United States
                       Securities and Exchange Commission

                             Washington, D.C. 20549

- --------------------------------------------------------------------------------

                                    Form 10-K
    (Mark One)
    |X|         Annual Report Pursuant to Section 13 or 15(d) of the
                Securities Exchange Act of 1934 [No Fee Required]
                   For the fiscal year ended December 31, 2000
                                       OR
    |_|         Transition Report Pursuant to Section 13 or 15(d)
                 of the Securities Exchange Act of 1934 [No Fee
                Required] For the transition period from _______
                                   to _______
                         Commission file number 0-22493

- --------------------------------------------------------------------------------

                        Mettler-Toledo International Inc.
             (Exact name of registrant as specified in its charter)

            Delaware                                   13-3668641
      (State or other jurisdiction of      (I.R.S. Employer Identification No.)
       incorporation or organization)

                                  Im Langacher
                                 P.O. Box MT-100
                         CH 8606 Greifensee, Switzerland
               (Address of principal executive offices) (Zip Code)

                               011-41-1-944-22-11
              (Registrant's telephone number, including area code)

- --------------------------------------------------------------------------------

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

                                                    Name of each exchange
        Title of each class                          on which registered
        -------------------                          -------------------
      Common Stock, $.01 par value                 New York Stock Exchange

        Securities registered pursuant to Section 12(g) of the Act: NONE

- --------------------------------------------------------------------------------

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the preceding 12 months (or such shorter  period that the Registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes X No

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of  Regulation  S-K (ss.  229.405  of this  chapter)  is not  contained
herein,  and will not be contained,  to the best of Registrant's  knowledge,  in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K.

         As of March 16, 2001 there  were 39,681,536 shares of the  Registrant's
Common Stock, $0.01 par value per share, outstanding. The aggregate market value
of the shares of Common Stock held by non-affiliates of the Registrant (based on
the closing  price for the Common Stock on the New York Stock  Exchange on March
16, 2001) was approximately $1.655 billion.  For  purposes of  this computation,
shares held by affiliates and by directors of the Registrant have been excluded.
Such  exclusion  of shares held by directors  is not  intended,  nor shall it be
deemed, to be an admission that such persons are affiliates of the Registrant.

                       Documents Incorporated by Reference

          Document                                    Part of Form 10-K
   Proxy Statement for 2001                       Into which Incorporated
 Annual Meeting of Stockholders                           Part III





                        METTLER-TOLEDO INTERNATIONAL INC.

                           ANNUAL REPORT ON FORM 10-K
                   FOR FISCAL YEAR ENDED DECEMBER 31, 2000


PART I

ITEM 1.       BUSINESS.........................................................1

ITEM 2.       PROPERTIES......................................................23

ITEM 3.       LEGAL PROCEEDINGS...............................................24

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............24

PART II

ITEM 5.       MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
              RELATED STOCKHOLDER MATTERS.....................................25

ITEM 6.       SELECTED FINANCIAL DATA.........................................26

ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS...................28

ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK......39

ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.....................39

ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
              AND FINANCIAL DISCLOSURE........................................39

PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT..............40

ITEM 11.      EXECUTIVE COMPENSATION..........................................42

ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
              MANAGEMENT......................................................42

ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................42

PART IV

ITEM 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
              ON FORM 8-K.....................................................42

SIGNATURES....................................................................43

                                        i



         Unless  otherwise  stated  or where  the  context  otherwise  requires,
references  herein  to we,  our,  the  "Company"  or  "Mettler-Toledo"  refer to
Mettler-Toledo International Inc. and its direct and indirect subsidiaries.

         This Annual  Report on Form 10-K  includes  forward-looking  statements
based on our current  expectations  and projections  about future events.  These
forward-looking  statements  are subject to a number of risks and  uncertainties
which  could  cause our actual  results  to differ  materially  from  historical
results or those  anticipated  and certain of which are beyond our control.  The
words  "believe",  "expect",   "anticipate"  and  similar  expressions  identify
forward-looking  statements.  We undertake no obligation  to publicly  update or
revise any forward-looking  statements,  whether as a result of new information,
future events or otherwise.  New risk factors emerge from time to time and it is
not  possible  for us to predict  all such risk  factors,  nor can we assess the
impact of all such  risk  factors  on our  business  or the  extent to which any
factor, or combination of factors, may cause actual results to differ materially
from those contained in any  forward-looking  statements.  Given these risks and
uncertainties,  investors  should not place undue  reliance  on  forward-looking
statements as a prediction of actual results.  See "Management's  Discussion and
Analysis of Financial  Condition and Results of Operations"  and Exhibit 99.1 to
this Report.

         We use the following registered and unregistered trademarks,  which are
found in this Report: APPLIED SYSTEMS, ASI, AVS, AX, BERGER, BERGER INSTRUMENTS,
BOHDAN, CARGOSCAN,  DELTARANGE,  DIGITOL,  FORMWEIGH,  FREEWEIGH,  FTIR, JAGUAR,
JAGXTREME,  LABMAX,  LUTRANA,  MENTOR SC,  METTLER,   METTLER-TOLEDO,   MT-SHOP,
MULTIMAX,   MultiRange,   MYRIAD,   OHAUS,  OPRA,  SAFELINE,   SPIDER,   TESTUT,
TESTUT-LUTRANA, THORNTON, TRIMWEIGH , TRUCKMATE, VIPER, WINBRIDGE.

         Unless otherwise  indicated,  industry data contained herein is derived
from publicly  available  industry trade journals,  government reports and other
publicly available sources. We have not independently  verified this data but we
believe the data is  reliable.  Where such sources are not  available,  industry
data is derived from our internal estimates,  which we believe to be reasonable,
but which cannot be independently  verified.  As used in this Annual Report, "$"
refers to U.S. dollars, "CHF" or "SFr" refers to Swiss francs,  "(pound)" refers
to British pounds sterling and "CDN $" refers to Canadian dollars.

                                     PART I

ITEM 1.       BUSINESS

Overview

         Mettler-Toledo  is a leading global supplier of precision  instruments.
We are the  world's  largest  manufacturer  of weighing  instruments  for use in
laboratory, industrial and food retailing applications. We hold top-three market
positions in several related analytical instruments,  and are a leading provider
of automated  chemistry systems used in drug and chemical compound discovery and
development.  In addition,  we are the world's largest manufacturer and marketer
of metal detection and other end-of-line  inspection  systems used in production
and packaging.

                                        1



         We focus on the high  value-added  segments of our markets by providing
innovative  instruments  that are  often  integrated  into  application-specific
solutions for customers.  We design our instruments not only to capture valuable
data but also to  facilitate  the  processing  and  transfer  of this  data into
customers' management information systems.

Competitive Strengths

         We believe our franchise has a number of competitive  strengths,  which
allow us to compete successfully in high value-added segments:

o        Worldwide Market  Leadership Positions.   We believe  that  we  have  a
         leading  position  in each of our  markets,  and  at  least  80% of our
         product sales are from  products  that are the global  leaders in their
         segment. In the weighing instruments market, we are the only company to
         offer   products  for   laboratory,   industrial   and  food  retailing
         applications  globally  and we believe that we hold a market share more
         than twice that of our nearest  competitor.  We believe that in 2000 we
         had  approximately  50% of the global market for  laboratory  balances,
         including the largest market share in each of Europe, the United States
         and Asia  (excluding  Japan),  and the number two position in Japan. In
         the  industrial  and food  retailing  markets,  we  believe we have the
         largest market share in Europe and the United States.  In Asia, we have
         a substantial  industrial and food retailing  business which has gained
         market  share in  recent  years.  This  business  is  supported  by our
         established  manufacturing  presence  in  China.  In  addition  to  our
         weighing  franchise,  most of our other sales come from  product  lines
         where we hold a top-three global position.

o        Global  Brand  and  Reputation.   The  Mettler-Toledo   brand  name  is
         identified   worldwide  with  accuracy,   reliability  and  innovation.
         Customers value these  characteristics  because most of our instruments
         significantly  impact customers' product quality,  productivity,  costs
         and regulatory compliance. Furthermore, precision instruments generally
         constitute a small percentage of customers' aggregate expenditures.  As
         a result, we believe customers focus on accuracy,  product reliability,
         technical innovation,  service quality,  reputation and past experience
         when choosing  precision  instruments,  rather than cost alone. We have
         one of the strongest brand names in the laboratory.  In fact laboratory
         balances are often generically referred to as "Mettlers".  The strength
         of this brand name has allowed us to successfully extend our laboratory
         balance line to include other analytical instruments.

o        Technological Innovation. We have a long and successful track record of
         innovation and remain at the forefront of technological  development by
         focusing on the high value-added  segments of our markets.  We believe
         that we are the global leader in  our industry in providing  innovative
         measurement  solutions  to   enhance  our  customers'  processes.   Our
         technological   innovation  efforts   benefit  from  our  knowledge  of
         customer  processes  and   related   requirements,   our  manufacturing
         expertise in sensor technology,  precision   machining and electronics,
         as well as our strength in software development.

o        Comprehensive,   High  Quality  Solution  Offering.  We  offer  a  more
         comprehensive  range of  instruments  and solutions than any of our key
         competitors.   Our  broad  product  line  addresses  a  wide  range  of
         applications   across  and  within  many  industries  and  regions.  We
         manufacture  our products in modern  facilities,  most of which are ISO
         9001  certified.  Our  broad  range of high  quality  products  and the
         ability to provide integrated solutions


                                       2


         allows  us to  leverage  our sales and  service  organization,  product
         development activities and manufacturing and distribution capabilities.

o        Global  Sales and  Service.  We have the only global  sales and service
         organization among weighing instruments  manufacturers,  and one of the
         largest of any  precision  instrument  company.  We  believe  that this
         capability is a major competitive advantage. At December 31, 2000, this
         organization  consisted  of more than 4,000  employees  organized  into
         locally based,  customer-focused groups that provide prompt service and
         support  to our  customers  and  distributors  in  virtually  all major
         markets  around the  world.  The local  focus of our sales and  service
         organization  enables us to provide timely,  responsive  support to our
         customers worldwide and provides feedback for manufacturing and product
         development.  When we survey our current  and  potential  customers  on
         their needs, they often name service as the most important criteria for
         choosing their instrument suppliers. In addition, we believe there is a
         trend in may of our customer segments to outsource service  activities,
         which provides us a growth opportunity for the future.

o        Largest  Installed Base. We believe that we have the largest  installed
         base of weighing instruments in the world. From this installed base, we
         obtain  service  contracts  that  provide  a strong,  stable  source of
         recurring service revenue.  Service revenue  represented  approximately
         18% of net  sales in  2000,  of which  approximately  half was  derived
         solely from service  contracts and repairs with the  remainder  derived
         from the sale of spare  parts.  We believe that our  installed  base of
         instruments  represents a competitive  advantage with respect to repeat
         purchases  and  purchases  of  other  instruments  we  offer,   because
         customers  tend to remain with their existing  suppliers.  In addition,
         switching to a new instrument  supplier entails additional costs to the
         customer for  training,  spare parts,  service and systems  integration
         requirements.  Close  relationships and frequent contact with our broad
         customer  base also  provide us with sales  leads and new  product  and
         application ideas.

o        Geographical, Product and Customer Diversification. Our revenue base is
         diversified  by geographic  region,  product  range and customer.  Many
         different industries, including pharmaceuticals,  food processing, food
         retailing and  chemicals,  cosmetics  and  logistics  utilize our broad
         product  range.  We supply  customers  all over the  world,  and no one
         customer  accounted for more than 3% of net sales in 2000.  Our diverse
         revenue  base  reduces our  exposure  to regional or  industry-specific
         economic  conditions,  and our  presence in many  different  geographic
         markets,  product markets and industries enhances our attractiveness as
         a supplier to  multinational  customers.  In 2000,  our sales were $1.1
         billion.  Of this total 44% came from Europe,  44% from North and South
         America  and  12%  from  Asia  and  other  countries.   For  additional
         information  regarding  our  segment  disclosure,  see  Note  15 to our
         audited consolidated financial statements.

                                       3



Growth Strategies

         We believe  that our  growth  opportunities  arise  from our  solutions
approach to the principal challenges facing our customer base. These include the
need for increased  efficiency  (for example,  in  accelerating  time to market,
achieving  better  yields,  improving work  processes and  outsourcing  non-core
activities),  the desire to integrate  information  captured by instruments into
management  information  systems, the drive for ever higher quality products and
services,  including  the need to adhere to  stringent  regulatory  and industry
standards, and the move towards globalization in all major customer groups.

         We continue to execute the business  strategies that we outlined at the
time  of our  buy-out  in  1996,  which  are  described  below.  The  successful
implementation  of these  strategies has allowed us to achieve a compound annual
sales  growth rate in local  currencies  of 11% since  1996,  and to improve our
Adjusted  Operating  Income  (gross  profit less  research and  development  and
selling,   general  and   administrative   expenses  before   amortization   and
non-recurring  costs) from $57.8  million (6.8% of net sales) for 1996 to $142.8
million (13.0% of net sales) for 2000.  Earnings per share  increased from $0.14
in 1996 (pro forma for our buy-out) to $1.70 in 2000 before non-recurring items.
In addition,  our ratio of net debt to EBITDA  decreased from 4.6 in 1996 to 1.6
in 2000 and our  interest  coverage  increased  from 2.3 to 8.4  during the same
period.

         Our key growth strategies are as follows:

         Expanding Our Technology Leadership. We attribute a significant portion
of our recent margin  improvement to our research and  development  efforts.  We
intend  to  continue  to  invest  in  product  innovation  in order  to  provide
technologically  advanced  products  to  our  customers  for  existing  and  new
applications.  Over the last three years,  we have invested  approximately  $160
million in research and development.  Our research and development  efforts fall
into two categories:

         o    technology advancements, which increase the value of our products.
              These  may  be  in  the  form  of  enhanced   functionality,   new
              applications  for our  technologies,  more  accurate  or  reliable
              measurement,  additional software capability or automation through
              robotics or other means

         o    cost reductions, which reduce the manufacturing cost of our
              products through better overall design

         Our research and development  efforts have contributed to a pipeline of
innovative and new products, significant reductions in product costs and reduced
time to market for our new products.  Examples of recent  product  introductions
include:

         o    our new AX line of analytical  balances,  which gives scientists a
              wealth of new capabilities through its embedded software, Internet
              connection for remote  monitoring and  downloadable  applications,
              and sensors that provide for single-handed operation,

         o    our Internet-enabled  industrial terminal,  JagXtreme, which gives
              production   managers  the  ability  to  perform   monitoring  and
              diagnostics  off-site,  including  predicting  equipment  problems
              before they disrupt manufacturing processes and

                                       4


         o    MultiMax, our high-throughput lab reactor, which combines multiple
              vessels with robotic and FTIR technologies that enable chemists to
              reduce  process  development  time by running  real-time  chemical
              analysis.

         Increasing  our  Market  Share and  Capitalizing  on  Opportunities  in
Developed  Markets.  We recognize that to be a successful  company,  we must not
only  develop  excellent  solutions,  but we must  market  and  distribute  them
effectively--more  effectively than our competitors. We view the key elements of
our sales and service strategy as follows:

         o    We utilize what we believe are the  most  sophisticated  marketing
              and sales techniques in our industry. These techniques include the
              development  and  utilization of marketing  databases.  We develop
              these  databases to better  understand  the full  potential of our
              market by customer,  location,  industry,  instrument  and related
              application.  We then utilize this data to more efficiently direct
              our field  resources  and  complement  our direct and  distributor
              sales forces with targeted mailing and telemarketing  campaigns to
              more fully exploit our market's potential. The transparency of the
              marketplace  created  through  these  databases  allows us to more
              effectively identify penetration opportunities among customers and
              non-customers.

         o    With  our  developing   E-commerce project,  we  plan  to create a
              configurable  Internet portal which will allow customers,  channel
              partners and suppliers to customize the  information  presented to
              them and to interact with us in the way they choose. Over time, we
              will  develop a knowledge  base which will allow us to gain deeper
              insight  into our  customers'  patterns  of  behavior  and give us
              better market  transparency.  From this, we will be able to refine
              our marketing  efforts,  gain quicker market  penetration with new
              products and services,  and also  ultimately  reduce our marketing
              costs.

         o    Our service  capabilities  stretch   across the  globe and include
              around-the-clock  availability of well-trained technicians,  which
              is  highly  valued  by our  customers.  We  believe  that no other
              competitor has our capabilities and that our service  capabilities
              are a critical  success factor for us. Customers are continuing to
              outsource  non-core  activities,  such as  service.  In almost all
              cases, we can provide  higher-quality  service at lower costs than
              the customer can.  Therefore,  it is important  that our customers
              have  the  right  partner  in  these  outsourcing   efforts.   Our
              value-added   services   encompass    maintenance,    calibration,
              traceability of weights, certification, asset management, software
              upgrades, data integration and training.

         o    We also utilize a dual brand strategy for certain market  segments
              to improve our overall market  penetration.  For example,  we sell
              balances  under  the Ohaus  brand  name as an  alternative  to the
              Mettler-Toledo brand name in certain distribution  channels,  such
              as the education market.

         Capitalizing  on  Opportunities  in Emerging  Markets.  We believe that
emerging  markets will continue to provide  growth  opportunities  for us. These
growth  opportunities  are being driven  primarily by economic  development  and
multinationals' use of additional and more sophisticated  precision  instruments
as they shift production to emerging markets. In addition,  we believe that over
the long term, the trend toward  international  quality  standards,  the need to
upgrade mechanical scales to electronic  versions and the establishment of local
production  facilities  by  our  multinational  client  base  will  add  to  the
opportunities in emerging markets.

                                       5



         To date our emerging market expansion has primarily focused on Asia. In
Asia  (excluding  Japan),  we are  the  market  leader  in  laboratory  weighing
instruments and have a substantial  industrial and food retailing  business that
has gained market share in recent years.  For instance,  we have two  profitable
operations in China: a facility that  manufactures and sells industrial and food
retailing  products and a facility that manufactures and distributes  laboratory
products.  We also have direct marketing  organizations in Taiwan,  Korea,  Hong
Kong, Singapore,  India, Thailand,  Malaysia and Eastern Europe. Beyond Asia, we
are also  expanding  our sales and service  presence in Latin  America and other
emerging markets.

         We want to continue  leveraging our Chinese  manufacturing and R&D as a
platform for low-end  products,  which are necessary to increase our penetration
of  emerging  markets.  At the same time,  we are  supplying  these  products to
complementary  channels in North  America and Europe.  We are also  transferring
production  of many of our low-end  products  from  Europe and North  America to
China - the most recent example being our Ohaus electronic  laboratory  balances
and our shipping scales.

         China is itself a great market for us. China is striving to meet global
quality standards so it can be a significant  exporter.  An increasing number of
multinationals  are investing in China.  Also, the local market is continuing to
switch over from mechanical to electronic  weighing.  For these reasons,  we are
working to win a larger share of the market. We developed and launched a host of
new products in China in the past two years and our  objective is to continue to
gain momentum.

         Pursuing  Selected  Acquisition  Opportunities.   Acquisitions  are  an
integral  part of our  growth  strategy.  We  believe  that  we have a  powerful
acquisition platform in the instrument industry.  Our acquisitions  leverage our
global  sales and  service  network,  respected  brand,  extensive  distribution
channels  and   technological   leadership.   We  are   interested  in  pursuing
acquisitions  which have strong  strategic  fit - for  example,  companies  with
complementary  products  that  will  benefit  from our  brand  name  and  global
distribution  channels, and companies with solutions we can combine with our own
technologies to create overall better solutions for our customers.  In addition,
our acquisitions  should anchor more of our business in faster-growing  markets.
We are particularly attracted to the following end markets:

         o    Drug Discovery. The impact of scientific  developments,  including
              the  human  genome   project,   is   fundamentally   changing  the
              pharmaceutical  industry  and its need for  automation.  In recent
              years,  we have  acquired a variety of  companies  in the field of
              drug discovery, including ASI, Bohdan, Myriad and Berger. We offer
              these  companies the  infrastructure  to expand  globally and take
              advantage of the  Mettler-Toledo  brand name.  We now offer one of
              the  industry's  broadest  range of automation  solutions for drug
              discovery and research.

         o    Process Analytics.  Our pharmaceutical  and biotech customers need
              to comply with  increasing  quality  standards.  At the same time,
              they are seeking  in-line  control  instruments  to improve  their
              yields. In December 2000 we announced the acquisition of Thornton.
              Thornton  is the leader in pure and  ultra-pure  industrial  water
              monitoring     instrumentation     used     in     semi-conductor,
              micro-electronics,  pharmaceutical  and biotech  applications.  We
              believe the acquisition of Thornton is an excellent strategic move
              to expand our process analytics  business,  and gain access to new
              markets. Their  conductivity  technology and know-how are

                                       6



              complementary to our strength in pH and oxygen measurements.  With
              a broader technology offering, we will be better able to serve our
              expanded customer base.

         o    Food  and  Drug  Packaging.    Increasing   safety   and  consumer
              protection  requirements  are  driving  the need for more and more
              sophisticated  end-of-line  inspection systems. We are the world's
              leading provider of metal detectors and checkweighers, which, when
              combined with our application-specific  software packages, provide
              food and drug packaging lines an integrated  solution to check the
              quality and quantity of their packages.  In 2000, we acquired AVS,
              which  allowed  us to add  x-ray-based  vision  technology  to our
              offering.  X-ray-based vision inspection is effective in detecting
              non-metallic  contamination  in packages and where metal packaging
              prevents detection by conventional means.

         o    Transportation and Logistics. The effects  of  globalization,  the
              move to just-in-time processes, and e-commerce are all causing our
              customers to invest in our weighing  and  dimensioning  solutions.
              Our customers are the major express carriers,  freight forwarders,
              third-party  logistic  entities and warehousing  and  distribution
              companies.  We are  currently  the leading  supplier of  automatic
              identification   and  data  capture  solutions  which  incorporate
              weighing and dimensioning  technology to optimize the shipment and
              tracking of packages  worldwide.  In 2000,  we  announced  that we
              would acquire full ownership of our Cargoscan  joint venture,  the
              premier  provider of  dimensioning  technology.  This  transaction
              underscores  our  commitment to the  transportation  and logistics
              sector   and   will   allow   us  the   flexibility   and   faster
              decision-making  necessary  to exploit the  substantial  growth of
              this market.

         These are not the only  opportunities  and end markets we are  focusing
on.  We  are  also  alert  for  opportunities  to  expand  our  solution  scope,
particularly by adding more  application-specific  software,  and to consolidate
fragmented markets or expand geographically.

         Re-engineering and Cost Savings.  We have improved our profitability in
recent years partly through a series of  initiatives  aimed at reducing our cost
structure.  We plan to undertake similar initiatives in the future with the goal
of further improving our operating margins. These initiatives include:

         o    Continuing  to  leverage  our Chinese  manufacturing  and R&D as a
              platform for low-end products, which are necessary to increase our
              penetration  of  emerging   markets.   We  are  also  transferring
              production  of many of our low-end  products from Europe and North
              America  to  China - the  most  recent  example  being  our  Ohaus
              electronic  laboratory  balances and our shipping  scales.  We now
              have over 600 employees in China,  including  approximately 75 R&D
              professionals.

         o    Our procurement initiative, launched in 1999, which is expected to
              bring  us  substantial  cost  savings.   Our  global   procurement
              initiative  aims to reduce our supplier  base to a select group of
              high-quality  suppliers from all parts of the world.  By doing so,
              we believe we can ensure  maximum cost  effectiveness  and improve
              the  quality of our product  and  processes.  We expect to improve
              operating margins through a more effective procurement effort over
              the coming years.

         o    Opportunities in our service business. We have approximately 2,000
              employees   worldwide   engaged  in   service,   which   generates
              approximately  18% of our annual  sales.  We believe our customers
              are looking far beyond  repair to  value-added

                                       7


              services that give them competitive advantages in the marketplace.
              Customers are also  increasingly  looking to outsource  processes,
              which provides us additional growth  opportunities.  By exploiting
              available  technology  and  best  practices,  we  believe  we  can
              increase  the  efficiency  of our service  business and expand our
              margins.

         o    We  are taking  advantage  of the  globalization  of our  customer
              base and the  harmonization of regulatory  standards  worldwide to
              standardize our product lines on a global basis and streamline our
              organizational  structure.  As much as possible, we will harmonize
              our product lines worldwide.  With global standardized  offerings,
              our sales and service  professionals  will require  less  frequent
              training  and  reduced  parts  inventory.  R&D  resources  will be
              re-deployed  for new  value-added  products,  allowing  us to gain
              incremental  growth.  In addition,  consolidated  operations  will
              produce  significant  savings and more  efficient  use of invested
              capital.

         We  believe  that  these  initiatives  and  others  will  place us in a
position to build on our recent  improvement in profitability.  Furthermore,  we
believe  that we can  leverage our  existing  infrastructure,  particularly  our
recent investments in Asia, to obtain continued sales growth without significant
additions to our overall cost base.

Instruments and Solutions

Laboratory Instruments and Solutions

         We manufacture  and market a broad range of instruments  for use in the
laboratory.  Our largest  product line is  laboratory  balances,  where we are a
clear global market leader. We estimate that  approximately 40% of our sales are
to customers using our instruments and services in laboratory environments.  Our
drug discovery group provides  customers with  integrated  solutions that enable
chemists  to increase  their  productivity  and  accelerate  the drug  discovery
process.  Drug discovery  products  include a variety of  synthesizers,  robotic
workstations,   automatic  lab  reactors,   purification  systems  and  reaction
calorimeters.  We also offer selected analytical instruments, such as titrators,
thermal analysis systems and other analytical instruments. Our process analytics
business provides  instruments for the in-line  measurement of liquid parameters
in the production process of pharmaceutical and biotech companies.

         We estimate  that we have  approximately  one half of the global market
for laboratory  balances.  Our drug  discovery  business is the global leader in
synthesis,  supercritical fluid chromatography, and reaction engineering. In the
analytical  instrument  field,  we are the global  number two in  titrators  and
number  three in  thermal  analysis,  and we are among  the top three  suppliers
worldwide of other analytical instruments. Our process analytics business is the
global leader in measuring liquid parameters for the  pharmaceutical and biotech
industries.

Laboratory Balances

         The balance is the most common piece of equipment in the laboratory. We
believe that we sell the highest  performance  laboratory  balances available on
the  market,  with  weighing  ranges from one  ten-millionth  of a gram up to 32
kilograms.  Our brand name is so well recognized  that  laboratory  balances are
often  generically  referred  to  as  "Mettlers."  The  Mettler-Toledo  name  is
identified worldwide with accuracy, reliability and innovation. In our judgment,
this reputation constitutes one of our principal competitive strengths.

                                       8



         In order to cover a wide range of customer  needs and price points,  we
market laboratory  balances in three principal product tiers offering  different
levels  of  functionality.  High-end  balances  provide  maximum  automation  of
calibration,  application support and additional  functions.  Mid-level balances
provide a more  limited  but  still  extensive  set of  automated  features  and
software  applications.  Basic level balances  provide  simple  operations and a
limited feature set. We also  manufacture  mass  comparators,  which are used by
weights and measures  regulators as well as  laboratories to ensure the accuracy
of reference weights. Due to the wide range of functions and features offered by
our products,  prices vary significantly.  A typical mid-range precision balance
is priced  at  approximately  $2,500  and a  typical  microbalance  is priced at
approximately $14,000.

         In addition to Mettler-Toledo branded products, we also manufacture and
sell balances  under the brand name  "Ohaus."  Ohaus  branded  products  include
mechanical balances and electronic balances for the educational market and other
markets in which  customers are  interested in lower cost, a more limited set of
features and less comprehensive support and service.

Drug Discovery

         Our pharmaceutical and biotechnology customers are all too aware of the
costs involved in drug research and development.  To take a drug from "the bench
to the bottle"  costs on average  $500 million and takes in the region of ten to
twelve  years.  The  mission  of our  drug  discovery  group is to  provide  our
customers  with  integrated  solutions  that enable  chemists to increase  their
productivity and accelerate the drug discovery  process.  The potential benefits
to our customers are enormous: each day that a pharmaceutical company is able to
accelerate the introduction of a blockbuster drug can translate into millions of
dollars of additional revenue.

         The number of drug targets and potential  lead  compounds has increased
significantly as a result of combinatorial chemistry techniques, high-throughput
screening  methods and the initial  findings of the human  genome  project.  The
increasing  number of targets and compounds  resulting  from these  developments
have created severe bottlenecks in the drug discovery  process.  We believe that
our portfolio of integrated  technologies can bring significant  efficiencies to
the drug discovery  process,  enabling our customers to create larger numbers of
higher quality candidate compounds.

         The drug R&D process essentially comprises six distinct phases:

         o    Target  identification
         o    Lead identification
         o    Lead optimization
         o    Preclinical development and product development
         o    Clinical development and process development
         o    Production

         Our current drug discovery  solution offering is focused on key aspects
of the lead identification, lead optimization, and process development phases of
the drug R&D process. Our overall value proposition is to speed up and integrate
these phases by offering  systems  which  perform the many tasks which a chemist
has to perform, in parallel and fully automated.

                                       9



         In the target  identification  phase,  researchers seek to identify the
genes  responsible  for disease states and  ultimately the proteins  produced by
these genes which become the target for a therapeutic drug.

         Lead  identification  is  the  process  of  producing  large,  diverse,
libraries  of tens of  thousands of  potential  drug  candidates  which are then
screened for possible biological activity against the target protein.

         Lead  optimization  is the process  used by  chemists  to evaluate  the
hundreds of drug candidates that may emerge from the lead identification  phase.
Chemists  perform  successive  rounds of chemical  synthesis to create  numerous
variants of the drug  candidates to find  compounds  likely to have  appropriate
drug  properties.  Chemists then  optimize the  compounds  for their  biological
potency, thus creating lead compounds.

         In pre-clinical  development and product development,  process research
chemists  investigate  practical  ways to produce  individual  lead compounds in
larger quantities.  Also, laboratory tests are performed to check the compound's
ability to pass into, and out of, the body without seriously toxic side-effects.

         Clinical  development  and process  development is the process in which
chemists test clinical  candidates  in animals and humans to  demonstrate  their
safety and as well as efficacy.  The successful  outcome of clinical  trials may
result in regulatory approval to commercialize the new drug product. During this
time period, process chemists optimize the method of compound synthesis prior to
commencement of large scale manufacturing of the drug.

         Production is the process of manufacturing bulk quantities of the final
drug. Both the production methodology and the analytical methods which check the
drug's composition are tightly regulated and monitored.

         Within our drug discovery group, the Chemistry  Systems team focuses on
lead identification and optimization,  and the Reaction Engineering team focuses
on process research and development.  The Chemistry  Systems business offers the
following  solutions to  combinatorial  and medicinal  chemists  working on lead
identification and optimization:


         o    the  Mini-Block manual  parallel  synthesizer,  which has become a
              standard tool among medicinal  chemists for chemistry  development
              and lead optimization

         o    the   Discoverer  automated   synthesizer,  capable  of  extremely
              sophisticated chemistry

         o    the Myriad Core System,  the  top-of the  range automated parallel
              synthesizer,  capable of  producing  hundreds of  thousands of new
              drug candidates per year

         o    automated  workstations   for   reagent   preparation,   weighing,
              labeling and dispensing to support the synthesis process

         o    the ALLEX automated liquid/liquid extraction  system  for cleaning
              up synthesis products, and

                                       10



         o    Berger's  supercritical fluid chromatographs,  which  are  capable
              of  purifying  synthesis  products  in a  fraction  of the time of
              conventional HPLC instruments.

         Our  Reaction  Engineering  business  offers  products to help speed up
process   research  and   development.   Automatic  lab  reactors  and  reaction
calorimeters   simulate  an  entire  chemical   manufacturing   process  in  the
laboratory.  Customers use the simulation test before  proceeding to production,
in order to test the safety and  feasibility of new processes.  Our products are
fully  computer-integrated,  with a significant  software component that we also
provide:

         o    the  Process  Development  Workstation,   which  has  16  separate
              reactors  and is used  for  process  screening  (finding  possible
              pathways to make the drug candidate economically and safely)

         o    the new Multimax and Labmax automated  laboratory  reactors,  with
              four and one  separately-controlled  reactors respectively,  which
              are used in  process  optimization  to find the  precise  reaction
              parameters to make larger quantities of the drug candidate

         o    the RC-1, which combines a laboratory reactor with calorimetry and
              is used to ensure the process  remains  economical as well as safe
              as the manufactured quantities are scaled up

         o    the React-IR 4000 in-situ  infrared  analyzer,  which  can be used
              with  the   laboratory   reactors  to  monitor  the  chemistry  in
              real-time, and

         o    React-IR  MP   and   Process-IR,    which  are  hardened  infrared
              analyzers used in scale-up applications and production.

         We continue to pursue  opportunities  that will enable us to extend our
drug discovery and  development  solutions by internal  research and development
and  by  acquiring   businesses   that  have   technologies   and   capabilities
complementary to ours. In particular, we recognize the importance of software as
an integral part of any solution offering.  Effective  integration of automation
instruments with data recording and analysis  software  represents an attractive
solution to our  customers.  We believe  that our drug  discovery  group is well
positioned  to  support  and grow  with  the  pharmaceutical  and  biotechnology
industries in their exciting challenge to discover and develop new drugs.

Analytical Instruments

         The research  and quality  control  labs of our  customers,  especially
those in the pharmaceutical,  chemical,  food and cosmetics industries,  use our
analytical  instruments to help them understand the properties of the liquid and
solid  compounds  used  in  their  products.  We  offer a  broad  range  of such
analytical  instruments,  taking advantage of our strong position in the balance
market.  We also offer a host of value-added  services to support our customers,
including calibration, validation and maintenance services.

         Titrators.  Titrators measure the chemical  composition of samples. Our
high-end   titrators   are   multi-tasking   models,   which  can   perform  two
determinations  simultaneously.  They permit high  sample  throughputs  and have
extensive  expansion  capability and flexibility in calculations,  functions and
parameters.  Most models,  including  those in the  lower-range,  permit

                                       11



common determinations to be stored in a database for frequent use. Titrators are
used heavily in the food and beverage industry.  A typical titrator is priced at
approximately $12,000.

         Thermal Analysis  Systems.  Thermal analysis systems measure  different
properties,  such as weight, dimension and energy flow, at varying temperatures.
Our  thermal  analysis   products  include  full  computer   integration  and  a
significant  amount of proprietary  software.  Thermal analysis systems are used
primarily in the plastics and polymer  industries.  A typical  thermal  analysis
system is priced at approximately $50,000.

         Other  Instruments.  We have  recently  introduced  single-channel  and
multi-channel  pipettes  which are used for liquid  handling in the  laboratory.
These devices are the most widely used  instruments in the rapidly  growing life
science market.  The pH meters we offer measure  acidity in laboratory  samples,
and are the second most widely used  measurement  instruments in the laboratory,
after the balance.  Data  collected  from our pH meters can be  downloaded  to a
computer or printer using an interface kit and custom software.  We sell density
and  refractometry   instruments,   which  measure  chemical  concentrations  in
solutions.  These instruments are sourced through a marketing joint venture with
a third-party manufacturer, but are sold under the Mettler-Toledo brand name. In
addition, we manufacture and sell moisture analyzers,  which precisely determine
the moisture  content of a sample by  utilizing  an infrared  dryer to evaporate
moisture.

Process Analytics

         Our process  analytics  business  provides  instruments for the in-line
measurement of liquid parameters in the production process of pharmaceutical and
biotech  companies.  In  the  ongoing  quest  to  improve  product  quality  and
production  efficiency,  manufacturers  are  adopting  sensor  technologies  for
in-line process control.  Our process analytics business is the leading supplier
of  pH  and   oxygen   measurement   instruments   used  in   bio-pharmaceutical
manufacturing,  and is well  positioned to accelerate its growth in this market.
With our  acquisition of Thornton,  we have expanded our technology  offering in
process analytics to include Thornton's  conductivity technology and know-how in
determining water purity.

         More than half of our process analytics sales are to the pharmaceutical
and biotech markets.  Our customers need fast and secure scale-up and production
that  meets  the  validation  processes  required  for GMP  (Good  Manufacturing
Processes)  and  other  regulatory  standards.  Our  in-line  process  analytics
solutions  help these  customers  ensure  reproducible  and  consistent  product
quality, while ensuring compliance within relevant regulatory standards.

Industrial Instruments and Solutions

         We offer industrial  measurement solutions to customers in a variety of
industries,  often  in the  same  end  markets  where  we  sell  our  laboratory
instruments.  Weighing  instruments are among the most broadly used  measurement
devices in  industry.  We estimate  that  approximately  40% of our sales are to
customers  using our  instruments  and services in industrial  environments.  We
believe that we have the largest market share in the  industrial  market in each
of Europe and the  United  States.  In Asia,  we have a  substantial  industrial
business  which has  gained  market  share in recent  years.  This  business  is
supported by an established  manufacturing presence in China. We believe that we
are the only company with a true global presence across industrial  weighing and
related applications.

                                       12


         In recent years, we have continued the  globalization of our industrial
businesses. This anticipates the continued emergence of a global marketplace, as
our  customers  set up  operations  worldwide  and  as  industry  standards  are
harmonized globally. We want to offer state-of-the-art  solutions and consistent
quality and service  levels around the globe.  It is this  powerful  combination
that  continues  to  attract  major  customers  who  have  standardized  on  our
instruments  at their  facilities  worldwide.  The  industrial  instruments  and
solutions that we offer are described in more detail below.

Industrial Weighing Solutions

         Industrial Scales and Balances.  We offer a complete line of industrial
scales and balances,  such as bench scales and floor scales,  for weighing loads
from a few grams to several  thousand  kilograms  in  applications  ranging from
measuring  materials in chemical  production to weighing mail and packages.  Our
product  lines  include  the Viper and  Spider  range of  scales,  often used in
receiving and shipping departments in counting  applications;  TrimWeigh scales,
which determine  whether an item falls within a specified  weight range, and are
used primarily in the food industry;  Mentor SC scales,  for counting parts; and
precision   scales  for   formulating  and  mixing   ingredients.   Prices  vary
significantly  with the size and functions of the scale,  generally ranging from
$1,000 to $20,000.

         Industrial  Terminals.  Our latest  industrial  scale  terminal  is the
JagXtreme, which is our fastest, most powerful scale terminal ever. It harnesses
the  power  and  flexibility  of the  internet  to help  integrate  and  control
information,  equipment management,  and automation in manufacturing  processes.
The JagXtreme terminal is two and a half times faster than our  industry-leading
Jaguar  terminal  - but it works  like a  Jaguar  terminal  so  there is  little
training  time  required.  It allows users to download  programs or access setup
data from across the plant - or across the globe.  The  JagXtreme  terminal  can
also  maximize up time by  dispatching  emails when the unit needs service - and
minimize  down time through  predictive  rather than reactive  maintenance.  The
JagXtreme terminal can serve up data across the web through an internet browser.
It also provides users with the tools to design their own user interface. Prices
for industrial  weighing terminals vary significantly  based on functionality of
the application, generally ranging from $500 to $10,000.

         Vehicle Scale Systems. Our primary heavy industrial products are scales
for  weighing  trucks or  railcars  (i.e.,  weighing  bulk goods as they enter a
factory  or at a  toll  station).  Our  vehicle  scales,  such  as  the  DigiTol
TRUCKMATE, generally have digital load cells, which offer significant advantages
in serviceability over analog load cells. Heavy industrial scales are capable of
measuring  weights up to 500 tons and permit  accurate  weighing  under  extreme
environmental  conditions.  We also offer advanced  computer  software,  such as
WinBridge,  that can be used with our heavy industrial  scales to permit a broad
range of  applications.  Our WinBridge  software  provides a complete system for
managing  vehicle  weighing  transactions.  Vehicle scale prices generally range
from $20,000 to $50,000.

         Application Software for Weighing. Our software for industrial weighing
applications are based on an open-system  architecture that enables  interaction
with  customers'  enterprise  software  packages.  For  example,  FreeWeigh is a
powerful  standard  software  package that covers the entire range of prepackage
and filling process  control.  FreeWeigh is distinguished by its large number of
standard  functions and by its high flexibility in meeting  customers'  specific
application  needs.  The modular  structure of the  software  allows for gradual
expansion  and great  flexibility  to meet often  rapid  changes  in  production
conditions. FormWeigh  is  our  formulation/batching solution used in chemistry,
pharmaceutical and food

                                       13


production  processes.  Using  FormWeigh,  weighing is made simple and reliable,
including  for a host of customized  configurations.  We also offer a variety of
solutions in the industrial  filling process to meet our customers'  statistical
process and quality  control  needs.  Our  "MultiRange"  products  also  include
standardized  software  which uses the weight data  obtained to calculate  other
parameters,  such as price or  number of  pieces.  The  modular  design of these
products  facilitates the integration of our weighing  equipment into a computer
system performing other functions, like inventory control or batch management.

Packaging

         Dynamic  Checkweighers.  We are the world's  leading  provider of metal
detectors,  checkweighers  and x-ray  visioning,  which,  when combined with our
application-specific software packages, provide food and drug packaging lines an
integrated  solution  to check the quality and  quantity of their  packages.  We
offer  solutions  to   checkweighing   requirements  in  the  food   processing,
pharmaceutical,  chemicals and cosmetic industries, where customers are required
to  accurately  measure  portions  for  packaging.  We also offer  checkweighing
solutions to the transportation and package delivery  industries,  where tariffs
are levied  based on weight.  Customizable  software  applications  utilize  the
information  generated  by  checkweighing  hardware  to find  production  flaws,
packaging  and  labeling  errors  and  nonuniform  products,  as well as to sort
rejects and record the  results.  Our  checkweighing  equipment  can  accurately
determine  weight in dynamic  applications  at speeds of up to  several  hundred
units per minute. Checkweighers generally range in price from $8,000 to $40,000.

         End-of-line  Inspection  Solutions.   Increasing  safety  and  consumer
protection  requirements  are driving  the need for more and more  sophisticated
end-of-line inspection systems. We are the leading global provider of integrated
end-of-line  inspection  solutions.  These high throughput solutions incorporate
sensor  technologies and software to assist  customers in fulfilling  validation
requirements  and in  improving  their  quality and yield.  For  example,  metal
detection  systems  control  the  removal of  products  that are  identified  as
contaminated by metal during the  manufacturing  process in the food processing,
pharmaceutical,  cosmetics,  chemicals  and other  industries.  Metal  detectors
therefore   provide   manufacturers   with  vital   protection   against   metal
contamination  arising  from  their  own  production  processes  or  from  using
contaminated  raw  materials.  Metal  detectors  are  most  commonly  used  with
checkweighers   as  components  of  integrated   packaging  lines  in  the  food
processing,  pharmaceutical  and other  industries.  Prices for metal  detection
systems generally range from $5,000 to $20,000.  Through our recent  acquisition
of AVS, we added x-ray-based vision  inspection,  which is ideal for identifying
non-metallic  contamination.   We  feel  that  AVS  is  an  excellent  strategic
complement  to our  existing  offering  of metal  detection,  checkweighing  and
related quality control software systems.

Transportation / Shipping and Logistics

         Companies  are  increasingly   conducting  business  across  geographic
boundaries,   and   transportation/logistics   suppliers  are   instrumental  in
supporting those efforts.  Speed is also critical, as evidenced by the growth in
e-commerce and just-in-time  methods.  Customers are seeking  solutions to speed
throughput, lower costs, increase revenue and ensure first-rate service to their
own customers.  We are addressing  those needs as the leading global supplier of
automatic  identification and data capture solutions,  which integrate in-motion
weighing,  dimensioning and identification  technologies.  With these solutions,
companies  such as FedEx can measure the weigh and cubic  volume of packages for
appropriate billing, logistics and quality control. Our solutions also integrate
into  information  systems that allow  customers to

                                       14



track  the  progress  of  packages   via  the  Internet.  Prices  for integrated
dimensioning/weighing systems range from $5,000 to $20,000.

         We believe our solutions  provide our customers  with greater  accuracy
and  higher  throughput  than  competitors'   products.   Based  on  a  thorough
understanding  of customer  processes,  we can match our solutions  precisely to
customer needs. Our global presence gives us the ability to provide  world-class
service in most major  locations  around the world.  What's more,  our technical
knowledge of local weights and measures regulations and our application know-how
result in effective installations and provides ongoing support for customers.

Food Retailing Instruments and Solutions

         We offer food retailing measurement solutions to customers in a variety
of  industries,  often  in the  same end  markets  where we sell our  industrial
solutions.  Weighing  instruments  are among the most broadly  used  measurement
devices in industry and food retailing.  We estimate that  approximately  20% of
our sales are to customers in food  retailing  environments.  We believe that we
have the largest market share in the food retailing market in each of Europe and
the United States. In Asia, we have a substantial food retailing  business which
has gained  market  share in recent  years.  This  business is  supported  by an
established  manufacturing  presence in China.  We believe  that we are the only
company with a true global presence across food retailing weighing applications.

Retail Weighing Solutions

         Retail   Scale   Systems  and   Prepackaging   Systems.   Supermarkets,
hypermarkets and other food retail  establishments make use of multiple weighing
applications for the full handling of perishable goods. For example,  perishable
goods are weighed on arrival to determine payment to suppliers and some of these
goods are repackaged,  priced and labeled for sale to customers. Other goods are
kept  loose and  selected  by  customers  and either  weighed at the  produce or
delicatessen counter or at the checkout counter. We offer stand-alone scales for
basic counter weighing and pricing, price finding, and printing. In addition, we
offer  network  scales and  software,  which can  integrate  backroom,  counter,
self-service and checkout  functions,  and can incorporate  weighing data into a
supermarket's overall perishable goods management system.

         Our OPRA retail scale, a key element of our perishable goods management
solution,  is the first  Internet-enabled  weighing  instrument in the industry.
OPRA enables  customers to remotely  manage  pricing,  run  promotions,  support
frequent-shopper  programs,  download  software,  manage inventory and more. Our
equipment can also accommodate required  dual-currency displays and, thorugh its
Internet  capabilities,  can  automatically  adjust for  conversion to the euro.
Backroom  products  include  dynamic  weighing  products,  labeling and wrapping
machines,  perishable  goods  management and data  processing  systems.  In some
countries in Europe, we also sell slicing and mincing equipment. Prices for food
retailing scales generally range from $500 to $5,000, but are often sold as part
of comprehensive weighing solutions.

                                       15


Customers and Distribution

         Our business is geographically diversified,  with sales in 2000 derived
44% from  Europe,  44% from North and South  America and 12% from Asia and other
countries.  Our customer base is also  diversified by industry and by individual
customer.  Our largest single customer accounted for no more than 3% of 2000 net
sales.

         Principal   customers  for  our  solutions  include  companies  in  the
following key end markets: the life science industry (pharmaceutical and biotech
companies,  as well as independent  research  organizations),  food  processors,
packagers  and  retailers,  specialty  chemicals and  cosmetics  companies,  the
transportation  and logistics  industry,  the metals  industry,  the electronics
industry and the academic market.

         Our  laboratory  products  are sold  through a  worldwide  distribution
network.  Our  extensive  direct  distribution  network  and our dealer  support
activities  enable us to  maintain  a  significant  degree of  control  over the
distribution of our products.  Mid to high-end products in the United States are
handled by our own sales force. We sell laboratory  products in Asia through our
own sales force and distributors,  and in Europe primarily through direct sales.
European and Asian distributors are generally fragmented on a country-by-country
basis.

         Ohaus  branded   laboratory   balances  are  generally   positioned  in
alternative  distribution channels to those of Mettler-Toledo  branded products.
This  means  that we can fill a greater  number  of  distribution  channels  and
increase penetration of our existing markets.  Since acquiring Ohaus in 1990, we
have  expanded  this brand  beyond its  historical  U.S.  focus.  Ohaus  branded
products are sold exclusively through distributors.

         In the industrial and food retailing  market,  we sell both directly to
customers  (including  OEMs) and  through  distributors.  In the United  States,
direct sales exceed distribution sales and in Europe,  direct sales predominate,
with  distributors  used in certain  cases.  We sell products in Asia  primarily
through  distributors,  except in China where we sell  products  through our own
sales force and distributors. Where we use distributors, we seek to provide them
with significant support.

         We  also  offer   customers  the  ability  to  shop  online  for  basic
instruments  with  global  appeal,  such  as  balances,   pipettes,  pH  meters,
electrodes, titrators and density meters. Launched in mid-1999,  www.MT-Shop.com
presents  customers  with unique  options,  including the ability to customize a
product down to a specific color or design motif. Users also can access the site
in multiple  languages.  Our virtual shop is aimed principally at small start-up
companies  and  individual  scientists - segments of the market that  previously
were difficult to reach cost-effectively. The site is expected to increase brand
awareness and market penetration with these new target groups.

Sales and Service

Market Organizations

         We have a host of geographically  focused market organizations  ("MOs")
around the world that are  responsible for all aspects of our sales and service.
The MOs are local marketing and service organizations designed to maintain close
relationships  with our customer base.  Each MO has the flexibility to adapt its
marketing  and service  efforts to account for  different  cultural and economic
conditions.  MOs also work closely with our producing  organizations  (described

                                       16



below)  by  providing   feedback  on  manufacturing   and  product   development
initiatives and relaying innovative product and application ideas.

         We have the only global sales and service  organization  among weighing
instruments  manufacturers.  At December 31, 2000,  our sales and services group
consisted of more than 4,000 employees in sales,  marketing and customer service
(including related administration) and after-sales technical service. This field
organization  has the capability to provide service and support to our customers
and distributors in virtually all major markets across the globe.

         Sales managers and  representatives  interact  across product lines and
markets in order to serve customers that have a wide range of instrument  needs,
such as  pharmaceutical  companies that purchase both  laboratory and industrial
products.  We classify customers  according to their potential for sales and the
appropriate  distribution  channel  is  selected  to  service  the  customer  as
efficiently  as  possible.   Larger   accounts  tend  to  have  dedicated  sales
representatives.   Other  representatives  specialize  by  product  line.  Sales
representatives  call  directly on end-users  either alone or, in regions  where
sales are made through distributors, jointly with distributors.

         We utilize a variety of advertising  media,  including  trade journals,
catalogs,  exhibitions and trade shows. In addition,  we also sponsor  seminars,
product  demonstrations and customer training programs. We utilize sophisticated
marketing  techniques  in  our  sales  efforts.  These  techniques  include  the
development and utilization of marketing  databases.  We develop these databases
to better  understand  the full  potential of our market by customer,  location,
industry, instruments and related application. We then utilize this data to more
efficiently direct our field resources and complement our direct and distributor
sales forces with  targeted  mailing and  telemarketing  campaigns to more fully
exploit our market's potential.

         We also utilize a dual brand  strategy for certain  market  segments to
improve our overall market penetration. For example, we sell laboratory balances
under the Ohaus brand name as an alternative to the Mettler-Toledo brand name in
certain distribution channels.

         We use the Mettler-Toledo Web site, www.mt.com,  to provide current and
prospective  customers and other audiences with the  information  they need in a
convenient manner. With several thousand pages of information,  our Web site has
become  a  principal  source  of  answers  for  customers'   questions  on  many
laboratory, industrial and food retailing processes.

         In addition,  we use the information  gained through visits to our site
to make our marketing  messages  even more relevant to customers.  This includes
employing one-to-one marketing techniques.

                                       17



Service

         We believe service  capabilities  are a critical  success factor in our
business. Through our own dedicated service technicians, we provide contract and
repair  services in all  countries in which our  products are sold.  We estimate
that we have the largest  installed  base of weighing  instruments in the world,
and our contract and repair services  generate  significant  revenues.  In 2000,
service  (representing   service  contracts,   repairs  and  replacement  parts)
accounted  for  approximately  18% of our total net sales  (service  revenue  is
included in the laboratory and industrial and food retailing  sales  percentages
given above). Approximately half of this amount is derived from spare parts with
the  remaining   portion   derived  from  service   contacts.   Beyond   revenue
opportunities,  service  is a  key  part  of  our  product  offering  and  helps
significantly in generating  repeat sales. The close  relationships and frequent
contact with our large  customer base provides us with sales  opportunities  and
innovative  product and  application  ideas. A global service network also is an
important  factor in our ability to expand in emerging  markets.  Moreover,  the
widespread  adoption of quality  laboratory and manufacturing  standards and the
privatization of weights and measures  certification  represent favorable trends
for  our  service  business,  as  they  tend  to  increase  demand  for  on-site
calibration services.

         Our  service  contracts  provide  for repair  services  within  various
guaranteed  response  times,  depending on the level of service  selected.  Many
contracts also include periodic calibration and testing. Contracts are generally
one year in length,  but may be longer.  If the service  contract  also includes
products of other manufacturers, we will generally perform calibration,  testing
and basic repairs  directly,  and contract out more significant  repair work. As
application  software  becomes more complex,  our service  efforts  increasingly
include installation and customer training programs as well as product service.

Research and Development; Manufacturing

Producing Organizations

         Our  product  development,   research  and  manufacturing  efforts  are
organized  into a number of  producing  organizations  ("POs").  POs are product
development  teams  comprised  of  personnel  from our  marketing,  development,
research, manufacturing,  engineering and purchasing departments. POs often seek
customer  input to ensure that the  products  developed  are  tailored to market
needs.  We have organized our POs to reduce product  development  time,  improve
customer focus, reduce costs and maintain technological leadership. The POs work
together to share ideas and best  practices,  and some employees are in both MOs
and POs.  We recently  implemented  a number of  projects  that we believe  will
further increase  productivity and lower costs. For example, we restructured the
order and product delivery process in Europe to enable us to deliver many of our
products  to our  customers  directly  from the  manufacturing  facility  within
several  days,  which  minimizes  the need to store  products  in  decentralized
warehouses.  In addition, we have centralized our European spare parts inventory
management  system  allowing all spare parts for Europe to be  delivered  from a
single, highly automated location.

                                       18



Research and Development

         We attribute a significant  portion of our recent margin improvement to
our research and development efforts. We intend to continue to invest in product
innovation  in  order  to  provide  technologically  advanced  products  to  our
customers for existing and new applications.  Over the last three years, we have
invested more than $160 million in research and  development.  In 2000, we spent
approximately  5.1% of net sales on research and  development  (including  costs
associated with  customer-specific  engineering projects,  which are included in
cost of sales for financial  reporting  purposes).  Our research and development
efforts fall into two categories:

         o    technology advancements, which increase the value of our products.
              These  may  be  in  the  form  of  enhanced   functionality,   new
              applications  for our  technologies,  more  accurate  or  reliable
              measurement,  additional software capability or automation through
              robotics or other means

         o    cost  reductions,  which  reduce  the  manufacturing  cost  of our
              products through better overall design

         We  have  devoted  an   increasing   proportion  of  our  research  and
development budget to software  development.  Software  development for weighing
applications  includes  application-specific   software,  as  well  as  software
utilized in sensor mechanisms,  displays and other common components,  which can
be leveraged across our broad product lines.

         We  closely   integrate   research  and  development   with  marketing,
manufacturing  and  product  engineering.  We have  over  700  professionals  in
research and  development and product  engineering.  As part of our research and
development  activities,  we have  frequent  contact  with  university  experts,
industry professionals and the governmental agencies responsible for weights and
measures,  analytical instruments and metal detectors. In addition, our in-house
development is complemented by technology and product development alliances with
customers and original equipment manufacturers.

Manufacturing

         We manufacture  some of our own  components,  usually  components  that
contain  proprietary  technology.  However,  when outside  manufacturing is more
efficient,  we contract with others for certain components and in turn use these
components in our own manufacturing  processes. We use a wide range of suppliers
and we believe our supply arrangements to be adequate. From time to time we rely
on a single supplier for all of our requirements of a particular component. Even
then, adequate alternative sources are generally available if necessary.  Supply
arrangements  for  electronics  are  generally  made  globally.  For  mechanical
components, we generally use local sources to optimize materials flow.

         We strive to emphasize product quality in our manufacturing operations,
and  most  of  our   products   require   very  strict   tolerances   and  exact
specifications.  We use an extensive  quality  control system that is integrated
into each step of the  manufacturing  process.  This  integration  permits field
service  technicians to trace important  information  about the manufacture of a
particular unit, which facilitates repair efforts and permits fine-tuning of the
manufacturing  process.  Many of our measuring  instruments  are subjected to an
extensive   calibration  process  that  allows  the  software  in  the  unit  to
automatically adjust for the impact of temperature and humidity.

                                       19


         We are a  worldwide  manufacturer,  with  manufacturing  plants  in the
United  States,  Switzerland,  Germany,  the United  Kingdom,  France and China.
Laboratory products are produced mainly in Switzerland and to a lesser extent in
the United States and China,  while  industrial and food retailing  products are
produced worldwide.  Most of our manufacturing facilities have achieved ISO 9001
certification.  We believe that our manufacturing capacity is sufficient to meet
our present and currently anticipated needs.

Backlog

         Manufacturing  turnaround time is generally sufficiently short so as to
permit us to manufacture to fill orders for most of our products, which helps to
limit inventory  costs.  Backlog is therefore  generally a function of requested
customer delivery dates and is typically no longer than one to two months.

Employees

         As  of  December  31,  2000,  we  had  approximately   8,250  employees
throughout the world,  including  approximately 4,500 in Europe,  2,750 in North
and South  America,  and  1,000 in Asia and  other  countries.  We  believe  our
employee relations are good, and we have not suffered any material employee work
stoppage or strike  during the last five years.  Labor unions do not represent a
meaningful number of our employees.

         In certain of our facilities, we have a flexible workforce environment,
in which hours vary depending on the workload. This flexible working environment
enhances employees' involvement,  thus increasing productivity. It also improves
efficient  payroll  management  by  permitting  us to adjust  staffing  to match
workload to a greater degree without changing the size of the overall workforce.

Intellectual Property

         We hold more than 1,100 patents and trademarks, primarily in the United
States,  Switzerland,  Germany, the United Kingdom, France, Japan and China. Our
products generally incorporate a wide variety of technological innovations, some
of which  are  protected  by  patents  and some of which are not.  Products  are
generally not protected as a whole by individual  patents,  and as a result,  no
one patent or group of related  patents is  material  to our  business.  We have
numerous  trademarks,  including  the  Mettler-Toledo  name and logo,  which are
material to our  business.  We regularly  protect  against  infringement  of our
intellectual property.

Regulation

         Our products are subject to various regulatory  standards and approvals
by weights  and  measures  regulatory  authorities.  Although  there are a large
number of regulatory  agencies across our markets,  there is an increasing trend
toward  harmonization  of  standards,  and weights and  measures  regulation  is
harmonized  across the European  Union.  Our food  processing and food retailing
products  are subject to  regulation  and  approvals  by  relevant  governmental
agencies, such as the United States Food and Drug Administration.  Products used
in hazardous  environments may also be subject to special  requirements.  All of
our electrical components are subject to electrical safety standards. We believe
that we are in compliance in all material respects with applicable regulations.

                                       20



Environmental Matters

         We are subject to a variety of  environmental  laws and  regulations in
the  jurisdictions  in which we operate,  including  provisions  relating to air
emissions,  wastewater  discharges,  the  handling  and  disposal  of solid  and
hazardous  wastes and the remediation of  contamination  associated with the use
and disposal of hazardous  substances.  We wholly or partly own, lease or hold a
direct or indirect equity  interest in a number of properties and  manufacturing
facilities  around  the  world,  including  North  and  South  America,  Europe,
Australia and China.  Like many of our competitors,  we have incurred,  and will
continue  to incur,  capital  and  operating  expenditures  and  other  costs in
complying with such laws and regulations in both the United States and abroad.

         We are currently involved in, or have potential  liability with respect
to, the remediation of past  contamination  in certain of our facilities in both
the United  States and abroad.  In  addition,  certain of our present and former
facilities  have or had been in operation  for many decades and, over such time,
some of these  facilities may have used  substances or generated and disposed of
wastes which are or may be considered hazardous. It is possible that such sites,
as well as disposal  sites owned by third  parties to which we have sent wastes,
may in  the  future  be  identified  and  become  the  subject  of  remediation.
Accordingly,  although we believe  that we are in  substantial  compliance  with
applicable environmental  requirements and to date we have not incurred material
expenditures in connection with  environmental  matters,  it is possible that we
could become subject to additional environmental  liabilities in the future that
could result in a material adverse effect on our financial  condition or results
of operations.

         We, or in some cases the former owner of Toledo Scale,  have been named
a potentially  responsible party under CERCLA or analogous state statutes at the
following  third-party  owned sites with respect to the alleged  disposal at the
sites by Toledo Scale during the period before we owned it:  Granville  Solvents
Site,  Granville,  Ohio;  Aqua-Tech  Environmental,   Inc.  Site,  Greer,  South
Carolina;  and  Seaboard  Chemical  Company  Site,  Jamestown,  North  Carolina.
Pursuant to the terms of the stock purchase  agreement between us and the former
owner of Toledo Scale, the former owner is obligated to indemnify us for various
environmental liabilities. To date, with respect to each of the foregoing sites,
the former owner has undertaken the defense and indemnification of Toledo Scale.
Based on currently  available  information and given our  contractual  rights of
indemnification, we believe that the costs associated with the investigation and
remediation  of these  sites  will not have a  material  adverse  effect  on our
financial condition or results of operations.

Competition

         Our markets are highly competitive.  Furthermore,  weighing instruments
markets are fragmented both geographically and by application,  particularly the
industrial and food retailing weighing  instruments market. As a result, we face
numerous regional or specialized competitors, many of which are well established
in their markets.  In addition,  some of our competitors are divisions of larger
companies with potentially  greater  financial and other resources than our own.
Taken  together,  the  competitive  forces present in our markets can impair our
operating margins in certain product lines and geographic markets.

         We expect  our  competitors  to  continue  to  improve  the  design and
performance  of their  products and to introduce new products  with  competitive
prices.  Although  we  believe  that we have  certain  technological  and  other
advantages  over our  competitors,  we may not be able to realize  and  maintain
these  advantages.  In any event,  to remain  competitive,  we must  continue to

                                       21



invest in research and development, sales and marketing and customer service and
support. We cannot be sure that we will have sufficient resources to continue to
make these investments or that we will be successful in identifying,  developing
and maintaining any competitive advantages.

         We believe that the principal  competitive  factors in our U.S. markets
for purchasing  decisions are accuracy and durability,  while in Europe accuracy
and service are the most important factors. In emerging markets,  where there is
greater demand for less sophisticated products, price is a more important factor
than in developed markets. Competition in the United States laboratory market is
also  influenced  by the presence of large  distributors  that sell not only our
products but those of our competitors as well.

History

         Mettler-Toledo  International  Inc.  was  incorporated  as  a  Delaware
Corporation  in  December  1991 and was  recapitalized  in  connection  with the
October 15, 1996  acquisition  of the  Mettler-Toledo  group of  companies  from
Ciba-Geigy. In the acquisition,  we paid cash consideration of approximately SFr
505.0 million  (approximately  $402.0  million at October 15,  1996),  including
dividends of  approximately  SFr 109.4 million  (approximately  $87.1 million at
October 15, 1996),  paid  approximately  $185.0 million to settle amounts due to
Ciba-Geigy  and its  affiliates  and incurred  expenses in  connection  with the
acquisition and related  financing of approximately  $29.0 million.  We financed
the acquisition  primarily with (i) borrowings  under a credit  agreement in the
amount  of  $307.0  million,  (ii) the  issuance  of  $135.0  million  of senior
subordinated notes and (iii) an equity  contribution of $190.0 million primarily
from AEA Investors Inc., its  shareholder-investors  and our executive  officers
and other employees.  Following the completion of our initial public offering in
November 1997,  management,  employees and Company  sponsored benefit funds held
approximately 18% of the Company's shares on a fully diluted basis.

         In May 1997,  we  acquired  Safeline  Limited for  (pound)63.7  million
(approximately  $104.4 million at May 30, 1997). Safeline is the world's largest
manufacturer and marketer of metal detection  systems for companies that produce
and package goods in the food processing,  pharmaceutical,  cosmetics, chemicals
and other industries.

         In November 1997, we completed our initial public offering of 7,666,667
shares of common stock at a per share price of $14.00.  The offering  raised net
proceeds of  approximately  $97.3 million.  Concurrently  with the offering,  we
refinanced our prior credit  facility and used proceeds from the refinancing and
the  offering  to  repay  the  senior  subordinated  notes of our  wholly  owned
subsidiary, Mettler-Toledo, Inc.

         In 1998 and 1999,  certain  selling  shareholders  completed  secondary
offerings of 11,464,400 and 6,099,250 shares of our common stock,  respectively.
Neither we nor any of our directors,  executive officers or other employees sold
shares or received any proceeds from these offerings.

                                       22


ITEM 2.       PROPERTIES

         The  following  table  lists our  principal  manufacturing  facilities,
indicating  the  location  and  whether  the  facility  is owned or leased.  Our
Greifensee,  Switzerland facility also serves as our worldwide  headquarters and
our Columbus,  Ohio,  facility  serves as our North  American  headquarters.  We
believe our facilities  are adequate for our current and reasonably  anticipated
future needs.

Location                                                Owned/Leased
Europe:

   Greifensee/Nanikon, Switzerland........                   Owned
   Uznach, Switzerland....................                   Owned
   Urdorf, Switzerland....................                   Owned
   Schwerzenbach, Switzerland.............                  Leased
   Albstadt, Germany......................                   Owned
   Giesen, Germany........................                   Owned
   Bethune, France........................                  Leased
   Manchester, England....................                  Leased
   Royston, England.......................                  Leased

Americas:
   Columbus, Ohio.........................                  Leased
   Worthington, Ohio......................                   Owned
   Spartanburg, South Carolina............                   Owned
   Ithaca, New York.......................                   Owned
   Woburn, Massachusetts..................                  Leased
   Millersville, Maryland.................                  Leased
   Tampa, Florida.........................                  Leased
   Vernon Hills, Illinois.................                  Leased

Other:
   Shanghai, China............................    Building Owned; Land Leased
   Changzhou, China...........................    Building Owned; Land Leased
   Mumbai, India..............................              Leased


                                       23


ITEM 3.       LEGAL PROCEEDINGS

         Routine litigation is incidental to our business.  Nevertheless, we are
not  currently  involved in any legal  proceeding  which we believe could have a
material  adverse effect upon our financial  condition or results of operations.
See  "Environmental  Matters"  under Part I, Item 1 for  information  concerning
legal proceedings relating to certain environmental claims.

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

                                       24



                                     PART II

ITEM 5.       MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
              MATTERS

MARKET INFORMATION FOR COMMON STOCK

         Our  common  stock is traded on the New York Stock  Exchange  under the
symbol "MTD".  The following  table sets forth on a per share basis the high and
low sales prices for consolidated trading in our common stock as reported on the
New York Stock Exchange Composite Tape for the quarters indicated.

                                               Common Stock
                                               Price Range
                                               -----------

                                    High                      Low
                                    ----                      ---
2000

    Fourth Quarter                 $56.00                    $39.50
    Third Quarter                  $48.81                    $37.75
    Second Quarter                 $45.75                    $30.00
    First Quarter                  $44.50                    $31.81

1999

    Fourth Quarter                 $39.50                    $27.63
    Third Quarter                  $30.44                    $23.81
    Second Quarter                 $29.00                    $22.63
    First Quarter                  $27.94                    $19.63


HOLDERS

           At March 16,  2001 there were 229 holders of record of  common  stock
and 39,681,536 shares of common stock outstanding.   The  number of  holders  of
record excludes beneficial owners of common stock held in street name.

DIVIDEND POLICY

         We have never  paid any  dividends  on our  common  stock and we do not
anticipate  paying any cash  dividends  on the common  stock in the  foreseeable
future.  The current  policy of our Board of Directors is to retain  earnings to
finance the  operations  and  expansion of our  business.  Moreover,  our credit
agreement  restricts our ability to pay dividends.  Any future  determination to
pay dividends  will depend on our results of  operations,  financial  condition,
capital requirements, contractual restrictions and other factors deemed relevant
by our Board of Directors.

                                       25



ITEM 6.       SELECTED FINANCIAL DATA

         The  selected  historical  financial  information  set  forth  below at
December 31, 2000,  1999,  1998, 1997 and 1996, for the years ended December 31,
2000,  1999, 1998 and 1997, for the period from October 15, 1996 to December 31,
1996 and for the period from January 1, 1996 to October 14, 1996 is derived from
our consolidated financial statements.  The financial information for the period
prior to October 15, 1996,  the date of our  acquisition  from  Ciba-Geigy  (the
"Acquisition"), is combined financial information of the Mettler-Toledo group of
companies (the  "Predecessor  Business").  The combined  historical  data of the
Predecessor Business and the consolidated historical data of the Company are not
comparable in many respects due to the Acquisition and the Safeline acquisition.
See "Management's  Discussion and Analysis of Financial Condition and Results of
Operations" and our consolidated  financial  statements and accompanying  notes.
The financial  information  presented below, in thousands except per share data,
was prepared in accordance with generally accepted accounting  principles in the
United States of America ("U.S. GAAP").



                                                                                                                        Predecessor
                                                                 Mettler-Toledo International Inc.                        Business
                                             ------------------------------------------------------------------------   -----------
                                                                                                         October 15     January 1
                                              Year ended     Year ended     Year ended     Year ended       to             to
                                             December 31,   December 31,   December 31,   December 31,   December 31,   October 14,
                                                2000           1999           1998           1997          1996           1996
                                             ------------   ------------   ------------   ------------   -----------   ------------
                                                                                                      
Statement of Operations Data:

  Net sales...............................    $1,095,547   $1,065,473       $935,658       $878,415      $ 186,912      $662,221
  Cost of sales...........................       600,185      585,007 (a)    520,190        493,480 (c)    136,820 (f)   395,239
                                                 -------      -------        -------        -------       --------       -------
  Gross profit............................       495,362      480,466        415,468        384,935         50,092       266,982
  Research and development................        56,334       57,393         48,977         47,551          9,805        40,244
  Selling, general and administrative.....       296,187      300,389        265,511        260,397         59,353       186,898
  Amortization............................        11,564       10,359          7,634          6,222          1,065         2,151
  Purchased research and development......             -            -          9,976 (b)     29,959 (d)    114,070 (g)         -
  Interest expense........................        20,034       21,980         22,638         35,924          8,738        13,868
  Other charges (income), net (h).........         2,638       10,468          1,197         10,834         17,137        (1,332)
                                                 -------      -------         ------         ------         ------        -------
  Earnings (loss) before taxes, minority
   interest and extraordinary items.......       108,605       79,877         59,535         (5,952)      (160,076)       25,153

  Provision for taxes.....................        38,510       31,398         20,999         17,489           (938)       10,055
  Minority interest.......................           (24)         378            911            468            (92)          637
                                                 --------     -------         ------         ------         -------      -------
  Earnings (loss) before
   extraordinary items....................        70,119       48,101         37,625        (23,909)      (159,046)       14,461
  Extraordinary items -
   debt extinguishments...................             -            -              -        (41,197) (e)         -             -
                                              ----------   ----------       --------       ---------     ----------     --------
  Net earnings (loss).....................    $   70,119   $   48,101       $ 37,625       $(65,106)     $(159,046)     $ 14,461
                                              ==========   ==========       ========       =========     ==========     ========

  Basic earnings (loss) per common share:

    Net earnings (loss) before
     extraordinary items..................       $  1.80      $  1.25        $  0.98       $ (0.76)      $ (5.18)
    Extraordinary items...................             -            -           -            (1.30)            -
                                                 -------      -------       --------       --------      --------
    Net earnings (loss)...................       $  1.80      $  1.25        $  0.98       $ (2.06)      $ (5.18)
                                                 =======      =======        =======       ========      ========

    Weighted average number
     of common shares.....................    38,897,879   38,518,084     38,357,079    31,617,071    30,686,065

  Diluted earnings (loss) per common share:

    Net earnings (loss) before
     extraordinary items..................       $  1.66      $  1.16        $  0.92       $ (0.76)      $ (5.18)
    Extraordinary items...................             -            -              -         (1.30)            -
                                                --------     --------       --------       --------      --------
    Net earnings (loss)...................       $  1.66      $  1.16        $  0.92       $ (2.06)      $ (5.18)
                                                 =======      =======        =======       ========      ========

    Weighted average number
     of common shares.....................    42,141,548   41,295,757     40,682,211    31,617,071    30,686,065

Balance Sheet Data (at end of period):

  Cash and cash equivalents...............      $ 21,725     $ 17,179       $ 21,191      $ 23,566      $ 60,696
  Working capital.........................       103,021       81,470         90,042        79,163       103,697
  Total assets............................       887,582      820,973        820,441       749,313       771,888
  Long-term debt..........................       237,807      249,721        340,246       340,334       373,758
  Other non-current liabilities (i).......        95,843      100,334        103,201        91,011        96,810
  Shareholders' equity.....................      178,840      112,015         53,835        25,399        12,426


                                                        (Footnotes on next page)

                                      26



(Footnotes from previous page)
- ------------------------------
(a)  In  connection  with  acquisitions in 1999,   including  the acquisition of
     the  Testut-Lutrana  group,  we  allocated  $998 of the  purchase  price to
     revalue  certain  inventories  (principally  work-in-progress  and finished
     goods)  to fair  value  (net  realizable  value).  Substantially  all  such
     inventories were sold during the second quarter of 1999.

(b)  In  connection  with the  Bohdan  acquisition,  we  allocated,  based  upon
     independent valuations,  $9,976 of the purchase price to purchased research
     and  development  in  process.  This  amount  was  recorded  as an  expense
     immediately following the Bohdan acquisition.

(c)  In connection  with the Safeline  acquisition,  we allocated  $2,054 of the
     purchase price to revalue certain inventories (principally work-in-progress
     and finished goods) to fair value (net realizable value). Substantially all
     such inventories were sold during the second quarter of 1997.

(d)  In  connection  with the Safeline  acquisition,  we  allocated,  based upon
     independent valuations, $29,959 of the purchase price to purchased research
     and  development  in  process.  This  amount  was  recorded  as an  expense
     immediately following the Safeline acquisition.

(e)  Represents  charges for the write-off of capitalized debt issuance fees and
     related expenses associated with our previous credit facilities. The amount
     also includes the prepayment premium on the senior subordinated notes which
     were repurchased and the write-off of the related capitalized debt issuance
     fees.

(f)  In connection with the  Acquisition,  we allocated  $32,194 of the purchase
     price to revalue  certain  inventories  (principally  work-in-progress  and
     finished goods) to fair value (net  realizable  value).  Substantially  all
     such  inventories  were sold during the period October 15, 1996 to December
     31, 1996.

(g)  In connection with the  Acquisition,  we allocated,  based upon independent
     valuations,  $114,070  of the  purchase  price to  purchased  research  and
     development in process.  This amount was recorded as an expense immediately
     following the Acquisition.

(h)  Other charges (income),  net generally  includes  interest income,  foreign
     currency transactions, (gains) losses from sales of assets and other items.
     The 2000 amount also includes a charge of $1,425  related to the close-down
     and  consolidation  of  operations.  The 1999 amount  includes a gain on an
     asset  sale of  approximately  $3,100,  a  charge  of  $8,007  to  transfer
     production  lines from the  Americas to China and Europe and the closure of
     facilities and losses of  approximately  $4,100 in connection with the exit
     from our glass  batching  business  based in  Belgium.  For the years ended
     December 31, 1999 and 1998,  the amount shown also  includes $825 and $650,
     respectively,   of  expenses   incurred   on  behalf  of  certain   selling
     shareholders in connection with the secondary offerings. For the year ended
     December 31,  1997,  the amount shown  includes a  restructuring  charge of
     $6,300 to consolidate three facilities in North America.

(i)  Consists  primarily of  obligations  under various  pension plans and plans
     that provide  postretirement  medical benefits.  See Note 11 to the audited
     consolidated financial statements included herein.

                                       27



ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATIONS

         The following  discussion  and analysis of our financial  condition and
results  of  operations   should  be  read  in  conjunction   with  our  audited
consolidated financial statements.

Overview

         We operate a global  business,  with net sales that are  diversified by
geographic  region,  product  range  and  customer.  We hold  leading  positions
worldwide  in many of our  markets  and  attribute  this  leadership  to several
factors,   including  the  strength  of  our  brand  name  and  reputation,  our
comprehensive  solution  offering,  the quality of our global  sales and service
network,  our  continued  investment  in  product  development,  our  pursuit of
technology  leadership  and  our  focus  on  capitalizing  on  opportunities  in
developed and emerging  markets.  While all of our businesses  have  significant
strategic   links  in  terms  of  technology   or  customer   base,  we  have  a
geographically diverse business which serves customers in relatively healthy and
stable end markets, including the pharmaceutical, biotech and food industries.

         Our financial  information  is  presented  in accordance with generally
accepted  accounting  principles  in the United States of America ("U.S. GAAP").

         Net sales in local currency increased 9% in 2000, 16% in 1999 and 8% in
1998. The  strengthening of the U.S. dollar versus our major trading  currencies
reduced  U.S.  dollar-reported  sales  growth  in each  year.  Net sales in U.S.
dollars  increased 3% in 2000, 14% in 1999 and 7% in 1998. In 2000, we had local
currency  sales growth of 11% in Europe,  6% in the Americas and 13% in Asia and
other markets.

         We  believe  our sales  growth  over the next  several  years will come
primarily  from our solutions  approach to the principal  challenges  facing our
customer base. These include the need for increased  efficiency (for example, in
accelerating time to market for new products, achieving better yields, improving
work processes and  outsourcing  non-core  activities),  the desire to integrate
information  captured by instruments into management  information  systems,  the
drive for ever higher quality of our customers' products and services, including
the need to adhere to stringent regulatory and industry standards,  and the move
towards globalization in all major customer groups.

         Acquisitions  are also an  integral  part of our growth  strategy.  Our
acquisitions  leverage our global sales and service  network,  respected  brand,
extensive   distribution   channels  and   technological   leadership.   We  are
particularly  attracted to  acquisitions  which  leverage  these  attributes  or
increase our solutions  capability  (for  example,  software  acquisitions).  In
addition,  we are most attracted to the following end markets:  drug  discovery,
process analytics, food and drug packaging and transportation and logistics.

         We increased our Adjusted  Operating Income (gross profit less research
and  development  and  selling,   general  and  administrative  expenses  before
amortization and non-recurring costs) as a percentage of net sales from 10.8% in
1998 to 13.0% in 2000. This improved performance was achieved while we continued
to invest in  product  development  and in our  distribution  and  manufacturing
infrastructure.  We believe  that a  significant  portion of the increase in our
Adjusted   Operating   Income  resulted  from  our  strategy  to  reduce  costs,
re-engineer our operations and focus on the highest value-added  segments of the
markets in which we compete.

                                       28



Recent Acquisitions

         In 2000, we acquired Berger Instruments, Thornton Inc. and AVS. We also
increased our shareholding in Cargoscan to 100%.

         Berger  Instruments,  based in Delaware,  USA, is the market  leader in
Supercritical Fluid Chromatography (SFC), a high-performance  technology used to
analyze and purify chemical compounds during drug discovery.  Berger Instruments
is an  excellent  complement  to  our  portfolio  of  automated  drug  discovery
solutions.  We  already  have a  leading  position  in  sample  preparation  and
synthesis.  Purification is the next process step after synthesis. Berger allows
us to further our strategy of providing  solutions  that  automate and integrate
the drug  discovery  process  and  therefore  help  our  customers  improve  the
efficiency, throughput and accuracy of their processes.

         Thornton Inc., based in  Massachusetts,  USA, is the leader in pure and
ultra-pure  industrial water monitoring  instrumentation used in semi-conductor,
micro-electronics,  pharmaceutical,  and  biotech  applications.  We believe the
acquisition  of Thornton is an  excellent  strategic  move to expand our process
analytics business and gain access to new markets. Their conductivity technology
and know-how are  complementary  to our strength in pH and oxygen  measurements.
With a broader technology offering, we will be better able to serve our expanded
customer base.

         AVS,  UK-based,  is a leader in x-ray  visioning  solutions used in the
inspection of packaged  goods.  We are the leading global provider of integrated
end-of-line  inspection  solutions.  These high throughput solutions incorporate
sensor  technologies and software to assist  customers in fulfilling  validation
requirements  and in  improving  their  quality and yield.  Through  AVS, we add
x-ray-based  vision  inspection,  which is ideal  for  identifying  non-metallic
contamination  in  packages  and where metal  packaging  prevents  detection  by
conventional means. We feel that AVS is an excellent strategic complement to our
existing offering of metal detection,  checkweighing and related quality control
software systems.

         Cargoscan is the premier  provider of  dimensioning  technology used by
major express carriers,  freight forwarders,  third-party  logistic entities and
distribution  companies.  We believe we are  uniquely  positioned  to serve this
industry  given  our  global  presence  and our  technical  knowledge  of  local
regulatory  requirements.  This  transaction  underscores  our commitment to the
transportation and logistics sector and will allow us the flexibility and faster
decision-making necessary to exploit the substantial growth of this market.

         In 1999, we acquired the Testut-Lutrana  group, a leading  manufacturer
and marketer of industrial and retail weighing instruments in France with annual
sales of approximately $50 million.  We believe this acquisition is an excellent
strategic  fit given  Testut-Lutrana's  extensive  sales and service  network in
France  and  excellent  brand  recognition.  By virtue of this  acquisition,  we
assumed  the leading  position  in food  retail  weighing in Europe and are well
positioned to meet the rapidly changing demands of our European customer base.

         In 1999,  we also signed an agreement to convert our 60% joint  venture
in Changzhou,  China, into a legal structure that provides us with full control.
Through this change in  ownership,  we are able to fully  leverage this low-cost
manufacturing  base  for  international   markets.  This  move  underscores  our
strategic  commitment to Asia and our belief in the  fundamental  growth factors
for the region.

                                       29


         In  1998,  we  acquired  three   technologically   advanced  instrument
companies in the drug discovery sector: Applied Systems,  Bohdan Automation Inc.
and Myriad.

         Applied  Systems  designs,   assembles  and  markets   instruments  for
in-process  molecular  analysis,   which  is  primarily  used  for  researching,
developing and  monitoring  chemical  processes.  Applied  Systems'  proprietary
sensors,  together with its innovative  Fourier transform  infrared  technology,
enable  chemists to analyze  chemical  reactions  as they  occur,  which is more
efficient than pulling samples.

         Bohdan is a leading  supplier of  laboratory  automation  and automated
synthesis  products to the automated drug and chemical compound discovery market
used in research for life science  applications.  Myriad designs,  assembles and
markets  instruments that facilitate and automate the synthesis of large numbers
of chemical compounds in parallel,  which is a key step in the chemical compound
discovery  process.  Its products can be used in all stages of synthesis in drug
discovery.

Cost Reduction Programs

         As part of our efforts to reduce  costs,  we evaluate from time to time
the cost  effectiveness  of our  global  manufacturing  strategy.  In  2000,  we
recorded a charge of $1.4 million related to the close-down and consolidation of
operations. Over the next few years, we also intend to continue to develop China
as a low-cost manufacturing resource and to seek other manufacturing cost-saving
opportunities.  In this  respect,  we recorded a charge of $8.0  million in 1999
associated with the transfer of production  lines from the Americas to China and
Europe  and the  closure  of  facilities.  These  charges  relate  primarily  to
severance and other related benefits and costs of exiting facilities,  including
lease  termination  costs and the write-down of impaired assets. We believe that
the future cash benefits of these  programs will exceed the costs,  although the
cash outflows  will precede the cash flow  benefits.  Activities  related to the
charge recorded in 1999 were significantly completed in 2000.

         In 1999, we launched a worldwide  procurement  project.  The project is
intended to  eliminate  price  differences  between  units,  leverage  potential
opportunities  to  increase  buying  power,  and  establish  worldwide  sourcing
arrangements.  We envision it will take at least two years to obtain anticipated
benefits from this project.

         During  1999,  we also  exited  our glass  batching  business  based in
Belgium.  In this  respect,  we  incurred  losses of $4.1  million  during  1999
primarily for severance and other costs of exiting this  business.  We completed
our exit of the glass batching business by the end of 1999.

                                       30




Results of Operations

         The  following  table sets forth  certain  items from our  consolidated
statements of operations  for the years ended  December 31, 2000,  1999 and 1998
(amounts in thousands).



                                                       2000           1999 (a)           1998(b)
                                                       ----           --------           -------
                                                                               
Net sales..............................            $1,095,547       $1,065,473          $935,658
Cost of sales..........................               600,185          585,007           520,190
                                                      -------          -------           -------
Gross profit...........................               495,362          480,466           415,468
Research and development...............                56,334           57,393            48,977
Selling, general and administrative....               296,187          300,389           265,511
Amortization...........................                11,564           10,359             7,634
Purchased research and development.....                     -                -             9,976
Interest expense.......................                20,034           21,980            22,638
Other charges, net (c).................                 2,638           10,468             1,197
                                                    ---------         --------          --------
Earnings before taxes and minority interest        $  108,605       $   79,877          $ 59,535
                                                   ==========       ==========          ========
Adjusted Operating Income (d)..........            $  142,841       $  123,682          $100,980
                                                   ==========       ==========          ========




(a)   In connection with acquisitions in 1999,  including the acquisition of the
      Testut-Lutrana  group,  we allocated $998 of the purchase price to revalue
      certain inventories  (principally  work-in-progress and finished goods) to
      fair value (net realizable value). Substantially all such inventories were
      sold during the second quarter of 1999.

(b)   In  connection  with the  Bohdan  acquisition,  we  allocated,  based upon
      independent valuations, $9,976 of the purchase price to purchased research
      and  development  in  process.  This  amount  was  recorded  as an expense
      immediately following the Bohdan acquisition.

(c)   Other charges,  net generally  includes interest income,  foreign currency
      transactions,  (gains)  losses from sales of assets and other  items.  The
      2000 amount also includes a charge of $1,425 related to the close-down and
      consolidation  of operations.  The 1999 amount includes a gain on an asset
      sale of approximately  $3,100,  a charge of $8,007 to transfer  production
      lines from the Americas to China and Europe and the closure of  facilities
      and losses of  approximately  $4,100 in connection  with the exit from our
      glass batching business based in Belgium. For the years ended December 31,
      1999 and 1998, the amount shown also includes $825 and $650, respectively,
      of  expenses  incurred  on  behalf  of  certain  selling  shareholders  in
      connection with our secondary offerings in 1999 and 1998, respectively.

(d)   Adjusted  Operating  Income is defined as operating  income  (gross profit
      less  research and  development  and selling,  general and  administrative
      expenses) before amortization and non-recurring costs. Non-recurring costs
      which have been  excluded  are the costs set forth in Note (a)  above.  We
      believe  that  Adjusted  Operating  Income  provides  important  financial
      information in measuring and comparing our operating performance. Adjusted
      Operating Income is not intended to represent  operating income under U.S.
      GAAP and should not be considered as an  alternative to net earnings as an
      indicator of our operating performance.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

         Net sales were $1,095.5  million for the year ended  December 31, 2000,
compared to $1,065.5 million in the prior year. This reflected an increase of 9%
in local currencies  during 2000.  Results for 2000 were negatively  impacted by
the strengthening of the U.S. dollar against other currencies. Net sales in U.S.
dollars during 2000 increased 3%.

         Net sales by geographic customer location were as follows: Net sales in
Europe increased 11% in local currencies during 2000, versus the prior year. The
increase  reflected  organic  growth  in our  business  and  the  effect  of the
Testut-Lutrana  acquisition.  Net sales in local  currencies  during 2000 in the
Americas  increased  6%. Net sales in Asia and other  markets  increased  13% in
local  currencies  during  2000.  The results of our  business in Asia and other
markets during 2000 reflect strong sales performance in China and Japan.

         The operating  results for  Testut-Lutrana  (which were included in our
results from May 1, 1999) would have had the effect of increasing  our net sales
by an additional $16.3 million in 1999.


                                       31


         Gross profit as a percentage  of net sales was 45.2% for 2000 and 1999,
before  non-recurring  acquisition costs in 1999. During 2000, we experienced an
increase in certain raw material costs, including electronics.

         Research and  development  expenses as a  percentage  of net sales were
5.1% for 2000,  compared to 5.4% for the prior year. This decrease is the result
of exchange rate movements.

         Selling,  general and  administrative  expenses as a percentage  of net
sales decreased to 27.1% for 2000, compared to 28.2% for the prior year.

         Adjusted Operating Income increased 15% to $142.8 million,  or 13.0% of
net sales, for 2000,  compared to $123.7 million, or 11.6% of net sales, for the
prior  year.  The  1999  period  excludes  the  previously  noted  non-recurring
acquisition  charge of $1.0 million for the  revaluation  of inventories to fair
value.  The increased  operating  profit  reflected the benefits of higher sales
levels and our continuous efforts to improve productivity.

         Interest expense decreased to $20.0 million for 2000, compared to $22.0
million for the prior year.  The  decrease was  principally  due to reduced debt
levels.

         Other  charges,  net were  $2.6  million  for 2000,  compared  to other
charges,  net of $10.5  million for the prior year.  The 2000 amount  includes a
charge  of  $1.4  million  related  to  the  close-down  and   consolidation  of
operations.  The 1999  amount  also  included  a gain on an  asset  sale of $3.1
million, charges of $8.0 million regarding the transfer of production lines from
the Americas to China and Europe and the closure of  facilities,  losses of $4.1
million to exit our glass  batching  business  based in Belgium  and a charge of
$0.8 million relating to the secondary offering completed in 1999.

         Our  effective  tax  rate of 35% before non-recurring items in 2000 was
consistent with the previous year.

         Net earnings were $71.5  million in 2000,  compared to $57.9 million in
1999, before the $1.4 million charge to close down and consolidate operations in
2000, and expenses for the secondary offering,  acquisition charges and the $8.0
million  charge to  transfer  production  lines from the  Americas  to China and
Europe and the closure of  facilities  in 1999.  This  represents an increase of
23%.

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

         Net sales were $1,065.5  million for the year ended  December 31, 1999,
compared to $935.7 million in the prior year.  This reflected an increase of 16%
in local currencies  during 1999.  Results for 1999 were negatively  impacted by
the strengthening of the U.S. dollar against other currencies. Net sales in U.S.
dollars during 1999 increased 14%.

         Net sales by geographic customer location were as follows: Net sales in
Europe increased 19% in local currencies during 1999, versus the prior year. The
increase  largely  reflected  the effect of  Testut-Lutrana,  as well as organic
growth  in our  business.  Net  sales in  local  currencies  during  1999 in the
Americas  increased 15%  principally  due to organic growth in our business,  as
well as the effect of businesses  acquired.  Net sales in Asia and other markets
increased 11% in local  currencies  during 1999.  The results of our business in
Asia


                                       32


and  other   markets  during 1999   primarily   represented   improved  economic
conditions throughout the region, which began in the fourth quarter of 1998.

         The operating  results for  Testut-Lutrana  (which were included in our
results from May 1, 1999) would have had the effect of increasing  our net sales
by an additional $38.8 million in 1998, if included from May 1, 1998.

         Gross profit as a percentage of net sales  increased to 45.2% for 1999,
compared to 44.4% for 1998, before non-recurring acquisition costs.

         Research  and  development  expenses  as  a  percentage  of  net  sales
increased  to 5.4% for 1999,  compared to 5.2% for the prior year.  The increase
primarily  reflected  increased  research and  development  activity  related to
product introductions, as well as the effect of acquired businesses.

         Selling,  general and  administrative  expenses as a percentage  of net
sales decreased to 28.2% for 1999, compared to 28.4% for the prior year.

         Adjusted  Operating Income increased 22.5% to $123.7 million,  or 11.6%
of net sales, for 1999,  compared to $101.0 million,  or 10.8% of net sales, for
the prior year.  The 1999 period  excludes the  previously  noted  non-recurring
acquisition  charge of $1.0 million for the  revaluation  of inventories to fair
value.  The increased  operating  margin  reflected the benefits of higher sales
levels and our continuous efforts to improve productivity.

         Interest expense decreased to $22.0 million for 1999, compared to $22.6
million for the prior year.  The  decrease was  principally  due to reduced debt
levels.

         Other  charges,  net were $10.5  million  for 1999,  compared  to other
charges,  net of $1.2  million  for the prior  year.  The 1999 and 1998  amounts
included  charges of $0.8  million and $0.7  million  relating to the  secondary
offerings  completed  in 1999  and  1998,  respectively.  The 1999  amount  also
included  a gain on an  asset  sale of $3.1  million,  charges  of $8.0  million
regarding the transfer of production lines from the Americas to China and Europe
and the  closure  of  facilities  and  losses of $4.1  million to exit our glass
batching business based in Belgium. The 1998 amount also included gains on asset
sales offset by other charges.

         Our tax rate in 1999 before non-recurring items was consistent with the
prior year,  excluding a benefit of  approximately  5 percentage  points or $3.6
million based upon a one-time  change in Swiss tax law which  benefited only the
1998 period. The 1998 period also included non-deductible purchased research and
development charges incurred in connection with the Bohdan acquisition.

         Net earnings before expenses for the secondary  offerings,  acquisition
charges  and the $8.0  million  charge to  transfer  production  lines  from the
Americas to China and Europe and the closure of facilities were $57.9 million in
1999,  compared to $48.3 million in 1998.  This represents an increase of almost
30%, excluding the one-time tax benefit of $3.6 million received in 1998.

Liquidity and Capital Resources

         At December 31, 2000,  our  consolidated  debt, net of cash, was $266.6
million.  We had  borrowings of $237.7  million  under our credit  agreement and
$50.7 million under various other  arrangements  as of December 31, 2000. Of our
credit agreement  borrowings,  approximately

                                       33


$127.8 million was borrowed as term loans scheduled to mature in 2004 and $109.9
million was  borrowed  under a  multi-currency  revolving  credit  facility.  At
December 31, 2000, we had $293.5  million of  availability  remaining  under the
revolving credit facility.

         At December 31, 2000,  approximately  $110.2  million of the borrowings
under the credit agreement and local working capital facilities were denominated
in U.S.  dollars.  The balance of the borrowings  under the credit agreement and
local  working  capital  facilities  were  denominated  in  certain of our other
principal  trading  currencies  amounting  to  approximately  $178.2  million at
December 31, 2000.  Changes in exchange rates between the currencies in which we
generate cash flow and the currencies in which our  borrowings  are  denominated
affect our liquidity. In addition, because we borrow in a variety of currencies,
our debt balances fluctuate due to changes in exchange rates.

         Under the credit  agreement,  amounts  outstanding under the term loans
are  payable in  quarterly  installments.  In  addition,  the  credit  agreement
obligates us to make  mandatory  prepayments in certain  circumstances  with the
proceeds of asset sales or issuance of capital  stock or  indebtedness  and with
certain excess cash flow. The credit agreement  imposes certain  restrictions on
us and our subsidiaries,  including  restrictions and limitations on the ability
to pay dividends to our  shareholders,  incur  indebtedness,  make  investments,
grant liens,  sell financial assets and engage in certain other  activities.  We
must also comply with  several  financial  covenants.  The credit  agreement  is
secured by most of our assets.

         Cash  provided by operating  activities  totaled $84.7 million in 2000,
compared to $91.3  million in 1999 and $72.0  million in 1998.  The  decrease in
2000 resulted  principally  from a one-time  payment of $4.2 million  associated
with an early  retirement  plan from previous  years,  as well as an increase in
inventory levels associated with product introductions, production transfers and
increased safety stocks of electronics.  In 1999, we also increased our accounts
payable  terms with many  suppliers to improve our working  capital  efficiency.
This resulted in an increase in cash  provided by operating  activities of $16.2
million in 1999. We  maintained  these  payment  terms in 2000,  and  therefore,
accounts payables were not a source of cash in 2000.

         During 2000,  we spent  approximately  $55.5  million on  acquisitions,
including  approximately  $10.2 million of additional  consideration  related to
earn-out periods  associated with acquisitions  consummated in December of 1998,
seller financing of $27.6 million and working capital retained by sellers. These
purchases  were  funded  from cash  generated  from  operations  and  additional
borrowings.  We continue to explore potential  acquisitions.  In connection with
any acquisition, we may incur additional indebtedness. In addition, we expect to
make additional  earn-out payments relating to certain of these  acquisitions in
the future.

         Capital  expenditures  are a  significant  use of  funds  and are  made
primarily for machinery, equipment and the purchase and expansion of facilities.
Our capital  expenditures  totaled $29.3 million in 2000,  $29.2 million in 1999
and $28.6 million in 1998.  We expect  capital  expenditures  to increase as our
business grows, and fluctuate as currency exchange rates change.

         We currently believe that cash flow from operating activities, together
with borrowings  available under the credit  agreement and local working capital
facilities,  will be sufficient to fund currently  anticipated  working  capital
needs and capital spending requirements as well as debt service requirements for
at least  several  years,  but there can be no  assurance  that this will be the
case.

                                       34


Effect of Currency on Results of Operations

         Because we conduct  operations in many countries,  our operating income
can be significantly  affected by fluctuations in currency exchange rates. Swiss
franc-denominated  expenses represent a much greater percentage of our operating
expenses than Swiss franc-denominated sales represent of our net sales. In part,
this is  because  most of our  manufacturing  costs  in  Switzerland  relate  to
products  that  are  sold  outside  of  Switzerland.   Moreover,  a  substantial
percentage   of  our   research  and   development   expenses  and  general  and
administrative  expenses are incurred in  Switzerland.  Therefore,  if the Swiss
franc strengthens against all or most of our major trading currencies (e.g., the
U.S. dollar,  the euro,  other major European  currencies and the Japanese yen),
our  operating  profit is  reduced.  We also have  significantly  more  sales in
European  currencies (other than the Swiss franc) than we have expenses in those
currencies.  Therefore,  when European currencies weaken against the U.S. dollar
and the Swiss franc, it also decreases our operating  profits.  In recent years,
the  Swiss  franc  and  other  European  currencies  have  generally  moved in a
consistent  manner versus the U.S.  dollar.  Therefore,  because the two effects
previously described have offset each other, our operating profits have not been
materially  affected  by  movements  in the U.S.  dollar  exchange  rate  versus
European  currencies.  However,  there can be no assurance that these currencies
will continue to move in a consistent  manner in the future.  In addition to the
effects of exchange  rate  movements on operating  profits,  our debt levels can
fluctuate due to changes in exchange rates, particularly between the U.S. dollar
and the Swiss franc.

European Economic and Monetary Union

         Within  Europe,  the European  Economic and Monetary  Union (the "EMU")
introduced a new currency, the euro, on January 1, 1999. Switzerland is not part
of the EMU.

         On January 1, 1999,  the  participating  countries  adopted the euro as
their local  currency,  initially  available  for  currency  trading on currency
exchanges and non-cash (banking) transactions. The existing local currencies, or
legacy currencies,  will remain legal tender through January 1, 2002.  Beginning
on  January 1,  2002,  euro-denominated  bills and coins will be issued for cash
transactions.  For a period of six months from this date, both legacy currencies
and the euro will be legal tender.  On or before July 1, 2002, the participating
countries will withdraw all legacy currency and use exclusively the euro.

         We have recognized the introduction of the euro as a significant  event
with potential  implications for existing operations.  Currently,  we operate in
all of the  participating  countries  in the  EMU.  We  expect  nonparticipating
European Union countries, where we also have operations, may eventually join the
EMU.

         We have  committed  resources to conduct risk  assessments  and to take
corrective  actions,   where  required,  to  ensure  we  are  prepared  for  the
introduction of the euro. We have undertaken a review of the euro implementation
and have  concentrated on areas such as operations,  finance,  treasury,  legal,
information  management,  procurement  and  others,  both in  participating  and
nonparticipating  European  Union  countries  where we operate.  Also,  existing
legacy  accounting  and  business  systems and other  business  assets have been
reviewed for euro compliance,  including assessing any risks from third parties.
Progress regarding euro implementation is reported periodically to management.


                                       35


         Because of the staggered  introduction  of the euro regarding  non-cash
and cash transactions, we have developed our plans to address our accounting and
business  systems first and our business  assets second.  We were euro compliant
within our accounting  and business  systems by the end of 1999 and expect to be
compliant within our other business assets prior to the introduction of the euro
bills and coins. Compliance in participating and nonparticipating countries will
be achieved primarily through upgraded systems, which were previously planned to
be upgraded. Remaining systems will be modified to achieve compliance. We do not
currently  expect to experience any  significant  operational  disruptions or to
incur any significant costs, including any currency risk, which could materially
affect our liquidity or capital  resources.  We are  preparing  plans to address
issues within the  transitional  period when both legacy and euro currencies may
be used.

         We continue to assess our pricing strategy throughout Europe due to the
increased  price  transparency  created by the euro and are attempting to adjust
prices in some of our markets.  We are also  encouraging our suppliers,  even in
Switzerland,  to commence  transacting  in the euro.  We do not believe that the
effect of these adjustments will be material.

         We have a disproportionate amount of our costs in Swiss francs relative
to sales.  Historically,  the potential  currency  impact has been muted because
currency   fluctuations  between  the  Swiss  franc  and  other  major  European
currencies have been minimal and there is greater balance between total European
(including  Swiss) sales and costs.  However,  if the  introduction  of the euro
results in a  significant  weakening of the euro  against the Swiss  franc,  our
financial performance could be harmed.

         The statements set forth herein concerning the introduction of the euro
which are not historical facts are forward-looking statements that involve risks
and  uncertainties  that could cause actual  results to differ  materially  from
those in the  forward-looking  statements.  In particular,  the costs associated
with our euro  programs  and the  time-frame  in which we plan to complete  euro
modifications are based upon  management's best estimates.  These estimates were
derived from internal assessments and assumptions of future events. There can be
no guarantee  that any  estimates or other  forward-looking  statements  will be
achieved, and actual results could differ significantly from those contemplated.

Taxes

         We are subject to taxation in many jurisdictions  throughout the world.
Our  effective  tax rate  and tax  liability  will be  affected  by a number  of
factors, such as the amount of taxable income in particular  jurisdictions,  the
tax rates in such jurisdictions,  tax treaties between jurisdictions, the extent
to which we transfer  funds between  jurisdictions  and repatriate  income,  and
changes in law. Generally,  the tax liability for each taxpayer within the group
is determined either (i) on a  non-consolidated/non-combined  basis or (ii) on a
consolidated/combined  basis only with other eligible entities subject to tax in
the same  jurisdiction,  in either case without  regard to the taxable losses of
non-consolidated/non-combined affiliated legal entities. As a result, we may pay
income taxes to certain jurisdictions even though on an overall basis we incur a
net loss for the period.

Environmental Matters

         We are subject to various environmental laws and regulations, including
those  relating  to air  emissions,  wastewater  discharges,  the  handling  and
disposal of solid and  hazardous  wastes

                                       36


and the  remediation  of  contamination associated with the use and disposal of
hazardous substances.

         We  incur  capital  and  operating   expenditures   in  complying  with
environmental  laws and regulations both in the United States and abroad. We are
currently  involved  in,  or have  potential  liability  with  respect  to,  the
remediation of past  contamination  in facilities  both in the United States and
abroad. In addition,  some of these facilities have or had been in operation for
many decades and may have used  substances  or generated  and disposed of wastes
that are hazardous or may be considered  hazardous in the future. Such sites and
disposal  sites  owned by  others to which we sent  waste  may in the  future be
identified as contaminated and require remediation.  Accordingly, it is possible
that we could become  subject to  additional  environmental  liabilities  in the
future that may harm our results of operations or financial condition.  However,
we do not anticipate any material adverse effect on our results of operations or
financial condition as a result of future costs of environmental compliance.

Inflation

         Inflation  can affect the costs of goods and services  that we use. The
competitive  environment  in which we operate  limits  somewhat  our  ability to
recover higher costs through  increased selling prices.  Moreover,  there may be
differences  in inflation  rates  between  countries in which we incur the major
portion of our costs and other  countries in which we sell  products,  which may
limit our ability to recover  increased costs. We remain committed to operations
in China, Latin America and Eastern Europe, which have experienced  inflationary
conditions.  To date,  inflationary conditions have not had a material effect on
our  operating  results.  However,  if our presence in China,  Latin America and
Eastern Europe  increases,  these  inflationary  conditions could have a greater
impact on our operating results.

Seasonality

         Our business has  historically  experienced a slight amount of seasonal
variation, with sales in the first quarter slightly lower than, and sales in the
fourth quarter  slightly  higher than,  sales in the second and third  quarters.
This trend has a somewhat  greater effect on income from  operations than on net
sales because fixed costs are spread evenly across all quarters.

Quantitative and Qualitative Disclosures About Market Risk

         We have only limited involvement with derivative financial  instruments
and do not use them for trading purposes.

         We have  entered  into  foreign  currency  forward  contracts  to hedge
short-term  intercompany  balances with our foreign  businesses.  Such contracts
limit our exposure to both favorable and unfavorable  currency  fluctuations.  A
sensitivity  analysis  to  changes in the U.S.  dollar and Swiss  franc on these
foreign  currency-denominated  contracts  indicates that if the U.S.  dollar and
Swiss franc uniformly worsened by 10% against all of our currency exposures, the
fair value of these  instruments  would decrease by $1.2 million at December 31,
2000, as compared with $2.7 million at December 31, 1999. Any resulting  changes
in fair value would be offset by changes in the underlying  hedged balance sheet
position.  The sensitivity analysis assumes a parallel shift in foreign currency
exchange rates.  The assumption  that exchange rates change in parallel  fashion
may overstate the impact of changing  exchange  rates on assets and  liabilities
denominated  in a  foreign  currency.  We also  have  other  currency  risks  as
described under "Effect of Currency on Results of Operations."

                                       37


         We have entered into certain  interest rate swap agreements in order to
limit our exposure to  increases in interest  rates.  These  contracts  are more
fully  described  in Note 5 to our audited  consolidated  financial  statements.
Based on our  agreements  outstanding  at December  31,  2000, a 100 basis point
increase in  interest  rates  would  result in an increase in the net  aggregate
market value of these instruments of $0.8 million, as compared with $9.4 million
at December 31, 1999.  Conversely,  a 100 basis point decrease in interest rates
would result in a $0.7 million net reduction in the net  aggregate  market value
of these  instruments,  as compared with $9.4 million at December 31, 1999.  Any
change in fair value would not affect our  Consolidated  Statement of Operations
unless such  agreements  and the variable rate debt they hedge were  prematurely
settled.

         We have  designated  certain of our Swiss  franc debt as a hedge of our
net  investments.  A sensitivity  analysis to changes in the U.S. dollar on such
debt at December  31, 2000  indicates  that if the U.S.  dollar  weakened by 10%
against  the Swiss  franc,  the fair value of such debt would  increase  by $9.7
million, as compared with $5.1 million at December 31, 1999. Any changes in fair
value of the debt are recorded in comprehensive  income and offset the impact on
comprehensive  income of foreign exchange  changes on the net investments  which
they hedge.

New Accounting Standards

         In December 1999, the Securities and Exchange Commission staff released
Staff  Accounting  Bulletin ("SAB") No. 101,  "Revenue  Recognition in Financial
Statements,"  which  provides  guidance  on the  recognition,  presentation  and
disclosure  of  revenue  in  financial  statements.  SAB No.  101 did not have a
material impact on our financial position and results of operations.

         In June 1998, the Financial Accounting Standards Board issued Statement
of  Financial   Accounting   Standards  No.  133,   "Accounting  for  Derivative
Instruments and Hedging Activities." This statement  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments   embedded  in  other   contracts   (collectively   referred  to  as
derivatives),  and for hedging activities.  It requires that an entity recognize
all  derivatives  as either assets or  liabilities in the statement of financial
position  and  measure  those  instruments  at fair  value.  This  statement  is
effective for all fiscal quarters of fiscal years beginning after June 15, 2000.
The adoption of this statement will not have a material  effect on our financial
condition or results of operations.

Forward-Looking Statements and Associated Risks

         This annual report  includes  forward-looking  statements  based on our
current expectations and projections about future events,  including:  strategic
plans;  potential  growth,   including  penetration  of  developed  markets  and
opportunities  in  emerging  markets;  planned  product  introductions;  planned
operational  changes and  research  and  development  efforts;  euro  conversion
issues; future financial  performance,  including expected capital expenditures;
research  and  development  expenditures;   potential  acquisitions;  impact  of
completed acquisitions; future cash sources and requirements;  liquidity; impact
of environmental costs; and potential cost savings.

         These  forward-looking  statements are subject to a number of risks and
uncertainties,  including those  identified in Exhibit 99.1 to our Annual Report
on Form 10-K,  which could cause our actual  results to differ  materially  from
historical  results  or those  anticipated  and

                                       38


certain  of which  are  beyond  our  control.  The  words  "believe,"  "expect,"
"anticipate" and similar expressions  identify  forward-looking  statements.  We
undertake  no  obligation  to  publicly  update  or revise  any  forward-looking
statements, whether as a result of new information,  future events or otherwise.
New risk  factors  emerge  from  time to time and it is not  possible  for us to
predict  all such risk  factors,  nor can we assess  the impact of all such risk
factors on our  business or the extent to which any factor,  or  combination  of
factors,  may cause actual results to differ  materially from those contained in
any forward-looking statements.  Given these risks and uncertainties,  investors
should not place undue reliance on forward-looking statements as a prediction of
actual results.


ITEM 7a.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Discussion of this item is on page 37 of  Management's  Discussion  and
Analysis of Financial Condition and Results of Operations.

ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The financial  statements  required by this item are set forth on pages
F-1 through F-27 and the related financial schedule is set forth on page S-2.

ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
              FINANCIAL DISCLOSURE

         On March  10,  1999,  the  Company  dismissed  KPMG  Fides  Peat as its
independent auditors.  The reports of KPMG Fides Peat on the Company's financial
statements  for the fiscal  years ended  December 31, 1998 and December 31, 1997
did  not  contain  an  adverse  opinion  or  a  disclaimer  of  opinion,   or  a
qualification  or  modification  as to  uncertainty,  audit scope, or accounting
principles.  In connection  with its audits for fiscal years ended  December 31,
1998 and 1997, and through March 10, 1999, there were no disagreements with KPMG
Fides  Peat on any  matter of  accounting  principles  or  practices,  financial
statement disclosure, or auditing scope or procedure, which disagreement(s),  if
not  resolved to the  satisfaction  of KPMG Fides Peat,  would have caused it to
make a reference to the subject matter of the disagreement(s) in connection with
its reports covering such periods.  None of the reportable events listed in Item
304(a)(1)(v)  of  Regulation  S-K occurred  with respect to the Company and KPMG
Fides Peat.

         On March 10, 1999, the Company engaged  PricewaterhouseCoopers  ("PwC")
as its independent auditors for the fiscal year ending December 31, 1999. During
the fiscal years ended  December 31, 1998 and 1997,  and through March 10, 1999,
the Company did not consult with PwC as to either the  application of accounting
principles to a specified transaction, either completed or proposed, or the type
of audit  opinion that might be rendered on the Company's  financial  statements
and the Company  did not  consult  with PwC as to any matter that was either the
subject of a disagreement or reportable event.

         The  decision to dismiss KPMG Fides Peat as the  Company's  independent
auditors  was  approved  by the  Audit  Committee  of  the  Company's  Board  of
Directors.

                                       39



                                    PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The  directors  and  executive  officers  of the  Company are set forth
below.  All  directors  hold  office  until the annual  meeting of  shareholders
following  their  election  or  until  their  successors  are duly  elected  and
qualified.  Officers are  appointed  by the Board of Directors  and serve at the
discretion of the Board.

Name                                   Age         Position

Robert F. Spoerry                       45         President, Chief Executive
                                                   Officer and Chairman of the
                                                   Board of Directors
William P. Donnelly                     39         Chief Financial Officer
Lukas Braunschweiler                    44         Head of Industrial and Retail
Peter Burker                            55         Head of Human Resources
Jean-Lucien Gloor                       48         Head of Information Systems
                                                   and Logistics
Karl M. Lang                            54         Head of Asia/Pacific
Daniel G. Schillinger                   42         Head of Laboratory
Philip Caldwell                         81         Director
John T. Dickson                         55         Director
Reginald H. Jones                       83         Director
John D. Macomber                        73         Director
George M. Milne                         57         Director
Laurence Z. Y. Moh                      75         Director (to retire)
Thomas P. Salice                        41         Director

         Robert F. Spoerry has been President and Chief Executive Officer of the
Company since 1993. He served as Head of Industrial  and Retail  (Europe) of the
Company from 1987 to 1993.  Mr.  Spoerry has been a Director since October 1996.
Mr. Spoerry has been Chairman of the Board of Directors since May 1998.

         William P.  Donnelly  has been Chief  Financial  Officer of the Company
since  1997.  From 1993  until  joining  the  Company,  he held  various  senior
financial and management positions, including most recently Group Vice President
and Chief  Financial  Officer with Elsag  Bailey  Process  Automation,  a global
manufacturer  of  instrumentation  and  analytical  products  and  developer  of
distributed control systems.

         Lukas  Braunschweiler  has been Head of  Industrial  and  Retail of the
Company since 1999. From 1995 to 1999 he served as Head of Industrial and Retail
(Europe).  From 1992 until 1995 he held various senior management positions with
the Landis & Gyr Group, a manufacturer of electrical  meters.  Prior to 1992, he
was a Vice President in the Technology  Group of Saurer Group, a manufacturer of
textile machinery and IT solutions.

         Peter  Burker has been Head of Human  Resources  of the  Company  since
1994. From 1992 to 1994 he was the Company's  General Manager in Spain, and from
1989 to 1991 he headed the Company's operations in Italy.

         Jean-Lucien Gloor joined the Company as Head of Information Systems and
Logistics  on March 1,  2001.  From 1999 to 2000,  he was the  leader of Central
Server Platforms for Credit


                                       40


Suisse Financial Services in Zurich.  Prior to 1999, he served in a variety of
IT functions for Dow Chemical Corporation.

         Karl M.  Lang has been  Head of Asia /  Pacific  of the  Company  since
January 2000.  From 1994 to January 2000 he served as Head of  Laboratory.  From
1991 to 1994 he was based in Japan as a representative of senior management with
responsibility for expansion of the Asian operations.

         Daniel G.  Schillinger has been Head of Laboratory of the Company since
January  2000.  From  1995 to 1999 he was with  Grundfos,  a  Danish  industrial
instrument  manufacturer,  as head of the mid- and east European sales companies
and as General Manager for Germany.  Prior to 1995, he held various positions in
R&D and technology  management with ABB, an engineering concern, and with Landis
& Gyr, a manufacturer of electrical meters and building control systems.

         Philip  Caldwell has been a Director  since October 1996.  Prior to May
1998, Mr.  Caldwell  served as Chairman of the Board of Directors.  Mr. Caldwell
spent 32 years at Ford Motor  Company,  where he served as Chairman of the Board
of Directors and Chief  Executive  Officer from 1980 to 1985 and a Director from
1973 to 1990.  He served as a Director  and Senior  Managing  Director of Lehman
Bros. Inc. and its predecessor,  Shearson Lehman Brothers  Holdings,  Inc., from
1985 to February  1998.  Mr.  Caldwell  is also a Director  of the Mexico  Fund,
Russell Reynolds Associates,  Inc. and Waters Corporation. He is a member of the
Zurich  Financial  Services Group US Advisory Board. He has served as a Director
of the Chase Manhattan Bank, N.A., the Chase Manhattan Corp.,  Digital Equipment
Corporation, Federated Department Stores Inc., Kellogg Company, CasTech Aluminum
Group  Inc.,  Specialty  Coatings   International  Inc.,  American  Guarantee  &
Liability Insurance Company, Zurich Holding Company of America, Inc., and Zurich
Reinsurance Centre Holdings, Inc.

         John T. Dickson has been a Director  since March 2000.  Mr.  Dickson is
Executive Vice President of Lucent  Technologies and CEO designate and President
of  Agere  Systems  Inc.   (formerly  the   Microelectronics   Group  of  Lucent
Technologies).  Mr. Dickson joined Lucent  Technologies  in 1993. Mr. Dickson is
also a Director of the  Semiconductor  Industry  Association and a member of the
Board of Trustees of Lehigh Valley Health Network.

         Reginald H. Jones has been a Director  since  October  1996.  Mr. Jones
retired  as  Chairman  of the Board of  Directors  of General  Electric  Company
("General  Electric") in April 1981. At General Electric,  he served as Chairman
of the Board of Directors and Chief Executive Officer from December 1972 through
April 1981, President from June 1972 to December 1972 and a Director from August
1971 to April 1981.

         John D. Macomber has been a Director  since October 1996. He has been a
principal of JDM  Investment  Group since 1992. He was Chairman and President of
the Export-Import  Bank of the United States (an agency of the U.S.  Government)
from  1989 to 1992.  From  1973 to 1986 Mr.  Macomber  was  Chairman  and  Chief
Executive  Officer of Celanese  Corporation.  Prior to that, Mr.  Macomber was a
Senior Partner of McKinsey & Company.  Mr. Macomber is also a Director of Lehman
Brothers Holdings and Textron Inc.

         George M. Milne has been a Director since  September 1999. Mr. Milne is
President of the Central  Research  Division and Senior Vice President of Pfizer
Inc., with  responsibility  for guiding the company's global  pharmaceutical and
animal health drug discovery and development  efforts,  a position he assumed in
1993.  Since  joining  Pfizer in 1970,  Mr.  Milne has held a variety  of senior
management and research positions.

                                       41


         Laurence Z. Y. Moh has been a Director  since October 1996. At present,
he is Chairman and Chief Executive Officer of Plantation Timber Products Limited
(CHINA),  which he  founded  in  1996.  He is  Chairman  Emeritus  of  Universal
Furniture Limited, which he founded in 1959.

         Thomas P. Salice has been a Director  since October 1996. Mr. Salice is
President  and  Chief  Executive  Officer  of AEA  Investors  Inc.  and has been
associated  with AEA  Investors  Inc.  since  June  1989.  Mr.  Salice is also a
Director of Waters Corporation and Sovereign Specialty Chemicals, Inc.

ITEM 11.      EXECUTIVE COMPENSATION

         The information appearing in the sections captioned "Board of Directors
Information,"  "Executive  Compensation" and "Compensation  Committee Interlocks
and Insider  Participation"  in the  Registrant's  Proxy  Statement for the 2001
Annual Meeting of Stockholders  (the "2001 Proxy  Statement") is incorporated by
reference herein.

ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information  appearing in the section "Share Ownership" in the 2001
Proxy Statement is incorporated by reference herein.

ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The   information   appearing   in  the  section   captioned   "Certain
Transactions" in the 2001 Proxy Statement is incorporated by reference herein.

                                     PART IV

ITEM 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

         (a)      Documents Filed as Part of this Report:

                  1.       Financial Statements.

                           See Index to Consolidated Financial Statements
                           included on page F-1.


                  2.       Financial Statement Schedule and related Audit Report

                           See Schedule II, which is included on pages S-1
                           and S-2.


                  3.       List of Exhibits.

                           See Index of Exhibits included on page E-1.

         (b)      Reports on Form 8-K:

                  None.


                                       42




                                   SIGNATURES

         Pursuant  to the  requirements  of Section  13 or Section  15(d) of the
Securities Exchange Act of 1934, as amended, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

                                             Mettler-Toledo International Inc.
                                                         (Registrant)

Date: March 22, 2001                         By:  /s/ ROBERT F. SPOERRY
                                                  ---------------------
                                                   Robert F. Spoerry
                                                   Chairman of the Board,
                                                   President and Chief Executive
                                                   Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended,  this Annual Report on Form 10-K has been signed below by the following
persons  on  behalf of the  registrant  and in the  capacities  and on the dates
indicated.

        Signature                          Title                      Date

                                  Chairman of the Board,
                                       President and
  /s/ ROBERT F. SPOERRY           Chief Executive Officer        March 22, 2001
- --------------------------
    Robert F. Spoerry
                                    Vice President and
                                  Chief Financial Officer
                                 (Principal financial and
 /s/ WILLIAM P. DONNELLY            accounting  officer)         March 22, 2001
- --------------------------
   William P. Donnelly

   /s/ PHILIP CALDWELL                   Director                March 22, 2001
- --------------------------
     Philip Caldwell

  /s/ JOHN T. DICKSON                    Director                March 22, 2001
- --------------------------
     John T. Dickson

  /s/ REGINALD H. JONES                  Director                March 22, 2001
- --------------------------
    Reginald H. Jones

   /s/ JOHN D. MACOMBER                  Director                March 22, 2001
- --------------------------
     John D. Macomber

   /s/ GEORGE M. MILNE                   Director                March 22, 2001
- --------------------------
     George M. Milne

  /s/ LAURENCE Z.Y. MOH                  Director                March 22, 2001
- --------------------------
    Laurence Z.Y. Moh

  /s/ THOMAS P. SALICE                   Director                March 22, 2001
- --------------------------
     Thomas P. Salice


                                       43




                                                                     
                                                                                          Page Number or
 Exhibit No.                   Description                                           Incorporation by Reference
 -----------                   -----------                                           --------------------------
      3.1          Amended and Restated Certificate of                    Filed as Exhibit 3.1 to the Annual Report on Form
                   Incorporation of the Company                           10-K of the Company dated March 13, 1998 and
                                                                          incorporated herein by reference

      3.2          Amended By-laws of the Company, effective              Filed as Exhibit 3.2 to the Annual Report on Form
                   February 3, 2000                                       10-K of the Company dated March 24, 2000 and
                                                                          incorporated herein by reference

      4.1          Specimen Form of the Company's Stock                   Filed as Exhibit 4.3 to the Registration Statement,
                   Certificate                                            as amended, on Form S-1 of the Company (Reg. No.
                                                                          333-35597) and incorporated herein by reference

     10.1          Employment Agreement between Robert F. Spoerry         Filed as Exhibit 10.4 to the Annual Report on Form
                   and Mettler-Toledo AG, dated as of October 30,         10-K of Mettler-Toledo Holding Inc. dated March 31,
                   1996                                                   1997 and incorporated herein by reference

     10.2          Employment Agreement between Lukas                     Filed as Exhibit 10.2 to the Annual Report on Form
                   Braunschweiler and Mettler-Toledo GmbH dated           10-K of the Company dated March 13, 1998 and
                   as of November 10, 1997                                incorporated herein by reference

     10.3          Employment Agreement between William P.                Filed as Exhibit 10.3 to the Annual Report on Form
                   Donnelly and Mettler-Toledo GmbH dated as of           10-K of the Company dated March 13, 1998 and
                   November 10, 1997                                      incorporated herein by reference

     10.4          Employment Agreement between Karl M. Lang and          Filed as Exhibit 10.4 to the Annual Report on Form
                   Mettler-Toledo GmbH dated as of November 10,           10-K of the Company dated March 13, 1998 and
                   1997                                                   incorporated herein by reference

     10.5          Loan Agreement between Robert F. Spoerry and           Filed as Exhibit 10.5 to the Annual Report on Form
                   Mettler-Toledo AG, dated as of October 7, 1996         10-K of Mettler-Toledo  Holding Inc. dated March 31,
                                                                          1997 and incorporated herein by reference

     10.6          Regulations of the Performance Oriented Bonus          Filed as Exhibit 10.7 to the Annual Report on Form
                   System (POBS) - Incentive System for the               10-K of the Company dated March 18, 1999 and
                   Management of Mettler Toledo, effective as of          incorporated herein by reference
                   November 5, 1998

     10.7          Regulations of the POBS Plus - Incentive               Filed as Exhibit 10.7 to the Annual Report on Form
                   Scheme for Senior Management of Mettler                10-K of the Company dated March 24, 2000 and
                   Toledo, effective as of March 14, 2000                 incorporated herein by reference

     10.8          Credit Agreement, dated as of November 19,             Filed as Exhibit 10.9 to the Annual Report on Form
                   1997, between Mettler-Toledo International             10-K of the Company dated March 13, 1998 and
                   Inc., as Guarantor, Mettler-Toledo, Inc.,              incorporated herein by reference
                   Mettler-Toledo AG, as Borrowers, Safeline
                   Holding Company as UK Borrower,
                   Mettler-Toledo, Inc., as Canadian Borrower and
                   Merrill Lynch & Co. as Arranger and
                   Documentation Agent, and the Lenders thereto

     10.9          Amendment No.1, dated as of September 30,              Filed as Exhibit 10 to the Quarterly Report on Form
                   1998, to the Second Amended and Restated               10-Q of the Company, dated November 16, 1998 and
                   Credit Agreement, dated as of November 19,             incorporated herein by reference
                   1997

                                      E-1


                                                                                          Page Number or
 Exhibit No.                   Description                                           Incorporation by Reference
 -----------                   -----------                                           --------------------------

     10.10         1997 Amended and Restated Stock Option Plan            Filed as Exhibit 10.10 to the Registration
                                                                          Statement on Form S-1 of the Company (Reg. No.
                                                                          333-35597) and incorporated herein by reference)

     10.11         Amendment to the 1997 Amended and Restated             Filed as Exhibit 10 to the Quarterly Report on Form
                   Stock Option Plan                                      10-Q of the Company dated August 15, 2000 and
                                                                          incorporated herein by reference

     10.12         Employment Agreement between Peter Burker and          Filed as Exhibit 10.11 to the Annual Report on Form
                   Mettler-Toledo GmbH dated as of November 10,           10-K of the Company dated March 24, 2000 and
                   1997                                                   incorporated herein by reference

     10.13         Employment Agreement between Daniel G.                 Filed as Exhibit 10.12 to the Annual Report on Form
                   Schillinger and Mettler-Toledo GmbH dated as of        10-K of the Company dated March 24, 2000 and
                   January 1, 2000                                        incorporated herein by reference

     10.14         Regulations of the POBS PLUS - Incentive               Filed as Exhibit 10.13 to the Annual Report on Form
                   Scheme for Members of the Group Management of          10-K of the Company dated March 24, 2000 and
                   Mettler Toledo, effective as of March 7, 2000          incorporated herein by reference

     10.15*        Employment Agreement between Jean-Lucien Gloor         Page 76
                   and Mettler-Toledo GmbH dated as of March 1,
                   2001

     21*           Subsidiaries of the Company                            Page 78

     23.1*         Consent of PricewaterhouseCoopers AG                   Page 82

     99.1*         Factors Affecting Our Future Operating Results         Page 83
- ---------------
* Filed herewith


                                       E-2




                        METTLER-TOLEDO INTERNATIONAL INC.

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                           Page
                                                                           ----

   Independent Auditors' Reports.....................................       F-2

   Consolidated Balance Sheets as of December 31, 2000 and 1999......       F-4

   Consolidated Statements of Operations

       for the years ended December 31, 2000, 1999 and 1998..........       F-5

   Consolidated Statements of Shareholders' Equity

       for the years ended December 31, 2000, 1999 and 1998..........       F-6

   Consolidated Statements of Cash Flows

       for the years ended December 31, 2000, 1999 and 1998..........       F-7

   Notes to Consolidated Financial Statements........................       F-8



                                      F-1




                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of
Mettler-Toledo International Inc.

In our opinion, the consolidated  financial statements listed in the index under
Item 14(a)(1) on page 42 present fairly, in all material respects, the financial
position of Mettler-Toledo  International  Inc. and its subsidiaries at December
31, 2000 and 1999, and the results of their  operations and their cash flows for
each of the two years in the period ended  December 31, 2000 in conformity  with
accounting  principles  generally  accepted in the United States of America.  In
addition,  in our opinion,  the financial statement schedule listed in the index
under Item 14 (a) (2) on page 42 presents fairly, in all material respects,  the
information  set forth therein for 2000 and 1999 when read in  conjunction  with
the related consolidated  financial  statements.  These financial statements and
financial statement schedule are the responsibility of the Company's management;
our  responsibility  is to express an opinion on these financial  statements and
financial  statement  schedule  based on our audits.  We conducted our audits of
these statements in accordance with auditing standards generally accepted in the
United  States of America,  which  require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers AG

Zurich, Switzerland
February 8, 2001


                                      F-2



                          INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
Mettler-Toledo International Inc.


We  have  audited  the  accompanying   consolidated  statements  of  operations,
shareholders'  equity and cash flows of  Mettler-Toledo  International  Inc. and
subsidiaries for the year ended December 31, 1998. These consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  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  audit  provides  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the  consolidated  results of operations of
Mettler-Toledo  International  Inc. and subsidiaries for the year ended December
31, 1998, in conformity with  accounting  principles  generally  accepted in the
United States of America.

KPMG Fides Peat

Zurich, Switzerland
February 5, 1999


                                      F-3





                                        METTLER-TOLEDO INTERNATIONAL INC.
                                           CONSOLIDATED BALANCE SHEETS
                                                As of December 31
                                      (In thousands, except per share data)

                                                                                        2000              1999
                                                                                       -------          -------
                                                                                                  
                                     ASSETS

Current assets:
   Cash and cash equivalents...............................................           $ 21,725         $ 17,179
   Trade accounts receivable, less allowances of $9,097 in 2000
     and $9,827 in 1999....................................................            212,570          203,750
   Inventories, net........................................................            141,677          123,901
   Other current assets and prepaid expenses...............................             47,367           43,115
                                                                                       -------          -------
     Total current assets..................................................            423,339          387,945
Property, plant and equipment, net.........................................            199,388          199,723
Excess of cost over net assets acquired, net of accumulated amortization
   of $29,664 in 2000 and $21,313 in 1999..................................            228,035          204,395
Other non-current assets ..................................................             36,820           28,910
                                                                                       -------          -------
     Total assets..........................................................           $887,582         $820,973
                                                                                      ========         ========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Trade accounts payable.................................................            $ 80,513         $ 81,234
   Accrued and other liabilities...........................................             97,575          105,783
   Accrued compensation and related items..................................             51,968           53,510
   Taxes payable...........................................................             68,537           48,769
   Short-term borrowings and current maturities of long-term debt.........              50,560           46,879
                                                                                       -------          -------
     Total current liabilities.............................................            349,153          336,175
Long-term debt.............................................................            237,807          249,721
Non-current deferred taxes.................................................             25,939           22,728
Other non-current liabilities..............................................             95,843          100,334
                                                                                       -------          -------
     Total liabilities....................................................             708,742          708,958

Shareholders' equity:
   Preferred stock, $0.01 par value per share; authorized 10,000,000 shares                  -                -
   Common stock, $0.01 par value per share; authorized 125,000,000 shares;
     issued 39,372,873 and 38,674,768 (excluding 64,467 shares held in
     treasury) at December 31, 2000 and 1999...............................                393              386
   Additional paid-in capital..............................................            294,558          288,092
   Accumulated deficit ....................................................            (68,307)        (138,426)
   Accumulated other comprehensive loss....................................            (47,804)         (38,037)
                                                                                       --------         --------
     Total shareholders' equity ...........................................            178,840          112,015
Commitments and contingencies..............................................           --------         --------
     Total liabilities and shareholders' equity ...........................           $887,582         $820,973
                                                                                      ========         ========

             The accompanying notes are an integral part of these consolidated financial statements.



                                      F-4





                                   METTLER-TOLEDO INTERNATIONAL INC.
                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                                    For the years ended December 31
                                 (In thousands, except per share data)

                                                            2000              1999             1998
                                                           ------            ------           -------
                                                                                    
Net sales......................................        $1,095,547        $1,065,473          $935,658
Cost of sales..................................           600,185           585,007           520,190
                                                          -------           -------           -------
    Gross profit...............................           495,362           480,466           415,468
Research and development.......................            56,334            57,393            48,977
Selling, general and administrative............           296,187           300,389           265,511
Amortization...................................            11,564            10,359             7,634
Purchased research and development.............                 -                 -             9,976
Interest expense...............................            20,034            21,980            22,638
Other charges, net.............................             2,638            10,468             1,197
                                                          -------            ------             -----
    Earnings before taxes and minority
       interest................................           108,605            79,877            59,535
Provision for taxes............................            38,510            31,398            20,999
Minority interest..............................              (24)               378               911
                                                       ----------        ----------          --------
    Net earnings...............................        $   70,119        $   48,101          $ 37,625
                                                       ==========        ==========          ========

Basic earnings per common share:

    Net earnings...............................             $1.80             $1.25             $0.98
    Weighted average number of common shares...        38,897,879        38,518,084        38,357,079

Diluted earnings per common share:

    Net earnings...............................             $1.66             $1.16             $0.92
    Weighted average number of common shares...        42,141,548        41,295,757        40,682,211


        The accompanying notes are an integral part of these consolidated financial statements.



                                      F-5





                                              METTLER-TOLEDO INTERNATIONAL INC.
                                       CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                               For the years ended December 31
                                            (In thousands, except for share data)


                                              Common Stock                                          Accumulated
                                               All Classes            Additional                       Other
                                        -----------------------        Paid-in       Accumulated    Comprehensive
                                         Shares          Amount        Capital         Deficit         Loss           Total
                                       ----------        ------        --------      ----------      ---------       -------

                                                                                                   
Balance at December 31, 1997....       38,336,014         $383         $284,630      $(224,152)      $(35,462)       $25,399
Exercise of stock options.......           64,349            1              531              -              -            532
Comprehensive income:
   Net earnings.................                -            -                -         37,625              -         37,625
   Change in currency translation
      adjustment................                -            -                -              -         (4,962)        (4,962)
   Minimum pension liability....                -            -                -              -         (4,759)        (4,759)
                                                                                                                      -------
Comprehensive income............                                                                                      27,904
                                       ----------         ----         --------      ----------      ---------       -------
Balance at December 31, 1998....       38,400,363         $384         $285,161      $(186,527)      $(45,183)       $53,835
Exercise of stock options.......          274,405            2            2,931              -              -          2,933
Comprehensive income:
   Net earnings.................                -            -                -         48,101              -         48,101
   Change in currency translation
      adjustment................                -            -                -              -          2,387          2,387
   Minimum pension liability....                -            -                -              -          4,759          4,759
                                                                                                                      ------
Comprehensive income............                                                                                      55,247
                                       ----------         ----         --------      ----------      ---------       -------
Balance at December 31, 1999....       38,674,768         $386         $288,092      $(138,426)      $(38,037)      $112,015
Exercise of stock options.......          698,105            7            6,466              -              -          6,473
Comprehensive income:
   Net earnings.................                -            -                -         70,119              -         70,119
   Change in currency translation
      adjustment................                -            -                -              -         (9,767)        (9,767)
                                                                                                                      -------
Comprehensive income............                                                                                      60,352
                                       ----------         ----         --------       ---------      ---------       -------
Balance at December 31, 2000....       39,372,873         $393         $294,558       $(68,307)      $(47,804)      $178,840
                                       ==========         ====         ========       =========      =========      ========

                   The accompanying notes are an integral part of these consolidated financial statements.



                                      F-6





                                          METTLER-TOLEDO INTERNATIONAL INC.
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                           For the years ended December 31
                                                    (In thousands)

                                                                          2000               1999              1998
                                                                         ------             ------            ------
                                                                                                     
Cash flows from operating activities:

   Net earnings..............................................           $70,119            $48,101           $37,625
   Adjustments to reconcile net earnings to
     net cash provided by operating activities:
      Depreciation.........................................              21,690             24,940            24,592
      Amortization.........................................              11,564             10,359             7,634
      Write-off of purchased research and
         development and cost of sales associated
         with revaluation of inventories...................                   -                998             9,976
      Net (gain) loss on disposal of long-term assets......                 427             (3,269)           (2,868)
      Deferred taxes and adjustments to goodwill...........               1,487             (1,636)           (1,200)
      Minority interest....................................                 (24)               378               911
   Increase (decrease) in cash resulting from changes in:
      Trade accounts receivable, net.......................             (12,437)           (19,437)          (16,391)
      Inventories..........................................             (17,274)            (9,540)           (5,953)
      Other current assets.................................              (1,778)            11,363             3,300
      Trade accounts payable...............................              (2,958)            16,239            17,523
      Accruals and other liabilities.......................              13,898 (a)         12,844 (a)        (3,107) (a)
                                                                         ------             ------            -------
        Net cash provided by operating activities..........              84,714             91,340            72,042
                                                                         ------             ------            ------
Cash flows from investing activities:
   Proceeds from sale of property, plant and equipment.....               1,468             10,151            22,500
   Purchase of property, plant and equipment...............             (29,304)           (29,188)          (28,633)
   Acquisitions, net of seller financings..................             (26,377) (b)       (18,468) (b)      (28,925) (b)
   Other investing activities..............................                   -                  -              (885)
                                                                         ------             ------            ------
       Net cash used in investing activities..............              (54,213)           (37,505)          (35,943)
                                                                        --------           --------          --------
Cash flows from financing activities:
   Proceeds from borrowings................................              29,239             20,640            23,019
   Repayments of borrowings................................             (61,617)           (80,393)          (62,376)
   Proceeds from issuance of common stock..................               6,473              2,592               532
                                                                       --------           --------           --------
        Net cash used in financing activities..............            (25,905)            (57,161)          (38,825)
                                                                       --------            --------          --------
Effect of exchange rate changes on cash and cash equivalents               (50)               (686)              351
                                                                           ----               -----              ---
Net increase (decrease) in cash and cash equivalents.......               4,546             (4,012)           (2,375)
                                                                          -----             -------           -------
Cash and cash equivalents:
   Beginning of period.....................................              17,179             21,191            23,566
                                                                        -------            -------           -------
   End of period...........................................             $21,725            $17,179           $21,191
                                                                        =======            =======           =======

Supplemental  disclosures  of cash flow  information:
   Cash paid during the year for:

     Interest..............................................             $20,014            $21,642           $21,109
     Taxes.................................................              16,523             25,952            20,285

Non-cash investing activities:
   Seller financings on acquisitions.......................             $27,638                  -           $11,960



(a)  Accruals and other liabilities include payments for restructuring,  certain
     acquisition   integration   activities  and  a  one-time  payment  in  2000
     associated with an early retirement plan from previous years. These amounts
     totalled  $10.3  million,  $5.9 million and $9.4 million in 2000,  1999 and
     1998, respectively.

(b)  Amounts paid for acquisitions including seller financing,  assumed debt and
     working capital  retained by sellers were $55.5 million,  $20.5 million and
     $44.0 million in 2000, 1999 and 1998, respectively.

               The accompanying notes are an integral part of these consolidated financial statements.




                                      F-7





                        METTLER-TOLEDO INTERNATIONAL INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     (In thousands unless otherwise stated)

1.            Business Description and Basis of Presentation

         Mettler-Toledo  International Inc.  ("Mettler-Toledo" or the "Company")
is a global  manufacturer  and  marketer  of  precision  instruments,  including
weighing  and  certain  analytical  and  measurement  technologies,  for  use in
laboratory,  industrial and food retailing  applications.  The Company is also a
leading  provider of  automated  chemistry  solutions  used in drug and chemical
compound  discovery  and  development.   The  Company's  primary   manufacturing
facilities are located in Switzerland,  the United States,  Germany,  the United
Kingdom, France and China. The Company's principal executive offices are located
in Greifensee, Switzerland.

         The consolidated  financial statements have been prepared in accordance
with generally  accepted  accounting  principles in the United States of America
("U.S.  GAAP") and  include  all  entities  in which the  Company  has  control,
including its majority owned  subsidiaries.  Certain amounts in the prior period
financial  statements  have been  reclassified  to  conform  with  current  year
presentation.

         All  intercompany  transactions  and  balances  have  been  eliminated.
Investments  in which the  Company  has  voting  rights  between  20% to 50% are
accounted for using the equity method of accounting.

         The  preparation of financial  statements  requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities,  as well as disclosure of contingent  assets and liabilities at the
date of the  financial  statements,  and the  reported  amounts of revenues  and
expenses  during the  reporting  periods.  Actual  results may differ from those
estimates.

2.            Summary of Significant Accounting Policies

         Cash and Cash Equivalents

         Cash  and cash  equivalents  include  highly  liquid  investments  with
original maturity dates of three months or less.

         Inventories

         Inventories  are  valued at the lower of cost or  market.  Cost,  which
includes  direct  materials,  labor and  overhead  plus  indirect  overhead,  is
determined using the first in, first out (FIFO) or weighted average cost methods
and to a lesser extent the last in, first out (LIFO) method.


                                      F-8




                        METTLER-TOLEDO INTERNATIONAL INC.
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                     (In thousands unless otherwise stated)


2.            Summary of Significant Accounting Policies - (Continued)

         Property, Plant and Equipment

         Property,  plant and  equipment  are  stated  at cost less  accumulated
depreciation.  Depreciation  is  charged  on  a  straight-line  basis  over  the
estimated useful lives of the assets as follows:

            Buildings and improvements      15 to 50 years
            Machinery and equipment         3 to 12 years
            Computer software               3 to 5 years
            Leasehold improvements          Shorter of useful life or lease term

         The Company  reviews its property,  plant and equipment for  impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be  recoverable.  An impairment  loss would be recognized  when
estimated future cash flows expected to result from the use of the asset and its
eventual disposition are less than its carrying amount.

         Excess of Cost over Net Assets Acquired

         The excess of purchase price over the fair value of net assets acquired
is amortized on a straight-line  basis over the expected period to be benefited.
The Company assesses the  recoverability of such amounts by determining  whether
the  amortization  of the balance over its remaining  life can be recovered from
the undiscounted future operating cash flows of the acquired operations.

         Taxation

         The  Company  files  tax  returns  in each  jurisdiction  in  which  it
operates.  Deferred tax assets and liabilities are recognized for the future tax
consequences   attributable  to  differences  between  the  financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
bases and operating loss and tax credit  carryforwards.  Deferred tax assets and
liabilities are measured using enacted tax rates in the respective jurisdictions
in which the Company  operates  that are expected to apply to taxable  income in
the years in which those  temporary  differences are expected to be recovered or
settled.  In assessing  the  realizability  of deferred  tax assets,  management
considers  whether it is more  likely  than not that some  portion or all of the
deferred tax assets will not be realized.

         Generally,  deferred taxes are not provided on the unremitted  earnings
of subsidiaries  outside of the U.S.  because it is expected that these earnings
are  permanently  reinvested and such  determination  is not  practicable.  Such
earnings may become taxable upon the sale or  liquidation of these  subsidiaries
or upon the  remittance of dividends.  Deferred taxes are provided in situations
where the Company's subsidiaries plan to make future dividend distributions.


                                      F-9



2.            Summary of Significant Accounting Policies - (Continued)

         Currency Translation and Transactions

         The reporting currency for the consolidated financial statements of the
Company is the U.S. dollar. The functional currency for the Company's operations
is  generally  the  applicable  local  currency.  Accordingly,  the  assets  and
liabilities of companies whose functional currency is other than the U.S. dollar
are included in the consolidated  financial statements by translating the assets
and liabilities into the reporting  currency at the exchange rates applicable at
the end of the reporting period.  The statements of operations and cash flows of
such  non-U.S.  dollar  functional  currency  operations  are  translated at the
monthly average exchange rates during the year.  Translation gains or losses are
accumulated in other comprehensive income (loss) in the Consolidated  Statements
of Shareholders' Equity.

         Revenue Recognition

         Revenue  is  recognized  when  title to a product  has  transferred  or
services have been rendered and any customer  obligations  have been  fulfilled.
Revenues from service contracts are recognized over the contract period.

         Research and Development

         Research and development costs are expensed as incurred.

         Earnings per Common Share

         As described in Note 10, in accordance  with the treasury stock method,
the Company has included  3,243,669 and 2,777,673  equivalent shares relating to
5,173,777  outstanding  options  to  purchase  shares  of  common  stock  in the
calculation of diluted weighted average number of common shares for years ending
December 31, 2000 and 1999, respectively.

         Derivative Financial Instruments

         The Company has only  limited  involvement  with  derivative  financial
instruments and does not use them for trading purposes.  The Company enters into
foreign currency forward contracts to hedge short-term intercompany transactions
with its foreign businesses. Such contracts limit the Company's exposure to both
favorable and unfavorable currency fluctuations. These contracts are adjusted to
reflect market values as of each balance sheet date, with the resulting  changes
in fair value being recognized in other charges, net.

         The Company also enters into certain  interest rate swap  agreements in
order to reduce its exposure to changes in interest rates. The differential paid
or received on interest rate swap  agreements is recognized as interest  expense
over the life of the agreements as incurred.

         The Company has entered into certain foreign currency forward contracts
in order to convert certain U.S.  dollar-based debt into Swiss franc-based debt.
The  Company has also  designated  certain of its Swiss franc debt as a hedge of
its net investments. Any changes in

                                      F-10



2.            Summary of Significant Accounting Policies - (Continued)

fair value of the forward  contracts and the debt are recorded in  comprehensive
income (loss) and offset the net investments which they hedge.

         Stock Based Compensation

         The  Company  applies  Accounting  Principles  Board  Opinion  No.  25,
"Accounting  for Stock  Issued to  Employees,"  and related  interpretations  in
accounting for its stock option plan.

         Concentration of Credit Risk

         The Company's  revenue base is widely  diversified by geographic region
and by  individual  customer.  The  Company's  products  are  utilized  in  many
different  industries,  although  extensively  in the  pharmaceutical,  food and
beverage,  transportation  and logistics and chemicals  industries.  The Company
performs ongoing credit evaluations of its customers'  financial  condition and,
generally, requires no collateral from its customers.

3.            Business Combinations

         During  2000,  the  Company  spent   approximately   $55.5  million  on
acquisitions,  including approximately $10.2 million of additional consideration
related to earn-out periods  associated with  acquisitions  consummated in prior
years, seller financing of $27.6 million and working capital retained by sellers
which  has been  excluded  from  the  purchase  price  allocation.  The  Company
accounted for the acquisition  payments using the purchase method of accounting.
The Company may be required to make  additional  earn-out  payments  relating to
certain of these acquisitions in the future.

         In 2000, the Company  acquired  Berger  Instruments,  Thornton Inc. and
AVS. The Company also increased its  shareholding  in Cargoscan to 100%.  Berger
Instruments is the market leader in Supercritical Fluid Chromatography  (SFC), a
high-performance technology used to analyze and purify chemical compounds during
drug discovery.  Thornton is the market leader in pure and ultra-pure industrial
water  monitoring  instrumentation  used in  semi-conductor,  micro-electronics,
pharmaceutical  and  biotech  applications.  AVS is a leader in x-ray  visioning
solutions  used in the  inspection of packaged  goods.  Cargoscan is the leading
provider of  dimensioning  technology  used by major express  carriers,  freight
forwarders, third-party logistic entities and distribution companies.

         During  1999,  the  Company  spent   approximately   $20.5  million  on
acquisitions  including the net assets of the  Testut-Lutrana  group,  a leading
manufacturer  and marketer of  industrial  and retail  weighing  instruments  in
France.  This amount  includes  approximately  $2.0  million of working  capital
retained by sellers which has been excluded from the purchase price  allocation.
The  Company  accounted  for the  acquisitions  using  the  purchase  method  of
accounting.  Accordingly,  the costs of the  acquisitions  were allocated to the
assets acquired and liabilities assumed based upon their respective fair values.
In this respect,  the Company  allocated  $1.0 million of the purchase  price to
revalue certain finished goods  inventories to fair value.  Substantially all of
such inventories were sold in 1999.

                                      F-11


3.            Business Combinations - (Continued)

         During  1998,  the  Company  spent   approximately   $44.9  million  on
acquisitions and other investing  activities including seller financing of $12.0
million  and  assumed  debt of $3.1  million  as well as  contingent  and  other
payments associated with acquisitions consummated in 1997.

         In 1998, the Company acquired Applied Systems,  Bohdan  Automation Inc.
and Myriad.  The Company  accounted  for these  acquisitions  using the purchase
method of accounting.  Accordingly,  the costs of the acquisition were allocated
to the assets acquired and liabilities  assumed based upon their respective fair
values. The Company incurred a charge of $10.0 million immediately following the
acquisition  of  Bohdan  Automation  based  upon an  independent  valuation  for
purchased  research and development  costs for products being developed that had
not established  technological feasibility as of the date of acquisition and, if
unsuccessful,  had  no  alternative  future  use  in  research  and  development
activities or otherwise.

         Applied  Systems  designs,   assembles  and  markets   instruments  for
in-process  molecular  analysis,   which  is  primarily  used  for  researching,
developing and  monitoring  chemical  processes.  Applied  Systems'  proprietary
sensors,  together with its innovative  Fourier transform  infrared  technology,
enable  chemists to analyze  chemical  reactions  as they  occur,  which is more
efficient than pulling samples.  Bohdan Automation Inc. is a leading supplier of
laboratory automation and automated synthesis products to the automated drug and
chemical   compound   discovery   market  used  in  research  for  life  science
applications.  Myriad designs, assembles and markets instruments that facilitate
and automate the synthesis of large  numbers of chemical  compounds in parallel,
which is a key step in the chemical compound discovery process. Its products can
be used in all stages of synthesis in drug discovery.

4.            Inventories, Net

         Inventories, net consisted of the following at December 31:

                                                     2000                1999
                                                    ------             -------
Raw materials and parts................           $ 67,379            $ 53,685
Work-in-progress.......................             37,289              33,073
Finished goods.........................             38,148              37,769
                                                  --------            --------
                                                   142,816             124,527
LIFO reserve...........................             (1,139)               (626)
                                                  ---------           ---------
                                                  $141,677            $123,901
                                                  ========            ========

                                      F-12




5.            Financial Instruments

         At December  31,  2000,  the Company  had  certain  interest  rate swap
agreements outstanding that fix the variable interest obligation associated with
CHF 110 million of Swiss  franc-based  debt and $50 million of  USD-based  debt.
Certain of these  agreements have forward starting dates commencing in 2001. The
agreements  have various  maturities  beginning in 2003 and  continuing  through
2004.  The  fixed  rates  associated  with  the  swap of  Swiss  franc  debt are
approximately   3.5%,   while  the  rates  associated  with  the  USD  debt  are
approximately  6.0% plus the Company's  normal  interest  margin.  The swaps are
effective at either  one-month or three-month  LIBOR rates. At December 31, 2000
and 1999, the fair market value of such financial  instruments was approximately
$(0.5) million and $2.4 million, respectively.

         At December  31, 2000,  the Company had  outstanding  foreign  currency
forward contracts in the amount of $23.5 million. The purpose of these contracts
is to hedge short-term  intercompany  balances with its foreign businesses.  The
fair value of these  contracts was not  materially  different  than the carrying
value at December 31, 2000 and 1999, respectively.

         The  Company  may  be  exposed  to  credit   losses  in  the  event  of
nonperformance  by the  counterparties  to its derivative  financial  instrument
contracts.  Counterparties are established banks and financial institutions with
high  credit   ratings.   The  Company  has  no  reason  to  believe  that  such
counterparties  will not be able to fully satisfy their  obligations under these
contracts.

         The fair values of all derivative  financial  instruments are estimated
based on current settlement prices of comparable  contracts obtained from dealer
quotes.  The values  represent  the  estimated  amount the Company  would pay or
receive to terminate the agreements at the reporting  date,  taking into account
current creditworthiness of the counterparties.

6.            Property, Plant and Equipment, Net

         Property,  plant and  equipment,  net,  consisted  of the  following at
December 31:

                                                            2000         1999
                                                          --------     --------
      Land............................................    $ 40,580     $ 41,230
      Buildings and leasehold improvements............     105,937      101,088
      Machinery and equipment.........................     133,072      120,989
      Computer software...............................       5,387        5,399
                                                          --------     --------
                                                           284,976      268,706
      Less accumulated depreciation and amortization..     (85,588)     (68,983)
                                                          ---------    ---------
                                                          $199,388     $199,723
                                                          ========     ========

                                      F-13



7.            Short-Term Borrowings and Current Maturities of Long-Term Debt

         Short-term   borrowings  and  current   maturities  of  long-term  debt
consisted of the following for the years ended December 31:


                                                            2000          1999
                                                           ------       -------
     Current maturities of long-term debt.............    $31,900       $23,204
     Other short-term borrowings......................     18,660        23,675
                                                          -------       -------
                                                          $50,560       $46,879
                                                          =======       =======


8.            Long-Term Debt




         Long-term debt consisted of the following at December 31:

                                                                                    2000            1999
                                                                                   ------          ------
                                                                                             
Credit Agreement Borrowings:
  Term A USD Loans, interest at LIBOR plus 0.625% (7.1% at December 31,
    2000) payable in quarterly installments due May 19, 2004........             $ 69,420        $ 81,816
  Term A CHF Loans, interest at LIBOR plus 0.625% (4.0% at December 31,
    2000) payable in quarterly installments due May 19, 2004........               36,245          43,102
  Term A GBP Loans, interest at LIBOR plus 0.625% (6.5% at December 31,
    2000) payable in quarterly installments due May 19, 2004........               22,096          28,221
  Revolving credit facilities.......................................              109,907         127,283
Other...............................................................               50,699          16,178
                                                                                 --------        --------
                                                                                  288,367         296,600
Less current maturities.............................................              (50,560)        (46,879)
                                                                                 ---------       ---------
                                                                                 $237,807        $249,721
                                                                                 ========        ========



         The  Company  has a  multi-currency  $400.0  million  revolving  credit
facility and a CDN $26.3 million  Canadian  revolving  credit facility under its
credit  agreement.  Loans under these revolving credit  facilities may be repaid
and  reborrowed  and are due in full on May 19, 2004. At December 31, 2000,  the
Company had $293.5  million of additional  borrowing  capacity  under its credit
agreement.  The Company has the ability to refinance its  short-term  borrowings
through its revolving  facilities for an  uninterrupted  period extending beyond
one year.  Accordingly,  approximately $145 million of the Company's  short-term
borrowings at December 31, 2000 have been reclassified to long-term.

         The aggregate  maturities of long-term  obligations  during each of the
years 2002 through 2004 are approximately $31.9 million, $36.5 million and $27.4
million, respectively.

         The  Company  is  required  to pay a facility  fee based  upon  certain
financial  ratios  per annum on the  amount  of its  revolving  facilities.  The
facility  fee at December  31, 2000 was equal to 0.2%.  At  December  31,  2000,
borrowings under the Company's revolving  facilities carried an interest rate of
LIBOR plus 0.425%.  The Company's  weighted  average  interest rate for the year
ended December 31, 2000 was approximately 7.0%.

         The  Company's   credit   agreement   contains   covenants,   including
limitations  on the Company's  ability to pay dividends to  shareholders,  incur
indebtedness, make investments, grant liens, sell financial assets and engage in
certain other activities. The credit agreement

                                      F-14


8.            Long-Term Debt - (Continued)

also  requires  the  Company to maintain a minimum  net worth,  a minimum  fixed
charge  coverage  ratio,  and a ratio of total debt to EBITDA  below a specified
maximum.

         The  carrying  value of the  Company's  obligations  under  its  credit
agreement  approximates  fair  value  due to the  variable  rate  nature  of the
obligations.

9.            Shareholders' Equity

         Common Stock

         The  number of  authorized  shares  of the  Company's  common  stock is
125,000,000 shares with a par value of $0.01 per share. Holders of the Company's
common stock are entitled to one vote per share. At December 31, 2000, 7,831,586
shares of the  Company's  common stock were  reserved for grant  pursuant to the
Company's stock option plan.

         Preferred Stock

         The Board of Directors,  without further shareholder authorization,  is
authorized to issue up to 10,000,000  shares of preferred stock, par value $0.01
per share in one or more series and to determine and fix the rights, preferences
and privileges of each series,  including  dividend rights and preferences  over
dividends  on the common  stock and one or more series of the  preferred  stock,
conversion  rights,  voting  rights  (in  addition  to those  provided  by law),
redemption  rights and the terms of any sinking fund therefore,  and rights upon
liquidation,  dissolution or winding up,  including  preferences over the common
stock and one or more series of the preferred  stock.  The issuance of shares of
preferred stock, or the issuance of rights to purchase such shares, may have the
effect of delaying,  deferring or  preventing a change in control of the Company
or an unsolicited acquisition proposal.


                                      F-15



10.           Stock Option Plan

         The  Company's  stock option plan  provides  certain key  employees and
directors  of the Company  additional  incentive  to join  and/or  remain in the
service  of the  Company  as well  as to  maintain  and  enhance  the  long-term
performance and profitability of the Company.

         Under the terms of the plan,  options granted shall be nonqualified and
the  exercise  price shall not be less than the fair market  value of the common
stock on the date of grant.  Options vest  equally over a five-year  period from
the date of grant.


                                                                Weighted Average
                                             Number of Options   Exercise Price

Outstanding at December 31, 1997............      4,408,740          $ 9.75
Granted.....................................        670,000           21.48
Exercised...................................        (64,349)          (8.26)
Forfeited...................................       (142,549)          (7.95)
                                                   ---------          ------
Outstanding at December 31, 1998............      4,871,842          $11.30
Granted.....................................        647,500           28.56
Exercised...................................       (274,405)          (8.87)
Forfeited...................................       (209,290)         (13.74)
                                                   ---------         -------
Outstanding at December 31, 1999............      5,035,647          $13.45
Granted.....................................        887,000           43.72
Exercised...................................       (698,105)         (10.68)
Forfeited...................................        (50,765)         (13.12)
                                                    --------         -------
Outstanding at December 31, 2000............      5,173,777          $19.02
                                                  =========          ======

Options exercisable at December 31, 2000....      2,700,697          $11.14
                                                  =========          ======

         At December 31, 2000, 2,657,809 options were available for grant.

         The following table details the weighted average remaining  contractual
life of options outstanding at December 31, 2000 by range of exercise prices:




               Number of Options         Weighted Average       Remaining Contractual           Options
                 Outstanding              Exercise Price           Life of Options           Exercisable
                                                                     Outstanding
                 -----------              --------------           ---------------           -----------
                                                                                    

                  2,456,751                   $ 7.95                    5.8                   1,965,401
                    669,726                   $15.91                    6.8                     400,916
                  1,162,300                   $25.38                    6.8                     334,380
                    167,000                   $32.75                    6.7                           -
                    718,000                   $46.30                    9.2                           -
                    -------                                             ---                   ---------
                  5,173,777                                             6.6                   2,700,697
                  =========                                                                   =========


                                      F-16



10.           Stock Option Plan - (Continued)

         As of the date granted,  the weighted average  grant-date fair value of
the options  granted during the years ended December 31, 2000, 1999 and 1998 was
approximately  $18.31, $12.31 and $8.11 per share,  respectively.  Such weighted
average grant-date fair value was determined using an option pricing model which
incorporated the following assumptions:


                                            2000           1999           1998
                                            ----           ----           ----
Risk-free interest rate..............       5.0%           6.3%           5.2%
Expected life in years...............         4              4              4
Expected volatility..................        46%            45%            39%
Expected dividend yield..............         -              -              -


         The  Company  applies  Accounting  Standards  Board  Opinion No. 25 and
related  interpretations  in accounting for its plan. Had compensation  cost for
the  Company's  stock option plan been  determined  based upon the fair value of
such  awards at the grant date,  consistent  with the  methods of  Statement  of
Financial   Accounting   Standards   No.  123   "Accounting   for  Stock   Based
Compensation," the Company's net earnings and basic and diluted net earnings per
common share for the years ended December 31 would have been as follows:



                                            2000           1999           1998
                                           -----           ----           ----
Net earnings:
    As reported......................    $70,119        $48,101        $37,625
    Pro forma........................     66,425         45,847         35,475
                                          ======         ======         ======
Basic earnings per common share:

    As reported......................      $1.80          $1.25          $0.98
    Pro forma........................       1.71           1.19           0.92
                                            ====           ====           ====
Diluted earnings per common share:

    As reported......................      $1.66          $1.16          $0.92
    Pro forma........................       1.58           1.11           0.87
                                            ====           ====           ====

11.           Benefit Plans

         Mettler-Toledo  maintains a number of retirement  plans for the benefit
of its employees.

         Certain  companies  sponsor defined  contribution  plans.  Benefits are
determined  and  funded  annually  based  upon the terms of the  plans.  Amounts
recognized as cost under these plans amounted to $2.6 million,  $2.8 million and
$8.2 million for the years ended December 31, 2000, 1999 and 1998, respectively.
Based on certain  changes in 1999, the Company  performed a reevaluation  of its
Swiss  pension plans and  determined  these plans to be defined  benefit  plans.
Accordingly,  commencing  in 1999,  the Company has accounted for these plans as
such. The application of defined benefit accounting to the plans had no material
impact on the consolidated financial statements.

                                      F-17



11.           Benefit Plans - (Continued)

         Certain companies sponsor defined benefit plans.  Benefits are provided
to employees  primarily based upon years of service and employees'  compensation
for certain  periods  during the last years of  employment.  The Company's  U.S.
operations  also provide  postretirement  medical  benefits to their  employees.
Contributions for medical benefits are related to employee years of service.

         The following  table sets forth the change in benefit  obligation,  the
change  in  plan  assets,  the  funded  status  and  amounts  recognized  in the
consolidated  financial  statements for the Company's  principal defined benefit
plans and postretirement plans at December 31, 2000 and 1999:



                                                               Pension Benefits           Other Benefits
                                                        -------------------------     ----------------------
                                                           2000            1999         2000          1999
                                                        ---------       ---------     --------      --------
                                                                                        
Change in benefit obligation:
Benefit obligation at beginning of year......           $394,250       $149,930       $35,464      $37,095
Service cost, gross..........................             19,250         20,972           461          624
Interest cost................................             18,572         18,680         2,460        2,489
Actuarial gains..............................            (12,694)        (2,918)       (2,577)      (2,482)
Plan amendments and other....................                151           (239)            -         (105)
Benefits paid................................            (18,013)       (17,429)       (2,426)      (2,161)
Impact of foreign currency...................             (7,479)       (46,316)           (2)           4
Impact of businesses acquired................                  -          1,867             -            -
Impact of Swiss pension plans................                  -        269,703             -            -
                                                         -------        -------        ------       ------
Benefit obligation at end of year............            394,037        394,250        33,380       35,464
                                                         -------        -------        ------       ------
Change in plan assets:
Fair value of plan assets at beginning of
year.........................................            368,674         77,375             -            -
Actual return on plan assets.................             18,244         39,760             -            -
Employer contributions.......................             14,611         11,360         2,426        2,161
Plan participants' contributions.............              4,236          4,472             -            -
Benefits paid................................            (18,013)       (17,429)       (2,426)      (2,161)
Impact of foreign currency...................             (3,667)       (42,738)            -            -
Impact of Swiss pension plans................                  -        295,874             -            -
                                                         -------        -------         -----        -----
Fair value of plan assets at end of year.....            384,085        368,674             -            -
                                                         -------        -------         -----        -----

Funded status................................             (9,952)       (25,576)      (33,380)     (35,464)
Unrecognized actuarial (gain) loss...........            (37,826)       (28,712)          594        2,438
                                                        ---------      ---------     ---------    ---------
Net amount recognized........................           $(47,778)      $(54,288)     $(32,786)    $(33,026)
                                                        =========      =========     =========    =========


         Amounts recognized in the Consolidated Balance Sheets consist of:

                                                               Pension Benefits             Other Benefits
                                                        --------------------------      ----------------------
                                                           2000            1999           2000          1999
                                                        ----------      ----------      ---------     --------
Other non-current assets.....................            $  6,881        $  6,597       $      -     $      -
Other non-current liabilities................             (54,659)        (60,885)       (32,786)     (33,026)
                                                         ---------       ---------      ---------    ---------
Net amount recognized........................            $(47,778)       $(54,288)      $(32,786)    $(33,026)
                                                         =========       =========      =========    =========


                                      F-18



11.           Benefit Plans - (Continued)

         The assumed discount rates and rates of increase in future compensation
levels used in calculating the projected  benefit  obligations vary according to
the  economic  conditions  of the  country  in which  the  retirement  plans are
situated. The weighted average rates used for the purposes of the Company's U.S.
plans are as follows:

                                                       2000      1999       1998
                                                       ----      ----       ----
Discount rate......................................    7.8%      7.8%       7.2%
Compensation increase rate.........................    5.0%      5.0%       5.0%
Expected long-term rate of return on plan assets...    9.5%      9.5%       9.5%

         Plan  assets  relate  principally  to  the  Company's  U.S.  and  Swiss
companies and consist of equity investments, obligations of the U.S. Treasury or
other governmental agencies, and other interest-bearing investments.

         At  December  31,  2000,  the fair  value of plan  assets and the total
projected benefit  obligation for the Company's  non-U.S.  defined benefit plans
were $314.2 million and $319.4 million, respectively.  Actuarial assumptions for
these plans  ranged from 3.75% to 8.5% for the discount  rate,  2.0% to 6.5% for
the compensation  increase rate and 5.0% to 9.5% for the expected long-term rate
of return on plan assets for the years ended December 31, 2000, 1999 and 1998.

         Net periodic  pension cost for the defined  benefit plans  includes the
following components for the year ended December 31:


                                              2000        1999        1998
                                            -------     --------     -------
Service cost, net.....................      $15,438     $16,842      $5,929
Interest cost on projected benefit           18,572      18,680       8,624
obligations...........................
Expected return on plan assets........      (22,491)    (22,420)     (6,613)
Recognition of actuarial (gains) losses          19         394        (104)
                                            -------     -------      -------
Net periodic pension cost.............      $11,538     $13,496      $7,836
                                            =======     =======      ======

         Net periodic  postretirement  benefit cost for the U.S.  postretirement
plans includes the following components for the year ended December 31:

                                              2000        1999        1998
                                            -------      ------      ------
Service cost........................        $   461      $  624      $  507
Interest cost on projected benefit
  obligations.......................          2,460       2,489       2,360
Recognition of actuarial losses.....              -         189           -
Net amortization and deferral.......              -          21          26
                                              -----      ------      ------
Net periodic postretirement benefit
  cost..............................        $ 2,921     $ 3,323      $2,893
                                            =======     =======      ======


         The  accumulated  postretirement  benefit  obligation  and net periodic
postretirement  benefit cost were principally determined using discount rates of
7.8% in 2000,  7.2% in 1999 and 6.7% in 1998 and health  care cost  trend  rates
ranging from 7.0% to 8.0% in 2000, 1999 and 1998, decreasing to 5% in 2005.

                                      F-19



11.           Benefit Plans - (Continued)

         The health care cost trend rate assumption has a significant  effect on
the   accumulated   postretirement   benefit   obligation   and   net   periodic
postretirement  benefit cost. A  one-percentage-point  change in assumed  health
care cost trend rates would have the following effects:

                                             One-Percentage-    One-Percentage-
                                             Point Increase     Point Decrease
                                             ---------------     ---------------
Effect on total of service and
   interest cost components..............       $  376             $  (326)
Effect on postretirement
   benefit obligation....................       $3,430             $(3,102)


12.           Taxes

         The  sources  of the  Company's  earnings  before  taxes  and  minority
interest were as follows for the year ended December 31:

                                      2000            1999             1998
                                    --------        --------         --------
United States...............        $ 13,670        $(1,906)         $(2,172)
Non-United States..........           94,935         81,783           61,707
                                    --------        -------          -------
Earnings before taxes
   and minority interest......      $108,605        $79,877          $59,535
                                    ========        =======          =======


         The provision for taxes consists of:



                                                                                      Adjustments
                                                                                           to
                                                           Current        Deferred      Goodwill         Total
                                                           -------        --------      --------         -----
                                                                                             
Year ended December 31, 2000:

United States federal............................          $   381        $ (601)        $    -         $  (220)
State and local..................................              519             -              -             519
Non-United States................................           36,123         1,052          1,036          38,211
                                                           -------        ------         ------         -------
                                                           $37,023        $  451         $1,036         $38,510
                                                           =======        ======         ======         =======

                                                                                       Adjustments
                                                                                           to
                                                           Current        Deferred      Goodwill         Total
                                                           -------        --------      --------         -----
Year ended December 31, 1999:

United States federal............................          $   (17)       $    -         $    -         $   (17)
State and local..................................              494             -              -             494
Non-United States................................           32,557         (10,260)      8,624           30,921
                                                            ------        ---------      ------         -------
                                                           $33,034        $(10,260)      $8,624         $31,398
                                                           =======        =========      ======         =======

                                                                                       Adjustments
                                                                                           to
                                                           Current        Deferred      Goodwill         Total
                                                           -------        --------      --------         -----
Year ended December 31, 1998:

United States federal............................          $   517        $   (700)      $  591         $   408
State and local..................................              561            (102)         351             810
Non-United States................................           21,121          (2,642)       1,302          19,781
                                                            ------        ---------      ------         -------
                                                           $22,199        $ (3,444)      $2,244         $20,999
                                                           =======        =========      ======         =======


                                      F-20


12.           Taxes - (Continued)

         The  adjustments to goodwill during the years ending December 31, 2000,
1999 and  1998  relate  to tax  benefits  utilized  which  were  not  previously
recognized in the purchase price allocation pertaining to previous acquisitions.

         The  provision  for tax expense for the years ended  December 31, 2000,
1999 and 1998 differed  from the amounts  computed by applying the United States
federal  income  tax  rate of 35% to the  earnings  before  taxes  and  minority
interest as a result of the following:




                                                                  2000           1999            1998
                                                                -------         -------         -------
                                                                                       
Expected tax.....................................               $38,012         $27,957         $20,837
United States state and local income taxes,
    net of federal income tax benefit............                   519             494             810
Non-deductible purchased research and development                     -               -           3,492
Non-deductible intangible amortization...........                 2,227           2,254           2,459
Change in valuation allowance....................                (3,065)           (983)          4,964
Other non-United States income taxes
    at other than a 35% rate.....................                   455           1,165          (6,708)
Change in Swiss tax law..........................                     -               -          (3,557)
Change in Swiss tax rates........................                     -               -          (1,406)
Other, net.......................................                   362             511             108
                                                                -------         -------         -------
Total provision for taxes........................               $38,510         $31,398         $20,999
                                                                =======         =======         =======


         The tax effects of temporary  differences that give rise to significant
portions of the deferred tax assets and deferred tax  liabilities  are presented
below at December 31:



                                                                      2000                   1999
                                                                     ------                 ------
                                                                                     
Deferred tax assets:
    Inventory............................................            $ 2,042               $ 1,363
    Accrued and other liabilities........................             20,466                15,099
    Deferred losses......................................              6,524                 2,091
    Accrued postretirement benefit and pension costs.....             19,451                21,984
    Net operating loss carryforwards.....................             16,499                27,798
    Other................................................              1,942                 4,075
                                                                     -------               -------
Total deferred tax assets................................             66,924                72,410
Less valuation allowance.................................            (49,027)              (53,128)
                                                                     --------              --------
Total deferred tax assets less valuation allowance.......             17,897                19,282
                                                                     -------               -------
Deferred tax liabilities:
    Inventory............................................              1,640                 1,787
    Property, plant and equipment........................             16,259                15,531
    Other................................................              8,221                 9,131
                                                                     -------               -------
Total deferred tax liabilities...........................             26,120                26,449
                                                                     -------               -------
Net deferred tax liability...............................            $ 8,223               $ 7,167
                                                                     =======               =======



         The Company has  established  valuation  allowances  primarily  for net
operating losses, deferred losses as well as postretirement and pension costs as
follows as of December 31:



                                                                      2000                   1999
                                                                     ------                -------
                                                                                     
Summary of valuation allowances:
    Cumulative net operating losses.......................           $13,923               $26,923
    Deferred loss.........................................             6,524                 2,091
    Accrued postretirement and pension benefit costs......            12,765                14,579
    Other.................................................            15,815                 9,535
                                                                     -------               -------
Total valuation allowance.................................           $49,027               $53,128
                                                                     =======               =======



                                      F-21


12.           Taxes - (Continued)

         The Company has recorded  valuation  allowances related to its deferred
income tax assets due to the  uncertainty of the ultimate  realization of future
benefits  from such assets.  The 2000 net change in the  valuation  allowance is
primarily  attributable to the changes as enumerated  above which are related to
improved  realization  potential and/or  utilization of associated  deferred tax
assets.

         The potential  decrease or increase of the  valuation  allowance in the
near term is  dependent on the future  realizability  of the deferred tax assets
which  are  affected  by the  future  profitability  of  operations  in  various
worldwide  jurisdictions,  but  primarily  in the  United  States.  A  valuation
allowance has been provided on the Company's net deferred tax assets  related to
its  United  States  operations  because  of  the  uncertainty  regarding  their
realizability  due to the expectation that deductions from future employee stock
option  exercises and related tax deductions  will exceed future taxable income.
Deferred  tax  assets of $1.2  million  at  December  31,  2000  pertain  to net
operating loss  carryforwards  resulting  from the exercise of certain  employee
stock options. When recognized, the tax benefit of these losses will be recorded
in shareholders' equity.

         The total valuation  allowances  relating to acquired businesses amount
to $15.5 million and $16.7 million at December 31, 2000 and 1999,  respectively.
The reduction for the current year is primarily  attributable to the utilization
of net  operating  losses  and the  expiration  of the  useful  life of  various
deferred  tax assets.  Future  reductions  of these  valuation  allowances  will
continue to be credited to goodwill when realized.

         At December 31, 2000, for U.S. federal income tax purposes, the Company
had net operating  loss  carryforwards  of $21.3 million which expire in various
amounts  through  2012 and other  tax  credits  of $0.6  million  which  have no
expiration.  The Company has various U.S. state net operating losses and various
foreign operating losses that expire in varying amounts through 2012.

13.           Other Charges, Net

         Other charges, net consists primarily of foreign currency transactions,
interest income,  charges related to the Company's  cost-reduction  programs and
gains on the sale of property, plant and equipment.

         As part of its efforts to reduce costs, the Company evaluates from time
to time the cost  effectiveness of its global  manufacturing  strategy.  In this
respect,  the Company recorded  charges of  approximately  $1.4 million and $8.0
million  in 2000 and 1999,  respectively,  associated  with the  close-down  and
consolidation  of operations in 2000, and the transfer of production  lines from
the  Americas to China and Europe and the  closure of  facilities  in 1999.  The
charges  comprised  primarily  severance and other related benefits and costs of
exiting  facilities,  including  lease  termination  costs and the write-down of
impaired  assets.  In  connection  with  these   activities,   the  Company  has
involuntarily  terminated  approximately  180 employees,  and expects to further
terminate  60 employees in 2001.  Activities  related to the charge  recorded in
1999 were significantly completed in 2000.

                                      F-22



13.           Other Charges, Net (Continued)

         The  Company  also  incurred  losses  of $4.1  million  during  1999 in
connection with the exit from its glass batching business based in Belgium. This
amount primarily  comprised  severance and other costs of exiting this business.
The Company completed its exit of this business by the end of 1999. These losses
were offset by a gain of $3.1 million recorded in connection with an asset sale.

         A  rollforward  of  the   components  of  the  Company's  accrual   for
restructuring activities is as follows:
                                                           2000           1999
                                                         -------        -------
Beginning of the year...............................      $5,462        $ 1,831
Restructuring expense...............................       1,972         12,881
Reductions in workforce and other cash outflows.....      (4,337)        (5,902)
Non-cash write-downs of impaired assets.............           -         (3,018)
Impact of foreign currency..........................        (117)          (330)
                                                          -------       --------
End of the year.....................................      $2,980        $ 5,462
                                                          ======        =======

         The Company's accrual for restructuring activities at December 31, 2000
primarily  consisted of severance,  lease termination and other costs of exiting
facilities.

14.           Commitments and Contingencies

         Operating Leases

         The  Company  leases  certain of its  facilities  and  equipment  under
operating  leases.  The  future  minimum  lease  payments  under  non-cancelable
operating leases are as follows at December 31, 2000:

                           2001..................          $12,509
                           2002..................           11,911
                           2003..................            9,994
                           2004..................            6,287
                           2005..................            5,447
                           Thereafter............           12,356
                                                           -------
                             Total...............          $58,504
                                                           =======

         Rent expense for  operating  leases  amounted to $21.2  million,  $18.5
million and $17.7 million for the years ended December 31, 2000,  1999 and 1998,
respectively.

         Legal

         The Company is party to various legal  proceedings,  including  certain
environmental matters,  incidental to the normal course of business.  Management
does not expect that any of such proceedings will have a material adverse effect
on the Company's financial condition or results of operations.

                                      F-23



15.           Segment Reporting

         Operating  segments  are the  individual  reporting  units  within  the
Company.  These units are managed separately,  and it is at this level where the
determination  of resource  allocation is made.  The units have been  aggregated
based on operating  segments in geographical  regions that have similar economic
characteristics  and meet the aggregation  criteria of SFAS 131. The Company has
determined that there are five reportable  segments:  Principal U.S. Operations,
Principal Central European Operations,  Swiss R&D and Manufacturing  Operations,
Other Western European Operations and Other. Principal U.S. Operations represent
certain of the Company's  marketing and producing  organizations  located in the
United States.  Principal  Central  European  Operations  primarily  include the
Company's German marketing and producing  organizations that primarily serve the
German  market  and, to a lesser  extent,  Europe.  Swiss R&D and  Manufacturing
Operations  consist  of  the  organizations  located  in  Switzerland  that  are
responsible  for  the   development,   production  and  marketing  of  precision
instruments, including weighing, analytical and measurement technologies for use
in a variety of industrial and laboratory  applications.  Other Western European
Operations include the Company's market organizations in Western Europe that are
not included in Principal  Central  European  Operations.  The Company's  market
organizations are geographically  focused and are responsible for all aspects of
the  Company's  sales and service.  Operating  segments that exist outside these
reportable segments are included in Other.

         The accounting policies of the operating segments are the same as those
described  in the  summary  of  significant  accounting  policies.  The  Company
evaluates  performance  based on adjusted  operating  income  (gross profit less
research and development and selling, general and administrative expenses before
amortization  and  non-recurring  costs).  Intersegment  sales and transfers are
priced to reflect  consideration of market conditions and the regulations of the
countries in which the transferring  entities are located.  The following tables
show the operations of the Company's operating segments:





                                                Principal                   Other
                                  Principal      Central     Swiss R&D     Western                Eliminations
      For the year ended             U.S.        European     and Mfg.     European                     and
       December 31, 2000          Operations    Operations   Operations   Operations   Other (a)  Corporate (b)     Total
- -------------------------------   ----------    ----------   ----------   ----------   ---------  -------------    --------
                                                                                            
Net sales to external customers   $367,738      $177,912      $ 26,974     $256,257    $266,666     $       -     $1,095,547
Net sales to other segments....     33,528        53,563       148,158       41,896     120,730      (397,875)             -
                                  --------      --------      --------     --------    --------      ---------    ----------
Total net sales................   $401,266      $231,475      $175,132     $298,153    $387,396     $(397,875)    $1,095,547
                                  ========      ========      ========     ========    ========     ==========    ==========

Adjusted operating income......   $ 38,414       $22,881      $ 38,313     $ 21,979    $ 32,231     $ (10,977)    $  142,841
Depreciation...................      6,692         2,364         1,962        2,803       7,488           381         21,690
Total assets...................    242,878       138,957       199,067      152,816     661,740      (507,876)       887,582
Purchase of property, plant
and equipment..................      6,289         3,123         3,068        4,226      10,798         1,800         29,304



                                      F-24





15.           Segment Reporting - (Continued)




                                                Principal                   Other
                                  Principal      Central     Swiss R&D     Western                Eliminations
      For the year ended             U.S.        European     and Mfg.     European                     and
       December 31, 1999          Operations    Operations   Operations   Operations   Other (a)  Corporate (b)     Total
- -------------------------------   ----------    ----------   ----------   ----------   ---------  -------------    --------
                                                                                            
Net sales to external customers   $356,400      $184,021      $ 23,832     $267,426    $233,794     $       -     $1,065,473
Net sales to other segments....     46,310        58,094       154,931       20,229     111,284      (390,848)             -
                                  --------      --------      --------     --------    --------      ---------    ----------
Total net sales................   $402,710      $242,115      $178,763     $287,655    $345,078     $(390,848)    $1,065,473
                                  ========      ========      ========     ========    ========     ==========    ==========

Adjusted operating income......   $ 37,255       $23,070      $ 32,992     $ 25,024    $ 30,138     $ (24,797)    $  123,682
Depreciation...................      7,807         2,912         2,748        3,176       7,903           394         24,940
Total assets...................    217,202       139,726       158,160      146,955     624,528      (465,598)       820,973
Purchase of property, plant
and equipment..................      7,588         2,051         2,322        4,140      10,548         2,539         29,188



                                                Principal                   Other
                                  Principal      Central     Swiss R&D     Western                Eliminations
      For the year ended             U.S.        European     and Mfg.     European                     and
       December 31, 1998          Operations    Operations   Operations   Operations   Other (a)  Corporate (b)     Total
- -------------------------------   ----------    ----------   ----------   ----------   ---------  -------------    --------
Net sales to external customers   $324,455      $181,377      $23,554      $220,543    $185,729     $    -        $ 935,658
Net sales to other segments....     39,634        58,035      148,062        22,848     104,585      (373,164)            -
                                  --------      --------      --------     --------    --------      ---------    ---------
Total net sales................   $364,089      $239,412     $171,616      $243,391    $290,314     $(373,164)    $ 935,658
                                  ========      ========     ========      ========    ========     ==========    =========

Adjusted operating income......   $ 26,283      $ 20,314     $ 30,155      $ 17,795    $ 23,576     $ (17,143)    $ 100,980
Depreciation...................      8,132         3,081        2,506         2,748       7,770           355        24,592
Total assets...................    166,934       146,754      142,717       125,621     597,175      (358,760)      820,441
Purchase of property, plant
and equipment..................      8,296         2,957        2,922         3,562       8,886         2,010        28,633



(a)    Other includes reporting units in Asia, Eastern Europe, Latin America and
       segments from other countries that do not meet the  aggregation  criteria
       of SFAS 131.

(b)    Eliminations  and  Corporate  includes the  elimination  of  intersegment
       transactions  as  well  as  certain  corporate   expenses,   intercompany
       investments and certain goodwill, which are not included in the Company's
       operating segments.

         A reconciliation of adjusted  operating income to earnings before taxes
and minority interest for the year ended December 31 follows:




                                                2000             1999            1998
                                              --------         --------         --------
                                                                          
Adjusted operating income.............        $142,841         $123,682         $100,980
Amortization..........................          11,564           10,359            7,634
Interest expense......................          20,034           21,980           22,638
Other charges, net....................           2,638           10,468            1,197
Revaluation of acquisition inventories               -              998                -
Purchased research and development....               -                -            9,976
                                              --------         --------        ---------
Earnings before taxes and minority
  interest............................        $108,605         $ 79,877         $ 59,535
                                              ========         ========         ========



                                      F-25




15.           Segment Reporting - (Continued)

         The Company sells precision instruments, including weighing instruments
and certain analytical and measurement  technologies,  and related  after-market
support  to a variety  of  customers  and  industries.  None of these  customers
account  for  more  than 3% of net  sales.  After-market  support  revenues  are
primarily derived from parts and services such as calibration, certification and
repair, much of which is provided under contracts. A break-down of the Company's
sales by product category for the years ended December 31 follows:



                                              2000                1999                1998
                                           ----------          ----------           --------
                                                                           
Weighing-related instruments.....          $  663,598          $  659,785           $600,450
Non-weighing instruments.........             237,501             226,434            183,259
After-market.....................             194,448             179,254            151,949
                                           ----------          ----------           --------
Total net sales..................          $1,095,547          $1,065,473           $935,658
                                           ==========          ==========           ========



         The  breakdown  of net sales by  geographic  customer  destination  and
property,  plant  and  equipment,  net for the  year  ended  December  31 are as
follows:



                                                                               Property, plant
                                        Net sales                               equipment, net
                            -------------------------------------            --------------------
                              2000          1999           1998               2000          1999
                            --------      --------        -------            -------      -------
                                                                          
United States.......      $  411,484    $  386,452       $328,448           $ 41,050     $ 41,604
Other Americas......          76,522        74,701         74,951              2,222        1,887
                             -------       -------        -------             ------       ------
Total Americas......         488,006       461,153        403,399             43,272       43,491
Germany.............         122,570       132,302        129,464             22,504       23,086
France..............          97,345        94,557         58,081              5,863        5,438
United Kingdom......          44,927        44,105         41,265              6,037        5,828
Switzerland.........          45,308        42,530         40,158             99,627       99,324
Other Europe........         168,040       174,497        161,314              5,985        6,515
                             -------       -------        -------             ------       ------
Total Europe........         478,190       487,991        430,282            140,016      140,191
Rest of World.......         129,351       116,329        101,977             16,100       16,041
                          ----------    ----------       --------           --------     --------
Totals..............      $1,095,547    $1,065,473       $935,658           $199,388     $199,723
                          ==========    ==========       ========           ========     ========



                                      F-26




16.           Quarterly Financial Data (unaudited)

         Quarterly financial data for the years ended December 31, 2000 and 1999
are as follows:




                                             First           Second             Third           Fourth
                                            Quarter         Quarter (a)         Quarter         Quarter (b)
                                           ---------        --------           --------         -------
                                                                                    
 2000

 Net sales ........................        $259,116         $268,558           $270,003         $297,870
 Gross profit......................         114,241          119,586            120,684          140,851
 Net earnings......................        $ 11,754         $ 17,931           $ 17,134         $ 23,300

Basic earnings per common share....           $0.30            $0.46              $0.44            $0.59
Diluted earnings per common share..           $0.28            $0.43              $0.41            $0.55

 Market price per share:
   High............................          $44.50           $45.75             $48.81           $56.00
   Low.............................          $31.81           $30.00             $37.75           $39.50

 1999

 Net sales ........................        $235,715         $257,465           $268,006         $304,287
 Gross profit......................         105,227          113,755            119,728          141,756
 Net earnings......................        $  8,065         $ 13,467           $ 13,658         $ 12,911

Basic earnings per common share....           $0.21            $0.35              $0.35            $0.33
Diluted earnings per common share..           $0.20            $0.33              $0.33            $0.31

 Market price per share:
   High............................          $27.94           $29.00             $30.44           $39.50
   Low.............................          $19.63           $22.63             $23.81           $27.63




(a)      The financial data for the second quarter of 1999 includes  acquisition
         charges  of  $1.0  million   regarding  the   revaluation   of  certain
         inventories to fair value (Note 3).

(b)      The financial  data for the fourth quarter of 2000 includes a charge of
         $1.4 million related to the close-down and consolidation of operations.
         The financial  data for the fourth quarter of 1999 includes a charge of
         approximately  $8.0 million  associated with the transfer of production
         lines  from the  Americas  to  China  and  Europe  and the  closure  of
         facilities (Note 13).

                                      F-27




          Independent Auditors' Report on Financial Statement Schedule

The Board of Directors and Shareholders
Mettler-Toledo International Inc.:

Under date of February 5, 1999,  we reported on the  consolidated  statements of
operations,  shareholders' equity and cash flows of Mettler-Toledo International
Inc. and subsidiaries for the year ended December 31, 1998,  included herein. In
connection  with  our  audit  of  the  aforementioned   consolidated   financial
statements,  we  also  audited  the  related  consolidated  financial  statement
schedule  included  under Item 14 of the Form  10-K.  This  financial  statement
schedule is the responsibility of the Company's  management.  Our responsibility
is to  express  an opinion on this  financial  statement  schedule  based on our
audit.

In our opinion,  such financial statement schedule,  when considered in relation
to the basic consolidated financial statements taken as a whole, present fairly,
in all material respects, the information set forth therein.

KPMG Fides Peat

Zurich, Switzerland
February 5, 1999

                                      S-1





Schedule II- Valuation and Qualifying Accounts

- -------------------------------- ---------------- ---------------------------------- ---------------- -----------------
           Column A                 Column B                  Column C                  Column D          Column E
- -------------------------------- ---------------- ---------------------------------- ---------------- -----------------
                                                              Additions
                                                  ----------------------------------
                                                        (1)               (2)
                                   Balance at         Charged         Charged to
                                  the beginning     to costs and    other accounts    -Deductions-       Balance at
          Description               of period         expenses         describe         describe       end of period
                                                                                       
- -------------------------------- ---------------- ----------------- ---------------- ---------------- -----------------
                                                                                        Note (A)

Accounts Receivable-
     allowance for doubtful
     accounts:

     Year ended
       December 31, 2000              9,827             1,008                 -            1,738             9,097

     Year ended
       December 31, 1999              9,443             1,867                 -            1,483             9,827

     Year ended
       December 31, 1998              7,669             2,008                 -              234             9,443


- -------------------------------- ---------------- ----------------- ---------------- ---------------- -----------------



Note A

     Represents excess of uncollectable  balances written off over recoveries of
     accounts previously written off.  Additionally,  amounts are net of foreign
     currency translation effect of $(253),  $(691) and $239 for the years ended
     December 31, 2000, 1999 and 1998, respectively.


                                      S-2