<PAGE>
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   ----------

                                    FORM 10-Q
(MARK ONE)
   [X]
                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                 FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 2002

                                       OR
   [ ]
                TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                         FOR THE TRANSITION PERIOD FROM

                    COMMISSION FILE NUMBER 1-7427       TO

                                VERITAS DGC INC.
             (Exact name of registrant as specified in its charter)

                DELAWARE                               76-0343152
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
    incorporation or organization)

           10300 TOWN PARK
           HOUSTON, TEXAS                                77072
(Address of principal executive offices)               (Zip Code)

                                 (832) 351-8300
              (Registrant's telephone number, including area code)

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

        TITLE OF EACH CLASS            NAME OF EACH EXCHANGE ON WHICH REGISTERED
        -------------------            -----------------------------------------
    Common Stock, $.01 par Value                New York Stock Exchange
  Preferred Stock Purchase Rights               New York Stock Exchange

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

     Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

    Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

     The number of shares of the Company's common stock, $.01 par value,
outstanding at November 30, 2002 was 33,287,866 (including 1,444,411 Veritas
Energy Services Inc. exchangeable shares which are identical to the Common Stock
in all material respects).

================================================================================

<PAGE>

                                TABLE OF CONTENTS

                                    FORM 10-Q


                                      INDEX



================================================================================

<Table>
<Caption>
                                                                                                    Page Number
                                                                                                    -----------
<S>                                                                                                 <C>
PART I.      Financial Information

             Item 1.   Financial Statements

                Consolidated Statements of Operations and Comprehensive Income -
                  For the Three Months Ended October 31, 2002 and 2001                                   1

                Consolidated Balance Sheets - October 31, 2002 and July 31, 2002                         2

                Consolidated Statements of Cash Flows -
                  For the Three Months Ended October 31, 2002 and 2001                                   3

                Notes to Consolidated Financial Statements                                               4

             Item 2.   Management's Discussion and Analysis
                        of Financial Condition and Results of Operations                                 9

             Item 3.   Quantitative and Qualitative Disclosures Regarding Market Risk                   12

             Item 4.   Controls and Procedures                                                          12

PART II.     Other Information


             Item 6.   Exhibits and Reports on Form 8-K                                                 13

             Signatures                                                                                 14

             Certification of Chief Executive Officer                                                   15

             Certification of Chief Financial Officer                                                   16
</Table>



<PAGE>

                        VERITAS DGC INC. AND SUBSIDIARIES

         CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                                   (UNAUDITED)

<Table>
<Caption>
                                                                             THREE MONTHS ENDED
                                                                                 OCTOBER 31,
                                                                        ----------------------------
                                                                           2002               2001
                                                                        ---------          ---------
                                                                  (In thousands, except per share amounts)
<S>                                                               <C>                      <C>
Revenues .....................................................          $ 137,507          $ 121,378
Operating expenses:
  Cost of services ...........................................            118,712             97,576
  Research and development ...................................              3,008              2,839
  General and administrative .................................              7,673              5,836
                                                                        ---------          ---------
Operating income .............................................              8,114             15,127
Interest expense .............................................              3,942              3,535
Other expense (income) - net .................................              1,234               (915)
                                                                        ---------          ---------
Income before provision for income taxes .....................              2,938             12,507
Provision for income taxes ...................................              1,375              4,862
                                                                        ---------          ---------
Net income ...................................................              1,563              7,645

Other comprehensive income (loss)  (net of tax, $0 in all
  periods)
  Foreign currency translation adjustments ...................                225             (1,504)
  Unrealized loss on investments-available for sale ..........                                  (509)
  Unrealized gain on foreign currency hedge ..................                112                152
                                                                        ---------          ---------
Total other comprehensive income (loss) ......................                337             (1,861)
                                                                        ---------          ---------
Comprehensive income .........................................          $   1,900          $   5,784
                                                                        =========          =========

PER SHARE:
BASIC:
  Net income per common share ................................          $     .05          $     .24
  Weighted average common shares .............................             33,151             32,321

DILUTED:
  Net income per common share ................................          $     .05          $     .24
  Weighted average common shares .............................             33,195             32,458
</Table>



                 See Notes to Consolidated Financial Statements



                                       1
<PAGE>

                        VERITAS DGC INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT PAR VALUE)

<Table>
<Caption>
                                                                                                     OCTOBER 31,       JULY 31,
                                                                                                        2002             2002
                                                                                                    ------------      ----------
                                                                                                     Unaudited
<S>                                                                                                 <C>               <C>
                                               ASSETS
Current assets:
  Cash and cash equivalents ...................................................................     $     47,876      $   10,586
  Restricted cash investments .................................................................              166             166
  Accounts and notes receivable (net of allowance for doubtful accounts: October $4,249;
    July $4,143) ..............................................................................          145,956         128,045
  Materials and supplies inventory ............................................................            4,247          16,096
  Prepayments and other .......................................................................           14,675          12,059
  Income taxes receivable .....................................................................           15,645          16,074
                                                                                                    ------------      ----------
      Total current assets ....................................................................          228,565         183,026
Property and equipment ........................................................................          516,157         515,823
Less accumulated depreciation .................................................................          334,721         324,742
                                                                                                    ------------      ----------
      Property and equipment -- net ...........................................................          181,436         191,081
Multi-client data library .....................................................................          348,431         336,475
Investment in and advances to joint ventures ..................................................            6,573           7,433
Goodwill (net of accumulated amortization: October $6,830; July $6,819) .......................           38,037          34,086
Deferred tax asset ............................................................................           16,072          13,756
Other assets ..................................................................................           26,130          14,924
                                                                                                    ------------      ----------
      Total ...................................................................................     $    845,244      $  780,781
                                                                                                    ============      ==========

                              LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current maturities of long-term debt and revolver ...........................................     $    210,684
  Accounts payable -- trade ...................................................................           43,751      $   46,471
  Accrued interest ............................................................................              884           3,965
  Other current liabilities ...................................................................           41,446          54,169
                                                                                                    ------------      ----------
      Total current liabilities ...............................................................          296,765         104,605
Non-current liabilities:
  Long-term debt ..............................................................................                          140,000
  Deferred tax liability ......................................................................            4,642           7,310
  Other non-current liabilities ...............................................................            7,323           4,654
                                                                                                    ------------      ----------
      Total non-current liabilities ...........................................................           11,965         151,964
Stockholders' equity:
  Common stock, $.01 par value; authorized: 40,000,000 shares; issued: 31,854,220 shares at
      October and 31,171,988 shares at July (excluding Exchangeable Shares of 1,444,514 at
      October and 1,444,514 at July) ..........................................................              318             311
 Additional paid-in capital ...................................................................          424,230         413,813
 Accumulated earnings (from August 1, 1991 with respect to Digicon Inc.) ......................          122,004         120,441
 Accumulated other comprehensive income:
   Cumulative foreign currency translation adjustment .........................................           (8,618)         (8,843)
   Unrealized gain on foreign currency hedge ..................................................              906             794
 Unearned compensation ........................................................................             (848)           (872)
 Treasury stock, at cost; 81,599 shares at October and 76,607 at July .........................           (1,478)         (1,432)
                                                                                                    ------------      ----------
      Total stockholders' equity ..............................................................          536,514         524,212
                                                                                                    ------------      ----------
      Total ...................................................................................     $    845,244      $  780,781
                                                                                                    ============      ==========
</Table>



                 See Notes to Consolidated Financial Statements



                                       2
<PAGE>

                        VERITAS DGC INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<Table>
<Caption>
                                                                                                  THREE MONTHS ENDED
                                                                                                      OCTOBER 31,
                                                                                               --------------------------
                                                                                                  2002            2001
                                                                                               ----------      ----------
                                                                                                     (IN THOUSANDS)
<S>                                                                                            <C>             <C>
Operating activities:
  Net income .............................................................................     $    1,563      $    7,645
  Non-cash items included in net income:
    Depreciation and amortization (other than multi-client) ..............................         18,786          17,238
    Depreciation and amortization capitalized to multi-client library and software .......         (6,034)         (6,313)
      Amortization of multi-client library ...............................................         32,026          25,970
       Impairment of land acquisition equipment ..........................................          1,780
    (Gain)/loss on disposition of property and equipment .................................            224            (339)
    Equity in loss of joint venture ......................................................            599              60
    Amortization of unearned compensation ................................................            180             203
  Change in operating assets/liabilities:
    Accounts and notes receivable ........................................................        (17,799)         (1,559)
    Materials and supplies inventory .....................................................         11,850           5,369
    Prepayments and other ................................................................         (2,520)         (1,771)
      Income tax receivable ..............................................................            429          (1,709)
    Accounts payable and other accrued liabilities .......................................        (19,462)        (19,326)
    Other non-current liabilities ........................................................            (12)            117
    Other ................................................................................            520            (122)
                                                                                               ----------      ----------
       Total cash provided by operating activities .......................................         22,130          25,463
Investing activities:
  Investment in multi-client library, net cash ...........................................        (37,506)        (50,021)
  Purchase of property and equipment .....................................................         (9,385)        (20,298)
  Sale of property and equipment .........................................................             92             548
  Purchase of Hampson-Russell Software Services Ltd. .....................................         (9,250)
                                                                                               ----------      ----------
       Total cash used by investing activities ...........................................        (56,049)        (69,771)
Financing activities:
  Borrowings on revolver .................................................................        120,500
  Payments on senior notes and revolver ..................................................        (49,950)
  Net proceeds from sale of common stock .................................................            643             554
                                                                                               ----------      ----------
       Total cash provided by financing activities .......................................         71,193             554
  Currency loss on foreign cash ..........................................................             16            (169)
                                                                                               ----------      ----------
  Change in cash and cash equivalents ....................................................         37,290         (43,923)
  Beginning cash and cash equivalents balance ............................................         10,586          69,218
                                                                                               ----------      ----------
  Ending cash and cash equivalents balance ...............................................     $   47,876      $   25,295
                                                                                               ==========      ==========
  Cash paid for:
    Interest .............................................................................     $    6,771      $    6,898
    Taxes ................................................................................     $      950      $    6,625
</Table>



                 See Notes to Consolidated Financial Statements



                                       3
<PAGE>

                        VERITAS DGC INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CONSOLIDATION

    The accompanying consolidated financial statements include our accounts and
the accounts of majority-owned domestic and foreign subsidiaries. Investment in
an 80% owned joint venture is accounted for on the equity method due to
provisions in the joint venture agreement that give minority shareholders the
right to exercise control. All material intercompany balances and transactions
have been eliminated. All material adjustments consisting only of normal
recurring adjustments that, in the opinion of management are necessary for a
fair statement of the results for the interim periods have been reflected. These
interim financial statements should be read in conjunction with our annual
consolidated financial statements.

USE OF ESTIMATES

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions. These estimates and assumptions 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.

RECLASSIFICATION OF PRIOR YEAR BALANCES

    Certain prior year balances have been reclassified for consistent
presentation. Depreciation and amortization expense is now included in cost of
services on the "Consolidated Statements of Operations and Comprehensive
Income".

RECENT ACCOUNTING PRONOUNCEMENTS

    In August 2001, the Financial Accounting Standards Board issued SFAS No. 143
(Asset Retirement Obligations). This standard requires that obligations
associated with the retirement of a tangible long-lived asset be recorded as a
liability when those obligations are incurred with the liability being initially
measured at fair value. We adopted the use of this accounting statement in
August 2002. Adoption did not have a material effect on our financial position
or results of operations.

    In October 2001, the Financial Accounting Standards Board issued SFAS No.
144 (Accounting for the Impairment or Disposal of Long Lived Assets). This
standard develops one accounting model for long-lived assets that are to be
disposed of by sale, requiring such assets to be measured at the lower of book
value or fair value less cost to sell. The standard also provides guidance on
the recognition of liabilities for the obligations arising from disposal
activities. We adopted the use of this accounting statement in August 2002.
Adoption did not have a material effect on our financial position or results of
operations.

    In April 2002, the Financial Accounting Standards Board issued SFAS No. 145
(Rescission of FASB Statement No. 4, 44, and 64, Amendment of FASB Statement No.
13 and Technical Corrections as of April 2002). Among other things, this
statement addresses how to report gains or losses resulting from the early
extinguishment of debt. Previously, any gains or losses were reported as an
extraordinary item. Upon adoption of SFAS No. 145, an entity is required to
evaluate whether the debt extinguishment is truly extraordinary in nature, in
accordance with Accounting Principles Board Opinion No. 30. We adopted the use
of this accounting statement in August 2002. The adoption of this statement will
likely preclude extraordinary classification of costs related to early debt
extinguishment, and the effect in the first fiscal quarter was immaterial.



                                       4
<PAGE>

                        VERITAS DGC INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)

    In July 2002, the Financial Accounting Standards Board issued SFAS No. 146
(Accounting for Costs Associated with Exit or Disposal Activities). This
standard requires recognition of costs associated with exit or disposal
activities when they are incurred rather than when management commits to an exit
or disposal plan. Examples of costs covered by this guidance include lease
termination costs, employee severance costs that are associated with
restructuring, discontinued operations, plant closings, or other exit or
disposal activities. We will adopt the use of this accounting statement for all
activities initiated after December 31, 2002 and do not expect adoption to have
a material effect on our financial position or results of operations.

2. BUSINESS COMBINATIONS

     On August 21 2002, we acquired Hampson-Russell Software Services Ltd.
("Hampson-Russell"), a Canadian provider of software tools and consulting
services related to reservoir interpretation. Under the terms of the agreement,
we acquired substantially all of the assets of Hampson-Russell in exchange for a
cash payment of $9,250,000, transfer of 589,623 shares of Veritas common stock
($12.30 per share), and Hampson-Russell's right to receive a percentage of the
revenues generated by the purchased assets over the five years following the
closing of the transaction, provided that certain financial targets are
obtained. The common stock price of $12.30 was based on the average closing
price for Veritas common stock for a short period up to the transaction
close date. Our preliminary allocation of the $16.5 million purchase price was
based on fair value as follows: $13.2 million to software, $3.9 million to
goodwill of which none is expected to be tax deductible, $1.1 million to accrued
liabilities, $0.3 million to fixed assets and $0.2 million to other assets. The
software will be amortized over no more than five years. David B. Robson,
Veritas DGC's Chairman and Chief Executive Officer, beneficially owns a
controlling interest in Vada Industries Ltd., which was a 25% shareholder of
Hampson-Russell at the time of the acquisition. The results of operations for
Hampton-Russell began to be included in our results of operations as of
August 21, 2002.

3. ASSET IMPAIRMENT

    For the quarter ended 10/31/02, we incurred a $1.8 million loss for the
impairment of land equipment. It was determined the fair value of the equipment
was zero. The impairment loss is included in cost of services in the
"Consolidated Statements of Operations and Comprehensive income".

4. OTHER COSTS AND EXPENSES

    Other costs and expenses consist of the following:

<Table>
<Caption>
                                                                      THREE MONTHS ENDED
                                                                         OCTOBER 31,
                                                                 --------------------------
                                                                    2002            2001
                                                                 ----------      ----------
                                                                       (IN THOUSANDS)
<S>                                                              <C>             <C>
Interest income ............................................     $      (74)     $     (849)
Net loss (gain) on disposition of property and equipment ...            224            (339)
Net foreign currency exchange loss .........................            283             232
Equity in loss of joint venture ............................            599              60
Other ......................................................            202             (19)
                                                                 ----------      ----------
         Total .............................................     $    1,234      $     (915)
                                                                 ==========      ==========
</Table>



                                       5
<PAGE>

                        VERITAS DGC INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


5. EARNINGS PER COMMON SHARE

    Earnings per common share -- basic and earnings per common share -- diluted
are computed as follows:

<Table>
<Caption>
                                                                                       THREE MONTHS ENDED
                                                                                           OCTOBER 31,
                                                                           ----------------------------------------
                                                                                 2002                          2001
                                                                           ----------                    ----------
                                                                           (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                                        <C>                           <C>
Net income ...........................................................     $    1,563                    $    7,645
Basic:
  Weighted average common shares (including exchangeable shares) .....         33,151                        32,321
                                                                           ----------                    ----------
  Net income per share ...............................................     $      .05                    $      .24
                                                                           ==========                    ==========

Diluted:
  Weighted average common shares (including exchangeable shares) .....         33,151                        32,321
  Shares issuable from assumed conversion of options .................             44                           137
                                                                           ----------                    ----------
          Total ......................................................         33,195                        32,458
                                                                           ----------                    ----------
  Net income per share ...............................................     $      .05                    $      .24
                                                                           ==========                    ==========
</Table>

    The following options to purchase common shares have been excluded from the
computation assuming dilution because the options' exercise price exceeded the
average market price of the underlying common shares.

<Table>
<Caption>
                                         THREE MONTHS ENDED
                                             OCTOBER 31,
                              -----------------------------------------
                                     2002                   2001
                              ------------------     ------------------
<S>                           <C>                    <C>
Number of options .......              3,363,216              1,499,197
Exercise price range ....       $10.71 - $55.125     $14.5625 - $55.125
Expiring through ........             March 2012             March 2011
</Table>


6. OTHER ASSETS - SOFTWARE

    Software available for sale is included in other assets. A portion of the
software was developed internally and the remaining portion was obtained through
the acquisition of Reservoir Characterization Research and Consulting, Inc. and
Hampson-Russell Software Services Ltd. For internally developed software, we
capitalize costs associated with the development of the product from the time
the product reaches technological feasibility until it is ready for commercial
release. The capitalized cost of the software, whether developed or purchased,
is charged to cost of services in the period sales occur based on the percentage
of total cost to total estimated sales multiplied by actual sales during the
period. In no case is the cumulative amortization for a product allowed to fall
below the amount that would be recorded using straight-line amortization for
that product's estimated useful life. Estimated useful lives of our software
products range from three to five years.

    Amortization expense for the periods ended October 31, 2002 and October 31,
2001 was $1.4 million and $0.6 million, respectively. The carrying value of our
software is as follows:

<Table>
<Caption>
                                       OCTOBER 31, 2002                           JULY 31, 2002
                            -------------------------------------     -------------------------------------
                             GROSS                                     GROSS
                            CARRYING     ACCUMULATED                  CARRYING     ACCUMULATED
                             AMOUNT      AMORTIZATION       NET        AMOUNT      AMORTIZATION       NET
                            --------     ------------     -------     --------     ------------     -------
                                                             (IN THOUSANDS)
<S>                         <C>          <C>              <C>         <C>          <C>              <C>
    Software ..........     $ 26,902     $      5,234     $21,668     $ 13,631     $      3,851     $ 9,780
</Table>



                                       6
<PAGE>

                        VERITAS DGC INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


7. LONG-TERM DEBT

    Long-term debt is as follows:

<Table>
<Caption>
                                                            OCTOBER 31, 2002     JULY 31, 2002
                                                            ----------------     -------------
                                                                     (IN THOUSANDS)
<S>                                                         <C>                  <C>
Senior Notes due October 2003, at 9 3/4% ..............     $        130,050     $     135,000
Revolving credit agreement, balance due August 2003 ...               80,634             5,000
                                                            ----------------     -------------
    Subtotal ..........................................     $        210,684     $     140,000
Less Current Maturities on long-term debt .............              210,684
                                                            ----------------     -------------
    Total .............................................     $              0     $     140,000
                                                            ================     =============
</Table>

    As of October 31, 2002, we had $130.1 million in Senior Notes outstanding
due in October 2003. The indenture relating to our Senior Notes contains
covenants that, among other things, limit our ability to incur additional debt,
pay dividends and complete mergers or sales of assets. Additionally the
indenture contains a change of control provision allowing the holders to require
us to call all or a portion of the notes under certain conditions.

    We also have a revolving credit facility due August 2003 from commercial
lenders that provides U.S. advances up to $80.0 million and non-U.S. advances up
to $20 million. Advances bear interest, at our election, at LIBOR plus a margin
or prime rate plus a margin. These margins are based on either certain of our
financial ratios or our credit rating. At October 31, 2002 the LIBOR margin was
1.25% and the prime rate margin was 0%. As of October 31, 2002, there were $80.6
million outstanding advances under the credit facility, and $10.7 million of the
credit facility was utilized for letters of credit. Beginning November 1, 2002,
provisions in our Senior Notes preclude us from incurring any additional
borrowings, other than issuance of letters of credit, due to our failure to meet
a fixed charge coverage provision in the indenture.

    We currently have a fully underwritten commitment from a major commercial
bank for the purpose of allowing us to redeem the existing Senior Notes and
replace the current revolving credit facility. We expect to close this financing
during our second fiscal quarter, but we cannot assure that we will be able to
obtain financing on terms acceptable to us. Should we not be able to obtain
acceptable and adequate financing, we may incur higher interest costs and may
need to take actions such as reducing or delaying capital expenditures, reducing
costs, selling assets, and otherwise responding to the reduced liquidity.

8. HEDGE TRANSACTION

    In March 2001, we entered into a contract requiring payments in Norwegian
kroner to charter the seismic vessel M/V Seisquest. The contract requires 36
monthly payments commencing on June 1, 2001. To protect our exposure to exchange
rate risk, we entered into multiple forward contracts as cash flow hedges
effectively locking our exchange rate for Norwegian kroner to the U.S. dollar.
The unrealized gain on the hedge transaction is summarized below:

<Table>
<Caption>
                                         OCTOBER 31, 2002                            JULY 31, 2002
                              -------------------------------------     -------------------------------------
                              FORWARD     UNREALIZED                    FORWARD     UNREALIZED
                               VALUE         GAIN        FAIR VALUE      VALUE         GAIN        FAIR VALUE
                              -------     ----------     ----------     -------     ----------     ----------
                                                             (IN THOUSANDS)
<S>                           <C>         <C>            <C>            <C>         <C>            <C>
Forward contracts .......     $ 4,938     $      906     $    5,844     $ 6,032     $      794     $    6,826
</Table>



                                       7
<PAGE>

                        VERITAS DGC INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


9. SEGMENT INFORMATION

    We have two segments, land and marine operations, both of which provide
geophysical products and services to the petroleum industry. The two segments
have been aggregated, as they are similar in their economic characteristics and
the nature of their products, production processes and customers. A
reconciliation of the reportable segments' results to those of the total
enterprise is given below.


<Table>
<Caption>
                                                                               THREE MONTHS ENDED
                                                                                   OCTOBER 31,
                                             ---------------------------------------------------------------------------------------
                                                               2002                                          2001
                                             -----------------------------------------     -----------------------------------------
                                              SEGMENTS      CORPORATE         TOTAL         SEGMENTS      CORPORATE         TOTAL
                                             ----------     ----------      ----------     ----------     ----------      ----------
                                                                                 (IN THOUSANDS)
<S>                                          <C>            <C>             <C>            <C>            <C>             <C>
Revenue ................................     $  137,507                     $  137,507     $  121,378                     $  121,378
Operating income .......................         16,781     $   (8,667)          8,114         22,813     $   (7,686)         15,127
Income (loss) before income taxes ......         15,677        (12,739)          2,938         23,511        (11,004)         12,507
</Table>


10. SEVERANCE

    In the first quarter of fiscal year 2002, we initiated a plan to reduce
overhead in all divisions and affecting all levels of employees. As a result, we
incurred $1.0 million of severance cost during the quarter of which $0.8 million
was paid and $0.2 million remains accrued. The total expense is included in
general and administrative in the "Consolidated Statement of Operations and
Comprehensive Income". The total number of employees terminated during the
current quarter was 35. We expect further workforce reductions in the second and
third fiscal quarters. Future termination costs have not been accrued, as the
plans have not been finalized at October 31, 2002.




                                       8
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

    This report contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in the forward-looking statements as a result of certain factors. These factors
are more fully described in other reports filed with the Securities and Exchange
Commission, including our fiscal year 2002 Form 10-K, and include changes in
market conditions in the oil and gas industry as well as declines in prices of
oil and gas.

OVERVIEW

    While commodity prices for the quarter were relatively high on an historical
basis, these have not resulted in increased spending by the oil companies on
seismic services. The demand for contract data acquisition is considerably lower
than current capacity and is keeping margins in that business depressed. One
bright spot in the seismic market is high demand for advanced data processing,
an area where Veritas has earned a leadership position. Our backlog of work in
this area is high and our technological superiority over most competitors allows
us to avoid competing solely on price, hence enjoying reasonable margins in this
business. We have several well-funded multi-client projects in various stages of
completion and have generated most of our multi-client revenue from these
ongoing jobs. Shelf sales were slow during the quarter but are expected to
increase toward the end of this calendar year.

    We do not foresee any significant changes in the near future for the seismic
business and are committed to generating free cash flow. We have reduced out
capital budget to a maintenance level of about $35 to $40 million for fiscal
2003 and have taken steps to reduce overhead. We incurred $1 million of
severance cost during the quarter related to this effort and expect to incur
additional amounts in the second and third fiscal quarters. We are not reducing
our commitment to providing and utilizing leading edge technology and will
continue to invest in research and development at our historical levels.


RESULTS OF OPERATIONS

THREE MONTHS ENDED OCTOBER 31, 2002 COMPARED WITH THREE MONTHS ENDED OCTOBER 31,
2001

    Revenues. Revenues increased by 13%, from $121.4 million to $137.5 million.
Multi-client revenues increased 8% due to high levels of pre-funding in Brazil
and Norway partially offset by weak land shelf sales. Contract revenues
increased 18% primarily due to a large land acquisition project in Peru and
marine acquisition projects in Morocco and Trinidad.

    Operating Income. Operating income as a percent of revenue decreased to 5.9%
compared to 12.5% in the prior year's first quarter. Margins declined due to
several operational disruptions in land acquisition and lower margins from
multi-client shelf sales. The operational disruptions included two lightning
strikes, two hurricanes, and civil unrest, all of which resulted in declarations
of contractual force majeur provisions. Reduced revenue and increased expense
associated with these projects reduced profit from our expectations by
approximately $2.1 million during the quarter. Additionally, we recognized the
impairment of $1.8 million of assets in the land acquisition business. General
and administrative expense increased by $1.8 million from the prior year's first
quarter due to severance and other items.

    Other expense (income). Other expense (income) decreased from income of $0.9
million to expense of $1.2 million. Interest income decreased from $0.8 million
to $74,000. Equipment sales in the prior year generated a gain of $0.3 million
as opposed to a loss in the current quarter of $0.2 million. In addition, our
Indonesian joint venture incurred a loss of $0.6 million in the current quarter
as opposed to a loss of $60,000 in the prior quarter.

    Provision for income taxes. The provision for income taxes decreased from
$4.9 million to $1.4 million due to the decrease in earnings in the current
year. The effective income tax rate, excluding the effects of losses from the
Indonesian joint venture, remained approximately the same year to year.



                                       9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

SOURCES AND USES

    Our internal sources of liquidity are cash, cash equivalents and cash flow
from operations. External sources include public financing, equity sales,
equipment financing and trade credit. We believe that these sources of funds are
adequate to meet our liquidity needs for the remainder of fiscal 2003.

    Net cash provided by operating activities decreased from $25.5 million in
the first quarter of 2002 to $22.1 million in 2003. Net income decreased from
$7.6 million to $1.6 million. Amortization of multi-client library increased
from $26.0 million to $32.0 million due to increased amortization of land
surveys. In addition, net cash used for working capital increased from $19.0
million to $27.5 million primarily the result of an increase in accounts
receivable.

    Net cash used by investing activities decreased from $69.8 million in the
first quarter of 2002 to $56.0 million in 2003 due to lower capital and
multi-client spending partially offset by the $9.3 million cash portion of the
purchase price of Hampson-Russell Software Services Ltd. Our revised capital
expenditure budget for fiscal 2003 is approximately $40.0 million, which is
substantially allocated to replacement and upgrading of existing equipment. In
fiscal year 2003, we are forecasting $163.0 million in cash additions to our
data library. We will require substantial cash flow to continue our investment
in multi-client library, complete our capital expenditure and research and
development programs and meet our principal and interest obligations with
respect to outstanding indebtedness. All of these investing activities are
contingent upon having sufficient sources of cash, both internally and
externally.

    Net cash provided by financing activities increased from $0.6 million in the
first quarter of 2002 to $71.2 million in 2003. The current year includes net
proceeds from the revolving credit facility of $75.6 million offset by
redemptions of our Senior Notes of $5.0 million. As of October 31, 2002, we had
$130.1 million in Senior Notes outstanding due in October 2003. The indenture
relating to our Senior Notes contains covenants that, among other things, limit
our ability to incur additional debt, pay dividends and complete mergers or
sales of assets. Additionally the indenture contains a change of control
provision allowing the holders to require us to call all or a portion of the
notes under certain conditions.

    We have a revolving credit facility due August 2003 from commercial lenders
that provides U.S. advances up to $80 million and non-U.S. advances up to $20
million. Advances bear interest, at our election, at LIBOR plus a margin or
prime rate plus a margin. These margins are based on either certain of our
financial ratios or our credit rating. At October 31, 2002 the LIBOR margin was
1.25% and the prime rate margin was 0%. As of October 31, 2002, there were $80.6
million outstanding advances under the credit facility, and $10.7 million of the
credit facility was utilized for letters of credit. Beginning November 1, 2002,
provisions in our Senior Notes preclude us from incurring any additional
borrowings, other than issuance of letters of credit, due to our failure to meet
a fixed charge coverage provision in the indenture.

    While we believe that we have adequate sources of funds to meet our
liquidity needs until the expiration of our existing credit facilities, our
ability to meet our obligations depends on our future performance, which, in
turn, is subject to many factors beyond our control. Key internal factors
affecting future results include utilization levels of acquisition and
processing assets and the level of multi-client data library licensing, all of
which are driven by the external factors of exploration spending and,
ultimately, underlying commodity prices. We currently have a fully underwritten
commitment for the purpose of allowing us to redeem the existing Senior Notes
and replace the current revolving credit facility. We expect to close this
financing during our second fiscal quarter, but we cannot assure that we will be
able to obtain financing on terms acceptable to us. Should we not be able to
obtain acceptable and adequate financing, we may incur higher interest costs and
may need to take actions such as reducing or delaying capital expenditures,
reducing costs, selling assets, and otherwise responding to the reduced
liquidity.

    The following represents out financial contractual obligations and
commitments for the fiscal period ending July 31, 2003 through 2007 and
thereafter.

<Table>
<Caption>
                                                                                                      2007 AND
CONTRACTUAL CASH OBLIGATIONS         TOTAL         2003         2004         2005         2006       THEREAFTER
----------------------------       ---------     --------     --------     --------     --------     ----------
<S>                                <C>           <C>          <C>          <C>          <C>          <C>
Lease obligations ............     $ 160,329     $ 41,710     $ 30,738     $ 23,963     $ 19,932     $   43,986
Long-term debt ...............       210,684                   210,684
Forward exchange contracts ...         6,033        2,440        2,497
Standby letters of credit ....        10,732        9,139        1,500           93
</Table>



                                       10
<PAGE>

CRITICAL ACCOUNTING POLICIES

    While all of our accounting policies are important in assuring that Veritas
adheres to current accounting standards, certain policies are particularly
important due to their impact on our financial statements. These are described
in detail below.

MULTI-CLIENT DATA LIBRARY

    In the portion of our business known as multi-client data library, we
collect and process geophysical data for our own account and retain all
ownership rights. We license the data to multiple clients on a non-transferable
basis. We capitalize costs associated with acquiring and processing the
multi-client data on a survey-by-survey basis (versus a pooled basis). The
capitalized cost of multi-client data is charged to cost of services in the
period revenue is recognized in an amount equal to the period revenue multiplied
by the percentage of total estimated costs to total estimated revenue.
Therefore, multi-client margins recognized in any given period are the product
of estimated costs and estimated sales and may not reflect the ultimate cash
margins recognized from a survey. Any costs remaining 36 months after completion
of a survey are charged to cost of services over a period not to exceed 24
months. The maximum amortization period of sixty months represents the period
over which the majority of revenues from these surveys are expected to be
derived. We periodically review the carrying value of the multi-client data
library to assess whether there has been a permanent impairment of value and
record losses when it is determined that estimated sales will not be sufficient
to cover the carrying value of the asset.

DEFERRED TAX ASSET

    Deferred taxes result from the effect of transactions that are recognized in
different periods for financial and tax reporting purposes. A valuation
allowance is established when it is more likely than not that some portion or
all of the deferred tax assets will not be realized. The valuation allowance is
then adjusted when the realization of deferred tax assets becomes more likely
than not. Adjustments are also made to recognize the expiration of net operating
loss and investment tax credit carry-forwards, with equal and offsetting
adjustments to the related deferred tax asset. Should the income projections
result in the conclusion that realization of additional deferred tax assets is
more likely than not, further adjustments to the valuation allowance are made.

OTHER ACCOUNTING POLICIES

    Since our quasi-reorganization on July 31, 1991 with respect to Digicon
Inc., the tax benefits of net operating loss carryforwards existing at the date
of the quasi-reorganization have been recognized through a direct addition to
additional paid-in capital, when realization is more likely than not.
Additionally, the utilization of the net operating loss carry-forwards existing
at the date of the quasi-reorganization is subject to certain limitations. For
the three months ended October 31, 2002, we recognized $2.3 million related to
these benefits.

    We receive some account receivable payments in foreign currency. We
currently do not conduct a hedging program because we do not consider our
current exposure to foreign currency fluctuations to be significant, although we
have hedged certain future charter payments to be made in a foreign currency.

    In August 2001, the Financial Accounting Standards Board issued SFAS No. 143
(Asset Retirement Obligations). This standard requires that obligations
associated with the retirement of a tangible long-lived asset be recorded as a
liability when those obligations are incurred with the liability being initially
measured at fair value. We adopted the use of this accounting statement in
August 2002. Adoption did not have a material effect on our financial position
or results of operations.

    In October 2001, the Financial Accounting Standards Board issued SFAS No.
144 (Accounting for the Impairment or Disposal of Long Lived Assets). This
standard develops one accounting model for long-lived assets that are to be
disposed of by sale, requiring such assets to be measured at the lower of book
value or fair value less cost to sell. The standard also provides guidance on
the recognition of liabilities for the obligations arising from disposal
activities. We adopted the use of this accounting statement in August 2002.
Adoption did not have a material effect on our financial position or results of
operations.

    In April 2002, the Financial Accounting Standards Board issued SFAS No. 145
(Rescission of FASB Statement No. 4, 44, and 64, Amendment of FASB Statement No.
13 and Technical Corrections as of April 2002). Among other things, this
statement addresses how to report gains or losses resulting from the early
extinguishment of debt. Previously, any gains or losses were reported as an
extraordinary item. Upon adoption of SFAS No. 145, an entity is required to
evaluate whether



                                       11
<PAGE>

the debt extinguishment is truly extraordinary in nature, in accordance with
Accounting Principles Board Opinion No. 30. We will adopt the use of this
accounting statement in August 2002. The adoption of this statement will likely
preclude extraordinary classification of costs related to early debt
extinguishment, and the effect in the first fiscal quarter was immaterial.

    In July 2002, the Financial Accounting Standards Board issued SFAS No. 146
(Accounting for Costs Associated with Exit or Disposal Activities). This
standard requires recognition of costs associated with exit or disposal
activities when they are incurred rather than when management commits to an exit
or disposal plan. Examples of costs covered by this guidance include lease
termination costs, employee severance costs that are associated with
restructuring, discontinued operations, plant closings, or other exit or
disposal activities. We will adopt the use of this accounting statement for all
activities initiated after December 31, 2002 and do not expect adoption to have
a material effect on our financial position or results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES REGARDING MARKET RISK

    At October 31, 2002, we had limited market risk related to foreign
currencies. In March 2001, we entered into a contract requiring payments in
Norwegian kroner to charter the seismic vessel M/V Seisquest. The contract
requires 36 monthly payments commencing on June 1, 2001. To protect our exposure
to exchange rate risk, we entered into multiple forward contracts as cash flow
hedges fixing our exchange rates for Norwegian kroner to the U.S. dollar. The
total fair value of the open forward contracts at October 31, 2002 in U.S.
dollars is $5.8 million.


ITEM 4. CONTROLS AND PROCEDURES

    Our management, including the Chief Executive Officer and Chief Financial
Officer, has conducted an evaluation of the effectiveness of disclosure controls
and procedures within ninety days of the filing of this report pursuant to
Exchange Act Rule 13a-14. Based on that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that the disclosure controls and
procedures are effective in ensuring that information required to be disclosed
in the reports we file or submit under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in Securities and
Exchange Commission (SEC) rules and forms. There have been no significant
changes in internal controls, or in factors that could significantly affect
internal controls, subsequent to the date our management, including its Chief
Executive Officer and Chief Financial Officer, completed its evaluation.



                                       12
<PAGE>

                           PART II. OTHER INFORMATION



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a) EXHIBITS FILED WITH THIS REPORT:

       EXHIBIT
         NO.                              DESCRIPTION
       -------                            -----------

        10-1   --   Credit Agreement among Veritas DGC Inc., as borrower,
                    and Wells Fargo, Inc., as a bank and agent for the banks
                    named therein, dated July 19, 2001.  (Exhibit 10-W to
                    Veritas DGC Inc.'s Form 10-K for the year ended July 31,
                    2001 is incorporated herein by reference.)

        10-2   --   Second Amendment to credit Agreement, effective as of
                    July 1, 2002, by and among Veritas DGC Inc., Veritas DGC
                    Limited, Veritas Energy Services Inc., Veritas Energy
                    Services Partnership, certain Banks party thereto, Wells
                    Fargo Bank Texas, N.A., as agent, and HSBC Bank Canada, as
                    agent. (Exhibit 10.1 to Veritas DGC Inc.'s Current Report on
                    Form 8'K dated September 27, 2002 is incorporated herein by
                    reference.)

        10-3   --   Asset Sale Agreement, dated August 15, 2002, by and
                    among Veritas (and certain of its affiliates) and
                    Hampson-Russell Software Services Ltd. (and certain of its
                    affiliates). (Exhibit 10 to Veritas DGC Inc.'s Current
                    Report on Form 8-K dated August 22, 2002 is incorporated
                    herein by reference.)

       *99.1    --  Certification pursuant to Section 906 of the Sarbanes-Oxley
                    Act of 2002 by David B. Robson.

       *99.2    --  Certification pursuant to Section 906 of the Sarbanes-Oxley
                    Act of 2002 by Matthew D. Fitzgerald.

    *  FILED HEREWITH

    b) REPORTS ON FORM 8-K

    We filed a Current Report on Form 8-K, dated August 22, 2002, regarding the
acquisition of substantially all of the assets of Hampson-Russell Software
Services Ltd.

    We filed a Current Report on Form 8-K, dated September 27, 2002, regarding
the Second Amendment to our Credit Agreement.



                                       13
<PAGE>

SIGNATURES

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, thereunto duly authorized, on the 13th day of December 2002.

                          VERITAS DGC INC.

                          By:  /s/ David B. Robson
                               -------------------------------------------------
                               DAVID B. ROBSON
                               Chairman of the Board and Chief Executive Officer



                               /s/ Matthew D. Fitzgerald
                               -------------------------------------------------
                               MATTHEW D. FITZGERALD
                               Executive Vice President, Chief Financial Officer
                               and Treasurer



                                       14
<PAGE>
                                 CERTIFICATIONS


I, David B. Robson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Veritas DGC Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

(a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

(b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

(c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

(a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: December 13, 2002
                                       /s/ David B. Robson
                                       -----------------------------------------
                                       David B. Robson
                                       Chief Executive Officer


                                       15
<PAGE>
                                 CERTIFICATIONS


I, Matthew D. Fitzgerald, certify that:


1. I have reviewed this quarterly report on Form 10-Q of Veritas DGC Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

(a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

(b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

(c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

(a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  December 13, 2002
                                       /s/ Matthew D. Fitzgerald
                                       -----------------------------------
                                       Matthew D. Fitzgerald
                                       Chief Financial Officer


                                       16
<PAGE>
                                 EXHIBIT INDEX


<Table>
<Caption>
       EXHIBIT
         NO.                              DESCRIPTION
       -------                            -----------
<S>                 <C>
       *99.1    --  Certification pursuant to Section 906 of the Sarbanes-Oxley
                    Act of 2002 by David B. Robson.

       *99.2    --  Certification pursuant to Section 906 of the Sarbanes-Oxley
                    Act of 2002 by Matthew D. Fitzgerald.
</Table>

    *  FILED HEREWITH