WATERS CORP, 8-K, 1996-05-15

WATERS CORP
8-K, 1996-05-15
LABORATORY ANALYTICAL INSTRUMENTS

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 1, 1996

Waters Corporation
- -----------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 0-14010 13-3668640
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)

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

34 Maple Street
Milford, Massachusetts 01757
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (508) 478-2000

Not Applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)

Exhibit Index on page 5

Page 1 of 142 pages
<PAGE>

ITEM 2. ACQUISITION OF ASSETS.

As of May 1, 1996, Waters Corporation ("Waters") completed its
acquisition of 100% of the capital stock of TA Instruments Inc. ("TAI") for $84
million in cash, subject to certain adjustments (the "Acquisition"). The
Acquisition was financed through drawings on the revolving credit facility under
the Company's Credit Agreement, dated as of November 22, 1995, among Waters
Corporation, Waters Technologies Corporation, Bankers Trust Company and other
Lenders party thereto (the "Credit Agreement"), as amended by the First
Amendment to the Credit Agreement dated as of March 6, 1996. Net sales for TAI
were approximately $47 million in 1995. TAI will operate as a wholly owned
subsidiary of Waters Technologies Corporation, the Company's wholly owned
operating company, with headquarters in New Castle, Delaware. As of May 1,
1996, TAI had approximately 200 employees worldwide. Manufacturing facilities
are located in New Castle, Delaware and Leatherhead, England.

In addition to the information contained herein, a more detailed
description of the Acquisition from the Company's Registration Statement on Form
S-1, Registration No. 333-3810, as filed with the Securities and Exchange
Commission (the "Commission") on April 19, 1996 and amended by Amendment No. 1,
as filed with the Commission on May 10, 1996 (the "Registration Statement") is
incorporated by reference.

PROPERTIES.

TAI uses the following properties for manufacturing and for office space,
each of which is leased. The Company believes that these facilities, together
with planned expenditures for normal maintenance, capacity and technological
improvements will provide adequate production capacity to meet current demand
for TAI's products.

OWNED OR APPROXIMATE
LOCATION USE LEASED SQUARE FEET
- -------- --- ------ -----------
New Castle, Delaware Manufacturing/ Leased 48,000
office space

Leatherhead, England Manufacturing/ Leased 12,000
office space

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

(a) Financial Statements of Business Acquired.

i) Incorporated by reference from the Registration Statement.

(b) Proforma Financial Information.

i) Incorporated by reference from the Registration Statement.

Page 2 of 142 pages
<PAGE>

10.1 Agreement and Plan of Merger among Waters Corporation, TA Merger Sub, Inc.
and TA Instruments, Inc. dated as of March 28, 1996 (the "Merger
Agreement") Incorporated by reference from Exhibit 10.1 to the Company's
Report on Form 8-K dated March 29, 1996.

10.2 Credit Agreement, dated as of November 22, 1995, among Waters Corporation,
Waters Technologies Corporation, Bankers Trust Company and other Lenders
party thereto. Incorporated by reference from Exhibit 10.1 to the
Registration Statement.

10.3 First Amendment to the Credit Agreement dated as of March 6, 1996.
Incorporated by reference from Exhibit 10.2 to the Registration Statement.

23.1 Consent of Arthur Andersen LLP.

99.5 Registration Statement on Form S-1, Registration No. 333-3810, as filed
with the Commission on April 19, 1996 and amended by Amendment No. 1 as
filed with the Commission on May 10, 1996.

Page 3 of 142 pages
<PAGE>

SIGNATURE
---------

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

WATERS CORPORATION

Dated: May 15, 1996 By: /s/ Philip S. Taymor
--------------------------
Philip S. Taymor
Senior Vice President
Chief Financial Officer

Page 4 of 142 pages
<PAGE>

EXHIBIT INDEX

Exhibit No. Document Page
- ----------- -------- ----
23.1 Consent of Arthur Andersen LLP. 7

99.5 Registration Statement on Form S-1, Registration 9
No. 333-3810, as filed with the Commission on
April 19, 1996 and amended by Amendment No. 1
as filed with the Commission on May 10, 1996.

Page 5 of 142 pages

<PAGE>

Exhibit 23.1

ARTHUR ANDERSEN LLP

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------

As independent public accountants, we hereby consent to the incorporation by
reference in the Waters Corporation Form S-8 registration statement, File No.
33-80677 dated December 20, 1995 and in the Waters Corporation Form S-8
registration statement, File No. 333-1436 dated February 15, 1996 of our report
on the financial statements of TA Instruments, Inc. and subsidiaries for the
year ended December 31, 1995, dated February 15, 1996, which is included in the
Waters Corporation Amendment No. 1 to Form S-1 registration statement, File No.
333-3810 filed May 10, 1996.

Philadelphia, PA
May 15, 1996

Page 6 of 142 pages

<PAGE>

EXHIBIT 99.5

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 10, 1996

REGISTRATION NO. 333-3810
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------

AMENDMENT NO. 1

TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
WATERS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 13-3668640 3826
(I.R.S. (PRIMARY STANDARD
(STATE OR OTHER EMPLOYERIDENTIFICATION INDUSTRIAL
JURISDICTION OF NO.) CLASSIFICATION CODE
INCORPORATION OR NUMBER)
ORGANIZATION)

34 MAPLE STREET MILFORD, MASSACHUSETTS 01757 TELEPHONE: 508-478-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

PHILIP S. TAYMOR WATERS CORPORATION 34 MAPLE STREET MILFORD, MASSACHUSETTS
01757 TELEPHONE: 508-478-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO:
LANCE C. BALK, ESQ.KIRKLAND & ELLIS153 VALERIE FORD JACOB, ESQ.FRIED, FRANK,
EAST 53RD STREETNEW YORK, NEW YORK HARRIS, SHRIVER & JACOBSONONE NEW YORK
10022TELEPHONE: 212-446-4800 PLAZANEW YORK, NEW YORK
10004TELEPHONE: 212-859-8000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
---------------
CALCULATION OF REGISTRATION FEE

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE(3)
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share........ 11,500,000 Shares $28.75 $330,625,000 $114,009
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Includes 1,500,000 shares that the Underwriters have the option to
purchase from the Selling Stockholders to cover over-allotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), using the average of the high and low prices
reported on the New York Stock Exchange on April 12, 1996.

(3) Previously paid.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

WATERS CORPORATION

CROSS REFERENCE SHEET PURSUANT TO ITEM 501(B) OF REGULATION S-K
SHOWING LOCATION IN PROSPECTUS OF INFORMATION REQUIRED BY ITEMS OF PART I OF
FORM S-1.

<TABLE>
<CAPTION>
REGISTRATION STATEMENT
ITEM NUMBER AND CAPTION CAPTION OR LOCATION IN PROSPECTUS
----------------------- ---------------------------------
<C> <S> <C>
1. Forepart of the Registration Statement
and Outside Front Cover Page of
Prospectus............................ Outside Front Cover Page

2. Inside Front and Outside Back Cover
Pages of Prospectus................... Inside Front Cover Page; Outside
Back Cover Page

3. Summary Information and Risk Factors... Prospectus Summary; Risk Factors

4. Use of Proceeds........................ Use of Proceeds

5. Determination of Offering Price........ Underwriting

6. Dilution............................... Not Applicable

7. Selling Security Holders............... Principal and Selling
Stockholders

8. Plan of Distribution................... Outside Front Cover Page;
Underwriting

9. Description of Securities to Be
Registered............................ Description of Capital Stock

10. Interests of Named Experts and
Counsel............................... Legal Matters; Experts

11. Information with Respect to the
Registrant............................ Outside Front Cover Page;
Prospectus Summary; Risk
Factors; Use of Proceeds;
Dividend Policy; Capitalization;
Selected Consolidated Financial
Data; Management's Discussion
and Analysis of Financial
Condition and Results of
Operations; Business;
Management; Description of
Capital Stock; Principal and
Selling Stockholders; Certain
Relationships and Related
Transactions; Index to Financial
Statements

12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities........................... Not Applicable
</TABLE>
<PAGE>

EXPLANATORY NOTE

This Registration Statement contains two separate prospectuses. The first
prospectus relates to a public offering in the United States and Canada (the
"U.S. Offering") of an aggregate of 8,000,000 shares of the Company's common
stock, par value $.01 per share (the "Common Stock"). The second prospectus
relates to a concurrent offering outside the United States and Canada of an
aggregate of 2,000,000 shares of Common Stock (the "International Offering").
The prospectuses for the U.S. Offering and the International Offering will be
identical with the exception of the following alternate pages for the
International Offering: a front cover page, an "Underwriting" section and a
back cover page. Such alternate pages appear in this Registration Statement
immediately following the complete prospectus for the U.S. Offering.
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED MAY 10, 1996

PROSPECTUS
10,000,000 SHARES

WATERS CORPORATION

COMMON STOCK

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

All of the 10,000,000 shares of common stock (the "Common Stock") of Waters
Corporation ("Waters" or the "Company") offered hereby will be sold by certain
stockholders (the "Selling Stockholders") of the Company. See "Principal and
Selling Stockholders." The Company is not selling shares of Common Stock in
this offering and will not receive any of the proceeds from the sale of shares
of Common Stock offered hereby.

Of the 10,000,000 shares offered hereby, 8,000,000 shares are being offered
in the United States and Canada by the U.S. Underwriters (the "U.S. Offering")
and 2,000,000 shares are being offered in a concurrent offering outside the
United States and Canada by the International Managers (the "International
Offering" and together with the U.S. Offering, the "Offerings"). The price to
public and the underwriting discount per share will be identical for both
Offerings. See "Underwriting."

The Common Stock is listed on the New York Stock Exchange under the symbol
"WAT." On May 9, 1996, the last reported sale price of the Common Stock on the
New York Stock Exchange was $27 7/8 per share. See "Price Range of Common Stock
and Dividend Policy."

SEE "RISK FACTORS," BEGINNING ON PAGE 11, FOR A DISCUSSION OF CERTAIN FACTORS
WHICH SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK
OFFERED HEREBY.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

<TABLE>
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
<CAPTION>
PROCEEDS TO
PRICE UNDERWRITING SELLING
TO PUBLIC DISCOUNT(1) STOCKHOLDERS(2)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share....................... $ $ $
- --------------------------------------------------------------------------------------------
Total(3)........................ $ $ $
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
</TABLE>
(1) The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities, including certain
liabilities under the Securities Act of 1933. See "Underwriting."

(2) The Company has agreed to pay certain expenses of the Offerings estimated
at $750,000.
(3) The Selling Stockholders have granted the U.S. Underwriters and the
International Managers options, exercisable within 30 days after the date
hereof, to purchase up to an additional 1,200,000 shares and 300,000 shares
of Common Stock, respectively, solely to cover over-allotments, if any. If
such options are exercised in full, the total Price to Public, Underwriting
Discount and Proceeds to Selling Stockholders will be $ , $ and
$ , respectively. See "Underwriting."

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

The shares of Common Stock are offered by the several Underwriters, subject to
prior sale, when, as and if issued to and accepted by them, subject to approval
of certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the shares of Common Stock will be made in New York, New York on or
about , 1996.

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

MERRILL LYNCH & CO.
ALEX. BROWN & SONS
INCORPORATED
CS FIRST BOSTON
GOLDMAN, SACHS & CO.

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

The date of this Prospectus is , 1996.
<PAGE>

HIGH PERFORMANCE LIQUID CHROMATOGRAPHY:

An instrument-based separation technology that is used to analyze and purify a
wide variety of samples.

CAPTION: CAPTION:
Quality control of Analysis of drugs
pharmaceuticals in blood

[PICTURE - Black and [PICTURE - Black and
white depiction white depiction of
of an open pill bottle] test tubes in a rack]

CAPTION: CAPTION:
Analysis of Determination of
drinking water nutritional contents of
foods

[PICTURE - Black and white [PICTURE - Black and white
depiction of a running faucet] depiction of a box and
bowl of corn flakes]

CAPTION: CAPTION:
Development of Purification of
engineering plastics biotechnology products

[PICTURE - Black and white [PICTURE - Black and white
depiction of an airplane] depiction of a DNA double
helix]

IN CONNECTION WITH THE OFFERINGS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMPANY'S
COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

DURING THIS OFFERING, CERTAIN PERSONS AFFILIATED WITH PERSONS PARTICIPATING IN
THE DISTRIBUTION MAY ENGAGE IN TRANSACTIONS FOR THEIR OWN ACCOUNTS OR FOR THE
ACCOUNTS OF OTHERS IN THE COMMON STOCK PURSUANT TO EXEMPTIONS FROM RULES 10B-
6, 10B-7, AND 10B-8 UNDER THE SECURITIES EXCHANGE ACT OF 1934.

2
<PAGE>

<TABLE>
<CAPTION>
WATERS CORPORATION: BRINGING CRITICAL TECHNOLOGY TO LABORATORIES AROUND THE WORLD
<S> <C> <C>
[PICTURE - Color depiction [PICTURE - Color depiction [PICTURE - Color depiction of
of an Integrity (TM) System] of various seals of approval] the Waters Chromatography Handbook
and three consumable products]

CAPTION: CAPTION: CAPTION:
The Integrity (TM) System Waters complies with ISO 9002, Waters has nearly 1500 consumable
combines HPLC with cGMP, and FDA-Medical Device products to support users of HPLC.
Mass Spectrometry for positive standards for development and
compound identification. manufacturing.

[PICTURE - Color depiction of
a woman operating a component
of an HPLC system]

[PICTURE - Color depiction of
[PICTURE - Color depiction an HPLC computer readout] [PICTURE - Color depiction
of the packaging for of two people working
Millenium (R) Software] CAPTION: in a laboratory]
Waters manufactures a comprehensive
CAPTION: range of systems and components CAPTION:
Millennium (R) results (solvent delivery systems, sample Instrumentation service
management software is injectors, detectors and data and support providing a
incorporated in individual management and system control continuing revenue stream.
PCs and corporate-wide networks. software) and consumables
(chromatography columns and sample
preparation devices) and offers
related services.
</TABLE>
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to the more
detailed information and financial statements, including the notes thereto,
appearing elsewhere in this Prospectus. Market data used throughout this
Prospectus were obtained from internal company surveys and industry
publications primarily based upon 1994 data which is the most recent data
currently available. Industry publications generally state that the information
contained therein has been obtained from sources believed to be reliable, but
the accuracy and completeness of such information is not guaranteed. Waters has
not independently verified this market data. Similarly, internal company
surveys, while believed by Waters to be reliable, have not been verified by any
independent sources. Unless otherwise stated or where the context otherwise
requires, all information herein assumes the Underwriters' over-allotment
options are not exercised.

THE COMPANY

GENERAL

Waters is the world's largest manufacturer, distributor and provider of high
performance liquid chromatography ("HPLC") instruments, chromatography columns
and other consumables, and related service. In 1994, the Company's market share
was approximately 21% of the estimated $1.5 billion global HPLC market, which
the Company believes was two and one-half times greater than its next leading
competitor. Waters serves a worldwide customer base with 65% of its 1995 net
sales to customers outside of the U.S.

HPLC is the largest product segment of the analytical instrument market. HPLC
is utilized in a broad range of industries to detect, identify, monitor and
measure the chemical, physical and biological composition of materials, and to
purify a full range of compounds. Customers include manufacturers of
pharmaceuticals (ethical, generic and over-the-counter), industrial chemicals
and polymers, food, beverages, and consumer products, as well as biotechnology
companies, environmental testing companies, universities, hospitals and
government agencies. HPLC is used for research and development, methods
development, manufacturing and quality control due to its ability to identify
approximately 80% of all known compounds and to operate in an automated manner,
increasing productivity at a low cost to the user. Examples of HPLC
applications include identification of new drug compounds, nutritional content
analysis for food and beverage labeling, environmental testing of waste water
and hazardous materials and quality control for a wide range of consumer and
industrial products.

MARKET LEADERSHIP

The Company has the largest HPLC market share in the United States, Europe
and non-Japan Asia and has a leading position in Japan. The Company attributes
its worldwide market leadership to its global brand and reputation,
technological innovation, comprehensive high quality product range, extensive
sales and service and to having the largest installed base of HPLC instruments.

Global Brand and Reputation. HPLC is critical to the research and development
and quality control efforts of customers and can have a significant impact on
their overall productivity. As a result, customers, principally scientists who
run research laboratories, value proven performance. Reputation and
demonstrated results are critical to end-user decisions to select an equipment
supplier. In many cases, once a manufacturer's equipment is adopted in the
laboratory, the costs and/or risks of switching to a different manufacturer's
instruments can be high. Today the Company believes it has the largest HPLC
installed base in the industry and outsells its closest competitor by two and
one-half times. The "Waters" name has been associated with the HPLC market
since the early 1970s when the Company pioneered the commercial adoption of
HPLC technology with the introduction of the first practical, reliable high
pressure solvent delivery system. The Company also introduced the first bonded
reverse phase HPLC column in 1973. An independent industry survey, based on
responses from

3
<PAGE>

approximately 8,800 U.S. customers, conducted from April 1992 through November
1995, cites Waters as the HPLC vendor they are most likely to consider when
they make their next HPLC purchase.

Technological Innovation. In the HPLC industry, technological innovation is a
key component of market growth. The Company believes that it is the leader in
HPLC technological innovation based upon its product introductions over the
past several years and that it spends significantly more on research and
development than its competitors. Since 1990, Waters has introduced a number of
new products and has redesigned each of the core components within its HPLC
product line including the Millennium(R) data collection software, the 717
Autosampler and the 996 Photo Diode Array detector, all of which have achieved
rapid market acceptance. Products introduced by Waters within the past four
years accounted for approximately 37% of the Company's net sales for 1995. The
Company has recently introduced and plans to introduce within the next 12 to 16
months several new product offerings, including new products based upon mass
spectrometry detection, a redesigned approach to solvent delivery for HPLC
systems and new products in its Symmetry(R) consumables line.

Comprehensive, High Quality Product Range. Waters manufactures a
comprehensive range of systems and components (solvent delivery systems, sample
injectors, detectors and data management and system control software) and
consumables (chromatography columns and sample preparation devices), and offers
related services. With over 100 instrument models and nearly 1,500 types of
chromatography columns and consumables, Waters offers the most comprehensive
range of HPLC products in the industry. This diverse product range enables
Waters to provide solutions for virtually any liquid chromatography
application. The Company is committed to maintaining the highest quality
manufacturing standards and believes that by controlling these processes, it
produces among the highest quality HPLC products available. Waters is more
vertically integrated in those manufacturing areas critical to product quality
and performance than most of its competitors, especially in the areas of
precision machining and chemical synthesis. The Company's manufacturing
facilities employ advanced techniques that meet the strict International
Standards Organization ("ISO") 9002 quality manufacturing standards and FDA
mandated Good Manufacturing Practices and the Taunton and Milford facilities
are approved by the FDA to produce Class 1 medical devices. Waters' broad array
of high quality products enables it to leverage its core technologies across a
broad range of applications.

Extensive Sales and Service. To meet the needs of its worldwide customer
base, the Company maintains 66 offices in 29 countries and has the world's
largest direct sales, service and technical support organization focused on
HPLC. Its more than 550 highly-trained and educated representatives worldwide
have average experience of over seven years with Waters and over ten years in
the industry. Waters believes it is one of the few HPLC industry participants
that both sells directly to end-users in each of its markets and provides local
technical service and aftermarket support to customers in virtually every
industrialized market in the world. This global presence enables Waters to
provide timely, responsive support and service to its customers, many of whom
operate internationally, and enables it to capitalize on growth opportunities
in emerging markets. By focusing dedicated resources on HPLC, Waters is able to
develop specialized service in HPLC and believes it can deliver higher quality
service than its competitors who focus on a broad range of instruments.

Largest Installed Base of HPLC Instruments. The Company believes that, based
on its estimated 40% share of the U.S. installed base, it has the largest
installed base of the estimated 150,000 HPLC systems in the world. This
installed base provides a strong source of ongoing revenue to the Company, with
approximately 39% of 1995 net sales generated by service of its HPLC equipment
and the sale of consumables. The Company believes it has a competitive
advantage as the market leader with respect to repeat purchases since customers
are more likely to buy new systems and consumables from manufacturers whose
products are compatible with their existing instruments and with whom they have
past experience with respect to quality, equipment support and service. Close
relationships and continual contact with its large customer base provide the
Company with sales opportunities and innovative product and application ideas.

4
<PAGE>

GROWTH STRATEGY

The Company has implemented a growth strategy comprised of four major parts.
The strategy focuses on accelerating new product introductions, better
capitalizing on potential market opportunities, pursuing selective acquisitions
and reengineering its operations to support its stand-alone HPLC business.

New Product Introductions. The Company believes it is the HPLC technology
leader based upon its product introductions over the past several years and is
committed to introducing technologically advanced products. Since the beginning
of 1991, the Company has invested approximately $99 million in research and
development, which has resulted in its current pipeline of high value-added
products. Major new product introductions launched in 1995 and 1996 and planned
for the second half of 1996 include:

. Integrity(TM) System. In October 1995, the Company shipped the first
units of its Integrity(TM) system, the first product in a family of new
HPLC-mass spectrometry ("HPLC-MS") benchtop products. Integrity(TM) is a
system that integrates the automated separation, quantitation and detection
capabilities of HPLC with the identification and characterization
capabilities of mass spectrometry ("MS"). The Company's HPLC-MS benchtop
equipment provides more complete data than HPLC or MS alone, is smaller,
easier to use and substantially less expensive than traditional MS products
and is suited for use by chemists and laboratories trained in HPLC methods,
equipment and data analysis. The Company believes that Integrity(TM) will
generate growth opportunities because of its lower cost (as compared with
traditional MS) together with its integration of MS and HPLC. Waters'
Integrity(TM) system is the first fully integrated benchtop HPLC-MS system.

. Fluidics. In March 1996, the Company introduced its Alliance(TM) product
which uses a new design for the fluidics element (solvent and sample
management) of the HPLC system. Alliance(TM) brings new performance
benefits to the HPLC marketplace, including improved accuracy,
reproducibility, ease of use, serviceability, reduced space consumption at
the laboratory bench and cost effectiveness. The new technology minimizes
solvent consumption and facilitates system calibration. The Company
believes this new product should improve its competitive position in the
core markets for HPLC.

. Symmetry(R). In May 1994, the Company introduced the first products in
its Symmetry(R) line of consumables products, which the Company believes
outperforms existing products in the marketplace due to its applicability
over a wide range of compounds and its ability to deliver more accurate,
reproducible results. Symmetry(R) is the result of a proprietary redesigned
manufacturing process for silica media. Waters anticipates that the
Symmetry(R) line of products will encompass a wide variety of columns and
other sample preparation devices. The Company introduced new Symmetry(R)
products during the first quarter of 1996 and plans to introduce more
during the second half of 1996. These products are expected to contribute
to the growth of the Company's consumables business.

. Beyond 1996. Waters is working to develop new products to build upon the
HPLC-MS and Symmetry(R) technologies. Additionally, upgrades to its
Millennium(R) software are expected to expand network capabilities and
connectivity to other analytical systems. The Company has research and
development efforts underway to develop new capillary scale liquid
chromatography and capillary electrophoresis products. Such developments,
if successful, could reduce solvent consumption and allow for detection of
minute sample sizes which would be particularly useful in the life sciences
industry where samples are expensive and quantities are limited. The
separating capabilities of these techniques could expand the applicability
of HPLC into new areas. For example, capillary technologies enable
separation and analysis of extremely small amounts of various compounds
which historically could not be analyzed using traditional HPLC systems.

5
<PAGE>

chemicals and polymers, food and beverage, consumer products and environmental
testing; (iii) increased spending by the pharmaceutical and biotech industries
to develop new drugs, generic versions of existing drugs and over-the-counter
drugs; (iv) increased customer emphasis on productivity and devices which
accelerate time-to-market; (v) increased worldwide environmental regulation
generating additional need for HPLC data collection systems, detection systems
and validation procedures; (vi) continued expansion of government-mandated
labeling and testing of drugs, foods and vitamins both in the U.S. and abroad;
and (vii) increased instrument purchases to replace an aging installed base.
The Company is targeting emerging markets with easy-to-use systems (including
its new Tiger(TM) product line) and plans to leverage its global presence to
take advantage of specific growth opportunities in Eastern Europe, Latin
America and the Pacific Rim.

Selective Acquisitions. In addition to internally generated growth, Waters
intends to expand sales and profitability through the acquisition of closely
related businesses and product lines. In particular, Waters believes that
acquisitions in the highly fragmented HPLC chromatography columns and other
consumables market would provide opportunities to gain niche technologies,
leverage the Company's assets and expand its customer base. In July 1995,
Waters began implementing this strategy with the acquisition of Phase
Separations Limited, a company with a strong proprietary position in
chromatography consumables, which had revenues of approximately $8.4 million in
1994. Waters also plans to selectively invest in ancillary, high value added
analytical laboratory instrument technologies that complement its existing HPLC
technologies and provide application solutions to existing and new customers.
On May 1, 1996, the Company acquired all of the capital stock of TA
Instruments, Inc. ("TAI"), the global leader in thermal analysis (the "TAI
Acquisition"). The TAI Acquisition will provide the Company with a stronger
presence in its non-pharmaceutical industrial markets. The Company has no other
agreements or understandings regarding any material acquisitions or joint
ventures at this time.

Reengineering Operations. As part of establishing the Company as a stand-
alone entity following the Acquisition (as defined below) in 1994, the Company
reengineered its operations in a manner appropriate to its independent HPLC
business. The Company (i) consolidated its manufacturing facilities from five
to two (one of which is dedicated to instruments and one of which is dedicated
to consumables), (ii) restructured its European distribution system, creating a
central distribution center in Holland and eliminating distribution facilities
in 13 European countries, (iii) streamlined administration (including the
elimination of a major administrative site) and (iv) reengineered its
production processes to reduce cycle times. During this period, the Company
reduced its overall workforce by approximately 120 employees. Although the
implementation of all operational changes is not yet complete, the Company has
already reduced annual expenses and substantially improved profitability.
Excluding 1994 and 1995 nonrecurring charges related to the purchase of Phase
Separations Limited in July 1995, the acquisition of the Predecessor (as
defined below) in August 1994 and the Company's initial public offering
completed in November 1995, operating income was $56.3 million for the year
ended December 31, 1995 and represented a 72% increase over the prior year
primarily as a result of these actions. Waters plans to continue to review its
operations in order to improve productivity and to reduce costs. Based upon the
reengineering of its operations, the Company believes it can leverage its
infrastructure to support additional sales without a corresponding increase in
costs. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

RECENT DEVELOPMENTS

The IPO and the Redemption. In November 1995, the Company consummated an
initial public offering (the "IPO") of its Common Stock which included the sale
by the Company of 6,250,000 shares at an initial public offering price of
$15.00 per share. In connection with the IPO, certain stockholders of the
Company sold an additional 4,812,500 shares of Common Stock. Proceeds from the
sale of Common Stock received by the Company were used (i) to repay a portion
of the indebtedness incurred under the Company's then existing credit facility
and (ii) to redeem (the "Redemption") $25 million in aggregate principal amount
of the Company's 12 3/4% Senior Subordinated Notes Due 2004 (the "Senior
Subordinated Notes"). The aggregate purchase price paid by the Company in
connection with the Redemption was $28.2 million.

6
<PAGE>

The Tender Offer and Bank Credit Agreement Amendment. On March 7, 1996, the
Company commenced a tender offer (the "Tender Offer") pursuant to which the
remaining $75 million in aggregate principal amount of Senior Subordinated
Notes which were not redeemed in connection with the IPO were purchased on
April 4, 1996. The aggregate purchase price paid by the Company in connection
with the Tender Offer was $90.6 million. Prior to the Tender Offer, in March
1996 the Company amended its senior credit facility (the "Bank Credit
Agreement") by increasing the maximum availability under such facility by $125
million to $300 million in order to simplify its capital structure and provide
additional flexibility.

The TA Instruments Acquisition. On May 1, 1996 the Company acquired all of
the capital stock of TAI for $84 million in cash, subject to certain
adjustments, which was financed through drawings on the revolving credit
facility under the Bank Credit Agreement. TAI develops, manufactures, sells and
services thermal analysis instrumentation which is used for the physical
characterization of polymers and related materials. The thermal analysis and
rheology products offered by TAI employ the most prevalent techniques used in
the analysis of polymers and other organic/inorganic materials. TAI is the
global market leader in the field of thermal analysis. Net sales for TAI were
approximately $47 million in 1995.

The Company has completed this strategic acquisition in order to provide more
comprehensive solutions to its polymer characterization customers in the
industrial marketplace. The Company views the TAI Acquisition as a significant
step toward the creation of a focused business unit geared toward the non-
pharmaceutical industrial customer which would combine the thermal analysis and
rheology businesses of TAI with Waters' current gel permeation chromatography
(a form of HPLC) product line. There is a strong relationship between the
information obtained through gel permeation chromatography and the types of
information obtained from thermal analysis and rheology. Waters believes that
bringing these related analytical technologies together on a common information
management system platform will bring significant value to industrial customers
working primarily with polymeric materials.

BACKGROUND

On August 18, 1994, the Company purchased the assets (the "Acquisition") of
the Waters Chromatography Division (the "Predecessor") of Millipore Corporation
("Millipore"). References herein to the "Company" and "Waters" refer to the
Company, the Predecessor and their direct and indirect subsidiaries.

THE OFFERINGS

<TABLE>
<S> <C> <C>
Common Stock offered by the Selling Stockholders:
U.S. Offering..................... 8,000,000 shares
International Offering............ 2,000,000
---------- shares
Total........................... 10,000,000 shares
==========
Common Stock to be Outstanding After 28,825,482
the Offerings(a)................... shares
Use of Proceeds..................... The Company is not selling shares in the
Offerings and will not receive any of the
proceeds from the sale of the shares
offered hereby.
New York Stock Exchange Symbol...... "WAT"
</TABLE>
- --------

(a) Excludes 5,005,560 shares that may be issued upon the exercise of options
granted pursuant to the Company's performance incentive plans. Also excludes
1,000,000 shares which may be issued pursuant to an additional incentive plan
which has been approved by the stockholders of the Company on May 7, 1996.
See "Management."

7
<PAGE>

SUMMARY CONSOLIDATED HISTORICAL AND PRO FORMA FINANCIAL DATA (A)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
---------------------------------------- --------------------------------------------
FULL YEAR 1994
-----------------------
THREE MONTHS
JANUARY 1 AUGUST 19 YEAR ENDED
YEAR ENDED DECEMBER 31, TO TO ENDED MARCH 31
---------------------------- AUGUST 18, DECEMBER 31, DECEMBER 31, ----------------
1991 1992 1993 1994 1994 1995 1995 1996
-------- -------- -------- ---------- ------------ ------------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net sales.............. $300,647 $309,287 $304,927 $176,097 $131,057 $332,972 $77,554 $85,313
Cost of sales.......... 125,160 123,342 124,387 73,446 49,740 126,216 30,282 32,114
Revaluation of acquired -- -- -- -- 38,424(b) 925(b) -- --
inventory............. -------- -------- -------- -------- -------- -------- ------- -------
Gross profit........... 175,487 185,945 180,540 102,651 42,893 205,831 47,272 53,199
S,G&A expenses (c)..... 130,600 138,318 132,452 85,216 44,522 132,746 30,920 33,429
R&D expenses........... 18,505 19,142 18,525 13,399 6,790 17,681 4,096 4,668
Goodwill and purchased
technology
amortization.......... -- -- -- -- 1,227(b) 3,629 903 931
Expensed in-process
R&D................... -- -- -- -- 53,918(b) -- -- --
Management fee (d)..... -- -- -- -- 552 5,393 387 --
Restructuring -- -- 13,000 -- 3,500 -- -- --
charge(e)............. -------- -------- -------- -------- -------- -------- ------- -------
Operating income
(loss)................ 26,382 28,485 16,563 4,036 (67,616) 46,382 10,966 14,171
Interest expense,
net(f)................ 2,185 2,107 2,072 828 12,011 30,315 8,119 3,954
Unrealized (gains)
losses on future cash
flow hedges(g)........ -- -- -- -- (923) 1,142 3,886 --
Realized (gains) on -- -- -- -- -- (2,317) -- --
cash flow hedges(g)... -------- -------- -------- -------- -------- -------- ------- -------
Income (loss) from con-
tinuing operations
before income taxes... 24,197 26,378 14,491 3,208 (78,704) 17,242 (1,039) 10,217
Provision (benefit) for 6,423 6,180 4,169 916 1,487 3,129 (199) 2,042
income taxes(h)....... -------- -------- -------- -------- -------- -------- ------- -------
Income (loss) from con-
tinuing operations.... 17,774 20,198 10,322 2,292 (80,191) 14,113 (840) 8,175
(Loss) income from dis-
continued operations,
net of tax(i)......... (59) 108 (9) (448) 787 -- -- --
Estimated (loss) on
disposal of discontin- -- -- -- -- (8,000) -- -- --
ued operations(i)..... -------- -------- -------- -------- -------- -------- ------- -------
Income (loss) before
extraordinary item.... 17,715 20,306 10,313 1,844 (87,404) 14,113 (840) 8,175
Extraordinary item--
(loss) on early re- -- -- -- -- -- (12,112) -- --
tirement of debt...... -------- -------- -------- -------- -------- -------- ------- -------
Income (loss) before
cumulative effect of
change in accounting
principle............. 17,715 20,306 10,313 1,844 (87,404) 2,001 (840) 8,175
Cumulative effect of
change in accounting -- (2,228) -- -- -- -- -- --
principle(j).......... -------- -------- -------- -------- -------- -------- ------- -------
Net income (loss)...... 17,715 18,078 10,313 1,844 (87,404) 2,001 (840) 8,175
Less: accretion of and
dividend on preferred -- -- -- -- 330 902 222 229
stock(k).............. -------- -------- -------- -------- -------- -------- ------- -------
Net income (loss)
available to common $ 17,715 $ 18,078 $ 10,313 $ 1,844 $(87,734) $ 1,099 $(1,062) $ 7,946
stockholders.......... ======== ======== ======== ======== ======== ======== ======= =======
Income (loss) per com-
mon share:
(Loss) income per com-
mon share from
continuing operations. $ (3.38) $ 0.54 $ (0.04) $ 0.26
(Loss) per common share
from discontinued
operations............ (0.30) -- -- --
Extraordinary (loss) -- (0.49) -- --
per common share...... -------- -------- ------- -------
Net (loss) income per $ (3.68) $ 0.05 $ (0.04) $ 0.26
common share.......... ======== ======== ======= =======
Weighted average number
of common shares...... 23,852 24,582 23,852 30,925
</TABLE>

<TABLE>
<CAPTION>
PRO FORMA
THREE MONTHS ENDED
MARCH 31,
-------------------
PRO FORMA 1995 1995 1996
-------------- --------- ---------
<S> <C> <C> <C>
PRO FORMA STATEMENT OF CONTINUING OPERATIONS
DATA(L):
Net sales.................................. $379,569 $ 87,285 $ 95,910
Operating income........................... 58,921 12,308 14,948
Interest expense, net...................... 20,279 5,396 4,099
Income from continuing operations.......... 32,962 3,090 8,595
Accretion of and dividend on preferred
stock(k).................................. 902 222 229
Income per common share from continuing
operations(m)............................. 1.06 0.10 0.27
</TABLE>

8
<PAGE>

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
-------------------------------------- -----------------------------------------------------
FULL YEAR 1994
-------------------------
JANUARY 1 AUGUST 19 YEAR THREE MONTHS THREE MONTHS
YEAR ENDED DECEMBER 31, TO TO ENDED ENDED ENDED
-------------------------- AUGUST 18, DECEMBER 31, DECEMBER 31, MARCH 31, MARCH 31,
1991 1992 1993 1994 1994 1995 1995 1996
-------- -------- ------ ---------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OTHER DATA:
Depreciation and
amortization.......... $ 7,482 $ 8,857 $9,265 $6,323 $ 4,394 $13,774 $ 3,460 $ 3,639
Capital expenditures... 7,896 10,739 8,439 5,935 2,191 9,878 3,020 2,463
Adjusted operating
income(n)............. 26,382 28,485 29,563 4,036(o) 28,778(o) 56,267 11,353 14,171
Adjusted operating
income as a percentage
of net sales(n)....... 8.8% 9.2% 9.7% 2.3%(o) 22.0%(o) 16.9% 14.6% 16.6%
<CAPTION>
MARCH 31, 1996
------------------
PRO
ACTUAL FORMA
-------- --------
<S> <C> <C>
BALANCE SHEET DATA(P):
Working capital........ $ 49,184 $ 60,283
Total assets........... 295,797 361,639
Total debt............. 144,403 244,545
Redeemable preferred
stock(k).............. 6,461 6,461
Stockholders' equity... 65,609 23,609
</TABLE>
- -------
(a) The periods beginning August 19, 1994 reflect data of the Company and its
subsidiaries. The periods prior to and including August 18, 1994 reflect
data of the Predecessor, substantially all of the assets of which were
acquired by Waters Corporation on August 18, 1994 from Millipore. Because
of the revaluation of the assets and liabilities acquired and related
impact to the statement of operations, the financial statements of the
Predecessor for the periods prior to August 19, 1994 are not strictly
comparable to those of the Company subsequent to that date. See "The
Company--Background."

(b) Results for the period from August 19, 1994 to December 31, 1994 included
several charges related to the Acquisition. The Company recorded charges
resulting from the revaluation of acquired inventory and for expensed in-
process R&D. During this period, the Company also began recording
amortization expense related to acquired goodwill and purchased technology.
Results for the year ended December 31, 1995 included a charge resulting
from the revaluation of acquired inventory arising from the acquisition of
Phase Separations Limited.

(c) For the year ended December 31, 1995, selling, general and administrative
expenses included a $3,567 fourth quarter nonrecurring charge for the one-
time acceleration of vesting of compensatory stock options.

(d) Management fees were incurred in connection with the Management Services
Agreement (as defined below) which services were terminated upon
consummation of the IPO in November 1995. See "Certain Relationships and
Related Transactions--Management Services Agreement."

(e) In the fourth quarter of 1994, the Company recorded a $3,500 restructuring
charge for the cost of actions taken in Japan and Europe to restructure
sales and administrative functions and to reduce the size of its workforce.
In the first quarter of 1993, the Predecessor recorded a restructuring
charge of $13,000 to cover costs associated with reorganizing into market-
focused business units, reducing the size of its workforce and closing
certain facilities.

(f) Predecessor interest expense was an allocation of Millipore's worldwide net
interest expense based upon the ratio of the Predecessor's net assets to
Millipore's net assets. No debt obligations of Millipore were reflected on
the Predecessor's balance sheets.

(g) The Company has periodically entered into forward exchange contracts to
hedge the U.S. dollar value of a portion of its anticipated future
international cash flows. The contract maturities were chosen to correspond
to the expected realization of the underlying cash flows. Generally
accepted accounting principles require that any contracts outstanding at
period end be valued at current market value even though they hedge
anticipated future cash flows. Resulting unrealized gains (losses) on
future cash flow hedges are reported separately from realized gains
(losses)

(footnotes continued on next page)

9
<PAGE>

on cash flow hedges which are recorded when contracts mature. In December
1995, the Company ceased to hedge anticipated future international cash
flows and therefore liquidated those particular forward foreign currency
contracts. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

(h) The Predecessor provision for income taxes was computed as if the
Predecessor operated on a stand-alone basis.
(i) On December 31, 1994, the Company announced a plan to sell its process
mass spectrometry business and recorded an $8,000 estimated loss on the
expected sale of this discontinued operation. In July 1995, the Company
sold a substantial portion of this business and the remainder of the
business was sold in January 1996.

(j) In 1992, the Predecessor recorded an after tax charge to income of $2,228
for the adoption of the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 106 "Employers' Accounting for Postretirement
Benefits Other than Pensions."

(k) Redeemable preferred stock represents the estimated fair market value of
stock issued to Millipore in connection with the Acquisition increased by
periodic accretion to liquidation value and accumulated but unpaid
dividends. The preferred stock must be redeemed by the Company in 2006.

(l) The summary unaudited pro forma statement of continuing operations data
has been prepared to give effect to the TAI Acquisition, the Tender Offer,
the IPO and the application of the net proceeds therefrom, together with
borrowings under the Bank Credit Agreement (as defined below), to repay
all outstanding indebtedness under the Prior Bank Credit Agreement (as
defined below) and to make the Redemption as if these events occurred on
January 1, 1995.

(m) There were 30,178, 30,178, and 30,925 weighted average shares of common
stock and common stock equivalents outstanding for the year ended December
31, 1995, and for the three months ended March 31, 1995 and 1996,
respectively, after giving effect to the IPO.

(n) Adjusted operating income and adjusted operating income as a percentage of
net sales exclude the following non-recurring charges: revaluation of
acquired inventory, expensed in-process R&D, the management fee paid in
connection with the Management Services Agreement, the one-time
acceleration of vesting of compensatory stock options and restructuring
charges.

(o) Based on historical shipment patterns within a quarter, the Company
typically generates losses in the first half of a quarter and income in
the second half. As a result, adjusted operating income for the period
January 1 to August 18, 1994 was adversely affected by the timing of the
Acquisition in the middle of a quarter and, conversely, adjusted operating
income for the period August 19, 1994 to December 31, 1994 was favorably
affected.

(p) The summary unaudited pro forma balance sheet data have been prepared to
give effect to the TAI Acquisition and the Tender Offer, as if these
events had occurred on the balance sheet date.

10
<PAGE>

RISK FACTORS

In addition to the other information contained in this Prospectus,
prospective investors should carefully consider the following risk factors
before making an investment in the Common Stock offered hereby. This
Prospectus includes forward looking statements. These statements are subject
to a number of risks and uncertainties, certain of which are beyond the
Company's control. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

COMPETITION; HPLC MARKET

The HPLC market is highly competitive, and the Company encounters
competition from several international instrument manufacturers and other
companies in both domestic and foreign markets. Certain competitors are
divisions of significantly larger companies which have greater financial and
other resources than the Company. There can be no assurances that the
Company's competitors will not introduce more effective and less costly
products than those of the Company. See "Competition."

The HPLC industry, from 1992 to 1994, experienced low sales growth.
Approximately 43% of Waters' net sales in 1995 were to the worldwide
pharmaceutical industry, which experienced slowed purchases of HPLC products
prior to 1995 due to unfavorable industry conditions and consolidations.
Unfavorable HPLC industry conditions could have a material adverse effect on
the Company's results of operations.

CONCENTRATED MANUFACTURING OPERATIONS INCREASE RISK OF DISRUPTION

The Company manufactures its HPLC instruments at its facility in Milford,
Massachusetts and its separation columns at its facility in Taunton,
Massachusetts. TAI manufactures all of its thermal analysis products at its
facility in Newcastle, Delaware. Any prolonged disruption to the operations at
either facility, whether due to labor difficulties, destruction of or damage
to either facility or other reasons, could have a material adverse effect on
the Company's results of operations and financial condition.

FOREIGN EXCHANGE RATES CAN ADVERSELY AFFECT RESULTS OF OPERATIONS

Approximately 65% of Waters' 1995 net sales were outside of the United
States and were primarily denominated in foreign currencies. As a result, a
significant portion of the Company's sales and operations are subject to
certain risks, including adverse developments in the foreign political and
economic environment, tariffs and other trade barriers, difficulties in
staffing and managing foreign operations and potentially adverse tax
consequences.

Additionally, the U.S. dollar value of the Company's net sales varies with
currency exchange rate fluctuations. Significant increases in the value of the
U.S. dollar relative to certain foreign currencies could have a material
adverse effect on Waters' results of operations. In 1995, each 1% average
strengthening of the dollar would have decreased reported net sales by
approximately $2.2 million but the impact on net income and cash flow would
have been significantly less as a result of offsetting effects of local
currency expenditures. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

SUBSTANTIAL INDEBTEDNESS

The Company has substantial indebtedness. Subject to the terms and
conditions of the Bank Credit Agreement, Waters may incur additional
indebtedness from time to time to finance acquisitions or capital expenditures
or for other purposes. The level of the Company's indebtedness could have
important consequences to holders of the Common Stock, given that: (i) a
substantial portion of the Company's cash flow from operations must be
dedicated to debt service and will not be available for other purposes; (ii)
the Company's ability to obtain additional debt financing in the future for
working capital, capital expenditures or acquisitions may be limited; and
(iii) the Company's level of indebtedness could limit its flexibility in
reacting to changes in the industry and economic conditions. Certain of the
Company's competitors currently operate on a less leveraged basis and, as a
result, have significantly greater financing flexibility than the Company.

11
<PAGE>

The Bank Credit Agreement imposes operating and financial restrictions on
the Company. The Bank Credit Agreement contains covenants which limit (subject
to certain exceptions): (i) the incurrence of additional indebtedness; (ii)
the payment of dividends; (iii) transactions with affiliates; (iv) asset
sales, acquisitions, mergers and consolidations; (v) prepayments of other
indebtedness; (vi) the creation of liens and encumbrances; and (vii) other
matters customarily restricted in such agreements. In addition, substantially
all of the Company's assets, including the stock of its subsidiaries, are
pledged to secure indebtedness under the Bank Credit Agreement. There can be
no assurance that the Company's existing cash balances and cash flow from
operations together with borrowings under the Bank Credit Agreement will be
sufficient to meet all of its debt service requirements and to fund its
capital expenditure requirements for the foreseeable future. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources."

RELIANCE ON KEY MANAGEMENT

The operation of the Company requires managerial and operational expertise.
None of the key management employees has an employment contract with the
Company, and there can be no assurance that such individuals will remain with
the Company. If, for any reason, such key personnel do not continue to be
active in management, the Company's operations could be adversely affected. As
of November 22, 1995, the Company's executive officers, including key
management employees, owned 1,816,349 shares of Common Stock and held options
to purchase approximately 4,371,975 additional shares of Common Stock,
representing on a fully diluted basis an approximately 18.3% aggregate
ownership interest. See "Management" and "Principal and Selling Stockholders."

POSSIBLE ADVERSE EFFECT ON MARKET PRICE DUE TO SHARES ELIGIBLE FOR FUTURE SALE

In addition to the shares of Common Stock sold in the Offerings, the
11,062,500 shares of Common Stock sold in the IPO will be freely tradeable
without restriction or further registration under the Securities Act of 1933
(the "Securities Act") unless held by an "affiliate" of the Company, as that
term is defined under Rule 144 of the Securities Act, which shares will be
subject to the resale limitations of Rule 144.

In connection with the Offerings, all Selling Stockholders and certain
members of management have agreed not to dispose of any shares for a period of
90 days from the date of this Prospectus, or to make any demand for or
exercise any right with respect to the registration of the shares; and the
Company's executive officers, non-selling directors and certain other members
of management, and certain other stockholders who hold in the aggregate
1,316,401 shares of Common Stock, have agreed not to dispose of any shares for
a period of 75 days from the date of the Prospectus or to make any demand for
or exercise any right with respect to the registration of their shares; and
the Company has agreed not to dispose of any shares (other than issuances by
the Company of certain employee stock options and shares covered thereby) for
a period of 90 days from the date of this Prospectus, in each case without the
prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") on behalf of the Underwriters. Certain existing stockholders
have also waived all rights to register securities owned by them in connection
with the Offerings. Upon expiration of the lock-up periods, the shares of
Common Stock subject to the lock-ups will be eligible for sale subject to
certain volume and other resale limitations of Rule 144 and Rule 144A under
the Securities Act.

No prediction can be made as to the effect, if any, that market sales of
shares of Common Stock or the availability of shares of Common Stock for sale
will have on the market price of the Common Stock from time to time. The sale
of a substantial number of shares held by the existing stockholders, whether
pursuant to a subsequent public offering or otherwise, or the perception that
such sales could occur, could adversely affect the market price of the Common
Stock and could materially impair the Company's future ability to raise
capital through an offering of equity securities. See "Shares Eligible For
Future Sale" and "Underwriting."

RESTRICTION ON PAYMENT OF DIVIDENDS ON COMMON STOCK

The Company does not expect to pay dividends for the foreseeable future. The
Bank Credit Agreement restricts the ability of the Company to pay dividends on
the Common Stock. See "Price Range of Common Stock and Dividend Policy" and
"Description of Certain Indebtedness."

12
<PAGE>

ANTITAKEOVER PROVISIONS

The Company's Amended and Restated Certificate of Incorporation and Bylaws
contain certain provisions that could make more difficult the acquisition of
the Company by means of a tender offer, a proxy contest or otherwise. These
provisions include advance notice procedures for stockholders to nominate
candidates for election as directors of the Company and for stockholders to
submit proposals for consideration at stockholders' meetings. In addition, the
Company is subject to Section 203 of the Delaware General Corporation Law,
which limits transactions between a publicly held company and "interested
stockholders" (generally, those stockholders who, together with their
affiliates and associates, own 15% or more of the company's outstanding
capital stock). This provision of Delaware law also may have the effect of
deterring certain potential acquisitions of the Company. See "Description of
Capital Stock."

13
<PAGE>

THE COMPANY

GENERAL

Waters is the world's largest manufacturer, distributor and provider of HPLC
instruments, chromatographic columns and other consumables, and related
service. In 1994, the Company's market share was approximately 21% of the
estimated $1.5 billion global HPLC market, which the Company believes was two
and one-half times greater than its next leading competitor. Waters serves a
worldwide client base with 65% of its 1995 net sales to customers outside of
the U.S.

HPLC is the largest product segment of the analytical instrument market.
HPLC is utilized in a broad range of industries to detect, identify, monitor
and measure the chemical, physical and biological composition of materials,
and to purify a full range of compounds. Customers include manufacturers of
pharmaceuticals (ethical, generic and over-the-counter), industrial chemicals
and polymers, food, beverages, and consumer products, as well as biotechnology
companies, environmental testing companies, universities, hospitals and
government agencies. HPLC is used for research and development, methods
development, manufacturing and quality control due to its ability to identify
approximately 80% of all known compounds and to operate in an automated
manner, increasing productivity at a low cost to the user. Examples of HPLC
applications include identification of new drug compounds, nutritional content
analysis for food and beverage labeling, environmental testing of waste water
and hazardous materials and quality control for a wide range of consumer and
industrial products.

The principal executive offices of the Company are located at 34 Maple
Street, Milford, Massachusetts 01757 and its telephone number is (508) 478-
2000.

RECENT DEVELOPMENTS

The IPO and the Redemption. In November 1995, the Company consummated the
IPO of its Common Stock which included the sale by the Company of 6,250,000
shares at an initial public offering price of $15.00 per share. In connection
with the IPO, certain stockholders of the Company sold an additional 4,812,500
shares of Common Stock. Proceeds from the sale of Common Stock received by the
Company were used (i) to repay a portion of the indebtedness incurred under
the Company's then existing credit facility and (ii) for the Redemption. The
aggregate purchase price paid by the Company in connection with the Redemption
was $28.2 million.

The Tender Offer and Bank Credit Agreement Amendment. On March 7, 1996, the
Company commenced the Tender Offer pursuant to which the remaining $75 million
in aggregate principal amount of Senior Subordinated Notes which were not
redeemed in connection with the IPO were purchased on April 4, 1996. The
aggregate purchase price paid by the Company in connection with the Tender
Offer was $90.6 million. Prior to the Tender Offer, in March 1996 the Company
amended the Bank Credit Agreement by increasing the maximum availability under
such facility by $125 million to $300 million in order to simplify its capital
structure and provide additional flexibility.

The TA Instruments Acquisition. On May 1, 1996, the Company acquired all of
the capital stock of TAI for $84 million in cash, subject to certain
adjustments, which was financed through drawings on the revolving credit
facility under the Bank Credit Agreement. TAI develops, manufactures, sells
and services thermal analysis instrumentation which is used for the physical
characterization of polymers and related materials. The thermal analysis and
rheology products offered by TAI are among the most prevalent techniques
employed in the analysis of polymers and other organic/inorganic materials.
TAI is the global market leader in the field of thermal analysis. Net sales
for TAI were approximately $47 million in 1995.

14
<PAGE>

industrial customer which would combine the thermal analysis and rheology
businesses of TAI with Waters' current gel permeation chromatography product
line. There is a strong relationship between the information obtained through
gel permeation chromatography and the types of information obtained from
thermal analysis. Waters believes that bringing these related analytical
technologies together on a common information management system will bring
significant value to industrial customers working primarily with polymeric
materials.

BACKGROUND

On August 18, 1994, the Company consummated the Acquisition of the
Predecessor from Millipore.

USE OF PROCEEDS

The Company is not selling shares of Common Stock in the Offerings and will
not receive any of the proceeds from the sale of the shares of Common Stock
offered hereby.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The Common Stock is traded on the New York Stock Exchange under the symbol
"WAT." The following table sets forth on a per share basis, for the periods
indicated, the high and low sales prices of the Common Stock as reported by
the New York Stock Exchange. The Common Stock was not publicly traded prior to
the IPO.

<TABLE>
<CAPTION>
PRICE RANGE
---------------
HIGH LOW
FISCAL 1995: ------- -------
<S> <C> <C>
Fourth Quarter (from November 17, 1995)............. $18 1/4 $13 1/4
FISCAL 1996:
First Quarter....................................... 24 5/8 16 3/4
Second Quarter (through May 9, 1996)................ 30 24 3/8
</TABLE>

A recent closing price as reported on the New York Stock Exchange is set
forth on the cover page of this Prospectus.

Since the Acquisition, except as described below, the Company has not
declared or paid any cash or other dividends on its Common Stock and does not
expect to pay dividends for the foreseeable future. The Company anticipates
that for the foreseeable future, earnings will be reinvested in the business.
The Company's Bank Credit Agreement restricts the Company's ability to pay
dividends or make other distributions on its Common Stock. The Bank Credit
Agreement provides that, among other limited exceptions, the Company may pay
dividends to holders of its Common Stock in an aggregate amount of $2 million,
plus the lesser of $2 million and the Cumulative Income Amount (as defined,
which definition includes approximately one quarter of net income less
expenditures for certain capital expenditures and dividends). The declaration
and payment of dividends by the Company are subject to the discretion of the
Board of Directors of the Company (the "Board"). Any future determination to
pay dividends will depend on the Company's results of operations, financial
condition, capital requirements, contractual restrictions and other factors
deemed relevant by the Board. On September 12, 1995, the Company declared and
paid a special distribution of approximately $16.2 million (the "Special
Distribution") to holders of the Company's Common Stock and warrants to
acquire its Common Stock.

15
<PAGE>

CAPITALIZATION

The following table sets forth the historical capitalization of the Company
at March 31, 1996 and on a pro forma basis to give effect to the Tender Offer
and the TAI Acquisition. This table should be read in conjunction with the
consolidated financial statements and the pro forma financial data of the
Company and notes thereto appearing elsewhere in this Prospectus. See
"Selected Consolidated Financial Data" and "Unaudited Pro Forma Financial
Data."

<TABLE>
<CAPTION>
MARCH 31, 1996
------------------
PRO
ACTUAL FORMA
-------- --------
(DOLLARS IN
THOUSANDS
EXCEPT PER SHARE
DATA)
<S> <C> <C>
Short-term debt (a)........................................ $ 1,303 $ 1,303
======== ========
Long-term debt:
Loans under Bank Credit Agreement (a).................... $ 68,100 $243,242
Senior Subordinated Notes................................ 75,000 --
-------- --------
Total long-term debt................................... 143,100 243,242
Redeemable preferred stock (b)............................. 6,461 6,461
Stockholders' equity:
Common Stock, par value $0.01 per share, 50,000,000
shares authorized,
28,795,685 shares issued and outstanding (c)............ 288 288
Additional paid-in capital............................... 145,089 145,089
Deferred stock option compensation....................... (993) (993)
Accumulated deficit (d).................................. (77,228) (119,228)
Translation adjustments.................................. (1,143) (1,143)
Minimum pension liability adjustment..................... (404) (404)
-------- --------
Total stockholders' equity............................. 65,609 23,609
-------- --------
Total capitalization................................... $215,170 $273,312
======== ========
</TABLE>
- --------

(a) On a pro forma basis as of March 31, 1996, the Company would have had
availability of $55,455 under the Bank Credit Agreement and cash of $1,825.

(b) Redeemable preferred stock represents the estimated fair value of the
stock issued to Millipore in connection with the Acquisition increased by
periodic accretion to liquidation value and accumulated but unpaid
dividends. The preferred stock has a liquidation value of $10,000 and
accrues cumulative dividends of 6% per annum based upon the liquidation
value thereof, for each year in which the Company does not pay cash
dividends. The preferred stock must be redeemed by the Company in 2006.

(c) Does not include shares that may be issued upon exercise of options
granted pursuant to the Company's stock option plan.

(d) Pro forma accumulated deficit includes the estimated $22,000 extraordinary
loss from the Tender Offer and $20,000 immediate write-off of acquired in
process research and development from the TAI Acquisition. See "Unaudited
Pro Forma Financial Data."

16
<PAGE>

UNAUDITED PRO FORMA FINANCIAL DATA

The following unaudited pro forma consolidated statements of continuing
operations for the year ended December 31, 1995 give effect to (i) the TAI
Acquisition, (ii) the Tender Offer, (iii) the Redemption and (iv) the IPO and
the application of the net proceeds therefrom, together with borrowings under
the Bank Credit Agreement, to repay all outstanding indebtedness under the
Prior Bank Credit Agreement as if each of such events had occurred on January
1, 1995. The unaudited pro forma statements of continuing operations for the
three month period ended March 31, 1996 give effect to the TAI Acquisition and
the Tender Offer as if each of such events had occurred on January 1, 1995.
The unaudited pro forma balance sheet of the Company at March 31, 1996 was
prepared as if items (i) and (ii) above had occurred on such date.

The unaudited pro forma financial data are based on the historical
consolidated financial statements for the Company and TAI and the assumptions
and adjustments described in the accompanying notes. The unaudited pro forma
statements of continuing operations do not (i) purport to represent what the
Company's results of operations actually would have been if the events
described above had occurred as of the dates indicated or what such results
will be for any future periods or (ii) give effect to certain non-recurring
charges which resulted from these events. The unaudited pro forma financial
data are based upon assumptions that the Company believes are reasonable and
should be read in conjunction with the Consolidated Financial Statements and
accompanying notes thereto included elsewhere in this Prospectus.

17
<PAGE>

WATERS CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF CONTINUING OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
WATERS CORPORATION IPO AND TA INSTRUMENTS, INC. TA INSTRUMENTS, INC.
HISTORICAL TENDER OFFER HISTORICAL ACQUISITION PRO
DECEMBER 31,1995 ADJUSTMENTS(A) DECEMBER 31,1995 ADJUSTMENTS FORMA
------------------ -------------- -------------------- -------------------- --------
<S> <C> <C> <C> <C> <C>
Net sales............... $332,972 $46,597 $379,569
Cost of sales........... 126,216 17,533 $ 20 (e) 143,769
Revaluation of acquired
inventory.............. 925 -- 925
-------- ------- ------- --------
Gross profit........... 205,831 29,064 (20) 234,875
Selling, general and
administrative
expenses............... 132,746 16,719 80 (e) 149,545
Research and development
expenses............... 17,681 2,072 15 (e) 19,768
Goodwill and purchased
technology, net........ 3,629 1,962 1,050 (e) 6,641
Management fee.......... 5,393 $(5,393)(b) -- --
-------- ------- ------- ------- --------
Operating income....... 46,382 5,393 8,311 (1,165) 58,921
Interest expense, net... 30,315 (15,996)(c) 4,278 1,682 (f) 20,279
Unrealized losses on
future cash flow
hedges................. 1,142 -- 1,142
Realized (gains) on cash
flow hedges............ (2,317) -- (2,317)
Other (income), net..... -- (434) (434)
-------- ------- ------- ------- --------
Income from continuing
operations before
income taxes.......... 17,242 21,389 4,467 (2,847) 40,251
Provision for income
taxes (income tax
benefit)............... 3,129 3,850(d) (345) 655 (d) 7,289
-------- ------- ------- ------- --------
Income from continuing
operations............ 14,113 17,539 4,812 (3,502) 32,962
-------- ------- ------- ------- --------
Accretion of and
dividend on preferred
stock.................. 902 1,014 (1,014)(g) 902
-------- ------- ------- ------- --------
Income from continuing
operations available
to common
stockholders.......... $ 13,211 $17,539 $ 3,798 $(2,488) $ 32,060
======== ======= ======= ======= ========
Income per common share
from continuing
operations............ $ .54 $ 1.06
======== ========
Weighted average number
of common shares....... 24,582 30,178(h)
</TABLE>

See Notes to Unaudited Pro Forma Consolidated Statements of Continuing
Operations.

18
<PAGE>

WATERS CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF CONTINUING OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
WATERS CORPORATION IPO AND TA INSTRUMENTS, INC. TA INSTRUMENTS, INC.
HISTORICAL TENDER OFFER HISTORICAL ACQUISITION PRO
MARCH 31, 1996 ADJUSTMENTS(A) MARCH 31, 1996 ADJUSTMENTS FORMA
------------------ -------------- -------------------- -------------------- -------
<S> <C> <C> <C> <C> <C>
Net sales............... $85,313 $10,597 $95,910
Cost of sales........... 32,114 4,066 $ 5(e) 36,185
------- ------- ----- -------
Gross profit........... 53,199 6,531 (5) 59,725
Selling, general and
administrative
expenses............... 33,429 4,052 20 (e) 37,501
Research and development
expenses............... 4,668 983 3 (e) 5,654
Goodwill and purchased
technology, net........ 931 428 263 (e) 1,622
------- ------- ------- ----- -------
Operating income....... 14,171 1,068 (291) 14,948
Interest expense, net... 3,954 ($1,216)(i) 955 406 (j) 4,099
Other expense, net...... -- 105 105
------- ------- ------- ----- -------
Income from continuing
operations before
income taxes.......... 10,217 1,216 8 (697) 10,744
Provision for income
taxes (income tax
benefit)............... 2,042 243(d) (57) (79) (d) 2,149
------- ------- ------- ----- -------
Income from continuing
operations............ 8,175 973 65 (618) 8,595
------- ------- ------- ----- -------
Accretion of and
dividend on preferred
stock.................. 229 273 (273)(g) 229
------- ------- ------- ----- -------
Income (loss) from
continuing operations
available to common
stockholders.......... $ 7,946 $ 973 $ (208) $(345) $ 8,366
======= ======= ======= ===== =======
Income per common share
from continuing
operations............ $ .26 $ .27
======= =======
Weighted average number
of common shares....... 30,925 30,925
</TABLE>

See Notes to Unaudited Pro Forma Consolidated Statements of Continuing
Operations.

19
<PAGE>

WATERS CORPORATION

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF
CONTINUING OPERATIONS

(DOLLARS IN THOUSANDS)

(a) The Unaudited Pro Forma Statements of Continuing Operations exclude the
estimated $22,000 nonrecurring charge related to the write-off of
unamortized debt issuance costs and redemption premium for the early
extinguishment of $75,000 principal amount of such indebtedness. This
charge will be recorded as an extraordinary charge in the second quarter
of 1996. The Unaudited Pro Forma Statement of Continuing Operations for
the year ended December 31, 1995 also excludes the extraordinary loss of
$12,112 recorded in the fourth quarter of 1995 from the early
extinguishment of $25,000 principal amount of Senior Subordinated Notes
and the repayment of all indebtedness under the Prior Bank Credit
Agreement.

(b) Reflects the elimination of the AEA and Bain management fee which was
discontinued upon the consummation of the Company's IPO.

(c) Adjustment of $12,750 to reflect the elimination in interest expense on
$100,000 of repurchased and redeemed Senior Subordinated Notes (which bore
interest of 12.75% per annum), an adjustment of $2,216 to reflect the
reduction of deferred financing costs associated with such indebtedness
and the Prior Bank Credit Agreement and an adjustment of $1,030 to reflect
the reduction in interest expense related to pro forma borrowings under
the Bank Credit Agreement (assuming an interest rate of 7.05% per annum).

(d) Adjustment to income tax expense to reflect the estimated income tax
effects of certain pro forma adjustments. The Company's pro forma
effective income tax rate is lower than the U.S. federal statutory rate
due to net operating loss carryforwards offset by the effect of
nondeductible acquisition related amortization.

(e) Reflects amortization of the depreciable write-up to property, plant and
equipment over the estimate of its composite useful life (7 years) and the
amortization of goodwill arising from the TAI Acquisition over a 40 year
period. Amortization of the depreciable property, plant and equipment
write-up has been allocated among costs of sales, selling, general and
administrative expenses and research and development expenses.

(f) Represents the elimination of TAI historical interest expense amounting to
$4,278 incurred as a stand alone company and incremental interest expense
of $5,960 resulting from borrowings under the Bank Credit Agreement
totaling $84,500 to fund the TAI Acquisition (assuming an interest rate of
7.05% per annum).

(g) Represents the elimination of dividends on TAI historical preferred stock.

(h) Pro forma income per share from continuing operations for the year ended
December 31, 1995 have been computed using the weighted average number of
common shares and common share equivalents outstanding adjusted for the
Company's IPO. Common share equivalents result from outstanding options
and warrants to purchase Common Stock. The warrants were exercised in
October 1995.

(i) Adjustment of $2,392 to reflect the elimination in interest expense on
$75,000 of repurchased Senior Subordinated Notes (which bore interest of
12.75% per annum), an adjustment of $212 to reflect the reduction in
deferred financing costs associated with such indebtedness and an
adjustment of $1,388 to reflect an increase in interest expense related to
pro forma borrowings under the Bank Credit Agreement (assuming an interest
rate of 6.44% per annum).

(j) Represents the elimination of TAI historical interest expense amounting to
$955 incurred as a stand alone Company and incremental interest expense of
$1,361 resulting from borrowings under the Bank Credit Agreement totaling
$84,500 to fund the TAI Acquisition (assuming an interest rate of 6.44%
per annum).

20
<PAGE>

WATERS CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

(IN THOUSANDS)

<TABLE>
<CAPTION>
WATERS CORPORATION TA INSTRUMENTS, INC. TA INSTRUMENTS, INC.
HISTORICAL TENDER OFFER HISTORICAL ACQUISITION PRO
MARCH 31, 1996 ADJUSTMENTS MARCH 31, 1996 ADJUSTMENTS FORMA
------------------ ------------ -------------------- -------------------- --------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets.......... $121,034 $ 19,120 $ 4,400 (c) $139,833
(4,721)(d)
Property, plant and
equipment, net......... 70,277 3,110 800 (e) 74,187
Other assets, including
purchased technology... 32,346 $ (5,542)(a) 7,455 34,259
Goodwill, net........... 72,140 -- 41,220 (f) 113,360
-------- -------- -------- -------- --------
Total assets............ $295,797 $ (5,542) $ 29,685 $ 41,699 $361,639
======== ======== ======== ======== ========
LIABILITIES AND EQUITY
(DEFICIT)
Current liabilities..... $ 71,850 $ 816 (a) $ 12,895 $ (6,011)(d) $ 79,550
Loans under Bank Credit
Agreement.............. 68,100 90,642 (b) 25,000 84,500 (g) 243,242
(25,000)(d)
Senior Subordinated
Notes.................. 75,000 (75,000)(b) -- --
Redeemable preferred
stock.................. 6,461 8,218 (8,218)(h) 6,461
Other liabilities....... 8,777 359 (359)(h) 8,777
Equity (deficit)........ 65,609 (22,000)(a) (16,787) 16,787 (h) 23,609
(20,000)(i)
-------- -------- -------- -------- --------
Total liabilities and
equity (deficit)....... $295,797 $ (5,542) $ 29,685 $ 41,699 $361,639
======== ======== ======== ======== ========
</TABLE>

See Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet.

21
<PAGE>

WATERS CORPORATION

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

(IN THOUSANDS)

(a) Represents estimated extraordinary loss of $22,000 due to the repurchase
of Senior Subordinated Notes, including $5,542 of debt issuance costs,
$816 of related expenses and $15,642 of premium.

(b) Represents the repurchase of $75,000 principal amount of Senior
Subordinated Notes through additional borrowing under the Bank Credit
Agreement totaling $90,642, including repurchase premium (see note a
above).

(c) The Company will write-up the value of certain inventory in connection
with the purchase price allocation. This write-up will be charged to cost
of goods sold during 1996. This one-time charge (currently estimated to be
$4,400) has not been reflected in the accompanying Pro Forma Statement of
Continuing Operations due to its non-recurring nature.

(d) Represents the elimination of certain assets and liabilities excluded from
the TAI Acquisition.

(e) Represents the estimated write-up to fair value of property, plant and
equipment.

(f) Represents estimated goodwill resulting from the TAI Acquisition.

(g) Represents additional borrowings under the Bank Credit agreement to fund
the TAI Acquisition.

(h) Represents the elimination of TA Instruments, Inc. historical equity,
redeemable preferred stock and deferred income tax accounts.

(i) In accordance with generally accepted accounting principles ("GAAP") the
Company will allocate a portion of the purchase price to in-process
research and development projects that have an economic value, and since
GAAP does not permit the capitalization of research and development,
immediately write-off this value (currently estimated at $20 million) as a
charge to operations upon consummation of the TAI Acquisition. This one-
time charge is reflected in the Pro Forma Balance Sheet but not in the Pro
Forma Statement of Continuing Operations due to its non-recurring nature.

Under purchase accounting, the total purchase cost will be allocated to the
acquired assets and liabilities of TA Instruments, Inc. based on their
relative fair values. Allocations are subject to valuations as of the date
of the TAI Acquisition based upon appraisals and other studies which are
not yet completed. Accordingly, the final allocations may be different from
the amounts reflected herein although such differences are not expected to
be material. The amount and components of the estimated price along with
the allocation of the estimated purchase price to assets and liabilities
assumed are as follows:

<TABLE>
<S> <C>
Contractual purchase price...................................... $ 84,000
Estimated acquisition costs..................................... 500
--------
Total estimated purchase price................................ $ 84,500
========
Historical stockholders' deficit at March 31, 1996.............. $(16,787)
Elimination of certain assets................................... (4,721)
Elimination of certain liabilities including redeemable pre-
ferred stock................................................... 39,588
Estimated write-up of inventories............................... 4,400
Estimated write-up of property, plant and equipment............. 800
Goodwill........................................................ 41,220
In-process research and development............................. 20,000
--------
$ 84,500
========
</TABLE>

22
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA (a)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Set forth below are selected historical financial data of the Predecessor
and the Company as of the dates and for the periods shown. The selected
historical financial data as of December 31, 1992 and 1993, for the years
ended December 31, 1991, 1992 and 1993, and for the periods from January 1,
1994 through August 18, 1994 were derived from the historical financial
statements of the Predecessor for such periods that were audited by Coopers &
Lybrand L.L.P., independent auditors. The selected historical financial data
of the Predecessor as of December 31, 1991 were derived from unaudited
historical financial statements of the Predecessor for such period. The
selected historical financial data as of December 31, 1994 and 1995 and for
the period from August 19, 1994 through December 31, 1994 and the year ended
December 31, 1995 were derived from the historical financial statements of the
Company that were audited by Coopers & Lybrand L.L.P., whose report appears
elsewhere in this Prospectus. The selected historical data of the Company for
the three month periods ended March 31, 1995 and 1996 are unaudited, however
in the opinion of management such unaudited data include all adjustments
(consisting of normal recurring adjustments) necessary for a fair
representation of the information included therein. The results of operations
for the three months ended March 31, 1996 are not necessarily indicative of
the results for the entire year or any other interim period. Because of the
revaluation of the assets and liabilities and related impact to the statement
of operations, the financial statements of the Predecessor for the periods
prior to August 19, 1994 are not strictly comparable to those of the Company
subsequent to that date. The selected historical financial data should be read
in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the financial statements and
accompanying notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
PREDECESSOR COMPANY
------------------------------------------ --------------------------------------------
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, FULL YEAR 1994 MARCH 31,
---------------------------- ------------------------- ----------------
JANUARY 1 TO AUGUST 19 TO YEAR ENDED
AUGUST 18, DECEMBER 31, DECEMBER 31,
1991 1992 1993 1994 1994 1995 1995 1996
-------- -------- -------- ------------ ------------ ------------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS
DATA:
Net sales............... $300,647 $309,287 $304,927 $176,097 $131,057 $332,972 $77,554 $85,313
Cost of sales........... 125,160 123,342 124,387 73,446 49,740 126,216 30,282 32,114
Revaluation of acquired
inventory.............. -- -- -- -- 38,424(b) 925(b) -- --
-------- -------- -------- -------- -------- -------- ------- -------
Gross profit........... 175,487 185,945 180,540 102,651 42,893 205,831 47,272 53,199
S,G&A expenses (c)...... 130,600 138,318 132,452 85,216 44,522 132,746 30,920 33,429
R&D expenses............ 18,505 19,142 18,525 13,399 6,790 17,681 4,096 4,668
Goodwill and purchased
technology amortization -- -- -- -- 1,227(b) 3,629 903 931
Expensed in-process R&D -- -- -- -- 53,918(b) -- -- --
Management fee (d)...... -- -- -- -- 552 5,393 387 --
Restructuring charge
(e).................... -- -- 13,000 -- 3,500 -- -- --
-------- -------- -------- -------- -------- -------- ------- -------
Operating income
(loss)................ 26,382 28,485 16,563 4,036 (67,616) 46,382 10,966 14,171
Interest expense, net
(f).................... 2,185 2,107 2,072 828 12,011 30,315 8,119 3,954
Unrealized (gains)
losses on future cash
flow hedges (g)........ -- -- -- -- (923) 1,142 3,886 --
Realized (gains) on cash
flow hedges(g)......... -- -- -- -- -- (2,317) -- --
-------- -------- -------- -------- -------- -------- ------- -------
Income (loss) from
continuing operations
before income taxes... 24,197 26,378 14,491 3,208 (78,704) 17,242 (1,039) 10,217
Provision (benefit) for
income taxes(h)........ 6,423 6,180 4,169 916 1,487 3,129 (199) 2,042
-------- -------- -------- -------- -------- -------- ------- -------
Income (loss) from
continuing operations. 17,774 20,198 10,322 2,292 (80,191) 14,113 (840) 8,175
(Loss) income from
discontinued
operations,
net of tax (i)......... (59) 108 (9) (448) 787 -- -- --
Estimated (loss) on
disposal of
discontinued
operations (i)......... -- -- -- -- (8,000) -- -- --
-------- -------- -------- -------- -------- -------- ------- -------
Income (loss) before
extraordinary item.... 17,715 20,306 10,313 1,844 (87,404) 14,113 (840) 8,175
Extraordinary item--
(loss) on early
retirement
of debt................ -- -- -- -- -- (12,112) -- --
-------- -------- -------- -------- -------- -------- ------- -------
Income (loss) before
cumulative effect of
change in accounting
principle............. 17,715 20,306 10,313 1,844 (87,404) 2,001 (840) 8,175
Cumulative effect of
change in accounting
principle (j).......... -- (2,228) -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- ------- -------
Net income (loss)...... 17,715 18,078 10,313 1,844 (87,404) 2,001 (840) 8,175
Less: accretion of and
dividend on preferred -- -- -- -- 330 902 222 229
stock (k).............. -------- -------- -------- -------- -------- -------- ------- -------
Net income (loss)
available to common $ 17,715 $ 18,078 $ 10,313 $ 1,844 $(87,734) $ 1,099 $(1,062) $ 7,946
stockholders.......... -------- ======== ======== ======== ======== ======== ======= =======
</TABLE>

23
<PAGE>

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
------------------------------------------ ---------------------------------------------------
FULL YEAR 1994
--------------------------
THREE MONTHS
YEAR ENDED DECEMBER 31, JANUARY 1 TO AUGUST 19 TO YEAR ENDED ENDED MARCH 31,
---------------------------- AUGUST 18, DECEMBER 31, DECEMBER 31, ----------------------
1991 1992 1993 1994 1994 1995 1995 1996
-------- -------- -------- ------------ ------------ ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income (loss) per common
share:
(Loss) income per common
share from continuing
operations............. $ (3.38) $ 0.54 $ (0.04) $ 0.26
(Loss) per common share
from discontinued
operations............. (0.30) -- -- --
Extraordinary (loss) per -- (0.49) -- --
common share........... ---------- ---------- ---------- ----------
Net (loss) income per $ (3.68) $ 0.05 $ (0.04) $ 0.26
common share........... ========== ========== ========== ==========
Weighted average number
of common shares........ 23,852 24,582 23,852 30,925
OTHER DATA:
Depreciation and
amortization........... $ 7,482 $ 8,857 $ 9,265 $6,323 $ 4,394 $ 13,774 $ 3,460 $ 3,639
Capital expenditures.... 7,896 10,739 8,439 5,935 2,191 9,878 3,020 2,463
Adjusted operating
income (l)............. 26,382 28,485 29,563 4,036(m) 28,778(m) 56,267 11,353 14,171
Adjusted operating
income as a
percentage of net sales
(l).................... 8.8% 9.2% 9.7% 2.3%(m) 22.0%(m) 16.9% 14.6% 16.6%
BALANCE SHEET DATA (AT
PERIOD END):
Working capital......... $106,743 $112,905 $100,528 $ 87,357 $ 57,033 $ 49,184
Total assets............ 195,730 199,513 189,592 331,598 299,816 295,797
Total debt.............. -- -- -- 276,017 160,433 144,403
Redeemable preferred
stock (k).............. -- -- -- 5,330 6,232 6,461
Stockholders' (deficit)
equity................. 161,736 163,157 149,095 (22,670) 58,118 65,609
</TABLE>
- --------
(a) The periods beginning August 19, 1994 reflect data of the Company and its
subsidiaries. The periods prior to and including August 18, 1994 reflect
data of the Predecessor, substantially all of the assets of which were
acquired by Waters Corporation on August 18, 1994.

(b) Results for the period from August 19, 1994 to December 31, 1994 included
several charges related to the Acquisition. The Company recorded charges
resulting from the revaluation of acquired inventory and for expensed in-
process R&D. During this period, the Company also began recording
amortization expense related to acquired goodwill and purchased
technology. Results for the year ended December 31, 1995 included a charge
resulting from the revaluation of acquired inventory arising from the
acquisition of Phase Separations Limited.

(c) For the year ended December 31, 1995, selling, general and administrative
expenses included a $3,567 fourth quarter non-recurring charge for the
one-time acceleration of vesting of compensatory stock options.

(e) In the fourth quarter of 1994, the Company recorded a $3,500 restructuring
charge for the cost of actions taken in Japan and Europe to restructure
sales and administrative functions and to reduce the size of its
workforce. In the first quarter of 1993, the Predecessor recorded a
restructuring charge of $13,000 to cover costs associated with
reorganizing into market-focused business units, reducing the size of its
workforce and closing certain facilities.

(f) The Predecessor's interest expense was an allocation of Millipore's
worldwide net interest expense based upon the ratio of the Predecessor's
net assets to Millipore's net assets. No debt obligations of Millipore
were reflected on the Predecessor's balance sheets.

(footnotes continued on next page)

24
<PAGE>

that any contracts outstanding at period end be valued at current market
value even though they hedge anticipated future cash flows. Resulting
unrealized gains (losses) on future cash flow hedges are reported separately
from realized gains (losses) on cash flow hedges which are recorded when
contracts mature. In December 1995, the Company ceased to hedge anticipated
future international cash flows and therefore liquidated those particular
forward foreign currency contracts. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

(h) The Predecessor's provision for income taxes was computed as if the
Predecessor operated on a stand-alone basis.

(i) On December 31, 1994, the Company announced a plan to sell its process
mass spectrometry business and recorded an $8,000 estimated loss on the
expected sale of this discontinued operation. In July 1995, the Company
sold a substantial portion of this business and the remainder of the
business was sold in January 1996.

(j) In 1992, the Predecessor recorded an after tax charge to income of $2,228
for the adoption of the provisions of SFAS No. 106, "Employers' Accounting
for Postretirement Benefits Other than Pensions."

(k) Redeemable preferred stock represents the fair market value of stock
issued to Millipore in connection with the Acquisition increased by
periodic accretion to liquidation value and accumulated but unpaid
dividends. The preferred stock has a liquidation value of $10,000 and
accrues cumulative dividends of 6% per annum based upon the liquidation
value thereof, for each year in which the Company does not pay cash
dividends. The preferred stock must be redeemed by the Company in 2006 and
may be redeemed at the option of the Company at any time prior thereto at
a redemption price equal to the liquidation value thereof plus accrued and
unpaid dividends thereon.

(l) Adjusted operating income and adjusted operating income as a percentage of
net sales exclude the following non-recurring charges: revaluation of
acquired inventory, expensed in-process R&D, the management fee paid in
connection with the Management Services Agreement, the one time
acceleration of vesting of compensatory stock options and restructuring
charges.

(m) Based on historical shipment patterns within a quarter, the Company
typically generates losses in the first half of a quarter and income in
the second half. As a result, adjusted operating income for the period
January 1 to August 18, 1994 was adversely affected by the timing of the
Acquisition in the middle of a quarter and, conversely, adjusted operating
income for the period August 19, 1994 to December 31, 1994 was favorably
affected.

25
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company's revenues are comprised of sales of high performance liquid
chromatography (HPLC) instruments and related consumables and service. After
compound annual sales growth in excess of 14% from 1980 to 1990, the Company's
compound annual sales growth slowed to approximately 1% per year from 1990
through 1994. The Company believes that this slower net sales growth was
primarily due to depressed worldwide economic conditions and a corresponding
slowdown in the growth of the analytical instrument marketplace. Beginning in
late 1992, reduced spending by pharmaceutical companies due to their concern
over U.S. healthcare reform further affected net sales growth. In 1994, net
sales grew by only 1%. However, combined full year 1994 results were depressed
by an aberrant 8% first quarter sales decline primarily due to circumstances
surrounding the Acquisition. Specifically, the Company's first quarter 1994
sales force reorganization, implemented to prepare it to operate as a stand
alone business, affected the closing of customer orders during that period.
Subsequent to this disruption, combined net sales for the nine month period
ended December 31, 1994 represented 4% growth over prior year levels. Sales
for the year ended December 31, 1995 represented 8% growth over the comparable
prior year period. Sales for the three month period ended March 31, 1996
represented 10% growth over the comparable prior year period. Sales growth has
increased over the past eight quarters as the Company has introduced new
products, the market has improved and the Company's international operations
have benefited from the decline in the U.S. dollar. While some product prices
have increased and others have decreased over the past three years, overall
pricing has remained generally stable.

The following table presents summary net sales data by quarter for 1993,
1994, 1995 and the first three months of 1996 (dollars in thousands):

<TABLE>
<CAPTION>
NET SALES
----------------------------------------------------------------------
1993 COMBINED 1994 1995 1996
-------- -------------------- -------------------- -------------------
% CHANGE TO % CHANGE TO % CHANGE TO
COMPARABLE COMPARABLE COMPARABLE
AMOUNT AMOUNT PERIOD AMOUNT PERIOD AMOUNT PERIOD
-------- -------- ----------- -------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Q1...................... $ 77,061 $ 71,130 (8)% $ 77,554 9% $85,313 10%
Q2...................... 74,867 78,236 5 % 84,328 8%
Q3...................... 71,194 74,987 5 % 80,634 8%
Q4 ..................... 81,805 82,801 1 % 90,456 9%
-------- -------- --------
FY...................... $304,927 $307,154 1 % $332,972 8%
======== ======== ========
</TABLE>

Waters improved its operating income in the face of the slow growth of the
early 1990s, principally through cost reduction. Although the compound annual
growth rate of sales was approximately 1% from 1990 through 1994, the compound
annual growth rate of operating income, excluding nonrecurring charges, was
more than 5% over this period. Waters has further improved operating income
levels in 1995 on the strength of 8% sales growth, substantial additional cost
reductions and operating leverage. As a result of measures taken in
conjunction with the Acquisition and restructuring actions completed in late
1994, the Company reduced annual operating spending by over $20 million. These
savings, which were in effect for all of 1995, reduced cost of sales; selling,
general and administrative expenses; and to a lesser extent, research and
development spending. The savings primarily consisted of (i) $12 million of
reduced salary and fringe benefit expense associated with headcount reductions
and benefit plan modifications, (ii) $3 million of reduced promotional and
research and development materials spending, (iii) $2 million of savings from
eliminating unnecessary space, (iv) $2 million from reduced corporate overhead
spending relative to levels previously allocated by the Predecessor's parent
and (v) other various items which aggregated over $1 million. Excluding 1995
and 1994 nonrecurring charges related to the purchase of Phase Separations
Limited in July 1995, the Acquisition and the IPO, operating income was $56.3
million for the year ended December 31, 1995 and represented a 72% increase
over the prior year primarily as a result of these actions. Excluded 1995
nonrecurring charges were as follows: $0.9 million of revaluation of acquired
inventory, $5.4 million of management fees under a management services
agreement terminated in conjunction with the IPO and $3.6 million of expense
included in selling, general and administrative expenses for the one-time
acceleration of vesting of certain compensatory stock options in the fourth
quarter. Excluded 1994 nonrecurring charges were as follows: $38.4 million of
revaluation of inventory, $53.9 million of expensed

26
<PAGE>

in-process research and development, $0.6 million of management fees and $3.5
million of restructuring charges associated with the Acquisition. Based upon
the reengineering of its operations, the Company believes it can leverage its
infrastructure to support additional sales without a corresponding increase in
costs.

During 1995, approximately 65% of the Company's combined net sales were
derived from operations outside the United States. The Company believes that
the geographic diversity of its sales reduces its dependence on any particular
region. The U.S. dollar value of these revenues varies with currency exchange
fluctuations, and such fluctuations can affect the Company's results from
period to period. For example, worldwide sales as measured in U.S. dollars
grew 8% in 1995, but grew 5% as measured in local currencies.

The following table presents the Company sales by geographic region for the
year ended December 31, 1995:
<TABLE>
<CAPTION>
1995
-----------------------
<S> <C> <C>
SALES PERCENT
----------- ----------
(DOLLARS IN THOUSANDS)
United States..................................... $ 116,065 34.9%
Europe............................................ 103,144 30.9
Asia (including Japan)............................ 75,192 22.6
Rest of World..................................... 38,571 11.6
----------- ----------
Total........................................... $ 332,972 100.0%
=========== ==========
</TABLE>

In 1995, each 1% average strengthening of the U.S. dollar would have
decreased reported net sales by approximately $2.2 million while each 1%
weakening of the dollar would have increased reported net sales by $2.2
million. The impact on net income and cash flow would have been significantly
less as a result of local currency expenditures. Prior to the fourth quarter
of 1995, the Company periodically entered into forward exchange contracts
(which had initial maturities of 24 months or less) to economically hedge a
significant portion of the U.S. dollar value of its anticipated future
international cash flows. Generally accepted accounting principles required
that those contracts outstanding at period end be valued at current market
value with the resulting unrealized gain or loss reflected in the statements
of operations even though they economically hedged anticipated future cash
flows. In the fourth quarter of 1995, the Company ceased to economically hedge
anticipated future international cash flows and therefore liquidated those
particular forward currency contracts. As of December 31, 1995, the Company's
outstanding forward currency contracts amounted to $3.4 million and hedged the
dollar value equivalent of specified customer commitments. Future unrealized
gains and losses on these contracts will not be reflected in the consolidated
statements of operations but will be recorded in translation adjustments to
stockholders' equity on the balance sheet. The Company does not speculate in
foreign currencies.

EFFECT OF ACQUISITION ON RESULTS OF OPERATIONS

The consummation of the Acquisition affected the Company's results of
operations following the Acquisition in certain significant respects. The
Acquisition was structured as an asset purchase which created certain tax
benefits from the revaluation of inventory, property, plant and equipment and
intangible assets. The Company adjusted upward the historical book value of
certain assets in accordance with generally accepted accounting principles.
Consequently, depreciation and amortization expense related to goodwill and
other intangibles increased subsequent to the Acquisition as did interest
expense related to debt used to finance the Acquisition.

Pursuant to the associated Transition Agreement with Millipore, certain
services historically provided to the Predecessor by Millipore have been
provided on a transitional basis to the Company. Office space was leased at
market rates. Other services were provided at the same cost as they were
provided prior to the Acquisition. During 1995, Waters reduced its reliance on
Millipore and as of December 31, 1995, the Company was substantially
independent. The Company continues to lease international office space from
Millipore and to receive certain other administrative services primarily in
the area of international management information services. In addition,
because of changes in operations arising in connection with the Acquisition
(principally reduced occupancy of Millipore facilities), the Company no longer
bears certain other charges historically allocated by Millipore to the
Predecessor.

27
<PAGE>

OPERATING INCOME DATA

Waters was established to acquire the Predecessor on August 18, 1994.
Because of the revaluation of the assets and liabilities of the Predecessor
and the related impact on cost of sales and expenses, the financial statements
of the Predecessor for periods prior to August 19, 1994 are not strictly
comparable to those of subsequent periods. However, the following table
combines 1994 data for the Predecessor and Company in order to facilitate
management's discussion of financial results.

OPERATING INCOME DATA (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSOR COMBINED COMPANY
------------ ------------ -----------------------------
THREE MONTHS
ENDED
YEAR ENDED YEAR ENDED YEAR ENDED MARCH 31,
DECEMBER 31, DECEMBER 31, DECEMBER 31, ----------------
1993 1994 1995 1995 1996
------------ ------------ ------------ ------- -------
<S> <C> <C> <C> <C> <C>
Net sales............... $304,927 $307,154 $332,972 $77,554 $85,313
Cost of sales........... 124,387 123,186 126,216 30,282 32,114
Revaluation of acquired -- 38,424 925 -- --
inventory(a)........... -------- -------- -------- ------- -------
Gross profit............ 180,540 145,544 205,831 47,272 53,199
SG&A expenses(b)........ 132,452 129,738 132,746 30,920 33,429
R&D expenses............ 18,525 20,189 17,681 4,096 4,668
Expensed in-process
R&D(a)................. -- 53,918 -- -- --
Goodwill and purchased
technology
amortization(c)........ -- 1,227 3,629 903 931
Management fee(a)....... -- 552 5,393 387 --
Restructuring charge(a). 13,000 3,500 -- -- --
-------- -------- -------- ------- -------
Operating income $ 16,563 $(63,580) $46,382 $10,966 $14,171
(loss)............... ======== ======== ======== ======= =======
OPERATING RESULTS AS A
PERCENTAGE OF NET
SALES:
Net sales............... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales........... 40.8 40.1 37.9 39.0 37.6
Revaluation of acquired -- 12.5 0.3 -- --
inventory(a)........... -------- -------- -------- ------- -------
Gross profit............ 59.2 47.4 61.8 61.0 62.4
SG&A expenses(b)........ 43.4 42.2 39.9 39.9 39.2
R&D expenses............ 6.1 6.6 5.3 5.3 5.5
Expensed in-process
R&D(a)................. -- 17.6 -- -- --
Goodwill and purchased
technology
amortization(c)........ -- 0.4 1.0 1.2 1.1
Management fee(a)....... -- 0.2 1.6 .5 --
Restructuring charge(a). 4.3 1.1 -- -- --
-------- -------- -------- ------- -------
Operating income 5.4% (20.7)% 14.0% 14.1% 16.6%
(loss) .............. ======== ======== ======== ======= =======
</TABLE>
- --------
(a) Non-recurring charges.

(b) The year ended December 31, 1995, includes a $3,567 non-recurring fourth
quarter charge for one-time acceleration of vesting of compensatory stock
options.
(c) For the 1994 period, amount reflects amortization only for the period
August 19, 1994 to December 31, 1994.

RECENT EVENTS

In July 1995, the Company advanced its strategy of expanding sales and
profitability through the acquisition of closely related businesses and
product lines when it acquired Phase Separations Limited, an HPLC consumables
business based in the United Kingdom with a strong proprietary position in
chromatographic column chemistries. The Company paid approximately $7.5
million for this business which had revenues of $8.4 million in 1994. Also, in
July 1995, the Company completed the divestiture of a substantial portion of
its discontinued process mass spectrometry business. The Company sold the net
assets of its Pittsburgh, Pennsylvania based operation, excluding land and
building, net of associated costs, for approximately $6.5 million. In January
1996, the Company completed the sale of the Pittsburgh land and building and a
smaller operation located in Madison, Wisconsin, net of associated costs, for
approximately $4.4 million.

28
<PAGE>

In November 1995, the Company successfully completed the IPO by selling
6,250,000 shares of Common Stock for net proceeds of $86.2 million. In
connection with the IPO, certain stockholders of the Company sold an
additional 4,812,500 shares of Common Stock. At the same time, the Company
repaid all borrowings outstanding under the senior credit facility dated
August 18, 1994 (the "Prior Bank Credit Agreement") with the net proceeds of
the IPO and borrowings under the Bank Credit Agreement. The Company, in
connection with the IPO, completed the Redemption of $25 million in aggregate
principal amount of its Senior Subordinated Notes. Accordingly, the Company
recorded an extraordinary loss of $12.1 million resulting from the early
retirement of debt in the fourth quarter of 1995. See "Liquidity and Capital
Resources."

On March 6, 1996, the Company increased the maximum availability under the
Bank Credit Agreement by $125 million in order to simplify its capital
structure and provide additional financial flexibility. On March 7, 1996, the
Company commenced the Tender Offer pursuant to which the remaining $75 million
in aggregate principal amount of Senior Subordinated Notes which were not
redeemed in connection with the IPO were purchased on April 4, 1996. See
"Liquidity and Capital Resources."

On May 1, 1996, the Company acquired all of the capital stock of TAI for $84
million in cash, subject to certain adjustments, which was financed through
drawings on the revolving credit facility under the Bank Credit Agreement. TAI
develops, manufactures, sells and services thermal analysis instrumentation
which is used for the physical characterization of polymers and related
materials. The thermal analysis and rheology products offered by TAI are among
the most prevalent techniques employed in the analysis of polymers and other
organic/inorganic materials. TAI is the global market leader in the field of
thermal analysis. Net sales for TAI were approximately $47 million in 1995.

In the second quarter of 1996, the Company will incur an extraordinary loss
of approximately $22 .0 million related to the early extinguishment of its
Senior Subordinated Notes. In addition, in conjunction with the TAI
Acquisition, the Company expects to record non-recurring charges of
approximately $20 million for the immediate write-off of in-process research
and development and approximately $4.4 million over the remainder of 1996 for
the revaluation of acquired inventory.

THREE MONTH PERIOD ENDED MARCH 31, 1996 COMPARED TO THE THREE MONTH PERIOD
ENDED MARCH 31, 1995

Net Sales. Net sales for the three month period ended March 31, 1996 (the
"1996 Quarter") were $85.3 million, compared to $77.6 million for the three
month period ended March 31, 1995 (the "1995 Quarter"), an increase of 10%.
The Company's international business grew 16% and growth was geographically
broad based, although the U.S. business was flat with the prior year.
Pharmaceutical sales, which account for over 40% of the Company's business,
continued the strong growth experienced in 1995. Excluding the adverse effects
of a stronger U.S. dollar, consolidated net sales for the 1996 Quarter
increased by 12%.

Gross Profit. Gross profit increased to $53.2 million in the 1996 Quarter
from $47.3 million in the 1995 Quarter, an increase of $5.9 million or 13%.
Gross profit as a percentage of sales improved to 62.4% during the 1996
Quarter from 61.0% during the 1995 Quarter as the Company continued to improve
manufacturing productivity.

Selling, General, and Administrative Expenses. Selling, general and
administrative expenses increased to $33.4 million in the 1996 Quarter as
compared to $30.9 million in the 1995 Quarter, an increase of $2.5 million or
8%. Selling, general and administrative expenses improved as a percentage of
net sales to 39.2% during the 1996 quarter as compared to 39.9% during the
1995 Quarter, reflecting general expense controls.

Research and Development Expenses. Research and development expenses
increased to $4.7 million in the 1996 Quarter from $4.1 million in the 1995
Quarter, an increase of $0.6 million or 14% due to the Company's continued
commitment to new product development. In March 1996, Waters introduced its
new Alliance(TM) HPLC systems. Alliance(TM) systems are modular and allow
scientists the flexibility to create tailored systems, which deliver more
consistent results and are more compact and easier to maintain than
conventional component systems.

29
<PAGE>

Goodwill and Purchased Technology Amortization. Goodwill and purchased
technology amortization remained relatively flat with the 1995 Quarter and
related primarily to the Acquisition on August 18, 1994.

Management Fee. Until November 1995, the Company paid AEA Investors Inc.
("AEA") and Bain Capital, Inc. ("Bain") an annual fee of $1.5 million plus out
of pocket expenses for general management, financial and other corporate
advisory services. The agreement was terminated in conjunction with the IPO.

Operating Income. Operating income increased 29% to $14.2 million in the
1996 Quarter compared to $11.0 million in the 1995 Quarter due to sales growth
and increased manufacturing and selling, general and administrative
productivity.

Interest Expense, Net. Contemporaneously with the IPO, the Company retired
$25 million of Senior Subordinated Notes, and retired all outstanding
indebtedness under the prior Bank Credit Agreement with proceeds from the IPO
and the Bank Credit Agreement. The reduced indebtedness and more favorable
interest rates under the new bank credit agreement resulted in a 51% decrease
in interest expense for the 1996 Quarter to $3.9 million compared to $8.1
million in the 1995 Quarter.

Unrealized Losses on Future Cash Flow Hedges. During 1995, the Company
periodically entered into forward exchange contracts to economically hedge a
significant portion of the U.S. dollar value of its anticipated future
international cash flows. Generally accepted accounting principles require
that those contracts outstanding at period end be valued at current market
value with the resulting unrealized gain or loss reflected in the statements
of operations even though they economically hedged anticipated future cash
flows. In the fourth quarter of 1995, the Company ceased to hedge anticipated
future international cash flows and therefore liquidated those particular
forward currency contracts. During the 1995 Quarter, the Company recorded a
$3.9 million charge for unrealized losses on future cash flow hedges.

Provision (Benefit) for Income Taxes. The Company's effective income tax
rates for the 1996 and 1995 Quarters were 20.0% and 18.2%, respectively. The
Company's 1996 U.S. taxable income will be offset by net operating loss
carryforwards.

Net Income (Loss). The Company generated net income of $8.2 million in the
1996 Quarter compared to a $0.9 million loss in the 1995 Quarter. This
improvement was a result of net sales growth, a continuing focus on cost
reductions in all operating areas, a $4.2 million reduction in interest
expense and the discontinuance of currency contracts which generated $3.9
million in unrealized losses on future cash flow hedges in the 1995 Quarter.
Income per share in the 1996 Quarter of $0.26 exceeded a $0.04 loss per share
in the 1995 Quarter.

COMPANY YEAR ENDED DECEMBER 31, 1995 COMPARED TO COMBINED PREDECESSOR AND
COMPANY YEAR ENDED DECEMBER 31, 1994

Net Sales. Net sales for 1995 were $333.0 million, compared with $307.2
million for the year ended December 31, 1994, an increase of 8%. The Company's
international business benefited from improved market conditions and weakening
of the U.S. dollar. International sales increased by 14% and growth was
geographically broad-based. The U.S. business was flat compared with the prior
year. On a worldwide basis, pharmaceutical customer demand, which accounts for
over 40% of the Company's business, grew strongly in 1995. Company revenues
reflected increased demand for new products introduced in 1994. In particular,
the Company experienced strong demand for its consumable Symmetry(R) column
products, which provide more accurate and reproducible chromatography results.
Sales growth was also generated by the Company's new Integrity(TM) product,
which combines the separation, quantitation and detection capabilities of HPLC
with the identification and characterization capabilities of benchtop MS
detection. Excluding the benefits of a weaker U.S. dollar, consolidated net
sales for 1995 increased by 5% compared to the prior year period.

Gross Profit. Gross profit for 1995 was $205.8 million, versus $145.5
million for 1994, an increase of $60.3 million or 41% over the comparable
period of the prior year, due to significantly lower charges for revaluation
of acquired inventory, higher sales volumes and productivity improvements. In
the year ended December 31, 1994, the Company charged $38.4 million to cost of
sales related to the revaluation of inventory acquired as part of the
Acquisition. In the year ended December 31, 1995, the Company charged $0.9
million to

30
<PAGE>

cost of sales related to the revaluation of inventory acquired in conjunction
with the July 1995 purchase of Phase Separations Limited. Moreover, the
Company took various measures to reduce costs in conjunction with the
Acquisition and as part of a restructuring in late 1994, including
consolidating manufacturing plants and reducing the number of employees.
Excluding revaluation of acquired inventory charges, gross profit for 1995 was
$206.8 million, versus $184.0 million for 1994, an increase of 12% over the
comparable period of the prior year, and gross profit margins of 62.1% for
1995 exceeded 59.9% margins for 1994.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses for 1995 were $132.7 million, compared to $129.7
million for the comparable 1994 period. As a percentage of net sales, selling,
general and administrative expenses decreased to 39.9% for 1995 from 42.2% for
the comparable period in 1994. This decrease was primarily the result of
reengineering measures adopted in connection with the Acquisition and fourth
quarter restructuring in 1994. The Company eliminated excess facilities,
consolidated administrative operations, reduced staffing and replaced
corporate overhead with a less costly stand-alone infrastructure. Cost
reduction impacts were partly offset by the increased translated dollar value
of international expenses due to the weak U.S. dollar and a $4.6 million
charge for compensatory stock option expense, including a one-time charge of
$3.6 million for the accelerated vesting of certain of these options.

Research and Development Expenses. Research and development expenses for
1995 were $17.7 million, $2.5 million below prior year levels due to three
factors. First, 1994 results included particularly high spending levels
related to the Company's Integrity(TM) HPLC-MS system. Research and
development spending levels for 1994 were 9% higher than those of 1993. HPLC-
MS spending has been reduced to levels typical after the completion of initial
development. Second, the Company eliminated certain administrative and
supervisory redundancies within its research and development organization by
consolidating two research and development organizations into one after the
Acquisition. Third, the Company modified its product development approach in
1995 and funded slightly fewer programs with more spending per program in
order to shorten time to market and improve productivity. The Company
continues to invest in those programs important to its future, including
benchtop mass spectrometry detection capabilities, a new solvent delivery
module, network data products and new column chemistries. The Company believes
its current HPLC research and development spending levels are significantly
greater than those of its nearest competitor.

Expensed In-Process Research and Development. In 1994, the Company wrote off
$53.9 million of the Acquisition purchase price related to in-process research
and development acquired from the Predecessor. Generally accepted accounting
principles prohibit capitalization of research and development expenditures.

Goodwill and Purchased Technology Amortization. Goodwill and purchased
technology amortization for 1995 was $3.6 million, an increase of $2.4 million
from the prior period and primarily relates to the Acquisition.

Management Fee. For the year ended December 31, 1995, the Company incurred
$5.4 million of expense for financial advice and consulting and other services
from AEA and Bain, an increase of $4.8 million from the prior period under the
Professional Services Agreement dated August 18, 1994 among AEA, Bain and the
Company (the "Management Services Agreement"). The increase was due primarily
to a $4.0 million charge to terminate this agreement in connection with the
IPO.

Operating Income. Operating income for 1995 was $46.4 million, an increase
of $110.0 million from the prior year loss. $92.3 million of this operating
income increase resulted from nonrecurring Acquisition related charges.
Excluding revaluation of acquired inventory charges in 1994 and 1995, the 1995
accelerated compensatory stock option vesting charge, 1994 and 1995 management
fees under the terminated Management Services Agreement and the 1994 expensed
in-process R&D and restructuring charges, operating income of $56.3 million
for the year ended December 31, 1995 was $23.5 million greater than that of
the comparable period in 1994, a 72% increase.

Interest Expense, Net. Interest expense for 1995 was $30.3 million, an
increase of $17.5 million as compared with $12.8 million for 1994. This
increase was due to borrowings used to finance the Acquisition.

31
<PAGE>

Unrealized Losses (Gains) on Future Cash Flow Hedges. As discussed in the
Overview above, until the fourth quarter of 1995, the Company periodically
entered into forward exchange contracts to economically hedge the U.S. dollar
value of a portion of its anticipated future international cash flows. The
Company reported unrealized losses of $1.1 million in 1995 and unrealized
gains of $0.9 million in 1994.

Realized (Gains) Losses on Cash Flow Hedges. In the fourth quarter of 1995,
the Company liquidated all outstanding forward exchange contracts which hedged
future cash flows. For the year ended December 31, 1995, the Company realized
a $2.3 million gain on cash flow hedges contracted in prior periods to hedge
its currency exposure.

Provision for Income Taxes. The Company's effective income tax rate for 1995
was 18.1%. The Predecessor's effective income tax rate for the period from
January 1, 1994 to August 18, 1994 was 28.6%. The Company's 1995 tax rate was
lower than the Predecessor's 1994 rate due to the benefit of net operating
loss carryforwards from 1994 which substantially offset U.S. taxable income.
The Company recorded a tax provision for the period from August 19 to December
31, 1994 while it reported operating losses because certain foreign
subsidiaries generated taxable income.

Income (loss) from Continuing Operations. Income from continuing operations
for 1995 was $14.1 million, compared to a loss of $77.9 million in the prior
year comparable period. Non-recurring charges related to the Acquisition
depressed 1994 profit levels. In addition, 1995 improvements in operating
profitability were offset by higher interest expense related to the
Acquisition and nonrecurring charges primarily related to the IPO.

Early Extinguishment of Debt. In the fourth quarter of 1995, the Company
recorded an extraordinary loss of $12.1 million related to the early
extinguishment of debt. The Company utilized the net proceeds from the IPO,
the Bank Credit Agreement and operating cash flow to retire $25.0 million of
Senior Subordinated Notes and $81.4 million of principal outstanding under the
Prior Bank Credit Agreement.

COMBINED YEAR ENDED DECEMBER 31, 1994 COMPARED TO PREDECESSOR YEAR ENDED
DECEMBER 31, 1993

Net Sales. Combined net sales for 1994 were $307.2 million, an increase of
1% from the prior year's net sales of $304.9 million. First quarter 1994 sales
decreased by 8% from 1993 levels. The Company believes this first quarter
sales decline was aberrant and primarily due to circumstances surrounding the
divestiture of the Predecessor by Millipore. Sales for the remainder of 1994
were 4% higher than the previous year. Like the immediately preceding years,
demand from pharmaceutical customers continued to be depressed, however, sales
to generic pharmaceutical companies increased and became a more significant
segment of the Company's business. Other industrial customer demand
strengthened as the operations of these customers, in particular chemical
manufacturers, continued to recover from cyclical lows. Excluding the
favorable impact of the weaker U.S. dollar, net sales for 1994 as compared to
1993 decreased by 1%.

Gross Profit. Combined gross profit for 1994 was $145.5 million as compared
to $180.5 million in 1993, a decrease of $35.0 million or 19.4%. Excluding the
$38.4 million nonrecurring charge related to inventory revalued in the
Acquisition, 1994 gross profit actually increased by 2%. 1994 gross profit
margins, excluding the impact of inventory revaluation, were 59.9%, up
slightly from 59.2% in 1993.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased by $2.7 million or 2% to $129.7 million in
1994 from $132.5 million in 1993. As a percentage of net sales, selling,
general and administrative expenses decreased from 43.4% in 1993 to 42.2% in
1994 primarily due to cost reductions implemented by the Company in the latter
part of 1994.

Research and Development Expenses. Research and development expenses were
$20.2 million in 1994, and represented 6.6% of net sales, as compared to $18.5
million and 6.1% of net sales in 1993, as the Company continued to invest in
new product development programs continued from 1993. Initial product
development was substantially completed and new products were introduced in
the areas of benchtop mass spectrometry detection, with the introduction of
the Integrity(TM) system, and new silica chemistries, with the introduction of
the Symmetry(R) product line.

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Goodwill and Purchased Technology Amortization. Goodwill and purchased
technology amortization expense for 1994 was $1.2 million and relates to the
Acquisition.

1994 Restructuring Charge. In the fourth quarter of 1994, the Company
recorded a $3.5 million restructuring charge as it reduced selling, general
and administrative employment levels. The restructuring plan was substantially
completed by the end of 1994.

Operating Income (Loss). The 1994 combined operating loss was $63.6 million
compared to operating income of $16.6 million in 1993 and resulted primarily
from non-recurring charges of $38.4 million resulting from the revaluation of
acquired inventory, $53.9 million for expensed in-process research and
development and a $3.5 million restructuring charge. Operating income before
non-recurring charges was $32.3 million and represented a 9% increase compared
to 1993 excluding a restructuring charge in that year.

Interest Expense, Net. Interest expense increased to $12.8 million in 1994
from $2.1 million in 1993 due to borrowings under the Prior Bank Credit
Agreement and the Senior Subordinated Notes.

Unrealized Losses (Gains) on Future Cash Flow Hedges. The Company recorded
unrealized gains of $0.9 million in 1994 related to forward exchange contracts
entered into after the Acquisition to hedge anticipated future international
cash flows.

Provision for Income Taxes. The Company recorded a tax provision in 1994
while it reported operating losses as certain of the Company's foreign
subsidiaries generated taxable income in the period from August 19, 1994 to
December 31, 1994. For the period from January 1, 1994 to August 18, 1994, the
Predecessor's effective tax rate was 28.6% which was consistent with the 1993
rate of 28.8%.

Income (Loss) From Continuing Operations. The combined 1994 loss from
continuing operations of $77.9 million, as compared to income of $10.3 million
in 1993, was due to nonrecurring charges related to the Acquisition and the
fourth quarter 1994 restructuring, and increased interest expense associated
with financing the Acquisition.

Income (Loss) from Discontinued Operations and Estimated Loss on Disposal of
Discontinued Operations. Effective December 31, 1994, the Board approved a
plan to divest the Company's process mass spectrometry business. Waters
acquired its process mass spectrometry business in early 1992 to access
technology needed to develop benchtop mass spectrometry detection capabilities
for use in conjunction with HPLC instrumentation. In 1994, the Company
completed its development effort in this area and decided to sell this
business. The historical results of the process mass spectrometry business
have been reflected as discontinued operations, and the Company recorded an
estimated loss of $8.0 million for the disposition of this business.

LIQUIDITY AND CAPITAL RESOURCES

Prior to the Acquisition, the Predecessor's liquidity requirements arose
substantially from working capital needs, consisting primarily of inventory
and accounts receivable, and capital expenditures. The Predecessor maintained
no banking or credit facilities separate from Millipore and remitted net cash
generated in its entirety to Millipore.

Upon consummation of the Acquisition, liquidity requirements increased
significantly due to debt service costs associated with borrowings of $175
million under the Prior Bank Credit Agreement and $100 million in aggregate
principal amount of Senior Subordinated Notes. Additional borrowings of up to
$30 million were also available under the revolving credit portion of the
Prior Bank Credit Agreement and from foreign subsidiaries' lines of credit.
Contemporaneously with the IPO, the Company retired all remaining indebtedness
totaling $164.8 million under the Prior Bank Credit Agreement with a portion
of the proceeds of the IPO and loans under the Bank Credit Agreement
aggregating $83.5 million. In December 1995, the Company also completed the
Redemption by purchasing $25 million in aggregate principal amount of the
Senior Subordinated Notes.

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The Bank Credit Agreement is a revolving credit facility with maximum
availability of $300 million with the following principal terms. The loans
under the Bank Credit Agreement bear interest for each calendar quarter at a
per annum rate equal to, at the Company's option, (i) the Base Rate plus an
amount which will vary between zero and .50%, based upon certain Company
performance criteria for the previous four quarters, or (ii) a Eurodollar Rate
(as defined) plus an amount which will vary between 0.50% and 1.50%, based
upon certain Company performance criteria for the previous four quarters. The
availability under the Bank Credit Agreement will decrease under certain
circumstances such as in the event of asset sales and issuances of equity,
will decrease by $45 million at November 22, 1998 and 1999, and will terminate
in 2000. At December 31, 1995, the interest rate on the Bank Credit Agreement
was approximately 6.7%. The Bank Credit Agreement imposes certain restrictions
on the Company and certain of its subsidiaries, including restrictions on its
ability to incur indebtedness, pay dividends, make acquisitions, make
investments, grant liens, sell its assets and engage in certain other
activities. Indebtedness under the Bank Credit Agreement is secured by
substantially all of the assets of the Company, including the Company's real
and personal property, inventory, accounts receivable, intellectual property
and other intangibles and a pledge of the stock of certain of the Company's
subsidiaries. The Company was in compliance with all of its debt covenants
under the Bank Credit Agreement as of March 31, 1996. See "Description of
Certain Indebtedness--Description of the Bank Credit Facility."

The Company generated $45.2 million in cash from operating activities during
1995. This cash flow was generated primarily by net income of $2.0 million, as
increased by $13.8 million for depreciation and amortization, $2.7 million for
amortization of debt issuance costs, $4.6 million for non-cash compensatory
stock option expense and $12.1 million of a non-cash extraordinary loss.
Further, accounts receivable balances were reduced by $10.2 million during the
year with improved worldwide collections and customary factoring in Japan.
Inventories decreased by $5.6 million.

Net cash used in investing activities during 1995 reflected (i) the receipt
of $6.5 million of net proceeds from the sale of a substantial portion of the
Company's discontinued process mass spectrometry business and (ii) the
expenditure of $7.5 million to acquire Phase Separations Limited. Other
expenditures consisted of $6.3 million for additions to property, plant and
equipment and $3.6 million for development of product software.

Net cash of $45.8 million used in financing activities during 1995 reflected
the payment of the $16.2 million Special Distribution, repayment of $175.0
million owed under the Prior Bank Credit Agreement (including $164.8 million
repaid in connection with the IPO) and $28.2 million paid to redeem Senior
Subordinated Notes including a $3.2 million call premium. The Company also
paid $2.2 million for debt issuance costs under the Bank Credit Agreement. The
Company raised $86.2 million net proceeds from the sale of 6,250,000 shares of
Common Stock in the IPO and borrowed $83.5 million under the Bank Credit
Agreement. In 1995, the Company also received net payments of $3.2 million of
notes receivable due from officers.

The Company generated $14.7 million in operating cash flows during the 1996
Quarter primarily as a result of $8.2 million in net income, increased by $2.0
million for depreciation and amortization, $1.2 million decrease in
inventories, $2.0 million increase in deferred revenue and $1.5 million for
amortization of capitalized software and intangible assets.

Net cash provided by investing activities of $1.7 million during the 1996
Quarter was the result of $4.5 million net proceeds from the sale of
discontinued operations reduced by additions to property, plant and equipment
and software capitalization.

Net cash used in financing activities consisted of $16.0 million during the
1996 Quarter of net repayments of bank debt and $1.7 million used to obtain
interest rate protection agreements which extend through 1999.

The Company's capital expenditures in 1993, 1994 and 1995 were $5.9 million,
$5.4 million and $6.3 million, respectively. The Company's capitalized
software expenditures in 1993, 1994 and 1995 were $2.6 million, $2.7 million
and $3.6 million, respectively. The Company expects capital expenditures and
capitalized software expenditures in 1996 to be consistent with historical
levels.

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In January 1996, the Company entered into a three-year debt swap agreement
with the Bank of Boston. The Company swapped $22 million in notional amount of
floating rate LIBOR borrowings for 2.3 billion yen notional amount of
borrowings at a fixed interest rate of 1.525% per annum. At representative
interest rates and current exchange rates in effect at January 23, 1996, the
effective date of the agreement, the Company would lower its annual interest
costs by approximately $0.9 million over the term of the swap. The Company
could also incur higher or lower principal repayments over the term of the
swap agreement.

In March and April 1996, the Company entered into several interest rate
protection agreements. These agreements provide payments to the Company if the
three month LIBOR rate, as defined, exceeds 8% in 1996, 6% in 1997 and 6.5% in
1998 and 1999 on aggregate borrowings of $183.0 million in 1996 and 1997 and
$70.0 million and $30.0 million in 1998 and 1999, respectively.

In April 1996, the Company consummated the Tender Offer for $75 million
principal amount of the Senior Subordinated Notes for an aggregate repurchase
price of $90.6 million including the redemption premium above par value. The
Company funded this redemption through additional borrowings under the Bank
Credit Agreement. Prior to the commencement of the Tender Offer, the Bank
Credit Agreement was amended in March 1996 to provide for aggregate
borrowings, as defined, totaling $300 million and to permit completion of the
TAI Acquisition. The Company funded this acquisition through drawings on the
revolving credit facility under the Bank Credit Agreement which totaled $84.5
million. In the second quarter of 1996, the Company will record an
extraordinary loss of approximately $22.0 million related to the early
extinguishment of the Senior Subordinated Notes.

At May 8, 1996, after consummation of the Tender Offer and the TAI
Acquisition, the Company had $247.6 million aggregate borrowings outstanding
under the Bank Credit Agreement and approximately $52.4 million additional
borrowings available.

The Company believes that existing cash balances and cash flow from
operating activities together with borrowings available under the Bank Credit
Agreement will be sufficient to fund future working capital needs, capital
spending requirements and debt service requirements of the Company in the
foreseeable future.

SEASONALITY

The Company experiences modest quarterly seasonal business swings. Third
quarter sales levels are typically lower than other quarters and fourth
quarter sales levels are typically higher. Third quarter sales levels decline
primarily due to Europe's summer holiday season and, to a lesser extent,
slower summer business activity in the U.S. Fourth quarter sales levels
increase primarily due to accelerated European business after the holiday
season ends and customer spending of remaining unallocated year-end budgets.

INFLATION

Inflation affects the cost of goods and services used by the Company. In
recent years, inflation has been modest. The competitive environment somewhat
limits the ability of the Company to recover higher costs by raising prices,
although the Company does selectively increase prices for certain products.
Overall product prices have been stable during the past four years and the
Company continues to mitigate the adverse effects of inflation primarily
through improved productivity and cost containment and improvement programs.

ENVIRONMENTAL MATTERS

The Company's facilities are subject to federal, state, local and foreign
environmental requirements, including those relating to discharges to air,
water and land, the handling and disposal of solid and hazardous waste and the
cleanup of properties affected by hazardous substances. The Company does not
currently anticipate any material adverse effect on its operations or
financial condition as a result of its efforts to comply with, or its
liabilities under, such requirements. The Company does not currently
anticipate any material capital expenditures for

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environmental control facilities. Some risk of environmental liability is
inherent in the Company's business, however, and there can be no assurance
that material environmental costs will not arise in the future. In particular,
the Company might incur capital and other costs to comply with increasingly
stringent environmental laws and enforcement policies. Although it is
difficult to predict future environmental costs, the Company does not
anticipate any material adverse effect on its operations, financial condition
or competitive position as a result of future costs of environmental
compliance. In connection with the Acquisition, Millipore agreed to retain
environmental liabilities resulting from pre-Acquisition operations of the
Company's facilities. See "Business-- Environmental Matters."

INCOME TAXES

The Company's effective tax rate for 1995 was 18.1%, which was affected by
the Company's utilization of federal and foreign net operating loss
carryforwards. The Company expects to utilize net operating loss carryforwards
to offset taxable income in 1996, 1997 and 1998 assuming that taxable profits
are realized. Consequently, the Company expects these net operating loss
carryforwards to reduce its statutory tax rate over the next three years. As
of December 31, 1995, the Company had U.S. net operating loss carryforwards of
approximately $41 million usable through 2009 and foreign net operating loss
carryforwards of approximately $5 million. See footnote 8 to the Company's
Consolidated Financial Statements.

RECENTLY ADOPTED ACCOUNTING STANDARDS

Accounting for Stock-Based Compensation. In 1996, the Company will adopt the
disclosure provisions of SFAS No. 123 which specifies a fair value based
method of accounting for stock based compensation plans.

FORWARD-LOOKING STATEMENTS

This Prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act of 1934, including statements regarding, among other items, (i) the
Company's growth strategies, including its intention to make acquisitions and
introduce new products, (ii) anticipated trends in the Company's business and
(iii) the Company's ability to continue to control costs and maintain quality.
These forward-looking statements are based largely on the Company's
expectations and are subject to a number of risks and uncertainties, certain
of which are beyond the Company's control. Actual results could differ
materially from these forward-looking statements as a result of the factors
described in "Risk Factors" including, among others, (i) changes in the HPLC
industry as a result of economic or regulatory influences or (ii) changes in
the competitive marketplace, including new products and pricing changes by the
Company's competitors. In light of these risks and uncertainties, there can be
no assurance that the forward-looking information contained in this Prospectus
will in fact transpire.

PRO FORMA FINANCIAL RESULTS

On a pro forma basis, adjusted to reflect the impact of the TAI Acquisition,
the Tender Offer, the Redemption and the IPO and the application of the net
proceeds therefrom together with borrowings under the Bank Credit Agreement to
repay all outstanding indebtedness under the Prior Bank Credit Agreement,
income from continuing operations was $33.0 million for the year ended
December 31, 1995 and $8.6 million for the three months ended March 31, 1996.
Improved pro forma 1995 operating income primarily resulted from reduced
interest expense associated with the IPO, the Redemption and the Tender Offer
as well as increased income associated with the TAI Acquisition.

On a pro forma basis, the ratio of the Company's (i) operating income plus
depreciation and amortization to (ii) cash interest expense for the year ended
December 31, 1995 was 3.9 times, which was greater than the 1995 actual
coverage ratio. Debt levels on a proforma basis at March 31, 1996 were $100.1
million higher than historical levels.

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BUSINESS

GENERAL

Waters is the world's largest manufacturer, distributor and provider of HPLC
instruments, chromatography columns and other consumables, and related
service. In 1994, the Company's market share was approximately 21% of the
estimated $1.5 billion global HPLC market, which the Company believes was two
and one-half times greater than its next leading competitor. Waters serves a
worldwide customer base with 65% of its 1995 net sales to customers outside of
the U.S.

HPLC is the largest product segment of the analytical instrument market.
HPLC is utilized in a broad range of industries to detect, identify, monitor
and measure the chemical, physical and biological composition of materials,
and to purify a full range of compounds. Customers include manufacturers of
pharmaceuticals (ethical, generic and over-the-counter), industrial chemicals
and polymers, food, beverages, and consumer products, as well as biotechnology
companies, environmental testing companies, universities, hospitals and
government agencies. HPLC is used for research and development, methods
development, manufacturing and quality control due to its ability to identify
approximately 80% of all known compounds and to operate in an automated
manner, increasing productivity at a low cost to the user. Examples of HPLC
applications include identification of new drug compounds, nutritional content
analysis for food and beverage labeling, environmental testing of waste water
and hazardous materials and quality control for a wide range of consumer and
industrial products.

MARKET LEADERSHIP

Global Brand and Reputation. HPLC is critical to the research and
development and quality control efforts of customers and can have a
significant impact on their overall productivity. As a result, customers,
principally scientists who run research laboratories, value proven
performance. Reputation and demonstrated results are critical to end-user
decisions to select an equipment supplier. In many cases, once a
manufacturer's equipment is adopted in the laboratory, the costs and/or risks
of switching to a different manufacturer's instruments can be high. Today the
Company believes it has the largest HPLC installed base in the industry and
outsells its closest competitor by two and one-half times. The "Waters" name
has been associated with the HPLC market since the early 1970s when the
Company pioneered the commercial adoption of HPLC technology with the
introduction of the first practical, reliable high pressure solvent delivery
system. The Company also introduced the first bonded reverse phase HPLC column
in 1973. An independent industry survey, based on responses from approximately
8,800 U.S. customers, conducted from April 1992 through November 1995, cites
Waters as the HPLC vendor they are most likely to consider when they make
their next HPLC purchase.

Technological Innovation. In the HPLC industry, technological innovation is
a key component of market growth. The Company believes that it is the market
leader in HPLC technological innovation based upon its product introductions
over the past several years and that it spends significantly more on research
and development than its competitors. Since 1990, Waters has introduced a
number of new products and has redesigned each of the core components within
its HPLC product line including the Millennium(R) data collection software,
the 717 Autosampler and the 996 Photo Diode Array detector, all of which have
achieved rapid market acceptance. Products introduced by Waters within the
past four years accounted for approximately 37% of the Company's net sales for
1995. The Company has recently introduced and plans to introduce within the
next 12 to 16 months several new product offerings including new products
based upon mass spectrometry detection, a redesigned approach to solvent
delivery for HPLC systems and new products in its Symmetry(R) consumables
line.

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management software) and consumables (chromatography columns and sample
preparation devices), and offers related services. With over 100 instrument
models and nearly 1,500 types of chromatography columns and consumables,
Waters offers the most comprehensive range of HPLC products in the industry.
This diverse product range enables Waters to provide solutions for virtually
any liquid chromatography application. The Company is committed to maintaining
the highest quality manufacturing standards and believes that by controlling
these processes, it produces among the highest quality HPLC products
available. Waters is more vertically integrated in those manufacturing areas
critical to product quality and performance than most of its competitors,
especially in the areas of precision machining and chemical synthesis. The
Company's manufacturing facilities employ advanced techniques that meet the
strict ISO 9002 quality manufacturing standards and FDA mandated Good
Manufacturing Practices and the Taunton and Milford facilities are approved by
the FDA to produce Class 1 medical devices. Waters' broad array of high
quality products enables it to leverage its core technologies across a broad
range of applications.

Extensive Sales and Service. To meet the needs of its worldwide customer
base, the Company maintains 66 offices in 29 countries and has the world's
largest direct sales, service and technical support organization focused on
HPLC. Its more than 550 highly-trained and educated representatives worldwide
have average experience of over seven years with Waters and over ten years in
the industry. Waters believes it is one of the few HPLC industry participants
that both sells directly to end-users in each of its markets and provides
local technical service and aftermarket support to customers in virtually
every industrialized market in the world. This global presence enables Waters
to provide timely, responsive support and service to its customers, many of
whom operate internationally, and enables it to capitalize on growth
opportunities in emerging markets. By focusing dedicated resources on HPLC,
Waters is able to develop specialized service in HPLC and believes it can
deliver higher quality service than its competitors who focus on a broad range
of instruments.

Largest Installed Base of HPLC Instruments. The Company believes that, based
on its estimated 40% share of the U.S. installed base, it has the largest
installed base of the estimated 150,000 HPLC systems in the world. This
installed base provides a strong source of ongoing revenue to the Company,
with approximately 39% of 1995 net sales generated by service of its HPLC
equipment and the sale of consumables. The Company believes it has a
competitive advantage as the market leader with respect to repeat purchases
since customers are more likely to buy new systems and consumables from
manufacturers whose products are compatible with their existing instruments
and with whom they have past experience with respect to quality, equipment
support and service. Close relationships and continual contact with its large
customer base provide the Company with sales opportunities and innovative
product and application ideas.

GROWTH STRATEGY

The Company has implemented a growth strategy comprised of four major parts.
The strategy focuses on accelerating new product introductions, better
capitalizing on potential market opportunities, pursuing selective
acquisitions and reengineering its operations to support its stand-alone HPLC
business.

New Product Introductions. The Company believes it is the HPLC technology
leader based upon its product introductions over the past several years and is
committed to introducing technologically advanced products. Since the
beginning of 1991, the Company has invested approximately $94 million in
research and development, which has resulted in its current pipeline of high
value-added products. Major new product introductions launched in 1995 and
1996 and planned for the second half of 1996 include:

. Integrity(TM) System. In October 1995, the Company shipped the first
units of its Integrity(TM) system, the first product in a family of new
HPLC-MS benchtop products. Integrity(TM) is a system that integrates the
automated separation, quantitation and detection capabilities of HPLC with
the identification and characterization capabilities of MS. The Company's
HPLC-MS benchtop equipment provides more complete data than HPLC or MS
alone, is smaller, easier to use and substantially less expensive than
traditional MS products and is suited for use by chemists and laboratories
trained in HPLC methods, equipment and data analysis. The Company believes
that Integrity(TM)will generate growth opportunities because of its lower
cost (as compared with traditional MS) together with its integration of MS
and HPLC. Waters' Integrity(TM)system is the first fully integrated
benchtop HPLC-MS system.

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. Fluidics. In March 1996, the Company introduced its Alliance(TM) product
which uses a new design for the fluidics element (solvent and sample
management) of the HPLC system. Alliance(TM) brings new performance
benefits to the HPLC marketplace including improved accuracy,
reproducibility, ease of use, serviceability, reduced space consumption at
the laboratory bench and cost effectiveness. The new technology minimizes
solvent consumption and facilitates system calibration. The Company
believes this new product should improve its competitive position in the
core markets for HPLC.

Capitalizing on Market Opportunities. Waters believes that it is well
positioned to take advantage of potential growth opportunities, including: (i)
industry innovations and new product introductions such as HPLC-MS and
capillary scale separations; (ii) growth in principal end-use markets such as
pharmaceuticals, industrial chemicals and polymers, food and beverage,
consumer products and environmental testing; (iii) increased spending by the
pharmaceutical and biotech industries to develop new drugs, generic versions
of existing drugs and over-the-counter drugs; (iv) increased customer emphasis
on productivity and devices which accelerate time-to-market; (v) increased
worldwide environmental regulation generating additional need for HPLC data
collection systems, detection systems and validation procedures; (vi)
continued expansion of government-mandated labeling and testing of drugs,
foods and vitamins both in the U.S. and abroad; and (vii) increased instrument
purchases to replace an aging installed base. The Company is targeting
emerging markets with easy-to-use systems (including its new Tiger(TM) product
line) and plans to leverage its global presence to take advantage of specific
growth opportunities in Eastern Europe, Latin America and the Pacific Rim.

Selective Acquisitions. In addition to internally generated growth, Waters
intends to expand sales and profitability through the acquisition of closely
related businesses and product lines. In particular, Waters believes that
acquisitions in the highly fragmented HPLC chromatography columns and other
consumables market would provide opportunities to gain niche technologies,
leverage the Company's assets and expand its customer base. In July 1995,
Waters began implementing this strategy with the acquisition of Phase
Separations Limited, a company with a strong proprietary position in
chromatography consumables, which had revenues of approximately $8.4 million
in 1994. Waters also plans to selectively invest in ancillary, high value
added analytical laboratory instrument technologies that complement its
existing HPLC technologies and provide application solutions to existing and
new customers. On May 1, 1996, the Company consummated the TAI Acquisition.
The TAI Acquisition will provide the Company with a stronger presence in its
non-pharmaceutical industrial markets. The Company has no other agreements or
understandings regarding any material acquisitions or joint ventures at this
time.

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Reengineering Operations. As part of establishing the Company as a stand-
alone entity following the Acquisition in 1994, the Company re-engineered its
operations in a manner appropriate to its independent HPLC business. The
Company (i) consolidated its manufacturing facilities from five to two (one of
which is dedicated to instruments and one of which is dedicated to
chemistries), (ii) restructured its European distribution system, creating a
central distribution center in Holland and eliminating distribution facilities
in 13 European countries, (iii) streamlined administration (including the
elimination of a major administrative site) and (iv) reengineered its
production processes to reduce cycle times. During this period, the Company
reduced its overall workforce by approximately 120 employees. Although the
implementation of all operational changes is not yet complete, the Company has
already reduced annual expenses and substantially improved profitability.
Excluding 1994 and 1995 nonrecurring charges related to the purchase of Phase
Separations Limited in July 1995, the Acquisition and the IPO, operating
income was $56.3 million for the year ended December 31, 1995, which
represented a 72% increase over the prior year, primarily as a result of these
actions. Waters plans to continue to review its operations in order to improve
productivity and to reduce costs. Based upon the reengineering of its
operations, the Company believes it can leverage its infrastructure to support
additional sales without a corresponding increase in costs. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

INDUSTRY OVERVIEW

Chromatography. Chromatography is a separation and detection technique used
in the analysis and purification of materials and their constituent
components. Chromatography commonly employs one of two primary techniques,
liquid chromatography or gas chromatography. Liquid chromatography surpassed
gas chromatography in the mid-1980s as the single largest analytical
instrument segment because of its more universal applicability: approximately
80% of known compounds can be analyzed by liquid chromatography while
approximately 20% can be separated by gas chromatography, which can analyze
only volatile and semi-volatile organic compounds. Materials best separated
through liquid chromatography include organic and inorganic compounds, complex
polymers and high molecular-weight biomolecules.

Most analytical chemistry problems involve complex mixtures which are made
up of hundreds or thousands of different chemical compounds. The difficult
task in a successful analysis is often not the specific determination of the
final components but the separation steps in which the sample is broken down
into its constituent parts. Liquid chromatography separates materials into
their constituent components by passing a sample dissolved in a solvent
through a column of chemically and physically interactive packing, which
selectively slows the passage of the solution's constituents. The most common
detection techniques are based upon ultraviolet light absorption and
refraction while others are based on electrochemical conductivity and
fluorescence characteristics.

HPLC. HPLC sales comprise the largest segment of the approximately $8.5
billion analytical instrument market. The worldwide market for HPLC
instruments and related products totaled approximately $1.5 billion in 1994
with an estimated installed base of 150,000 instruments. The United States,
Europe and Japan represent the largest markets for HPLC products, with
approximately 36%, 33% and 14% of worldwide 1994 sales, respectively. While
they represent a smaller part of the current HPLC market, economies such as
the Pacific Rim nations (excluding Japan), Latin America and Eastern Europe
offer above average growth potential as these countries purchase HPLC products
to support rapid industrial development.

Instrument sales and service account for approximately 76% of the total 1994
HPLC market and consumables (principally columns) comprise the remaining 24%.
Instrument sales comprise both sales of the initial systems (43%) and
aftermarket sales of instrument components and service (33%). While
representing only 43% of the total HPLC market, initial systems sales are
critical to industry participants because purchasers are more likely to
purchase components, consumables and service contracts from the manufacturers
of their initial systems. Therefore, system sales represent a source of
potential future revenues.

40
<PAGE>

The pharmaceutical and biotechnology industry is the largest HPLC customer
segment, representing 34% of total HPLC industry revenues in 1994 with the
chemical industry, universities and governments, the environmental industry
and all others representing 15%, 29%, 4% and 18% of the market, respectively.
Examples of HPLC applications include identification of new drug compounds,
nutritional content analysis for food and beverage labeling, environmental
testing of waste water and hazardous byproducts and quality control for a wide
range of consumer and industrial products.

Instrument performance and reliability are critical to users of HPLC. Within
the pharmaceutical industry, for example, many FDA drug applications and
approvals employ HPLC testing and results. The cost of HPLC instruments is a
small component of its customers' aggregate product and research and
development expenditures, but is critical to development efforts and can have
a significant impact on its customers' overall productivity. As a result,
customers, principally scientists who run research laboratories, tend to value
proven performance over price. Reputation, technical leadership, service and a
long-term track record of proven application specific results are critical to
end-user decisions to choose an equipment supplier. In many cases, once a
manufacturer's equipment is adopted in the laboratory, the costs and/or risks
of switching to a different manufacturer of instruments and validating new
methods can be high. Column performance and reliability are also critical to
users of HPLC. Once test methods are established using a particular column,
customers are reluctant to switch. In the pharmaceutical industry, as part of
the new drug approval process, the FDA and its international counterparts
require that the separation column be specified. This column is typically used
during the drug's patent life and later when the drug is manufactured in
generic and over-the-counter forms.

In the 1980s, HPLC enjoyed strong growth as many laboratories invested
heavily in analytical instrumentation. In the early 1990s, however, the
worldwide recession caused many customers, particularly chemical companies, to
reduce their capital investments. The uncertainties of health care reform in
the United States beginning in late 1992 also negatively impacted HPLC
spending by U.S. pharmaceutical customers. As a result of these factors, HPLC
annual market growth declined from in excess of 10% in the 1980s to the low
single digits per year on average for the five years ending 1994. Recently,
the pharmaceutical industry has increased HPLC related purchases, the European
recession has subsided, chemical companies have experienced increased
profitability and the threat of federally mandated health care reform has
declined.

Waters believes that it is well positioned to take advantage of potential
growth opportunities, including: (i) industry innovations and new product
introductions such as HPLC-MS and capillary scale separations; (ii) growth in
principal end-use markets such as pharmaceuticals, industrial chemicals and
polymers, food and beverage, consumer products and environmental testing;
(iii) increased spending by the pharmaceutical and biotech industries to
develop new drugs, generic versions of existing drugs and over-the-counter
drugs; (iv) increased customer emphasis on productivity and devices which
accelerate time-to-market; (v) increased worldwide environmental regulation
generating additional need for HPLC data collection systems, detection systems
and validation procedures; (vi) continued expansion of government-mandated
labeling and testing of drugs, foods and vitamins in both the U.S. and abroad;
and (vii) increased instrument purchases to replace an aging installed base.
The Company is targeting emerging markets with easy-to-use systems and plans
to leverage its global presence to take advantage of specific growth
opportunities in Eastern Europe, Latin America and the Pacific Rim.

Thermal Analysis. The TAI Acquisition expands the Company's product
offerings to include thermal analysis and rheology products. Thermal analysis
measures the physical characteristics of materials as a function of
temperature. Changes in temperature affect several characteristics of
materials such as their physical state, weight, dimension and mechanical and
electrical properties, which may be measured by one or more thermal analysis
techniques. Consequently, thermal analysis techniques are widely used in the
development, production and characterization of materials in various
industries such as plastics, chemicals, automobiles, pharmaceuticals and
electronics. Rheology instruments complement thermal analyzers in
characterizing materials. Rheology characterizes the flow properties of
materials and measures their viscosity, elasticity and deformation under
different types of loading. The information obtained provides insight with
regard to a material's behavior during

41
<PAGE>

manufacture, transport, usage and storage. The Company believes the total
global market demand for thermal analysis instruments is approximately $185
million while that for rheology instruments is estimated to be approximately
$50 million.

PRODUCTS

With over 100 instrument models, and nearly 1,500 types of chromatography
columns and consumables, Waters offers the most comprehensive range of HPLC
products in the industry. In 1995, the Company generated 61% of its net sales
from its HPLC instrument and component sales and 39% of its net sales from its
sale of consumables and service. Waters' product breadth enables the Company
to provide solutions to a full range of its customers' analytical
requirements.

HPLC Systems. Most of the Company's components are sold in system
configurations typically ranging in price from $25,000 to $50,000 and HPLC-MS
systems typically range in price from $130,000 to $150,000. A complete HPLC
system consists of five basic components: the solvent delivery system, the
sample injector, the separation column, the detector and the data acquisition
device. The solvent delivery system pumps the solvent through the HPLC system,
while the sample injector injects the sample into the solvent flow. The
separation column then separates the sample into its components for analysis
in the detector, which detects the presence and measures the amount of the
constituents. The data acquisition device then records the information from
the detector. In addition, Waters has developed Millennium, a proprietary PC-
based system control software package which manages the chromatographic
process (including set up of the solvent delivery system, autosampler and
detector); reports, stores and archives the results of multiple analyses; and
rapidly sets up sophisticated routines for following methods protocols. During
the last three years, the Company has redesigned the core components in each
component category and has introduced a number of new products. The
illustration and table below depict a typical configuration for an HPLC
system, provide a description of the basic components and describe the primary
Waters offering in each area:

[PICTURE - Black and white flowchart of the HPLC process which includes graphic
depictions of each named component]

<TABLE>
<S> <C>
SOLVENT [Right Arrow] PUMP [Right Arrow] INJECTOR [Right Arrow] COLUMN [Right Arrow] DETECTOR [Right and Down Arrow]
+
+
[Down Arrow]
+
DATA MANAGEMENT AND SYSTEM [Left Arrow] +++++++++++++
CONTROL SOFTWARE
</TABLE>

42
<PAGE>

DESCRIPTION OF HPLC SYSTEM COMPONENTS

COMPONENT WATERS' PRODUCTS
- ------------------------------------- -------------------------------------
Waters offers a wide array of deliv-
SOLVENT DELIVERY SYSTEM. The solvent ery systems capable of handling a
delivery system typically relies on broad range of solvents and flow
small, high pressure reciprocating rates. Waters produces five princi-
pumps to deliver one or more sol- pal solvent delivery systems which
vents to the injector where the sam- range in price from approximately
ple is introduced. $5,000 to over $16,000.

SAMPLE INJECTOR. The sample injector Waters offers a broad range of in-
relies on valves, loops or syringes jector products including manual in-
to insert the sample into the sol- jectors and autosamplers. The Com-
vent flow. The use of automatic in- pany believes that its 717
jection systems, or autosamplers, Autosampler, which was introduced in
allows unattended operation of HPLC 1992 and since has gained widespread
systems. market acceptance, represents ad-
vanced injector technology. Sample
CHROMATOGRAPHIC COLUMN. The separa- injectors range in price from ap-
tion column contains one of several proximately $1,000 to $12,000.
types of packing, typically station-
ary phase packing made from silica Waters is one of the few HPLC in-
or polymers. As the sample flows strument manufacturers that produces
through the column it is separated and distributes columns and manufac-
into its constituent components. Se- tures the silica and polymers used
lection of the correct column is im- as packing materials in the columns.
portant for achieving accurate, re- Waters most successful columns in-
producible separations over extended clude Bondapak(R), introduced in
periods. 1973, Nova-Pak(R), introduced in
1983 and Symmetry(R), introduced in
DETECTOR. The detector measures the 1994. Separation columns cost an av-
presence and amount of constituents erage of approximately $300 each,
in a compound. Ultraviolet/visible and are replaced every three weeks
light detectors, which are used in to several months depending on us-
approximately 75% of HPLC tests, age.
measure the absorption of ultravio-
let and visible light rays in order Waters offers 15 detectors in its
to provide quantitative analysis of core product line that provide a
the constituents of a compound. full range of detection techniques.
Photo diode array detection is be- The Company introduced its 996 Photo
coming increasingly popular as it Diode Array detector in 1992 and re-
allows more precise detection of cently introduced its HPLC systems
certain compounds. The latest detec- that include mass spectrometer de-
tor technology uses mass spectrome- tectors. Detectors (excluding those
try to identify constituents through with mass spectrometry technology)
their molecular weight. range in price from approximately
$8,000 for an ultraviolet detector
DATA MANAGEMENT AND SYSTEM CONTROL to $14,000 for the photo diode array
SOFTWARE. detector. MS detectors, today sold
only in a system configuration, are
Data Acquisition Device. The data sold for approximately $100,000.
acquisition device calculates and
records the results of the analysis Waters' data products range from the
completed in the detector. The re- basic 746 Data Module integrator,
sults of multiple analyses can be which provides simple reports of the
reported, stored and archived. The results of HPLC analysis, to the
most basic data acquisition units Millennium(R) Chromatography Manag-
convert detector signals to a con- er, which is a comprehensive soft-
tinuous trace on paper. ware package designed to run on an
individual PC or in a client/server
System Control network. Software options allow
Software. Management of the chro- Millennium(R) to be customized to
matographic process, including setup meet specific laboratory, applica-
of the solvent delivery system, au- tion, or regulatory requirements.
tomated sample injector, and detec- Millennium(R)'s use of a relational
tor, can be provided by personal database provides easy retrieval of
computer-based software. Method pro- stored results. Prices range from
tocols can be created, named and $4,000 for an integrator to $14,000
used to rapidly set up sophisticated for a PC-based workstation.
routines. Software feature content, Client/server networks for lab-wide
flexibility and ease-of-use can dif- or corporate-wide information man-
ferentiate one manufacturer's HPLC agement range from $50,000 to
system from another. $500,000.

43
<PAGE>

Consumables. Chromatography columns and other consumables sold by the
Company include HPLC separation columns and sample preparation products which
represented approximately 90% of Waters' total consumables net sales in 1995.
Sample preparation products are used to condition a sample for more effective
testing by an analytical technique. Consumables are required to be replaced at
regular intervals. HPLC columns are metal tubes packed with silica and
polymers that physically separate the sample into its components for analysis.
Columns are generally designed to be interchangeable among different HPLC
systems and manufacturers. Selection of the correct column is important for
achieving accurate measurements, as different packings and column sizes are
used for different compounds. Research and development customers often test a
variety of columns with different compounds until they find the correct
combination. For test results to be valuable, every column must provide
accurate, reproducible separations over extended periods. As a result, once a
particular manufacturer's column has been approved for a testing procedure,
such as trials for FDA approval, it becomes costly and time consuming to
switch. Replacement rates for HPLC columns range from once every three weeks
to every several months depending on the frequency of usage and the
application of the column. Waters offers nearly 1,300 types of chromatography
columns.

Service. Users of chromatography systems often require substantial technical
support before and after the system sale to ensure the reliability and
validation of HPLC instruments, the accuracy of HPLC tests and effective
resolution of any problems found during analytical testing. As part of its
support services, the Company's technical support staff provides individual
assistance in solving chemical analysis problems, typically at no additional
cost. The Company offers training courses and periodically sends its customers
information on applications development. Chromatography systems sold by the
Company generally include a one-year warranty, installation and certain user
training, all at no additional cost. Service contracts may be purchased by
customers to cover equipment no longer under warranty. Service work not
performed under warranty or service contracts is performed on a time and
materials basis. The Company believes that its experienced worldwide service
organization provides a significant and increasingly important source of
competitive advantage to its customers, particularly to customers with
worldwide operations. Its service organization allows the Company to
continuously monitor the needs of its customers over time, which provides
leads for new product sales and ideas for new products. The Company has also
recently started providing validation services, which provide assurance that
instruments perform to users' specifications, to its pharmaceutical customers
in response to regulatory requirements.

Software. The Company has developed proprietary software applications to
control performance of its HPLC instruments and collect, analyze and store
data collected by its instruments. Software facilitates the use of HPLC
systems and can be a differentiating factor for HPLC customers. Waters'
Windows(R)-based Millennium(R) software provides complete data acquisition and
system control from a single keyboard and offers the ability to process,
analyze, view, sort, store, retrieve and report data in a single package. The
instruments are designed to interface and be controlled by the Company's
Millennium(R) software. Therefore, once a customer makes the decision to
purchase Millennium(R), the customer is more likely to make its future HPLC
systems purchases from Waters. The Company intends to introduce annual
upgrades to its Millennium(R) software which will be an ongoing source of
revenues. A software upgrade allows a customer to upgrade its HPLC system at a
relatively low cost. Waters has also signed partnership agreements with more
than a dozen third-party software vendors to create applications for Millenium
as a way to add more overall value to the product.

New Products. The Company believes it is the HPLC technology leader and has
successfully developed and marketed a number of innovative products since its
inception. Products introduced by Waters within the last four years accounted
for approximately 37% of net sales in 1995. The Company's 996 Photo Diode
Array detector, introduced in 1992, commands a leading position in the HPLC
marketplace.

The Company plans to continue its pattern of new product introductions,
particularly in the areas of increasingly sensitive detection systems,
improved column chemistries, increased automation, and enhanced data
collection software.

44
<PAGE>

automated separation, quantitation and detection capabilities of HPLC with
the identification and characterization capabilities of MS. The Company's
HPLC-MS benchtop equipment provides more complete data than HPLC or MS
alone, is smaller, easier to use and substantially less expensive than
traditional MS products and is suited for use by chemists and laboratories
trained in HPLC methods, equipment and data analysis. The Company believes
that Integrity(TM) will generate growth opportunities because of its lower
cost (as compared with traditional MS) together with its integration of MS
and HPLC. Waters' Integrity(TM) system is the first fully integrated
benchtop HPLC-MS system.

. Fluidics. In March 1996, the Company introduced its Alliance(TM) product
which uses a new design for the fluidics element (solvent and sample
management) of the HPLC system. Alliance(TM) brings new performance
benefits to the HPLC marketplace including improved accuracy,
reproducibility, ease of use, serviceability, reduced space consumption at
the laboratory bench and cost effectiveness. The new technology minimizes
solvent consumption and facilitates system calibration. The Company
believes this new product should improve its competitive position in the
core markets for HPLC.

. Symmetry(R). In May 1994, the Company introduced the first products in
its Symmetry(R) line of consumables products, which the Company believes
outperforms existing products in the marketplace due to its applicability
over a wide range of compounds and its ability to deliver more accurate,
reproducible results. Symmetry(R) is the result of a proprietary redesigned
manufacturing process for silica media. Waters anticipates that the
Symmetry line of products will encompass a wide variety of columns and
other sample preparation devices. The Company introduced new Symmetry(R)
products during the first quarter of 1996 and plans to introduce more
during the second half of 1996. These products are expected to contribute
to the growth of the Company's consummables business.

CUSTOMERS

Waters has a broad and diversified customer base. The pharmaceutical
segment, which accounted for approximately 43% of the Company's 1995 net
sales, represents the Company's largest category of customers and includes
manufacturers of pharmaceuticals (ethical, generic and over-the-counter) and
biotechnology companies and laboratories. The industrial customer segment,
which accounted for approximately 36% of the Company's 1995 net sales,
includes producers of industrial chemicals and polymers, food and beverage
companies and environmental testing laboratories. Expanding into the
industrial customer segment is the primary business objective behind the TAI
Acquisition. The instrumentation used to make physical measurements (based on
thermal analysis) is found in almost all customer settings that also utilize
the Company's gel permeation chromatography. Furthermore, there is an
important relationship between the information obtained from gel permeation
chromatography analysis and the properties that can be measured by thermal
analysis. The Company believes that its recognition and exploitation of these
relationships will be highly valued by customers in the industrial
marketplace.

The Company also sells to universities, hospitals and government agencies.
The purchase decision is typically made by scientists who run research
laboratories, and Waters' technical support staff works closely with such
customers to develop and implement HPLC applications that meet their
analytical requirements. The Company does not rely on any one customer for a
material portion of its sales. During 1995, no customer accounted for more
than 2% of the Company's net sales.

45
<PAGE>

RESEARCH AND DEVELOPMENT

Waters maintains an active research and development program focused on
developing and commercializing products which complement and update its
existing product offerings. The Company believes it is the market leader in
HPLC technical innovation, having spent approximately $99 million on research
and development since the beginning of 1991, which the Company believes is
significantly more than expenditures by its competitors. The Company's
research and development expenditures for 1993, 1994 and 1995 were $18.5
million, $20.2 million and $17.7 million, respectively. The current core
products of the Company have been developed at the Company's research and
development center in Milford, Massachusetts with input and feedback from
Waters' worldwide field organization. At March 31, 1996, there were
approximately 160 employees involved in the Company's research and development
efforts.

SALES AND SERVICE

To meet the needs of its worldwide customer base, the Company maintains 66
offices in 29 countries and has the world's largest direct sales, service and
technical support organization focused exclusively on HPLC. In contrast, most
of the Company's competitors' representatives distribute several analytical
products only one of which is HPLC. The Company's more than 550 educated and
highly-trained representatives, many of whom are former Waters customers, have
average experience of over seven years with Waters and over ten years in the
HPLC industry. Waters believes it is one of the few HPLC industry participants
that both sells directly to end-users in each of its markets and provides
local technical service and aftermarket support to customers in virtually
every industrialized market in the world. This global presence enables Waters
to provide timely, responsive support and service to its customers, many of
whom operate internationally, and enables it to capitalize on growth
opportunities in emerging markets. By focusing designated resources on HPLC,
Waters is able to develop specialized service in HPLC and believes it can
deliver higher quality service than its competitors who focus on a broad range
of instruments. Waters also offers training sessions to customers at its in-
house training centers with the initial purchase of HPLC instrument systems,
and additional, more specialized training for a fee at the customer's request.
TAI sells and services its own products.

MANUFACTURING

Waters manufactures its instruments at the Company's Milford, Massachusetts
facility, where approximately 460 people are devoted to manufacturing. Waters'
Milford plant is an advanced facility which maintains the highest performance
and quality standards in the industry, meets the strict ISO 9002 quality
standards and FDA mandated Good Manufacturing Practices and is approved by the
FDA to produce Class 1 medical devices.

The Company believes that its high degree of vertical integration between
assembly and machining gives it a competitive advantage. The machine shop,
which utilizes advanced programmable equipment with quick set up features,
allows Waters to produce highly engineered narrow tolerance parts quickly.
Furthermore, both assembly and machining operations are linked with research
and development and engineering processes through the Company's CAD/CAM
system, enabling seamless hand-offs of specifications and manufacturing
procedures from the point of product concept through the product's
manufacture. The Company outsources the supply of certain commodity items,
such as computers, printed circuit boards and other items to outside vendors
which meet the Company's quality requirements. Certain of the outsourced items
are purchased from sole suppliers, and while all of the outsourced items could
be purchased from alternative suppliers, some business interruption could
result from discontinuation by a supplier.

The Company's Taunton, Massachusetts facility is dedicated to manufacturing
chromatography columns and chemicals and employs approximately 70 people.
Proprietary chemical synthesis techniques are used to ensure superior
consistency in the quality of Waters' chromatography chemical products.
Consistent product performance is essential to Waters' customers to produce
accurate and reproducible results. The Taunton facility meets the same ISO and
FDA standards met by the Milford facility.

Because Waters controls each element of the manufacturing process, it is
able to deliver high quality products to its customers. Based upon the
reengineering of its operations, the Company believes it can leverage its
infrastructure to support additional sales without a corresponding increase in
costs.

46
<PAGE>

TAI manufactures its thermal analysis products at its New Castle, Delaware
facility and its rheology products at its Leatherhead, England facility.

COMPETITION

The HPLC instrument market is highly competitive. Although the Company is
the largest in the HPLC industry, it faces competition from several
international instrument manufacturers in both domestic and foreign markets.
Waters competes in this market primarily on the basis of performance,
reliability, service and, to a lesser extent, price. Many competitors who are
not focused on the HPLC market have instrument businesses that are much larger
than the Company's business. Certain competitors are divisions of larger
companies which have greater financial and other resources than the Company.

Waters encounters competition in the highly fragmented consumables market
from chemical companies that produce column chemicals and small specialized
companies that pack and distribute columns. The Company believes that it is
one of the few suppliers that processes silica, packs columns, and distributes
its own product. Waters competes in this market on the basis of
reproducibility, reputation, performance and, to a lesser extent, price.

PATENTS, TRADEMARKS AND LICENSES

The Company owns a number of United States and foreign patents, and has
patent applications pending in the United States and abroad. Certain
technology and software is licensed from third parties. The Company also owns
a number of trademarks, the most significant registered trademarks of which
are Bondapak(R), Nova-Pak(R), Symmetry(R) and Millennium(R). While the
patents, licenses and trademarks are viewed as valuable assets, the Company's
patent position is not of material importance to its operations.

EMPLOYEES

At March 31, 1996, Waters had approximately 1,870 employees. Approximately
160 employees in the U.S. have post-graduate degrees, including 39 with PhDs.
Waters is committed to providing relevant training and educational assistance
which is driven by the operating needs and enhances the skills of Waters
employees. All sales personnel are trained in consultative selling skills and
technical product knowledge. Engineers and scientists are kept abreast of
technology advancements through company sponsored classes. Certain
manufacturing employees receive over 60 hours training annually in such areas
as electro/mechanical training, ISO 9000 and geometric tolerances. Waters also
provides management training sessions on such subjects as project management,
conflict resolution and leadership skills. Approximately 70% of the Company's
employees are located within the United States. Labor relations are considered
to be excellent, and no Waters' employees have union affiliations. TAI has
approximately 200 employees worldwide and their geographic distribution is
similar to the Waters population.

BACKLOG

Historically, the Company has had a backlog of approximately three weeks.

LEGAL PROCEEDINGS

The Company is currently asserting a claim against Millipore under
arbitration procedures specified in the purchase and sale agreement for the
Predecessor. Waters contends that Millipore has undervalued the amount of
assets it is obligated to transfer from the Millipore Retirement Plan to the
Waters successor plan. Millipore, in turn, has filed an action in
Massachusetts state court arguing that the Company's dispute is not subject to
arbitration. The Massachusetts court has preliminarily stayed the arbitration
proceedings. Waters believes it has meritorious arguments regardless of the
forum in which its dispute with Millipore is eventually heard although the
outcome is not certain. From time to time the Company and its subsidiaries are
involved in various other litigation matters arising in the ordinary course of
its business. The Company believes that none of the above, either individually
or in the aggregate, is material to the Company.

47
<PAGE>

ENVIRONMENTAL MATTERS

The Company's facilities are subject to federal, state, local and foreign
environmental requirements, including those relating to discharges to air,
water and land, the handling and disposal of solid and hazardous waste and the
cleanup of properties affected by hazardous substances. Certain environmental
laws, such as the Comprehensive Environmental Response, Compensation, and
Liability Act, as amended ("CERCLA"), impose strict, retroactive, joint and
several liability upon persons responsible for releases of hazardous
substances.

The Company believes that its operations have been and are in substantial
compliance with environmental requirements, and that it has no liabilities
arising under environmental requirements, other than liabilities that would
not be expected to have a material adverse effect on the Company's operations,
financial condition or competitive position. Some risk of environmental
liability is inherent in the nature of the Company's business, however, and
the Company might in the future incur material costs to meet current or more
stringent compliance, cleanup or other obligations pursuant to environmental
requirements.

In connection with the Acquisition, Millipore agreed to retain environmental
liabilities resulting from pre-Acquisition operations at the Company's
facilities, including but not limited to any such liabilities arising under
CERCLA and liabilities arising from pre-Acquisition releases of hazardous
substances on the Company's property in Taunton, Massachusetts.

The Company is aware that Millipore has been notified by U.S. Environmental
Protection Agency and private parties that Millipore is or may be liable under
CERCLA for certain costs resulting from the disposal of hazardous substances
generated and disposed of before the Acquisition from facilities now operated
by the Company. In each such instance, Millipore (and not the Company) (i) is
one of many parties that have been notified of potential liability with
respect to that site, (ii) has entered into a partial settlement of liability,
(iii) has made settlement payments in proportion to the volume of waste it is
alleged to have disposed of at that site and (iv) has received a partial
release from further liability.

It is possible, given the retroactive nature of CERCLA liability, that the
Company will from time to time receive notices of potential liability relating
to Millipore's pre-Acquisition activities or that government officials or
private parties will seek to impose liability for such activities on the
Company. The Company did not assume Millipore's pre-Acquisition CERCLA
liability, however, and expects that no material costs will be incurred by it
with respect to such matters. The Company could, of course, be liable under
CERCLA for its own post-Acquisition activities.

FACILITIES

Waters operates 11 United States facilities and 48 international facilities.
The Company believes its facilities are adequate for its current production
level and for reasonable growth over the next few years. The Company's primary
facilities are summarized in the table below.

PRIMARY FACILITY LOCATIONS

<TABLE>
<CAPTION>
LOCATION FUNCTION (A) OWNED/LEASED SQUARE FEET
-------- ------------ ------------ -----------
<S> <C> <C> <C>
Milford, MA M, R, S Owned 408,000
Taunton, MA M Owned 32,000
St. Quentin, France S Leased 18,000
Singapore S Leased 5,000
Tokyo, Japan R, S Leased 12,000
</TABLE>
- --------
(a) M=Manufacturing; R=Research; S=Sales

48
<PAGE>

Waters maintains eight field offices in the United States and 48 field
offices abroad (excluding TAI offices). The Company's primary field office
locations are listed below.

FIELD OFFICE LOCATIONS

<TABLE>
<CAPTION>
U.S. INTERNATIONAL (A)
- -------------- -----------------------------------------------------------------
<S> <C> <C> <C>
Tustin, CA Australia Hong Kong Poland
Wood Dale, IL Austria Hungary Puerto Rico
Fairfax, VA Belgium Italy Russia
Cary, NC Brazil Japan Singapore
Morristown, NJ Canada Korea Spain
Houston, TX Czech Republic Mexico Sweden
Pleasanton, CA Denmark Netherlands Switzerland
Ann Arbor, MI Finland Norway Taiwan
France People's Republic of United Kingdom
Germany China
</TABLE>
- --------
(a) Waters operates more than one office within several foreign countries.

TAI operates five United States facilities and seven international
facilities. TAI is headquartered in New Castle, Delaware.

49
<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The executive officers and directors of the Company, and their ages as of
May 1, 1996, are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Douglas A. Berthiaume 47 Chairman, President and Chief
Executive Officer
Arthur G. Caputo 44 Senior Vice President, Sales and
Marketing
Thomas W. Feller 56 Senior Vice President, Operations
John R. Nelson 52 Senior Vice President, Research and
Development
Philip S. Taymor 40 Senior Vice President, Finance and
Administration, Chief Financial
Officer, Treasurer and Assistant
Secretary
Brian K. Mazar 38 Vice President, Human Resources
Devette W. Russo 43 Vice President, Chromatography
Consumables Division
Joshua Bekenstein 37 Director
Charles L. Brown 74 Director
Philip Caldwell 76 Director
Edward Conard 39 Director
Thomas P. Salice 35 Director
Marc Wolpow 37 Director
</TABLE>

Officers are elected annually and serve at the discretion of the Board of
Directors. All directors serve until the next annual meeting of shareholders
and until their successors have been duly elected and qualified.

Douglas A. Berthiaume has served as Chairman of the Board of Directors of
the Company since February 1996 and has served as President and Chief
Executive Officer of the Company since August 1994. Mr. Berthiaume joined
Millipore in 1980 as Corporate Controller. Prior to joining the Predecessor as
President in 1990, he held a variety of positions including Senior Vice
President and Chief Financial Officer of Millipore for five years. Before
joining Millipore, Mr. Berthiaume worked at Helix Technology as Corporate
Controller and at Arthur Andersen & Co. as a Manager in Public Accounting. Mr.
Berthiaume is a Director of Genzyme Corporation.

Arthur G. Caputo has been Senior Vice President, Sales and Marketing of the
Company since August 1994. He joined the Predecessor in October 1977 and has
held a number of positions in sales within the Predecessor and Millipore.
Prior to his current position, he was Senior Vice President and General
Manager of Millipore's North American Business Operations responsible for
establishing the Millipore North American Sales Subsidiary and also served as
the General Manager of Waters' North American field sales, support and
marketing functions. Mr. Caputo worked at Whatman Inc. as Product Manager of
Chromatography Products before joining the Predecessor.

Thomas W. Feller has been Senior Vice President, Operations of the Company
since August 1994. He joined Millipore in 1977 and moved to the Predecessor as
Vice President of Operations in 1980. Mr. Feller returned to Millipore
Operations in 1985 before becoming Senior Vice President of Manufacturing
Operations for the Predecessor in January 1991. Since April 1993, Mr. Feller
has been Senior Vice President and General Manager of the Waters Instrument
Operations Division. Prior to joining Millipore, Mr. Feller held various
production and manufacturing positions at Johnson and Johnson, Jensen Speaker
and Baxter Travenol.

John R. Nelson has been Senior Vice President, Research and Development of
the Company since August 1994. He joined the Predecessor in August 1976 and
has held a variety of positions in marketing as well as research and
development, including Vice President Waters Research Development and
Engineering, Senior Vice

50
<PAGE>

President Worldwide Marketing Operations and Senior Vice President of Product
Development. Prior to taking his present position, Mr. Nelson was responsible
for all product development activities of Waters and the discontinued Extrel
business in Pittsburgh, Pennsylvania and Madison, Wisconsin. Mr. Nelson is
also responsible for the Company's TA Instruments, Inc. operations.

Philip S. Taymor has been Senior Vice President, Finance and Administration,
Chief Financial Officer, Treasurer and Assistant Secretary of the Company
since August 1994. He joined Millipore in May 1981 and held several positions
in the Millipore organization, including Corporate Controller, Director of
Finance of Millipore's Membrane Division and Manager of Corporate Accounting.
Mr. Taymor joined the Predecessor in early 1992. His current responsibilities
include business and financial planning, accounting and financial reporting,
treasury operations, legal, tax and information systems. Mr. Taymor joined
Millipore from Grant Thornton & Company, Certified Public Accountants.

Brian K. Mazar has been Vice President, Human Resources of the Company since
August 1994. He joined the Predecessor in 1991 as Director of Human Resources
with responsibility for worldwide human resources functions. From 1986 to
1991, Mr. Mazar was Director of Human Resources of GeneTrak Systems. Prior
thereto, Mr. Mazar worked at Exxon Corporation and Corning Glass Works.

Devette W. Russo has been Vice President, Chromatography Consumables
Division of the Company, since 1990. She joined the Predecessor in 1975 as a
Marketing Communications Account Manager, and has held a variety of positions
within the Predecessor and Millipore in marketing before assuming her current
responsibilities as Vice President, Chromatography Consumables Division. Prior
positions include Director of Corporate Communications for Millipore and Vice
President of Marketing for the Chemistry Division. Ms. Russo held various
marketing and application support roles before joining the Millipore
organization.

Joshua Bekenstein has served as a Director of the Company since August 1994.
He has been a Managing Director of Bain since January 1993 and a General
Partner of Bain Venture Capital since its inception in 1987. Mr. Bekenstein is
a Director of Specialty Retailers, Inc. and Apparel Retailers, Inc.

Charles L. Brown has served as a Director of the Company since August 1994.
Mr. Brown retired as Chairman and Chief Executive Officer of American
Telephone and Telegraph Company ("AT&T") in August 1986. He served as
President of AT&T from 1977 to 1979, Vice Chairman of the Board and Chief
Financial Officer of AT&T in 1976 and Executive Vice President of AT&T from
1974 to 1976. Previously, he was President of Illinois Bell Telephone Company
and was a Director of E.I. du Pont de Nemours and Company, Chemical Bank and
Delta Air Lines Inc. Mr. Brown is a Director of J.P. Morgan Florida, FSB.

Philip Caldwell has served as a Director of the Company since August 1994.
Mr. Caldwell has been Senior Managing Director of Lehman Brothers Inc. and its
predecessor, Shearson Lehman Brothers Holdings Inc., since 1985. Mr. Caldwell
spent 32 years at Ford Motor Company where he was Chairman of the Board of
Directors and Chief Executive Officer from 1980 to 1985 and a Director from
1973 through 1990. Mr. Caldwell is a Director of Zurich Holding Company of
America, Inc., Zurich Reinsurance Centre Holdings, Inc., American Guarantee &
Liability Insurance Company (a Zurich affiliate), The Mexico Fund, CasTech
Aluminum Group Inc. and Russell Reynolds Associates, Inc. He has served as a
Director of the Chase Manhattan Bank Corporation, the Chase Manhattan Bank,
N.A., Digital Equipment Corporation, Federated Department Stores Inc., the
Kellogg Company, Shearson Lehman Brothers Holdings, Inc. and Specialty Codings
International, Inc.

Edward Conard has served as a Director of the Company since August 1994. He
has been a Managing Director of Bain since March 1993. From 1990 to 1992, Mr.
Conard was a Director of Wasserstein Perella & Company, an investment banking
firm that specializes in mergers and acquisitions. Previously, he was a Vice
President of Bain & Company, where he headed the firm's operations practice
area.

Thomas P. Salice has served as a Director of the Company since July 1994.
Mr. Salice is a Managing Director of AEA and has been associated with AEA
since June 1989. Mr. Salice is also a Director of Dal-Tile International Inc.
and CasTech Aluminum Group Inc.

Marc Wolpow has served as a Director of the Company since August 1994. He
has been a Managing Director of Bain since January 1993 and was a Principal of
Bain Venture Capital from April 1990 through

51
<PAGE>

December 1992. From 1988 to April 1990, Mr. Wolpow was a Vice President in the
corporate finance department of Drexel Burnham Lambert, Incorporated. Mr.
Wolpow is also a Director of FTD, Inc. and Williamhouse-Regency of Delaware,
Inc.

COMPENSATION OF EXECUTIVE OFFICERS

Summary of Cash and Certain Other Compensation. The following table sets
forth in summary form information concerning the compensation for all services
rendered in all capacities to the Company and its subsidiaries for 1993, 1994
and 1995 for Mr. Berthiaume and the four other most highly compensated
executive officers of Waters at the end of fiscal year 1995 (collectively, the
"named executive officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
----------------- ---------------------
SECURITIES
UNDERLYING
RESTRICTED OPTIONS/ ALL OTHER
STOCK SARS COMPEN-
NAME AND PRINCIPAL FISCAL SALARY BONUS AWARDS (#) OF SATION
POSITION YEAR ($) ($) ($)(A) SHARES ($)
- ------------------ ------ ------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Douglas A. Berthiaume... 1995 275,002 548,414(b)(c) -- -- 26,916(d)(e)(f)
Chairman, President, 1994 318,329 1,570,000(g) -- 1,325,241(h) 9,550(i)(j)(k)
Chief Executive Officer 29,517(l) 34,548
1993 339,996 -- -- 21,000(m)
Philip S. Taymor........ 1995 149,994 395,714(b)(c) -- -- 16,799(d)(e)(f)
Senior Vice President, 1994 138,328 585,170(g) -- 491,412(h) 4,150(j)(k)(o)
Finance and 16,100(l) 2,900(m)
Administration and 1993 122,000 -- 47,425 12,221
Chief Financial Officer
John R. Nelson.......... 1995 160,004 359,714(b)(c) -- -- 18,086(d)(e)(f)
Senior Vice President, 1994 181,993 585,000(g) -- 491,412(h) 5,460(j)(k)(o)
Research and 17,170(l)
Development 1993 188,000 -- 50,813 4,100(m) 18,588
Thomas W. Feller........ 1995 155,012 352,714(b)(c) -- -- 18,966(d)(e)(f)
Senior Vice President, 1994 175,668 585,000(g) -- 491,412(h) 5,270(i)(j)(k)
Operations 16,637(1)
1993 178,000 -- 44,037 4,100(m) 17,538
Arthur G. Caputo........ 1995 149,994 345,714(b)(c) -- -- 15,687(d)(e)(f)
Senior Vice President, 1994 170,000 585,000(g) -- 491,412(h) 5,100(k)(n)(o)
Sales and Marketing 16,100(l)
1993 173,000 -- 47,425 4,600(m) 17,013
</TABLE>

- --------
(a) Reflects the dollar value as of the date of grant of restricted stock
awards granted by Millipore during 1993. Restrictions relating to such
Millipore stock lapsed upon consummation of the Acquisition.
(b) Reflects bonus earned under the Company's Pay for Performance Plan in 1995
which was paid in 1996 as follows: Mr. Berthiaume $412,700, Mr. Caputo
$210,000, Mr. Feller $217,000, Mr. Nelson $224,000 and Mr. Taymor
$210,000.
(c) Reflects one-time cash bonus earned in 1995 and paid in 1996 in connection
with certain productivity programs implemented by senior management as
follows: Mr. Berthiaume $135,714, Mr. Caputo $135,714, Mr. Feller
$135,714, Mr. Nelson $135,714 and Mr. Taymor $185,714.
(d) Includes amounts contributed for the benefit of the named executive under
the Waters 401(k) Restoration Plan in 1995 as follows: Mr. Berthiaume
$21,216, Mr. Caputo $8,504, Mr. Feller $10,422, Mr. Nelson $10,840 and Mr.
Taymor $11,503.

(e) Includes amounts contributed for the benefit of the named executive under
the Waters Employee Investment Plan in 1995 as follows: Mr. Berthiaume
$3,481, Mr. Caputo $6,367, Mr. Feller $4,809, Mr. Nelson $4,752 and Mr.
Taymor $4,867.

52
<PAGE>

(f) Includes amounts contributed for the benefit of the named executive under
Group Term Life Insurance in 1995 as follows: Mr. Berthiaume $2,219, Mr.
Caputo $816, Mr. Feller $3,735, Mr. Nelson $2,494 and Mr. Taymor $429.

(g) Reflects the aggregate amount of deferred compensation and cash paid by
Millipore in connection with the divestiture of the Company.
(h) Reflects grant of options to purchase shares of Common Stock. Certain of
such options were granted at an exercise price equal to the estimated fair
value of the Common Stock at the date of grant and the other options were
granted at an exercise price in excess of such estimated fair value. All
such options have a term of ten years. The Company amended the option
agreements in the third fiscal quarter of 1995. After giving effect to
such amendment, the named executive officers hold the following options:
Mr. Berthiaume, 282,563 options at an exercise price of $4.07 per share,
282,562 options at an exercise price of $9.50 per share, and 760,116
options at an exercise price of $16.28 per share; and each of Messrs.
Caputo, Feller, Nelson and Taymor, 110, 568 options at an exercise price
of $4.07 per share; 110,568 options at an exercise price of $9.50 per
share, and 270, 276 options at an exercise price of $16.28 per share. The
Company also amended the option agreements in the fourth fiscal quarter of
1995 to vest an aggregate of 1,099,535 options at the $9.50 exercise
price.
(i) Includes amounts contributed by Millipore for the benefit of the named
executive under the Millipore Supplemental Executive Retirement Plan as
follows: Mr. Berthiaume $3,720; and Mr. Feller $640.
(j) Includes amounts contributed by Millipore for the benefit of the named
executive under the Millipore Savings Plan as follows: Mr. Berthiaume
$3,080; Mr. Feller $3,080; Mr. Nelson $3,860; and Mr. Taymor $2,650.
(k) Includes amounts contributed by the Company for the benefit of the named
executive under the Waters 401(k) Restoration Plan as follows: Mr.
Berthiaume $2,750; Mr. Caputo $750; Mr. Feller $1,550; Mr. Nelson $1,200;
and Mr. Taymor $655.
(l) Reflects bonus earned under the Company's Pay for Performance Plan in 1994
which was paid in 1995.
(m) Reflects grant of options to purchase Millipore common stock.
(n) Includes $3,600 contributed by Millipore for the benefit of Mr. Caputo
under the Millipore Participation Plan.
(o) Includes amounts contributed for the benefit of the named executive under
the Waters Employee Investment Plan as follows: Mr. Caputo $750; Mr.
Nelson $400; and Mr. Taymor $845.

53
<PAGE>

Stock Options. There were no stock options granted during fiscal year 1995
to the Company's chief executive officer or any of the named executive
officers.

Option Exercises and Holdings. The following table shows information
regarding the exercise of stock options during fiscal 1995 by the named
executives and the number and value of any unexercised stock options held by
them as of December 31, 1995:

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE-
UNDERLYING UNEXERCISED MONEY OPTIONS/SARS AT
OPTIONS/SARS AT FY-END (#) FY-END ($) EXERCISABLE/
NAME EXERCISABLE/UNEXERCISABLE UNEXERCISABLE(1)
---- -------------------------- ----------------------------
<S> <C> <C>
Douglas A. Berthiaume... 491,097/834,143 $3,573,242/$4,403,332
Arthur G. Caputo........ 186,735/304,675 1,387,512/ 1,680,227
Thomas W. Feller........ 186,735/304,675 1,387,512/ 1,680,227
John R. Nelson.......... 186,735/304,675 1,387,512/ 1,680,227
Philip S. Taymor........ 186,735/304,675 1,387,512/ 1,680,227
</TABLE>
--------
(1) Based on the closing price of the Common Stock on December 31, 1995 of
$18.25.

WATERS CORPORATION RETIREMENT PLANS

Substantially all full-time United States and Puerto Rico employees of
Waters participate in the Waters Retirement Plan (the "Retirement Plan"), a
defined benefit pension plan intended to qualify under Section 401(a) of the
Internal Revenue Code (the "Code"). The Retirement Plan is a cash balance plan
whereby each participant's benefit is determined based on annual pay credits
and interest credits made to each participant's notional account. In general,
a participant becomes vested under the Retirement Plan upon the completion of
five years of service.

Pay credits range from 4.0% to 9.5% of compensation, depending on the
participant's amount of compensation and length of service with the Company.
Compensation refers to pension eligible earnings of the participant under the
Retirement Plan (up to $150,000 for 1995, as limited by the Code), including
base pay, overtime, incentive bonuses, commissions and pre-tax deferrals, but
excluding special items such as stock awards, moving expense reimbursements
and employer contributions to retirement plans.

Interest credits are based on the notional account balance on the last day
of the prior plan year and the plan's interest credit rate. This interest
credit rate equals the one-year constant maturity Treasury Bill rate on the
last day of the preceding plan year plus 0.5%, subject to a 5.0% minimum and
10.0% maximum rate.

No pay or interest credits are granted under the plan for periods of
employment prior to January 1, 1994. However, service is calculated from date
of hire for purposes of determining the level of pay credit for the plan year.
The normal retirement age under the plan is age 65. Benefits are computed on a
straight life basis. Certain participants under this plan may be entitled to a
minimum benefit equal to the amount accrued under the prior plan formula as of
August 18, 1994.

In addition, the Company maintains a non-qualified, supplemental plan which
provides benefits that would be paid by the Retirement Plan except for the
limitations on pensionable pay and benefit amounts currently imposed by the
Code.

The aggregate estimated annual benefit payable from the Retirement Plan and
supplemental plan to Messrs. Berthiaume, Caputo, Feller, Nelson and Taymor
upon normal retirement is $77,000, $50,000, $19,000, $31,000 and $65,000,
respectively. As of September 1, 1995, Messrs. Berthiaume, Caputo, Feller,
Nelson and Taymor had approximately 14, 17, 19, 18 and 14 years of credited
service, respectively, under the Retirement Plan.

54
<PAGE>

EMPLOYEE STOCK-BASED COMPENSATION PLANS

The Board and the Company's stockholders have approved the 1996 Long-Term
Performance Incentive Plan. Pursuant to this plan, the Compensation Committee
may grant to employees and other key individuals who perform services for the
Company and its subsidiaries stock options, stock appreciation rights,
restricted stock, performance units, performance grants and other types of
awards. Under the plan, no single participant may receive awards in excess of
100,000 shares of Common Stock in a single calendar year, and no more than
1,000,000 shares of Common Stock may be issued to all participants during the
life of the plan. The plan terminates on May 7, 2006.

The Board and the Company's stockholders have also approved the 1996
Employee Stock Purchase Plan. Under this plan, certain eligible employees of
the Company may purchase through payroll deductions shares of Common Stock at
the lesser of 90% of the fair market value of the shares on the first day of
each plan period or 100% of the fair market value of the shares on the last
day of each plan period. Up to 250,000 shares of Common Stock may be issued
under the plan, which will become effective on October 1, 1996.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Prior to October 20, 1995, the Company's Compensation Committee was composed
of Mr. Charles F. Baird, Jr., Mr. Charles L. Brown and Mr. Edward Conard. The
Compensation Committee currently consists of Messrs. Brown and Conard and Mr.
Thomas Salice. Prior to the Company's initial public offering, each of Mr.
Conard and Mr. Salice also served as an officer of the Company.

COMPENSATION OF BOARD OF DIRECTORS

Directors who are full-time employees of the Company receive no additional
compensation for serving on the Board or its committees. Prior to January 1,
1996, the Company paid certain of its directors an annual fee of $5,000,
except for the Chairman who received an annual fee of $25,000, and $500 for
each board or committee meeting attended. As of January 1, 1996, the Company's
non-employee directors (the "Outside Directors") each receive a retainer of
$15,000 per year (other than the Chairman who, if an Outside Director, will
receive an annual fee of $30,000) and $750 for each board meeting and
committee meeting that they attend. All directors are reimbursed for expenses
incurred in connection with their attendance at meetings.

In addition, the Board and the Company's stockholders have approved the 1996
Non-Employee Director Deferred Compensation Plan and the 1996 Non-Employee
Director Stock Option Plan. Under the deferred compensation plan, Outside
Directors may elect to defer their fees and credit such fees to either a cash
account which earns interest at a market-based rate or to a common stock unit
account, for which 100,000 shares of Common Stock have been reserved. Under
the Director Stock Option Plan, each Outside Director will receive 1,000
options to acquire shares of Common Stock, and up to 50,000 shares of Common
Stock may be issued under such plan.

55
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of Common Stock (i) immediately prior to the Offerings and (ii) as
adjusted to reflect the sale of the shares of Common Stock pursuant to the
Offerings, by (a) each person or entity known by the Company to be the
beneficial owner of more than 5% of the outstanding shares of Common Stock,
(b) each of the Company's directors, (c) each of the named executive officers,
(d) all directors and executive officers of the Company as a group and (e) all
other selling stockholders. Unless otherwise noted in the footnotes to the
table, the persons named in the table have sole voting and investing power
with respect to all shares of Common Stock indicated as being beneficially
owned by them.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
SHARES BENEFICIALLY OWNED OWNED AFTER
PRIOR TO THE OFFERINGS THE OFFERINGS (a)
--------------------------- ----------------------
NAME AND ADDRESS OF SHARES
BENEFICIAL OWNER NUMBER (B) PERCENT OFFERED NUMBER PERCENT
- ------------------- --------------- ----------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C>
5% STOCKHOLDERS
Bain Capital Entities
(c)
c/o Bain Capital,
Inc.
Two Copley Place
Boston, Massachusetts
02116................ 7,204,675 24.99 4,558,137 2,646,538 9.18
Invesco PLC
11 Devonshire Square
London EC2M 4YR
England.............. 1,815,900 6.30 -- 1,815,900 6.30
DIRECTORS AND EXECUTIVE
OFFICERS
Douglas A. Berthiaume. 1,144,405 3.90 -- 1,144,405 3.90
Arthur G. Caputo...... 372,598 1.28 -- 372,598 1.28
Thomas W. Feller...... 367,124 1.27 -- 367,124 1.27
John R. Nelson........ 309,062 1.07 -- 309,062 1.07
Philip S. Taymor...... 368,260 1.27 -- 368,260 1.27
Joshua Bekenstein (d). 7,204,675 24.99 4,558,137 2,646,538 9.18
Charles L. Brown...... 7,019 * -- 7,019 *
Philip Caldwell(e).... 31,782 * -- 31,782 *
Edward Conard (d)..... 7,204,675 24.99 4,558,137 2,646,538 9.18
Thomas P. Salice (f).. 102,257 * 68,527 33,730 *
Marc Wolpow (d)....... 7,204,675 24.99 4,558,137 2,646,538 9.18
All Directors and Ex-
ecutive Officers as a
group
(13 persons)......... 10,471,203 34.55 4,626,664 5,844,539 19.28
OTHER SELLING STOCKHOLD-
ERS
BT Investment Part-
ners, Inc. ........... 1,300,076 4.51 822,511 477,565 1.66
Nassau Capital Funds
L.P. ................. 565,919 1.96 508,198 57,721 *
A.P. Moller Tankers &
Liners................ 486,327 1.69 436,724 49,603 *
AEA Investors Inc. ... 306,543 1.06 275,277 31,266 *
95 other Selling
Stockholders, each of
whom is selling less
than 50,000 shares in
the Offerings or bene-
ficially owns less
than 1% of the out-
standing Common Stock
prior to the Offer-
ings.................. 4,293,325 14.89 3,330,626 962,699 3.34
</TABLE>

- --------

* represents less than 1% of the total.

(a) Assumes no exercise of the Underwriters' over-allotment options. If the
Underwriters' over-allotment options are exercised in full, the Bain Capital
Entities will sell an additional 683,720 shares, BT Investment Partners,
Inc. will sell an additional 335,323 shares, Nassau Capital Funds L.P. will
sell an additional 57,721 shares, A.P. Moller Tankers & Liners Inc. will
sell an additional 49,603 shares, AEA Investors Inc. will sell an additional
31,266 shares, Thomas P. Salice will sell an additional 1,473 shares, and
the 95 other Selling Stockholders will collectively sell an additional
340,894 shares.

(b) Figures are based upon 28,825,482 shares of Common Stock outstanding as of
April 30, 1996. The figures assume exercise by only the stockholder or
group named in each row of all options for the purchase of Common Stock
held by such stockholder or group which are exercisable within 60 days of
March 25, 1996.

(c) Amounts shown represent the aggregate number of shares held by Bain
Capital Fund IV, L.P. ("Fund IV"), Bain Capital Fund IV-B, L.P. ("Fund IV-
B"), BCIP Associates and BCIP Trust Associates, L.P. (collectively with
Fund IV and Fund IV-B, the "Bain Capital Entities"). Messrs. Bekenstein,
Conard and Wolpow, who serve as directors of the Company, are managing
directors of Bain and limited partners of Bain Capital Partners IV, L.P.,
the general partner of Fund IV and Fund IV-B. In addition, Messrs.

56
<PAGE>

Bekenstein, Conard and Wolpow are general partners of BCIP Associates and of
BCIP Trust Associates, L.P. Accordingly, Messrs. Bekenstein, Conard and
Wolpow may be deemed to share voting and dispositive power as to the shares
held by the Bain Capital Entities. Messrs. Bekenstein, Conard and Wolpow
disclaim beneficial ownership of such shares.

(d) All of the shares shown are held by the Bain Capital Entities. See Note
(c). The address of each such person is c/o Bain Capital, Inc., Two Copley
Place, Boston, Massachusetts 02116.

(e) Includes 31,782 shares held in trust for Mr. Caldwell's wife, Betsey C.
Caldwell, and for which shares he disclaims beneficial ownership.

(f) Excludes 306,543 shares owned by AEA, of which Mr. Salice serves as an
officer and for which shares he disclaims beneficial ownership.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

EMPLOYMENT AGREEMENTS

None of the executive officers have employment agreements with the Company
or any of its affiliates. None of them has any agreements entitling them to
termination or severance payments upon a change of control of the Company or a
change in the named executive's responsibilities following a change of
control. However, each of the named executive officers are parties to one or
more Management Subscription Agreements with the Company pursuant to which
each of them has purchased shares of Common Stock in the Company and each of
them is also the grantee of certain stock options from the Company under one
or more Stock Option Agreements. Pursuant to the terms of such agreements the
executive may be entitled to certain payments from the Company relating to the
repurchase of the stock purchased under such agreements or available upon
exercise of the options granted to him. The Management Subscription Agreements
and the Stock Option Agreements also impose certain additional restrictions
upon the executive, including confidentiality obligations, assignment of the
benefit of inventions and patents to the Company, a requirement that he devote
his exclusive business time to the Company, and noncompete restrictions which
extend in certain cases, depending on the basis on which his employment is
terminated, for a period of up to 24 months following his termination date. In
addition, in connection with the Acquisition, the Company assumed Millipore's
obligations to make certain payments to the named executive officers in
accordance with the terms of certain deferred compensation agreements.

LOANS TO EXECUTIVE OFFICERS

The Company has made loans, in an aggregate principal amount of $2,342,303,
to certain executive officers of the Company. These loans are full recourse
loans and are secured by a pledge of the shares of Common Stock owned by such
executive officers. The following executive officers' loans bear interest at
5.83% and have a maturity date of December 1, 2000: Douglas A. Berthiaume,
Chairman, President and Chief Executive Officer, $650,919; Arthur G. Caputo,
Senior Vice President, Sales and Marketing, $245,825; Thomas W. Feller, Senior
Vice President, Operations, $245,825; Brian K. Mazar, Vice President, Human
Resources and Investor Relations, $247,843; John R. Nelson, Senior Vice
President, Research and Development, $204,854; Devette Russo, Vice President,
Chromatography Chemistry Division, $211,190; and Philip S. Taymor, Senior Vice
President, Finance and Administration and Chief Financial Officer, $245,825
(the foregoing amounts are as of December 1, 1995). The following executive
officers' additional loans are as of January 8, 1996, bear interest at 5.65%
and have a maturity date of January 8, 2001: Mr. Berthiaume $92,939, Mr.
Caputo $34,629, Mr. Feller $34,617, Mr. Mazar $34,629, Mr. Nelson $28,858, Ms.
Russo $29,750 and Mr. Taymor $34,629.

MANAGEMENT SERVICES AGREEMENT

Prior to the IPO, AEA, Bain, certain affiliates of Bain and the Company were
party to the Management Services Agreement pursuant to which AEA and Bain
provided management, consulting and financial services to the Company. In
consideration for such services, AEA and Bain were entitled collectively to an
annual fee in the amount of $1.5 million, plus reimbursement for out-of-pocket
expenses and indemnification against certain liabilities. During 1995, the
fees and expenses paid by the Company to AEA and Bain totaled $1.4 million.
Upon consummation of the IPO, the Management Services Agreement was terminated
and AEA and Bain were paid collectively a fee of $4 million in connection
therewith.

57
<PAGE>

At the time of the Acquisition and in consideration of services rendered by
AEA and Bain (and certain affiliates of Bain) in arranging, structuring and
negotiating the terms of the Acquisition and the related financing
transactions, the Company paid to AEA and an affiliate of Bain collectively a
transaction fee of $8 million, and reimbursed AEA and Bain for certain related
expenses.

SPECIAL DISTRIBUTION TO SECURITYHOLDERS

On September 12, 1995, the Company declared and paid the Special
Distribution to the holders of its Class A common stock and warrants to
purchase Class A common stock. Pursuant to the Special Distribution the
following cash payments were made as a return of capital to the Company's
existing security holders as follows: (i) AEA, together with stockholders of
AEA, received an aggregate amount of $6,992,958; (ii) Bain Capital Entities
received an aggregate amount of $6,946,260; and (iii) certain members of
Waters senior management received an aggregate amount of $1,424,275.

REGISTRATION RIGHTS AGREEMENT

The Company is party to a registration rights agreement (the "Registration
Rights Agreement") among certain of the Company's existing stockholders (the
"Agreement Stockholders"). Pursuant to the terms of the Registration Rights
Agreement, each Agreement Stockholder has the right to require the Company, at
the sole expense of the Company and subject to certain limitations, to
register under the Securities Act of 1933 (the "Securities Act") all or part
of the shares of Common Stock (the "Registrable Securities") held by them.
Certain Agreement Stockholders (including affiliates of AEA and Bain) are
entitled to unlimited demand registrations (but no more than one within any
six month period), provided that the demand registration must be requested by
the holders of at least 5% of the shares of Common Stock and generate proceeds
of at least $30 million. All Agreement Stockholders are entitled to unlimited
"piggyback" registrations. In connection with all registrations, the Company
will agree to indemnify all holders of Registrable Securities against certain
liabilities, including liabilities under the Securities Act. Registrations
pursuant to the Registration Rights Agreement will be made on the appropriate
registration form and may be underwritten registrations.

The Offerings are being commenced as a result of the exercise of certain
demand rights pursuant to the Registration Rights Agreement. In accordance
with the Registration Rights Agreement, no Agreement Stockholders can make
additional demands for 180 days after the date of this Prospectus.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company has entered into agreements to provide indemnification for its
directors and executive officers in addition to the indemnification provided
for in the Company's Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws.

DESCRIPTION OF CERTAIN INDEBTEDNESS

DESCRIPTION OF THE BANK CREDIT AGREEMENT

The Company has entered into the Bank Credit Agreement dated as of November
22, 1995, as amended, with Bankers Trust Company, as agent (the "Agent") and
other institutions party thereto (the "Banks"), which provides for loans of up
to $300 million. As of May 8, 1996, the Company owed $247.6 million under the
Bank Credit Agreement. The following description is qualified in its entirety
by reference to the Bank Credit Agreement, a copy of which has been filed as
an exhibit to the registration statement of which this Prospectus is a part.

Indebtedness of the Company under the Bank Credit Agreement is guaranteed by
the domestic subsidiaries of the Company and is secured by (i) a first
priority security interest in all of the receivables, contracts, contract

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rights, securities, equipment (other than certain equipment secured by
purchase money security interests), intellectual property, inventory and real
estate owned by the Company and its domestic subsidiaries, (ii) a first
priority perfected pledge of all capital stock and intercompany notes of the
Company's domestic subsidiaries owned directly by the Company or its domestic
subsidiaries, and (iii) a first priority perfected pledge of 66 2/3% of the
capital stock of certain foreign subsidiaries owned directly by the Company or
its domestic subsidiaries.

The loans under the Bank Credit Agreement bear interest for each fiscal
quarter at a per annum rate equal to, at the Company's option, (i) the Base
Rate plus an amount which will vary between zero and .50%, based upon certain
performance criteria for the Company's previous four fiscal quarters, or (ii)
the Eurodollar Rate (as defined in the Bank Credit Agreement) plus an amount
which will vary between 0.50% and 1.50%, based upon certain performance
criteria for the Company's previous four fiscal quarters.

The availability under the Bank Credit Agreement will decrease under certain
circumstances, including upon certain asset sales, issuances of equity and
incurrences of debt, will reduce by $45 million at November 22, 1998 and 1999,
and will terminate at the earlier of the date on which a Change of Control
Event (as defined in the Bank Credit Agreement) occurs and November 22, 2000.

The Bank Credit Agreement requires the Company to meet certain financial
tests, including minimum levels of EBITDA (as defined in the Bank Credit
Agreement), minimum interest coverage, maximum amounts of capital expenditures
and a maximum leverage ratio. The Bank Credit Agreement also contains
covenants which, among other things, limit: (i) the incurrence of additional
indebtedness, (ii) the payment of dividends, (iii) transactions with
affiliates, (iv) asset sales, acquisitions, mergers and consolidations, (v)
prepayments of other indebtedness, (vi) the creation of liens and encumbrances
and (vii) other matters customarily restricted in such agreements. Pursuant to
the Bank Credit Agreement, the Company must obtain the consent of its lenders
in order to make acquisitions of more than $40 million and, in some cases, $25
million.

The Bank Credit Agreement contains customary events of default, including
payment defaults, breach of representations and warranties, covenant defaults,
cross-default to certain other indebtedness, certain events of bankruptcy and
insolvency, certain ERISA-related events, judgment defaults, failure of any
guaranty or security agreement supporting the Bank Credit Agreement to be in
full force and effect and a Change of Control Event (as defined in the Bank
Credit Agreement) of the Company.

DESCRIPTION OF CAPITAL STOCK

GENERAL MATTERS

The total amount of authorized capital stock of the Company consists of
50,000,000 shares of Common Stock, par value $0.01 per share, and 5,000,000
shares of preferred stock, par value $0.01 per share (the "Preferred Stock").
As of the date hereof, 28,825,482 shares of Common Stock are issued and
outstanding and 100 shares of Preferred Stock are issued and outstanding. The
following summary of certain provisions of the Company's capital stock
describes all material provisions of, but does not purport to be complete and
is subject to, and qualified in its entirety by, the Amended and Restated
Certificate of Incorporation and the Bylaws of the Company that are included
as exhibits to the Registration Statement of which this Prospectus forms a
part and by the provisions of applicable law.

Certain provisions described herein may have the effect of impeding
stockholder actions with respect to certain business combinations and the
election of new members to the Board. As such, the provisions could have the
effect of discouraging open market purchases of the Company's Common Stock
because they may be considered disadvantageous by a stockholder who desires to
participate in a business combination or elect a new director.

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<PAGE>

COMMON STOCK

Holders of the Common Stock are entitled to one vote per share on all
matters submitted to a vote of stockholders, including the election of
directors. Holders of Common Stock do not have cumulative voting rights, and
therefore holders of a majority of the shares voting for the election of
directors can elect all of the directors. In such event, the remaining shares
will not be able to elect any directors.

As of April 30, 1996, there were 28,825,482 shares of Common Stock
outstanding held by 333 holders of record. The issued and outstanding shares
of Common Stock are validly issued, fully paid and nonassessable. Subject to
the prior rights of the holders of any Preferred Stock and restrictions
contained in the Bank Credit Agreement, the holders of outstanding shares of
Common Stock are entitled to receive dividends out of assets legally available
therefor at such times and in such amounts as the Board may from time to time
determine. See "Price Range of Common Stock and Dividend Policy."

Upon liquidation, dissolution or winding up of the Company, the holders of
Common Stock are entitled to receive pro rata the assets of the Company which
are legally available for distribution, after payment of all debts and other
liabilities and subject to the prior rights of any holders of Preferred Stock
then outstanding.

The Common Stock is traded on the New York Stock Exchange under the symbol
"WAT."

PREFERRED STOCK

Millipore holds 100 shares of Series A Preferred Stock, par value $.01 per
share (the "Preferred Stock"). The Liquidation Value of the shares when issued
was $100,000 per share. Dividends on the Preferred Stock accrue at a rate of
6% per annum, and the Company may, at its option, elect to pay cumulated
dividends in cash; provided, that if any portion of such dividend is not paid
in cash, such portion shall be added to the Liquidation Value of the Preferred
Stock. The dividend rights on the Preferred Stock are cumulative, and the
Preferred Stock ranks prior to the Common Stock as to liquidation rights and
redemption. The Preferred Stock has no voting rights. The Preferred Stock is
redeemable by the Company at any time and must be redeemed on August 18, 2006.

Pursuant to the Company's Amended and Restated Certificate of Incorporation,
the Board may, without further action by the Company's stockholders, from time
to time, direct the issuance of additional shares of Preferred Stock in series
and may, at the time of issuance, determine the rights, preferences and
limitations of each series. Satisfaction of any dividend preferences of
outstanding shares of Preferred Stock would reduce the amount of funds
available for the payment of dividends on shares of Common Stock. Holders of
shares of Preferred Stock may be entitled to receive a preference payment in
the event of any liquidation, dissolution or winding-up of the Company before
any payment is made to the holders of shares of Common Stock. Under certain
circumstances, the issuance of shares of Preferred Stock may render more
difficult or tend to discourage a merger, tender offer or proxy contest, the
assumption of control by a holder of a large block of the Company's securities
or the removal of incumbent management. The Board, without stockholder
approval, may issue shares of Preferred Stock with voting and conversion
rights which could adversely affect the holders of shares of Common Stock.

CERTAIN PROVISIONS OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
AND BYLAWS AND STATUTORY PROVISIONS

The Amended and Restated Certificate of Incorporation and the Bylaws contain
certain provisions that could make more difficult the acquisition of the
Company by means of a tender offer, a proxy contest or otherwise.

Advance Notice Provisions for Stockholder Nominations and Stockholder
Proposals. The Amended and Restated Certificate of Incorporation requires that
any action required or permitted to be taken by the Company's stockholders
must be effected at a duly called annual or special meeting of stockholders
and may not be effected

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<PAGE>

by consent in writing. Additionally, the Amended and Restated Certificate of
Incorporation requires that special meetings of the stockholders of the
Company be called only by a majority of the Board or by certain officers.

The Amended and Restated Bylaws provide that stockholders seeking to bring
business before or to nominate directors at any annual meeting of stockholders
must provide timely notice thereof in writing. To be timely, a stockholder's
notice must be delivered to, or mailed and received at, the principal
executive offices of the Company not less than 60 days nor more than 90 days
prior to such meeting or, if less than 70 days' notice was given for the
meeting, within ten days following the date on which such notice was given.
The Bylaws also specify certain requirements for a stockholder's notice to be
in proper written form. These provisions restrict the ability of stockholders
to bring matters before the stockholders or to make nominations for directors
at meetings of stockholders.

Section 203 of Delaware Law. The Company is subject to the "business
combination" provisions of the Delaware General Corporation Law. In general,
such provisions prohibit a publicly-held Delaware corporation from engaging in
various "business combination" transactions with any "interested stockholder"
for a period of three years after the date of the transaction in which the
person became an "interested stockholder," unless (i) the transaction is
approved by the Board of Directors prior to the date the interested
stockholder obtained such status, (ii) upon consummation of the transaction
which resulted in the stockholder becoming an "interested stockholder," the
"interested stockholder" owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced, excluding for
purposes of determining the number of shares outstanding those shares owned by
(a) persons who are directors and also officers and (b) employee stock plans
in which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be tendered in a
tender or exchange offer, or (iii) on or subsequent to such date the "business
combination" is approved by the board of directors and authorized at an annual
or special meeting of stockholders by the affirmative vote of at least 66 % of
the outstanding voting stock which is not owned by the "interested
stockholder." A "business combination" is defined to include mergers, asset
sales and other transactions resulting in financial benefit to a stockholder.
In general, an "interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years, did own) 15% or more
of a corporation's voting stock. The statute could prohibit or delay mergers
or other takeover or change in control attempts with respect to the Company
and, accordingly, may discourage attempts to acquire the Company. In addition,
the Amended and Restated Certificate of Incorporation provides that the
affirmative vote of at least 80% of the outstanding voting stock is required
for a business combination between the Company or any subsidiary and the
beneficial owner of more than five percent of the outstanding voting stock
unless such transaction (i) has been approved by a majority of the
disinterested directors or (ii) involves a person who, as of the effectiveness
of the Offerings, was the beneficial owner of more than five percent of the
outstanding voting stock.

Limitations on Liability and Indemnification of Officers and Directors. The
Delaware Law provides that a corporation may limit the liability of each
director to the corporation or its stockholders for monetary damages except
for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or that involve intentional misconduct or a knowing violation of law, (iii) in
respect of certain unlawful dividend payments or stock redemptions or
repurchases and (iv) for any transaction from which the director derives an
improper personal benefit. The Company's Amended & Restated Certificate of
Incorporation provides that, to the fullest extent permitted by Delaware law,
no director of the Company shall be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duties as a
director. The effect of these provisions is to eliminate the rights of the
Company and its stockholders (through stockholders' derivative suits on behalf
of the Company) to recover monetary damages against a director for breach of
fiduciary duty as a director (including breaches resulting from grossly
negligent conduct). This provision does not exonerate the directors from
liability under federal securities laws nor does it limit the availability of
non-monetary relief in any action or proceeding against a director. In
addition, the Amended and Restated Certificate of Incorporation provides that
the Company shall, to the fullest extent not prohibited by Delaware Law,
indemnify its officers and directors against liabilities, cost and expenses as
provided by Delaware Law. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors,

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<PAGE>

officers or others pursuant to the foregoing provisions, the Company has been
informed that in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is The First National
Bank of Boston.

SHARES ELIGIBLE FOR FUTURE SALE

There are 28,825,482 shares of Common Stock outstanding. In addition to the
10,000,000 shares of Common Stock sold in the Offerings (11,500,000 shares if
the Underwriters' over-allotment options are exercised in full), the
11,062,500 shares sold in the IPO will be freely tradeable without restriction
or further registration under the Securities Act, unless held by an
"affiliate" of the Company as that term is defined in the Securities Act,
which shares will be subject to the resale limitations of Rule 144. All of the
remaining shares are "restricted securities" under the Securities Act and may
not be sold unless they are registered or unless an exemption from
registration, such as the exemptions provided by Rule 144 or Rule 144A under
the Securities Act, is available. A substantial portion of such remaining
shares are subject to the lock-up agreements described below.

In connection with the Offerings, all Selling Stockholders and certain
members of management have agreed not to dispose of any shares for a period of
90 days from the date of this Prospectus, or to make any demand for or
exercise any right with respect to the registration of the shares; and the
Company's executive officers, non-selling directors and certain other members
of management, and certain other stockholders who hold in the aggregate
1,316,401 shares of Common Stock, have agreed not to dispose of any shares for
a period of 75 days from the date of the Prospectus or to make any demand for
or exercise any right with respect to the registration of their shares; and
the Company has agreed not to dispose of any shares (other than issuances by
the Company of certain employee stock options and shares covered thereby) for
a period of 90 days from the date of this Prospectus, in each case without the
prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated on
behalf of the Underwriters. Certain existing shareholders have also waived all
rights to register securities owned by them in connection with the Offerings.
Upon expiration of the lock-up periods, the shares of Common Stock subject to
the lock-ups will be eligible for sale subject to certain volume and other
resale limitations of Rule 144 and Rule 144A under the Securities Act.

In general, under Rule 144 as currently in effect, a stockholder (or
stockholders whose shares are aggregated) who has beneficially owned shares
constituting "restricted securities" (generally defined as securities acquired
from the Company or an affiliate of the Company in a non-public transaction)
for at least two years, is entitled to sell within any three-month period a
number of shares that does not exceed the greater of one percent of the
outstanding Common Stock or the average weekly trading volume in the Common
Stock during the four calendar weeks preceding the date on which notice of
such sale is filed pursuant to Rule 144. Sales under Rule 144 are also subject
to certain provisions regarding the manner of sale, notice requirements and
the availability of current public information about the Company. A
stockholder (or stockholders whose shares are aggregated) who is not an
affiliate of the Company for at least 90 days prior to a proposed transaction
and who has beneficially owned "restricted securities" for at least three
years is entitled to sell such shares under Rule 144 without regard to the
limitations described above.

Rule 144A provides a nonexclusive safe harbor exemption from the
registration requirements of the Securities Act for specified resales of
restricted securities to certain institutional investors. In general, Rule
144A allows unregistered resales of restricted securities to a "qualified
institutional buyer," which generally includes an entity, acting for its own
account or for the account of other qualified institutional buyers, that in
the aggregate owns or invests at least $100 million in securities of
unaffiliated issuers. Rule 144A does not extend an exemption to the offer or
sale of securities that, when issued, were of the same class as securities
listed on a national securities exchange or quoted on Nasdaq. The shares of
Common Stock outstanding as of the date of this Prospectus would be eligible
for resale under Rule 144A because such shares, when issued, were not of the
same class as any listed or quoted securities.

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<PAGE>

Certain of the Company's shareholders have demand and piggyback registration
rights pursuant to the Registration Rights Agreement. Pursuant to the
Registration Rights Agreement, these rights may not be exercised for 180 days
following the date of this Prospectus.

No prediction can be made as to the effect, if any, that market sales for
shares of Common Stock or the availability of shares of Common Stock for sale
will have on the market price of the Common Stock from time to time. The sale
of a substantial number of shares held by existing stockholders, whether
pursuant to a subsequent public offering or otherwise, or the perception that
such sales would occur, could adversely affect the market price of the Common
Stock and could materially impair the Company's future ability to raise
capital through an offering of equity securities.

CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS FOR NON-UNITED STATES HOLDERS

The following is a general discussion of certain United States federal
income and estate tax consequences of the ownership and disposition of Common
Stock applicable to Non-U.S. Holders. In general, a "Non-U.S. Holder" is any
holder other than (i) a citizen or resident of the United States, (ii) a
corporation or partnership created or organized in the United States or under
the laws of the United States or of any state, or (iii) an estate or trust,
the income of which is includable in gross income for United States federal
income tax purposes regardless of its source. This discussion is based on
current law and is for general information only. This discussion does not
address aspects of United States federal taxation other than income and estate
taxation and does not address all aspects of income and estate taxation, nor
does it consider any specific facts or circumstances that may apply to a
particular Non-U.S. Holder (including the tax position of certain U.S.
expatriates). ACCORDINGLY, PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR
TAX ADVISERS REGARDING THE UNITED STATES FEDERAL, STATE, LOCAL AND NON-UNITED
STATES INCOME AND OTHER TAX CONSEQUENCES OF HOLDING AND DISPOSING OF SHARES OF
COMMON STOCK.

An individual may, subject to certain exceptions, be deemed to be a resident
alien (as opposed to a non-resident alien) by virtue of being present in the
United States on at least 31 days in the calendar year and for an aggregate of
at least 183 days during a three year period ending in the current calendar
year (counting for such purposes all of the days present in the current year,
one-third of the days present in the immediately preceding year, and one-sixth
of the days present in the second preceding year). Resident aliens are subject
to U.S. federal tax as if they were U.S. citizens.

DIVIDENDS

In general, dividends paid to a Non-U.S. Holder will be subject to United
States withholding tax at a 30% rate (or a lower rate prescribed by an
applicable tax treaty) unless the dividends are either (i) effectively
connected with a trade or business carried on by the Non-U.S. Holder within
the United States, or (ii) if certain income tax treaties apply, attributable
to a permanent establishment in the United States maintained by the Non-U.S.
Holder. Dividends effectively connected with such a United States trade or
business or attributable to such a United States permanent establishment
generally will not be subject to United States withholding tax (if the Non-
U.S. Holder files certain forms, including Internal Revenue Service Form 4224,
with the payor of the dividend) and generally will be subject to United States
federal income tax on a net income basis, in the same manner as if the Non-
U.S. Holder were a resident of the United States. A Non-U.S. Holder that is a
corporation may be subject to an additional branch profits tax at a rate of
30% (or such lower rate as may be specified by an applicable treaty) on the
repatriation from the United States of its "effectively connected earnings and
profits," subject to certain adjustments. To determine the applicability of a
tax treaty providing for a lower rate of withholding, dividends paid to an
address in a foreign country are presumed under current Treasury Regulations
to be paid to a resident of that country absent knowledge to the contrary.
Treasury regulations proposed in 1984 that have not been finally adopted,
however, would require Non-U.S. Holders to file certain forms to obtain the
benefit of any applicable tax treaty providing for a lower rate of withholding
tax on dividends. Such forms would contain the Non-U.S. Holders' name and
address and an official statement by the competent authority (as

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designated in the applicable treaty) in the foreign country attesting to the
Non-U.S. Holder's status as a resident thereof. A Non-U.S. Holder that is
eligible for a reduced rate of U.S. withholding tax pursuant to a tax treaty
may obtain a refund of any excess amounts withheld by filing an appropriate
claim for refund with the Internal Revenue Service.

SALE OF COMMON STOCK

In general, a Non-U.S. Holder will not be subject to United States federal
income tax on any gain realized upon the disposition of such holder's shares
of Common Stock unless (i) the gain is effectively connected with a trade or
business carried on by the Non-U.S. Holder within the United States or,
alternatively, if certain tax treaties apply, attributable to a permanent
establishment in the United States maintained by the Non-U.S. Holder (and in
either such case, the United States branch profits tax may also apply upon
repatriation of the gain if the Non-U.S. Holder is a corporation); (ii) in the
case of Non-U.S. Holder who is a nonresident alien individual and holds shares
of Common Stock as a capital asset, such individual is present in the United
States for 183 days or more in the taxable year of disposition, and either (a)
such individual has a "tax home" (as defined for United States federal income
tax purposes) in the United States (unless the gain from the disposition is
attributable to an office or other fixed place of business maintained by such
Non-U.S. Holder in a foreign country and such gain has been subject to a
foreign income tax equal to at least 10% of the gain derived from such
disposition), or (b) the gain is attributable to an office or other fixed
place of business maintained by such individual in the United States; (iii)
the Non-U.S. Holder is subject to tax pursuant to the provisions of United
States tax law applicable to certain United States expatriates whose loss of
United States citizenship had as one of its principal purposes the avoidance
of United States taxes; or (iv) the Company is or has been a United States
real property holding corporation (a "USRPHC") for United States federal
income tax purposes (which the Company does not believe that it is or is
likely to become) at any time within the shorter of the five year period
preceding such disposition or such Non-U.S. Holder's holding period. If the
Company were or were to become a USRPHC, gains realized upon a disposition of
Common Stock by a Non-U.S. Holder which did not directly or indirectly own
more than 5% of the Common Stock during the shorter of the periods described
above generally would not be subject to United States federal income tax,
provided that the Common Stock is "regularly traded" on an established
securities market.

ESTATE TAX

Common Stock owned or treated as owned by an individual who is not a citizen
or resident (as defined for United States federal estate tax purposes) of the
United States at the time of death will be includable in the individual's
gross estate for United States federal estate tax purposes (unless an
applicable estate tax treaty provides otherwise), and therefore may be subject
to United States federal estate tax.

BACKUP WITHHOLDING, INFORMATION REPORTING AND OTHER REPORTING REQUIREMENTS

The Company must report annually to the Internal Revenue Service and to each
Non-U.S. Holder the amount of dividends paid to, and the tax withheld with
respect to, each Non-U.S. Holder. These reporting requirements apply
regardless of whether withholding was reduced or eliminated by an applicable
tax treaty. Copies of this information also may be made available under the
provisions of a specific treaty or agreement with the tax authorities in the
country in which the Non-U.S. Holder resides or is established.

United States backup withholding (which generally is imposed at the rate of
31% on certain payments to persons that fail to furnish the information
required under the United States information reporting requirements) and
information reporting generally will not apply to dividends paid on Common
Stock to a Non-U.S. Holder at an address outside the United States.

The payment of proceeds from the disposition of Common Stock to or through a
United States office of a broker will be subject to information reporting and
backup withholding unless the owner, under penalties of

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perjury, certifies, among other things, its status as a Non-U.S. Holder or
otherwise establishes an exemption. The payment of proceeds from the
disposition of Common Stock to or through a non-U.S. office of a non-U.S.
broker generally will not be subject to backup withholding and information
reporting, except as noted below. In the case of proceeds from a disposition
of Common Stock paid to or through a non-United States office of a broker that
is (i) a United States person, (ii) a "controlled foreign corporation" for
United States federal income tax purposes or (iii) a foreign person 50% or
more of whose gross income from certain periods is effectively connected with
a United States trade or business, (a) backup withholding will not apply
unless such broker has actual knowledge that the owner is not a Non-U.S.
Holder, and (b) information reporting will apply unless the broker has
documentary evidence in its files that the owner is a Non-U.S. Holder (and the
broker has no actual knowledge to the contrary).

Backup withholding is not an individual tax. Any amounts withheld under the
backup withholding rules from a payment to a Non-U.S. Holder will be refunded
or credited against the Non-U.S. Holder's United States federal income tax
liability, if any, provided that the required information is furnished to the
Internal Revenue Service.

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UNDERWRITING

Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Alex.
Brown & Sons Incorporated, CS First Boston Corporation, and Goldman, Sachs &
Co. are acting as representatives (the "U.S. Representatives") of each of the
Underwriters named below (the "U.S. Underwriters"). Subject to the terms and
conditions set forth in a U.S. purchase agreement (the "U.S. Purchase Agree-
ment") among the Company, Waters Technologies Corporation, each of the Selling
Stockholders and the U.S. Underwriters, and concurrently with the sale of
2,000,000 shares of Common Stock to the International Managers (as defined be-
low), the Selling Stockholders severally have agreed to sell to the U.S. Un-
derwriters, and each of the U.S. Underwriters severally has agreed to purchase
from the Selling Stockholders, the number of shares of Common Stock set forth
opposite its name below.

<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITER SHARES
---------------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..............................................
Alex. Brown & Sons Incorporated....................................
CS First Boston Corporation........................................
Goldman, Sachs & Co................................................
---------
Total......................................................... 8,000,000
=========
</TABLE>

The Company, Waters Technologies Corporation and the Selling Stockholders
have also entered into an international purchase agreement (the "International
Purchase Agreement") with certain underwriters outside the United States and
Canada (the "International Managers" and, together with the U.S. Underwriters,
the "Underwriters") for whom Merrill Lynch International, Alex. Brown & Sons
Incorporated, CS First Boston Limited, and Goldman Sachs International are
acting as lead managers (the "Lead Managers"). Subject to the terms and
conditions set forth in the International Purchase Agreement, and concurrently
with the sale of 8,000,000 shares of Common Stock to the U.S. Underwriters
pursuant to the U.S. Purchase Agreement, the Selling Stockholders have agreed
to sell to the International Managers, and the International Managers
severally have agreed to purchase from the Selling Stockholders, an aggregate
of 2,000,000 shares of Common Stock. The initial public offering price per
share and the total underwriting discount per share of Common Stock are
identical under the U.S. Purchase Agreement and the International Purchase
Agreement.

In the U.S. Purchase Agreement and the International Purchase Agreement, the
several U.S. Underwriters and the several International Managers,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of Common Stock being sold pursuant to
each such agreement if any of the shares of Common Stock being sold pursuant
to such agreement are purchased. Under certain circumstances, the commitments
of non-defaulting U.S. Underwriters or International Managers (as the case may
be) may be increased. The closings with respect to the sale of shares of
Common Stock to be purchased by the U.S. Underwriters and the International
Managers are conditioned upon one another.

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The U.S. Representatives have advised the Selling Stockholders that the U.S.
Underwriters propose initially to offer the shares of Common Stock to the
public at the initial public offering price set forth on the cover page of
this Prospectus, and to certain dealers at such price less a concession not in
excess of $ per share of Common Stock. The U.S. Underwriters may allow,
and such dealers may reallow, a discount not in excess of $ per share of
Common Stock on sales to certain other dealers. After the initial public
offering, the public offering price, concession and discount may be changed.

The Selling Stockholders have granted an option to the U.S. Underwriters,
exercisable for 30 days after the date of this Prospectus, to purchase up to
an aggregate of 1,200,000 additional shares of Common Stock at the initial
public offering price set forth on the cover page of this Prospectus, less the
underwriting discount. The U.S. Underwriters may exercise this option only to
cover over-allotments, if any, made on the sale of the Common Stock offered
hereby. To the extent that the U.S. Underwriters exercise this option, each
U.S. Underwriter will be obligated, subject to certain conditions, to purchase
a number of additional shares of Common Stock proportionate to such U.S.
Underwriter's initial amount reflected in the foregoing table. The Selling
Stockholders also have granted an option to the International Managers,
exercisable for 30 days after the date of this Prospectus, to purchase up to
an aggregate of 300,000 additional shares of Common Stock to cover over-
allotments, if any, on terms similar to those granted to the U.S.
Underwriters.

The Company, each of the Selling Stockholders, the Company's directors and
executive officers, and certain other members of management, and certain other
stockholders of the Company who hold in the aggregate 1,316,401 shares, have
agreed, subject to certain exceptions, not to directly or indirectly sell,
offer to sell, grant any option for the sale of or otherwise dispose of any
shares of Common Stock or securities or rights convertible into or exercisable
or exchangeable for Common Stock, or make any demand for or exercise any right
with respect to the registration of any Common Stock or other such securities,
without the prior written consent of Merrill Lynch on behalf of the
Underwriters, for a period of (in the case of the Company, the Selling
Stockholders and certain members of management) 90 days after the date of this
Prospectus, or (in the case of the Company's executive officers, non-selling
directors, certain other members of management and certain other stockholders
of the Company) 75 days after the date of this Prospectus. See "Shares
Eligible for Future Sale."

The U.S. Underwriters and the International Managers have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for
the coordination of their activities. Pursuant to the Intersyndicate
Agreement, the U.S. Underwriters and the International Managers are permitted
to sell shares of Common Stock to each other for purposes of resale at the
offering price, less an amount not greater than the selling concession. Under
the terms of the Intersyndicate Agreement, the U.S. Underwriters and any
dealer to whom they sell shares of Common Stock will not offer to sell or sell
shares of Common Stock to persons who are non-U.S. or non-Canadian persons or
to persons they believe intend to resell to persons who are non-U.S. or non-
Canadian persons, and the International Managers and any dealer to whom they
sell shares of Common Stock will not offer to sell or sell shares of Common
Stock to U.S. persons or to Canadian persons or to persons they believe intend
to resell to United States or Canadian persons, except in the case of
transactions pursuant to the Intersyndicate Agreement.

The Company and the Selling Stockholders have agreed to indemnify the U.S.
Underwriters and the International Managers against certain liabilities,
including liabilities under the Securities Act.

67
<PAGE>

LEGAL MATTERS

The validity of the Common Stock being offered hereby and certain other
legal matters relating to the Offerings will be passed upon for the Company by
Kirkland & Ellis (a partnership which includes professional corporations), New
York, New York. Certain legal matters will be passed upon for the Underwriters
by Fried, Frank, Harris, Shriver & Jacobson (a partnership which includes
professional corporations), New York, New York. Fried, Frank, Harris, Shriver
& Jacobson performs legal services for AEA on a regular basis.

EXPERTS

The consolidated balance sheets as of December 31, 1994 and 1995 and the
consolidated statements of operations, stockholders' equity and cash flows of
the Company for the period August 19, 1994 through December 31, 1994 and the
year ended December 31, 1995, have been included herein in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.

The consolidated statements of operations and cash flows of the Waters
Chromatography Division of Millipore Corporation for the year ended December
31, 1993 and the period January 1, 1994 through August 18, 1994, have been
included herein in reliance on the report, which includes an explanatory
paragraph addressing certain costs and expenses presented in the financial
statements which represent allocations and management's estimates of the costs
of services provided by Millipore Corporation, of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.

The audited consolidated financial statements of TA Instruments, Inc. and
Subsidiaries included in this prospectus and elsewhere in the registration
statement to the extent and for the periods indicated in their report have
been audited by Arthur Andersen LLP, independent public accountants, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said report.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and copies may be obtained at prescribed rates.
Such reports, proxy statements and other information filed by the Company can
also be inspected at the offices of the New York Stock Exchange located at 20
Broad Street, New York, New York 10005.

The Company has filed a Registration Statement on Form S-1 under the
Securities Act of 1933, as amended with respect to the Common Stock being
offered hereby with the Commission under the Securities Act. This Prospectus,
which constitutes a part of the Registration Statement, does not contain all
the information set forth in the Registration Statement, certain items of
which are omitted in accordance with the rules and regulations of the
Commission. Statements contained in this Prospectus concerning the provisions
of documents filed with the Registration Statement as exhibits are necessarily
summaries of such documents, and each such statement is qualified in its
entirety by reference to the copy of the applicable document filed as an
exhibit to the Registration Statement. The Registration Statement and the
exhibits and schedules thereto filed by the Company with the Commission, as
well as such reports and other information filed by the Company with the
Commission, may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549; at its Chicago Regional Office, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and at its New York Regional Office, Seven World
Trade Center, 13 Floor, New York, New York 10048. Copies of such material can
be obtained from the public reference section of the Commission, 450 Fifth

68
<PAGE>

Street, N.W., Washington, D.C. 20549, at prescribed rates. Copies of such
material will be available for inspection at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005. For further information
pertaining to the Company and the Common Stock being offered hereby, reference
is made to the Registration Statement, including the exhibits thereto and the
financial statements, notes and schedules filed as a part thereof. The Company
intends to furnish to its stockholders annual reports containing audited
consolidated financial statements and a report thereon by the Company's
independent accountants and quarterly reports containing unaudited
consolidated financial data for the first three quarters of each fiscal year.

69
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
The Company

<S> <C>
Reports of Coopers and Lybrand L.L.P. ................................ F-2
Consolidated Balance Sheets for the Company at December 31, 1994 and
1995 and March 31, 1996 (unaudited).................................. F-4
Consolidated Statements of Operations for the Predecessor for the year
ended December 31, 1993 and for the period January 1, 1994 to August
18, 1994; Consolidated Statements of Operations for the Company for
the period August 19, 1994 to December 31, 1994, for the year ended
December 31, 1995, and for the three months ended March 31, 1995 and
1996 (unaudited)..................................................... F-5
Consolidated Statements of Cash Flows for the Predecessor for the year
ended December 31, 1993 and for the period January 1, 1994 to August
18, 1994; Consolidated Statements of Cash Flows for the Company for
the period August 19, 1994 to December 31, 1994, for the year ended
December 31, 1995, and for the three months ended March 31, 1995 and
1996 (unaudited)..................................................... F-6
Consolidated Statements of Stockholders' Equity of the Company for the
period August 19, 1994 to December 31, 1994, for the year ended De-
cember 31, 1995, and for the three months ended March 31, 1996 (unau-
dited)............................................................... F-7
Notes to Consolidated Financial Statements............................ F-8
TA Instruments, Inc. and Subsidiaries ("TAI")

Report of Arthur Andersen LLP......................................... F-28
Consolidated Statements of Operations for TAI for the years ended De-
cember 31, 1994 and 1995 and for the three months ended March 31,
1995 and 1996 (unaudited)............................................ F-29
Consolidated Balance Sheets for TAI at December 31, 1994 and 1995 and
March 31, 1996 (unaudited)........................................... F-30
Consolidated Statements of Cash Flows for TAI for the years ended De-
cember 31, 1994 and 1995 and for the three months ended March 31,
1995 and 1996 (unaudited)............................................ F-31
Consolidated Statements of Stockholders' Equity (Deficit) for TAI for
the years ended December 31, 1994 and 1995 and for the three months
ended March 31, 1996 (unaudited)..................................... F-32
Notes to Consolidated Financial Statements............................ F-33
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of Waters Corporation:

We have audited the accompanying consolidated balance sheets of Waters
Corporation and Subsidiaries as of December 31, 1994 and 1995 and the related
consolidated statements of operations, stockholders' equity and cash flows for
the period from August 19, 1994 to December 31, 1994 and the year ended
December 31, 1995. These financial statements are the responsibility of Waters
Corporation management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Waters
Corporation and Subsidiaries as of December 31, 1994 and 1995, and the results
of its operations and its cash flows for the period from August 19, 1994 to
December 31, 1994 and the year ended December 31, 1995 in conformity with
generally accepted accounting principles.

Coopers & Lybrand L.L.P.

Boston, Massachusetts January 23, 1996

F-2
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of Millipore Corporation:

We have audited the accompanying statements of operations and cash flows of
the Waters Chromatography Division of Millipore Corporation (the
"Predecessor") for the year ended December 31, 1993 and for the period from
January 1, 1994 to August 18, 1994. These financial statements are the
responsibility of Millipore Corporation's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

Certain costs and expenses presented in the financial statements represent
allocations and management's estimates of the costs of services provided to
the Waters Chromatography Division by Millipore Corporation. As a result, the
financial statements presented may not be indicative of the financial position
or results of operations that would have been achieved had the Waters
Chromatography Division operated as a non-affiliated entity.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the results of operations and cash flows of the
Waters Chromatography Division of Millipore Corporation for the year ended
December 31, 1993 and for the period from January 1, 1994 to August 18, 1994
in conformity with generally accepted accounting principles.

Coopers & Lybrand L.L.P.

Boston, Massachusetts February 10, 1995

F-3
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1995 MARCH 31, 1996
----------------- ----------------- --------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> (UNAUDITED)
ASSETS
Current assets:
Cash and cash
equivalents............. $ 16,739 $ 3,233 $ 1,825
Accounts receivable,
less allowances for
doubtful accounts of
$1,798, $1,513 and
$1,792 at December
31, 1994 and 1995 and
March 31, 1996,
respectively......... 83,383 76,087 75,560
Inventories............ 43,978 41,459 40,376
Other current assets... 1,768 2,847 3,273
Net current assets--
discontinued operations. 9,888 3,694 --
-------- -------- --------
Total current assets.. 155,756 127,320 121,034
Property, plant and
equipment, net.......... 71,060 70,261 70,277
Other assets............ 36,404 29,024 32,346
Goodwill, less
accumulated
amortization of $573,
$2,364 and $2,797 at
December 31, 1994 and
1995 and March 31,
1996, respectively..... 67,049 72,491 72,140
Net long term assets--
discontinued operations. 1,329 720 --
-------- -------- --------
Total assets.......... $331,598 $299,816 $295,797
======== ======== ========
LIABILITIES AND EQUITY
(DEFICIT)
Current liabilities:
Notes payable and
current portion of long
term debt............... $ 6,067 $ 1,933 $ 1,303
Accounts payable....... 18,479 16,757 18,065
Deferred revenue....... 6,900 6,945 8,902
Accrued interest....... 3,961 2,527 4,930
Accrued retirement plan
contributions........... 3,087 5,362 5,840
Other current
liabilities............. 29,905 36,763 32,810
-------- -------- --------
Total current
liabilities............. 68,399 70,287 71,850
Loans under Bank Credit
Agreement............... 169,950 83,500 68,100
Senior Subordinated
Notes................... 100,000 75,000 75,000
Redeemable preferred
stock................... 5,330 6,232 6,461
Other liabilities....... 10,589 6,679 8,777
-------- -------- --------
Total liabilities..... 354,268 241,698 230,188
Commitments and
contingent liabilities.. -- -- --
Equity (Deficit):
Common stock, par value
$0.01 per share
50,000 shares
authorized, 21,482,
28,796 and 28,796
shares issued and
outstanding at
December 31, 1994 and
1995 and March 31,
1996, respectively... 215 288 288
Additional paid-in
capital................. 67,494 145,318 145,089
Deferred stock option
compensation............ -- (1,076) (993)
Warrants............... 3,200 -- --
Notes receivable....... (5,055) -- --
Accumulated deficit.... (87,404) (85,403) (77,228)
Translation
adjustments............. (1,120) (605) (1,143)
Minimum pension
liability adjustment.... -- (404) (404)
-------- -------- --------
Total equity
(deficit)............... (22,670) 58,118 65,609
-------- -------- --------
Total liabilities and
equity (deficit)........ $331,598 $299,816 $295,797
======== ======== ========
</TABLE>

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

F-4
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
------------------------------------ ------------------------------------
YEAR ENDED JANUARY 1, 1994 TO AUGUST 19, 1994 TO YEAR ENDED
DECEMBER 31, 1993 AUGUST 18, 1994 DECEMBER 31, 1994 DECEMBER 31, 1995
----------------- ------------------ ------------------ -----------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales............... $304,927 $176,097 $131,057 $332,972
Cost of sales........... 124,387 73,446 49,740 126,216
Revaluation of acquired
inventory............... -- -- 38,424 925
-------- -------- -------- --------
Gross profit........... 180,540 102,651 42,893 205,831
Selling, general and
administrative
expenses............... 132,452 85,216 44,522 132,746
Research and development
expenses............... 18,525 13,399 6,790 17,681
Goodwill and purchased
technology
amortization........... -- -- 1,227 3,629
Expensed in-process
research and
development............ -- -- 53,918 --
Management fee.......... -- -- 552 5,393
Restructuring charge.... 13,000 -- 3,500 --
-------- -------- -------- --------
Operating income
(loss).................. 16,563 4,036 (67,616) 46,382
Interest expense, net... 2,072 828 12,011 30,315
Unrealized (gains)
losses on future cash
flow hedges............ -- -- (923) 1,142
Realized (gains) on cash
flow hedges............ -- -- -- (2,317)
-------- -------- -------- --------
Income (loss) from
continuing operations
before income taxes... 14,491 3,208 (78,704) 17,242
Provision (benefit) for
income taxes........... 4,169 916 1,487 3,129
-------- -------- -------- --------
Income (loss) from
continuing operations. 10,322 2,292 (80,191) 14,113
(Loss) income from
discontinued
operations,
net of tax effect...... (9) (448) 787 --
Estimated (loss) on
disposal of
discontinued
operations............. -- -- (8,000) --
-------- -------- -------- --------
Income (loss) before
extraordinary item.... 10,313 1,844 (87,404) 14,113
Extraordinary item
(loss) on early
retirement of debt..... -- -- -- (12,112)
-------- -------- -------- --------
Net income (loss) ..... $ 10,313 $ 1,844 (87,404) 2,001
======== ========
Less: accretion of and
6% dividend on 330 902
preferred stock........ -------- --------
Net (loss) income
available to common
stockholders.......... $(87,734) $ 1,099
======== ========
Income (loss) per common
share:
(Loss) income per
common share from
continuing operations. $ (3.38) $ .54
(Loss) per common share
from discontinued
operations............ (.30) --
Extraordinary (loss)
per common share...... -- (.49)
-------- --------
Net (loss) income per
common share.......... $ (3.68) $ .05
======== ========
Weighted average number
of common shares....... 23,852 24,582
<CAPTION>
COMPANY
-----------------------
THREE MONTHS ENDED
MARCH 31,
-----------------------
1995 1996
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Net sales............... $77,554 $85,313
Cost of sales........... 30,282 32,114
Revaluation of acquired
inventory............... -- --
----------- -----------
Gross profit........... 47,272 53,199
Selling, general and
administrative
expenses............... 30,920 33,429
Research and development
expenses............... 4,096 4,668
Goodwill and purchased
technology
amortization........... 903 931
Expensed in-process
research and
development............ -- --
Management fee.......... 387 --
Restructuring charge.... -- --
----------- -----------
Operating income
(loss).................. 10,966 14,171
Interest expense, net... 8,119 3,954
Unrealized (gains)
losses on future cash
flow hedges............ 3,886 --
Realized (gains) on cash
flow hedges............ -- --
----------- -----------
Income (loss) from
continuing operations
before income taxes... (1,039) 10,217
Provision (benefit) for
income taxes........... (199) 2,042
----------- -----------
Income (loss) from
continuing operations. (840) 8,175
(Loss) income from
discontinued
operations,
net of tax effect...... -- --
Estimated (loss) on
disposal of
discontinued
operations............. -- --
----------- -----------
Income (loss) before
extraordinary item.... (840) 8,175
Extraordinary item
(loss) on early
retirement of debt..... -- --
----------- -----------
Net income (loss) ..... (840) 8,175
Less: accretion of and
6% dividend on 222 229
preferred stock........ ----------- -----------
Net (loss) income
available to common
stockholders.......... $(1,062) $ 7,946
=========== ===========
Income (loss) per common
share:
(Loss) income per
common share from
continuing operations. $ (0.04) $ 0.26
(Loss) per common share
from discontinued
operations............ -- --
Extraordinary (loss)
per common share...... -- --
----------- -----------
Net (loss) income per
common share.......... $ (0.04) $ 0.26
=========== ===========
Weighted average number
of common shares....... 23,852 30,925
</TABLE>

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

F-5
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
----------------------------------- ------------------------------------------------------------
THREE MONTHS
ENDED MARCH 31,
YEAR ENDED JANUARY 1, 1994 TO AUGUST 19, 1994 TO YEAR ENDED -----------------------
ECEMBER 31, 1993 AUGUST 18, 1994 DECEMBER 31, 1994 DECEMBER 31, 1995 1995 1996
---------------- ------------------ ------------------ ----------------- ----------- -----------
(IN THOUSANDS) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Cash flows from
operating activities:
Net income (loss)..... $ 10,313 $ 1,844 $ (87,404) $ 2,001 $ (840) $ 8,175
Adjustments to
reconcile net income
(loss) to net cash
provided by operating
activities:
Net (income) loss from
discontinued
operations........... 9 448 (787) -- -- --
Unrealized losses
(gains) on future
cash flow hedges..... -- -- (923) 1,142 3,886 --
Estimated loss on
disposal of
discontinued
operations -- -- 8,000 -- -- --
Deferred income taxes. (683) -- -- -- -- --
Depreciation and
amortization......... 7,450 5,197 2,501 7,709 1,988 2,086
Amortization of
capitalized software
and intangible
assets............... 1,815 1,126 1,893 6,065 1,472 1,553
Amortization of debt
issuance costs....... -- -- 993 2,731 727 277
Compensatory stock
option expense....... -- -- -- 4,565 -- 83
Write-off of in-
process research and
development.......... -- -- 53,918 -- -- --
Extraordinary loss on
early retirement of
debt................. -- -- -- 12,112 -- --
Change in operating
assets and
liabilities:
Decrease (increase)
in accounts
receivable........... (3,679) 18,186 (38,127) 10,212 10,575 (131)
Decrease (increase) in
inventories.......... 12,096 (2,492) 44,324 5,583 (365) 1,190
(Increase) decrease in
other current assets. 218 (2,248) 970 (1,073) (547) (332)
(Increase) decrease in
other assets......... 285 453 (568) (1,277) (447) (2,211)
(Decrease) increase in
accounts payable and
other current
liabilities.......... 4,082 1,583 16,397 (1,661) (10,417) (569)
(Decrease) increase in
deferred revenue..... (444) 1,380 (317) (32) 1,360 1,953
Increase (decrease) in
accrued retirement
plan contributions... (46) (809) 109 1,637 373 486
(Decrease) increase in
other liabilities.... 945 503 5,012 (4,511) (673) 2,152
-------- -------- --------- --------- -------- --------
Net cash provided by
continuing
operations........... 32,361 25,171 5,991 45,203 7,092 14,712
Net cash provided by
(used in)
discontinued
operations........... (1,330) 478 1,418 1,039 422 --
-------- -------- --------- --------- -------- --------
Net cash provided by
operating activities. 31,031 25,649 7,409 46,242 7,514 14,712
Cash flows from
investing activities:
Additions to property,
plant and equipment.. (5,874) (3,901) (1,524) (6,260) (2,005) (1,678)
Software
capitalization and
other intangibles.... (2,565) (2,034) (667) (3,618) (1,015) (785)
Payment to acquire
predecessor net
assets............... -- -- (310,456) -- -- --
Payment to acquire net
assets of Phase
Separations, Ltd..... -- -- -- (7,469) -- --
Loans to officers..... -- -- -- (2,062) -- (322)
Realized loss on
contracts hedging net
asset value.......... -- -- -- (1,457) -- --
Proceeds from sale of
discontinued
operations........... -- -- -- 6,477 -- 4,497
-------- -------- --------- --------- -------- --------
Net cash (used for)
investing activities
by continuing
operations........... (8,439) (5,935) (312,647) (14,389) (3,020) 1,712
Net investing
activities of
discontinued
operations........... (737) (508) (594) (154) (94) --
-------- -------- --------- --------- -------- --------
Net cash (used in)
investing activities. (9,176) (6,443) (313,241) (14,543) (3,114) 1,712
Cash flows from
financing activities:
Proceeds from
borrowings........... -- -- 275,813 84,286 -- --
Proceeds from issuance
of common stock...... -- -- 66,628 86,152 -- --
Repayment (issuance)
of notes and accrued
interest............. -- -- (5,055) 5,309 -- --
Net repayment of bank
borrowings........... -- -- -- (175,000) (2,090) (15,961)
Retirement of Senior
Subordinated Notes... -- -- -- (28,188) -- --
Transactions with
parent company....... (21,855) (18,739) -- -- -- --
Payments for debt
issuance costs....... -- -- (15,111) (2,211) -- --
Payments for interest
rate protection
agreements........... -- -- -- -- -- (1,734)
Dividend paid......... -- -- -- (16,195) -- --
-------- -------- --------- --------- -------- --------
Net cash (used in)
provided by financing
activities........... (21,855) (18,739) 322,275 (45,847) (2,090) (17,695)
Effect of exchange rate -- -- (171) 642 354 (137)
changes on cash........ -------- -------- --------- --------- -------- --------
Net change in cash and
cash equivalents..... -- 467 16,272 (13,506) 2,664 (1,408)
-------- -------- --------- --------- -------- --------
Cash and cash
equivalents at
beginning of period.... -- -- 467 16,739 16,739 3,233
Cash and cash
equivalents at end of
period............... $ -- $ 467 $ 16,739 $ 3,233 $ 19,403 $ 1,825
======== ======== ========= ========= ======== ========
Supplemental cash flow
information:
Income taxes paid..... $ -- $ -- $ 217 $ 1,924 $ 587 $ 1,188
Interest paid......... $ -- $ -- $ 7,247 $ 30,370 $ 10,031 $ 2,959
</TABLE>

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

F-6
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
MINIMUM
ADDITIONAL DEFERRED CUMULATIVE PENSION
COMMON PAID-IN STOCK OPTION NOTES TRANSLATION LIABILITY
STOCK CAPITAL COMPENSATION WARRANTS RECEIVABLE ACCUMULATED DEFICIT ADJUSTMENTS ADJUSTMENT TOTAL
------ ---------- ------------ -------- ---------- ------------------- ------------ ---------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial capital
contribution at
August 19, 1994
(restated)....... $215 $ 67,824 $ -- $ 3,200 $ (4,925) $ -- $ -- $ -- $ 66,314
Net loss for the
period August 19,
1994 to December
31, 1994......... -- -- -- -- -- (87,404) -- -- (87,404)
Translation
adjustment for
the period August
19, 1994 to
December 31,
1994............. -- -- -- -- -- -- (1,120) -- (1,120)
Accretion of
preferred stock... -- (108) -- -- -- -- -- -- (108)
Interest income on
notes receivable. -- -- -- -- (130) -- -- -- (130)
Dividend payable
on preferred
stock............ -- (222) -- -- -- -- -- -- (222)
---- -------- ------- ------- -------- -------- ------- ----- --------
Balance December
31, 1994.......... 215 67,494 -- 3,200 (5,055) (87,404) (1,120) -- (22,670)
Net income for the
year ended
December 31,
1995............. -- -- -- -- -- 2,001 -- -- 2,001
Translation
adjustment for
the year ended
December 31,
1995............. -- -- -- -- -- -- 515 -- 515
Proceeds from
stock offering.... 63 86,089 -- -- -- -- -- -- 86,152
Accretion of
preferred stock... -- (301) -- -- -- -- -- -- (301)
Interest income on
notes receivable. -- -- -- -- (254) -- -- -- (254)
Dividend payable
on preferred
stock............ -- (600) -- -- -- -- -- -- (600)
Repayment of notes
receivable........ -- -- -- -- 5,309 -- -- -- 5,309
Minimum pension
liability
adjustment....... -- -- -- -- -- -- -- (404) (404)
Warrants
exercised......... 10 3,190 -- (3,200) -- -- -- -- --
Compensatory stock
options issued... -- 5,641 (5,641) -- -- -- -- -- --
Compensatory stock
option expense... -- -- 4,565 -- -- -- -- -- 4,565
Dividend paid..... -- (16,195) -- -- -- -- -- -- (16,195)
---- -------- ------- ------- -------- -------- ------- ----- --------
Balance December
31, 1995.......... $288 $145,318 $(1,076) $ -- $ -- $(85,403) $ (605) $(404) $58,118
Net income for the
three months
ended March 31,
1996............. -- -- -- -- -- 8,175 -- -- 8,175
Compensatory stock
option expense... -- -- 83 -- -- -- -- -- 83
Accretion of
preferred stock.. -- (79) -- -- -- -- -- -- (79)
Dividend payable
on preferred
stock............ -- (150) -- -- -- -- -- -- (150)
Translation
adjustment for
the three months
ended March 31,
1996............. -- -- -- -- -- -- (538) -- (538)
---- -------- ------- ------- -------- -------- ------- ----- --------
Balance March
31, 1996
(unaudited).... $288 $145,089 $ (993) $ -- $ -- $(77,228) $(1,143) $(404) $ 65,609
==== ======== ======= ======= ======== ======== ======= ===== ========
</TABLE>

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

F-7
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF
MARCH 31, 1996 IS UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Basis of Presentation

Waters Corporation ("Waters" or the "Company") is a holding company which
owns all and only the common stock of Waters Technologies Corporation. In
November 1995, the Company completed its initial public offering (the
"Offering"). Prior to this date, the Company was known as WCD Investors, Inc.
and Waters Technologies Corporation was known as Waters Corporation. Waters
acquired substantially all of the assets (the "Acquisition") of the Waters
Chromatography Division (the "Predecessor") of Millipore Corporation
("Millipore") on August 18, 1994. Pursuant to the purchase method of
accounting, acquired assets and liabilities were revalued to their fair market
value. The excess of the purchase price over the fair market value of the net
assets acquired was recorded as goodwill. Because of the revaluation of the
assets and liabilities and its related impact on the statement of operations,
the financial statements of the Predecessor for the periods prior to August
19, 1994 are not strictly comparable to those of the Company subsequent to
that date. Therefore, Predecessor financial statements have been presented
separately from Company financial statements. The consolidated financial
statements include the accounts of the Company and its subsidiaries, all of
which are wholly owned. All material intercompany balances and transactions
have been eliminated.

Cash and Cash Equivalents

Cash equivalents primarily represent highly liquid investments, with
original maturities of 90 days or less, in repurchase agreements and money
market funds which are convertible to a known amount of cash and carry an
insignificant risk of change in value. The Company has periodically maintained
balances in various operating accounts in excess of federally insured limits.

Inventory

The Company values all of its inventories at the lower of cost or market on
a first-in, first-out basis (FIFO).

Translation of Foreign Currencies

For most of the Company's foreign operations, assets and liabilities are
translated at exchange rates prevailing on the balance sheet date while
revenues and expenses are translated at average exchange rates prevailing
during the period. Any resulting translation gains or losses are included in
translation adjustments in the consolidated balance sheet.

Property, Plant and Equipment

Property, plant and equipment is recorded at cost. Expenditures for
maintenance and repairs are charged to expense while the costs of significant
improvements are capitalized. On August 19, 1994, pursuant to the purchase
method of accounting, property, plant and equipment was revalued to its fair
market value. Depreciation is provided using straight line methods over the
following estimated useful lives: leasehold improvements--lives of the related
leases, buildings and improvements--33 years, and production and other
equipment--5 to 10 years. Upon retirement or sale, the cost of assets disposed
and the related accumulated depreciation are eliminated from the balance sheet
and related gains or losses are reflected in income.

F-8
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF
MARCH 31, 1996 IS UNAUDITED)
Concentration of Credit Risk

The Company sells its products to a significant number of large and small
customers throughout the world, with approximately 43% of 1995 net sales to
the pharmaceutical industry. None of the Company's individual customers
account for more than two percent of annual Company sales. The Company
performs continuing credit evaluation of its customers and generally does not
require collateral, but, in certain circumstances may require letters of
credit. Historically, the Company has not experienced significant bad debt
losses.

Reclassification

Certain amounts in previous years' financial statements have been
reclassified to conform to current presentation.

Revenue Recognition

Sales of products and services are recorded based on product shipment and
performance of service, respectively. Proceeds received in advance of product
shipment or performance of service are recorded as deferred revenue in the
balance sheet.

Software Development Costs

The Company capitalizes software development costs in accordance with
Statement of Financial Accounting Standard No. 86. Capitalized costs are
amortized to cost of sales on a straight-line basis over the estimated useful
lives of the related software products, generally three to five years.
Capitalized software included in other assets was $7,409, $8,418 and $8,562 at
December 31, 1994 and 1995 and March 31, 1996, respectively.

Purchased Technology and Goodwill

Purchased technology is recorded at its fair market value as of the
acquisition date and is amortized over its estimated useful life, ranging from
four to fifteen years for current purchased technology components. Goodwill,
the excess of the acquired business purchase price over the underlying net
assets, is amortized on a straight-line basis over its useful life, 40 years
for current goodwill components. Impairment of purchased technology and
goodwill is measured on the basis of whether anticipated future undiscounted
operating cash flows expected from the acquired business will recover the
recorded respective intangible asset balances over the remaining amortization
period. At December 31, 1995 and March 31, 1996, no such impairment of assets
was indicated. Purchased technology included in other assets was $10,527,
$8,667 and $8,201, with accumulated amortization of $620, $2,482 and $2,947,
at December 31, 1994 and 1995 and March 31, 1996, respectively.

Field Service Expenses

All expenses of the Company's field service organization are included in
selling, general and administrative expenses.

Product Warranty Costs

The Company provides for estimated warranty costs at the point of sale.

F-9
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF
MARCH 31, 1996 IS UNAUDITED)
Debt Issuance Costs

Debt issuance costs are amortized over the life of the related debt using
the effective interest method. At December 31, 1994 and 1995 and March 31,
1996, debt issuance costs included in other assets amounted to $17,318, $7,874
and $9,324, net of accumulated amortization of $993, $912 and $1,190,
respectively.

Income Taxes

The Company provides for income taxes in accordance with Statement of
Financial Accounting Standard No. 109, "Accounting for Income Taxes". Under
this method, deferred tax assets and liabilities are determined based on the
differences between the financial reporting and tax basis of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse. Prior to the
Acquisition, the Predecessor's operations were included in the consolidated
tax returns of Millipore and all related income tax payments were made by
Millipore.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect (i) the reported amounts of assets and liabilities,
(ii) disclosure of contingent assets and liabilities at the dates of the
financial statements and (iii) the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those
estimates.

Income (Loss) Per Share

Income (loss) per common share is based on the weighted average number of
common shares and common share equivalents outstanding during the periods
presented. Common share equivalents result from outstanding options and
warrants to purchase common stock. Pursuant to Securities and Exchange
Commission Staff Accounting Bulletin No. 83, using the treasury stock method
until shares are actually issued, all common share equivalents issued and
options granted by the Company at a price less than the offering price during
the twelve months preceding the initial public offering date have been
included in computing income (loss) per common share. Accretion of and
cumulative dividends on preferred stock have been included in computing income
(loss) per share.

Supplemental unaudited pro forma income (loss) per common share amounts,
calculated as if the Offering had taken place at the beginning of the
respective periods, were $(2.75) and $.35 for the period August 19, 1994 to
December 31, 1994 and for the year ended December 31, 1995, respectively.
These calculations, required by APB Opinion No. 15 "Earnings per Share", make
supplemental pro forma adjustments to data as reported for the repayment of
debt and common stock issued due to the Offering, and not for other
nonrecurring items. The calculations are as follows:

<TABLE>
<CAPTION>
1994 1995
(UNAUDITED) (UNAUDITED)
----------- -----------
<S> <C> <C>
Net (loss) income available to common stockholders, as
reported............................................... $(87,734) $1,099
Pro forma adjustments for interest expense, assuming
that the Offering occurred at the beginning of the
period................................................ 4,820 9,407
-------- -------
Net (loss) income used for supplemental pro forma
(loss) income per common share calculation............ $(82,914) $10,506
======== =======
Weighted average number of common shares outstanding,
as reported............................................ 23,852 24,582
Adjustment necessary assuming shares issued in the
Offering were outstanding for the full period......... 6,250 5,529
-------- -------
</TABLE>

F-10
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF
MARCH 31, 1996 IS UNAUDITED)
<TABLE>
<CAPTION>
1994 1995
(UNAUDITED) (UNAUDITED)
----------- -----------
<S> <C> <C>
Weighted average common shares in supplemental pro
forma (loss) income per common share calculation... 30,102 30,111
====== ======
Supplemental pro forma (loss) income per common
share............................................... $(2.75) $ .35
====== ======
</TABLE>

2. BUSINESS COMBINATIONS

The total purchase price paid to acquire the Predecessor on August 18, 1994
was approximately $358,000, including related costs, and exceeded the
historical book value of the net assets acquired. The Acquisition was
accounted for by the purchase method and the excess purchase price was
allocated to the assets and liabilities of the Predecessor based upon their
estimated fair values. Principal components of this excess amount included the
revaluation of certain inventories ($38,424), in-process research and
development projects ($53,918), purchased technology ($10,748) and goodwill
($70,022).

In July 1995, the Company purchased Phase Separations Limited, a United
Kingdom company for approximately $7,500. Phase Separations Limited is a
manufacturer of chromatography consumable products. This acquisition was also
accounted for by the purchase method.

3. DISCONTINUED OPERATIONS

On December 31, 1994, the Company announced a plan to sell its process mass
spectrometry business. The largest operation was sold in July 1995 for
proceeds, net of associated costs, of approximately $6,500. Remaining
operations were sold in January 1996 for proceeds, net of associated costs, of
approximately $4,400. The results of this business prior to 1995 have been
classified as discontinued operations in the consolidated statements of
operations. A reserve of $8,000 was recorded in December 1994 for the
estimated loss on disposition of this business. This reserve was reduced by
actual losses for the year ended December 31, 1995 which aggregated $546. The
net assets of the business have been segregated in the consolidated balance
sheets.

4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1995 MARCH 31, 1996
----------------- ----------------- --------------
<S> <C> <C> <C>
Land........................ $ 3,092 $ 3,092 $ 3,092
Leasehold improvements...... 410 1,206 1,148
Buildings and improvements.. 26,626 28,653 28,754
Production and other
equipment................... 36,795 43,499 44,715
Construction in progress.... 6,638 3,965 4,803
------- -------- --------
73,561 80,415 82,512
Less: accumulated
depreciation and
amortization................ (2,501) (10,154) (12,235)
------- -------- --------
Property, plant and
equipment, net.............. $71,060 $ 70,261 $ 70,277
======= ======== ========
</TABLE>

5. INVENTORIES

Inventories are classified as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1995 MARCH 31, 1996
----------------- ----------------- --------------
<S> <C> <C> <C>
Raw materials................ $14,940 $10,719 $10,331
Work in progress............. 4,290 4,201 4,876
Finished goods............... 24,748 26,539 25,169
------- ------- -------
Total inventories.......... $43,978 $41,459 $40,376
======= ======= =======
</TABLE>

F-11
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF
MARCH 31, 1996 IS UNAUDITED)
6. DEFERRED COMPENSATION

In conjunction with the Acquisition, the Company assumed a deferred
compensation liability of $4,925 from Millipore to certain key executives of
Waters. The liability incurred interest at an annual rate of 7.05%. This
liability plus accrued interest was paid to the executives on September 14,
1995. The balance outstanding at December 31, 1994 was $5,055 and was included
in other liabilities in the consolidated balance sheet. Interest expense for
the period August 19, 1994 to December 31, 1994 and for the year ended
December 31, 1995 was $130 and $254, respectively.

7. DEBT

On August 18, 1994, the Company issued $100,000 of 12.75% Senior
Subordinated Notes, Series B due 2004 (the "Senior Subordinated Notes").
Interest is payable semi-annually commencing September 30, 1994. At the same
time, the Company entered into an original bank credit agreement which
provided for term loans of up to $205,000 including $30,000 for a revolving
credit facility. The interest rate on the term loans was a floating rate based
either on the prime rate, as defined, plus 1.750% for Term A, 2.375% for Term
B, 2.750% for Term C and 3.125% for Term D portions; or the applicable
Eurodollar Rate, as defined, plus 2.750% for Term A, 3.375% for Term B, 3.750%
for Term C, and 4.125% for Term D portions.

In September 1994, the Company entered into an interest rate protection
agreement required by the original bank credit agreement effective through
September 1997. This agreement provides payments to the Company if the three
month LIBOR rate exceeds 7%, on specified dates, through September 1995 and 8%
thereafter through September 1997. Payments would be based upon the excess of
three month LIBOR over the aforementioned rates on borrowings aggregating
$100,000.

Contemporaneously with the Offering, the Company retired all outstanding
indebtedness under the original bank credit agreement (the "Prior Bank Credit
Agreement") with net proceeds from the Offering and bank financing under a new
bank credit agreement ("New Bank Credit Agreement"). The New Bank Credit
Agreement is a revolving credit facility with maximum availability of
$175,000, as defined. The loans under the New Bank Credit Agreement bear
interest for each calendar quarter at a per annum rate equal to, at the
Company's option, (i) a floating rate based on the prime rate plus an amount
which will vary between zero and 0.50%, or (ii) the applicable Eurodollar Rate
plus an amount which will vary between 0.50% and 1.50%, based upon certain
Company performance criteria for the previous four quarters. Amounts available
under the New Bank Credit Agreement will decrease under certain circumstances
and, in any case, by $30,000 in each of 1998 and 1999. The agreement
terminates on November 22, 2000. Borrowings under the New Bank Credit
Agreement are collateralized by substantially all of the Company's assets. On
December 29, 1995, the Company also redeemed $25,000 of Senior Subordinated
Notes principal for a call premium of $3,188.

In connection with the early retirement of the Prior Bank Credit Agreement
and $25,000 of Senior Subordinated Notes principal, the Company recorded a
$12,112 extraordinary loss for the writeoff of associated unamortized debt
issuance costs, the call premium and the interest rate protection agreement.

Under its various loan agreements, the Company is required to meet certain
covenants, including certain restrictions on dividend payments, none of which
is considered restrictive to the operations of the Company. At December 31,
1995, the interest rate on the $75 million principal amount of Senior
Subordinated Notes outstanding was fixed at 12.75% and the weighted average
interest rate on the New Bank Credit Agreement borrowings was approximately
6.7% (6.2% at March 31, 1996). The Company's foreign subsidiaries have
available short-term lines of credit totaling $8,545 at December 31, 1995 and
March 31, 1996. At December 31, 1995, borrowings amounted to $1,933 at a
weighted average interest rate of approximately 4.0%. At March 31, 1996,
borrowings amounted to $1,303 at a weighted average interest rate of
approximately 7.0%.

F-12
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF
MARCH 31, 1996 IS UNAUDITED)

In January 1996, the Company entered into a three-year debt swap agreement
with the Bank of Boston. The Company swapped $22,000 in notional amount of
floating rate LIBOR borrowings for 2,300,000 yen notional amount of borrowings
at a fixed interest rate of 1.525% per annum. At representative interest rates
and current exchange rates in effect at January 23, 1996, the effective date
of the agreement, the Company would lower its annual interest costs by
approximately $900 over the term of the swap agreement. The Company could also
incur higher or lower principal repayments over the term of the swap
agreement.

In March 1996, the Company increased the maximum availability under its
senior credit facility (the "Bank Credit Agreement") to $300,000 in order to
repurchase its Senior Subordinated Notes (defined below) and provide
additional financial flexibility. The availability under the Bank Credit
Agreement will decrease under certain circumstances, including upon certain
asset sales, issuance of equity and incurrence of debt, will decrease by
$45,000 at November 22, 1998 and 1999, and will terminate on the earlier of
the date on which a Change of Control Event (as defined in the Bank Credit
Agreement) occurs and November 22, 2000.

On April 4, 1996, the Company consummated a tender offer (the "Tender
Offer") to repurchase $75,000 in principal amount of the Company's 12 3/4%
Senior Subordinated Notes (the "Senior Subordinated Notes"). The aggregate
purchase price paid by the Company in connection with the Tender Offer was
$90,600. The Company funded this redemption through additional borrowings
under the Bank Credit Agreement. In the second quarter of 1996, the Company
expects to record an extraordinary loss of approximately $22,000 related to
the early extinguishment of the Senior Subordinated Notes.

In March and April 1996, the Company entered into several interest rate
protection agreements. These agreements provide payments to the Company if the
three month LIBOR rate, as defined, exceeds 8% in 1996, 6% in 1997 and 6.5% in
1998 and 1999 on aggregate borrowings of $183,000 in 1996 and 1997 and $70,000
and $30,000 in 1998 and 1999, respectively.

F-13
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF MARCH
31, 1996 IS UNAUDITED)
8. INCOME TAXES

Income tax data follow in the tables below:

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
------------------------- --------------------------------------
THREE MONTHS
YEAR ENDED JANUARY 1 TO AUGUST 19 TO YEAR ENDED ENDED
DECEMBER 31, AUGUST 18, DECEMBER 31, DECEMBER 31, MARCH 31,
1993 1994 1994 1995 1996
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
The components of income
before income taxes
were as follows:
Domestic............... $ 20,113 $ 15,324 $(84,526) $ 6,210 $ 8,596
Foreign................ (5,634) (12,745) (1,384) (1,080) 1,621
-------- -------- -------- ------- -------
Total................. 14,479 2,579 (85,910) 5,130 10,217
Add back: loss from
discontinued
operations........... 12 629 7,206 -- --
Add back: loss on
extraordinary item...... -- -- -- 12,112 --
-------- -------- -------- ------- -------
Income (loss) from
continuing
operations......... $ 14,491 $ 3,208 $(78,704) $17,242 $10,217
======== ======== ======== ======= =======
The components of the
current and deferred
income tax provision
were as follows:
Current................ $ 4,852 $ 916 $ 1,487 $ 3,129 $ 2,042
Deferred............... (683) -- -- -- --
-------- -------- -------- ------- -------
Total................. $ 4,169 $ 916 $ 1,487 $ 3,129 $ 2,042
======== ======== ======== ======= =======
The components of the
provision for income
taxes for financial
reporting purposes were
as follows:
Federal................ $ 4,166 $ 735 $ -- $ -- $ --
State.................. -- -- 129 300 100
Foreign................ -- -- 1,365 2,829 1,942
-------- -------- -------- ------- -------
Total................. 4,166 735 1,494 3,129 2,042
Less: portion applied
to discontinued
operations (3) (181) 7 -- --
-------- -------- -------- ------- -------
Provision for income
taxes................... $ 4,169 $916 $ 1,487 $ 3,129 $ 2,042
======== ======== ======== ======= =======
The differences between
income taxes computed
at the United States
statutory rate and the
provision for income
taxes are summarized as
follows:
Federal tax computed at
U.S. statutory income
tax rate............. $ 5,068 $ 903 $(30,069) $ 1,796 $ 3,576
Puerto Rico rate
benefit................. (1,940) -- -- -- --
Foreign Sales
Corporation benefit (1,202) -- -- -- --
State income tax net of
federal income tax
benefit.............. -- -- (5,156) 300 100
Foreign taxes in excess
of U.S. statutory
income tax rate...... -- -- -- 868 1,012
</TABLE>

F-14
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF
MARCH 31, 1996 IS UNAUDITED)
<TABLE>
<CAPTION>
PREDECESSOR COMPANY
--------------------------------- ------------------------------------------------
THREE MONTHS
YEAR ENDED JANUARY 1 TO AUGUST 19 TO YEAR ENDED ENDED MARCH
DECEMBER 31, 1993 AUGUST 18, 1994 DECEMBER 31, 1994 DECEMBER 31, 1995 31, 1996
----------------- --------------- ----------------- ----------------- ------------
<S> <C> <C> <C> <C> <C>
Deferred tax assets not
benefitted
(benefitted)......... $ 1,965 $-- $35,080 $(2,032) $(3,441)
Foreign operating
losses not
benefitted........... -- -- -- 2,246 381
Foreign net operating
loss carryforward not
utilized............. -- -- -- (256) --
Other.................. 278 13 1,632 207 414
------- ---- ------- ------- -------
Provision for income
taxes................ $ 4,169 $916 $ 1,487 $ 3,129 $ 2,042
======= ==== ======= ======= =======

The elimination of the Puerto Rico tax rate benefit is a result of the
Company's decision to cease manufacturing operations in Puerto Rico during
1994.

<CAPTION>
PREDECESSOR COMPANY
--------------------------------- ------------------------------------------------
THREE MONTHS
YEAR ENDED JANUARY 1 TO AUGUST 19 TO YEAR ENDED ENDED MARCH
DECEMBER 31, 1993 AUGUST 18, 1994 DECEMBER 31, 1994 DECEMBER 31, 1995 31, 1996
----------------- --------------- ----------------- ----------------- ------------
<S> <C> <C> <C> <C> <C>
The tax effects of
temporary differences
and carryforwards which
gave rise to deferred
tax liabilities and
deferred tax (assets)
were as follows:
Restructuring charge... $(1,295) $-- $ -- $ -- $ --
Estimated loss on
disposal of
discontinued
operations........... (3,200) (1,900) (1,900)
Goodwill amortization.. -- -- (20,677) (12,808) (12,382)
Depreciation and
capitalized software. 496 77 -- 3,357 3,801
Deferred financing..... -- -- -- (2,569) (2,569)
Deferred compensation.. -- -- -- (1,840) (1,840)
Tax credit
carryforwards........... -- -- -- (1,221) (1,221)
Other.................. 116 (77) 189 513 635
Net operating loss
carryforward.......... -- -- (11,392) (17,704) (14,167)
Valuation allowance.... -- -- 35,080 34,172 29,643
------- ---- ------- ------- -------
Total deferred taxes.. $ (683) $-- $ -- $ -- $ --
======= ==== ======= ======= =======
</TABLE>

At December 31, 1995 the Company had a U.S. net operating loss carryforward
of approximately $41,000 which begins to expire in the year 2009. The
Company's ability to use the net operating loss carryforward may be limited
under Internal Revenue Code Section 382 if a more than 50% change in ownership
occurs. The Company had foreign net operating loss carryforwards of
approximately $5,000, some of which begin to expire in the year 2000 and some
of unlimited duration. The goodwill amortization represents the difference
between

F-15
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF
MARCH 31, 1996 IS UNAUDITED)
the book and tax treatment for both goodwill and in-process research and
development. Realization of deferred tax assets is contingent upon future
taxable income. The valuation allowance relates to the uncertainty of
realizing the deferred tax assets.

The Company's effective tax rate before the extraordinary charge for the
year ended December 31, 1995 was 18.1% and for the three months ended March
31, 1996 was 20%.

9. LEASES

Lease agreements, expiring at various dates through 2004, cover buildings,
office equipment and automobiles. Rental expense was approximately $3,072 in
1993, $3,262 in 1994 and $5,684 in 1995. In 1994 and 1995, Company rent
expense included amounts previously allocated to and not classified as direct
rent expense of the Predecessor. Future minimum rents payable as of December
31, 1995 under non-cancelable leases with initial terms exceeding one year
were as follows:

<TABLE>
<CAPTION>
1996............................................................... $4,459
<S> <C>
1997............................................................... 2,963
1998............................................................... 1,884
1999............................................................... 1,375
2000............................................................... 927
thereafter......................................................... 1,082
</TABLE>

10. NOTES RECEIVABLE

On August 18, 1994, the Company issued common stock at fair market value to
senior management in exchange for notes receivable in the amount of $4,925.
The notes receivable earned interest at an annual interest rate of 7.05%.
Interest income on the notes receivable for the period August 19, 1994 to
December 31, 1994 and for the year ended December 31, 1995 was $130 and $254,
respectively. The notes receivable were collateralized by the shares of common
stock owned by senior management of the Company. Accordingly, the notes
receivable were recorded as a reduction of stockholders' equity during the
period they were outstanding. On September 14, 1995, the notes were repaid in
full.

11. COMMON STOCK

Prior to the Offering, the authorized common stock of the Company consisted
of 919 shares of Class A, 10 shares of Class B and 194 shares of Class C
common stock. All general voting power was vested in the holders of the Class
B common stock. The holders of the Class A, Class B and Class C common stock
were entitled to receive dividends and distributions from the current and
accumulated earnings and profits, as declared by the Board of Directors, in
proportion to the number of shares of common stock held. In September 1995,
the Company declared and paid a $16,195 distribution to its securityholders.

Contemporaneously with the Offering, the Company completed a
reclassification in which each share of Class A, Class B, and Class C common
stock was converted into a specified number of shares of a single class of
Common Stock (the "Reclassification"). At the same time, the authorized number
of shares of common stock was increased to 50,000 shares with a par value of
$.01 per share. Accordingly, the financial statements have been restated for
the Reclassification. Holders of Common Stock are entitled to one vote per
share. In November 1995, the Company issued 6,250 shares of Common Stock in an
initial public offering for net proceeds of $86,152.

F-16
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF
MARCH 31, 1996 IS UNAUDITED)

12. REDEEMABLE PREFERRED STOCK

On August 18, 1994, as part of the consideration for the Acquisition, the
Company authorized and issued one hundred shares of Redeemable Preferred Stock
(the "Preferred Stock") with a par value of $.01 per share to Millipore. The
Preferred Stock has a liquidation value of $10,000 and earns an annual 6%
cumulative dividend based upon the liquidation value. Any accumulated but
unpaid dividends are added to the liquidation value. The Company may, at any
time, redeem the Preferred Stock at the current liquidation value but in no
event later than August 18, 2006. The Preferred Stock was recorded at its
estimated fair value of $5,000 on the date of issuance. The excess of the
liquidation value over the fair market value is being accreted by periodic
charges to additional paid-in capital from the date of issue through August
18, 2006. During the period August 19 to December 31, 1994 and the year ended
December 31, 1995 $108 and $301, respectively, were charged against additional
paid-in capital to reflect the accretion from fair value to the liquidation
value and $222 and $600, respectively, were charged against additional paid-in
capital for the accumulated but unpaid dividends. At December 31, 1995, the
liquidation preference was $10,822. During the three month period ended March
31, 1996, $79 was charged against additional paid in capital to reflect the
accretion from fair value to liquidation value and $150 was charged against
additional paid in capital for the accumulated but unpaid dividends. At March
31, 1996 the liquidated preference was $10,972.

13. STOCK OPTION PLAN

The Company's 1994 Stock Option Plan (the "Plan") provides for the grant of
stock options to certain key employees of Waters. Stock options under the Plan
allowed the purchase of Class A Common Stock of the Company. Concurrent with
the Reclassification, each option to purchase Class A Common Stock of the
Company was converted into a specified number of options to purchase shares of
Common Stock. The exercise price of the options is determined by a committee
of the Board of Directors (the "Board") of the Company. Options granted have a
term of ten years and vest in five equal installments on the first five
anniversaries after the grant. The following table summarizes stock option
activity after giving effect to the Reclassification:

<TABLE>
<CAPTION>
NUMBER OF SHARES PRICE PER SHARE
---------------- ---------------
<S> <C> <C>
Granted........................................ 4,372 $4.00 to $16.28
-----
Outstanding at December 31, 1994.............. 4,372 $4.00 to $16.28
Granted........................................ 663 $4.00 to $16.28
-----
Outstanding at December 31, 1995.............. 5,035 $4.00 to $16.28
===== ---------------
Options exercisable at December 31, 1995....... 1,780
=====
Available for grant at December 31, 1995....... 4
=====
</TABLE>

On September 14, 1995, the Board amended certain existing stock option
agreements as follows: (i) outstanding options for 971 and 129 shares granted
in August 1994 and January 1995, respectively, which had a variable exercise
price dependent on future events, were amended to fix the exercise price at
$9.50 per share and (ii) outstanding stock options for 2,431 and 129 shares
granted in August 1994 and January 1995, respectively, were amended to fix
both the number of shares as originally granted and to fix the exercise price
at $16.28 per share. On September 14, 1995, certain of these amended options
had an exercise price below estimated fair value. Accordingly, the Company
recorded $5,641 of deferred compensation expense to be recognized over the
vesting period of the underlying options. In October 1995, the Board
accelerated the vesting period of 1,100 outstanding stock options.
Accordingly, the Company immediately charged $3,567 of noncash compensatory
stock option expense to selling, general and administrative expenses in 1995.

F-17
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF
MARCH 31, 1996 IS UNAUDITED)
In October 1995, Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("FAS 123") was issued and will
require the Company to elect either expense recognition under FAS 123 or its
disclosure-only alternative for stock-based employee compensation. The expense
recognition provision encouraged by FAS 123 would require fair-value based
financial accounting to recognize compensation expense for employee stock
compensation plans. FAS 123 must be adopted in the Company's fiscal 1996
financial statements with comparable disclosures for the prior years. The
Company has determined that it will elect the disclosure-only alternative. The
Company will be required to disclose the pro forma net income or loss and per
share amounts in the notes to the financial statements using the fair value
based method beginning in fiscal 1996 with comparable disclosures for fiscal
1995. The Company has not determined the impact of these pro forma
adjustments.

14. WARRANT

On August 18, 1994, the Company issued a warrant (the "Warrant") to purchase
34 shares of Class A Common Stock and 10 shares of Class C Common Stock in
connection with the Company's financing under the Prior Bank Credit Agreement.
The Warrant had an exercise price of $.01 per share. The Company valued the

Warrant based upon the difference between the fair market value of the
Company's common stock as of the date of issuance and the exercise price of
the Warrant. The fair market value of the Company's common stock was
determined by the cash consideration per share paid by the original investors
at the time of the Acquisition. The estimated fair market value of $3,200 for
the Warrant was recorded as a component of stockholders' equity.

In connection with the Reclassification, the warrant allowed for the
purchase of 1,064 shares of the Common Stock at an exercise price of $.01 per
share. In October 1995, the Company issued 1,064 shares of Common Stock upon
the exercise of this Warrant.

15. FOREIGN CURRENCY CONTRACTS

The Company has periodically entered into forward exchange contracts to
hedge the impact of foreign currency fluctuations on the U.S. dollar value of
certain anticipated and specified future foreign cash flows and foreign net
asset values. The unrealized gains and losses on outstanding contracts at
period end which relate to anticipated future cash flows are recorded in
unrealized losses (gains) on future cash flow hedges in the statements of
operations. The realized gains and losses on these contracts and on those
contracts relating to specified future foreign cash flows are recorded as
realized (gains) losses on cash flow hedges. In December 1995, the Company
liquidated those outstanding contracts which hedged anticipated future cash
flows. Gains (losses) on contracts hedging net asset values generated a
reduction in translation adjustments of $1,313 for the year ended December 31,
1995.

At December 31, 1995 and March 31, 1996, the Company had outstanding forward
exchange contracts amounting to approximately $3,400 and $6,700, respectively
which hedged the dollar value equivalent of specified customer commitments.
These contracts have an initial maturity of less than three months.

16. RETIREMENT PLANS

Prior to the Acquisition, retirement benefits were provided to employees
through the Millipore Corporation Employees' Participation and Savings Plan
("Millipore Participation Plan") and the Retirement Plan for Employees of
Millipore Corporation ("Millipore Retirement Plan"). Subsequent to the
Acquisition, the

F-18
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF
MARCH 31, 1996 IS UNAUDITED)
Company adopted two new retirement plans for employees effective August 19,
1994; the Waters Employee Investment Plan, a defined contribution plan, and
the Waters Retirement Plan, a defined benefit cash balance plan which
supersede the aforementioned Millipore Corporation Participation and
Retirement plans.

Waters employees' accumulated benefit balances in the Millipore
Participation Plan were valued as of September 30, 1994 and transferred to the
Waters Employee Investment Plan. Millipore and the Company have not yet agreed
on the final valuation of the amount of benefits transferable from the
Millipore Retirement Plan on behalf of Waters Employees as of the Acquisition
date. Upon completion of this valuation, Millipore will transfer the Waters
employees' accumulated benefit balances to the Waters Retirement Plan.

Waters is currently asserting a claim against Millipore under arbitration
procedures specified in the purchase and sale agreement for the Predecessor.
Waters contends that Millipore has undervalued the amount of assets it is
obligated to transfer from the Millipore Retirement Plan to the Waters
successor plan. Waters believes it has meritorious arguments and should
prevail, although the outcome is not certain. The Company believes that any
outcome of the arbitration proceeding will not be material to the Company.

Employees hired prior to the Acquisition date were eligible to participate
in the Waters Employee Investment Plan as of the Acquisition date. Employees
hired after this date are eligible after one year of service. Employees may
contribute from 1%-15% of eligible pay on a pre-tax basis. The Company makes a
matching contribution of 50% for contributions up to 6% of eligible pay.
Employees are 100% vested in company matching contributions upon becoming
eligible for the plan. For the period August 19, 1994 to December 31, 1994 and
the year ended December 31, 1995 the Company's matching contributions amounted
to $476 and $1,280, respectively.

Employees are eligible to participate in the Waters Retirement Plan after
one year of service. The Company makes an annual contribution to each
employee's account as a percentage of eligible pay based on years of service.
In addition, each employee's account is credited for investment returns at the
beginning of each year for the prior year at the average 12 month Treasury
Bill rate plus 0.5%, limited to a minimum rate of 5% and a maximum of 10%. An
employee does not vest until the completion of five years of service at which
time the employee becomes 100% vested. Years of service under the Millipore
Retirement Plan count toward participation and vesting under the Waters
Retirement Plan.

F-19
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF
MARCH 31, 1996 IS UNAUDITED)

A separate estimated actuarial evaluation of the Waters Retirement Plan was
performed for the period August 19, 1994 to December 31, 1994 and the year
ended December 31, 1995. If the Plan had been in existence for the full year
1994, experience would have differed. Summary data for the Waters Retirement
Plan at December 31, 1994 and 1995 are presented in the following table.

<TABLE>
<CAPTION>
AUGUST 19, TO YEAR ENDED
DECEMBER 31, 1994 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
Actuarial present value of benefit
obligations:
Accumulated benefit obligation, including
vested benefits of $2,025 and $4,194,
respectively............................ $(2,117) $(4,323)
======= =======
Projected benefit obligation for service
rendered to date........................... $(2,117) $(4,424)
Estimated plan assets at fair value....... 2,560 2,087
------- -------
Projected benefit obligation (in excess
of) less than fair
value of assets....................... 443 (2,337)
Unrecognized prior service costs.......... -- 273
Unrecognized net actuarial (loss) gain.... (134) 505
Minimum pension liability adjustment...... -- (677)
------- -------
Prepaid (accrued) pension cost included
in the financial statements................ $ 309 $(2,236)
======= =======
Intangible asset.......................... $ -- $ 273
======= =======
Net periodic pension cost includes the
following components:
Service cost.............................. $ 543 $ 1,780
Interest cost............................. 68 321
Return on plan assets..................... (60) (137)
Amortization and deferral................. (16) (8)
------- -------
Net periodic pension cost................ $ 535 $ 1,956
======= =======
The projected benefit obligation was
calculated using the following
assumptions:
Discount rate............................. 8.75% 7.25%
Return on assets.......................... 8.50% 8.50%
Increases in compensation levels.......... 5.00% 4.50%
</TABLE>

Net periodic pension cost for the three-month period ended March 31, 1996
was $537.

Millipore did not perform separate actuarial calculations for the
Predecessor's portion of its Retirement Plan. As a result, comparable 1993
data are not available for the Plan.

17. POST-RETIREMENT BENEFITS OTHER THAN PENSIONS

The Company sponsors several unfunded defined benefit post-retirement plans
covering U.S. employees. The plans provide medical and life insurance benefits
and are, depending on the plan, either contributory or non-contributory.

F-20
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF
MARCH 31, 1996 IS UNAUDITED)

Net periodic post-retirement benefit cost included the following components:

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
--------------------------------- -----------------------------------
YEAR ENDED JANUARY 1 TO AUGUST 19 TO YEAR ENDED
DECEMBER 31, 1993 AUGUST 18, 1994 DECEMBER 31, 1994 DECEMBER 31, 1995
----------------- --------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Service cost-benefits
attributed to service
during the year......... $363 $257 $37 $82
Interest cost on
accumulated post-
retirement benefit
obligation.............. 245 174 35 64
Net amortization and
deferral................ (41) (29) (21) (83)
---- ---- --- ---
Net periodic post-
retirement benefit cost. $567 $402 $51 $63
==== ==== === ===
</TABLE>

Net post-retirement benefit cost for the three-month period ended March 31,
1996 was $43.

Summary information on the Company's plan at December 31, 1994 and 1995 is
presented in the following table:
<TABLE>
<CAPTION>
AUGUST 19 TO YEAR ENDED
DECEMBER 31, 1994 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
Accumulated post-retirement benefit
obligation:
Retirees................................. $ -- $ 152
Fully eligible active plan participants.. 177 45
Other active plan participants........... 469 608
Unrecognized amounts:
Prior service costs...................... 1,639 1,556
Net loss (gain).......................... 45 16
------ ------
Accrued post-retirement benefit cost...... $2,330 $2,377
====== ======
</TABLE>

The Company's accrued post-retirement benefit obligation was $2,330 and
$2,377 at December 31, 1994 and 1995, respectively, and is included in other
liabilities in the balance sheet. This obligation pertains only to active
employees of the Company at the time of the Acquisition and employees hired
subsequent to the Acquisition. The obligation to fund post-retirement benefits
for retired employees prior to the Acquisition has been retained by Millipore.

The discount rate used in determining the accumulated post-retirement
benefit obligation was 8.00%, 8.75% and 7.25% as of December 31, 1993, 1994,
and 1995, respectively. The assumed health care cost trend rate used in
measuring the accumulated post-retirement benefit obligation was 5% in 1994.
In 1995 the benefits available under the Plan were amended. As a result,
increases in the health care cost trend rate do not result in any additional
costs to the Company.

18. MATERIAL TRANSACTIONS/TRANSITION AGREEMENT

In connection with the consummation of the Acquisition, the Company and
Millipore entered into a Transition Support and Service Agreement (the
"Transition Agreement") whereby Millipore agreed to (i) lease office space,
(ii) transfer certain personnel, (iii) provide management information systems,
administrative, distribution and facilities management support, (iv) provide
access to its telephone network, and (v) supply professional support services.
The Company believes that the costs incurred under the Transition Agreement
are representative of the charges that would be levied by independent third
parties for similar services. The Company incurred net expenses pursuant to
this agreement of $5,621 for the period August 19, 1994 to December 31, 1994,

F-21
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF
MARCH 31, 1996 IS UNAUDITED)

$5,210 for the year ended December 31, 1995 and $961 for the three months
ended March 31, 1996. As of December 31, 1994 and 1995 and March 31, 1996, the
Company had a net balance payable to Millipore of approximately $1,394, $463,
and $853, respectively.

During the period August 19, 1994 to December 31, 1994, the year ended
December 31, 1995, and the three month period ended March 31, 1996, the
Company sold product and services totaling $203, $104, and $50, respectively,
to Millipore.

19. RELATED PARTY TRANSACTIONS

In connection with the Acquisition, the Company entered into a ten-year
Professional Services Agreement with AEA Investors Inc. and Bain Capital, Inc.
(the "Management Services Agreement") pursuant to which they agreed to pay AEA
Investors Inc. and Bain Capital, Inc. an aggregate annual management fee of
$1,500, plus out-of-pocket expenses. Pursuant to the Management Services
Agreement, AEA Investors Inc. and Bain Capital, Inc. provided general
management, financial and other corporate advisory services to the Company.
Pursuant to this agreement, AEA Investors Inc. and Bain Capital, Inc. received
a cash financial advisory fee of $8,000 at the closing of the Acquisition. The
management fee for the period August 19, 1994 to December 31, 1994 was $552.
In connection with the Offering, the Management Services agreement was
terminated for a fee of $4,000. Management fees excluding the termination fee
were $1,393 for the year ended December 31, 1995.

In 1995, the Company made loans to certain executive officers of the
Company. The loans are collateralized by a pledge of shares of common stock
held by these executive officers, bear interest at 5.83% per annum and mature
on December 1, 2000. Loans receivable of $2,062 and $2,384 at December 31,
1995 and March 31, 1996, respectively, were included in other assets in the
balance sheet.

20. BUSINESS SEGMENT INFORMATION

The Company operates in one business segment and in the geographical
segments indicated in the table below. Sales are reflected in the segment from
which the sales are made. The United States segment includes Puerto Rico. The
other international segment includes Canada, South America, Australia, Eastern
Europe and countries in the former Soviet Union. Transfer sales between
geographical areas are generally made at a discount from list price.

F-22
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF MARCH
31, 1996 IS UNAUDITED)

PREDECESSOR, 1993

<TABLE>
<CAPTION>
UNITED STATES EUROPE JAPAN ASIA OTHER INT'L ELIMINATIONS TOTAL
------------- ------- ------- ------- ----------- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales:
Unaffiliated sales..... $121,636 $85,906 $39,429 $12,806 $26,267 $ -- $286,044
Unaffiliated export
sales to Asia........ 10,953 -- -- -- -- -- 10,953
Unaffiliated export
sales to Other Int'l. 7,239 691 -- -- -- -- 7,930
Transfers between
areas................ 82,488 -- -- -- -- (82,488) --
-------- ------- ------- ------- ------- -------- --------
Total sales............. $222,316 $86,597 $39,429 $12,806 $26,267 $(82,488) $304,927
======== ======= ======= ======= ======= ======== ========
Income from operations
pre-restructuring...... $ 32,617 $(6,456) $ 2,881 $(1,048) $ 1,569 -- $ 29,563
Restructuring charge.... (11,000) (2,000) -- -- -- -- (13,000)
-------- ------- ------- ------- ------- -------- --------
Income from operations
post-restructuring..... $ 21,617 $(8,456) $ 2,881 $(1,048) $ 1,569 $ -- $ 16,563
======== ======= ======= ======= ======= ======== ========
Total assets............ $122,630 $45,734 $22,940 $ 6,969 $ 4,925 $(13,606) $189,592
======== ======= ======= ======= ======= ======== ========
</TABLE>

F-23
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF MARCH
31, 1996 IS UNAUDITED)

PREDECESSOR, JANUARY 1, 1994 TO AUGUST 18, 1994

COMPANY, AUGUST 19, 1994 TO DECEMBER 31, 1994

<TABLE>
<CAPTION>
UNITED STATES EUROPE JAPAN ASIA OTHER INT'L ELIMINATIONS TOTAL
------------- ------- ------- ------- ----------- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales:
Unaffiliated sales..... $ 47,663 $39,203 $17,095 $10,450 $13,359 $ -- $127,770
Unaffiliated export
sales to Asia........ 1,072 -- -- -- -- -- 1,072
Unaffiliated export
sales to Other Int'l. 2,022 193 -- -- -- -- 2,215
Transfers between 43,881 -- -- -- -- (43,881) --
areas................... -------- ------- ------- ------- ------- --------- --------
Total sales............. $ 94,638 $39,396 $17,095 $10,450 $13,359 $ (43,881) $131,057
======== ======= ======= ======= ======= ========= ========
Loss from operations
pre-restructuring...... $(63,973) $240 $ 789 $(1,204) $ 32 $ -- $(64,116)
Restructuring charge.... (498) (960) (1,660) (320) (62) (3,500)
-------- ------- ------- ------- ------- --------- --------
Loss from operations $(64,471) $ (720) $ (871) $(1,524) $ (30) $ -- $(67,616)
post-restructuring..... ======== ======= ======= ======= ======= ========= ========
Total assets............ $331,113 $79,291 $21,503 $12,058 $18,640 $(131,007) $331,598
======== ======= ======= ======= ======= ========= ========
</TABLE>

COMPANY, 1995
<TABLE>
<CAPTION>
UNITED STATES EUROPE JAPAN ASIA OTHER INT'L ELIMINATIONS TOTAL
------------- -------- ------- ------- ----------- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales:
Unaffiliated sales..... $116,065 $103,144 $47,941 $26,787 $33,749 $ -- $327,686
Unaffiliated export
sales
to Asia.............. 464 -- -- -- -- -- 464
Unaffiliated export
sales to Other Int'l. 3,947 875 -- -- -- -- 4,822
Transfers between 107,506 -- -- -- -- (107,506) --
areas................... -------- -------- ------- ------- ------- --------- --------
Total sales............. $227,982 $104,019 $47,941 $26,787 $33,749 $(107,506) $332,972
======== ======== ======= ======= ======= ========= ========
Income from operations.. $ 44,780 $ 1,610 $ 2,422 $(1,416) $(1,014) $ -- $ 46,382
======== ======== ======= ======= ======= ========= ========
Total assets............ $343,768 $ 75,464 $20,537 $11,010 $18,402 $(169,365) $299,816
======== ======== ======= ======= ======= ========= ========
</TABLE>

F-24
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF
MARCH 31, 1996 IS UNAUDITED)

21. TA INSTRUMENTS, INC. ACQUISITION

The Company entered into an Agreement and Plan of Merger on March 28, 1996
to acquire all of the capital stock of TA Instruments, Inc. ("TAI") for
$84,000 in cash, subject to certain adjustments. The merger closed on May 1,
1996 and was financed through drawings on the revolving credit facility under
the Bank Credit Agreement. TAI develops, manufactures, sells and services
thermal analysis and rheology instrumentation which is used for the physical
characterization of polymers and related materials. Thermal analysis and
rheology are among the most prevalent techniques employed in the analysis of
polymers and other organic/inorganic materials. TAI is the global market
leader in the field of thermal analysis. Net sales for TAI were approximately
$47,000 in 1995.

In conjunction with the TAI acquisition, the Company expects to record non-
recurring charges of approximately $20,000 for the immediate write-off of in-
process research and development and approximately $4,400 over the remainder
of 1996 for the revaluation of acquired inventory.

22. QUARTERLY RESULTS

The Company's (Predecessor's) unaudited quarterly results are summarized
below (In thousands except per share data):

<TABLE>
<CAPTION>
COMPANY
--------------------------------------------------------- 1995
FIRST QUARTER SECOND QUARTER THIRD QUARTER FOURTH QUARTER TOTAL
------------- -------------- ------------- -------------- --------
<S> <C> <C> <C> <C> <C>
Net sales............... $77,554 $84,328 $80,634 $90,456 $332,972
Cost of sales........... 30,282 31,275 30,761 33,898 126,216
Revaluation of acquired
inventory............... -- -- 371 554 925
------- ------- ------- -------- --------
Gross profit........... 47,272 53,053 49,502 56,004 205,831
Selling, general and
administrative
expenses............... 31,823 32,593 33,259 38,700 136,375
Management fee.......... 387 383 389 4,234 5,393
Research and development
expenses................ 4,096 4,418 4,346 4,821 17,681
------- ------- ------- -------- --------
Operating income
(loss).................. 10,966 15,659 11,508 8,249 46,382
Interest expense, net... 8,119 7,955 7,614 6,627 30,315
Foreign currency
contracts losses
(gains)................ 3,886 2,461 (6,669) (853) (1,175)
------- ------- ------- -------- --------
(Loss) income from
continuing operations
before income taxes.. (1,039) 5,243 10,563 2,475 17,242
(Credit) provision for
income taxes............ (199) 876 1,993 459 3,129
------- ------- ------- -------- --------
(Loss) income before
extraordinary item..... (840) 4,367 8,570 2,016 14,113
Extraordinary item
(loss) on early
retirement of debt..... -- -- -- (12,112) (12,112)
------- ------- ------- -------- --------
Net (loss) income...... (840) 4,367 8,570 (10,096) 2,001
Less: accretion of and
dividend on preferred
stock................... 222 226 227 227 902
------- ------- ------- -------- --------
Net (loss) income
available to
common stockholders.. $(1,062) $4,141 $8,343 $(10,323) $1,099
======= ======= ======= ======== ========
Per share information:
(Loss) income from
continuing
operations........... $(.04) $.17 $.35 $.07 $.54
Extraordinary (loss)
per share............... -- -- -- (.45) (.49)
------- ------- ------- -------- --------
Net (loss) income per
share................... $(.04) $.17 $.35 $(.38) $.05
======= ======= ======= ======== ========
Weighted average number
of common shares
outstanding............ 23,852 23,852 23,852 26,774 24,582
</TABLE>

F-25
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF MARCH
31, 1996 IS UNAUDITED)

<TABLE>
<CAPTION>
COMBINED
COMPANY AND
PREDECESSOR COMPANY PREDECESSOR
-------------------------------------- --------------------------- 1994
JULY 1 TO AUGUST 19 TO
FIRST QUARTER SECOND QUARTER AUGUST 18 SEPTEMBER 30 FOURTH QUARTER TOTAL
------------- -------------- --------- ------------ -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net sales............... $71,130 $78,236 $26,731 $ 48,256 $ 82,801 $307,154
Cost of sales........... 29,283 31,131 13,032 17,142 32,598 123,186
Revaluation of acquired
inventory.............. -- -- -- 11,647 26,777 38,424
------- ------- ------- -------- -------- --------
Gross profit........... 41,847 47,105 13,699 19,467 23,426 145,544
Selling, general and
administrative
expenses............... 32,540 33,216 19,460 13,385 32,364 130,965
Management fee.......... -- -- -- 177 375 552
Expensed in-process
research and
development............ -- -- -- 53,918 -- 53,918
Restructuring charge.... -- -- -- -- 3,500 3,500
Research and development
expenses............... 4,961 5,189 3,250 1,926 4,863 20,189
------- ------- ------- -------- -------- --------
Operating income
(loss)............... 4,346 8,700 (9,011) (49,939) (17,676) (63,580)
Interest expense, net... 336 313 178 3,724 8,288 12,839
Foreign currency
contracts (gains)...... -- -- -- (214) (709) (923)
------- ------- ------- -------- -------- --------
Income (loss) from
continuing operations
before income taxes.. 4,010 8,387 (9,189) (53,449) (25,255) (75,496)
Provision (credit) for
income taxes........... 1,153 2,411 (2,648) 741 746 2,403
------- ------- ------- -------- -------- --------
Income (loss) from
continuing
operations........... 2,857 5,976 (6,541) (54,190) (26,001) (77,899)
(Loss) income from
discontinued
operations............. (270) 61 (239) 18 (7,231) (7,661)
------- ------- ------- -------- -------- --------
Net income (loss)...... $ 2,587 $ 6,037 $(6,780) (54,172) (33,232) (85,560)
======= ======= =======
Less: accretion of and
dividend on preferred
stock.................. 104 226 330
-------- -------- --------
Net loss available to
common stockholders.... $(54,276) $(33,458) $(85,890)
======== ======== ========
</TABLE>

F-26
<PAGE>

WATERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 AND AS OF MARCH
31, 1996 IS UNAUDITED)
<TABLE>
<CAPTION>
PREDECESSOR COMPANY
-------------------------------------- --------------------------- COMBINED COMPANY
JULY 1 TO AUGUST 19 TO AND PREDECESSOR
FIRST QUARTER SECOND QUARTER AUGUST 18 SEPTEMBER 30 FOURTH QUARTER TOTAL
------------- -------------- --------- ------------ -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Per share information:
(Loss) from continuing
operations........... $(2.28) $(1.10)
(Loss) from
discontinued -- (.30)
operations........... ------ ------
Net (loss) per share... $(2.28) $(1.40)
====== ======
Weighted average number
of common shares
outstanding............ 23,852 23,852
</TABLE>

F-27
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors
TA Instruments, Inc.:

We have audited the accompanying consolidated balance sheets of TA
Instruments, Inc. (a Delaware corporation) and subsidiaries as of December 31,
1994 and 1995, and the related consolidated statements of operations,
stockholders' equity (deficit) and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of TA Instruments, Inc. and
subsidiaries as of December 31, 1994 and 1995, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles.

Arthur Andersen LLP

Philadelphia, PA
February 15, 1996 (except
with respect to the matter
discussed in Note 16, as to
which the date is May 1,
1996)

F-28
<PAGE>

TA INSTRUMENTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31 MARCH 31
------------------ -----------------------
1994 1995 1995 1996
-------- -------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net sales.......................... $ 37,377 $ 46,597 $ 9,731 $ 10,597
Cost of goods sold................. 13,846 17,533 3,701 4,066
-------- -------- -------- --------
Gross profit................... 23,531 29,064 6,030 6,531
Selling, general and administrative
expenses.......................... 14,632 16,719 3,796 4,052
Research and development........... 1,950 2,072 553 983
Amortization of intangibles........ 7,091 1,962 435 428
-------- -------- -------- --------
Operating profit (loss)........ (142) 8,311 1,246 1,068
-------- -------- -------- --------
Other (income) expense, net:
Interest expense, net............ 4,650 4,278 1,092 955
Other, net....................... (265) (434) (806) 105
-------- -------- -------- --------
4,385 3,844 286 1,060
-------- -------- -------- --------
Income (loss) before income
taxes......................... (4,527) 4,467 960 8
Income tax benefit................. (425) (345) (79) (57)
-------- -------- -------- --------
Net income (loss) before
preferred dividends........... (4,102) 4,812 1,039 65
Preferred dividends................ 878 1,014 249 273
-------- -------- -------- --------
Net income (loss) available to
common shareholders........... $ (4,980) $ 3,798 $ 790 $ (208)
======== ======== ======== ========
Net income (loss) per common and
equivalent share:
Earnings (loss) per share........ $ (38.57) $ 27.40 $ 5.93 $ (1.61)
======== ======== ======== ========
Weighted average number of common
and equivalent shares
outstanding..................... 129,110 138,618 133,189 128,969
======== ======== ======== ========
</TABLE>

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

F-29
<PAGE>

TA INSTRUMENTS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31
------------------ MARCH 31
1994 1995 1996
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................. $ 382 $ 5,451 $ 4,721
Trade accounts receivable, less allowance
for doubtful accounts of $497, $446 and
$416 at December 31, 1994, December 31,
1995 and March 31, 1996.................. 8,720 7,719 6,429
Inventories (Note 4)...................... 6,323 6,384 7,597
Prepaids and other current assets......... 542 384 373
-------- -------- --------
Total current assets.................... 15,967 19,938 19,120
Property and equipment, net (Note 5)....... 4,519 3,437 3,110
Intangible assets, net (Note 6)............ 8,452 7,670 7,455
-------- -------- --------
$ 28,938 $ 31,045 $ 29,685
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt (Note
7)....................................... $ -- $ 5,000 $ 5,000
Accounts payable.......................... 2,214 2,702 2,626
Accrued pension expense................... 730 809 928
Accrued commission expense................ 702 895 643
Accrued warranty expense.................. 392 534 542
Accrued expenses, other................... 1,462 2,197 1,132
Accrued interest.......................... 963 665 665
Deferred service income................... 1,009 998 1,013
Other liabilities (Note 15)............... -- 346 346
-------- -------- --------
Total current liabilities............... 7,472 14,146 12,895
Long-term debt, less current portion (Note
7)........................................ 34,000 25,000 25,000
Deferred income taxes (Note 9)............. 797 436 359
Other liabilities (Note 15)................ 607 -- --
Commitments and contingencies (Notes 13 and
15)
Redeemable preferred stock (Notes 8 and
12):
Series A voting cumulative redeemable; par
value $1.00 per share, 20,000 shares
authorized, 18,616 shares issued and
outstanding at December 31, 1994,
December 31, 1995 and March 31, 1996..... 356 408 411
Series B non-voting cumulative redeemable;
par value $1.00 per share, 400,000 shares
authorized, 351,147, 351,012 and 350,752
issued and outstanding at December 31,
1994, December 31, 1995 and March 31,
1996, respectively....................... 6,575 7,537 7,807
Stockholders' equity (deficit):
Common stock (Notes 8 and 12)
Class A and D voting; par value $.01 per
share, 450,000 shares authorized,
101,334, 121,863 and 121,863 issued and
outstanding at December 31, 1994,
December 31, 1995 and March 31, 1996,
respectively............................. 1 1 1
Class B and C non-voting; par value $.01
per share, 100,000 shares authorized,
27,674, 7,118 and 7,066 shares issued and
outstanding at December 31, 1994,
December 31, 1995 and March 31, 1996,
respectively............................. -- -- --
Additional paid-in capital................ 1,247 1,842 1,842
Accumulated deficit....................... (22,295) (18,497) (18,705)
Translation adjustments................... 178 172 75
-------- -------- --------
Total stockholders' equity (deficit).... (20,869) (16,482) (16,787)
-------- -------- --------
$ 28,938 $ 31,045 $ 29,685
======== ======== ========
</TABLE>

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

F-30
<PAGE>

TA INSTRUMENTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31 MARCH 31
---------------- -----------------------
1994 1995 1995 1996
------- ------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)................... $(4,102) $ 4,812 $ 1,039 $ 65
------- ------- ------- -------
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities--
Depreciation and amortization...... 9,160 3,724 984 715
Loss on disposal of equipment...... 101 56 76 32
Deferred income tax benefit........ (425) (345) (79) (57)
Compensation expense for perfor-
mance plan........................ -- 595 65 --
Changes in assets and liabilities--
Trade accounts receivable, net.... (1,439) 1,001 2,507 1,290
Inventories....................... (827) (394) (990) (1,203)
Prepaids and other current assets. 54 158 82 11
Accounts payable.................. 190 488 (48) (76)
Accrued expenses.................. (635) 1,149 (227) (1,190)
Accrued interest.................. 1 (298) 51 --
Deferred service income........... 77 (11) (13) 15
Other, net........................ (781) (231) (796) (66)
------- ------- ------- -------
Total adjustments................ 5,476 5,892 1,612 (529)
------- ------- ------- -------
Net cash provided by (used in)
operating activities............ 1,374 10,704 2,651 (464)
------- ------- ------- -------
Cash flows from investing activities:
Capital expenditures................ (657) (405) (85) (77)
Capitalized software costs.......... (920) (1,230) (213) (189)
------- ------- ------- -------
Net cash used in investing activ-
ities........................... (1,577) (1,635) (298) (266)
------- ------- ------- -------
Cash flows from financing activities:
Borrowings under revolving credit... 4,400 3,100 -- --
Repayment of revolving credit....... (5,200) (4,700) (1,600) --
Repayments of long-term debt........ -- (2,400) -- --
------- ------- ------- -------
Net cash used in financing activ-
ities........................... (800) (4,000) (1,600) --
------- ------- ------- -------
Net (decrease) increase in cash
and cash equivalents............ (1,003) 5,069 753 (730)
Cash and cash equivalents at begin-
ning of period...................... 1,385 382 382 5,451
------- ------- ------- -------
Cash and cash equivalents at end of
period.............................. $ 382 $ 5,451 $ 1,135 $ 4,721
======= ======= ======= =======
</TABLE>

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

F-31
<PAGE>

TA INSTRUMENTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS)

<TABLE>
<CAPTION>
ADDITIONAL CUMULATIVE
COMMON PAID-IN ACCUMULATED TRANSLATION
STOCK CAPITAL DEFICIT ADJUSTMENT TOTAL
------ ---------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1994. $ 1 $1,257 $(17,326) $ (45) $(16,113)
Preferred stock divi-
dends................... -- -- (878) -- (878)
Repurchase of stock...... -- (10) 11 -- 1
Translation adjustment... -- -- -- 223 223
Net loss................. -- -- (4,102) -- (4,102)
---- ------ -------- ----- --------
Balance at December 31,
1994...................... 1 1,247 (22,295) 178 (20,869)
Preferred stock divi-
dends................... -- -- (1,014) -- (1,014)
Translation adjustment... -- -- -- (6) (6)
Contribution of capital
for performance plan.... -- 595 -- -- 595
Net income............... -- -- 4,812 -- 4,812
---- ------ -------- ----- --------
Balance at December 31,
1995...................... 1 1,842 (18,497) 172 (16,482)
Preferred stock dividends
(unaudited)............. -- -- (273) -- (273)
Translation adjustment
(unaudited)............. -- -- -- (97) (97)
Net income (unaudited)... -- -- 65 -- 65
---- ------ -------- ----- --------
Balance at March 31, 1996
(unaudited)............... $ 1 $1,842 $(18,705) $ 75 $(16,787)
==== ====== ======== ===== ========
</TABLE>

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

F-32
<PAGE>

TA INSTRUMENTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS
ENDED MARCH 31, 1995 AND 1996 IS UNAUDITED)

1. DESCRIPTION OF BUSINESS:

TA Instruments, Inc. (the Company) engages in the design, manufacture,
marketing and servicing of analytical instruments which measure the response
of materials resulting from controlled changes in temperature (thermal
analysis) and stress/strain (rheology). The instruments are used in research
and development, quality control, educational and governmental applications.
The thermal analysis business represented approximately 89% and 87% of net
sales as of December 31, 1994 and 1995, respectively. The Company sells its
products primarily throughout the United States, Europe and the Far East.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. Material intercompany balances and
transactions have been eliminated in consolidation.

Interim Financial Statements

The financial statements as of March 31, 1996 and for the three months ended
March 31, 1995 and 1996 are unaudited. In the opinion of management of the
Company, the unaudited financial statements as of March 31, 1996 and for the
three months ended March 31, 1995 and 1996, include all adjustments,
consisting of only normal recurring adjustments, necessary for a fair
presentation. The results of operations for the three months ended March 31,
1996 are not necessarily indicative of the results to be expected for the full
year.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid interest-bearing
deposits with maturities of three months or less at time of purchase.

Inventories

Inventories are stated at lower of cost, determined by the first-in, first-
out (FIFO) method, or market.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is computed using
the straight-line method over the estimated useful lives of the assets ranging
from five to ten years for financial statement purposes and accelerated
methods for tax purposes. The cost of repairs and maintenance is charged to
earnings as incurred; significant renewals and betterments are capitalized.

Intangible Assets

The Company capitalizes software development costs in accordance with
Statement of Financial Accounting Standards No. 86, "Accounting for the Costs
of Computer Software to be Sold, Leased, or Otherwise Marketed" (SFAS No. 86).
Under SFAS No. 86, costs of computer software to be sold, leased, or otherwise
marketed as a separate product or as part of a product or process incurred
internally are required to be expensed as incurred as research and development
until technological feasibility has been established for the product.
Thereafter, all software production costs are capitalized and subsequently
reported at the lower of unamortized cost or net realizable value. For the
years ended December 31, 1994 and 1995 and for the three months ended March
31,

F-33
<PAGE>

TA INSTRUMENTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
1995 and 1996, amortization expense for software development costs was
approximately $0, $196,159, $0 and $116,525, respectively.

The costs of unpatented technology, noncompete agreements, tradename,
customer lists, workforce and certain other costs arising from acquisitions
are amortized over periods ranging from one to five years. Patents are
amortized over their remaining legal lives ranging from three to 17 years. The
straight-line method of amortization is used.

Deferred Service Income

Deferred service income represents payments received from customers for
extended service contracts. These revenues are deferred and recognized ratably
over the terms of the related contracts, principally one year.

Income Taxes

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS
No. 109). Under SFAS No. 109, deferred taxes are required to be classified
based on the financial statement classification of the related assets and
liabilities which give rise to temporary differences. Deferred taxes result
from temporary differences between the financial statement carrying amounts
and the tax bases of assets and liabilities.

Income taxes, if any, are provided based upon pre-tax accounting income.
Differences between tax and financial statement net operating loss
carryforwards arise as the result of differences in the recognition of certain
income and/or expense items between tax and financial statements.

Foreign Currency Translation

Foreign currency transactions and the financial statements of the Company's
foreign subsidiaries are translated in accordance with Statement of Financial
Accounting Standards No. 52, "Foreign Currency Translation" (SFAS No. 52).
Approximately 47% of sales are made to customers outside of the United States.

Net Income (Loss) Per Share

Net income (loss) per share is calculated utilizing the treasury stock
method. All per share amounts are based upon weighted average common shares
outstanding during the period including the dilutive effect of common stock
options. The inclusion of additional shares assuming the exercise of the
performance stock options would have been antidilutive.

Estimates and Assumptions

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

New Accounting Pronouncements

The Financial Accounting Standards Board issued SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of" (SFAS 121). The new standard requires that long-lived assets and
certain identifiable intangibles to be held and used by an entity be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be

F-34
<PAGE>

TA INSTRUMENTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
recoverable. The long-lived assets and certain identifiable intangibles to be
disposed of are to be reported at the lower of carrying amount or fair value
less cost to sell. The Company adopted the new accounting standard in 1996 and
there was no effect on the financial statements.

Reclassifications

Certain prior year amounts have been reclassified to conform to current year
presentation.

3. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Supplemental disclosures consist of the following (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS
DECEMBER 31 ENDED MARCH 31
-------------- ----------------
1994 1995 1995 1996
------ ------ ------- -------
<S> <C> <C> <C> <C>
Interest paid................................ $4,684 $4,645 $ 1,053 $ 1,005
====== ====== ======= =======
Noncash transactions, net--inventories....... $ (288) $ (333) $ (149) $ (10)
====== ====== ======= =======
Noncash transactions, net--property and
equipment, including capital additions of
$419, $482, $214 and $21, respectively...... $ 288 $ 333 $ 149 $ 10
====== ====== ======= =======
</TABLE>

4. INVENTORIES:

Inventories consist of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31
------------- MARCH 31
1994 1995 1996
------ ------ --------
<S> <C> <C> <C>
Raw materials............................................ $4,154 $4,161 $5,023
Work in process.......................................... 714 726 1,061
Finished goods........................................... 1,455 1,497 1,513
------ ------ ------
$6,323 $6,384 $7,597
====== ====== ======
</TABLE>

5. PROPERTY AND EQUIPMENT:

Property and equipment consist of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31
-------------- MARCH 31
1994 1995 1996
------- ------ --------
<S> <C> <C> <C>
Office fixtures and equipment........................... $ 827 $ 638 $ 644
Computer equipment...................................... 1,331 1,152 1,198
Production equipment.................................... 1,836 983 1,136
Demonstration equipment................................. 6,218 3,193 3,093
Leasehold improvements.................................. 655 581 475
Capital projects in progress............................ 239 190 197
Vehicles................................................ 297 258 264
------- ------ ------
11,403 6,995 7,007
Less--Accumulated depreciation.......................... 6,884 3,558 3,897
------- ------ ------
Net property and equipment............................ $ 4,519 $3,437 $3,110
======= ====== ======
</TABLE>

F-35
<PAGE>

TA INSTRUMENTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

For the years ended December 31, 1994 and 1995 and for the three month
periods ended March 31, 1995 and 1996, depreciation expense was approximately
$2,069,000, $1,762,000, $549,000 and $287,000, respectively.

6. INTANGIBLE ASSETS:

Intangible assets, not fully amortized, consist of the following (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31
--------------- MARCH 31
1994 1995 1996
------- ------- --------
<S> <C> <C> <C>
Technology............................................. $ 9,633 $ 7,295 $ 7,324
Software development costs............................. 1,557 2,786 2,970
Noncompete agreements.................................. 2,344 2,344 1,262
Tradename.............................................. 325 325 --
Customer lists, workforce.............................. 866 623 563
Start-up, financing and other costs.................... 203 199 132
------- ------- -------
14,928 13,572 12,251
Less--Accumulated amortization......................... 6,476 5,902 4,796
------- ------- -------
Net intangible assets................................ $ 8,452 $ 7,670 $ 7,455
======= ======= =======
</TABLE>

As of December 31, 1994 and 1995 and March 31, 1996, $21,295,000, $2,531,000
and $1,534,000 of fully amortized intangibles were written off.

7. LONG-TERM DEBT:

Long-term debt consist of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31
---------------
1994 1995
------- -------
<S> <C> <C>
Senior notes................................................... $20,000 $20,000
Senior subordinated notes...................................... 10,000 10,000
Junior subordinated notes...................................... 2,400 --
Revolving credit notes......................................... 1,600 --
------- -------
34,000 30,000
Less--Current portion.......................................... -- (5,000)
------- -------
Total long-term debt......................................... $34,000 $25,000
======= =======
</TABLE>

Principal maturities of long-term debt at December 31, 1995, are as follows
(in thousands):

<TABLE>
<S> <C>
1996.................................................................... $ 5,000
1997.................................................................... 5,000
1998.................................................................... 5,000
1999.................................................................... 5,000
2000.................................................................... 5,000
Thereafter.............................................................. 5,000
-------
$30,000
=======
</TABLE>

F-36
<PAGE>

TA INSTRUMENTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The Company has unsecured senior notes outstanding of $20,000,000 as of
December 31, 1994 and 1995. The Company is required to make four annual
principal payments of $5,000,000 beginning July 31, 1996. The outstanding debt
bears interest at an effective rate of 12.9% per annum, payable quarterly.

The Company has unsecured senior subordinated notes of $10,000,000 as of
December 31, 1994 and 1995. The Company is required to make two annual
principal payments of $5,000,000 beginning July 31, 2000. The outstanding debt
bears interest at 14.4% per annum, payable quarterly.

The Company had unsecured junior subordinated notes of $2,400,000 and $0 as
of December 31, 1994 and 1995, respectively. The outstanding debt bore
interest at 14.5% per annum, payable annually subject to attaining certain
cash flow requirements.

The Company has unsecured revolving credit notes available of $13,000,000
and $9,000,000 as of December 31, 1994 and 1995. The Company has revolving
credit notes outstanding of $1,600,000 and $0 as of December 31, 1994 and
1995, respectively. Borrowings in multiples of $100,000 are available to the
Company in accordance with the terms of notice to the bank. The unpaid
principal amount of each revolving note shall bear interest from the date of
borrowing to the date of payment at an interest rate equal to the applicable
London Interbank Offered Rate (LIBOR) plus 3.25% for each LIBOR period,
payable quarterly (effective rate of 8.88% at December 31, 1995). The Company
is also required to pay a commitment fee of one-half of one percent per annum
on the average daily balance of the unused amount of the $9,000,000 during
each LIBOR period. The credit facility will terminate on July 31, 1996.

All notes require that certain covenants, working capital and earnings
ratios, as defined, be maintained at the end of each fiscal quarter of the
Company. Additionally, the Company is generally precluded from declaring
capital stock dividends, among other restrictions.

All of the long-term debt has been provided by parties who are the majority
stockholders of the Company.

8. CAPITAL STOCK:

Common Stock

The Company has authorized 450,000 shares of Class A and D voting Common
Stock, par value $.01 per share, and 100,000 shares of Class B and C nonvoting
Common Stock, par value $.01 per share. As of December 31, 1994 and 1995,
101,334 and 121,863 shares of voting common stock were issued and outstanding,
respectively. As of December 31, 1994 and 1995, 27,674 and 7,118 shares of
nonvoting common stock were issued and outstanding, respectively.

Each class of common stock shall be entitled to participate in dividends
ratably on a per share basis. Classes B, C and D common stock are convertible
into Class A common stock upon the occurrence of certain events, as defined.

Redeemable Preferred Stock

The Company has authorized 20,000 shares of voting Series A Cumulative
Redeemable Preferred Stock (Series A), par value $1.00 per share, and 400,000
shares of nonvoting Series B Cumulative Redeemable Preferred Stock (Series B),
par value $1.00 per share (Preferred Stock). As of December 31, 1994 and 1995,
18,616 shares of Series A were issued and outstanding. As of December 31, 1994
and 1995, 351,147 and 351,012 shares of Series B were issued and outstanding,
respectively.

F-37
<PAGE>

TA INSTRUMENTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Dividends on the Preferred Stock are accrued at a rate of 14% per annum, and
accumulated and compounded quarterly since inception. No dividends on the
Preferred Stock shall be declared prior to the earlier of the redemption date
of the preferred shares, or the date of liquidation.

The Company shall redeem all the outstanding preferred shares on December
31, 2003, at the liquidation value ($10.22 per share plus all accumulated and
unpaid dividends) of each share. Subject to certain debt restrictions, the
Company may at any time redeem all or any portion of the Preferred Stock
outstanding at the liquidation value provided that the redemption is made
ratably among all the preferred stockholders or the Company may repurchase the
preferred shares in accordance with the provisions of the employee stock plan
(Note 12).

9. INCOME TAXES:

As of December 31, 1995, the Company has U.S. tax net operating loss
carryforwards of approximately $6,032,000 and non-U.S. tax net operating loss
carryforwards of approximately $2,175,000 for which a full valuation reserve
has been provided. These carryforwards begin to expire in 2005. In addition,
the Company has temporary differences as the result of the timing of
deductions related to asset reserves, certain intangible assets and accrued
expenses.

During 1993, in connection with certain foreign acquisitions, a deferred tax
liability was recorded for temporary differences associated with identified
intangible assets. This deferred tax liability will be reduced as the related
assets are amortized to expense. The income tax benefit of $425,000 and
$345,000 recognized in the 1994 and 1995 consolidated statements of operations
represents the income tax benefit on the amortization of these intangibles.

Deferred tax assets and (liabilities) are as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31
---------------- MARCH 31
1994 1995 1996
------- ------- --------
<S> <C> <C> <C>
Deferred tax asset for loss carryforward............ $ 4,359 $ 3,283 $ 3,283
Deferred tax assets................................. 1,873 1,444 1,444
Deferred tax liabilities............................ (797) (436) (359)
Valuation reserve................................... (6,232) (4,727) (4,727)
------- ------- -------
Net deferred tax liability........................ $ (797) $ (436) $ (359)
======= ======= =======
</TABLE>

Deferred tax assets primarily relate to temporary differences associated
with property and equipment, intangible assets and accrued expenses.

A valuation reserve is provided when it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The Company
has established valuation allowances for all U.S. and foreign net operating
loss carryforwards for which realization is dependent on future taxable
earnings.

F-38
<PAGE>

TA INSTRUMENTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

10. PENSION:

The Company has a defined benefit pension plan covering substantially all of
its employees. The benefits are based on years of service, as defined, and the
employee's compensation, and the employee's previously accrued benefit under
the predecessor plan. The Company makes annual contributions to the plan equal
to the maximum amount that can be deducted for income tax purposes. The
following table sets forth the plan's funded status and amounts recognized in
the Company's balance sheet at December 31 (in thousands):

<TABLE>
<CAPTION>
1994 1995
------- -------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation................................... $ 3,325 $ 3,916
======= =======
Accumulated benefit obligation.............................. $ 3,471 $ 4,001
======= =======
Projected benefit obligation for service rendered to date..... $(5,812) $(6,414)
Plan assets at fair value..................................... 4,751 5,803
------- -------
Plan assets less than benefit obligation...................... (1,061) (611)
Unrecognized net (gain) loss.................................. 329 (186)
------- -------
Accrued pension cost included in accrued expenses............. $ (732) $ (797)
======= =======
</TABLE>

Net periodic pension cost included the following components:

<TABLE>
<CAPTION>
1994 1995
----- -----
<S> <C> <C>
Service cost-benefits earned during the period.................... $ 308 $ 326
Interest cost on projected benefit obligation..................... 455 503
Actual return on plan assets...................................... (63) (789)
Asset gain (loss) deferred........................................ (333) 348
----- -----
Net periodic pension cost......................................... $ 367 $ 388
===== =====
</TABLE>

Assumptions used in accounting for the pension plan are as follows:

<TABLE>
<CAPTION>
1994 1995
---- ----
<S> <C> <C>
Discount rate......................................................... 8.5% 8.5%
Rates of increase in compensation levels.............................. 5.0% 5.0%
Expected long-term rate of return on assets........................... 9.0% 9.0%
</TABLE>

11. SAVINGS AND INVESTMENT PLAN:

Effective August 1, 1990, the Company established a 401(k) profit sharing
plan covering all employees of the Company who have attained age 21, and who
satisfy the service requirements, as defined. Employees may contribute to the
plan up to 15% of their salary with a maximum of $9,240 for pre-tax
contributions in 1994 and 1995. The Company will match up to 50% of the
employee contributions up to 6% of the employee's base salary. Contributions
are invested, at the direction of the employee, in one or more funds. Company
contributions vest over three years of service with the Company. Company
matching contributions are charged to expense as incurred. Amounts charged to
expense were approximately $169,000 for December 31, 1994 and 1995 and
approximately $41,000 and $43,000 for the three months ended March 31, 1995
and 1996, respectively.

12. EMPLOYEE STOCK PURCHASE AND STOCK OPTION PLAN:

In accordance with the provisions of the Employee Stock Purchase and Stock
Option Plan (the Plan), effective August 1, 1990, 5,000 shares of nonvoting
common stock and 25,000 shares of nonvoting preferred

F-39
<PAGE>

TA INSTRUMENTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
stock were made available for purchase to all employees of the Company. All
such shares were purchased in 1990 at fair market value as established by the
Board of Directors.

The Plan also provides for stock options that may be granted for an
additional 23,685 shares of nonvoting common stock. Participatory options for
10,000 shares have been reserved and granted. Additionally, performance
options for 13,685 shares may be granted based on the attainment of certain
financial targets over the five fiscal years ended December 31, 1995.
Performance options earned were 0 and 2,737 for 1994 and 1995, respectively.
In total 10,948 performance options were granted under this plan. The
performance options will not have a dilutive impact since the majority
stockholders are required to forfeit shares equivalent in number to the
options being granted. During 1995, compensation expense and an increase in
paid-in capital of $595,000 was recorded in the Company's consolidated
financial statements for these performance options. The compensation expense
was included in selling, general and administrative expenses in the 1995
consolidated statement of operations.

The shares purchased and options granted vest over a five-year period, as
defined. Once vested, the participants may exercise all or any portion of
their options. The exercise price of options granted shall equal the greater
of (i) $8.88, or (ii) the book value of a share of nonvoting common stock as
determined by the Board of Directors as of the last day of the latest fiscal
quarter prior to issuance of the options. All shares and options under the
Plan are allocated at the discretion of the Board of Directors. No options
will be exercisable after August 1, 2000, the expiration date.

The following summarizes plan option activity under the stock option plan.
The price per share for all stock option activity was $8.88.

<TABLE>
<CAPTION>
STOCK
OPTIONS
-------
<S> <C>
Exercisable at December 31, 1993........................................ 17,527
Granted............................................................... 684
------
Exercisable at December 31, 1994........................................ 18,211
Granted............................................................... 2,737
------
Exercisable at December 31, 1995........................................ 20,948
======
</TABLE>

As of December 31, 1995, substantially all options issued were vested. Under
the terms of the plan, 10,948 performance options included above will not have
a dilutive effect.

13. LEASES:

The Company leases certain office facilities and equipment, manufacturing
facilities, and automobiles under noncancelable operating lease agreements.
The last lease expires on December 31, 2000.

The following is a schedule of future minimum lease payments for operating
leases at December 31 (in thousands):

<TABLE>
<S> <C>
1996.................................................................... $1,333
1997.................................................................... 1,018
1998.................................................................... 823
1999.................................................................... 578
2000.................................................................... 591
------
Total minimum lease payments.......................................... $4,343
======
</TABLE>

F-40
<PAGE>

TA INSTRUMENTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Rent expense was approximately $1,444,000 and $1,601,000 for 1994 and 1995,
respectively.

14. RESEARCH AND DEVELOPMENT:

For the years ended December 31, 1994 and 1995 and for the three months
ended March 31, 1995 and 1996, the research and development costs amounted to
$2,870,000, $3,302,000, $766,000 and $1,172,000, respectively. Of these costs,
$920,000, $1,230,000 and $189,000 has been capitalized and included in
intangible assets at December 31, 1994 and 1995 and March 31, 1996,
respectively.

15. COMMITMENTS AND CONTINGENCIES:

In connection with the acquisition of the Company in 1990, the asset
purchase agreement provided for contingent payments to the seller equal to 10%
of thermal analysis net sales in excess of $37,000,000, subject to certain
adjustments, for each of the five full fiscal years ended December 31, 1995,
subject to certain maximum payments. The expected payment was included as part
of the original purchase price allocation.

As of January 1, 1994, the Company had recorded a liability of $1,326,000
plus interest of $571,000. During 1994, the Company revised its estimate of
this liability and reduced the estimated obligation to $344,000 plus interest
of $263,000. During 1995, the Company again revised its estimate of this
liability and reduced the total estimated obligation to $346,000. The
estimated obligation is included in other liabilities in the accompanying
consolidated balance sheets. During 1994, the Company recorded the reduction
in the maximum liability of $982,000 as a reduction of the assigned intangible
asset values when the Company was acquired. The reduction in accrued interest
expense was recorded as income in the Company's 1994 and 1995 consolidated
statements of operations.

In connection with the 1993 acquisition of Carri-Med Plc (Carri-Med), a
United Kingdom rheological instruments manufacturer, the Company may be
required to issue additional shares of its nonvoting common stock to certain
of the former owners of Carri-Med. If annual and three-year cumulative
rheological sales targets are achieved, the Company will issue 640 nonvoting
common shares per year, or a cumulative total of 1,920 shares. When and if
additional shares are issued, the additional consideration will be reflected
as additional purchase price and allocated to the assets acquired. The Company
did not achieve its first or second annual rheological sales targets nor does
it anticipate achieving the third annual rheological sales target. As such, no
additional shares were issued during 1994 or 1995.

Contingencies may exist with respect to taxing authorities' examinations
against the Company and its subsidiaries. In 1994, the Internal Revenue
Service began an audit of the Company's 1990 through 1993 tax returns. A final
report has not yet been issued. In the opinion of management, any settlement
of such items will not have a material effect on the Company's consolidated
financial position or results of operations.

16. SUBSEQUENT EVENT:

The Company entered into an Agreement and Plan of Merger on March 28, 1996
whereby all of the capital stock of the Company will be acquired by Waters
Corporation. This transaction was consummated in May 1996.

F-41
<PAGE>

WATERS HAS OFFICES IN 29 COUNTRIES

[PICTURE - Color depiction of a map of the world indicating the locations of
each of the Company's offices]

[PICTURE - Color depiction of electron models]

CAPTION:
The Internet allows customers from around the world to communicate directly with
Waters.

<PAGE>

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

NO DEALER, SALESPERSON OR ANY OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPEC-
TUS IN CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS OR THE UNDERWRITERS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, THE COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO
WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET
FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HERE-
OF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 11
The Company............................................................... 14
Use of Proceeds........................................................... 15
Price Range of Common Stock and Dividend Policy........................... 15
Capitalization............................................................ 16
Unaudited Pro Forma Financial Data........................................ 17
Selected Consolidated Financial Data...................................... 23
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 26
Business.................................................................. 37
Management................................................................ 50
Principal and Selling Stockholders........................................ 56
Certain Relationship and Related
Transactions............................................................. 57
Description of Certain Indebtedness....................................... 58
Description of Capital Stock.............................................. 59
Shares Eligible for Future Sale........................................... 62
Certain United States Federal Tax
Considerations for Non-United States
Holders ................................................................. 63
Underwriting.............................................................. 66
Legal Matters............................................................. 68
Experts................................................................... 68
Available Information..................................................... 68
Index to Financial Statements............................................. F-1
</TABLE>

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

10,000,000 SHARES

WATERS CORPORATION

COMMON STOCK

----------------
PROSPECTUS
----------------

MERRILL LYNCH & CO.

ALEX. BROWN & SONS
INCORPORATED

CS FIRST BOSTON

GOLDMAN, SACHS & CO.

, 1996

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

PRELIMINARY PROSPECTUS DATED MAY 10, 1996

PROSPECTUS

10,000,000 SHARES

WATERS CORPORATION

COMMON STOCK

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

Of the 10,000,000 shares offered hereby, 2,000,000 shares are being offered
outside of the United States and Canada by the International Managers (the
"International Offering") and 8,000,000 shares are being offered in a
concurrent offering in the United States and Canada by the U.S. Underwriters
(the "U.S. Offering" and together with the International Offering, the
"Offerings"). The price to public and the underwriting discount per share will
be identical for both Offerings. See "Underwriting."

SEE "RISK FACTORS," BEGINNING ON PAGE 11, FOR A DISCUSSION OF CERTAIN FACTORS
WHICH SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK
OFFERED HEREBY.

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

(2) The Company has agreed to pay certain expenses of the Offerings estimated
at $750,000.
(3) The Selling Stockholders have granted the International Managers and the
U.S. Underwriters options, exercisable within 30 days after the date
hereof, to purchase up to an additional 300,000 shares and 1,200,000 shares
of Common Stock, respectively, solely to cover over-allotments, if any. If
such options are exercised in full, the total Price to Public, Underwriting
Discount and Proceeds to Selling Stockholders will be $ , $ and
$ , respectively. See "Underwriting."

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

MERRILL LYNCH INTERNATIONAL
ALEX. BROWN & SONS
INTERNATIONAL
CS FIRST BOSTON
GOLDMAN SACHS INTERNATIONAL

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

The date of this Prospectus is , 1996.
<PAGE>

ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS

UNDERWRITING

Merrill Lynch International ("Merrill Lynch"), Alex. Brown & Sons
Incorporated, CS First Boston Limited, and Goldman Sachs International are
acting as representatives (the "International Representatives") of each of the
International Managers named below (the "International Managers"). Subject to
the terms and conditions set forth in an international purchase agreement (the
"International Purchase Agreement") among the Company, Waters Technologies
Corporation, each of the Selling Stockholders and the International Managers,
and concurrently with the sale of 8,000,000 shares of Common Stock to the U.S.
Underwriters (as defined below), the Selling Stockholders severally have
agreed to sell to the International Managers, and each of the International
Managers severally has agreed to purchase from the Selling Stockholders, the
number of shares of Common Stock set forth opposite its name below.

<TABLE>
<CAPTION>
NUMBER OF
INTERNATIONAL MANAGER SHARES
--------------------- ---------
<S> <C>
Merrill Lynch International.......................................
Alex. Brown & Sons Incorporated...................................
CS First Boston Limited...........................................
Goldman Sachs International.......................................
---------
Total........................................................ 2,000,000
=========
</TABLE>

The Company, Waters Technologies Corporation and the Selling Stockholders
have also entered into a U.S. purchase agreement (the "U.S. Purchase
Agreement") with certain underwriters in the United States and Canada (the
"U.S. Underwriters" and, together with the International Managers, the
"Underwriters") for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Alex. Brown & Sons Incorporated, CS First Boston Corporation and Goldman,
Sachs & Co. are acting as representatives (the "U.S. Representatives").
Subject to the terms and conditions set forth in the U.S. Purchase Agreement,
and concurrently with the sale of 2,000,000 shares of Common Stock to the
International Managers pursuant to the International Purchase Agreement, the
Selling Stockholders have agreed to sell to the U.S. Underwriters, and the
U.S. Underwriters severally have agreed to purchase from the Selling
Stockholders, an aggregate of 8,000,000 shares of Common Stock. The initial
public offering price per share and the total underwriting discount per share
of Common Stock are identical under the International Purchase Agreement and
the U.S. Purchase Agreement.

In the International Purchase Agreement and the U.S. Purchase Agreement, the
several International Managers and the several U.S. Underwriters,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of Common Stock being sold pursuant to
each such agreement if any of the shares of Common Stock being sold pursuant
to such agreement are purchased. Under certain circumstances, the commitments
of non-defaulting International Managers or U.S. Underwriters (as the case may
be) may be increased. The closings with respect to the sale of shares of
Common Stock to be purchased by the International Managers and the U.S.
Underwriters are conditioned upon one another.

The International Representatives have advised the Company that the
International Managers propose initially to offer the shares of Common Stock
to the public at the initial public offering price set forth on the cover page
of this Prospectus, and to certain dealers at such price less a concession not
in excess of $ per share of Common Stock. The International Managers may
allow, and such dealers may reallow, a discount not in excess of $ per
share of Common Stock on sales to certain other dealers. After the initial
public offering, the public offering price, concession and discount may be
changed.

The Selling Stockholders have granted an option to the International
Managers, exercisable for 30 days after the date of this Prospectus, to
purchase up to an aggregate of 300,000 additional shares of Common Stock at
the initial public offering price set forth on the cover page of this
Prospectus, less the underwriting discount. The International Managers may
exercise this option only to cover over-allotments, if any, made on the sale
of the Common Stock offered hereby. To the extent that the International
Managers exercise this option, each

66
<PAGE>

ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS

International Manager will be obligated, subject to certain conditions, to
purchase a number of additional shares of Common Stock proportionate to such
International Manager's initial amount reflected in the foregoing table. The
Selling Stockholders also have granted an option to the U.S. Underwriters,
exercisable for 30 days after the date of this Prospectus, to purchase up to
an aggregate of 1,200,000 additional shares of Common Stock to cover over-
allotments, if any, on terms similar to those granted to the International
Managers.

The Company, each of the Selling Stockholders, the Company's directors and
executive officers, and certain other members of management, and certain other
stockholders of the Company who hold in the aggregate 1,316,401 shares, have
agreed, subject to certain exceptions, not to directly or indirectly sell,
offer to sell, grant any option for the sale of or otherwise dispose of any
shares of Common Stock or securities or rights convertible into or exercisable
or exchangeable for Common Stock, or make any demand for or exercise any right
with respect to the registration of any Common Stock or other such securities,
without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith
Incorporated on behalf of the Underwriters, for a period of (in the case of
the Company, the Selling Stockholders and certain members of management) 90
days after the date of this Prospectus, or (in the case of the Company's
executive officers, non-selling directors, certain other members of management
and certain other stockholders of the Company) 75 days after the date of this
Prospectus. See "Shares Eligible for Future Sale."

The International Managers and the U.S. Underwriters have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for
the coordination of their activities. Pursuant to the Intersyndicate
Agreement, the International Managers and the U.S. Underwriters are permitted
to sell shares of Common Stock to each other for purposes of resale at the
initial public offering price, less an amount not greater than the selling
concession. Under the terms of the Intersyndicate Agreement, the U.S.
Underwriters and any dealer to whom they sell shares of Common Stock will not
offer to sell or sell shares of Common Stock to persons who are non-U.S. or
non-Canadian persons or to persons they believe intend to resell to persons
who are non-U.S. or non-Canadian persons, and the International Managers and
any dealer to whom they sell shares of Common Stock will not offer to sell or
sell shares of Common Stock to U.S. persons or to Canadian persons or to
persons they believe intend to resell to United States or Canadian persons,
except in the case of transactions pursuant to the Intersyndicate Agreement.

The Company and the Selling Stockholders have agreed to indemnify the
International Managers and the U.S. Underwriters against certain liabilities,
including liabilities under the Securities Act.

Each International Manager has agreed that (i) it has not offered or sold
and, prior to the expiration of the period of six months from the Closing
Date, will not offer or sell any shares of Common Stock to persons in the
United Kingdom, except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances
which do not constitute an offer to the public in the United Kingdom within
the meaning of the Public Offers of Securities Regulations 1995; (ii) it has
complied and will comply with all applicable provisions of the Financial
Services Act 1986 with respect to anything done by it in relation to the
Common Stock in, from or otherwise involving the United Kingdom; and (iii) it
has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issuance of Common
Stock to a person who is of a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995 or is a
person to whom such document may otherwise lawfully be issued or passed on.

No action has been or will be taken in any jurisdiction (except in the
United States) that would permit a public offering of the shares of Common
Stock, or the possession, circulation or distribution of this Prospectus or
any other material relating to the Company, the Selling Stockholders or shares
of Common Stock in any jurisdiction where action for that purpose is required.
Accordingly, the shares of Common Stock may not be offered or sold, directly
or indirectly, and neither this Prospectus nor any other offering material or
advertisements in connection with the shares of Common Stock may be
distributed or published, in or from any country or jurisdiction except in
compliance with any applicable rules and regulations of any such country or
jurisdiction.

Purchasers of the shares offered hereby may be required to pay stamp taxes
and other charges in accordance with the laws and practices of the country of
purchase in addition to the offering price set forth on the cover page hereof.

67
<PAGE>

ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

IN THE PROSPECTUS, REFERENCES TO "DOLLARS" AND "$" ARE TO UNITED STATES
DOLLARS.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 11
The Company............................................................... 14
Use of Proceeds........................................................... 15
Price Range of Common Stock and Dividend Policy........................... 15
Capitalization............................................................ 16
Unaudited Pro Forma Financial Data........................................ 17
Selected Consolidated Financial Data...................................... 23
Management's Discussion and Analysis
of Financial Condition and Results
of Operations............................................................ 26
Business.................................................................. 37
Management................................................................ 50
Principal and Selling Stockholders........................................ 56
Certain Relationship and Related Transactions............................. 57
Description of Certain Indebtedness....................................... 58
Description of Capital Stock.............................................. 59
Shares Eligible for Future Sale........................................... 62
Certain United States Federal Tax Considerations for Non-United States
Holders.................................................................. 63
Underwriting.............................................................. 66
Legal Matters............................................................. 68
Experts................................................................... 68
Available Information..................................................... 68
Index to Financial Statements............................................. F-1
</TABLE>

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

10,000,000 SHARES

WATERS CORPORATION

COMMON STOCK

----------------
PROSPECTUS
----------------

MERRILL LYNCH INTERNATIONAL

ALEX. BROWN & SONS
INTERNATIONAL

CS FIRST BOSTON

GOLDMAN SACHS INTERNATIONAL

, 1996

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

PART II--INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following is a statement of estimated expenses of the issuance and
distribution of the securities being registered other than underwriting
compensation:

<TABLE>
<S> <C>
SEC registration fee............................................ $114,009
NASD filing fee................................................. 30,500
Blue sky fees and expenses (including attorneys' fees and
expenses)...................................................... *
Printing and engraving expenses................................. *
Transfer agent's fees and expenses.............................. *
Accounting fees and expenses.................................... *
Legal fees and expenses......................................... *
Miscellaneous expenses.......................................... *
--------
Total......................................................... $750,000
========
</TABLE>

All amounts are estimated except for the SEC registration fee and the NASD
filing fee.
- --------
* To be filed by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company is incorporated under the laws of the State of Delaware. Section
145 of the General Corporation Law of the State of Delaware ("Section 145")
provides that a Delaware corporation may indemnify any person who is, or is
threatened to be made, a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation), by reason of
the fact that such person was an officer, director, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding, provided such person acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the corporation's best interests and, with respect to any criminal action
or proceeding, had no reasonable cause to believe that his conduct was
illegal. A Delaware corporation may indemnify any person who is, or is
threatened to be made, a party to any threatened, pending or completed action
or suit by or in the right of the corporation by reason of the fact that such
person was a director, officer, employee or agent of such corporation, or is
or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise. The indemnity may
include expenses (including attorneys' fees) actually and reasonably incurred
by such person in connection with the defense or settlement of such action or
suit, provided such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the corporation's best interests except
that no indemnification is permitted without judicial approval if the officer
or director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses
which such officer or director has actually and reasonably incurred.

The Company's Second Amended and Restated Certificate of Incorporation
provides for the indemnification of directors and officers of the Company to
the fullest extent permitted by Section 145. In that regard, the Amended and
Restated Certificate of Incorporation provides that the Company shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or
in the right of the corporation) by reason of the fact that he is or was a
director or officer of such corporation, or is or was serving at the request
of such corporation as a director, officer or member of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid

II-1
<PAGE>

in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of such
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Indemnification in
connection with an action or suit by or in the right of such corporation to
procure a judgment in its favor is limited to payment of settlement of such an
action or suit except that no such indemnification may be made in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable for negligence or misconduct in the performance of his duty to the
indemnifying corporation unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine that, despite the adjudication of liability but in
consideration of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper.

In addition, the by-laws of the Company provide that the Company shall
indemnify to the full extent authorized by law any person made or threatened
to be made a party to an action, suit or proceeding, whether criminal, civil,
administrative or investigative, by reason of the fact that he, his testator
or intestate is or was a director, officer, employee or agent of the Company
or is or was serving, at the request of the Company, as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise.

In addition, pursuant to certain Indemnification Agreements dated August 18,
1994 (the "Indemnification Agreements") between the Company and its directors
and executive officers, the Company agreed to indemnify such directors and
executive officers to the fullest extent permitted by the laws of the State of
Delaware. Among other things, the Indemnification Agreements provide
indemnification procedures, advancement of expenses during proceedings subject
to indemnification and mechanisms for reviewing executive conduct in
connection with a claim for indemnification.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On August 18, 1994, WCD Investors Inc. sold (i) to Millipore Corporation 100
shares of Series A Preferred Stock with an aggregate liquidation value of
$10,000,000 as partial consideration for the Acquisition, (ii) to AEA
stockholders and AEA management an aggregate of 299,500 shares of its Class A
common stock, par value $.01, for an aggregate of $29,950,000 in cash, (ii) to
certain investment funds managed by Bain an aggregate of 299,500 shares of its
Class A common stock, par value $.01, for an aggregate of $29,950,000 in cash,
(iii) to Waters senior management an aggregate of 61,000 shares of its Class A
common stock, par value $.01, for an aggregate of $6,100,000 in cash and (iv)
to BT Investment Partners, Inc. an aggregate of 20,000 shares of its Class A
common stock, par value $.01 for an aggregate of $2,000,000 in cash. These
sales were made in reliance on the exemption from registration afforded by
section 4(2) of the Securities Act and regulation D promulgated thereunder.

On February 1, 1994, WCD Investors Inc. sold to AEA management an aggregate
of 2,550 shares of its Class B common stock, par value $.01 for an aggregate
of $286.31. On May 20, 1992, WCD Investors Inc. sold to AEA an aggregate of
2,450 shares of its Class B common stock, par value $.01 for an aggregate of
$286.31. On August 18, 1994, WCD Investors Inc. sold to certain investment
funds managed by Bain an aggregate of 5,000 shares of its Class B common
stock, par value $.01, for an aggregate of $600.00. These sales were made in
reliance on the exemption from registration afforded by Section 4(2) of the
Securities Act and regulation D promulgated thereunder.

On February 1, 1994, WCD Investors Inc. sold to AEA management an aggregate
of 40,236 shares of its Class C common stock, par value $.01, for an aggregate
of $4,713.69. On May 20, 1992 and August 1, 1994, WCD Investors Inc. sold to
AEA and AEA stockholders and AEA management, respectively, an

II-2
<PAGE>

aggregate of 40,336 shares of its Class C common stock, par value $.01, for an
aggregate of $4,713.69. On August 18, 1994, WCD Investors Inc. sold (i) to
certain investment funds managed by Bain an aggregate of 80,572 shares of its
Class C common stock, par value $.01, for an aggregate of $9,668.64 in cash,
(ii) to Waters senior management an aggregate of 17,428 shares of its Class C
common stock, par value $.01, for an aggregate of $2,091.36 in cash and (iii)
to BT Investment Partners, Inc. an aggregate of 5,714 shares of its Class C
common stock, par value $.01, for an aggregate of $685.68 in cash. These sales
were made in reliance on the exemption from registration afforded by Section
4(2) of the Securities Act and regulation D promulgated thereunder.

On August 18, 1994, WCD Investors Inc. issued to BT Securities Corporation
(i) warrants to purchase 33,684 shares of its Class A common stock and (ii)
warrants to purchase 9,624 shares of its Class C common stock as partial
consideration for acting as placement agent for the Senior Notes. These sales
were made in reliance on the exemption from registration afforded by Section
4(2) of the Securities Act and regulation D promulgated thereunder.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits:

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
1.1 Form of U.S. Underwriting Agreement.(1)
1.2 Form of International Underwriting Agreement.(1)
3.1 Second Amended and Restated Certificate of Incorporation of Waters
Corporation, as amended to date.(2)
3.2 Amended and Restated Bylaws of Waters Corporation, as amended to
date.(2)
5.1 Opinion of Kirkland & Ellis.(1)
10.1 Credit Agreement, dated as of November 22, 1995, among Waters
Corporation, Waters Technologies Corporation, Bankers Trust Company
and other Lenders party thereto.
10.2 First Amendment to Credit Agreement, dated as of March 6, 1996 among
Waters Corporation, Waters Technologies Corporation, Bankers Trust
Company and other Lenders party thereto.
10.3 Waters Corporation 1996 Long-Term Performance Incentive Plan.
Incorporated by reference to Exhibit A of the Proxy Statement for the
1996 Annual Meeting of Stockholders (the "Proxy Statement")
10.4 Waters Corporation 1996 Employee Stock Purchase Plan. Incorporated by
reference to Exhibit B of the Proxy Statement.
10.5 Waters Corporation 1996 Non-Employee Director Deferred Compensation
Plan. Incorporated by reference to Exhibit C of the Proxy Statement.
10.6 Waters Corporation 1996 Non-Employee Director Stock Option Plan.
Incorporated by reference to Exhibit C of the Proxy Statement.
10.7 Amended and Restated Purchase and Sale Agreement dated as of March 31,
1994 (as executed on June 28, 1994), as amended as of August 5, 1994,
August 11, 1994 and August 18, 1994, among Waters Holding Inc.,
Millipore Corporation and certain of its subsidiaries.(3)
10.8 WCD Investors Inc. Amended and Restated 1994 Stock Option Plan, as
amended (including Form of Amended and Restated Stock Option
Agreement).(3)
10.9 Waters Corporation Retirement Plan.(3)
10.10 Registration Rights Agreement made as of August 18, 1994, by and among
WCD Investors Inc., AEA Investors Inc., certain investment funds
controlled by Bain Capital, Inc. and other stockholders of Waters
Corporation.(3)
10.11 Form of Indemnification Agreement, dated as of August 18, 1994, between
WCD Investors Inc. and its directors and executive officers.(3)
10.12 Form of Management Subscription Agreement, dated as of August 18, 1994,
between WCD Investors Inc. and certain members of management.(3)
10.13 Agreement and Plan of Merger among Waters Corporation, TA Merger Sub,
Inc.and TA Instruments, Inc. dated as of March 28, 1996. Incorporated
by reference to the Registrant's Report on Form 8-K dated March 29,
1996.
11 Statement re Computation of Per Share Earnings.
</TABLE>

II-3
<PAGE>

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
21.1 Subsidiaries of Waters Corporation.(2)
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Arthur Andersen LLP
23.4 Consent of Kirkland & Ellis (to be included in opinion to be filed as
Exhibit 5.1).
24.1 Powers of attorney (included on the signature page included in this
part II).
</TABLE>
- --------
(1) To be filed by amendment.
(2) Incorporated by reference to the Registrant's Report on Form 10-K dated
March 29, 1996.
(3) Incorporated by reference to the Registrant's Registration Statement on
Form S-1 File No. 33-96934.

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the Offerings of such securities at that time shall be
deemed to be the initial bona fide Offerings thereof.

II-4
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW
YORK ON MAY 10, 1996.

Waters Corporation

/s/ Philip S. Taymor
By:_________________________________

NAME: PHILIP S. TAYMOR

TITLE: SENIOR VICE PRESIDENT,
FINANCE AND ADMINISTRATION
AND CHIEF FINANCIAL OFFICER

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED ON MAY 10, 1996, BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED WITH RESPECT TO WATERS CORPORATION:

SIGNATURE CAPACITY

President, Chief Executive
* Officer, and Chairman of the
------------------------------------- Board of Directors (Principal
DOUGLAS A. BERTHIAUME Executive Officer)

/s/ Philip S. Taymor Senior Vice President,
------------------------------------- Finance and Administration
PHILIP S. TAYMOR and Chief Financial Officer
(Principal Financial and
Accounting Officer)

Director
*
-------------------------------------
JOSHUA BEKENSTEIN

Director
*
-------------------------------------
CHARLES L. BROWN

Director
*
-------------------------------------
PHILIP CALDWELL

Director
*
-------------------------------------
EDWARD CONARD

Director
*
-------------------------------------
THOMAS P. SALICE

Director
*
-------------------------------------
MARC WOLPOW

/s/ Philip S. Taymor

*By: Attorney-in-Fact
-------------------------------------

PHILIP S. TAYMOR

II-5