirement benefits - - 5,068 - - Net income $56,209 $34,603 $33,183 $54,565 $23,077 Net income per common share: Income from continuing $2.18 $1.75 $1.26 $1.27 $1.05 operations Net income per common 2.05 1.24 1.17 1.93 0.82 share Cash dividends declared 0.59 0.55 0.51 0.47 0.43 per share Average common shares and equivalents 27,363 27,951 28,242 28,294 28,307 Financial Data Working Capital $100,649 $232,865 $220,378 $247,399 $225,039 Total assets 527,653 720,553 764,858 765,129 704,971 Long-term obligations 100,231 102,047 103,240 106,306 107,517 Shareholders' equity $221,277 $461,154 $452,835 $464,496 $427,008 The Company adopted SFAS # 109 "Accounting for Income Taxes" during 1992 and restated tax provisions in 1991 and 1990 and 1986. 1984 earnings per share include a $.15 per share non-recurring tax benefit from the reversal of all deferred taxes provided on DISC income prior to 1984. 1989 1988 1987 1986 1985 1984 Net sales $365,825 $347,267 $298,728 $251,212 $202,411 $193,190 Cost of sales 165,979 161,613 138,587 117,997 99,427 97,048 Gross profit 199,846 185,654 160,141 133,215 102,984 96,142 Selling, general and administrative expenses 115,951 116,636 98,730 87,058 66,409 62,777 Research and development expenses 28,756 22,336 19,742 16,756 15,132 15,407 Restructuring charge - - - - - - Operating income 55,139 46,682 41,669 29,401 21,443 17,958 Other Income (expense) 3,149 - - - - - Interest income 3,914 3,450 2,234 3,066 3,403 4,145 Interest expense (8,543) (6,543) (3,432) (3,762) (3,300) (3,136) Income from continuing operations before income taxes 53,659 43,589 40,471 28,705 21,546 18,967 Provision for income taxes excluding non-recurring 11,619 10,955 10,040 10,538 5,357 5,121 tax benefit Nonrecurring benefit - - - - - (4,002) Income from continuing 42,040 32,634 30,431 18,167 16,189 17,848 operations Earnings (loss) from discontinued operations 10,462 22,751 17,993 14,797 15,541 12,645 Loss on disposal of discontinued operations - - - - - - Income before extraordinary item and cumulative effect of change in 52,502 55,385 48,424 32,964 31,730 30,493 accounting principle Extraordinary item-loss on early extinguishment - - - - - - of debt Cumulative effect of change in accounting for postretirement benefits - - - - - - Net income $52,502 $55,385 $48,424 $32,964 $31,730 $30,493 Net income per common share: Income from continuing $1.48 $1.15 $1.07 $0.65 $0.59 $0.65 operations Net income per common 1.85 1.96 1.71 1.18 1.15 1.11 share Cash dividends declared 0.39 0.35 0.31 0.27 0.24 0.22 per share Average common shares and equivalents 28,323 28,329 28,344 27,931 27,632 27,552 Financial Data Working Capital $249,777 $251,825 $168,594 $165,421 $146,334 $121,075 Total assets 616,747 547,997 452,387 369,414 326,903 283,517 Long-term obligations 106,147 105,946 6,378 12,094 13,446 10,630 Shareholders' equity $403,827 $362,800 $327,604 $283,547 $244,607 $214,289 40-41 Quarterly Results (Unaudited) The Company's unaudited quarterly results are summarized below. First Second Third Fourth (In thousands, except per share data) quarter quarter quarter quarter Year 1994 Net sales $118,959 $124,690 $123,551$130,052$497,252 Cost of sales 51,265 52,910 53,114 55,386 212,675 Gross profit 67,694 71,780 70,437 74,666 284,577 Selling, general and administrative expenses 38,109 39,456 40,181 41,845 159,591 Research and development expenses 8,558 8,446 8,367 8,956 34,327 Operating income 21,027 23,878 21,889 23,865 90,659 Other expense - - -(10,800)(10,800) Interest income 565 713 1,976 837 4,091 Interest expense (1,858) (1,917) (1,714) (1,546) (7,035) Income from continuing operations before income taxes 19,734 22,674 22,151 12,356 76,915 Provision for income taxes 4,440 5,102 4,984 2,780 17,306 Income from continuing operations 15,294 17,572 17,167 9,576 59,609 Loss from discontinued operations - - (3,400) - (3,400) Net income $ 15,294 $ 17,572 $ 13,767 $ 9,576 $56,209 Per share information Income from continuing operations $0.54 $0.62 $0.61 $0.40 $2.18 Net income $0.54 $0.62 $0.49 $0.40 $2.05 Weighted average common shares outstanding 28,123 28,388 28,155 23,840 27,363 1993 Net sales $105,189 $114,613 $111,854$113,710$445,366 Cost of sales 45,140 49,271 49,587 49,577 193,575 Gross profit 60,049 65,342 62,267 64,133 251,791 Selling, general and administrative expenses 36,555 36,946 36,424 35,722 145,647 Research and development expenses 8,587 9,010 8,652 8,703 34,952 Operating income 14,907 19,386 17,191 19,708 71,192 Interest income 1,098 1,039 1,047 885 4,069 Interest expense (3,315) (3,122) (3,015) (2,586)(12,038) Income from continuing operations before income taxes 12,690 17,303 15,223 18,007 63,223 Provision for income taxes 2,855 3,893 3,425 4,052 14,225 Income from continuing operations 9,835 13,410 11,798 13,955 48,998 Loss from discontinued operations (9,083) (579) (1,189) - (10,851) Extraordinary item - loss on early extinguishment of debt - - - 3,544 3,544 Net income $ 752 $ 12,831 $ 10,609$ 10,411$ 34,603 Per share information Income from continuing operations $0.35 $0.48 $0.42 $0.50 $1.75 Net income $0.03 $0.46 $0.38 $0.37 $1.24 Weighted average common shares outstanding 27,983 27,946 27,921 27,954 27,951 42 Investor Information Registrar and Transfer Agent The First National Bank of Boston Shareholders Services Division P.O. Box 644 Boston, Massachusetts 02102-0644 Annual Meeting The Annual Meeting of Shareholders of Millipore Corporation will be held at our Bedford Massachusetts Facility (80 Ashby Road) on Thursday, April 20, 1995 at 11 a.m. Dividend Reinvestment An automatic dividend reinvestment program is available to shareholders. A descriptive brochure and authorization card are available on request. Reports Quarterly results are available through facsimile, voice mail, and the Internet, or on request from the Company. Form 10-K is filed annually with the Securities Exchange Commission and is available on the Internet and on request from the Company. To receive the latest quarterly results through facsimile, call (800)758-5804 (PIN# 101371); through voice mail call (800)605-5249; through the Internet go to URL http://www.millipore.com. The 10-K is alos available through that voice mail number and that Internet address. For other investor information, contact: Geoffrey E. Helliwell Director of Treasury Operations Millipore Corporation 80 Ashby Road Bedford, Massachusetts 01730-2271 (617) 533-2032 Common Stock Millipore's Common Stock is traded on the New York Stock Exchange. Our symbol is MIL. Stock price information is shown below. Millipore Stock Prices Range of Stock Prices Dividends Declared Per Share 1994 1993 1994 1993 High Low High Low First Quarter $48.87 $38.50 $35.50 $25.88 $0.14 $0.13 Second Quarter 53.87 42.75 32.38 26.50 0.15 0.14 Third Quarter 57.00 50.00 34.25 29.75 0.15 0.14 Fourth Quarter 55.13 46.63 40.25 32.75 0.15 0.14 43