BURLINGTON INDUSTRIES: 1. Consolidated Statements of Operations - for the fiscal years ended September 29, 2001, September 30, 2000 and October 2, 1999. 2. Consolidated Balance Sheets - as of September 29, 2001 and September 30, 2000. 3. Consolidated Statements of Shareholders' Equity - for the fiscal years ended October 2, 1999, September 30, 2000 and September 29, 2001. 4. Consolidated Statements of Cash Flows - for the fiscal years ended September 29, 2001, September 30, 2000, and October 2, 1999. 1. CONSOLIDATED STATEMENTS OF OPERATIONS BURLINGTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES (Debtors-in-Possession as of November 15, 2001) For the 52 weeks ended September 29, 2001, September 30, 2000 and October 2, 1999 (Amounts in thousands, except for per share amounts) 2001 2000 1999 ----------- ----------- ----------- Net sales $ 1,403,905 $ 1,620,247 $ 1,651,689 Cost of sales 1,272,694 1,434,867 1,426,311 ----------- ----------- ----------- Gross profit 131,211 185,380 225,378 Selling, general and administrative expenses 118,672 138,725 143,171 Provision for doubtful accounts 4,334 4,380 5,482 Provision for restructuring and impairments 72,098 67,003 62,069 Amortization of goodwill 0 16,715 17,810 Write-off of goodwill 0 463,247 0 ----------- ----------- ----------- Operating loss before interest and taxes (63,893) (504,690) (3,154) Interest expense 71,174 66,264 58,420 Equity in income of joint ventures (626) (10,263) (6,357) Other expense (income) - net (15,706) (12,043) (7,868) ----------- ----------- ----------- Loss before income taxes (118,735) (548,648) (47,349) Income tax expense (benefit): Current (2,041) 10,004 4,163 Deferred (25,593) (31,680) (20,018) ----------- ----------- ----------- Total income tax benefit (27,634) (21,676) (15,855) ----------- ----------- ----------- Net loss $ (91,101) $ (526,972) $ (31,494) =========== =========== =========== Basic and diluted loss per common share $ (1.73) $ (10.12) $ (0.57) See notes to consolidated financial statements. 2. CONSOLIDATED BALANCE SHEETS BURLINGTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES (Debtors-in-Possession as of November 15, 2001) As of September 29, 2001 and September 30, 2000 (Amounts in thousands) 2001 2000 ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 87,473 $ 26,172 Short-term investments 13,394 13,167 Customer accounts receivable after deductions of $12,406 and $16,866 for the respective dates for doubtful accounts, discounts, returns and allowances 195,571 269,209 Sundry notes and accounts receivable 21,985 31,792 Inventories 216,968 287,969 Prepaid expenses 3,329 3,476 ----------- ----------- Total current assets 538,720 631,785 Fixed assets, at cost: Land and land improvements 23,334 25,871 Buildings 352,491 379,969 Machinery, fixtures and equipment 585,425 635,493 ----------- ----------- 961,250 1,041,333 Less accumulated depreciation and amortization 456,890 465,897 ----------- ----------- Fixed assets - net 504,360 575,436 Other assets: Assets held for sale 32,818 36,431 Investments and receivables 48,405 60,217 Intangibles and deferred charges 60,692 47,731 ----------- ----------- Total other assets 141,915 144,379 ----------- ----------- $ 1,184,995 $ 1,351,600 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term borrowings $ 0 $ 3,400 Long-term debt - current 476,900 30,470 Accounts payable - trade 62,171 86,892 Sundry payables and accrued expenses 79,724 97,552 Income taxes payable 4,566 2,024 Deferred income taxes 31,819 22,560 ----------- ----------- Total current liabilities 655,180 242,898 Long-term liabilities: Long-term debt 397,068 865,980 Other 53,957 58,288 ----------- ----------- Total long-term liabilities 451,025 924,268 Deferred income taxes 53,346 89,659 Shareholders' equity: Common stock issued (Note I) 700 689 Capital in excess of par value 885,935 884,643 Accumulated deficit (703,416) (612,315) Accumulated other comprehensive income (loss) (1,860) (22,452) Cost of common stock held in treasury (155,915) (155,790) ----------- ----------- Total shareholders' equity 25,444 94,775 ----------- ----------- $ 1,184,995 $ 1,351,600 =========== =========== See notes to consolidated financial statements. 3. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY BURLINGTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES (Debtors-in-Possession as of November 15, 2001) For the 52 weeks ended September 29, 2001, September 30, 2000 and October 2, 1999 (Amounts in thousands) Accumulated Capital in other Treasury Common excess of Accumulated comprehensive shares, Stock par value deficit income (loss) at cost Total --------- ----------- ----------- ------------- --------- --------- Balance October 3, 1998 $ 684 $ 884,685 $ (53,849) $ (17,357) $(113,942) $ 700,221 Net loss for the period (31,494) (31,494) Translation adjustments 1,084 1,084 Unrealized gains on securities (net of income taxes of $870) 1,615 1,615 --------- Comprehensive income (loss) (28,795) Purchase of treasury stock (41,994) (41,994) Issuance of treasury stock (378) 155 (223) Amortization of unearned compensation 40 40 --------- --------- --------- --------- --------- --------- Balance October 2, 1999 684 884,347 (85,343) (14,658) (155,781) 629,249 Net loss for the period (526,972) (526,972) Translation adjustments (947) (947) Less: reclassification adjustment for realized gain included in net loss (5,507) (5,507) Unrealized losses on securities (net of income taxes of $388) (721) (721) Less: reclassification adjustment for realized gains included in net loss (net of income taxes of $333) (619) (619) --------- Comprehensive income (loss) (534,766) Awards issued under Equity Incentive Plans 5 (26) (9) (30) Amortization of unearned compensation 322 322 --------- --------- --------- --------- --------- --------- Balance September 30, 2000 689 884,643 (612,315) (22,452) (155,790) 94,775 Net loss for the period (91,101) (91,101) Translation adjustments (198) (198) Less: reclassification adjustment for realized loss included in net loss 22,491 22,491 Net loss on derivative instruments qualifying as cash flow hedges (net of income taxes of $971) (1,493) (1,493) Less: reclassification adjustment for realized losses included in net loss (net of income taxes of $78) 120 120 Unrealized gains on securities (net of income taxes of $141) 262 262 Less: reclassification adjustment for realized gains included in net loss (net of income taxes of $318) (590) (590) --------- Comprehensive income (loss) (70,509) Shares issued related to Nano-Tex acquisition 4 577 581 Awards issued under Equity Incentive Plans 7 (87) (80) Forfeiture of restricted nonvested stock 1 (125) (124) Amortization of unearned compensation 801 801 --------- --------- --------- --------- --------- --------- Balance September 29, 2001 $ 700 $ 885,935 $(703,416) $ (1,860) $(155,915) $ 25,444 ========= ========= ========= ========= ========= ========= See notes to consolidated financial statements. 4. CONSOLIDATED STATEMENTS OF CASH FLOWS BURLINGTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES (Debtors-in-Possession as of November 15, 2001) For the 52 weeks ended September 29, 2001, September 30, 2000 and October 2, 1999 (Amounts in thousands) 2001 2000 1999 --------- --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (91,101) $(526,972) $ (31,494) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization of fixed assets 65,012 67,096 64,757 Provision for doubtful accounts 4,334 4,380 5,482 Amortization of intangibles and deferred debt expense 4,786 17,602 18,170 Write-off of goodwill 0 463,247 0 Equity in loss of joint ventures 2,074 837 3,052 Deferred income taxes (25,593) (31,680) (20,018) Translation gain on liquidation of subsidiary 0 (5,507) 0 Gain on disposal of assets (5,165) (990) (4,328) Provision for restructuring and impairments 72,098 67,003 62,069 Changes in assets and liabilities: Customer accounts receivable - net 69,304 (21,808) 31,543 Sundry notes and accounts receivable 9,245 (8,348) (7,634) Inventories 57,751 29,585 (5,560) Prepaid expenses 23 1,895 (2,288) Accounts payable and accrued expenses (49,429) (3,407) (29,174) Change in income taxes payable 2,542 858 726 Other (22,678) (7,466) (18,577) --------- --------- --------- Total adjustments 184,304 573,297 98,220 --------- --------- --------- Net cash provided by operating activities 93,203 46,325 66,726 --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (24,785) (73,773) (141,539) Proceeds from sales of assets 29,727 11,091 55,884 Investment in joint ventures 0 (446) (5,366) Change in investments (131) 7,838 (451) --------- --------- --------- Net cash provided (used) by investing activities 4,811 (55,290) (91,472) --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Changes in short-term borrowings (3,400) 3,400 (14,200) Repayments of long-term debt (175,296) (11,665) (36,880) Proceeds from issuance of long-term debt 153,900 26,000 119,000 Payment of financing fees (11,917) 0 0 Purchase of treasury stock 0 0 (41,994) --------- --------- --------- Net cash provided (used) by financing activities (36,713) 17,735 25,926 --------- --------- --------- Net change in cash and cash equivalents 61,301 8,770 1,180 Cash and cash equivalents at beginning of period 26,172 17,402 16,222 --------- --------- --------- Cash and cash equivalents at end of period $ 87,473 $ 26,172 $ 17,402 ========= ========= =========