<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, 2001

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

                        FOR THE TRANSITION PERIOD FROM TO

                          COMMISSION FILE NUMBER 1-7427

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

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

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

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

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

<Table>
<S>                                                               <C>
                  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
</Table>

     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 [ ]

                      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, 2001 was 32,440,470 (including 1,484,914 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>                                                                             <C>
PART I.      Financial Information

             Item 1.   Financial Statements

                Consolidated Statements of Income and Comprehensive Income -
                  For the Three Months Ended October 31, 2001 and 2000                                   1

                Consolidated Balance Sheets - October 31, 2001 and July 31, 2001                         2

                Consolidated Statements of Cash Flows -
                  For the Three Months Ended October 31, 2001 and 2000                                   3

                Notes to Consolidated Financial Statements                                               4

             Item 2.   Management's Discussion and Analysis
                       of Financial Condition and Results of Operations                                  7

             Item 3.   Quantitative and Qualitative Disclosures Regarding Market Risk                    8


PART II.     Other Information

             Item 6.  Exhibits and Reports on Form 8-K                                                   9

             Signatures                                                                                 11
</Table>


<PAGE>


                        VERITAS DGC INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                    UNAUDITED

<Table>
<Caption>
                                                                              THREE MONTHS ENDED
                                                                                 OCTOBER 31,
                                                                          --------------------------
                                                                             2001            2000
                                                                          ----------      ----------
                                                                                (In thousands)
<S>                                                                       <C>             <C>
Revenues ............................................................     $  121,378      $  111,299
Costs and expenses:
  Cost of services ..................................................         80,338          76,168
  Research and development ..........................................          2,839           2,169
  Depreciation and amortization .....................................         17,238          17,105
  Selling, general and administrative ...............................          5,836           5,503
                                                                          ----------      ----------
Operating income ....................................................         15,127          10,354
  Interest expense ..................................................          3,535           3,516
  Other income ......................................................           (915)         (1,516)
                                                                          ----------      ----------
Income before provision for income taxes ............................         12,507           8,354
Provision for income taxes ..........................................          4,862           3,346
                                                                          ----------      ----------
Net income ..........................................................     $    7,645      $    5,008

Other comprehensive income (loss)(net of tax, $0 in all periods)
  Foreign currency translation adjustments ..........................         (1,504)         (1,904)
  Unrealized gain (loss) on investments - available for sale ........           (509)          2,337
  Unrealized gain on foreign currency hedge .........................            152
                                                                          ----------      ----------
Total other comprehensive income (loss) .............................         (1,861)            433
                                                                          ----------      ----------
Comprehensive income ................................................     $    5,784      $    5,441
                                                                          ==========      ==========

PER SHARE:
BASIC:
  Net income per common share .......................................     $      .24      $      .18
                                                                          ==========      ==========
  Weighted average common shares ....................................         32,321          27,795
                                                                          ==========      ==========

DILUTED:
  Net income per common share .......................................     $      .24      $      .18
                                                                          ==========      ==========
  Weighted average common shares ....................................         32,458          28,584
                                                                          ==========      ==========
</Table>



                 See Notes to Consolidated Financial Statements


                                       1
<PAGE>


                        VERITAS DGC INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                                                                     OCTOBER 31,       JULY 31,
                                                                                                        2001             2001
                                                                                                     -----------      -----------
                                                                                                      Unaudited
                                                                                                    (In thousands except par value)
<S>                                                                                                  <C>              <C>
                                                ASSETS
Current assets:
  Cash and cash equivalents ....................................................................     $    25,295      $    69,218
  Accounts and notes receivable (net of allowance for doubtful accounts: October $1,229; July
    $709) ......................................................................................         141,619          140,761
  Materials and supplies inventory .............................................................           4,688           10,062
  Prepayments and other ........................................................................          13,574           11,817
  Income taxes receivable ......................................................................           6,790            5,017
  Investments -- available for sale ............................................................             977            1,487
                                                                                                     -----------      -----------
      Total current assets .....................................................................         192,943          238,362
Property and equipment .........................................................................         487,544          474,345
Less accumulated depreciation ..................................................................         311,172          300,410
                                                                                                     -----------      -----------
      Property and equipment -- net ............................................................         176,372          173,935

Multi-client data library ......................................................................         339,844          310,610
Investment in and advances to joint ventures ...................................................           2,294            2,354
Goodwill (net of accumulated amortization: October $6,813; July $6,844) ........................          34,365           34,514
Deferred tax asset .............................................................................          16,147           15,031
Long term notes receivable .....................................................................           4,014            4,017
Other assets ...................................................................................          18,664           18,129
                                                                                                     -----------      -----------
      Total ....................................................................................     $   784,643      $   796,952
                                                                                                     ===========      ===========

                                 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable -- trade ....................................................................     $    46,976      $    60,631
  Accrued interest .............................................................................             588            3,952
  Other accrued liabilities ....................................................................          42,158           45,261
                                                                                                     -----------      -----------
      Total current liabilities ................................................................          89,722          109,844
Non-current liabilities:
  Long-term debt ...............................................................................         135,000          135,000
  Deferred tax liability .......................................................................           6,134            6,144
  Other non-current liabilities ................................................................           4,681            4,501
                                                                                                     -----------      -----------
      Total non-current liabilities ............................................................         145,815          145,645
Stockholders' equity:
   Common stock, $.01 par value; authorized: 40,000,000 shares; issued: 30,965,790 shares at
   October and 30,920,550 shares at July (excluding Exchangeable Shares of  1,484,914 at
   October and 1,484,948 at July) ..............................................................             309              309
  Additional paid-in capital ...................................................................         409,411          407,442
  Accumulated earnings (from August 1, 1991 with respect to Digicon Inc.) ......................         151,236          143,591
  Accumulated other comprehensive income:
   Cumulative foreign currency translation adjustment ..........................................          (8,480)          (6,976)
   Unrealized loss on investments -- available for sale ........................................            (524)             (14)
   Unrealized loss on foreign currency hedge ...................................................            (268)            (421)
Unearned compensation ..........................................................................          (1,391)          (1,297)
Treasury stock, at cost; 66,392 shares at October and 65,296 at July ...........................          (1,187)          (1,171)
                                                                                                     -----------      -----------
      Total stockholders' equity ...............................................................         549,106          541,463
                                                                                                     -----------      -----------
      Total ....................................................................................     $   784,643      $   796,952
                                                                                                     ===========      ===========
</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,
                                                                               --------------------------
                                                                                  2001            2000
                                                                               ----------      ----------
                                                                                      (IN THOUSANDS)
<S>                                                                            <C>             <C>
Operating activities:
  Net income .............................................................     $    7,645      $    5,008
  Non-cash items included in net income:
    Depreciation and amortization (other than multi-client) ..............         17,238          17,105
      Amortization of multi-client library ...............................         25,970          31,632
    Gain on disposition of property and equipment ........................           (339)           (733)
    Equity in loss of 50% or less-owned  companies and joint ventures ....             60              11
    Deferred taxes .......................................................             (1)             12
    Amortization of unearned compensation ................................            203             161
  Change in operating assets/liabilities:
    Accounts and notes receivable ........................................         (1,559)        (26,978)
    Materials and supplies inventory .....................................          5,369             246
    Prepayments and other ................................................         (1,771)         (7,407)
      Income tax receivable ..............................................         (1,709)
    Accounts payable and other accrued liabilities .......................        (19,326)         (1,524)
    Income taxes payable .................................................                          3,459
    Other non-current liabilities ........................................            117              22
    Other ................................................................           (165)         (3,426)
                                                                               ----------      ----------
       Total cash provided by operating activities .......................         31,732          17,588
Investing activities:
  Increase in restricted cash investments ................................                             (2)
  Investment in multi-client library .....................................        (56,290)        (52,901)
  Purchase of property and equipment .....................................        (20,298)         (7,314)
  Sale of property and equipment .........................................            548           1,748
                                                                               ----------      ----------
       Total cash used by investing activities ...........................        (76,040)        (58,469)
Financing activities:
  Payments of long-term debt .............................................                            (24)
  Net proceeds from sale of common stock .................................            554          88,210
                                                                               ----------      ----------
       Total cash provided by financing activities .......................            554          88,186
  Currency loss on foreign cash ..........................................           (169)            (68)
                                                                               ----------      ----------
  Change in cash and cash equivalents ....................................        (43,923)         47,237
  Beginning cash and cash equivalents balance ............................         69,218          43,154
                                                                               ----------      ----------
  Ending cash and cash equivalents balance ...............................     $   25,295      $   90,391
                                                                               ==========      ==========
</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.


RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board issued SFAS No. 141
(Business Combinations) and SFAS No. 142 (Goodwill and Other Intangible Assets).
We adopted SFAS No. 141 upon its issuance, and we adopted SFAS No. 142 as of
August 1, 2001. The main effect of SFAS No. 141 is to require purchase
accounting be used in all future business combinations, disallowing the
pooling-of-interests method allowed under APB Opinion No. 16. SFAS No. 142
defines the booking and subsequent treatment of goodwill and other intangible
assets derived from business combinations and supersedes APB Opinion No. 17.
This statement requires us to discontinue amortization of goodwill and requires
that we test goodwill and other intangible assets for impairment in a specific
manner on an annual basis or when certain events trigger such a test. Management
expects to complete its evaluation of impairment of goodwill in January 2002.
The prior year's first quarter includes $0.3 million ($0.01 per share) for
goodwill amortization.

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 will adopt the use of this accounting statement in
fiscal 2003. We have not yet completed our evaluation of the effect of this
statement on our accounting practices.

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 and
fair value less cost to sell. The standard also provides guidance on the
recognition of liabilities for the obligations arising from disposal activities.
We will adopt the use of this accounting statement in fiscal 2003. We have not
yet completed our evaluation of the effect of this statement on our accounting
practices.

                                       4
<PAGE>


                        VERITAS DGC INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                    UNAUDITED

2.    OTHER COSTS AND EXPENSES

Other costs and expenses consist of the following:

<Table>
<Caption>
                                                                                      THREE MONTHS ENDED
                                                                                         OCTOBER 31,
                                                                                     ---------------------
                                                                                       2001         2000
                                                                                     ---------    --------
                                                                                         (IN THOUSANDS)
<S>                                                                                  <C>          <C>
                Interest income                                                      $    (849)   $ (1,001)
                Net gain on disposition of property and equipment..............           (339)       (733)
                Net foreign currency exchange loss.............................            232         214
                Loss from unconsolidated subsidiary............................             60          11
                Other..........................................................            (19)         (7)
                                                                                     ---------    --------
                         Total.................................................      $    (915)   $ (1,516)
                                                                                     =========    ========
</Table>


3.    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,
                                                                            -----------------------------------------
                                                                                   2001                   2000
                                                                            --------------------    -----------------
                                                                            (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                                         <C>                     <C>
     Net income........................................................          $   7,645              $    5,008
                                                                                 =========              ==========
     Basic:
       Weighted average common shares (including exchangeable shares)..             32,321                  27,795
                                                                                 =========              ==========
       Net income per share............................................          $     .24              $     .18
                                                                                 =========              ==========

     Diluted:
       Weighted average common shares (including exchangeable shares)..             32,321                  27,795
       Shares issuable from assumed conversion of:
          Options......................................................                137                     789
                                                                                 ---------              ----------
               Total...................................................             32,458                  28,584
                                                                                 =========              ==========
       Net income per share............................................          $     .24              $      .18
                                                                                 =========              ==========
</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,
                                                                  -----------------------------------------
                                                                         2001                   2000
                                                                  ------------------     ------------------
<S>                                                               <C>                    <C>
                         Number of options...................              1,499,197                 64,504
                         Exercise price range................     $14.5625 - $55.125     $27.8125 - $55.125
                         Expiring through....................             March 2011            August 2008
</Table>


4.    UNREALIZED LOSS ON INVESTMENTS -- AVAILABLE FOR SALE

In April 1999, we exchanged a $4.7 million account receivable from Miller
Exploration Company ("Miller"), a publicly traded company, for a long-term note
receivable bearing 18% interest. Effective October 15, 2000, the note bears
interest at 9 3/4%. Interest is paid in Miller common stock warrants, with an
exercise price of $0.01 pER share, in advance, at six-month intervals.

<Table>
<Caption>
                                           OCTOBER 31, 2001                      JULY 31, 2001
                                 -----------------------------------   -------------------------------
                                                               (IN THOUSANDS)

                                 --------    -----------     -------   -------   -----------   -------
                                   COST       UNREALIZED      FAIR      COST      UNREALIZED     FAIR
                                   BASIS     (LOSS)/GAIN      VALUE     BASIS    (LOSS)/GAIN    VALUE
                                 --------    -----------     -------   -------   -----------   -------
<S>                              <C>         <C>             <C>       <C>       <C>           <C>
   Miller stock and warrants....    1,501           (524)        977     1,501           (14)    1,487
</Table>


                                       5
<PAGE>


                        VERITAS DGC INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                    UNAUDITED


5.    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 loss on the hedge transaction is summarized below:

<Table>
<Caption>
                                    OCTOBER 31, 2001                    JULY 31, 2001
                           ---------------------------------   ---------------------------------
                           FORWARD   UNREALIZED                FORWARD   UNREALIZED
                            VALUE       LOSS      FAIR VALUE    VALUE       LOSS      FAIR VALUE
                           -------   ----------   ----------   -------   ----------   ----------
                                                      (IN THOUSANDS)
<S>                        <C>       <C>          <C>          <C>       <C>          <C>
      Forward contracts    $ 8,123   $     (268)  $    7,855   $ 9,183   $     (421)  $    8,762
</Table>


6.    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 so 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                    THREE MONTHS ENDED
                                                     OCTOBER 31, 2001                     OCTOBER 31, 2000
                                         ----------    ---------   ------------    --------   -----------   ---------
                                          SEGMENTS     CORPORATE       TOTAL       SEGMENTS    CORPORATE      TOTAL
                                         ----------    ---------   ------------    --------   -----------   ---------
                                                                  (DOLLARS IN THOUSANDS)
<S>                                      <C>           <C>         <C>             <C>        <C>           <C>
  Revenue...............................    121,378                     121,378     111,299                   111,299
  Operating income......................     22,813       (7,686)        15,127      17,942        (7,588)     10,354
  Net income (loss) before income tax...     23,511      (11,004)        12,507      19,325       (10,971)      8,354
</Table>

7.       SUBSEQUENT EVENT

On November 26, 2001, Petroleum Geo-Services ASA, a Norwegian public limited
liability company ("PGS"), Veritas DGC Inc., a Delaware corporation ("Veritas"),
Venus I, a Cayman Islands exempted company and a direct, wholly owned subsidiary
of Veritas ("Caymanco"), Venus Holdco Inc., a Delaware corporation and an
indirect, wholly owned subsidiary of Caymanco ("Veritas Holdco"), and Venus
Mergerco Inc., a Delaware corporation and a direct, wholly owned subsidiary of
Veritas Holdco ("Veritas Merger Sub"), entered into an Agreement and Plan of
Merger and Exchange Agreement (the "Agreement"), whereby, subject to the
conditions stated therein, (i) Caymanco will make an offer (the "Exchange
Offer") to issue ordinary shares, par value $0.01 per share, of Caymanco
("Caymanco Shares") in exchange for the issued and outstanding ordinary shares,
nominal value NOK 5 per share, of PGS ("PGS Shares") and all issued and
outstanding American Depositary Shares representing such PGS Shares ("PGS
ADSs"), at an exchange ratio of 0.47 Caymanco Shares for each PGS Share and each
PGS ADS; and (ii) immediately following the closing of the Exchange Offer,
Veritas Merger Sub will be merged with and into Veritas (the "Merger" and,
together with the Exchange Offer, the "Combination"), pursuant to which shares
of common stock, par value $0.01 per share, of Veritas ("Veritas Common Stock")
will be converted into Caymanco Shares on a one-for-one basis and certain shares
that are exchangeable for shares of Veritas Common Stock will become
exchangeable for Caymanco Shares. Upon closing of the Combination, which is
anticipated to occur in April 2002, PGS and Veritas will become subsidiaries of
Caymanco. PGS shareholders will hold approximately 60% of the shares to be
issued by Caymanco, and Veritas shareholders will hold approximately 40% of such
shares.


                                       6
<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 2001 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.

RESULTS OF OPERATIONS

THREE MONTHS ENDED OCTOBER 31, 2001 COMPARED WITH THREE MONTHS ENDED OCTOBER 31,
2000

Revenues. Revenues increased by 9%, from $111.3 million to $121.4 million.
Multi-client revenues decreased 15% from $61.2 million to $52.3 million as a
result of lower activity on new programs in the current quarter. Contract
revenues increased 38%, from $50.1 million to $69.1 million primarily due to
additional crews working in South America and Canada.

Operating Income. Operating income increased by 45%, from $10.4 million to $15.1
million. Cost of services as a percentage of revenue decreased from 68% to 66%
due to improved contract pricing and better operating performance. Research and
development increased by 27%, from $2.2 million to $2.8 million due to increased
investment in new technology.

Other income. Other income decreased by $0.6 million, from $1.5 million to $0.9
million. This is primarily the result of $0.7 million in fixed asset gains in
the prior year's first quarter compared to $0.3 million in the current quarter.
In addition, interest income decreased by $0.2 million as a result of the
decrease in cash, from $90.4 million in October 2000 to $25.3 million in October
2001.

Provision for income taxes. Income taxes increased from $3.3 million to $4.9
million as a result of our higher earnings in the current quarter with the
effective income tax rate remaining essentially flat.


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, the
unutilized portion of a revolving credit facility, equipment financing and trade
credit. We believe that these sources of funds are adequate to meet our
liquidity needs for fiscal 2002.

Net cash provided by operating activities increased from $17.6 million in the
first quarter of 2001 to $31.7 million in 2002. Net income increased from $5.0
million to $7.6 million. In addition, net cash used by working capital decreased
from $35.6 million to $19.0 million. This is primarily due to a decrease in
accounts receivable as a result of increased collections on trade receivables.
This is offset by a decrease in accounts payable as a result of large payments
occurring in the current quarter.

Net cash used by investing activities increased from $58.5 million in the first
quarter of 2001 to $76.0 million in 2002 due to higher capital spending. We
require significant amounts of working capital to support our operations and
fund our research and development program. Our capital expenditure budget for
fiscal 2002 is approximately $100.0 million, which includes expenditures of
approximately $60 million to expand or upgrade our marine fleet. We also planned
approximately $170.0 million in gross additions to our data library and planned
$11.1 million for research and development spending in fiscal 2002.

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. While we believe that we have adequate sources of funds to meet
our liquidity needs, 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


                                       7
<PAGE>


data library licensing, all of which are driven by the external factors of
exploration spending and, ultimately, underlying commodity prices.

Net cash provided by financing activities decreased from $88.2 million in the
first quarter of 2001 to $0.6 million in 2002. The prior year includes proceeds
from a stock offering of $82.4 million. As of October 31, 2001, we had $135.0
million in senior notes outstanding due in October 2003. These notes contain a
change of control provision allowing the holders to require us to call 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, 2001
the LIBOR margin was 1.25% and the prime rate margin was 0%. As of October 31,
2001, there were no outstanding advances under the credit facility, but $7.2
million of the credit facility was utilized for letters of credit, leaving $92.8
million available for borrowings.

OTHER

On November 26, 2001, we entered into an Agreement and Plan of Merger and
Exchange Agreement with Petroleum Geo-Services ASA and other parties. Upon
closing of the transactions contemplated by that agreement, which is anticipated
to occur in April 2002, Veritas DGC Inc. and Petroleum Geo-Services ASA will
become subsidiaries of a new holding company. See Note 7 of the Notes to
Consolidated Financial Statements.

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 carryforwards existing
at the date of the quasi-reorganization is subject to certain limitations. For
the three months ended October 31, 2001, we recognized $1.1 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 July 2001, the Financial Accounting Standards Board issued SFAS No. 141
(Business Combinations) and SFAS No. 142 (Goodwill and Other Intangible Assets).
We adopted SFAS No. 141 upon its issuance, and we adopted SFAS No. 142 as of
August 1, 2001. The main effect of SFAS No. 141 is to require purchase
accounting be used in all future business combinations, disallowing the
pooling-of-interests method allowed under APB Opinion No. 16. SFAS No. 142
defines the booking and subsequent treatment of goodwill and other intangible
assets derived from business combinations and supersedes APB Opinion No. 17.
This statement requires us to discontinue amortization of goodwill and requires
that we test goodwill and other intangible assets for impairment in a specific
manner on an annual basis or when certain events trigger such a test. Management
expects to complete its evaluation of impairment of goodwill in January 2002.
The prior year's first quarter includes $0.3 million ($0.01 per share) for
goodwill amortization.

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 will adopt the use of this accounting statement in
fiscal 2003. We have not yet completed our evaluation of the effect of this
statement on our accounting practices.

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 and
fair value less cost to sell. The standard also provides guidance on the
recognition of liabilities for the obligations arising from disposal activities.
We will adopt the use of this accounting statement in fiscal 2003. We have not
yet completed our evaluation of the effect of this statement on our accounting
practices.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES REGARDING MARKET RISK

At October 31, 2001, 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, 2001 in U.S. dollars is $7.9 million.


                                       8
<PAGE>


                           PART II. OTHER INFORMATION



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

a)  EXHIBITS FILES WITH THIS REPORT:

<Table>
<Caption>
                        EXHIBIT
                           NO.                             DESCRIPTION
                        -------                            -----------
<S>                                    <C>
                            2-A    --  Agreement and Plan of Merger and Exchange Agreement
                                       dated November 26, 2001, among Petroleum Geo-Services
                                       ASA, Veritas DGC Inc., Venus I, Venus Holdco Inc. and
                                       Venus Mergerco Inc. (Exhibit 2.1 to Veritas DGC
                                       Inc.'s Current Report on Form 8-K filed November 28,
                                       2001 is incorporated herein by reference.)
                            3-A    --  Restated Certificate of Incorporation with amendments
                                       Of Veritas DGC Inc. dated August 30, 1996. (Exhibit
                                       3.1 to Veritas DGC Inc.'s Current Report on Form 8-K
                                       filed September 16, 1996 is incorporated herein by
                                       reference.)
                            3-B    --  Certificate of Ownership and Merger of New Digicon Inc.
                                       And Digicon Inc. (Exhibit 3-B to Digicon Inc.'s
                                       Registration Statement No. 33-43873 dated November
                                       12, 1991 Is incorporated herein by reference.)
                            3-C    --  By-laws of New Digicon Inc. dated June 24, 1991.
                                       (Exhibit 3-C to Digicon Inc.'s Registration Statement
                                       No. 33-43873 dated November 12, 1991 is incorporated
                                       herein by Reference.)
                            3-D    --  Certificate of Amendment to Restated Certificate of
                                       Incorporation of Veritas DGC Inc. dated September 30,
                                       1999. (Exhibit 3-D to Veritas DGC Inc.'s For 10-K for
                                       the year ended July 31, 1999 is incorporated herein
                                       by reference.)
                            3-F    --  By-laws of Veritas DGC Inc. as amended and restated
                                       March 7, 2000 (Exhibit 3-E to Veritas DGC Inc.'s Form
                                       10-Q for the quarter ended January 31, 2000 is
                                       incorporated herein by reference)
                            4-A    --  Specimen certificate for Senior Notes (Series A).
                                       (Included as part of Section 2.2 of Exhibit 4-B to
                                       Veritas DGC Inc.'s Registration Statement No.
                                       333-12481 dated September 20, 1996 is incorporated
                                       herein by reference.)
                            4-B    --  Form of Trust Indenture relating to the 9 3/4% Senior
                                       Notes due 2003 of Veritas DGC Inc. between Veritas
                                       DGC Inc. and Fleet National Bank, as trustee.
                                       (Exhibit 4-B to Veritas DGC Inc.'s Registration
                                       Statement No. 333-12481 dated September 20, 1996 is
                                       incorporated herein by reference.)
                            4-C    --  Specimen Veritas DGC Inc. Common Stock certificate.
                                       (Exhibit 4-C to Veritas DGC Inc.'s Form 10-K for the
                                       year ended July 31, 1996 is incorporated herein by
                                       reference.)
                            4-D    --  Rights Agreement between Veritas DGC Inc. and
                                       ChaseMellon Shareholder Services, L.L.C. dated as of
                                       May 15, 1997. (Exhibit 4.1 to Veritas DGC Inc.'s
                                       Current Report on form 8-K filed May 27, 1997 is
                                       incorporated herein by reference.)
                            4-E    --  Form of Restricted Stock Grant Agreement. (Exhibit
                                       4.8 to Veritas DGC Inc.'s Registration Statement No.
                                       333-48953 dated March 31, 1998 is incorporated herein
                                       by reference.)
                            4-F    --  Restricted Stock Plan as amended and restated March
                                       7, 2000. (Exhibit 4-F to Veritas DGC Inc.'s Form 10-Q
                                       for the quarter ended April 30, 2000 is incorporated
                                       herein by reference.)
</Table>


                                             9
<PAGE>


<Table>
<S>                                    <C>
                            4-G    --  Key Contributor Incentive Plan as amended and
                                       restated March 9, 1999. (Exhibit 4.9 to Veritas DGC
                                       Inc.'s Registration Statement No. 333-74305 dated
                                       March 12, 1999 is incorporated herein by reference.)
                            4-H    --  Specimen for Senior Notes (Series C). (Exhibit 4-K to
                                       Veritas DGC Inc.'s Form 10-Q for the quarter ended
                                       January 31, 1999 is incorporated herein by
                                       reference.)
                            4-I    --  Indenture relating to the 9 3/4% Senior Notes due
                                       2003, Series B and Series C of Veritas DGC Inc.
                                       between Veritas DGC Inc. and State Street Bank and
                                       Trust Company dated October 28, 1998. (Exhibit 4.3 to
                                       Veritas DGC Inc.'s Current Report on Form 8-K dated
                                       November 12, 1998 is incorporated herein by
                                       reference.)
                          *10-A        Amended and Restated Employment Agreement between
                                       Veritas DGC Inc. and Matthew D. Fitzgerald.
                          *10-B        Amendment No. 1 to Amended and Restated Employment
                                       Agreement between Veritas DGC Inc. and Matthew D.
                                       Fitzgerald.
                          *10-C        Amended and Restated Employment Agreement between
                                       Veritas DGC Inc. and Stephen J. Ludlow.
                          *10-D        Amendment No. 1 to Amended and Restated Employment
                                       Agreement between Veritas DGC Inc. and Stephen J.
                                       Ludlow.
                          *10-E        Amended and Restated Employment Agreement between
                                       Veritas DGC Inc. and David B. Robson.
                          *10-F        Amendment No. 1 to Amended and Restated Employment
                                       Agreement between Veritas DGC Inc. and David B.
                                       Robson.
                          *10-G        Amended and Restated Employment Agreement between
                                       Veritas DGC Inc. and Anthony Tripodo.
                          *10-H        Amendment No. 1 to Amended and Restated Employment
                                       Agreement between Veritas DGC Inc. and Anthony
                                       Tripodo.
                          *10-I        Amended and Restated Employment Agreement between
                                       Veritas DGC Inc. and Rene M.J. VandenBrand.
                          *10-J        Amendment No. 1 to Amended and Restated Employment
                                       Agreement between Veritas DGC Inc. and Rene M.J.
                                       VandenBrand.
                          *10-K        Amended and Restated Employment Agreement between
                                       Veritas DGC Inc. and Timothy L. Wells.
                          *10-L        Amendment No. 1 to Amended and Restated Employment
                                       Agreement between Veritas DGC Inc. and Timothy L.
                                       Wells.
                          *10-M        Amended and Restated Employment Agreement between
                                       Veritas DGC Inc. and Larry L. Worden.
                          *10-N        Amendment No. 1 to Amended and Restated Employment
                                       Agreement between Veritas DGC Inc. and Larry L.
                                       Worden.
</Table>

     * Management remuneration contracts filed in this Form 10-Q.


     b) REPORTS ON FORM 8-K

      We did not file a Form 8-K during the quarter ended October 31, 2001. On
      November 28, 2001 we filed a Form 8-K regarding the proposed combination
      of Veritas DGC Inc. and Petroleum Geo-Services ASA.


                                       10
<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 12th day of December 2001.

                          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


                                       11
<PAGE>

                                  EXHIBIT INDEX



<Table>
<Caption>
  EXHIBIT
  NUMBER                                   DESCRIPTION
  -------                                  -----------
<S>               <C>
   10-A)          Amended and Restated Employment Agreement between Veritas DGC
                  Inc. and Matthew D. Fitzgerald.
   10-B)          Amendment No. 1 to Amended and Restated Employment Agreement
                  between Veritas DGC Inc. and Matthew D. Fitzgerald.
   10-C)          Amended and Restated Employment Agreement between Veritas DGC
                  Inc. and Stephen J. Ludlow.
   10-D)          Amendment No. 1 to Amended and Restated Employment Agreement
                  between Veritas DGC Inc. and Stephen J. Ludlow.
   10-E)          Amended and Restated Employment Agreement between Veritas DGC
                  Inc. and David B. Robson.
   10-F)          Amendment No. 1 to Amended and Restated Employment Agreement
                  between Veritas DGC Inc. and David B. Robson.
   10-G)          Amended and Restated Employment Agreement between Veritas DGC
                  Inc. and Anthony Tripodo.
   10-H)          Amendment No. 1 to Amended and Restated Employment Agreement
                  between Veritas DGC Inc. and Anthony Tripodo.
   10-I)          Amended and Restated Employment Agreement between Veritas DGC
                  Inc. and Rene M.J. VandenBrand.
   10-J)          Amendment No. 1 to Amended and Restated Employment Agreement
                  between Veritas DGC Inc. and Rene M.J. VandenBrand.
   10-K)          Amended and Restated Employment Agreement between Veritas DGC
                  Inc. and Timothy L. Wells.
   10-L)          Amendment No. 1 to Amended and Restated Employment Agreement
                  between Veritas DGC Inc. and Timothy L. Wells.
   10-M)          Amended and Restated Employment Agreement between Veritas DGC
                  Inc. and Larry L. Worden.
   10-N)          Amendment No. 1 to Amended and Restated Employment Agreement
                  between Veritas DGC Inc. and Larry L. Worden.
</Table>