<PAGE>

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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

                        COMMISSION FILE NUMBER 333-73160

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

                                  ARMKEL, LLC
    (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CERTIFICATE OF FORMATION)

                              ORGANIZED IN DELAWARE

             469 NORTH HARRISON STREET
         PRINCETON, NEW JERSEY 08543-5297                        13-4181336
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)            I.R.S EMPLOYER
                                                              IDENTIFICATION NO.

                                 (609) 683-5900
               REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE

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

        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: None

        SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None

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

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

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

Indicated by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act) Yes | | No |X|

As of March 27, 2003, all of the 10,000 outstanding membership interests in
Armkel, LLC were held by affiliates.

                   Documents Incorporated by Reference: None
================================================================================

<PAGE>

CAUTIONARY NOTE ON FORWARD LOOKING INFORMATION

      This Annual Report contains forward-looking statements relating to, among
other things, short- and long-term financial objectives, sales growth, cash flow
and cost improvement programs. These statements represent the intentions, plans,
expectations and beliefs of the Company, and are subject to risk, uncertainties
and other factors, many of which are outside the Company's control and could
cause actual results to differ materially from such forward-looking statements.
The uncertainties include assumptions as to market growth and consumer demand
(including the effect of political and economic events on consumer demand), raw
material and energy prices and the financial condition of major customers. With
regard to the new product introductions referred to in this report, there is
particular uncertainty relating to trade, competitive and consumer reactions.
Other factors, which could materially affect the results, include the outcome of
contingencies, including litigation, pending regulatory proceedings,
environmental remediation and the acquisition or divestiture of assets.

      The Company undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new information, future
events or otherwise. You are advised, however, to consult any further
disclosures we make on related subjects in our filings with the U.S. Securities
and Exchange Commission. This discussion is provided as permitted by the Private
Securities Litigation Reform Act of 1995.

<PAGE>

                        TABLE OF CONTENTS [TO BE UPDATED]

<TABLE>
<CAPTION>
ITEM                                                                        PAGE
                                     PART I
<S>                                                                         <C>
ITEM 1.  BUSINESS .........................................................    1

ITEM 2.  PROPERTIES .......................................................    9

ITEM 3.  LEGAL PROCEEDINGS ................................................   10

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ..............   10

                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
           STOCKHOLDER MATTERS ............................................   11

ITEM 6.  SELECTED FINANCIAL DATA ..........................................   11

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATIONS ......................................   12

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK .......   21

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ......................   23

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
           AND FINANCIAL DISCLOSURE .......................................   69

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ...............   69

ITEM 11. EXECUTIVE COMPENSATION ...........................................   70

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGEMENT AND RELATED STOCKHOLDER MATTERS .....................   74

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ...................   75

ITEM 14. CONTROLS AND PROCEDURES ..........................................   80

                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
           FORM 8-K .......................................................   80
</TABLE>

<PAGE>
                                     PART I

ITEM 1. BUSINESS.

GENERAL; RECENT DEVELOPMENTS

      Armkel, LLC (the "Company") is an equally owned joint venture formed by
Church & Dwight Co., Inc. ("C&D") and affiliates of Kelso & Company, L.P.
("Kelso"). On September 28, 2001, the Company acquired certain of the domestic
consumer product assets of Carter-Wallace, primarily Trojan condoms, Nair
depilatories, and First Response and Answer test kits, and the international
subsidiaries of Carter-Wallace (the "Acquisition"). The remainder of
Carter-Wallace, comprised of its healthcare and pharmaceuticals businesses, was
merged with an unrelated third party after the completion of the Acquisition.
Simultaneously with the consummation of the Acquisition, the Company sold the
remainder of the consumer products businesses, Arrid antiperspirant in the U.S
and Canada and the Lambert-Kay line of pet care products, to C&D. The Company
retained the Arrid antiperspirant business outside the U.S. and Canada.

      C&D markets a broad range of products under its well-recognized Arm &
Hammer brand name, including personal care products such as antiperspirants,
dentifrices and oral care gum and other products, such as baking soda, carpet
deodorizer, air freshener and laundry detergent. C&D distributes its products
through a broad distribution platform that includes mass merchandisers, food
stores, drug stores, convenience stores and other channels. C&D's senior
management team has extensive experience in the branded consumer products
industry with average experience of more than 20 years. C&D was founded in 1846
and its common stock is publicly traded under the symbol "CHD" and has been
publicly traded for over thirty years. Kelso & Company, or Kelso, is a private
investment firm founded in 1971 that specializes in acquisition transactions.
Since 1980, Kelso has acquired 71 companies requiring total capital at closing
of approximately $18 billion.

      During 2002, the Company continued the integration of its consumer
products business with the operations of C&D. The integration began in the
fourth quarter of 2001 with the consolidation of sales organizations, continued
through the integration of manufacturing and distribution and was materially
completed with the shut down of the former Carter-Wallace production facility in
Cranbury, New Jersey in the third quarter of 2002.

      In February 2003, the Company sold its Italian subsidiary, S.p.A. Italiana
Laboratori Bouty, including its two subsidiaries, to a group comprised of local
management and private equity investors for a price of $22.6 million. The net
proceeds from the sale were used to prepay a portion of the Company's syndicated
financing loans. The Company will retain ownership of certain Italian pregnancy
kit and oral care product lines with annual sales of approximately $3 million.
The remainder of the Italian subsidiary's business disposed of in the sale
included a high percentage of distributor sales as well as hospital diagnostic
and other products not related to the Company's core business.

      The Company is a leading marketer and manufacturer of well-recognized
branded personal care consumer products. The Company's Trojan brand occupies the
number one position in the domestic condom market. The Company's Nair brand
occupies the number one position in the domestic depilatories and waxes market.

      The Company is either the number one or two provider of condoms,
depilatories and waxes and home pregnancy and ovulation test kits to consumers
in the United States. The Company's home pregnancy and ovulation test kits are
marketed under the First Response and Answer brand names. Similarly, the Company
enjoys leading market positions in certain of its international markets. In
Canada, for example, the Company's Trojan brand is the market leader. In
addition, the Company's depilatory and wax products, marketed under the Nair and
Taky brand names, have either a number one or number two market position in many
of its key international markets. The Company believes its leading market
positions and its well-recognized brand names are significant competitive
advantages, as they typically enable it to maintain superior shelf space
allocations within its retail customers' facilities.

      The Company markets its products through a well-established, diversified
marketing platform that serves mass merchandisers, food stores, drug stores,
convenience stores and other channels. For the period ended December 31, 2002,
approximately 55% of the Company's net sales were generated in the United States
and the majority of the remainder were generated in Europe, Mexico and Canada.
The Company's products include condoms (latex, natural skin and polyurethane
contraceptives), depilatories and waxes (lotion, cream and wax hair removal
treatments), home pregnancy and ovulation test kits, over-the-counter (OTC)
products (topical analgesics, antinauseants, nasal decongestants and vitamin
supplements), oral care products (cosmetic tooth polishes and denture adhesives)
skin care products (moisturizers, anti-cellulite cream and skin cleansers), and
other products.

                                                                               1
<PAGE>

DESCRIPTION OF BUSINESS SEGMENTS

      The Company conducts its business through its domestic consumer products
division and its international consumer products division.

      Neither of these segments is seasonal with the exception of the
depilatories and waxes product group which performs better in the spring and
summer months. Information concerning the net sales, operating income and
identifiable assets of each of the segments is set forth in Note 19 to the
consolidated financial statements included in Item 8 of this form 10-K.

      DOMESTIC CONSUMER PRODUCTS. The following table sets forth the principal
products of the Company's domestic consumer products division and related data.

<TABLE>
<CAPTION>
                                                                             CATEGORY
       CATEGORIE                         KEY BRAND NAMES                     POSITION*
       ---------                         ---------------                     ---------
<S>                              <C>                                         <C>
Condoms                          Trojan, Naturalamb, Class Act                   1
Depilatories and waxes           Nair, Lineance                                  1
Home pregnancy test kits         First Response, Answer                          2
Home ovulation test kits         First Response, Answer                          2
Other Consumer products          Pearl Drops, Carter's Little Pills,
                                    H-R Lubricating Jelly, Rigident             --
</TABLE>

      *     All brand rankings are based on IRI FDTKS, excluding Wal-Mart, for
            the 52 weeks ending December 22, 2002.

      Condoms. The Company offers a wide variety of products under its
well-recognized brand names, including: Trojan, its leading consumer brand;
Naturalamb, a natural product offered at higher prices; and Class Act, a
discount brand offered at lower prices.

      The Company is dedicated to building its Trojan brand through advertising,
trade promotions and new product development.

      The Company is currently the leading advertiser in the U.S. condom
category based on dollars spent. The Company has increased its promotional
programs and has regularly developed new and innovative product line extensions.
To this end, in 2002 the Company launched Trojan Her Pleasure Condoms and plans
on launching additional products in 2003.

      Depilatories and Waxes. The Company's Nair depilatories and waxes products
have a leading market share. The Company believes that, as a result of its
dedicated advertising and promotional programs, distinct packaging and several
successful line extensions, Nair is positioned as the leader in lotion and cream
depilatories. The Company is also a leader in product innovation in the
depilatories and waxes categories. The Company's success with female hair
removal products has prompted it to broaden its product line and introduce hair
removal products for men. In 2003, new waxes, depilatory creams and cloth strips
will be launched to further strengthen Nair depilatories and waxes leadership
position.

      In February 2003, the Company began shipping Lineance European Body
Essentials, a line of upscale hair removal and skin care treatments.

      Home Pregnancy and Ovulation Test Kits. First Response and Answer brand
home pregnancy test kits represent the number two market position in each
category.

      The First Response home pregnancy test kit is a premium priced, branded
product. In a sector with intensive advertising and promotion-based competition,
First Response is well-positioned as a trusted, well-recognized brand name with
high brand awareness. The Company's Answer brand home pregnancy test kit is a
value-priced product that competes with other valued-priced brands including
private label products, but generally at a slightly higher price point.

      The First Response 1-Step Ovulation Kit is a premium priced, branded
product. The Company has introduced technology that enables the user to monitor
the test while in progress. First Response appeals to customers that favor
premium brand products.

      Other Consumer Products. The Company's other domestic consumer products
operate in mature markets. The Company's brands include Pearl Drops
tooth-whitening products, Carter's Little Pills, a stimulant laxative, Rigident
denture adhesive and H-R Lubricating Jelly.

      INTERNATIONAL CONSUMER PRODUCTS. The Company markets a diverse portfolio
of consumer products in a broad range of international markets. The Company's
international consumer products primarily include condoms, home pregnancy and
ovulation test kits, antiperspirants, skin care products, oral hygiene products
and other consumer products, as well as OTC pharmaceuticals and professional
diagnostic tests. The Company's primary international markets are France, the
United Kingdom, Canada, Mexico, Australia and Spain, and it has operations in
each of these countries. In addition, the Company exports some of


                                                                               2
<PAGE>

its products from the United Kingdom to European countries such as Germany,
Belgium, Holland, Poland, Switzerland, Ireland and Greece, as well as to the
Middle East. The Company's operations in each of its primary international
markets operate as independent, stand alone companies, with separate management,
marketing efforts and product sourcing.

      The Company believes that approximately 33% of its international net sales
are attributable to brands which hold the number one or two position in their
respective local markets. None of the countries in which the Company operates
accounts for more than 31% of its total international net sales, and no brand
accounts for more than 12% of its total international net sales. Certain of the
Company's international product lines are similar to its domestic product lines.
For example, the Company markets depilatories and waxes, home pregnancy and
ovulation test kits and oral care products in most of its international markets,
as well as condoms in Canada and Mexico.

      In 2002 the Company's Canadian subsidiary, Carter-Horner Corp., and C&D's
Canadian subsidiary, Church & Dwight Ltd./Ltee. began to provide certain
services and employees to each other for the purposes of efficiently allocating
management, administrative, operations and sales functions among the entities.

      The following table sets forth the principal product categories of the
Company's international consumer products division.

<TABLE>
<CAPTION>
        CATEGORIES                           KEY BRAND NAMES                           COUNTRIES SERVED
        ----------                           ---------------                           ----------------
<S>                               <C>                                        <C>
Condoms                           Trojan,                                    Canada, Mexico
Home pregnancy and ovulation      First Response, Answer, Confidelle,        Australia, Canada, Italy, Mexico, U.K.
test kits                         Discover, Gravix
Depilatories and waxes            Nair, Taky                                 Australia, Canada, France, Mexico,
                                                                               Middle East, Spain, U.K.
Face and skin care                Barbara Gould, Lineance, Eudermin,         France, Spain, U.K.
                                  Anne French, Bi-Solution
Oral care                         Pearl Drops, Email Diamant, Perlweiss,     Australia, Canada, France, Germany,
                                  Nacar Blanco,, Ultrafresh                    Italy, Mexico, U.K.
OTC products                      Sterimar, Gravol, Dencorub, Rub A-535,     Australia, Canada,   France, Mexico
                                  Atasol, Ovol, Diovol
Antiperspirants                   Arrid                                      Australia, U.K.
Baby care                         Poupina, Curash                            Australia, France
Professional diagnostics          --                                         France
Other consumer products           Femfresh, Cossack                          Australia, Canada, Mexico, U.K., France,
                                                                                Spain
</TABLE>


      Condoms. The Company markets condoms primarily in Canada and Mexico under
the Trojan brand name. In Canada, the Company's Trojan brand has a leading
market share. The Company markets its condoms through distribution channels
similar to those of its domestic condom business. These channels include
pharmacies, drug stores and mass merchandisers.

      Home Pregnancy and Ovulation Test Kits. The Company's international home
pregnancy and ovulation test kits consist of the First Response, Answer,
Confidelle, Discover and Gravix brands. The Company sells these products in the
United Kingdom, Canada, Italy, Mexico and Australia. Additionally, the Company
licenses a third party to market its test kits in Germany.

      Depilatories and Waxes. The Company's international depilatories are sold
under the Nair brand name and are sold in Canada, Mexico, the United Kingdom,
France, Australia and Spain (marketed under the Taky brand name), as well as
distributed in the Middle East and other parts of Europe.

      Face and Skin Care. The Company's face and skin care products are marketed
under the Barbara Gould, Lineance, Anne French and Eudermin brand names. Barbara
Gould is a leading range of facial and beauty skin care products that serves the
French mass market. Anne French offers a traditional range of facial cleansing
products that are marketed in England and Ireland. Lineance is an established
leader in the mass market slimming, anti-cellulite category in France. Eudermin
is a leading hand cream marketed in Spain.

      Oral Care. The Company's principal international oral care products are
sold in Australia, Canada, France, Germany, Italy, Mexico and the United Kingdom
and include: cosmetic whitening tooth polishes marketed under the Pearl Drops,
Perlweiss, Nacar Blanco and Email Diamant brand names; and mouthwash and breath
freshening products marketed under the Ultrafresh brand name. Pearl Drops, the
Company's leading oral care brand, is positioned as a cosmetic whitening tooth
polish and sells at a premium price over regular toothpaste.

      OTC Products. The Company's principal OTC products are: Sterimar sea water
nasal decongestant and cleansing spray, which is sold primarily in France and
Mexico; Gravol anti-nauseant, Atasol acetaminophen analgesic, Ovol antiflatulent
and


                                                                               3
<PAGE>

Diovol antacid, all of which are sold primarily in Canada; topical analgesics
sold under Rub A-535 brand name in Canada and Dencorub brand name in Australia.

      Antiperspirants. The Company's principal antiperspirant brand is Arrid,
which it manufactures and sells primarily in the United Kingdom. Arrid is
manufactured and sold in United States and Canada by C&D..

      Baby Care. The Company's main baby care brands are Curash, a line of
diaper rash powder, cream and wipes products sold in Australia and Poupina, a
line of skin care and toiletry products sold in France.

      Professional Diagnostics. The Company sells professional diagnostic tests
for the detection of infectious diseases in France. These comprise enzyme
immuno-assay tests, which are sold by the Company's sales force to hospitals,
clinics and government laboratories.

      Other Consumer Products. The Company's other international brands include
the Femfresh line of feminine hygiene products sold in the United Kingdom,
France and Australia and the Cossack line of men's grooming products sold in the
United Kingdom. In addition, the Company has distribution agreements with third
parties to sell their products through its sales force.

DISTRIBUTION

      Under a management services agreement with C&D (described elsewhere in
this document), the Company sells its domestic consumer products through C&D's
direct sales force. The Company also uses the independent broker currently
utilized by C&D to supplement the direct sales force. C&D's sales force makes
presentations for the Company's products at the headquarters or home offices of
the Company's customers, where applicable, as well as to individual retail
outlets.

      The international division sells its products through classes of trade
substantially similar to the domestic division in each of the countries in which
the Company operates, with some exceptions. For example, in many European
countries, the pharmacy channel (high end drug stores), which is not significant
to the Company's business in the United States, is important to the distribution
of certain consumer products. The Company believes its international consumer
products are adequately represented by class of trade in each of the countries
in which it competes.

      The Company, through C&D, uses a combination of third-party distribution
centers and a leased facility to ship its products in the United States. These
distribution centers are located strategically to maximize the Company's ability
to service its customers.

      The Company's international distribution network is based on subsidiary
capacities and cost considerations. In Canada, Mexico, Spain and Australia,
finished goods are warehoused internally and shipped directly to customers
through independent freight carriers. In the United Kingdom, all product
distribution is subcontracted to a professional distribution company. In France,
distribution of consumer products to mass markets is handled internally while
distribution of OTC products to pharmacies and professional diagnostics to
laboratories is handled by outside agencies.

      In 2002, the Company took over distribution of the Arm & Hammer toothpaste
product line in the United Kingdom and began distribution in Mexico for C&D.

COMPETITION

     For information regarding competition, see Item 7 "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

RAW MATERIALS

     The Company's major raw materials are chemicals, plastics, latex and
packaging materials.

     These materials are generally available from several sources and the
Company has had no significant supply problems to date. The Company generally
has two or more approved suppliers for production materials. Although there are
multiple providers of its raw materials, in certain instances the Company
chooses to sole source certain raw materials in order to gain favorable pricing.

TRADEMARKS, PATENTS AND LICENSES

     The Company markets its products under a number of trademarks and trade
names. The Company has registered these trademarks (identified throughout this
annual report in italicized letters), or has applications pending, in the United
States and in certain of the countries in which the Company sells these product
lines. United States trademark registrations are for a term of 10 years,
renewable every 10 years so long as the trademarks are used in the regular
course of trade. The Company considers the

                                                                               4
<PAGE>

protection of its trademarks to be important to its business. The Company
maintains a portfolio of trademarks representing substantial goodwill in the
businesses using the trademarks.

     The Company owns or has licenses for a number of United States and foreign
patents and patent applications covering certain of its products, and has an
ongoing program of obtaining additional patents to protect new product
developments. The Company believes that certain of these patents may provide
competitive insulation and advantage. The Company does not believe that the
expiration of or any other change in any of these patents or patent applications
will materially affect its business.

CUSTOMERS AND ORDER BACKLOG

     A group of five customers accounted for approximately 27% of consolidated
net sales in 2002, including a single customer Walmart who accounted for 12%.
This group accounted for 27% of domestic net sales in 2001.

     Although not included in the top five customers noted above, Kmart
Corporation historically has represented approximately 2% of the Company's
consolidated net sales. Kmart's bankruptcy, followed by its announcement to
close an additional 329 stores in the first half of 2003, could cause an
insignificant reduction in sales to Kmart of approximately 0.3% of the Company's
consolidated net sales. It is not clear whether, and to what extent, these lost
sales may be made to other retailers.

     The time between receipt of orders and shipment is generally short, and as
a result, backlog is not significant.

NEW PRODUCT DEVELOPMENT

     The Company conducts the majority of its research and development ("R&D")
activities at its facility in Cranbury, New Jersey. C&D will provide
supplementary R&D services on an as needed basis. Internationally, the Company
operates small satellite R&D facilities in the United Kingdom, France, Spain and
Canada. The Company's expenditures on R&D were approximately $8.4 million in the
year ended December 31, 2002, $7.2 million for the twelve months ended December
31, 2001 and $7.5 million in the fiscal year ended March 31, 2001.

     The primary focus of the Company's new product development group is to
design and develop new and improved products that address consumer needs. In
addition, this group provides technology support to both in-house and contract
manufacturing and safety and regulatory support to all of the Company's
businesses. The Company devotes significant resources and attention to product
innovation and consumer research to develop differentiated products with new and
distinctive features, which provide increased convenience and value to its
consumers. The Company's new product development broadens its product line by
creating new product line extensions and new formulations that appeal to various
consumer needs.

QUALITY CONTROL

     The Company places a high degree of importance on quality and product
testing through its quality control department, with quality control employees
in each of its manufacturing locations. Through its quality control efforts, the
Company maintains rigorous standards over all of its products. In addition, the
Company also tests the ingredients and packaging that comprise its product
offerings. Several of the Company's products are registered with the FDA
including condoms, home pregnancy and ovulation test kits, depilatories, oral
care products and OTC product offerings. As a result, the Company is required to
meet exacting standards of quality. An example of the Company's commitment to
quality control is the 100% product testing policy with respect to its condoms.
Each condom is quality tested by trained and qualified employees before it is
released for sale. As a result, the Company has never had to recall any of its
condoms as a result of design or production flaws.

GOVERNMENTAL REGULATION

     Some of the Company's products are subject to regulation under the FDA and
the Fair Packaging and Labeling Act. The Company is also subject to regulation
by the FTC in connection with the content of its labeling, advertising,
promotion, trade practices and other matters. The Company is subject to
regulation by the FDA in connection with its manufacture, labeling and sale of
its condoms, home pregnancy and ovulation test kits, depilatories and OTC
products. The Company's relationships with certain unionized employees may be
overseen by the National Labor Relations Board.

     In addition, the Company's international operations, including the
production of OTC drug products, are subject to regulation in each of the
foreign jurisdictions in which the Company manufactures or markets goods.

ENVIRONMENTAL MATTERS

     The Company's operations involve the use, storage and disposal of chemicals
and other hazardous materials and wastes. The Company is subject to applicable
federal, state, local and foreign health, safety and environmental laws relating
to the protection of the environment, including those governing discharges of
pollutants to air and water, the generation, management and disposal of
hazardous materials and wastes and the cleanup of contaminated sites. Some of
the Company's operations, particularly its


                                                                               5
<PAGE>

manufacturing sites, require environmental permits and controls to prevent and
reduce air and water pollution, and these permits are subject to modification,
renewal and revocation by issuing authorities.

     The Company believes that its operations are currently in material
compliance with all environmental laws, regulations and permits. While the
Company does not believe that ongoing environmental operating and capital
expenditures will be material, the Company could incur significant additional
operating and capital expenditures in order to comply with current or future
environmental laws, such as the installation of pollution control equipment at
its manufacturing sites. For example, the Company may be required to make
significant upgrades to its on-site wastewater treatment plant at its Colonial
Heights, Virginia facility.

     In addition, some environmental laws, such as the U.S. Superfund law,
similar state statutes and common laws, can impose liability for the entire
cleanup of a contaminated site or for third-party claims for property damage and
personal injury, regardless of whether the current owner or operator owned or
operated the site at the time of the release of contaminants or the legality of
the original disposal activity. With certain limited exceptions, the Company
also has agreed to assume any environmental-related liabilities that may arise
from the pre-Acquisition operation of the consumer products business and assets
transferred as part of the Carter-Wallace acquisition. Many of the Company's
sites have a history of industrial operations and contaminants from current and
historical operations have been detected at some of its sites. For example,
contamination has been discovered at the Company's Cranbury, New Jersey site.
Based on the Company's preliminary assessments, the cost of remediating such
contamination is expected to be approximately $1.8 million, which is recorded in
the Company's reorganization reserves. While the Company is not aware of any
other material cleanup obligations or related third-party claims, the detection
of additional contaminants or the imposition of additional cleanup obligations
at its sites or any other properties could result in significant costs.

GEOGRAPHIC AREAS

     Approximately 55% of net sales of the Company in 2002 and 2001 were to
customers in the United States and approximately 82% of long-lived assets of the
Company in 2002 and 2001 were located in the United States.

EMPLOYEES AND LABOR RELATIONS

     The Company's worldwide work force consisted of approximately 1700
employees as of December 31, 2002, of whom approximately 1000 were located
outside the United States and approximately 700 worked in its domestic
facilities. This includes approximately 150 employees at the Company's Italian
subsidiaries that were sold in February 2003.

     The hourly employees at the Company's Cranbury, New Jersey facility are
represented by Paper, Allied-Industrial Chemical and Energy Workers union. As of
December 31, 2002 the Company had shut down the Dayton facility and had
substantially shut down the Cranbury facility leaving only a few hourly
employees to maintain the facility until its disposition. This agreement expires
on April 30, 2004. Internationally, the Company employs union representatives in
France, Spain and Mexico. The Company believes that its labor relations are
satisfactory and no material labor cost increases are anticipated prior to April
30, 2004.

CLASSES OF SIMILAR PRODUCTS

     Information concerning similar products marketed by the Company during the
period from January 1, 2001 to December 31, 2002 is set forth in Note 19 to the
consolidated financial statements included in Item 8 herein.

CERTAIN RISKS AND UNCERTAINTIES RELATED TO THE COMPANY'S BUSINESS

     The Company's future results and financial condition are dependent upon its
ability to develop, manufacture and market consumer products successfully.
Inherent in this process are a number of factors that the Company must
successfully manage to achieve favorable future operating results and financial
condition. In addition to the other information contained in this Annual Report
on Form 10-K, the following risks and uncertainties could affect the Company's
future operating results and financial condition:

-    THE COMPANY HAS RECENTLY DEVELOPED AND COMMENCED SALES OF A NUMBER OF NEW
     PRODUCTS WHICH, IF THEY DO NOT GAIN WIDESPREAD CUSTOMER ACCEPTANCE OR IF
     THEY CANNIBALIZE SALES OF EXISTING PRODUCTS, COULD HARM THE COMPANY'S
     EFFORTS TO IMPROVE ITS FINANCIAL PERFORMANCE.

     The Company has introduced a number of new consumer products. The
development and introduction of new products involves substantial research,
development and marketing expenditures, which the Company may be unable to
recoup if the new products do not gain widespread market acceptance. In
addition, if the new products merely cannibalize sales of existing products, the
Company's financial performance could be harmed.


                                                                               6
<PAGE>

     In addition new products carry a greater risk of supply chain interruption
if product sales are significantly greater or less than expectations. Although
the Company has taken steps to ensure that demand planning is done properly
interruptions in supply may occur and could affect the Company's financial
condition and operating results.

-    THE COMPANY MAY DISCONTINUE PRODUCTS OR PRODUCT LINES, WHICH COULD RESULT
     IN RETURNS, ASSET WRITE-OFFS AND SHUT DOWN COSTS.

     In the past, the Company has discontinued certain products and product
lines, which resulted in returns from customers, asset write-offs, and shut down
costs. The Company may suffer similar adverse consequences in the future to the
extent it discontinues products that do not meet expectations or no longer
satisfy consumer demand. Product returns, write-offs or shut down costs would
reduce cash flow and earnings. Product efficacy or safety concerns could result
in product recalls or declining sales which would reduce cash flow and earnings.

-    THE COMPANY FACES INTENSE COMPETITION IN A MATURE INDUSTRY THAT MAY REQUIRE
     IT TO INCREASE EXPENDITURES AND ACCEPT LOWER PROFIT MARGINS TO PRESERVE OR
     MAINTAIN ITS MARKET SHARE. UNLESS THE MARKETS IN WHICH THE COMPANY COMPETES
     GROW SUBSTANTIALLY, A LOSS OF MARKET SHARE WILL RESULT IN REDUCED SALES
     LEVELS AND DECLINING OPERATING RESULTS.

     The Company operates in competitive consumer product markets in which
performance, quality and innovation are critical to success. It holds leading
market positions and possesses well recognized and respected brand names. The
Company competes on the basis of name recognition, advertising, quality of
products, product differentiation, promotion and price. It is either the number
one or two provider of condoms, depilatories and waxes, and home pregnancy and
ovulation test kits in the United States. Internationally, the Company markets a
diverse portfolio of consumer products in a broad range of markets, several of
which are similar to its domestic business, such as condoms, depilatories and
waxes, home pregnancy and ovulation test kits and oral care products. In
addition, the Company competes in a variety of other international categories
including antiperspirants, skin care products and other consumer products, as
well as OTC pharmaceuticals and professional diagnostic kits.

     The Company's unit sales growth will depend on increasing usage by
consumers, product innovation and capturing market share from competitors. The
Company may not be able to succeed in implementing its strategies to increase
revenues. To protect the Company's existing market share or to capture increased
market share, the Company may need to increase expenditures for promotions and
advertising and introduce and establish new products. Increased expenditures may
not prove successful in maintaining or enhancing the Company's market share and
could result in lower sales and profits.

     The Company competes with SSL International and Ansell in the condom
business, Pfizer, Inverness, Medical Innovations and Abbott Labs in the
pregnancy test kits business, Del Labs, Aussie Nads and Reckitt Benckiser in the
depilatories and wax business and L'Oreal, Beiersdorf and Unilever in the skin
care business. Many of the Company's competitors are substantially larger
companies with greater financial resources than the Company. They have the
capacity to outspend the Company in an attempt to take market share from the
Company.

-    PROVIDING PRICE CONCESSIONS OR TRADE TERMS THAT ARE ACCEPTABLE TO THE
     COMPANY'S TRADE CUSTOMERS, OR THE FAILURE TO DO SO, COULD ADVERSELY AFFECT
     THE COMPANY'S SALES AND PROFITABILITY. IN ADDITION, REDUCTIONS IN INVENTORY
     BY THE COMPANY'S TRADE CUSTOMERS, INCLUDING AS A RESULT OF CONSOLIDATIONS
     IN THE RETAIL INDUSTRY, OR A SHIFT IN THE IMPORTANCE OF CERTAIN CHANNELS OF
     TRADE COULD ADVERSELY AFFECT ITS SALES.

     From time to time, the Company may need to reduce the prices for some of
its products to respond to competitive and customer pressures and to maintain
market share. Any reduction in prices to respond to these pressures would harm
profit margins. In addition, if the Company's sales volumes fail to grow
sufficiently to offset any reduction in margins, its results of operations would
suffer.

     Because of the competitive environment facing retailers, many of the
Company's trade customers, particularly its high-volume retail store customers,
have increasingly sought to obtain pricing concessions or better trade terms.
These concessions or terms could reduce the Company's margins. Further, if the
Company is unable to maintain price or trade terms that are acceptable to its
trade customers, they could reduce product purchases from the Company and
increase product purchases from the Company's competitors, which would harm the
Company's sales and profitability. In addition, from time to time the Company's
retail customers have reduced inventory levels in managing their working capital
requirements. Any reduction in inventory levels by the Company's retail
customers would harm its operating results. In particular, continued
consolidation within the retail industry could potentially reduce inventory
levels maintained by the Company's retail customers, which could adversely
impact its results of operations. The Company's performance is also dependent
upon the general health of the economy and of the retail environment in
particular and could be significantly harmed by changes affecting retailing and
by the financial difficulties of retailers, including the ongoing bankruptcy
proceedings involving Kmart.


                                                                               7
<PAGE>

-    PRICE INCREASES IN CERTAIN RAW MATERIALS OR ENERGY COSTS COULD ERODE OUR
     PROFIT MARGINS, WHICH COULD HARM OUR OPERATING RESULTS.

     Increases in the prices of certain raw materials or increases in energy
costs could significantly impact our profit margins. If price increases were to
occur we may not be able to increase the prices of our products to offset these
increases. This could harm the Company's financial condition and results of
operations.

-    LOSS OF ANY OF THE COMPANY'S PRINCIPAL CUSTOMERS COULD SIGNIFICANTLY
     DECREASE ITS SALES AND PROFITABILITY.

     A group of five customers accounted for approximately 27% of consolidated
net sales in 2002, including a single customer Walmart who accounted for 12%.
This group accounted for 27% of domestic net sales in 2001.

     Although not included in the top five customers noted above, Kmart
Corporation historically has represented approximately 2% of the Company's
consolidated net sales. Kmart's bankruptcy, followed by its announcement to
close an additional 329 stores in the first half of 2003, could cause an
insignificant reduction in sales to Kmart of approximately 0.3% of the Company's
consolidated net sales. It is not clear whether, and to what extent, these lost
sales may be made to other retailers.

-    THE COMPANY'S CONDOM PRODUCT LINE COULD SUFFER IF THE SPERMICIDE N-9 IS
     PROVED OR PERCEIVED TO BE HARMFUL.

     The Company's distribution of condoms under the Trojan and other trademarks
is regulated by the U.S. Food and Drug Administration (FDA). Certain of Armkel's
condoms and similar condoms sold by Armkel's major competitors, contain the
spermicide nonoxynol-9 (N-9). The World Health Organization and other interested
groups have issued reports suggesting that N-9 should not be used rectally or
for multiple daily acts of vaginal intercourse, given the ingredient's potential
to cause irritation to human membranes. The Company expects the FDA to issue
non-binding draft guidance concerning the labeling of condoms with N-9, although
the timing of such draft guidance is uncertain. The Company believes that
condoms with N-9 provide an acceptable added means of contraceptive protection
and is cooperating with the FDA concerning the appropriate labeling revisions,
if any. However, the Company cannot predict the outcome of the FDA review. If
the FDA or state governments promulgate rules which prohibit or restrict the use
of N-9 in condoms (such as new labeling requirements), the financial condition
and operating results of the Company could suffer.

     Related to this issue, on February 28, 2003 a purported class action suit,
Lissette Velez v. Church & Dwight Co., Inc., et als including Armkel, LLC., was
filed against the Company and Armkel, and two other condom manufacturers, in the
Superior Court of New Jersey. The lawsuit alleges that condoms lubricated with
N-9 are being marketed in a misleading manner because the makers of such condoms
claim they aid in the prevention of sexually transmitted diseases whereas,
according to the plaintiffs, public health organizations have found that N-9
usage can under some circumstances increase the risk of transmission of disease.
Condoms with N-9 have been marketed for many years as a cleared medical device
under applicable FDA regulations, however, the Company cannot predict the
outcome of this litigation.

-    CURRENT AND FUTURE PRODUCT LIABILITY CLAIMS COULD HARM THE COMPANY'S
     PREGNANCY DIAGNOSTIC PRODUCTS BUSINESS.

     In 2002, a purported class action suit, Sandra J. Wagner v. Church & Dwight
Co., Inc., et al, was filed against the Company and C&D in the Superior Court of
New Jersey. The lawsuit alleged that the Company's ovulation test kits ("OTK")
are being marketed in a misleading manner because they do not advise women with
certain ovarian conditions that test results may be inaccurate. The plaintiffs
seek monetary damages as well as injunctive relief against the OTK's - marketing
materials. The products in question have been cleared for marketing as medical
devices under applicable FDA regulations. If the Company is not successful in
defending against a claim, the Company could be liable for substantial damages
or may be prevented from offering some of the Company's products. These events
could harm the Company's financial condition and results of operations.


                                                                               8
<PAGE>

ITEM 2.   PROPERTIES.

     The Company's headquarters are located in C&D's global headquarters at 469
North Harrison Street, Princeton, New Jersey. The following are the Company's
principal facilities as of March 21, 2003:

<TABLE>
<CAPTION>
                        LOCATION                              PRODUCTS MANUFACTURED                     AREA (SQ. FEET)
                        --------                              ---------------------                     ---------------
<S>                                                           <C>                                       <C>
OWNED:
Manufacturing Facilities and Offices:
Cranbury, New Jersey(1)..................................     None                                         734,000
Colonial Heights, Virginia...............................     Condoms                                      220,000
Montreal, Canada.........................................     Personal care products                       157,000
Folkestone, England......................................     Personal care products                        78,000
Mexico City, Mexico......................................     Pharmaceutical products                       37,600
New Plymouth, New Zealand................................     Condom processing                             31,000

Warehouse and Offices
Toronto, Canada..........................................     --                                            52,000
Toronto, Canada (2)......................................     --                                            83,000

LEASED:
Manufacturing Facilities and Offices:
Barcelona, Spain(3)......................................     Personal care products                        58,400
Folkestone, England......................................     Personal care products                        21,500
Norwood, Pennsylvania....................................     Condom processing                             10,000

Warehouses and Offices:
Folkestone, England......................................    --                                             65,000
Revel, France............................................    --                                             35,500
Mexico City, Mexico......................................    --                                             27,500
Sydney, Australia........................................    --                                             24,900
Atlanta, Georgia.........................................    --                                             23,071
Levallois, France*.......................................    --                                             22,500
</TABLE>

----------
1.   The Cranbury production facility was closed during 2002 and is currently
     for sale. The Company continues to operate a 36,000 square feet research
     facility located on the site.
2.   Shared facility with C&D. The Company occupies approximately 35% of the
     available space.
3.   The Company intends to relocate its manufacturing facility to a leased
     facility also in Barcelona, Spain. The new facility is approximately 83,000
     square feet. The lease for the present facility may be terminated at any
     time with six months prior notice to the landlord.
*    Offices only
     The leased facilities in Dayton, New Jersey, Momence, Illinois and Sparks,
     Nevada were closed during 2002 and the leases were terminated.


                                                                               9
<PAGE>

ITEM 3.   LEGAL PROCEEDINGS.

LITIGATION.

     On January 17, 2002, a petition for appraisal, Cede & Co., Inc. and GAMCO
Investors, Inc. v. MedPointe Healthcare Inc., Civil Action No. 19354, was filed
in the Court of Chancery of the State of Delaware demanding a determination of
the fair value of shares of MedPointe. The action was brought by purported
former shareholders of Carter-Wallace in connection with the merger on September
28, 2001 of MCC Acquisition Sub Corporation with and into Carter-Wallace. The
merged entity subsequently changed its name to MedPointe. The petitioners seek
an appraisal of the fair value of their shares in accordance with Section 262 of
the Delaware General Corporation Law. The matter was heard on March 10 and 11,
2003, at which time the petitioners purportedly held approximately 2.3 million
shares of MedPointe. No decision has yet been rendered by the court.

     MedPointe and certain former Carter-Wallace shareholders are party to an
indemnification agreement pursuant to which such shareholders will be required
to indemnify MedPointe from a portion of the damages, if any, suffered by
MedPointe in relation to the exercise of appraisal rights by other former
Carter-Wallace shareholders in the merger. Pursuant to the agreement, the
shareholders have agreed to indemnify MedPointe for 40% of any Appraisal Damages
(defined as the recovery greater than the per share merger price times the
number of shares in the appraisal class) suffered by Medpointe in relation to
the merger; provided that if the total amount of Appraisal Damages exceeds $33.3
million, then the indemnifying stockholders will indemnify MedPointe for 100% of
any damages suffered in excess of that amount. The Company, in turn, is party to
an agreement with MedPointe pursuant to which it has agreed to indemnify
MedPointe and certain related parties against 60% of any Appraisal Damages for
which MedPointe remains liable. The maximum liability to the Company pursuant to
the indemnification agreement and prior to any indemnification from C&D, as
described in the following sentence is $12 million. C&D is party to an agreement
with the Company pursuant to which it has agreed to indemnify the Company for
17.4% of any Appraisal Damages, or up to a maximum of $2.1 million for which the
Company becomes liable.

     The Company, MedPointe and the indemnifying shareholders believe that the
consideration offered in the merger was fair to the former Carter-Wallace
shareholders and have vigorously defended the petitioner's claim. However, the
Company cannot predict the outcome of the proceedings.

     On August 26, 2002, the Company filed suit against Pfizer in the District
Court of New Jersey to redress infringement of two (2) of the Company's patents
directed to pregnancy diagnostic devices. The suit claims that Pfizer's "ept"
product infringes these patents. The Company is seeking a reasonable royalty and
associated damages as compensation for Pfizer's infringement. The Court has
ordered a Settlement Conference for April 11, 2003, and has set dates throughout
2003 for various stages of discovery.

     In 2002, a purported class action suit, Sandra J. Wagner v. Church & Dwight
Co., Inc., et al, was filed against the Company and C&D in the Superior Court of
New Jersey. The lawsuit alleged that the Company's ovulation test kits ("OTK")
are being marketed in a misleading manner because they do not advise women with
certain ovarian conditions that test results may be inaccurate. The plaintiffs
seek monetary damages as well as injunctive relief against the OTK's - marketing
materials. The products in question have been cleared for marketing as medical
devices under applicable FDA regulations. The Company is vigorously defending
the action but cannot predict the outcome of the proceedings.

     On February 28, 2003 a purported class action suit, Lissette Velez v.
Church & Dwight Co., Inc., et als including Armkel, LLC, was filed against the
Company and C&D, and two other condom manufacturers, in the Superior Court of
New Jersey. The lawsuit alleges that condoms lubricated with the spermicide
non-oxydol 9 (N-9) are being marketed in a misleading manner because the makers
of such condoms claim they aid in the prevention of sexually transmitted
diseases whereas, according to the plaintiffs, public health organizations have
found that N-9 usage can under some circumstances increase the risk of
transmission of disease. The plaintiffs claim economic loss from the purchase of
the Company's Trojan-brand condoms with N-9 but no personal injury and seek
injunctive relief. Condoms with N-9 have been marketed for many years as a
cleared medical device under applicable FDA regulations. Separately, FDA has
begun a notice and comment rulemaking, which will permit the Company as well as
other interested parties the opportunity to consider and review the labeling of
N-9 lubricated condoms. The Company is vigorously defending the lawsuit but
cannot predict its outcome.

     The Company, in the ordinary course of its business, is the subject of, or
party to, various pending or threatened legal actions. The Company believes that
any ultimate liability arising from these actions will not have a material
adverse effect on its financial position or results of operation.

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

     None.


                                                                              10
<PAGE>

                                     PART II

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

     At March , 2003, the Company had 10,000 membership interests outstanding
and held by C&D (5,000 interests) and Kelso (5,000 interests). There is no
established trading market for the membership interests of the Company. During
2002, the Company did not declare any dividends.

     The Company believes that the foregoing issuances of equity securities to
C&D and Kelso did not involve a public offering or sale of securities and were
exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act") pursuant to the exemption from registration
afforded by Section 4(2 )of the Securities Act. No underwriters, brokers or
finders were involved in these transactions.

ITEM 6.   SELECTED FINANCIAL DATA.

<TABLE>
<CAPTION>
                                                                          ARMKEL, LLC AND SUBSIDIARIES

FIVE-YEAR FINANCIAL REVIEW (2)
(in millions)
                                                   SUCCESSOR                                            PREDECESSOR
                                   -----------------------------------------   -----------------------------------------------------
                                                                                                               YEAR ENDED
                                                           PERIOD FROM            PERIOD FROM                   MARCH 31,
                                       YEAR ENDED       AUGUST 28, 2001 TO      APRIL 1, 2001 TO       ----------------------------
                                   DECEMBER 31, 2002   DECEMBER 31, 2001 (1)   SEPTEMBER 28, 2001      2001       2000         1999
                                   -----------------   ---------------------   ------------------      ----       ----         ----
<S>                                <C>                 <C>                     <C>                  <C>         <C>          <C>
OPERATING RESULTS
Net sales........................         $383.8             $ 77.6              $ 197.7            $  344.5    $ 320.2      $ 278.0
Income (loss) before taxes
   from continuing operations....           35.4              (15.4)                53.8                84.3       64.0         52.3
Net income (loss)................           31.2              (15.6)                33.4                49.9       40.5         31.3
Total assets.....................          808.5              811.7                379.3               371.2      369.5        353.9
Total debt.......................          440.2              443.4                 23.1                24.3       26.8         33.4
</TABLE>

----------
(1)  The period from August 28, 2001 to September 28, 2001 is inclusive of only
     net interest expense of $1.6 million.

(2)  All periods have been adjusted for the effect of discontinued operations.

<TABLE>
<CAPTION>
UNAUDITED QUARTERLY FINANCIAL INFORMATION(3)
(in millions)
                                               CALENDAR YEAR 2001                           CALENDAR YEAR 2002
                                               ------------------                           ------------------
                                      FIRST         SECOND      THIRD        FOURTH       FIRST      SECOND       THIRD      FOURTH
                                     QUARTER(4)   QUARTER(4)  QUARTER(4)    QUARTER(2)   QUARTER     QUARTER     QUARTER     QUARTER
                                     ----------   ---------   ----------    ---------    -------     -------     -------     -------
<S>                                     <C>       <C>          <C>          <C>        <C>         <C>         <C>         <C>
Net sales............................   $ 84.4    $ 102.6      $ 96.1       $  77.6    $  87.4     $ 104.4     $ 101.0     $  91.0
Gross profit(1)......................     47.6       61.6        54.3          27.1       42.1        58.9        58.5        51.3
Income (loss) before taxes from
  continuing operations(1)...........     20.1       32.0        21.8         (15.4)       1.1        17.6         9.9         6.8
Net income (loss)....................     10.3       18.8        14.6         (15.6)       0.3        15.6         9.3         6.0
</TABLE>

----------
(1)  Distribution expense reclassified from operating expense to cost of goods
     sold for predecessor financial statements in order to conform to the
     Company's presentation.
(2)  Fourth quarter 2001 represents the period from August 28, 2001 (inception)
     to December 31, 2001. Operations for this period commenced on September 29,
     2001. The period from August 28, 2001 (inception) to September 28, 2001
     only included net interest expense of approximately $1.6 million relating
     to the issuance of senior subordinated notes on August 28, 2001.
(3)  All periods have been adjusted for the effect of discontinued operations.
(4)  Represents combined statement of revenue in excess of expenses for
     the predecessor company.

                                                                              11
<PAGE>

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

     Armkel, LLC (the Company) is an equally owned joint venture formed by
Church & Dwight Co., Inc. (C&D) and affiliates of Kelso & Company, L.P. (Kelso).
On September 28, 2001, the Company acquired certain of the domestic consumer
product assets of Carter-Wallace (the "Acquisition"), primarily Trojan condoms,
Nair depilatories, and First Response and Answer test kits, and the
international subsidiaries of Carter-Wallace. Initial financing was obtained on
August 28, 2001, however operations did not commence until the Acquisition was
consummated on September 28, 2001. The remainder of Carter-Wallace, comprised of
its healthcare and pharmaceuticals businesses, was merged with MedPointe, Inc.
("MedPointe") after the completion of the Acquisition. Simultaneously with the
consummation of the Acquisition, the Company sold the remainder of the consumer
products businesses, Arrid antiperspirant in the U.S and Canada and the
Lambert-Kay line of pet care products, to C&D - (the "Disposed Businesses").

     Prior to the Acquisition, Carter-Wallace reported its historical financial
results for the combined business, including the business the Company acquired,
the Disposed Businesses and the healthcare and pharmaceuticals business on a
consolidated basis. In connection with the Acquisition, the Carter-Wallace
consumer business predecessor financial statements were prepared to reflect the
operating performance of the Company's business for the years ended March 31,
2000 and 2001 and for the period from April 1, 2001 to September 28, 2001. The
Company's historical financial statements were not compiled separately at any
prior time, as the Company was not a stand-alone subsidiary, with the exception
of the international division. As a result, certain cost allocation assumptions
were made. See Note 1 to the predecessor combined financial statements as shown
in Item 8 of this report.

     In December 2002, the Company entered into an agreement to sell its Italian
subsidiary to a group, comprising local management and private equity investors.
The sale closed in February 2003 for a price of approximately $22.6 million
including the repayment of $11.8 million of intercompany debt. The Company will
retain ownership of certain Italian pregnancy kit and oral care product lines
with sales of approximately $3 million. The remainder of the Italian
subsidiary's business includes a high percentage of distributor sales as well as
hospital diagnostic and other products not related to the Company's core
business. The financial statements have been reclassified to reflect the Italian
business as a discontinued operation in 2002 and prior financial statements.

     The following section discusses comparisons to the year period ended
December 31, 2002 compared to the combined (predecessor and successor) twelve
month period ended December 31, 2001. All amounts have been adjusted for the
effect of discontinued operations.

2002 COMPARED TO 2001

YEAR ENDED DECEMBER 31, 2002 COMPARED WITH TWELVE MONTHS ENDED DECEMBER 31, 2001

<TABLE>
<CAPTION>
                                                                            2002           2001(1)(2)(3)
                                                                            ----           ----
                                                                                 (in millions)
<S>                                                                        <C>             <C>
Net sales(1)............................................................   $383.8          $360.7
Cost of goods sold(2)...................................................    173.0           170.1
                                                                           ------          ------
Gross profit(1) (2).....................................................    210.8           190.6
Marketing expenses(1)...................................................     53.1            44.6
Selling, general and administrative expenses(2)(4)                           87.6            75.5
Interest Expense & Other Income.........................................     34.7            12.0
                                                                           ------          ------
Income before taxes from continuing operations..........................   $ 35.4          $ 58.5
                                                                           ======          ======
</TABLE>
----------
(1)  Net Sales and marketing expenses for the predecessor financial statements
     have been adjusted to conform with EITF 01-9.
(2)  Distribution expense reclassified from operating expense to cost of goods
     sold for predecessor financial statements in order to conform to the
     Company's presentation.
(3)  For 2001, represents combined statement of revenue in excess of expenses,
     before provision for taxes for the predecessor company from January 1, 2001
     to September 28, 2001 and for the Company from August 28, 2001 (inception)
     to December 31, 2001, restated for discontinued operations.
(4)  In 2002, selling, general and administrative expenses include management
     service agreements with C&D for the full year, principally in the Domestic
     segment. In 2001, these expenses include the management service costs which
     were in effect in the fourth quarter. Refer to the agreements with C&D in
     Item 13, Certain Relationships and Related Transactions, Arrangements with
     C&D.


                                                                              12
<PAGE>

     The results of operations for both periods are affected by certain expenses
related to accounting and other acquisition related integration expenses. These
items are outlined below and addressed in further detail in the discussion
below:

<TABLE>
<CAPTION>
                                                                   2002                2001
                                                                   ----                ----
                                                                          (in millions)
<S>                                                                <C>                <C>
 Inventory Step-up Expenses..................................      $ 8.1              $15.1
 Transition Expenses.........................................      $ 9.0              $ 2.6
</TABLE>

Net Sales

     Net sales increased $23.1 million, or 6.4%, to $383.8 million for the year
ended December 31, 2002 from $360.7 million in the previous year. This increase
is discussed by business segment below.

     Net sales of domestic products, excluding intercompany sales, increased
$10.1 million, or 5.0%, to $209.2 million for the year ended December 31, 2002
from $199.1 million in the twelve months ended December 31, 2001. This increase
in net sales is behind solid year on year category growth for Trojan, pregnancy
kits and Nair and brand growth related to product line extensions for Trojan and
Nair.

     Net sales of international products increased $13.0 million, or 8.1%, to
$174.6 million for the year ended December 31, 2002 from $161.6 million in the
twelve months ended December 31, 2001. The increase was principally due to
volume increases in England, France and Mexico. Favorable foreign exchange
accounted for $2.6 million of the increase.

     In November 2001, the Financial Accounting Standards Board ("FASB")
Emerging Issues Task Force ("EITF") reached a consensus on Issue 01-9 (formerly
EITF issues 00-14 and 00-25), "Accounting for Consideration Given to a Customer
or Reseller of the Vendor's Products." This EITF addressed the recognition,
measurement and income statement classification of consideration from a vendor
to a customer in connection with the customer's purchase or promotion of the
vendor's products. The EITF requires the cost of such items as coupons, slotting
allowances, cooperative advertising arrangements, buydowns, and other allowances
to be accounted for as a reduction of revenues, not included as a marketing
expense as the Company did previously. The prior period net sales have been
reclassified to conform with this pronouncement. The impact was a reduction of
net sales of approximately $52.9 million in 2002 and $45.4 million for the
twelve months ended December 31, 2001. This consensus did not have an effect on
net income. In accordance with the consensus reached, the Company adopted the
required accounting beginning January 1, 2002.

Cost of Goods Sold

     Cost of goods sold increased $2.9 million, or 1.7%, to $173.0 million for
the year ended December 31, 2002 from $170.1 million in the twelve months ended
December 31, 2001. As a percentage of net sales, cost of goods sold reduced to
45.1% from 47.2% in 2001. This decrease in cost of goods sold is primarily
related to a decline year to year in expenses related to inventory step-up
adjustments incurred at the Acquisition of $8.1 million expensed in 2002 and
$15.1 million expensed in 2001. At the time of the Acquisition, the inventory
book value was $57.8 million. As part of the allocation of the purchase price,
the inventory value was increased by $23.2 million to $81.0 million. The
majority of this inventory step-up, $15.1 million, was reflected in the fourth
quarter results of operations of 2001, including $11.2 million for domestic
operations and $3.9 million for international operations. The remaining $8.1
million inventory step-up adjustment was all reflected in the first quarter of
2002 operating results. Excluding these adjustments, cost of goods sold, as a
percentage of net sales, would be reduced to 43.0% in 2002 and 42.9% in 2001.

     Cost of goods sold for domestic products, excluding intercompany sales,
increased $0.1 million, or 0.1%, to $85.2 million for the year ended December
31, 2002 from $85.1 million in the twelve months ended December 31, 2001. As a
percentage of net sales, domestic cost of goods sold decreased to 40.7% from
42.7% in 2001. This decrease in cost of goods sold is primarily due to the
inventory step-up adjustments of $7.9 million in 2002 and $11.2 million in 2001.
Excluding these adjustments, cost of goods sold, as a percentage of net sales,
would be reduced to 37.0% in 2002 and 37.1% in 2001.

     Cost of goods sold for international products increased $2.8 million, or
3.3%, to $87.8 million for the year ended December 31, 2002 from $85.0 million
in the twelve months ended December 31, 2001. As a percentage of net sales,
international cost of goods sold decreased to 50.3% from 52.6% principally due
to inventory step-up adjustments. Excluding these adjustments, cost of goods
sold, as a percentage of net sales would be reduced to 50.1% for the period
ending December 31, 2002 and 50.2% for the twelve months ending December 31,
2001.

Operating Costs excluding Interest Expense and Other Income

     Total operating expenses, excluding interest expense and other income,
increased $20.6 million, or 17.2%, to $140.7 million in the period ended
December 31, 2002 from $120.1 million in the twelve months ended December 31,
2001.


                                                                              13
<PAGE>

     Marketing expenses increased by $8.5 million, or 19.0%, to $53.1 million
for the year ended December 31, 2002 from $44.6 million for the twelve months
ended December 31, 2001. The majority of the increase, $6.3 million, was in the
International segment behind products such as Nair, Trojan, Barbara Gould and
Arm & Hammer toothpaste primarily in the U.K., Mexico and France. The remaining
$2.2 million was in the Domestic segment primarily for higher advertising
spending behind First Response.

     Selling, general and administrative expenses increased $12.1 million, or
16.0%, to $87.6 million for the year ended December 31, 2002 from $75.5 million
for the twelve months ended December 31, 2001. The Domestic segment had $13.7
million in additional spending while the International segment was lower by $1.4
million. This domestic increase is related to estimated transitional costs of
$7.4 million in 2002 compared to $1.8 million in 2001 for former Carter-Wallace
employees employed during the integration process, a net increase of $1.5
million in amortization for acquired patents, compared to prior year
amortization of patents and predecessor goodwill, and the remainder of the
increase was for additional legal fees as well as fees paid to Church & Dwight
and Kelso. The International segment was lower due to synergies in Canada as a
result of the Church & Dwight and Armkel Canadian operations being combined.

Interest Expense and Other Income

     Interest expense was $36.6 million for the year ended December 31, 2002
compared to $12.3 million for the twelve months ended December 31, 2001. This
increase in interest expense is related to the $225.0 million in senior
subordinated notes and $220.0 million in a syndicated bank credit facility
incurred at the time of the Acquisition. Interest expense for 2002 represents a
full year of financing while 2001 represents interest expense on financing from
August 28, 2001 to December 31, 2001 and a small amount of predecessor interest
expense.

     Interest income was $1.0 million for 2002 and $1.3 million for 2001. The
year 2001 includes $0.4 million of interest income earned on the proceeds from
the senior subordinated notes prior to Acquisition.

     Other income/expense was $0.9 million of income in 2002 and $1.0 of expense
in 2001. The increase in income is primarily related to foreign exchange
accounting remeasurement on intercompany loans entered into at acquisition with
certain of its subsidiaries.

NINE MONTH COMPARISON

THE FOLLOWING SECTION REFERS TO NINE MONTHS OF FINANCIAL DATA FROM APRIL TO
DECEMBER. FOR 2000, THE COMPANY DID NOT HAVE PREDECESSOR DOMESTIC CONSUMER
PRODUCTS BUSINESS AND INTERNATIONAL SUBSIDIARY DATA FOR THE THREE MONTHS ENDED
MARCH 31, 2000 IN ORDER TO COMPARE A TWELVE MONTH CALENDAR YEAR.

NINE MONTHS ENDED DECEMBER 31, 2001 COMPARED WITH NINE MONTHS ENDED DECEMBER 31,
2000(1)

<TABLE>
<CAPTION>
                                                                            2001(1)        2000(1)
                                                                            ----           ----
                                                                              (in millions)
<S>                                                                        <C>             <C>
Net sales(2)..........................................................     $276.3          $260.6
Cost of goods sold(3).................................................      133.3           111.4
                                                                           ------          ------
Gross profit(2) (3)...................................................      143.0           149.2
Marketing expenses(2).................................................       34.0            30.1
Selling, general and administrative expenses(3)                              59.4            54.3
Interest Expense & Other Income.......................................       11.2             0.5
                                                                           ------          ------
Income before taxes from continuing operations........................     $ 38.4          $ 64.3
                                                                           ======          ======
</TABLE>
----------
(1)  For 2001, represents combined statement of revenue in excess of expenses,
     before provision for taxes for the predecessor company from April 1, 2001
     to September 28, 2001 and for the Company from August 28, 2001 (inception)
     to December 31, 2001, restated for discontinued operations. The period from
     August 28, 2001 to September 28, 2001 only included net interest expense of
     approximately $1.6 million relating to the issuance of senior subordinated
     notes on August 28, 2001. The nine months ended December 31, 2000
     represents the predecessor company.

(2)  Net Sales and marketing expenses for the predecessor financial statements
     have been adjusted to conform with EITF 01-9.

(3)  Distribution expense reclassified from operating expense to cost of goods
     sold for predecessor financial statements in order to conform to the
     Company's presentation.

     Net Sales


                                                                              14
<PAGE>


     Net sales increased $15.7 million, or 6.0%, to $276.3 million in the period
ended December 31, 2001 from $260.6 million in the nine months ended December
31, 2000. This increase is discussed below.

     Net sales of domestic products, excluding intercompany sales, increased
$12.5 million, or 8.8%, to $153.7 million in the period ended December 31, 2001
from $141.2 million in the nine months ended December 31, 2000. The increase in
net sales reflects higher net sales of Trojan condoms and Nair depilatories due
to new product introductions, coupled with selective price increases in Trojan
and Nair brand products. In addition, net sales of First Response home pregnancy
and ovulation test kits were higher based on expanded distribution, as well as
an improved product claim for one of the Company's home pregnancy tests kits.

     Net sales of international products increased $3.2 million, or 2.7%, to
$122.6 million in the period ended December 31, 2001 from $119.4 million in the
nine months ended December 31, 2000. This increase was due to volume increases
on Trojan and Nair, selective price increases on several products and higher
sales of OTC pharmaceuticals in Mexico, offset by lower foreign exchange rates.

Cost of Goods Sold

     Cost of goods sold increased $21.9 million, or 19.6%, to $133.3 million in
the period ended December 31, 2001 from $111.4 million in the nine months ended
December 31, 2000. As a percentage of net sales, cost of goods sold grew to
48.2% from 42.8% in 2000. This increase in cost of goods sold is primarily due
to $15.1 million of additional expense relating to inventory step-up incurred at
acquisition. At the time of the Acquisition inventory book value was $57.8
million. As part of purchase accounting, the inventory value was increased by
$23.2 million to $81.0 million. The majority of this step-up, $15.1 million, was
reflected in the fourth quarter results of operations of 2001, including $11.2
million for domestic operations and $3.9 million for international operations.
The remaining $8.1 million inventory step-up adjustment was reflected in the
first quarter of 2002 operating results. Excluding these adjustments, cost of
goods sold as a percentage of net sales would have been 42.8% in 2001.

     Cost of goods sold for domestic products, excluding intercompany sales,
increased $16.3 million, or 31.0%, to $68.9 million in the period ended December
31, 2001 from $52.6 million in the nine months ended December 31, 2000. As a
percentage of net sales, domestic cost of goods sold increased to 44.8% from
37.3% in 2000. This increase in cost of goods sold is primarily due to the
inventory step-up adjustment of $11.2 million. Excluding these adjustments, cost
of goods sold as a percentage of net sales would have been 37.5% in 2001.

     Cost of goods sold for international products increased $5.6 million, or
9.4%, to $64.4 million in the period ended December 31, 2001 from $58.8 million
in the nine months ended December 31, 2000. As a percentage of net sales,
international cost of goods sold increased to 52.5% from 49.3% in 2000. This
increase is primarily due to the inventory step-up adjustments of $3.9 million.
Excluding these adjustments, cost of goods sold, as a percentage of net sales
would be reduced to 49.3% in 2001.

Operating Costs excluding Interest Expense and Other Income

     Total operating expenses excluding interest expense and other income
increased $9.0 million, or 10.6%, to $93.4 million in the period ended December
31, 2001 from $84.4 million in the nine months ended December 31, 2000.

     Marketing expenses increased by $3.9 million, or 12.9%, to $34.0 million in
the period ended December 31, 2001 from $30.1 million in 2000.

     Selling, general and administrative expenses increased $5.1 million, or
9.4%, to $59.4 million in the period ended December 31, 2001 from $54.3 million
in 2000. This increase is related to estimated transitional costs of $1.8
million, related to general and administrative costs for former Carter-Wallace
employees employed during the integration process, $1.0 million in fees to C&D
and Kelso, $1.1 million in amortization for acquired patents, with the remainder
due to higher legal costs.

Interest Expense and Other Income

     Interest expense and other income was $11.2 million in the period ended
December 31, 2001 compared to $0.5 million for the nine months ending December
31, 2000. This increase in net interest expense and other income is related to
the $225.0 million in senior subordinated notes and $220.0 million in a
syndicated bank credit facility incurred at the time of the Acquisition.

     Interest income was $1.1 million for 2001 and $0.3 million for 2000. The
period ended December 31, 2001 includes $0.4 million of interest income earned
on the proceeds from the senior subordinated notes prior to acquisition.


                                                                              15
<PAGE>

     Other expense was $0.3 million in 2001 and $0.1 in 2000. The increase in
income is primarily related to foreign exchange accounting remeasurement on
intercompany loans entered into at acquisition with certain of its subsidiaries.

Liquidity and capital resources following the Acquisition

     Cash flows provided by operating activities was $18.4 million for the year
ended December 31, 2002. This includes $31.8 million in severance payments and
$9.0 million in transition expenses offset by higher operating earnings before
non-cash charges for depreciation and amortization. Also, there is a reduction
in working capital which included a $1.1 million reduction in inventory, after
the $8.1 million step-up adjustment, and a decrease in accounts receivable due
to approximately $6.0 million received from MedPointe, Inc., for lockbox cash
receipts owed to the Company at December 31, 2001.

     Cash flows used in investing activities was $17.3 million for the year
ended December 31, 2002. The net cash flows used in investing activities
includes additions to property, plant and equipment of $8.4 million, a $5.2
million settlement with MedPointe, Inc. regarding the Company's liability for
retiree medical costs, domestic working capital assessed as of the date of the
Acquisition and executive retirement plan costs, and $3.7 million of other costs
related to the Acquisition.

     Cash flows used in financing activities was $3.2 million for the year ended
December 31, 2002, for the mandatory payment of debt from the syndicated bank
credit facility.

     The Company entered into a syndicated bank credit facility and also issued
a senior subordinated notes to finance its investment in the Acquisition. The
long-term $305 million credit facility consists of $220.0 million in 6 and 7
1/2-year term loans, of which $ 216.5 million was outstanding at December 31,
2002 and an $85.0 million revolving credit facility, which remained fully
undrawn at December 31, 2002. On August 28, 2001 the Company issued $225 million
of 9.5% senior subordinated notes due in 8 years with the interest paid
semi-annually. The Company had outstanding long-term debt of $411.6 million, and
cash less short-term debt of $26.2 million, for a net debt position of $385.4
million at year-end. This excludes discontinued operations. The weighted average
interest rate on the credit facility borrowings at December 31, 2002, excluding
deferred financing costs and commitment fees, was approximately 5.0% including
hedges.

     Interest payments on the notes and on borrowings under the senior credit
facilities significantly increase the Company's liquidity requirements.
Borrowings under the term loans and the revolving credit facility bear interest
at variable rates plus any applicable margin. The interest rates on the term
loans are dependent on the attainment of certain covenants depending on the
ratio of total debt to EBITDA. Financial covenants include a leverage ratio and
an interest coverage ratio, which if not met, could result in an event of
default and trigger the early termination of the credit facility, if not
remedied within a certain period of time. EBITDA, as defined by the Company's
loan agreement, which includes an add-back of certain acquisition related costs,
was approximately $99.3 million for the twelve month period ending December 31,
2002. The leverage ratio as defined in the term loan agreement was 3.88 versus
the agreement's maximum 5.50, and the interest coverage ratio was 3.10 versus
the agreement's minimum of 2.00. The reconciliation of income from continuing
operations to the Company's key liquidity measure, adjusted EBITDA per the term
loan agreement, is as follows (in millions):

<TABLE>
<S>                                                                <C>
              Income from continuing operations                    $ 70.2
              Other income (principally royalty income)               0.1
              Depreciation & Amortization(1)                         11.9
                                                                   ------
              EBITDA from continuing operations                      82.2
              Inventory Step-up Adjustment                            8.1
              Transition Expenses                                     9.0
                                                                   ------
              Adjusted EBITDA                                      $ 99.3
                                                                   ======
</TABLE>

(1)  Amortization is reduced by $3.6 million for deferred financing costs that
     are recognized as interest expense.

     Distributions of a portion of net income may be made to fund tax
distributions to Kelso and C&D. No such distributions were made in 2002.

     The Company incurred severance and other change in control related
liabilities to certain employees. Since acquisition the Company paid $42.0
million in severance payments, including $31.8 million paid for the year ended
December 31, 2002. The Company estimates that the total severance payments will
be approximately $48.0 million. The Company anticipates the remaining $6.0
million in severance and related costs to be principally paid out in 2003 with a
small balance being carried into future years for medical and life insurance
payments for three prior Carter-Wallace executives.

     The term loans will be subject to mandatory prepayments, subject to certain
limited exceptions, in an amount equal to (1) 50% of excess cash flow of the
Company and its subsidiaries, (2) 100% of the net cash proceeds of asset sales
and dispositions of


                                                                              16
<PAGE>

property of the Company and its subsidiaries, (3) 100% of the net cash proceeds
of any issuance of debt obligations of the Company and its subsidiaries and (4)
50% of the net cash proceeds of issuances of equity of the Company and it
subsidiaries.

     The syndicated bank credit facility and the senior subordinated notes
impose certain restrictions on the Company, including restrictions on its
ability to incur indebtedness, pay dividends, make investments, grant liens,
sell assets and engage in certain other activities. In 2002 the Company obtained
a waiver to the syndicated bank credit facility in order to proceed with the
sale of the Italian operations. The proceeds from the sale of the Italian
operations were received in February 2003 and were used to prepay the term loans
under the covenant requirements. In addition, the senior credit facilities
requires the Company to maintain certain financial ratios. The borrowings under
the credit facility are secured by substantially all of the domestic assets of
the Company, in a pledge of stock of the Company's operating subsidiaries and a
pledge of not more than 65% of the voting capital stock of the Company's foreign
subsidiaries.

     The Company expects that the total capital expenditures will be
approximately $16 million in 2003 and approximately $10 million in 2004. Of such
amounts, the Company currently estimates that a minimum range of $3 million to
$5 million of ongoing maintenance capital expenditures are required each year.

<TABLE>
<CAPTION>
                                                                                  PAYMENTS DUE BY PERIOD
                                                                                  ----------------------
                                                                                            2004 TO         2007 TO           AFTER
                                                             TOTAL          2003              2006            2008             2008
                                                           --------        -------          --------        --------         -------
                                                                                     (THOUSANDS OF DOLLARS)
<S>                                                        <C>             <C>              <C>             <C>              <C>
PRINCIPAL PAYMENTS ON BORROWINGS:
     Long-term debt
          Syndicated Financing Loans(1).................   $216,468       $ 28,501          $ 35,127        $116,139        $ 36,701
          Notes Payable 9 1/2%..........................    225,000             --                --              --         225,000
          Various Short-Term Borrowings at
             Foreign Subsidiaries.......................         55             55                --              --              --

OTHER COMMITMENTS:
     Operating Leases Obligations.......................     17,379          3,580             9,128           2,676           1,995
     Capital Lease Obligations..........................        191             52               139              --              --
     Guarantee(2).......................................      1,828          1,828                --              --              --
     Management Services Agreements.....................     58,344         14,586            43,758              --              --
     Manufacturing Distribution Agreement...............      3,264            816             2,448              --              --
                                                           --------       --------          --------        --------         -------
Total...................................................   $522,529       $ 49,418          $ 90,600       $ 118,815        $263,696
                                                           ========       ========          ========       =========        ========
</TABLE>

(1)  In the first quarter of 2003 net proceeds from the sale of the Italian
     operations of $21.6 million are required to pay down the syndicated credit
     facility, along with the $6.9 million of predetermined payments.
(2)  Guarantee represents the Company's performance based obligation with the
     New Jersey Department of Environmental Protection for estimated
     environmental remediation costs at its Cranbury, New Jersey facility.

     The Company expects that funds provided from operations and available
borrowings of $85 million under its six-year revolving credit facility, none of
which was drawn at December 31, 2002, will provide sufficient funds to operate
its business, to make expected capital expenditures of approximately $16 million
in 2003 and approximately $10 million in 2004 and to meet foreseeable liquidity
requirements, including debt service on the notes and the senior credit
facilities, as noted above. There can be no assurance, however, that the
Company's business will generate sufficient cash flows or that future borrowings
will be available in an amount sufficient to enable it to service its debt or to
fund its other liquidity needs. If the Company is unable to pay its obligations,
it will be required to pursue one or more alternative strategies, such as
selling assets, refinancing or restructuring indebtedness or raising additional
capital. However, the Company cannot give assurance that any alternative
strategies will be feasible or prove adequate. However, management believes that
operating cash flow, coupled with the Company's access to credit markets, will
be sufficient to meet the anticipated cash requirements for the coming year.

                                   OTHER ITEMS

Related Party Transactions

     The Company has achieved substantial synergies by combining certain of its
operations with those of C&D particularly in the areas of sales, manufacturing
and distribution, and most service functions. The Company retained its core
marketing, research & development, and financial planning capabilities, and
continues to manufacture condoms, but purchases virtually all the support
services it requires for its U.S. domestic business from C&D under a management
services agreement, which has a term of five years with possible renewal. The
Company and C&D merged the two sales organizations during the fourth quarter of
2001 and merged the companies Canadian operations in 2002. The companies
transferred production of antiperspirants and depilatories


                                                                              17
<PAGE>

from the former Carter-Wallace plant at Cranbury, NJ, to C&D's plant at
Lakewood, NJ, which is a more efficient producer of antiperspirants and other
personal care products. This process was completed by the third quarter 2002.
The companies integrated the planning and purchasing, accounting and management
information systems, and other service functions during 2002.

     During 2002, the Company was invoiced $22.5 million for administrative,
manufacturing and management oversight services provided by C&D and $1.4 million
of toothpaste products purchased from C&D. The Company sold $7.1 million of
deodorant anti-perspirant inventory to the Company's at its cost. The Company
also invoiced C&D $1.7 million for transition administrative services. The
Company has an open net accounts payable to C&D at December 31, 2002 of
approximately $4.8 million that primarily related to administrative services
partially offset by amounts owed by C&D for inventory from international
subsidiaries.

     Kelso has agreed to provide the Company with financial advisory services
for which the Company pays an annual fee of $1.0 million. The Company has agreed
to indemnify Kelso against certain liabilities and reimburse expenses in
connection with its engagement. For the year ended December 31, 2002, the
Company paid Kelso $1.0 million for 2002 financial advisory fees plus prepaid
the 2003 financial advisory service fee of $1.0 million at a discounted value.

Significant Accounting Policies

     The Company's significant accounting policies are more fully described in
Note 1 to its consolidated financial statements. Certain of the Company's
accounting policies require the application of significant judgment by
management in selecting the appropriate assumptions for calculating financial
estimates. By their nature, these judgments are subject to an inherent degree of
uncertainty. These judgments are based on the Company's historical experience,
its observance of trends in the industry, information provided by its customers
and information available from other outside sources, as appropriate. The
Company's significant accounting policies include:

Promotional and Sales Returns Reserves

     The reserves for consumer and trade promotion liabilities, and sales
returns are established based on our best estimate of the amounts necessary to
settle future and existing claims on products sold as of the balance sheet date.
We use historical trend experience and coupon redemption provider input in
arriving at coupon reserve requirements, and we use forecasted appropriations,
customer and sales organization inputs, and historical trend analysis in
arriving at the reserves required for other promotional reserves and sales
returns. While we believe that our promotional and sales returns reserves are
adequate and that the judgment applied is appropriate, such amounts estimated to
be due and payable could differ materially form what will actually transpire in
the future. If the Company's estimates for other promotional reserves and sales
returns were to differ by 10%, the impact to promotional spending and sales
return accruals would be approximately $1.2 million.

Impairment of Goodwill, Tradenames and Other Intangible Assets and Property,
Plant and Equipment

     Carrying values of goodwill, tradenames, patents and other intangible
assets are reviewed periodically for possible impairment in accordance with SFAS
No. 142, "Goodwill and Other Intangible Assets". The Company's impairment review
is based on a discounted cash flow approach that requires significant judgment
with respect to future volume, revenue and expense growth rates, and the
selection of an appropriate discount rate. With respect to goodwill, impairment
occurs when the carrying value of the reporting unit exceeds the discounted
present value of cash flows for that reporting unit. For trademarks and other
intangible assets, an impairment charge is recorded for the difference between
the carrying value and the net present value of estimated cash flows, which
represents the estimated fair value of the asset. The Company uses its judgment
in assessing whether assets may have become impaired between annual valuations.
Indicators such as unexpected adverse, economic factors, unanticipated
technological change or competitive activities, acts by governments and courts,
may signal that an asset has become impaired. In accordance with SFAS No. 142,
the Company completed the annual impairment test of the valuation of goodwill
and intangibles as of April 1, 2002 and, based upon the results, there was no
impairment.

     Property, plant and equipment and other long-lived assets are reviewed
periodically for possible impairment in accordance with SFAS No. 144 "Accounting
for the Impairment or Disposal of Long-Lived Assets". The Company's impairment
review is based on an undiscounted cash flow analysis at the lowest level for
which identifiable cash flows exist. The analysis requires management judgment
with respect to changes in technology, the continued success of product lines,
and future volume, revenue and expense growth rates. The Company conducts annual
reviews for idle and underutilized equipment, and reviews business plans for
possible impairment implications. Impairment occurs when the carrying value of
the asset exceeds the future undiscounted cash flows. When an impairment is
indicated, the estimated future cash flows are then discounted to determine the
estimated fair value of the asset and an impairment charge is recorded for the
difference between the carrying value and the net present value of estimated
future cash flows.

     The estimates and assumptions used are consistent with the business plans
and estimates that the Company uses to manage its business operations. The use
of different assumptions would increase or decrease the estimated value of
future cash flows and would have increased or decreased any impairment charge
taken. Future outcomes may also differ. If the Company's products


                                                                              18
<PAGE>

fail to achieve estimated volume and pricing targets, market conditions
unfavorably change or other significant estimates are not realized, then the
Company's revenue and cost forecasts may not be achieved, and the Company may be
required to recognize additional impairment charges.

Inventory Reserves

     When appropriate, the Company provided allowances to adjust the carrying
value of its inventory to the lower of cost or market (net realizable value),
including any costs to sell or dispose. The Company identifies any slow moving,
obsolete or excess inventory to determine whether a valuation allowance is
indicated. The determination of whether inventory items are slow moving obsolete
or in excess of needs requires estimates and assumptions about the future demand
for the Company's products, technological changes, and new product
introductions. The estimates as to the future demand used in the valuation of
inventory are dependent on the ongoing success of its products. In addition, the
Company's allowance for obsolescence may be impacted by the rationalization of
the number of stock keeping units. To minimize this risk, the Company evaluated
its inventory levels and expected usage on a periodic basis and records
adjustments as required. Reserves for inventory obsolescence were $0.7 million
at December 31, 2002, and $1.9 million at December 31, 2001. The decline is
primarily related to a revaluation of a reserve established for a specific
product that is no longer at risk to be discontinued.

Valuation of Pension and Postretirement Benefit Costs

     The Company's pension and postretirement benefit costs are developed from
actuarial valuations. Inherent in these valuations are key assumptions provided
by the Company to our actuaries, including the discount rate and expected
long-term rate of return on plan assets. Material changes in the Company's
pension and postretirement benefit costs may occur in the future due to changes
in these assumptions.

     The discount rate is subject to change each year, consistent with changes
in applicable high-quality, long-term corporate bond indices. Based on the
expected duration of the benefit payments for our pension plans and
postretirement plans we refer to applicable indices such as the Moody's AA
Corporate Bond Index to select a rate at which we believe the pension benefits
could be effectively settled. Based on applicable published rates as of December
31, 2002, the Company used a discount rate ranging from 5.7% to 6.75% for its
various, worldwide plans, compared to the discount rate range in 2001 of 5.5% to
7.25%.

     The expected long-term rate of return on pension plan assets is selected by
taking into account a historical long-term average, the expected duration of the
projected benefit obligation for the plans, the asset mix of the plans, and
known economic and market conditions at the time of valuation. Based on these
factors, the Company's expected long-term rate of return as of December 31, 2002
for its various plan is 5.5% to 8.5%, compared to a range of 5.5% to 8.5% as of
December 31, 2001.

     On December 31, 2002 the accumulated benefit obligation related to our
pension plans exceeded the fair value of the pension plan assets (such excess is
referred to as an un-funded accumulated benefit obligation) in two of our plans.
This difference is attributed to (1) an increase in the accumulated benefit
obligation that resulted from the decrease in the interest rate used to discount
the projected benefit obligation to its present settlement amount and (2) a
decline in the market value of the plan assets at December 31, 2002. As a
result, in accordance with SFAS No. 87, the Company recognized an additional
minimum pension liability of $5.2 million included in benefit obligations, and
recorded a charge, net of tax, to accumulated other comprehensive loss of $4.8
million which decreased stockholders' equity. The charge to stockholders' equity
for the excess of additional pension liability represents a net loss not yet
recognized as pension expense.

Recent Accounting Pronouncements

     In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. The Company has assessed SFAS
No. 143 and does not anticipate it to have a material impact on the Company's
financial statements. The effective date for the Company is January 1, 2003.

     In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". SFAS No. 144 addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
This statement supersedes FASB Statement No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" and the
accounting and reporting provisions of APB Opinion No. 30, "Reporting the
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions", for the disposal of a business (as previously defined in that
Opinion). This statement also amends ARB No. 51, "Consolidated Financial
Statements", to eliminate the exception to consolidation for a subsidiary for
which control is likely to be temporary. The Company implemented this standard
in 2002 and according to this standard, the Company accounted for its Cranbury
facility, anticipated to be sold as assets held for sale, and its Italian
operations (sold in February 2003) as discontinued operations.


                                                                              19
<PAGE>

     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." This Statement rescinds FASB Statement No. 4, "Reporting Gains and
Losses from Extinguishment of Debt", and an amendment of that Statement, FASB
Statement No. 64, "Extinguishment of Debt Made to Satisfy Sinking-Fund
Requirements." This Statement also rescinds FASB Statement No. 44, "Accounting
for Intangible Assets of Motor Carriers." This Statement amends FASB Statement
No. 13, "Accounting for Leases", to eliminate an inconsistency between the
required accounting for sale-leaseback transactions and the required accounting
for certain lease modifications that have economic effects that are similar to
sale-leaseback transactions. This Statement also amends other existing
authoritative pronouncements to make various technical corrections, clarify
meanings or describe their applicability under changed conditions. The Company
will adopt the provisions of this Statement upon its effective date and does not
anticipate it to have a material effect on its financial statements.

     In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." The standard requires companies to
recognize certain costs associated with exit or disposal activities when they
are incurred rather than at the date of commitment of a commitment to an exit or
disposal plan. Examples of costs covered by the standard include lease
termination costs and certain employee severance costs that are associated with
a restructuring, discontinued operation, plant closing, or other exit or
disposal activity. Statement 146 is to be applied prospectively to exit or
disposal activities initiated after December 31, 2002. The Company does not
anticipate that this interpretation will have a material effect on its financial
statements.

     In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" ("Interpretation"). This Interpretation
elaborates on the existing disclosure requirements for most guarantees,
including loan guarantees such as standby letters of credit. It also clarifies
that at the time a company issues a guarantee, the company must recognize an
initial liability for the fair market value of the obligations it assumes under
that guarantee and must disclose that information in its interim and annual
financial statements. The initial recognition and measurement provisions of the
Interpretation apply on a prospective basis to guarantees issued or modified
after December 31, 2002. The disclosure provisions are effective for financial
statements of interim or annual periods ending after December 15, 2002.

     In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities (an interpretation of ARB No.51)". This
Interpretation addresses consolidation by business enterprises of certain
variable interest entities, commonly referred to as special purpose entities
(SPEs). The Company does not anticipate that this interpretation will have a
material effect on its financial statements.

Competitive Environment

     The Company operates in competitive consumer product markets in which
performance, quality and innovation are critical to success. It holds leading
market positions and possesses well recognized and respected brand names. The
Company competes on the basis of name recognition, advertising, quality of
products, product differentiation, promotion and price. It is either the number
one or two provider of condoms, depilatories and waxes, and home pregnancy and
ovulation test kits in the United States. Internationally, the Company markets a
diverse portfolio of consumer products in a broad range of markets, several of
which are similar to its domestic business, such as condoms, depilatories and
waxes, home pregnancy and ovulation test kits and oral care products. In
addition, the Company competes in a variety of other international categories
including antiperspirants, skin care products and other consumer products, as
well as OTC pharmaceuticals and professional diagnostic kits.

     The markets for the Company's products are extremely competitive and are
characterized by the frequent introduction of new products, often accompanied by
advertising and promotional programs. The Company believes that the market for
these consumer products will continue to be highly competitive and the level of
competition may intensify in the future. The Company's competitors consist of a
large number of domestic and foreign companies, a number of which have
significantly greater financial resources than it does.

     The domestic condom market is highly concentrated with a limited number of
competitors. The market is divided between premium brands and price brands, with
companies competing on the basis of quality, innovation and price. The major
domestic producers are the Company, with its Trojan, Naturalamb and Class Act
brands, SSL International with its Durex and Avanti brands, and Ansell with its
Lifestyles brand. The Company is the market leader with an approximate 69%
share. The Company is currently the leading advertiser in the U.S. condom
category based on dollars spent. The Company also increased its promotional
programs and has regularly developed new and innovative product line extensions
including the very successful introduction of Her Pleasure in 2002. In 2003 the
company will launch several additional innovative products.

     The domestic market for home pregnancy test kits is divided between premium
and value brands. The home pregnancy test kit industry is highly competitive and
unit sales have been shifting toward value brands. The dynamics of the category
will be changing with the launch of digital pregnancy kits in 2003. The major
domestic producers are the Company, Pfizer, Inverness and Abbott Labs.


                                                                              20
<PAGE>

     The domestic depilatories and waxes market is highly concentrated with a
limited number of competitors. Products compete based on their functionality,
innovation and price. The major domestic manufacturers are the Company with its
Nair brand, Del Labs with its Sally Hansen brand and Aussie Nads with its Nads
wax product. In March 2002 Reckitt Benckiser introduced Veet into the domestic
depilatory market. Veet is currently successful in the international marketplace
with a predominant emphasis on wax products. The Company believes that, as a
result of its dedicated advertising and promotional programs, distinct packaging
and several successful line extensions, Nair is positioned to continue to be a
leader in lotion and cream depilatories. The company has announced a 1st quarter
2003 launch of an upscale depilatory line called Lineance of which the consumer
acceptance in pre-market testing was excellent.

     Internationally, the Company's products compete in similar, competitive
categories. Some of the Company's U.S. branded products are also marketed in
other countries, holding leading or number two market share positions. Examples
include: Trojan in Canada and Mexico, and Nair, in Canada, Mexico, France,
Australia, the U.K., and Spain, where the Company's depilatory products are
marketed under the Taky brand name. The Company also has a position in the
cosmetic whitening dentifrice segment with its Pearl Drops brand in the U.K.,
Australia, Italy, and Germany, (under the Perl Weiss brand), as well as in
France, (where the Company's products are marketed as Email Diamant).

     The Company markets home pregnancy test kits in many countries, under such
brand names as First Response, Discover, Confidelle, and Answer. This category
has been negatively effected in international markets by the introduction of
many lower-priced and private label products, as it has in the U.S., but the
Company has seen some growth for its business recently as it has rolled out the
"use 3 days before a missed period" claim first used domestically.

     In the skin care category the Company markets such brands as Lineance and
Barbara Gould in France, the former for anti-cellulite and general body care and
the latter for facial care. In Spain, the Company markets Eurdermin hand care
cream, in the mass market class of trade, where it has a number two position.
Recently this line has been expanded to include body and foot care products.

     In various countries the Company also markets OTC pharmaceutical products.
These include Gravol and Ovol, the leading anti-nauseant and anti-gas brands in
Canada, the Pangavit range of vitamin supplements in Mexico, Sterimar, a
sea-water nasal hygiene product sold primarily in France, but also in about
fifty other countries, including most recently Mexico.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

MARKET RISK
Concentration of Risk

     The Company is exposed to market risks, which include changes in interest
rates as well as changes in foreign currency exchange rates as measured against
the U.S. dollar. It does not currently have an established foreign exchange risk
management policy, although it may implement such a policy in the future. The
Company may, in the normal course of business, use derivative financial
instruments, including foreign currency forward contracts, to manage its foreign
exchange risk. The Company uses these instruments only for risk management
purposes and does not use them for speculation or for trading.

     A group of five customers accounted for approximately 27% of consolidated
net sales in 2002, including a single customer Walmart who accounted for 12%.
This group accounted for 27% of domestic net sales in 2001.

     Although not included in the top five customers noted above, Kmart
Corporation historically has represented approximately 2% of our consolidated
net sales. Kmart's bankruptcy, followed by its announcement to close an
additional 329 stores in the first half of 2003, could cause an insignificant
reduction in the Company's sales to Kmart of approximately 0.3% of the
Company's consolidated net sales. It is not clear whether, and to what extent,
these lost sales may be made to other retailers.

Interest Rate Risk

     The Company entered into interest rate swap agreements, which are
considered derivatives, to reduce the impact of changes in interest rates on its
floating rate credit facility. The swap agreements are contracts to exchange
floating interest payments for fixed interest payments periodically over the
life of the agreements without the exchange of the underlying notional amounts.
As of December 31, 2002, the Company had swap agreements in the notional amount
of $50 million, swapping debt with a one month LIBOR rate for a fixed interest
rate that averages 6.6%. The fair value of these swaps were recorded as a
liability in the amount of $1.2 million at December 31, 2002. These instruments
are designated as cash flow hedges as of December 31, 2002 and the changes in
fair value have been recorded in other comprehensive income ("OCI") as there
was no ineffectiveness. The amount expected to be classified from OCI to
earnings over the next three months is not significant.


                                                                              21
<PAGE>

     The Company measures its interest rate risk, as outlined below, utilizing a
sensitivity analysis. The analysis measures the potential loss in fair values,
cash flows, and earnings based on a hypothetical 10% change in interest rates
and currency exchange rates. The Company uses year-end market rates on its
financial instruments to perform the sensitivity analysis.

     The Company's interest rate risk related to the predecessor financial
statements was not material. However, the potential loss in cash flows and
earnings based on a hypothetical 10% change in interest rates over a one-year
period due to an immediate change in rates at December 31, 2002, would have
affected earnings by approximately $0.7 million.

Foreign Currency Risk

     A portion of the Company's revenues and earnings are exposed to changes in
foreign currency exchange rates. Where practical, the Company seeks to relate
expected local currency revenues with local currency costs and local currency
assets with local currency liabilities. In connection with the Acquisition, the
Company entered into intercompany loans with certain of its subsidiaries. The
Company is exposed to foreign exchange accounting remeasurement gains and losses
from these intercompany loans. The Company has entered into several foreign
exchange contracts to hedge the net accounting remeasurement exposure on the
intercompany loans. At December 31, 2002, the Company has 15.0M EUROS hedge with
an average rate of 98.42, which is approximately 43.0% of the total EURO debt
position. The Company has 30.0M Mexican Pesos hedge with a rate of 10.55, which
is approximately 48.5% of the PESO debt position. The Company has 2.0M
Australian Dollar hedge with a rate of 0.5392, which is approximately 22.4% of
the AUS$ debt position.

     The Company's foreign exchange rate risk related to the predecessor
financial statements was not material. However, in connection with the Company's
intercompany loans, the potential loss in cash flows and earnings based upon a
hypothetical 10% change in foreign currency rates over a one-year period due to
immediate change in rates at December 31, 2002, would have affected earnings by
approximately $1.3 million.



                                       22
<PAGE>

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

(A) 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                       ARMKEL, LLC

<S>                                                                                                             <C>
AUDITED FINANCIAL STATEMENTS
Independent Auditors' Report...............................................................................     24
Consolidated Statements of Income and Changes in Members' Equity for the year
   ended December 31, 2002 and for the period from August 28, 2001 (inception)
   to December 31, 2001....................................................................................     25
Consolidated Balance Sheets as of December 31, 2002 and 2001...............................................     26
Consolidated Statement of Cash Flows for the year ended December 31, 2002 and
   for the period from August 28, 2001 (inception) to December 31, 2001....................................     27
Notes to Consolidated Financial Statements.................................................................     28


CARTER-WALLACE, INC.--CONSUMER BUSINESS EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
IN THE UNITED STATES AND CANADA AND PET PRODUCTS


AUDITED COMBINED FINANCIAL STATEMENTS
Independent Auditors' Report...............................................................................     52
Combined Statements of Revenues and Expenses for the Period from April 1, 2001 to
   September 28, 2001 and for the Year Ended March 31, 2001................................................     53
Combined Statements of Changes in Net Assets and Comprehensive Earnings for the period
   from April 1, 2001 to September 28, 2001 and for the Year Ended March 31, 2001..........................     54
Combined Statements of Cash Flows for the Period from April 1, 2001 to September 28, 2001
   and for the Year Ended March 31, 2001...................................................................     55
Notes to Combined Statements...............................................................................     56

(A) 2. FINANCIAL STATEMENTS SCHEDULE

    Included in Part IV of this report:

         Schedule II--Valuation and Qualifying Accounts....................................................     S-1
</TABLE>




                                                                              23
<PAGE>


                          INDEPENDENT AUDITORS' REPORT

To the Members of Armkel, LLC
Princeton, New Jersey

     We have audited the accompanying consolidated balance sheets of Armkel, LLC
(the "Company") and subsidiaries as of December 31, 2002 and 2001, and the
related consolidated statements of income and changes in members' equity, and
cash flow for the year ended December 31, 2002 and for the period from August
28, 2001 (inception) to December 31, 2001. Our audits also included the
financial statement schedule listed in the Index at Item 15 as of December 31,
2002 and 2001 and for the year ended December 31, 2002 and for the period from
August 28, 2001 (inception) to December 31, 2001. These financial statements and
financial statement schedule are the responsibility of the Company's management.
Our responsibility is to express an opinion on the financial statements and
financial statement schedule based on our audits.

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

     In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Armkel, LLC and subsidiaries as
of December 31, 2002 and 2001, and the results of their operations and their
cash flows for the year ended December 31, 2002 and for the period from August
28, 2001 (inception) to December 31, 2001, in conformity with accounting
principles generally accepted in the United States of America. Also, in our
opinion, such financial statement schedule as of December 31, 2002 and 2001 and
for the year ended December 31, 2002 and for the period from August 28, 2001
(inception) to December 31, 2001, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.


DELOITTE & TOUCHE LLP

Parsippany, New Jersey
March 10, 2003


                                                                              24
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME
                         AND CHANGES IN MEMBERS' EQUITY

<TABLE>
<CAPTION>
                                                                                                  PERIOD FROM
                                                                                                AUGUST 28, 2001
                                                                                YEAR ENDED       (INCEPTION) TO
                                                                               DECEMBER 31,       DECEMBER 31,
                                                                                   2002               2001
                                                                               ------------     ---------------
                                                                                     (Dollars in thousands)
<S>                                                                            <C>                 <C>
STATEMENTS OF INCOME:
Net Sales...............................................................        $ 383,782           $ 77,561
Cost of goods sold......................................................          172,949             50,446
                                                                                ---------           --------
Gross Profit............................................................          210,833             27,115
Marketing expenses......................................................           53,053              7,988
Selling, general and administrative expenses............................           87,634             23,315
                                                                                ---------           --------
Operating Income (Loss) from continuing operations......................           70,146             (4,188)
Interest expense........................................................          (36,599)           (11,716)
Interest income.........................................................              954                813
Other income (expense)..................................................              943               (276)
                                                                                ---------           --------
Income (Loss) before taxes from continuing operations...................           35,444            (15,367)
Income taxes (benefit)..................................................            6,942               (474)
                                                                                ---------           --------
Income (Loss) from continuing operations................................           28,502            (14,893)
Income (Loss) from discontinued operations..............................            2,712               (755)
                                                                                ---------           --------
Net Income (Loss).......................................................        $  31,214           $(15,648)
                                                                                ---------           --------

STATEMENTS OF CHANGES IN MEMBERS' EQUITY:
Balance, Beginning of Period............................................        $ 203,586           $228,500
Distributions to Members................................................               --             (8,000)
Net Income (Loss).......................................................           31,214            (15,648)
Other Comprehensive Income (Loss).......................................
     Foreign translation gain (loss)....................................              728             (1,064)
     Fair market value of interest rate swaps...........................           (1,015)              (202)
      Minimum pension liability (net of taxes of $342)..................           (4,833)                --
                                                                                ---------            -------
Total Comprehensive Income (Loss).......................................           26,094            (16,914)
                                                                                ---------            -------
BALANCE, END OF YEAR....................................................        $ 229,680           $203,586
                                                                                =========           ========
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                                                              25
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                     DECEMBER 31,        DECEMBER, 31
                                                                                        2002                 2001
                                                                                     ------------        ------------
                                                                                         (Dollars in thousands)
                                       ASSETS
<S>                                                                                   <C>                  <C>
CURRENT ASSETS
Cash and cash equivalents..........................................................   $  54,780            $  55,617
Accounts receivable, less allowances of  $2,177 and $2,141.........................      75,864               76,350
Inventories........................................................................      53,427               61,787
Prepaid expenses...................................................................       5,557                3,179
Assets of discontinued operations..................................................      42,079               37,011
Assets held for sale...............................................................      14,600               37,639
                                                                                      ---------            ---------
TOTAL CURRENT ASSETS...............................................................     246,307              271,583
PROPERTY, PLANT AND EQUIPMENT (NET)................................................      72,867               76,198
TRADENAMES AND PATENTS.............................................................     261,275              265,411
GOODWILL...........................................................................     205,467              173,650
DEFERRED FINANCING COSTS...........................................................      17,380               20,492
OTHER ASSETS.......................................................................       5,218                4,401
                                                                                      ---------            ---------
TOTAL ASSETS.......................................................................   $ 808,514            $ 811,735
                                                                                      =========            =========

                       LIABILITIES AND MEMBERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings..............................................................     $    55              $   356
Accounts payable and accrued expenses..............................................      85,036              117,198
Liabilities of discontinued operations.............................................      23,582               21,243
Current portion of long-term debt..................................................      28,501                3,246
Taxes payable......................................................................       1,606                2,127
                                                                                      ---------            ---------
TOTAL CURRENT LIABILITIES..........................................................     138,780              144,170
LONG-TERM DEBT.....................................................................     411,634              439,750
DEFERRED INCOME TAXES..............................................................       8,500               10,363
DEFERRED AND OTHER LONG-TERM LIABILITIES...........................................      19,920               13,866
COMMITMENTS AND CONTINGENCIES                                                                --                   --
MEMBERS' EQUITY
Net contributed capital............................................................     220,500              220,500
Retained earnings..................................................................      15,566              (15,648)
Accumulated other comprehensive loss...............................................          --                   --
    Foreign translation gain (loss)................................................        (336)              (1,064)
    Fair market value of interest rate swaps.......................................      (1,217)                (202)
    Minimum pension liability......................................................      (4,833)                  --
                                                                                      ---------            ---------
                                                                                         (6,386)              (1,266)
                                                                                      ---------            ---------
TOTAL MEMBERS' EQUITY..............................................................     229,680              203,586
                                                                                      ---------            ---------
TOTAL LIABILITIES AND MEMBERS' EQUITY..............................................    $808,514             $811,735
                                                                                      =========            =========
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                                                              26
<PAGE>


                          ARMKEL, LLC AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOW

<TABLE>
<CAPTION>
                                                                                                                      PERIOD FROM
                                                                                                                    AUGUST 28, 2001
                                                                                                 YEAR ENDED         (INCEPTION) TO
                                                                                              DECEMBER 31, 2002    DECEMBER 31, 2001
                                                                                              -----------------    -----------------
                                                                                                      (Dollars in thousands)
<S>                                                                                           <C>                  <C>
CASH FLOW FROM OPERATING ACTIVITIES
NET INCOME (LOSS)...........................................................................       $ 31,214          $ (15,648)
Adjustments to reconcile net loss to net cash provided by operating activities:
    Depreciation and amortization...........................................................         15,521              4,015
    Unrealized loss on foreign exchange transactions........................................           (898)               395
    Net (Income) Loss from discontinued operations..........................................         (2,712)               755
Change in assets and liabilities:
    Decrease in accounts receivable.........................................................            178              5,616
    Decrease in inventories.................................................................          9,516             12,353
    (Increase) Decrease in prepaid expenses and other current assets .......................         (2,411)             1,065
    Increase (Decrease) in accounts payable and other accrued expenses......................        (32,026)             8,305
    Increase in other liabilities...........................................................             68              3,745
                                                                                                  ---------          ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES...................................................         18,450             20,601
CASH FLOW FROM INVESTING ACTIVITIES
Additions to property, plant and equipment..................................................         (8,443)            (1,906)
Acquisition of Carter-Wallace Consumer Business, including anti-perspirant and pet care
  products business, net of cash acquired...................................................             --           (713,293)
Proceeds from sale of anti-perspirant and pet care products business........................             --            128,500
Payment for purchase price adjustments and costs related to the acquisition of the
  Carter-Wallace Consumer Business..........................................................         (8,890)                --
                                                                                                  ---------          ---------
NET CASH USED IN INVESTING ACTIVITIES.......................................................        (17,333)          (586,699)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of senior subordinated notes.........................................             --            223,477
Proceeds from syndicated bank credit facility...............................................             --            220,000
Repayment of syndicated bank credit facility................................................         (3,252)              (375)
Repayment of acquired long-term debt........................................................             --            (19,971)
Payment of deferred financing costs.........................................................             --            (21,754)
Proceeds from Members.......................................................................             --            228,500
Distributions to Members....................................................................             --             (8,000)
                                                                                                  ---------          ---------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES.........................................         (3,252)           621,877
Effect of exchange rate changes on cash and cash equivalents................................          1,298               (162)
                                                                                                  ---------          ---------
NET CHANGE IN CASH AND CASH EQUIVALENTS.....................................................           (837)            55,617
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD............................................         55,617                --
                                                                                                  ---------          ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD..................................................       $ 54,780           $ 55,617
                                                                                                  =========          =========
CASH PAID DURING THE PERIOD FOR:
    Interest................................................................................       $ 32,729           $  2,395
    Income taxes............................................................................       $  3,742           $  3,720
ACQUISITION IN WHICH LIABILITIES WERE ASSUMED ARE AS FOLLOWS:
    Fair value of assets acquired...........................................................          $  --            771,899
    Cash paid for acquisition...............................................................             --           (586,920)
                                                                                                  ---------          ---------
        Liabilities assumed.................................................................      $      --           $184,979
                                                                                                  =========          =========
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                                                              27
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001


1.   DESCRIPTION OF BUSINESS

     Armkel, LLC (the "Company"), a Delaware limited liability company, was
formed as an equally owned joint venture between Church and Dwight Co., Inc.
("C&D") and affiliates and Kelso and Company, L.P ("Kelso"). The Company's joint
venture agreement governs its operations. The Company was formed to acquire (the
"Acquisition") certain operations of the consumer products business of
Carter-Wallace, Inc. ("CWCPD"). The remainder of Carter-Wallace, which was
primarily comprised of Carter-Wallace's healthcare and pharmaceuticals business,
was merged with an unrelated third party, which became the successor company to
Carter-Wallace (the "Successor"). On August 28, 2001, the Company was
capitalized when Armkel Finance Company (a wholly owned subsidiary of the
Company) issued $225 million of 9.5% senior subordinated notes, for net proceeds
of $223.5 million. The Company is a leading marketer and manufacturer of
well-recognized branded personal care consumer products, including condoms,
depilatories and waxes and home pregnancy and ovulation test kits.

2.   BASIS OF PRESENTATION

  Principles of Consolidation

     The accompanying consolidated financial statements include the accounts of
the Company and its subsidiaries. All material intercompany transactions and
profits have been eliminated in consolidation. Accounts of operating units
outside of North America are included for periods one month prior to the period
presented. The financial statement effect of the recently divested Italian
operations is recognized as discontinued operations in all periods.

  Use of Estimates

     The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenue and expenses during the reporting
period. Management makes estimates regarding inventory valuation, promotional
and sales returns reserves, the carrying amount of goodwill and other intangible
assets, the realization of deferred tax assets, tax reserves, liabilities
related to pensions and other postretirement benefit obligations and other
matters that affect the reported amounts and other disclosures in the financial
statements. Estimates by their nature are based on judgement and available
information. Therefore, actual results could differ materially from those
estimates, and it is possible such changes could occur in the near term.

  Revenue Recognition

     Revenue is recognized when the earning process is complete and the risks
and rewards of ownership have transferred to the customer, which is considered
to have occurred upon shipment of the finished product.

  Promotional and Sales Returns Reserves

     The reserves for consumer and trade promotion liabilities, and sales
returns are established based on our best estimate of the amounts necessary to
settle future and existing claims on products sold as of the balance sheet date.
The Company uses historical trend experience and coupon redemption provider
input in arriving at coupon reserve requirements, and the Company uses
forecasted appropriations, customer and sales organization inputs, and
historical trend analysis in arriving at the reserves required for other
promotional reserves and sales returns. While the Company believes that its
promotional and sales returns reserves are adequate and that the judgment
applied is appropriate, such amounts estimated to be due and payable could
differ materially from what will actually transpire in the future.

  Impairment of Long-lived Assets

     Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of the asset may not be
recoverable. In such situations, long-lived assets are considered impaired when
estimated future cash flows (undiscounted and without interest charges)
resulting from the use of the asset and its eventual disposition are less than
the asset's carrying amount. While we believe that our estimates of future cash
flows are reasonable, different assumptions regarding such cash flows could
materially affect our evaluations. When an impairment is indicated, the
estimated future cash flows are then discounted to determine the estimated fair
value of the asset and an impairment charge is recorded for the difference
between the carrying value and the net present value of estimated future cash
flows.


                                                                              28
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001


  Foreign Currency Translation

     Financial statements of foreign subsidiaries are translated into U.S.
dollars in accordance with SFAS No. 52. Translation gains and losses are
recorded in Other Comprehensive Income. Gains and losses on foreign currency
transactions are recorded in the Consolidated Statements of Income.

   Derivatives

  All derivatives are recognized as assets or liabilities at fair value in
the accompanying Consolidated Balance Sheets.

     Derivatives designated as hedges are either (1) a hedge of the fair value
of a recognized asset or liability ("fair value" hedge), or (2) a hedge of the
variability of cash flows to be received or paid related to a recognized asset
or liability ("cash flow" hedge).

-    Changes in the fair value of derivatives that are designated and qualify as
     fair value hedges, along with the gain or loss on the hedged asset or
     liability that is attributable to the hedged risk, are recorded in current
     period earnings.

-    Changes in the fair value of derivatives that are designated and qualify as
     cash flow hedges are recorded in Other Comprehensive Loss until earnings
     are affected by the variability of cash flows of the hedged asset or
     liability. Any ineffectiveness related to these hedges are recorded
     directly in earnings. The amount of the ineffectiveness was not material.

-    Changes in the fair value of derivatives not designated or qualifying as an
     accounting hedge are recorded directly to earnings.

  Comprehensive Income

     Comprehensive income consists of net income, foreign currency translation
adjustments, changes in the fair value of certain derivative financial
instruments designated and qualifying as cash flow hedges, and minimum pension
liability adjustments, and is presented in the Consolidated Statements of Income
and Changes in Members' Equity.

  Cash Equivalents

     Cash equivalents consist of highly liquid short-term investments, which
mature within three months of purchase.

  Inventories

     Inventories are valued at the lower of cost or market on the first-in,
first-out ("FIFO") method.

  Property, Plant and Equipment

     Property, plant and equipment and additions thereto are stated at cost less
accumulated depreciation. Depreciation is provided by the straight-line method
over the estimated useful lives of the respective assets which range from 3-20
years.

  Goodwill, Tradenames and Patents

     The Company accounts for Goodwill, Tradenames and Patents in accordance
with SFAS No. 142. SFAS No. 142 prohibits the amortization of goodwill and
intangible assets with indefinite useful lives. SFAS No. 142 requires these
assets be reviewed for impairment at least annually. Intangible assets with
finite lives will continue to be amortized over their estimated useful lives
using the straight-line method.

  Shipping and Handling Costs

     The Company does not bill shipping and handling costs to its customers. The
Company reimburses C&D for shipping and handling costs. Shipping and handling
costs are included within cost of goods sold.


                                                                              29
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001


  Selected Operating Expenses

     Research & development costs in the amount of $8.4 million for the year
ended December 31, 2002 and $7.2 million for the twelve month period ended
December 31, 2001,were charged to operations as incurred. Research and
development costs were $1.8 million for the period from August 28 to December
31, 2001, adjusted for discontinued operations.

  Income Taxes

     As the Company is treated as a partnership for U.S. tax purposes, it is
generally not subject to U.S. taxes on income. Accordingly, no provision has
been made for income taxes on Domestic income. The foreign subsidiaries of the
Company are subject to taxation. They recognize current and deferred income
taxes under the asset and liability method; accordingly, deferred income taxes
are provided to reflect the future consequences of differences between the tax
bases of assets and liabilities and their reported amounts in the financial
statements. Also, distributions may be made to the members in order to fund
their tax liability.

  Recent Accounting Pronouncements

     In November 2001, the Financial Accounting Standards Board ("FASB")
Emerging Issues Task Force ("EITF") reached a consensus on Issue 01-9 (formerly
EITF issues 00-14 and 00-25), "Accounting for Consideration Given to a Customer
or Reseller of the Vendor's Products." This EITF addressed the recognition,
measurement and income statement classification of consideration from a vendor
to a customer in connection with the customer's purchase or promotion of the
vendor's products. The EITF requires the cost of such items as coupons, slotting
allowances, cooperative advertising arrangements, buydowns, and other allowances
to be accounted for as a reduction of revenues, not included as a marketing
expense as the Company did previously. The prior period net sales have been
reclassified to conform with this pronouncement. The impact was a reduction of
net sales of approximately $52.9 million in 2002, $45.4 million for the twelve
months ended December 31, 2001. This consensus did not have an effect on net
income. In accordance with the consensus reached, the Company adopted the
required accounting beginning January 1, 2002.

     In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. The Company has assessed SFAS
No. 143 and does not anticipate it to have a material impact on the Company's
financial statements. The effective date for the Company is January 1, 2003.

     In January 2002, the Company adopted SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". SFAS No. 144 addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
This statement supersedes FASB Statement No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" and the
accounting and reporting provisions of APB Opinion No. 30, "Reporting the
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions", for the disposal of a business (as previously defined in that
Opinion). This statement also amends ARB No. 51, "Consolidated Financial
Statements", to eliminate the exception to consolidation for a subsidiary for
which control is likely to be temporary. The Company implemented this standard
in 2002 and according to this standard, the Company accounted for its Cranbury
facility, anticipated to be sold as assets held for sale, and its Italian
operations (sold in February 2003) as discontinued operations.

     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." This Statement rescinds FASB Statement No. 4, "Reporting Gains and
Losses from Extinguishment of Debt", and an amendment of that Statement, FASB
Statement No. 64, "Extinguishment of Debt Made to Satisfy Sinking-Fund
Requirements." This Statement also rescinds FASB Statement No. 44, "Accounting
for Intangible Assets of Motor Carriers." This Statement amends FASB Statement
No. 13, "Accounting for Leases", to eliminate an inconsistency between the
required accounting for sale-leaseback transactions and the required accounting
for certain lease modifications that have economic effects that are similar to
sale-leaseback transactions. This Statement also amends other existing
authoritative pronouncements to make various technical corrections, clarify
meanings or describe their applicability under changed conditions. The Company
will adopt the provisions of this Statement upon its effective date and does not
anticipate it to have a material effect on its financial statements.

     In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." The standard requires companies to
recognize certain costs associated with exit or disposal activities when they
are incurred rather than at the date of commitment of a commitment to an exit or
disposal plan. Examples of costs covered by the standard include lease
termination costs and certain employee severance costs that are associated with
a restructuring, discontinued operation, plant closing,


                                       30
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001


or other exit or disposal activity. Statement 146 is to be applied prospectively
to exit or disposal activities initiated after December 31, 2002. The Company
has assessed SFAS 146 and does not anticipate it to have a material impact on
the Company's financial statements.

     In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" ("Interpretation"). This Interpretation
elaborates on the existing disclosure requirements for most guarantees,
including loan guarantees such as standby letters of credit. It also clarifies
that at the time a company issues a guarantee, the company must recognize an
initial liability for the fair market value of the obligations it assumes under
that guarantee and must disclose that information in its interim and annual
financial statements. The initial recognition and measurement provisions of the
Interpretation apply on a prospective basis to guarantees issued or modified
after December 31, 2002. The disclosure provisions are effective for financial
statements of interim or annual periods ending after December 15, 2002.

     In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities (an interpretation of ARB No.51)". This
Interpretation addresses consolidation by business enterprises of certain
variable interest entities, commonly referred to as special purpose entities
(SPEs). The Company has implemented the disclosure provisions of this
Interpretation in these financial statements. The Company will be required to
implement the other provisions of this Interpretation in 2003.

  Reclassification

     Prior year amounts have been reclassified in order to recognize the effect
of discontinued operations and, for certain categories, to conform with the
current year presentation.

3.   FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

     The following table presents the carrying amounts and estimated fair values
of the Company's financial instruments at December 31, 2002 and 2001. SFAS No.
107, "Disclosures About Fair Value of Financial Instruments," defines the fair
value of a financial instrument as the amount at which the instrument could be
exchanged in a current transaction between willing parties.

<TABLE>
<CAPTION>
                                                                            2002                            2001
                                                                            ----                            ----
                                                                 CARRYING         FAIR           CARRYING            FAIR
                                                                  AMOUNT         VALUE            AMOUNT             VALUE
                                                                ---------       --------         --------          --------
<S>                                                             <C>             <C>              <C>               <C>
     (In thousands)
     Short-term borrowings......................................$      55       $     55         $    356          $    356
     Syndicated bank credit facility............................  216,468        216,468          219,474           219,474
     Senior subordinated notes..................................  223,668        242,121          223,522           236,250
     Interest rate swaps........................................    1,217          1,217              202               202
</TABLE>

     The following methods and assumptions were used to estimate the fair value
of each class of financial instruments reflected in the Consolidated Balance
Sheets:

  Short-term Borrowings

     The amounts of unsecured lines of credit equal fair value because of their
short maturities and variable interest rates.

  Syndicated Bank Credit Facility

     The fair value of these securities approximates their carrying values based
upon the variable interest rates that they carry.

  Senior Subordinated Notes

     The fair value is determined based on quoted market prices at or near
December 31, 2002.

  Interest Rate Swaps

     The fair values are the estimated amounts that the Company would receive or
pay to terminate the agreements at the balance sheet date, taking into account
current interest rates.


                                       31
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001


  Foreign Currency

     The Company is subject to exposure from fluctuations in foreign currency
exchange rates, primarily U.S. Dollar/British Pound, U.S. Dollar/Canadian
Dollar, U.S. Dollar/Mexican Peso, U.S. Dollar/Australian Dollar and U.S.
Dollar/Euro. A portion of the Company's revenues and earnings are exposed to
changes in these foreign currency exchange rates. Where practical, the Company
seeks to relate expected local currency revenues with local currency costs and
local currency assets with local currency liabilities.

     In connection with the Acquisition, the Company entered into intercompany
loans with certain of its subsidiaries. The Company is exposed to foreign
exchange accounting remeasurement gains and losses from these intercompany
loans. The Company has entered into several foreign exchange contracts to hedge
the net accounting remeasurement exposure on the intercompany loans. At December
31, 2002, the Company has 15.0M EUROS hedge with an average rate of 98.42, which
is approximately 43.0% of the total EURO debt position. The Company has 30.0M
Mexican Pesos hedge with a rate of 10.55, which is approximately 48.5% of the
PESO debt position. The Company has 2.0M Australian Dollar hedge with a rate of
0.5392, which is approximately 22.4% of the AUS$ debt position.

  Interest Rate Risk

     The Company entered into a syndicated bank credit facility and also issued
senior subordinated notes to finance the Acquisition. The syndicated bank credit
facility consists of variable rate $220 million 6 and 7 1/2-year term loans, of
which $216.5 million was outstanding at December 31, 2002, and an $85 million
variable rate revolving credit facility, which remained fully undrawn at
December 31, 2002. On August 28, 2001, the Company issued $225 million of 9.5%
senior subordinated notes due in 8 years with the interest paid semi-annually.
The weighted average interest rate on the credit facility borrowings at December
31, 2002 and 2001, excluding deferred financing costs and commitment fees, was
approximately 5.0% and 5.9% respectively. The Company entered into interest rate
swap agreements to reduce the impact of the credit facility's variable interest
rate. The swap agreements are contracts to exchange floating rate for fixed
interest rate payments periodically over the life of the agreements without the
exchange of the underlying notional amounts. During the year ended December 31,
2002, the Company had agreements for a notional amount of $50 million, swapping
debt with a one-month LIBOR rate for a fixed rate that averages 6.6%.

4.   INVENTORIES

     Inventories are summarized as follows at December 31:
<TABLE>
<CAPTION>
                                                                      2002             2001
                                                                      ----             ----
                                                                         (in thousands)
<S>                                                                  <C>            <C>
Raw materials and supplies........................................   $10,561        $19,218
Work in process...................................................     5,983         13,045
Finished goods....................................................    36,883         29,524
                                                                     -------        -------
                                                                     $53,427        $61,787
                                                                     =======        =======
</TABLE>

     In the first quarter of 2002 the Company expensed the remaining $8.1
million inventory step-up adjustment recorded in the December 31, 2001 balance.
The step-up adjustment was recorded due to the fair market valuation at
acquisition.

5.   PROPERTY, PLANT AND EQUIPMENT

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

<TABLE>
<CAPTION>
                                                                                                   ESTIMATED
                                                                                                     LIVES
                                                                                                   --------
                                                                          2001          2002        (YEARS)
                                                                        --------      --------     --------
                                                                            (in thousands)
<S>                                                                     <C>           <C>          <C>
Land                                                                     $ 7,067       $ 6,604        N/A
Buildings and improvements...........................................     21,620        21,155      15-20
Machinery and equipment..............................................     44,946        37,594       5-20
Office equipment and other assets....................................      3,800         7,286       3-10
Construction in progress.............................................      4,716         5,443        N/A
                                                                        --------      --------
                                                                          82,149        78,082
Less accumulated depreciation........................................      9,282         1,884
                                                                        --------      --------
Net property, plant and equipment....................................   $ 72,867      $ 76,198
                                                                        ========      ========
</TABLE>


                                       32
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001


     Depreciation of property, plant and equipment amounted to $7.4 million for
the year ended December 31, 2002 and $2.0 million for the three month period
ended December 31, 2001.

6.   ACQUISITIONS

     On May 7, 2001 the Company and Carter-Wallace entered into a definitive
Asset Purchase Agreement which was consummated on September 28, 2001. The
Company acquired the assets and liabilities that related primarily to the
consumer products business of Carter-Wallace, as well as 100% of the capital
stock of certain foreign subsidiaries of Carter-Wallace. The purchase price for
the acquired business was approximately $739 million, which consisted of cash
consideration of approximately $715.4 million, the repayment of approximately
$19.9 million of indebtedness and the assumption of approximately $3.7 million
of indebtedness, plus transaction fees and expenses of approximately $10.4
million. Additional purchase price was paid in 2002 related to the settlement of
certain contingencies surrounding the Acquisition.

     Under a separate agreement dated May 7, 2001, C&D agreed to simultaneously
purchase from the Company, for $128.5 million, the assets relating to the
antiperspirant/deodorant product lines in the United States and Canada and the
assets relating to the Lambert-Kay line of pet products, and assumed the
liabilities of these businesses.

     The Acquisition is accounted for as a purchase under the provisions of SFAS
No. 141, "Business Combinations" and has been included in the Company's
financial statements from the date of the acquisition.

     The following table summarizes the fair values of the assets acquired and
liabilities assumed (excluding the assets relating to the anti-perspirant and
pet care products businesses) adjusted to reflect the additional purchase price
and allocation adjustments in 2002:

<TABLE>
                                                                   (in thousands)
<S>                                                                <C>
Current assets................................................        $206,068
Property, plant and equipment.................................          94,835
Tradenames and patents........................................         266,900
Goodwill......................................................         208,994
Other long-term assets........................................           3,218
                                                                      --------
Total assets acquired.........................................         780,015
Total liabilities.............................................        (184,205)
                                                                      --------
     Net assets acquired......................................        $595,810
                                                                      ========
</TABLE>

     $239.4 million was assigned to tradenames and $27.5 million was assigned to
patents. Tradenames are not being amortized as it has been determined that they
have an indefinite life. Patents are being amortized between 5-8 years.

     $173.0 million and $36.0 million of goodwill were assigned to the domestic
segment and international segment, respectively. Domestic goodwill will be
deductible for tax purposes by the members. International goodwill is before the
reclass of discontinued operations and is not deductible for tax purposes.

  Pro forma results--unaudited

     The following reflects pro forma results for the nine months ended December
31, 2001 and the twelve months ended March 31, 2001.

<TABLE>
<CAPTION>
                                                       FOR THE NINE
                                                       MONTHS ENDED      FOR THE TWELVE
                                                       DECEMBER 31,       MONTHS ENDED
                                                           2001          MARCH 31, 2001
                                                       ------------      --------------
                                                         PRO FORMA         PRO FORMA
<S>                                                    <C>               <C>
Net Sales...........................................      $276.3           $ 344.5
Income from operations..............................        51.3              85.3
Net Income..........................................        20.9              39.5
</TABLE>

     The pro forma results adjusts for additional interest expense related
principally to the debt incurred to finance the Acquisition and for income taxes
under the Company's LLC status. Adjustments were also made to depreciation and
amortization expense related to the fair value of the assets acquired and the
implementation of SFAS No. 142, "Goodwill and Other Intangible Assets."


                                                                              33
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001



  7.  GOODWILL AND INTANGIBLE ASSETS

     In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets," which supersedes APB Opinion No. 17, "Intangible Assets". Under its
changes, SFAS No. 142 establishes new standards for goodwill acquired in a
business combination and eliminates amortization of goodwill and instead sets
forth methods to periodically evaluate goodwill for impairment. The Company, at
its inception, adopted certain provisions of this statement. The impairment
provisions of the statement were adopted January 1, 2002 and did not have any
impact on the Company's consolidated financial statements.

     The following tables discloses the carrying value of all intangible assets:

<TABLE>
<CAPTION>
                                                      DECEMBER 31, 2002                               DECEMBER 31, 2001
                                        -------------------------------------------    ---------------------------------------------
                                        Gross Carrying      Accum.                     Gross Carrying        Accum.
(In thousands)                            Amount        Amortization         Net          Amount         Amortization        Net
                                          ------        ------------         ---          ------         ------------        ---
<S>                                     <C>             <C>            <C>             <C>               <C>             <C>
Amortized intangible assets:
      Patents                           $     27,500     $   5,625     $     21,875    $     27,500      $   1,125       $   26,375
                                        ============     =========     ============    ============      =========       ==========

Unamortized intangible assets - Carrying value(1)
      Tradenames                        $    239,400     $      --     $    239,400    $    239,036      $      --       $  239,036
                                        ============     =========     ============    ============      =========       ==========
</TABLE>

----------
(1)  Change in unamortized tradenames is primarily due to translation
     adjustments.

     Intangible amortization expense amounted to $4.5 million and $1.1 million
for the year ended December 31, 2002 and for the period from August 28, 2001
(inception) to December 31, 2001, respectively. The estimated intangible
amortization for each of the next five years is approximately $4.5 million.
The weighted average amortization period for patents is 6.4 years.

     The changes in the carrying amount of goodwill for the year ended December
31, 2002 is as follows:

<TABLE>
<CAPTION>
(In thousands)                                                  DOMESTIC         INTERNATIONAL             TOTAL
                                                               ----------        -------------          ----------
<S>                                                            <C>               <C>                    <C>
Balance December 31, 2001...............................       $  145,237          $   28,413           $  173,650
Purchase accounting adjustments.........................           27,769               3,740               31,509
Foreign exchange/other..................................               --                 308                  308
                                                               ----------          ----------           ----------
Balance December 31, 2002...............................      $   173,006         $    32,461         $    205,467
                                                               ==========          ==========           ==========
</TABLE>

     The purchase accounting adjustments include the revaluation of the
Cranbury, New Jersey property (see Note 16), settlement of the domestic working
capital and other matters with Medpointe Inc. (the successor to Carter-Wallace,
Inc.) (see Note 14), required severance reserves and additional acquisition
costs.

     In accordance with SFAS No. 142, the Company completed the annual
impairment test of the valuation of goodwill and intangibles as of April 1, 2002
and based upon the results, there was no impairment.

8.   JOINT VENTURE AGREEMENT

     The Company is a Delaware limited liability company. The Company was formed
as a joint venture among C&D, which owns 50%, and an entity wholly owned by
Kelso Investment Associates VI, L.P. and KEP VI, LLC, which the are referred to
as the Kelso funds, which owns 50%, for the purpose of acquiring the consumer
products business of Carter-Wallace. The Company's joint venture agreement
governs the Company's operations. The material provisions of this agreement are
described below.

  Governance. The joint venture agreement contains provisions regarding the
Company's governance, including the following:

     -    Board of Directors. The Company's board of directors consists of three
          directors appointed by C&D and three directors appointed by the Kelso
          funds. Any committee established by the Company's board of directors
          must have an equal number of directors appointed by the Kelso funds
          and by C&D. Any action by the Company's board of directors requires
          the affirmative vote of members holding a majority of membership
          interests present at a meeting at which such matter is voted upon,
          except that in certain matters, approval of at least one C&D director
          and at least one Kelso director is also required. The presence of an
          equal number of Kelso directors and C&D directors constitutes a
          quorum.


                                                                              34
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001


     -    Officers and Management. The Company's officers may be removed by its
          board of directors (requiring, in the case of its chief executive
          officer, the approval of at least one Kelso director and one C&D
          director) or the Company's chief executive officer (in the case of its
          other officers). In addition, if certain financial targets are not
          satisfied, Kelso has the right to remove the Company's chief executive
          officer. Vacancies in the Company's officer positions will be filled
          by its board of directors (which, in the case of the Company's chief
          executive officer and chief financial officer positions, require the
          approval of a Kelso director and a C&D director) or the Company's
          chief executive officer.

     A number of significant managerial functions are performed for the Company
by C&D. For additional information about the Company's management, see Item 10.
Directors and Executive Officers of the Registrant.

     Transfers of Interests; Preferential Purchase or Sale Rights. Except as
described below, the Company's members may not transfer their interests in the
Company or admit additional members (other than in transactions with certain of
their respective affiliates), without the prior written consent of all of the
other members.

     -    Call Option. The Kelso funds have granted C&D an option to purchase
          the Kelso funds' membership interests in the Company. The option is
          exercisable at any time after the third anniversary and before the
          fifth anniversary of the closing of the Acquisition. The purchase
          price for the Kelso funds' interests in the Company is equal to 50% of
          the Company's fair market value at the time the option exercise notice
          is given, as determined pursuant to a valuation method set forth in
          the joint venture agreement. The purchase price is subject to certain
          floors and caps which are indexed to the Kelso funds' rate of return
          on their investment in the Company.

          -    Right of First Offer and Drag Along Rights. The joint venture
          agreement provides for a mechanism whereby the Company's members may
          dispose of their interests and, in certain circumstances, force a sale
          of the entire entity. At any time after the fifth anniversary of the
          closing of the Acquisition, in the case of a request by the Kelso
          funds, and after the seventh anniversary of the closing of the
          Acquisition, in the case of a request by C&D, the Kelso funds or C&D
          may request that the other party purchase all (but not less than all)
          of the requesting party's ownership interests in the Company at a
          price specified in the request. If the other party declines the
          request, the requesting party may sell all of its interests and all of
          the other member's interest in the Company to a third party, with the
          proceeds of such sale to be distributed to the members in accordance
          with the terms of the joint venture agreement. Under certain
          circumstances, if the proceeds of a proposed third party sale are
          insufficient to provide the Kelso funds with a return of their initial
          investment (less $5.0 million), C&D may elect to purchase the Kelso
          funds' interests at a price equal to the amount of the Kelso funds'
          initial investment (less $5.0 million), or pay the Kelso funds the
          amount of such shortfall, as described below. Under certain
          circumstances in which Kelso requests that C&D purchase its ownership
          interests, and C&D declines, then following a bona fide sales process,
          Kelso may require C&D to purchase the Kelso funds' ownership interests
          for a price equal to Kelso's investment, less $5.0 million (as such
          terms are defined in the joint venture agreement). This amount would
          not be payable until after the seventh anniversary of the Acquisition.

     -    Change of Control Put Option. The joint venture agreement also
          provides that, upon the occurrence of a change of control of C&D (as
          defined in the joint venture agreement), the Kelso funds may require
          C&D to purchase all of the Kelso funds' ownership interests in the
          Company at a price equal to (i) the fair market value of the Company
          at the time the option exercise notice is given, minus $5.0 million,
          multiplied by 50%, plus (ii) $5.0 million.

     The foregoing purchase and sale rights will be subject to various
adjustments and limitations not described above, including the agreement by C&D
that, in the case of a forced sale to a third party, after the seventh
anniversary of the Acquisition it will make up any shortfall to the Kelso funds
relative to the Kelso funds' aggregate initial capital contribution, less $5.0
million.

     Covenants of C&D. Under the joint venture agreement, C&D has agreed that:

     -    without the prior consent of the Kelso funds, C&D will not incur any
          indebtedness unless C&D's ratio of consolidated debt to adjusted
          EBITDA (as defined in C&D's senior credit facility) for the prior four
          fiscal quarters is less than 4.5:1.0, or unless C&D has provided the
          Kelso funds with a letter of credit or other reasonably satisfactory
          credit support in an amount equal to the Kelso funds' initial capital
          contributions, less $5.0 million;

     -    it will not create or cause or permit to exist any restriction on its
          ability to operate the Company or on the Company's ability to engage
          in any line of business; and

     -    if presented with an opportunity to operate or invest in any entity
          engaged in the business of manufacturing, marketing or selling of
          condoms, depilatory products or diagnostic tests, or, with respect to
          non-U.S. operations, cosmetics, over-the-counter drugs or toning and
          exfoliating products, it will first offer such opportunity to the
          Company.


                                                                              35
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001

     Covenant of Kelso. Under the joint venture agreement, the Kelso funds have
agreed that, if presented with an opportunity to operate or invest in any entity
engaged in the business of manufacturing, marketing or selling condoms,
depilatory products or diagnostic tests, it will first offer such opportunity to
the Company.

     Termination of the Joint Venture Agreement. The joint venture agreement
will terminate upon the occurrence of any of the following:

     -    the vote of all members in favor of termination;

     -    an initial public offering of the Company's equity interests;

     -    the payment of the proceeds of any sale of the Company to a third
          party, or upon the final liquidating distribution made in connection
          with a dissolution of the Company; or

     -    the payment in full by either member of the purchase price for all the
          membership interests of the other member.

     Dissolution of the Company. The Company will be dissolved and its assets
liquidated upon the occurrence of any of the following:

     -    the vote of all members in favor of dissolution;

     -    the sale, exchange or disposition of substantially all of the
          Company's assets;

     -    an insolvency event with respect to any member, if other members
          holding at least 50.0% of the interests vote in favor of dissolution;

     o    it becoming unlawful for a member to conduct its business
          substantially in the manner contemplated by the joint venture
          agreement; or

     -    a judicially ordered dissolution.


9.   ACCOUNTS PAYABLE AND ACCRUED EXPENSES

     Accounts payable and accrued expenses consist of the following at December
31 (in thousands):

<TABLE>
<CAPTION>
                                                                         2002          2001
                                                                         ----          ----
<S>                                                                   <C>              <C>
Accounts payable..................................................    $36,103           $25,482
Accrued severance.................................................      6,005            40,709
Accrued advertising, marketing, brokerage & sales promotion.......      9,894            11,769
Accrued payroll liabilities.......................................     10,745             8,698
Payable due to Church & Dwight....................................      4,833            11,937
Accrued acquisition costs.........................................      3,082             4,225
Accrued interest payable..........................................      8,112             8,092
Accrued audit and professional fees...............................        536               659
Other accrued expenses............................................      5,726             5,627
                                                                      -------          --------
Total accounts payable and other accrued expenses.................    $85,036          $117,198
                                                                      =======          ========
</TABLE>

10.  SHORT-TERM BORROWINGS AND LONG-TERM DEBT

     The Company entered into a syndicated bank credit facility and also issued
senior subordinated notes primarily to finance the Acquisition.

     Syndicated Bank Credit Facility

     The bank credit facility, consisting of several tranches, has a total of
$220 million in variable rate six and seven and one half year term loans, all of
which were used to finance the Acquisition and a six year $85 million variable
rate revolving credit facility, which remained fully undrawn at December 31,
2002. The revolving credit facility is available for working capital, general
corporate purposes, severance payments and acquisitions.


                                                                              36
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001

     The tranche A-1 facility, a $50 million term loan with a predetermined
repayment schedule, matures in September of 2007. The interest rate is variable
with the Company having the option to select one of several variable rates
including LIBOR plus a percentage to be determined based on the Company's
financial performance but no greater than 3%, an alternate base rate plus a
percentage to be determined based on the Company's financial performance but no
greater than 2% or the greater of prime rate, a certificate of deposit rate plus
1% or Federal Funds effective rate plus 1/2 of 1%. For the period ended December
31, 2002 the Company selected a rate based on LIBOR.

     The tranche A-2 facility, a $31.5 million Canadian dollar term loan (US$20
million at acquisition), with a predetermined repayment schedule, matures in
September of 2007. The interest rate is variable with the Company having the
option to select among two variable rates, Canadian BA rate plus a percentage to
be determined based on the Company's financial performance but no greater than
3% or a rate equal to the greater of the Bank of Canada's prime rate plus a
percentage to be determined based on the Company's financial performance but no
greater than 2%. During the period ended December 31, 2002 the Company selected
variable rates.

     The tranche B facility, a $150 million term loan with a predetermined
repayment schedule, matures in March of 2009. The interest rate is variable with
the Company having the option to select one of two variable rates, LIBOR plus 3%
or an alternate base rate plus 2%. For the period ended December 31, 2002 the
Company selected a rate based on LIBOR.

     The $85 million revolving credit facility has a variable interest rate with
the Company having the option to select one of several rates including LIBOR
plus a percentage to be determined based on the Company's financial performance
but no greater than 3%, an alternate base rate plus a percentage to be
determined based on the Company's financial performance but no greater than 2%
or the greater of prime rate, a certificate of deposit rate plus 1% or Federal
Funds effective rate plus 1/2 of 1%. The Company pays an unused commitment fee
of .5% based on the daily average unused portion of the revolving credit
facility, subject to certain reductions based on the Company's financial
performance.

     The weighted average interest rate on the overall credit facility, for the
year ended December 31, 2002 and for the period from August 28 (inception) to
December 31, 2001, excluding the undrawn revolving facility, was 5.0% and 5.9%
respectively, exclusive of deferred financing costs and commitment fees,
including hedges.

     The syndicated bank credit facility contains various non financial and
financial covenants including the maintenance of certain ratios of leverage and
interest coverage as well as limitations on capital expenditures, liens, sale of
assets, acquisitions, voluntary prepayment of debt, transactions with affiliates
and loans and investments. Violation of covenants could result in an event of
default and trigger early termination of the credit facility, if not remedied
within a certain period of time. In 2002, the Company executed a waiver to the
syndicated bank credit facility in order to gain approval for the sale of the
Italian operations.

     In addition to the predetermined repayment schedule, the term loans will be
mandatorily reduced in amounts equal to 50% of excess cash flow, as defined,
100% of net cash proceeds of asset sales and dispositions of property, 100% of
net cash proceeds of any issuances of debt obligations and 50% of net cash
proceeds of issuances of equity. Upon completion of the sale of the Italian
operations in February 2003, the Company paid 100% of the net cash proceeds of
$21.6 million to reduce the term loans.

     The borrowings under the syndicated bank credit facility are secured by
substantially all of the domestic assets of the Company, a pledge of stock of
the Company's operating subsidiaries and a pledge of not more than 65% of the
voting capital stock of the Company's foreign subsidiaries.

     Senior Subordinated Notes

     On August 28, 2001, the Company issued $225 million of 9.5% senior
subordinated notes due in 2009 ("Notes") with interest paid semi-annually. The
Notes were issued at a discount and the Company received proceeds of $223.5
million, all of which were used to finance the Acquisition. The Notes are
subordinate to all amounts outstanding under the credit facility. The effective
yield on the Notes is approximately 9.62%. The terms of the Notes provide for an
optional prepayment of principal at a premium. The original issue discount is
being amortized using the effective interest method. The Notes are guaranteed by
all of the Company's domestic subsidiaries. The Notes contain various financial
and non-financial covenants similar to the credit facility.


                                                                              37
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                    FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001

     Long-term debt and current portion of long-term debt consist of the
following (in thousands):

<TABLE>
<CAPTION>
                                                                                                               2002           2001
                                                                                                               ----           ----
<S>                                                                                                          <C>            <C>
           Syndicated Financing Loan Due September 30, 2007...........................................       $ 48,750       $50,000
           Syndicated Financing Loan Due September 30, 2007...........................................         19,593        19,849
           Syndicated Financing Loan Due March 30, 2009...............................................        148,125       149,625
           Senior Subordinated Note (9 1/2%) Due August 28, 2009.........................................
                Interest Paid semi-annually 2/15 and 8/15.............................................        225,000       225,000
           Various short term borrowings at foreign subsidiaries......................................             55           356
                                                                                                             --------      --------
                Total Debt............................................................................        441,523       444,830
                Less: discount on Senior Subordinated Note............................................          1,333         1,478
                Less: current maturities (including short term borrowings)............................         28,556         3,602
                                                                                                             --------      --------
                Net long-term debt....................................................................       $411,634      $439,750
                                                                                                             ========      ========

     The principal payments required to be made are as follows (in thousands):

           2003.......................................................................................      $  28,556(1)
           2004.......................................................................................          9,307
           2005.......................................................................................         11,108
           2006.......................................................................................         14,712
           2007.......................................................................................         37,401
           2008.......................................................................................         78,738
           2009.......................................................................................        261,701
                                                                                                            ---------
                Total Debt............................................................................      $ 441,523
                                                                                                            =========
</TABLE>

     (1) In the first quarter of 2003 net proceeds from the sale of the Italian
operations of $21.6 million are required to pay down the syndicated credit
facility, along with $6.9 million of predetermined repayments.

     The Company entered into interest rate swap agreements, which are
considered derivatives, to reduce the impact of changes in interest rates on its
floating rate credit facility. The swap agreements are contracts to exchange
floating interest payments for fixed interest payments periodically over the
life of the agreements without the exchange of the underlying notional amounts.
As of December 31, 2002, the Company had swap agreements in the notional amount
of $50 million, swapping debt with a one month LIBOR rate for a fixed interest
rate that averages 6.6%. The fair value of these swaps were recorded as a
liability in the amount of $1.2 million at December 31, 2002. These instruments
are designated as cash flow hedges as of December 31, 2002 and the changes in
fair value have been recorded in other comprehensive income ("OCI") as there was
no ineffectiveness. The amount expected to be classified from OCI to earnings
over the next three months is not significant.

11.  INCOME TAXES

     Federal income taxes on the income of the Company are payable directly by
the members pursuant to the Internal Revenue Code. Accordingly, no provision for
federal or state income tax has been included in the Company's financial
statements. The difference between federal tax and book basis of the Company's
domestic assets and liabilities is a net tax deductible difference of $44.6
million at December 31, 2002 (consisting of tax deductible differences of $51.5
million and taxable temporary differences of $6.9 million). Earnings of the
foreign operations are taxable under local country statutes.

     The components of income (loss) before taxes are as follows:

<TABLE>
<CAPTION>
                                                                           PERIOD FROM
                                                         YEAR ENDED        AUGUST 28 TO
                                                        DECEMBER 31,       DECEMBER 31,
                                                            2002               2001
                                                            ----               ----
                                                                 (in thousands)
<S>                                                       <C>                <C>
           Domestic...................................    $ 22,859           $ (14,426)
           Foreign....................................      12,585                (941)
                                                          --------           ---------
           Total......................................    $ 35,444           $ (15,367)
                                                          ========           =========
</TABLE>


                                                                              38
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001


     The following table summarizes the provision for U.S. federal, state and
foreign income taxes:


<TABLE>
<CAPTION>
                                                                           YEAR ENDED       PERIOD FROM
                                                                          DECEMBER 31,      AUGUST 28 TO
                                                                              2002        DECEMBER 31, 2001
                                                                          ------------    -----------------
                                                                                  (in thousands)
<S>                                                                       <C>             <C>
           Current:
                U.S. federal...........................................      $  --           $   --
                State..................................................         --               --
                Foreign................................................        7,928            1,151
                                                                             -------         --------
                                                                             $ 7,928         $  1,151
                                                                             =======         ========

           Deferred:
                U.S. federal...........................................       $ --             $ --
                State..................................................         --               --
                Foreign................................................         (986)          (1,625)
                                                                             -------         --------
                                                                                (986)          (1,625)
                                                                             -------         --------
           Total provision (benefit)...................................     $  6,942          $  (474)
                                                                             =======         ========
</TABLE>

     Deferred tax liabilities/(assets) of the foreign subsidiaries consist of
the following at December 31:

<TABLE>
<CAPTION>
                                                                                                 2002            2001
                                                                                                 ----            ----
                                                                                                    (in thousands)
<S>                                                                                            <C>             <C>
Deferred tax assets:
     Personnel benefits................................................................        $(3,772)        $ (1,209)
     Other.............................................................................           (498)             (53)
                                                                                               -------         --------
     Total deferred tax assets.........................................................         (4,270)          (1,262)
                                                                                               -------         --------
Deferred tax liabilities:
     Inventory related.................................................................          1,873            1,203
     Depreciation and amortization.....................................................          1,700            1,611
     Fair market value adjustment to intangible assets.................................          5,748            5,225
     Fair market value adjustment to property, plant and equipment.....................          2,302            2,148
     Other.............................................................................           (173)             176
                                                                                               -------         --------
     Total deferred tax liabilities....................................................         11,450           10,363
                                                                                               -------         --------
Net deferred tax liability.............................................................        $ 7,180          $ 9,101
                                                                                               =======         ========
</TABLE>

     The difference between tax expense and the "expected" tax which would
result from the use of the federal statutory rate is as follows:

<TABLE>
<CAPTION>
                                                                                                              PERIOD FROM
                                                                                      YEAR ENDED             AUGUST 28 TO
                                                                                  DECEMBER 31, 2002        DECEMBER 31, 2001
                                                                                  -----------------        -----------------
                                                                                               (in thousands)
<S>                                                                               <C>                      <C>
Income taxes computed at statutory U.S. federal income tax rate..................       $ 12,405                   $ (5,520)
Partnership status for U.S. Federal income tax purposes..........................         (8,001)                     5,049
Foreign tax adjustments..........................................................          1,343                       (498)
Unrecognized foreign exchange loss...............................................          1,444                        232
Other............................................................................           (249)                       263
                                                                                        --------                   --------
Income taxes as recorded (benefits)..............................................       $  6,942                     $ (474)
                                                                                        ========                   ========
</TABLE>

12.  PENSION AND NONPENSION POSTRETIREMENT BENEFITS

     The Company has defined benefit pension plans covering certain hourly
employees. Pension benefits to retired employees are based upon their length of
service and a percentage of qualifying compensation during the final years of
employment. The Company's funding policy is consistent with federal funding
requirements. Retirement plan obligations consist of the Retirement Plan for
Bargaining Employees of Carter-Wallace, and certain obligations of foreign
subsidiaries.

     Obligations for retirement-related plans exist in each of the Company's
foreign subsidiaries. Both Canada and the United Kingdom have defined benefit
pension plans. The plans are accounted for in accordance with SFAS No. 87,
"Accounting for


                                                                              39
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001


Pensions." The retirement-related plans that also exist in other foreign
subsidiaries which, in totality, are not material to these combined statements.

     Postretirement benefit obligations related to the Company's United States
bargaining unit employees and employees in Canada are included in the
accompanying combined statements in accordance with SFAS No. 106, "Employers'
Obligations for Postretirement Benefits Other Than Pensions."

<TABLE>
<CAPTION>
                                                                                                     NONPENSION         NONPENSION
                                                                                                   POSTRETIREMENT     POSTRETIREMENT
                                                              PENSION PLANS      PENSION PLANS      BENEFIT PLANS     BENEFIT PLANS
                                                                   2002             2001(1)             2002              2001(1)
                                                              -------------      -------------     --------------     --------------
                                                                                       (in thousands)
<S>                                                           <C>                <C>               <C>                <C>
Change in Benefit Obligation:
     Benefit obligation at beginning of period.............      $  71,665         $  71,109            $ 1,680          $  1,608
     Adjustment to prior year benefit plan obligation......             63                --                (58)               --
     Service costs.........................................          1,704               539                 43                21
     Interest cost.........................................          4,555             1,144                108                28
     Other Participant's contributions.....................            418               156                 --                --
     Actuarial (gain) loss.................................            915               282                 39                57
     Benefits paid.........................................         (7,371)           (1,007)               (90)              (23)
     Effect of exchange rate changes.......................          2,192              (558)                13               (11)
                                                                 ---------         ---------           --------          --------
Benefit obligation at end of period........................      $  74,141         $  71,665           $  1,735          $  1,680
                                                                 =========         =========           ========          ========
Change in Plan Assets:
     Fair value of plan assets at beginning of period......      $  61,616         $  60,938                 --          $     --
     Actual return on plan assets (net of expenses)........         (4,037)            1,711                 --                --
     Employer contributions................................          2,453               291                 81                23
     Participants' contributions...........................            418               156                  9                --
     Benefits paid.........................................         (7,371)           (1,007)               (90)              (23)
     Effect of exchange rate changes.......................          1,683              (474)                --                --
                                                                 ---------         ---------           --------          --------
Fair value of plan assets at end of period.................      $  54,762         $  61,615                 --          $     --
                                                                 =========         =========           ========          ========
Reconciliation of the Funded Status:
     Funded status.........................................        (19,379)        $ (10,050)            (1,735)         $ (1,680)
      Unrecognized transition obligation...................             --                --                 --                --
      Unrecognized prior service cost (benefit)............             --               (33)                --                --
      Unrecognized actuarial gain..........................          9,516                --                 26                --
      Effect of exchange rate changes......................            114                --                 --                --
                                                                 ---------         ---------           --------          --------
      Net amount recognized at end of period...............      $  (9,749)        $ (10,083)          $ (1,709)         $ (1,680)
                                                                 =========         =========           ========          ========
Amounts recognized in the statement of financial position
   consist of:
     Prepaid benefit cost..................................             --         $   3,199                 --             $  --
     Accrued benefit liability.............................        (14,924)          (13,282)           (1,709)            (1,680)
      Accumulated loss in comprehensive income.............          5,175                --                 --                --
                                                                 ---------         ---------           --------          --------
Net amount recognized at end of period.....................      $ ( 9,749)        $ (10,083)          $ (1,709)         $ (1,680)
                                                                 =========         =========           ========          ========
Weighted-average assumptions as of December 31:
   Discount rate...........................................           6.47%             6.60%              6.75%             6.54%
   Rate of compensation increase...........................           4.33%             4.29%                --                --
   Expected return on plan assets..........................           7.76%             7.80%                --                --
</TABLE>

(1)  Prior year amounts are reclassified for conformity to 2002 presentation.


                                                                              40
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001

     Net Pension and Net Postretirement Benefit Costs consisted of the following
components:

<TABLE>
<CAPTION>
                                                                                               POSTRETIREMENT      POSTRETIREMENT
                                                        PENSION COSTS      PENSION COSTS           COSTS                COSTS
                                                             2002             2001(1)               2002               2001(1)
                                                             ----             -------               ----               -------
                                                                                    (in thousands)

<S>                                                     <C>                <C>                 <C>                  <C>
Components of Net Periodic Benefit Cost:
Service cost.........................................          $ 1,704           $  539             $   43               $  21
Interest cost........................................            4,555            1,144                108                  28
Expected return on plan assets.......................           (1,823)            (497)                --                  --
Other................................................               --              (30)                --                 (37)
Net deferrals........................................           (2,840)            (775)                --                  --
Recognized actuarial loss............................               --               53                 --                  --
                                                               -------           ------             ------               -----
Net periodic benefit cost (income)...................          $ 1,596           $  434             $  151               $  12
                                                               =======           ======             ======               =====
</TABLE>

(1)  Prior year amounts are reclassified  for conformity to 2002 presentation

     On December 31, 2002 the accumulated benefit obligation related to the
pension plans exceeded the fair value of the pension plan assets (such excess is
referred to as an un-funded accumulated benefit obligation). This difference is
attributed to (1) an increase in the accumulated benefit obligation that
resulted from the decrease in the interest rate used to discount the projected
benefit obligation to its present settlement amount from 7.25% to 6.75% in two
of the Company's plans and (2) a decline in the market value of the plan assets
at December 31, 2002. As a result, in accordance with SFAS No. 87, the Company
recognized an additional minimum pension liability of $5.2 million included in
benefit obligations, and recorded a charge, net of tax, to accumulated other
comprehensive loss of $4.8 million which decreased stockholders' equity. The
charge to stockholders' equity for the excess of additional pension liability
represents a net loss not yet recognized as pension expense.

     The pension plan assets primarily consist of equity mutual funds, fixed
income funds and a guaranteed investment contract fund.

<TABLE>
<CAPTION>
                                                                         2002         2001
                                                                         ----         ----
                                                                          (in thousands)
<S>                                                                      <C>          <C>
Effect of 1% increase in health-care cost trend rates on:
     Postretirement benefit obligation.................................  $164         $139
     Total of service cost and interest cost component.................    18            6
Effect of 1% decrease in health-care cost trend rates on:..............
     Postretirement benefit obligation.................................   139         (124)
     Total of service cost and interest cost component.................    15            5
</TABLE>

     The Company also maintains a defined contribution profit-sharing plan for
domestic salaried and certain hourly employees. Contributions to the
profit-sharing plan charged to earnings were approximately $1.8 million for the
year ended December 31, 2002 and $0.6 million for the period from September 29,
2001 to December 31, 2001.

     The Company also has an employee savings plan. The Company matches 50% of
each employee's contribution up to a maximum of 6% of the employee's earnings.
The Company's matching contributions to the savings plan were approximately $0.4
million for the year ended December 31, 2002 and $0.1 million for the period
from September 29, 2001 to December 31, 2001.

13.   RELATED PARTY TRANSACTIONS

      Arrangements with Church & Dwight

     As part of the acquisition, the Company entered into a management services
agreement ("MSA") with C&D whereby C&D has agreed to provide the Company with
corporate management and administrative services primarily for the Company's
domestic operations. These services generally include, but are not limited to,
sales, marketing, facilities operations, finance, accounting, MIS, legal and
regulatory, human resources, R&D, Canadian sales and executive and senior
management oversight of each of the above services.


                                                                              41
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001

     The term of the management services agreement is five years, with automatic
one-year renewals unless the Company provides six months' notice that it does
not want to renew the agreement.

     For the year ended December 31, 2002, the Company was invoiced by C&D $22.5
million for administrative, manufacturing and management oversight services
provided by C&D and $1.4 million of toothpaste products. The Company sold $7.1
million of deodorant anti-perspirant inventory to C&D at its cost. The Company
also invoiced C&D $1.7 million of transition administrative services.

     At December 31, 2002 the Company had a net payable of approximately $4.8
million primarily related to administrative services partially offset by amounts
owed by C&D for inventory from international subsidiaries.

      Arrangements with Kelso

     Kelso has agreed to provide the Company with financial advisory services
for which the Company pays an annual fee of $1.0 million. The Company has agreed
to indemnify Kelso against certain liabilities and reimburse expenses in
connection with its engagement. For the year ended December 31, 2002, the
Company paid Kelso $1.0 million for 2002 financial advisory fees plus prepaid
the 2003 financial advisory services fee of $1.0 million at a discounted value.
For the period ended December 31, 2001, the Company paid Kelso $250 thousand for
financial advisory fees.

14.  COMMITMENTS AND CONTINGENCIES

     Commitments

     Rent expense amounted to $3.2 million for the year ended December 31, 2002
and $1.5 million for the period of September 29, 2001 to December 31, 2001. The
Company is obligated for minimum annual rentals under non-cancelable long-term
operating leases as follows:

<TABLE>
<S>                                                              <C>
                                                                 (in thousands)
2003.............................................................     $ 3,580
2004.............................................................       3,413
2005.............................................................       2,938
2006.............................................................       2,777
2007 and thereafter..............................................       4,671
                                                                  -----------
Total future minimum lease commitments...........................     $17,379
                                                                  ===========

</TABLE>

     The Company also has capital lease obligations at certain of its foreign
subsidiaries. The commitments on these obligations are immaterial.

     Contingencies

     The Acquisition, and the concurrent sale of the remainder of
Carter-Wallace's business to MedPointe Inc. (the successor to Carter-Wallace),
involved a number of arrangements between the Company and MedPointe relating to
assets and liabilities purchased and assumed by the Company or MedPointe as part
of the transaction. These arrangements have given rise to a number of disputes
among the parties which may lead to the incurrence of costs or liabilities, and
the Company's payment of funds.

     In September 2002, the Company reached a settlement with MedPointe
regarding liability for retiree medical costs. Pursuant to the Asset Purchase
Agreement, the Company had agreed to assume liability for 60% of the future
retiree medical costs incurred with respect to certain specifically identified
employees of the consumer products business that terminated employment with
Carter-Wallace during the period from May 7, 2001, through and including
September 28, 2001, the date the Acquisition was consummated. MedPointe asserted
that all of the specifically identified employees of the consumer products
business were terminated by Carter-Wallace on the date of closing, and that the
Company was therefore liable for 60% of the future retiree medical costs with
respect to all of those former employees. MedPointe estimated the Company's
share of the liability for the specifically identified employees was
approximately $6 million to $10 million (depending upon final actuarial
valuation), based on current plan design, which is subject to change at any time
by such entity. The Company disputed MedPointe's position. Under the terms of
the settlement, the Company paid MedPointe $1.5 million to settle the issue and
adjusted the purchase price allocation accordingly.


                                       42
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001

     In September 2002, the Company adjusted the purchase price allocation for a
$3.4 million settlement with MedPointe for domestic working capital as of the
date of the acquisition and for a $1.1 million settlement with MedPointe for
amounts allocable to the retirement program for former Carter-Wallace
executives, of which $0.8 million was recognized at December 31, 2001.

     On January 17, 2002, a petition for appraisal, Cede & Co., Inc. and GAMCO
Investors, Inc. v. MedPointe Healthcare Inc., Civil Action No. 19354, was filed
in the Court of Chancery of the State of Delaware demanding a determination of
the fair value of shares of MedPointe. The action was brought by purported
former shareholders of Carter-Wallace in connection with the merger on September
28, 2001 of MCC Acquisition Sub Corporation with and into Carter-Wallace. The
merged entity subsequently changed its name to MedPointe. The petitioners seek
an appraisal of the fair value of their shares in accordance with Section 262 of
the Delaware General Corporation Law. The matter was heard on March 10 and 11,
2003, at which time the petitioners purportedly held approximately 2.3 million
shares of MedPointe. No decision has yet been rendered by the court.

     MedPointe and certain former Carter-Wallace shareholders are party to an
indemnification agreement pursuant to which such shareholders will be required
to indemnify MedPointe from a portion of the damages, if any, suffered by
MedPointe in relation to the exercise of appraisal rights by other former
Carter-Wallace shareholders in the merger. Pursuant to the agreement, the
shareholders have agreed to indemnify MedPointe for 40% of any Appraisal Damages
(defined as the recovery greater than the per share merger price times the
number of shares in the appraisal class) suffered by Medpointe in relation to
the merger; provided that if the total amount of Appraisal Damages exceeds $33.3
million, then the indemnifying stockholders will indemnify MedPointe for 100% of
any damages suffered in excess of that amount. The Company, in turn, is party to
an agreement with MedPointe pursuant to which it has agreed to indemnify
MedPointe and certain related parties against 60% of any Appraisal Damages for
which MedPointe remains liable. The maximum liability to the Company pursuant to
the indemnification agreement and prior to any indemnification from C&D, as
described in the following sentence is $12 million. C&D is party to an agreement
with the Company pursuant to which it has agreed to indemnify the Company for
17.4% of any Appraisal Damages, or up to a maximum of $2.1 million for which the
Company becomes liable.

     The Company, MedPointe and the indemnifying shareholders believe that the
consideration offered in the merger was fair to the former Carter-Wallace
shareholders and have vigorously defended the petitioner's claim. However, the
Company cannot predict the outcome of the proceedings.

     On August 26, 2002, the Company filed suit against Pfizer in the District
Court of New Jersey to redress infringement of two (2) of the Company's patents
directed to pregnancy diagnostic devices. The suit claims that Pfizer's "ept"
product infringes these patents. The Company is seeking a reasonable royalty and
associated damages as compensation for Pfizer's infringement. The Court has
ordered a Settlement Conference for April 11, 2003, and has set dates throughout
2003 for various stages of discovery.

     In 2002, a purported class action suit, Sandra J. Wagner v. Church & Dwight
Co., Inc., et al, was filed against the Company and C&D in the Superior Court of
New Jersey. The lawsuit alleged that the Company's ovulation test kits ("OTK")
are being marketed in a misleading manner because they do not advise women with
certain ovarian conditions that test results may be inaccurate. The plaintiffs
seek monetary damages as well as injunctive relief against the OTK's - marketing
materials. The products in question have been cleared for marketing as medical
devices under applicable FDA regulations. The Company is vigorously defending
the action but cannot predict the outcome of the proceedings. If the Company is
not successful in defending against a claim, the Company could be liable for
substantial damages or may be prevented from offering some of the Company's
products. These events could harm the Company's financial condition and results
of operations.

     The Company's distribution of condoms under the Trojan and other trademarks
is regulated by the U.S. Food and Drug Administration (FDA). Certain of Armkel's
condoms and similar condoms sold by Armkel's major competitors, contain the
spermicide nonoxynol-9 (N-9). The World Health Organization and other interested
groups have issued reports suggesting that N-9 should not be used rectally or
for multiple daily acts of vaginal intercourse, given the ingredient's potential
to cause irritation to human membranes. The Company expects the FDA to issue
non-binding draft guidance concerning the labeling of condoms with N-9, although
the timing of such draft guidance is uncertain. The Company believes that
condoms with N-9 provide an acceptable added means of contraceptive protection
and is cooperating with the FDA concerning the appropriate labeling revisions,
if any. However, the Company cannot predict the outcome of the FDA review. If
the FDA or state governments promulgate rules which prohibit or restrict the use
of N-9 in condoms (such as new labeling requirements), the financial condition
and operating results of the Company could suffer.

     Related to this issue, on February 28, 2003 a purported class action suit,
Lissette Velez v. Church & Dwight Co., Inc., et als including Armkel, LLC, was
filed against the Company and C&D, and two other condom manufacturers, in the
Superior Court of New Jersey. The


                                       43
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001

lawsuit alleges that condoms lubricated with N-9 are being marketed in a
misleading manner because the makers of such condoms claim they aid in the
prevention of sexually transmitted diseases whereas, according to the
plaintiffs, public health organizations have found that N-9 usage can under some
circumstances increase the risk of transmission of disease. Condoms with N-9
have been marketed for many years as a cleared medical device under applicable
FDA regulations, however, the Company cannot predict the outcome of this
litigation.

     The Company, in the ordinary course of its business, is the subject of, or
party to, various pending or threatened legal actions. The Company believes that
any ultimate liability arising from these actions will not have a material
adverse effect on its financial position or results of operation.

15.  REORGANIZATION RESERVE

     As of the date of the Acquisition, the Company started to implement a plan
to reorganize the operation of the acquired consumer business. The main
components of the plan include rationalizing facilities for which the Company
has incurred lease termination costs, environmental remediation costs and work
force rationalization costs. The plan was finalized in 2002 and the Company
expects to complete the plan within one year from this date except for certain
long-term contractual obligations related to benefits for certain former
executives of Carter-Wallace, Inc.

     The Company established an accrual for severance to reflect the purchase of
various services from C&D in lieu of obtaining such services through continued
employment of certain personnel at the Predecessor company. The accrued
severance is for identified employees from various areas including executives,
administrative support and corporate functions (finance, human resources, legal,
MIS, R&D, logistics, marketing, sales and purchasing).

     The following table summarizes the activity in the Company's reorganization
accruals:

<TABLE>
<CAPTION>
                                                                      Reserves at          Payments and          Reserves at
(In thousands)                                                     December 31, 2001        Adjustments       December 31, 2002
                                                                   -----------------       ------------       -----------------
<S>                                                                <C>                      <C>                   <C>
Severance and other charges........................................   $   40,709            $ (34,704)             $  6,005
Environmental remediation costs....................................          250                1,578                 1,828
Lease termination costs............................................        1,753               (1,643)                  110
                                                                      ----------            ----------             --------
                                                                      $   42,712            $ (34,769)             $  7,943
                                                                      ==========            ==========             ========
</TABLE>

16.  ASSETS HELD FOR SALE

     In July 2002, the Company met the criteria to classify its Cranbury, New
Jersey facility as assets held for sale. At December 31, 2001, the net book
value of the Cranbury property and facilities was $43 million based on regional
market prices for such property when used for a similar purpose, as determined
by an independent appraisal at the time of acquisition. During the third quarter
of 2002, however, independent real estate consultants advised the Company that
the property would likely have to be sold to land developers who would use it
for purposes other than manufacturing, for which the fair value is significantly
less. Accordingly, the Company adjusted the purchase price allocation recorded
for the property to the fair value for developmental property ($20 million).
Upon further review, the Company decided to retain the research and development
building of the facility for continued use. The fair value of the research
building is $5.4 million which has been reclassified to property, plant and
equipment in the December 31, 2002 balance sheet. The remaining balance of $14.6
million is classified as assets held for sale. Prior year financial information
has been reclassified to conform with the current period classification.


                                                                              44
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001

17.  DISCONTINUED OPERATIONS

     The table below reflects the assets and liabilities of the Italian
subsidiaries, which were sold in February 2003 for $22.6 million, and which are
accounted for as discontinued operations as of December 31, 2002 and 2001, and
the results of operations for the year ended December 31, 2002 and for the
period from August 28, 2001 (inception) to December 31, 2001.

<TABLE>
<CAPTION>
(in thousands)
                                                                                               PERIOD FROM
                                                                              YEAR ENDED       AUGUST 28 TO
                                                                              DECEMBER 31,     DECEMBER 31,
                                                                                  2002             2001
                                                                              ------------     ------------
<S>                                                                           <C>              <C>
                Net Sales (1)                                                 $ 40,826         $  8,473

                Income (Loss) from Discontinued Operations (2)                 $ 2,712         $   (755)

                Assets
                  Current assets.........................................     $ 33,464         $ 28,702
                  Property, plant & equipment............................        6,506            6,043
                  Other assets ..........................................        2,109            2,266
                                                                              --------         --------
                Total Assets.............................................     $ 42,079         $ 37,011
                                                                              ========         ========

                Liabilities..............................................
                  Current liabilities....................................     $ 18,492         $ 17,243
                  Other Liabilities .....................................        5,090            4,000
                                                                              --------         --------
                Total Liabilities........................................     $ 23,582         $ 21,243
                                                                              ========         ========
</TABLE>

(1)  Presented for informational purposes only. All results of operations are
     reported net in the Statements of Income.
(2)  Income(loss) from discontinued operations is reported net of taxes of $1.5
     million in 2002 and net of a tax benefit of $0.2 million for the period
     from August 28, 2001 to December 31, 2001.


18.  LONG-TERM INCENTIVE PLAN

     The Company has a long-term equity appreciation rights plan (the "EAR") for
its senior management executives. Approximately 800 thousand awards are
authorized under the EAR. At December 31, 2002, approximately 727 thousand
awards were issued. Each award constitutes a right to receive in cash, or other
settlement such as C&D stock, a portion of the appreciation in the value of the
Company established as of Acquisition up until a sale of Kelso's interest in the
Company or a sale to a third party of substantially all of the Company's assets.
The awards are realizable only upon such a liquidation event, as defined, and
further vest during the two year period after such an event.

19.  SEGMENTS AND SUPPLEMENTAL INFORMATION

     Segment Information

     The Company has two operating segments: Domestic Consumer Products Division
and International Consumer Products Division.

     Measurement of Segment Results and Assets

     The accounting policies of the segments are generally the same as those
described in the summary of significant accounting policies.

                                                                              45
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001

SUPPLEMENTAL FINANCIAL INFORMATION OF DOMESTIC AND INTERNATIONAL OPERATIONS

     The senior subordinated notes registered by the Company are fully and
unconditionally guaranteed by the domestic subsidiaries of the Company on a
joint and several basis. The following information is being presented to comply
with SEC Regulation SX, Item 3-10 and to provide required segment disclosures.

     Supplemental information for condensed consolidated balance sheets at
December 31, 2002 and 2001, condensed consolidated statements of income and
consolidated cash flows for the year ended December 31, 2002 and for the period
from August 28, 2001 (inception) to December 31, 2001 is summarized as follows
(amounts in thousands):

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                          FOR THE YEAR ENDED DECEMBER 31, 2002
                                                                          ------------------------------------

                                                                                                                            TOTAL
                                                              DOMESTIC         INTERNATIONAL         ELIMINATIONS       CONSOLIDATED
                                                              --------         -------------         ------------       ------------
<S>                                                           <C>              <C>                   <C>                <C>
Net sales...............................................      $ 219,167          $ 174,631             $ (10,016)         $ 383,782
Cost of goods sold......................................         95,172             87,793               (10,016)           172,949
                                                              ---------          ---------             ---------          ---------
Gross profit............................................        123,995             86,838                    --            210,833
Marketing expenses......................................         27,110             25,943                    --             53,053
Selling, general and administrative expenses............         50,152             37,482                    --             87,634
                                                              ---------          ---------             ---------          ---------
Operating income from continuing operations.............         46,733             23,413                    --             70,146
Interest expense........................................        (35,329)            (5,714)                4,444            (36,599)
Interest income.........................................          4,689                709                (4,444)               954
Other income (expense)..................................          6,766             (5,823)                   --                943
                                                              ---------          ---------             ---------          ---------
Income before taxes from continuing operations..........         22,859             12,585                    --             35,444
Income taxes ...........................................             --              6,942                    --              6,942
                                                              ---------          ---------             ---------          ---------
Income from continuing operations.......................         22,859              5,643                    --             28,502
Income from discontinued operations.....................             --              2,712                    --              2,712
                                                              ---------          ---------             ---------          ---------
 Net Income.............................................      $  22,859          $   8,355             $      --          $  31,214
                                                              =========          =========             =========          =========
</TABLE>

<TABLE>
<CAPTION>
                                                                          FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION)
                                                                                         TO DECEMBER 31, 2001
                                                                                         --------------------

                                                                                                                          TOTAL
                                                              DOMESTIC         INTERNATIONAL       ELIMINATIONS        CONSOLIDATED
                                                              --------         -------------       ------------        ------------
<S>                                                           <C>              <C>                 <C>                 <C>
Net sales...............................................      $  40,459          $  39,755            $ (2,653)          $ 77,561
Cost of goods sold......................................         28,453             24,646              (2,653)            50,446
                                                              ---------          ---------            --------           --------
Gross profit............................................         12,006             15,109                  --             27,115
Marketing expenses......................................          5,361              2,627                  --              7,988
Selling, general and administrative expenses............         10,743             12,572                                 23,315
                                                              ---------          ---------            --------           --------
Loss from continuing operations.........................         (4,098)               (90)                 --             (4,188)
Interest expense........................................        (11,181)            (1,253)                718            (11,716)
Interest income.........................................          1,393                138                (718)               813
Other income (expense)..................................           (540)               264                  --               (276)
                                                              ---------          ---------            --------           --------
Loss before taxes from continuing operations............        (14,426)              (941)                 --            (15,367)
Income tax benefit......................................             --               (474)                 --               (474)
                                                              ---------          ---------            --------           --------
Loss from continuing operations.........................        (14,426)              (467)                 --            (14,893)
Loss from discontinued operations.......................             --               (755)                 --               (755)
                                                              ---------          ---------            --------           --------
 Net Loss...............................................      $ (14,426)         $  (1,222)           $     --           $(15,648)
                                                              =========          =========            ========           ========
</TABLE>



                                                                              46
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001


<TABLE>
<CAPTION>
                                                                                        DECEMBER 31, 2002
                                                                                        -----------------
CONSOLIDATED BALANCE SHEET
                                                                                                                           TOTAL
                                                               DOMESTIC       INTERNATIONAL      ELIMINATIONS          CONSOLIDATED
                                                              ---------       -------------      ------------          ------------
<S>                                                           <C>             <C>                <C>                   <C>
Cash and cash equivalents.............................        $  35,093          $  19,687         $       --          $  54,780
Accounts receivable, less allowances..................           21,885             53,979                 --             75,864
Inventories...........................................           22,948             30,479                 --             53,427
Prepaid expenses......................................            1,428              4,129                 --              5,557
Net assets of discontinued operations.................               --             42,079                 --             42,079
Net assets held for sale..............................           14,600                --                  --             14,600
                                                              ---------          ---------         ----------          ---------
     Total current assets.............................           95,954            150,353                               246,307

Property, plant and equivalent, net...................           48,646             24,221                 --             72,867
Notes receivable......................................           58,591                 --            (58,591)                --
Investment in subsidiaries............................           63,557                 --            (63,557)                --
Tradenames and patents................................          223,075             38,200                 --            261,275
Goodwill..............................................          173,006             32,461                 --            205,467
Deferred financing costs..............................           17,380                 --                 --             17,380
Other assets..........................................            2,665              2,553                 --              5,218
                                                              ---------          ---------         ----------          ---------
     Total assets.....................................        $ 682,874          $ 247,788         $ (122,148)         $ 808,514
                                                              =========          =========         ==========          =========

Short-term borrowings.................................        $      --          $      55         $       --          $      55
Accounts payable and accrued expenses.................           41,129             43,907                 --             85,036
Net liabilities of discontinued operations............               --             23,582                 --             23,582
Current portion of long-term debt.....................            9,541             18,960                 --             28,501
Taxes payable.........................................              --               1,606                 --              1,606
                                                              ---------          ---------         ----------          ---------
     Total current liabilities........................           50,670             88,110                 --            138,780
Long-term debt........................................          397,838             13,796                 --            411,634
Deferred income taxes.................................               --              8,500                 --              8,500
Notes payable.........................................               --             69,138            (69,138)                --
Deferred and other long-term liabilities..............           10,705              9,215                 --             19,920
                                                              ---------          ---------         ----------          ---------
     Total liabilities................................          459,213            188,759            (69,138)           578,834
Net contributed capital...............................          220,500             52,061            (52,061)           220,500
Retained earnings.....................................            8,434              7,132                 --             15,566
Other comprehensive income:
     Foreign translation gain.........................              137                476               (949)              (336)
     Fair market value of interest rate swaps.........           (1,217)                --                 --             (1,217)
     Minimum pension liability, net of tax............           (4,193)              (640)                --             (4,833)
                                                              ---------          ---------         ----------          ---------
     Total Other Comprehensive Income.................           (5,273)              (164)              (949)            (6,386)
                                                              ---------          ---------         ----------          ---------
     Total Members' Equity............................          223,661             59,029            (53,010)           229,680
                                                              ---------          ---------         ----------          ---------
     Total Liabilities and Member's Equity............        $ 682,874          $ 247,788         $ (122,148)         $ 808,514
                                                              =========          =========         ==========          =========
</TABLE>


                                                                              47
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001


<TABLE>
<CAPTION>
                                                                                       DECEMBER 31, 2001
                                                                                       -----------------
CONSOLIDATED BALANCE SHEET
                                                                                                                          TOTAL
                                                              DOMESTIC       INTERNATIONAL      ELIMINATIONS          CONSOLIDATED
                                                             ---------       -------------      ------------          ------------
<S>                                                          <C>             <C>                <C>                   <C>
Cash and cash equivalents...............................     $ 40,444            $15,173          $     --             $ 55,617
Accounts receivable, less allowance.....................       30,200             50,372            (4,222)              76,350
Inventories.............................................       36,137             25,650                --               61,787
Prepaid expenses........................................          648              2,531                --                3,179
 Net assets of discontinued operations..................           --             37,011                --               37,011
 Net assets held for sale...............................       37,639                 --                --               37,639
                                                             --------           --------         ---------            ---------
     Total current assets...............................      145,068            130,737            (4,222)             271,583

Property, plant and equivalent, net.....................       51,151             25,047                --               76,198
Notes receivable........................................       65,540                 --           (65,540)                  --
Investment in subsidiaries..............................       52,061                 --           (52,061)                  --
Tradenames and patents..................................      227,575             37,836                --              265,411
Goodwill................................................      145,237             28,413                --              173,650
Deferred financing costs................................       20,492                 --                --               20,492
Other assets............................................           --              4,401                --                4,401
                                                             --------           --------         ---------            ---------
     Total assets.......................................     $707,124           $226,434         $(121,823)           $ 811,735
                                                             ========           ========         =========            =========

Short-term borrowings...................................     $     --           $    356                --            $     356
Accounts payable and accrued expenses...................       85,594             35,826            (4,222)             117,198
Net liabilities of discontinued operations..............           --             21,243                --               21,243
Current portion of long-term debt.......................        2,413                833                --                3,246
Taxes payable...........................................           --              2,127                --                2,127
                                                             --------           --------         ---------            ---------
     Total current liabilities..........................       88,007             60,385            (4,222)             144,170
Long-term debt..........................................      407,235             32,515                --              439,750
Deferred income taxes...................................           --             10,363                --               10,363
Notes payable...........................................           --             65,540           (65,540)                  --
Deferred and other long-term liabilities................        6,011              7,855                --               13,866
                                                             --------           --------         ---------            ---------
     Total liabilities..................................      501,253            176,658           (69,762)             608,149
Net contributed capital.................................      220,500             52,061           (52,061)             220,500
Retained deficit........................................      (14,426)            (1,222)               --              (15,648)
Other comprehensive income..............................         (203)            (1,063)               --               (1,266)
                                                             --------           --------         ---------            ---------
     Total Members' Equity..............................      205,871             49,776           (52,061)             203,586
                                                             --------           --------         ---------            ---------
     Total liabilities and Member's Equity..............     $707,124           $226,434         $(121,823)           $ 811,735
                                                             ========           ========         =========            =========
</TABLE>


                                                                              48
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001


<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
                                                                                            FOR THE YEAR ENDED DECEMBER 31, 2002
                                                                                         -----------------------------------------
                                                                                                                         TOTAL
                                                                                         DOMESTIC    INTERNATIONAL    CONSOLIDATED
                                                                                         --------    -------------    ------------
                                                                                                       (In thousands)
<S>                                                                                      <C>         <C>              <C>
CASH FLOW FROM OPERATING ACTIVITIES
NET INCOME ........................................................................      $ 22,859       $  8,355       $ 31,214
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED
BY OPERATING ACTIVITIES:
     Depreciation and amortization ................................................        12,205          3,316         15,521
     Unrealized (gain) loss on foreign exchange transactions ......................        (5,314)         4,416           (898)
       Net income from discontinued operations ....................................            --         (2,712)        (2,712)
CHANGE IN ASSETS AND LIABILITIES:
     (Increase) Decrease in accounts receivable....................................         5,507         (5,329)           178

     (Increase) Decrease in inventories ...........................................        13,320         (3,804)         9,516
     Increase in prepaid expenses and other current assets ........................          (780)        (1,631)        (2,411)
     Increase (Decrease) in accounts payable and other accrued expenses ...........       (35,524)         3,498        (32,026)
     Increase (Decrease) in other liabilities .....................................          (297)           365             68
                                                                                         --------       --------       --------

NET CASH PROVIDED BY OPERATING ACTIVITIES .........................................        11,976          6,474         18,450
                                                                                         --------       --------       --------

CASH FLOW FROM INVESTING ACTIVITIES
Additions to property, plant and equipment ........................................        (6,024)        (2,419)        (8,443)
Payment for purchase price adjustments and costs related to the acquisition of
   Carter-Wallace Consumer Business ...............................................        (8,890)            --         (8,890)
                                                                                         --------       --------       --------

NET CASH USED IN INVESTING ACTIVITIES .............................................       (14,914)        (2,419)       (17,333)
                                                                                         --------       --------       --------

CASH FLOW FROM FINANCING ACTIVITIES
Repayment of syndicated bank credit facility ......................................        (2,413)          (839)        (3,252)
Payment of deferred financing costs ...............................................            --             --             --
                                                                                         --------       --------       --------

NET CASH USED IN FINANCING ACTIVITIES .............................................        (2,413)          (839)        (3,252)
                                                                                         --------       --------       --------

Effect of exchange rate changes on cash and cash equivalents ......................            --          1,298          1,298
                                                                                         --------       --------       --------
NET CHANGE IN CASH & CASH EQUIVALENTS .............................................        (5,351)         4,514           (837)

CASH & CASH EQUIVALENTS AT BEGINNING OF PERIOD ....................................        40,444         15,173         55,617
                                                                                         --------       --------       --------

CASH & CASH EQUIVALENTS AT END OF PERIOD ..........................................      $ 35,093       $ 19,687       $ 54,780
                                                                                         ========       ========       ========
</TABLE>


                                                                              49
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001


<TABLE>
<CAPTION>
                                                                                         FOR THE PERIOD FROM AUGUST 28, 2001
                                                                                           (INCEPTION) TO DECEMBER 31, 2001
                                                                                      -----------------------------------------
                                                                                                                         TOTAL
                                                                                      DOMESTIC      INTERNATIONAL     CONSOLIDATED
                                                                                      ---------     -------------     ------------
                                                                                                   (In thousands)
<S>                                                                                   <C>           <C>               <C>
CASH FLOW FROM OPERATING ACTIVITIES
NET LOSS .......................................................................      $ (14,426)      $  (1,222)      $ (15,648)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
     Depreciation and amortization .............................................          3,255             760           4,015
     Unrealized (gain) loss on foreign exchange transactions ...................            967            (572)            395
     Net loss from discontinued operations .....................................             --             755             755
CHANGE IN ASSETS AND LIABILITIES:
     Decrease in accounts receivable ...........................................          2,330           3,286           5,616
     Decrease in inventories ...................................................          8,877           3,476          12,353
     (Increase) Decrease in prepaid expenses ...................................           (990)          2,055           1,065
     Increase (Decrease) in accounts payable and other accrued expenses ........          9,625          (1,320)          8,305
     Increase (Decrease) in other liabilities ..................................          6,830          (3,085)          3,745
                                                                                      ---------       ---------       ---------

NET CASH PROVIDED BY OPERATING ACTIVITIES ......................................         16,468           4,133          20,601
                                                                                      ---------       ---------       ---------

CASH FLOW FROM INVESTING ACTIVITIES
Additions to property, plant and equipment .....................................         (1,190)           (716)         (1,906)
Acquisition of Carter-Wallace Consumer Business, including anti
   -perspirant and pet care products business, net of cash acquired ............       (593,548)       (119,745)       (713,293)
Proceeds from sale of anti-perspirant and pet care products business ...........        128,500              --         128,500
                                                                                      ---------       ---------       ---------

NET CASH USED IN INVESTING ACTIVITIES ..........................................       (466,238)       (120,461)       (586,699)
                                                                                      ---------       ---------       ---------

CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of senior subordinated notes ............................        223,477              --         223,477
Proceeds from syndicated bank credit facility ..................................        186,500          33,500         220,000
Repayment of syndicated bank credit facility ...................................           (375)             --            (375)
Repayment of acquired long-term debt ...........................................             --         (19,971)        (19,971)
Payment of deferred financing costs ............................................        (21,354)           (400)        (21,754)
Proceeds from Members ..........................................................        228,500              --         228,500
Distributions to Members .......................................................         (8,000)             --          (8,000)
Intercompany acquisition financing .............................................       (118,534)        118,534              --
                                                                                      ---------       ---------       ---------

NET CASH PROVIDED BY FINANCING ACTIVITIES ......................................        490,214         131,663         621,877
                                                                                      ---------       ---------       ---------

Effect of exchange rate changes on cash and cash equivalents ...................             --            (162)           (162)
NET CHANGE IN CASH & CASH EQUIVALENTS ..........................................         40,444          15,173          55,617

CASH & CASH EQUIVALENTS AT BEGINNING OF PERIOD .................................             --              --              --
                                                                                      ---------       ---------       ---------

CASH & CASH EQUIVALENTS AT END OF PERIOD .......................................      $  40,444       $  15,173       $  55,617
                                                                                      =========       =========       =========
</TABLE>


                                                                              50
<PAGE>

                          ARMKEL, LLC AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                      FOR THE YEAR ENDED DECEMBER 31, 2002
    AND FOR THE PERIOD FROM AUGUST 28, 2001 (INCEPTION) TO DECEMBER 31, 2001


     The following table sets forth our principal product lines and related
data:

<TABLE>
<CAPTION>
                                                                                    YEAR ENDED        PERIOD FROM AUGUST
                                                                                   DECEMBER 31,      28, 2001 (INCEPTION)
                                                                                       2002          TO DECEMBER 31, 2001
                                                                                   ------------      --------------------
                                            NET SALES                                    (in thousands)
PRODUCT
<S>                                                                                <C>               <C>
Family Planning(1)..........................................................          $184,952             $ 37,119
Depilatories and waxes; face and skincare...................................            83,517               12,451
Oral care...................................................................            29,727                5,865
OTC Products................................................................            46,064               12,241
Other consumer products.....................................................            39,522                9,885
                                                                                      --------             --------
     Total net sales........................................................          $383,782             $ 77,561
                                                                                      ========             ========
</TABLE>

----------
(1)  Family Planning includes condom product sales and pregnancy and ovulation
     kits.

GEOGRAPHIC INFORMATION

     Approximately 55% of net sales for the year ended December 31, 2002 and 49%
of net sales for the period August 28, 2001 (inception) to December 31, 2001,
were to customers in the United States, and approximately 82% of long-lived
assets at December 31, 2002 and 2001 were located in the U.S.

CUSTOMERS

     A group of five customers accounted for approximately 27% of consolidated
net sales in 2002, including a single customer Walmart who accounted for 12%.
This group accounted for 27% of domestic net sales in 2001.

     Although not included in the top five customers noted above, Kmart
Corporation historically has represented approximately 2% of the Company's
consolidated net sales.Kmart's bankruptcy, followed by its announcement to close
an additional 329 stores in the first half of 2003, could cause an insignificant
reduction in sales to Kmart of approximately 0.3% of the Company's consolidated
net sales.It is not clear whether, and to what extent, these lost sales may be
made to other retailers.



                                                                              51
<PAGE>


                          INDEPENDENT AUDITORS' REPORT

The Board of Directors
Carter-Wallace, Inc.:

     We have audited the accompanying combined statements of revenues and
expenses, changes in net assets and comprehensive earnings, and cash flows of
Carter-Wallace, Inc. Consumer Business--Excluding Antiperspirant/Deodorant
Products in the United States and Canada and Pet Products for the period from
April 1, 2001 to September 28, 2001 and for the year ended March 31, 2001. These
combined statements are the responsibility of the Consumer Business management.
Our responsibility is to express an opinion on these combined statements based
on our audits.

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

     As described in and to the extent of note 1, the accompanying combined
statements were prepared to present the combined statements of revenues and
expenses, changes in net assets and comprehensive earnings, and cash flows of
Carter-Wallace, Inc. Consumer Business--Excluding Antiperspirant/Deodorant
Products in the United States and Canada and Pet Products for the period from
April 1, 2001 to September 28, 2001 and for the year ended March 31, 2001,
pursuant to the Asset Purchase Agreement between Carter-Wallace, Inc. and
Armkel, LLC and the Product Line Purchase Agreement between Armkel, LLC and
Church & Dwight Co., Inc.

     In our opinion, the accompanying combined statements referred to above
present fairly, in all material respects, revenues and expenses and cash flows
of Carter-Wallace, Inc. Consumer Business--Excluding Antiperspirant/Deodorant
Products in the United States and Canada and Pet Products, and its for the
period from April 1, 2001 to September 28, 2001 and for the year ended March 31,
2001, pursuant to the Asset Purchase Agreement between Carter-Wallace, Inc. and
Armkel, LLC and the Product Line Purchase Agreement between Armkel, LLC and
Church & Dwight Co. referred to in note 1, in conformity with accounting
principles generally accepted in the United States of America.


                                                           KPMG LLP

New York, New York
December 11, 2001, except as to the fifth paragraph of Note 1 which is
as of February 20, 2003.



                                                                              52
<PAGE>

                              CARTER-WALLACE, INC.

                               CONSUMER BUSINESS--
                   EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
                IN THE UNITED STATES AND CANADA AND PET PRODUCTS

                  COMBINED STATEMENT OF REVENUES AND EXPENSES
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                          PERIOD
                                                                                      FROM APRIL 1,
                                                                                         2001 TO            YEAR ENDED
                                                                                    SEPTEMBER 28, 2001    MARCH 31, 2001
                                                                                    ------------------    --------------
<S>                                                                                 <C>                   <C>
Net sales........................................................................        $ 197,709            $ 344,530
Cost of goods sold...............................................................           82,820              148,272
                                                                                         ---------            ---------
     Gross profit................................................................          114,889              196,258
                                                                                         ---------            ---------

Operating expenses:
     Advertising and promotion...................................................           23,245               40,296
     Marketing and other selling.................................................           22,746               42,663
     Research and development....................................................            3,230                7,473
     General and administrative..................................................           11,821               20,209
     Interest expense............................................................              428                  992
     Interest income.............................................................             (175)                (467)
     Other (income) expense, net.................................................             (174)                 767
                                                                                         ---------            ---------
                                                                                            61,121              111,933
                                                                                         ---------            ---------
Revenues in excess of expenses before provision for taxes
     on income from continuing operations........................................           53,768               84,325
Provision for taxes on income....................................................           20,677               35,149
                                                                                         ---------            ---------
     Revenues in excess of expenses from continuing operations...................           33,091               49,176
     Revenues in excess of expenses from discontinued operations, net of
       taxes of $503 and $1,180, respectively....................................              347                  750
                                                                                         ---------            ---------
Total revenues in excess of expenses.............................................        $  33,438            $  49,926
                                                                                         =========            =========
</TABLE>

                 See accompanying notes to combined statements.


                                                                              53
<PAGE>

                              CARTER-WALLACE, INC.

                               CONSUMER BUSINESS--
                   EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
                IN THE UNITED STATES AND CANADA AND PET PRODUCTS

                  COMBINED STATEMENTS OF CHANGES IN NET ASSETS
                           AND COMPREHENSIVE EARNINGS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                       PERIOD
                                                                                   FROM APRIL 1,
                                                                                      2001 TO                 YEAR ENDED
                                                                                   SEPTEMBER 28,               MARCH 31,
                                                                                        2001                      2001
                                                                                     ---------                ----------
<S>                                                                                  <C>                      <C>
Amount at beginning of period ............................................           $ 255,762                $ 259,497
Revenues in excess of expenses ...........................................              33,438                   49,926
Foreign currency translation adjustments .................................                 222                   (8,223)
                                                                                     ---------                ---------
Comprehensive earnings ...................................................              33,660                   41,703
Cash and other transfers to Carter-Wallace, Inc. .........................             (21,763)                 (45,438)
                                                                                     ---------                ---------
Amount at end of period ..................................................           $ 267,659                $ 255,762
                                                                                     =========                =========
</TABLE>



                 See accompanying notes to combined statements.


                                                                              54
<PAGE>

                              CARTER-WALLACE, INC.

                               CONSUMER BUSINESS--
                   EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
                IN THE UNITED STATES AND CANADA AND PET PRODUCTS

                        COMBINED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                             PERIOD FROM
                                                                                           APRIL 1, 2001 TO       YEAR ENDED
                                                                                          SEPTEMBER 28, 2001    MARCH 31, 2001
                                                                                          ------------------    --------------
<S>                                                                                       <C>                   <C>
Cash flows from operating activities:
Total revenues in excess of expenses ...................................................         $ 33,438          $ 49,926
Adjustments to reconcile total revenues in excess of expenses to cash flows
   from operations:
     Depreciation and amortization .....................................................            4,142             7,623
     Amortization of excess of purchase price of businesses acquired
       over the net assets at date of acquisition, patents, trademarks,
        contracts, and formulae ........................................................            1,201             2,565
     Revenues in excess of expenses from discontinued operations, net of tax ...........             (346)             (750)
     Other changes in assets and liabilities:
          Decrease (increase) in accounts receivable and other
            receivables ................................................................          (14,862)           (9,116)
          (Increase) decrease in inventories ...........................................            5,239            (1,693)
          Increase in prepaid expenses .................................................           (2,053)             (353)
          (Decrease) increase in accounts payable and accrued
            expenses ...................................................................           (3,804)           12,641
          Increase in deferred taxes ...................................................           (2,553)             (809)
          Other changes ................................................................            1,938               550
                                                                                                 --------          --------
               Cash flows provided by operating activities .............................           22,340            60,584
                                                                                                 --------          --------

Cash flows used in investing activities:
     Additions to property, plant, and equipment--net of
       acquisitions ....................................................................           (4,459)          (10,607)
     Decrease in short-term investments ................................................               --                --
     Proceeds from sale of property, plant, and equipment ..............................               79             1,443
                                                                                                 --------          --------
               Cash flows used in investing activities .................................           (4,380)           (9,164)
                                                                                                 --------          --------

Cash flows used in financing activities:
     Payments of debt ..................................................................           (1,961)           (3,596)
     Cash transferred to Carter-Wallace, Inc. ..........................................          (19,135)          (41,697)
     Increase in borrowings ............................................................              473               194
                                                                                                 --------          --------
               Cash flows used in financing activities .................................          (20,623)          (45,099)
                                                                                                 --------          --------

Effect of foreign exchange rate changes on cash and
   cash equivalents ....................................................................              (50)             (553)
                                                                                                 ========          ========
               Increase (decrease) in cash and cash equivalents ........................           (2,713)            5,768
                                                                                                 --------          --------
</TABLE>

                 See accompanying notes to combined statements.

                                                                              55
<PAGE>

                              CARTER-WALLACE, INC.

                               CONSUMER BUSINESS--
                   EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
                IN THE UNITED STATES AND CANADA AND PET PRODUCTS

                          NOTES TO COMBINED STATEMENTS

                                 MARCH 31, 2001


(1)  DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

     On May 7, 2001, Carter-Wallace, Inc. ("the Company") entered into
definitive agreements for the sale of the Company in a two-step transaction
which was consummated on September 28, 2001. In accordance with an Asset
Purchase Agreement, the Company first sold the net assets and business of the
Company's Consumer Business, as defined in the Asset Purchase Agreement, to
Armkel, LLC ("Armkel") for $739 million, less certain debt outstanding. Armkel
is jointly owned by two private investment funds formed by Kelso & Company L.P.
and by Church & Dwight Co., Inc. Such funds were paid directly to the Company.
Pursuant to an Agreement and Plan of Merger, immediately following the sale of
the Consumer Business, a buying group ("the Buying Group") purchased the
Company's outstanding common stock and Class B common stock for $20.44 per share
subject to certain closing adjustments. The aggregate consideration from both
parts of the transaction was $1.121 billion, less approximately $155 million of
corporate taxes to be paid on the sale of the Consumer Business.

     Under a separate product Line Purchase Agreement effective May 7, 2001, as
amended, Church & Dwight Co., Inc. acquired the antiperspirant/deodorant
products business in the United States and Canada and the pet products business
from Armkel. Excluded from this transaction are the antiperspirants/deodorants
products business in the United Kingdom and Australia.

     Products sold domestically by this component of the Consumer Business
primarily include condoms, at-home pregnancy and ovulation test kits, hair
removal products, and tooth-whitening products. These products are promoted
directly to the consumer by television and other advertising media and are sold
to wholesalers and various retailers. Many of the products sold by foreign
subsidiaries are the same products which are sold domestically, as well as
certain other products which are sold exclusively in international markets.
Products are sold throughout the world by various subsidiaries and distributors.

     The accompanying combined statements pertain to the Consumer Business of
the Company--Excluding Antiperspirant/Deodorant Products in the United States
and Canada and Pet Products (as defined in the aforementioned definitive
agreements) and have been prepared pursuant to the Asset Purchase Agreement and
Product Line Purchase Agreement in accordance with accounting principles
generally accepted in the United States of America. The statements reflect the
normal business operations of the Consumer Business--Excluding
Antiperspirant/Deodorant Products in the United States and Canada and Pet
Products through September 28, 2001, the date of closing of the transaction
noted above. Accordingly, no transactions which arise directly related to the
sale or purchase of the Consumer Business have been reflected in the
accompanying combined statements. Also excluded from these statements is certain
debt financing that was incurred by the Buying Group to help finance its
purchase price.

     In December 2002, the Company entered into an agreement to sell its Italian
subsidiary to a group, comprising local management and private equity
investors.The sale closed in February 2003 for a price of approximately $22.6
million including the repayment of $11.8 million of intercompany debt. The
Company will retain ownership of certain Italian pregnancy kit and oral care
product lines. The remainder of the Italian subsidiary's business includes a
high percentage of distributor sales as well as hospital diagnostic and other
products not related to the Company's core business. The financial statements
have been reclassified to reflect the Italian business as a discontinued
operation in the accompanying statements.

     All significant intercompany transactions have been eliminated. This
component of the Consumer Business has no separate legal status and operated as
an integral part of the Company's Consumer Business which operated as an
integral part of the Company's overall operations. These combined statements
have been prepared from the historical accounting records of the Company prior
to the Armkel acquisition and do not reflect a new basis of accounting resulting
from the acquisition by Armkel or other direct costs related to the acquisition.

     The accompanying combined statements of revenues and expenses are not
necessarily indicative of the costs and expenses that would have been incurred
had the component been operated as a stand-alone entity.


                                                                              56
<PAGE>

                              CARTER-WALLACE, INC.

                               CONSUMER BUSINESS--
                   EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
                IN THE UNITED STATES AND CANADA AND PET PRODUCTS

                    NOTES TO COMBINED STATEMENTS--(CONTINUED)


     Certain indirect operating expenses for selling and general and
administrative costs of the Consumer Business were allocated to the
Carter-Wallace, Inc. Consumer Business--Excluding Antiperspirant/Deodorant
Products in the United States and Canada and Pet Products based on a percentage
of net sales. Such allocated selling and other general and administrative costs
for the period from April 1, 2001 to September 28, 2001, included in the
accompanying combined statements amounted to approximately $10,400,000, and for
the year ended March 31, 2001 amounted to $19,700,000. Corporate income and
expenses of the Company included in this component of the Consumer Business
include those items specifically identifiable to this component and allocation,
primarily based on usage estimates, of certain other corporate expenses,
including accounting, human resources, and corporate systems. Corporate expenses
allocated to this component of the Consumer Business are costs which benefit and
are required for its operations. Certain general corporate expenses of the
Company have not been allocated to this component of the Consumer Business
because they did not provide a direct or material benefit to this business. In
addition, if the Consumer Business had not been a part of the Company during the
period presented, such corporate expenses would not have significantly changed
as a result of not having to operate this business. In the opinion of
management, these methods of allocating these costs are reasonable; however,
such costs do not necessarily equal the costs that this component of the
Consumer Business would have incurred on a stand-alone basis. Therefore, the
financial information included herein may not necessarily reflect assets and
liabilities, revenues and expenses, and cash flows of this component of the
Consumer Business on a stand-alone basis in the future.

     This component of the Consumer Business includes only the cash of the
foreign subsidiaries, except for Canada where the amount of cash is limited to
U.S. $1,000,000.

     Certain expenses, such as postretirement benefit costs which are included
in the combined statements of revenues and expenses for this component of the
Consumer Business, relate to assets and/or liabilities which have not been
included in the accompanying combined statements of net assets to be sold of
this component of the Consumer Business. Such assets and/or liabilities will be
retained by Carter-Wallace, Inc. in accordance with the terms of the definitive
sales agreements. In accordance with such agreements, Armkel will assume the
liability for 60% of the retiree medical obligations incurred with respect to
certain specifically identified Consumer Business employees who terminate
employment during the period from May 7, 2001 through and including the sale
closing date. The Buying Group that acquired the outstanding shares of the
Company has asserted that all of the specifically identified Consumer Business
employees were terminated by the Company on the sale closing date and that
Armkel is therefore liable for 60% of the future retiree medical costs with
respect to all of those former employees. Armkel disagrees with the Buying
Group's position and does not believe it has any liability for those employees.
The Buying Group estimates Armkel's share of the liability for the specifically
identified Consumer Business employees to be approximately $6,000,000 to
$10,000,000 (depending upon a final actuarial valuation). This amount is not
reflected in the accompanying statement of net assets to be sold as of March 31,
2001. To the extent Armkel may have liability related to this matter, some
portion of that would be borne by Church & Dwight Co., Inc.

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    (a) Basis of Combination

The accompanying combined statements have been prepared pursuant to the Asset
Purchase Agreement and Product Line Purchase Agreement in accordance with
accounting principles generally accepted in the United States of America. All
significant intercompany transactions have been eliminated. The combined
statements include the accounts related to the Consumer Business--Excluding
Antiperspirant/Deodorant Products in the United States and Canada and Pet
products, as defined in the Asset Purchase Agreement and Product Line Purchase
Agreement, all of which have been stated on a going-concern basis and do not
necessarily reflect liquidity values (see note 1).

     (b) Revenue Recognition Policy

     Revenues from product sales are recognized upon shipment to customers as
title has passed and are shown net of sales adjustments for discounts, rebates
to customers, returns and other adjustments, which are provided in the same
period that the related sales are recorded.


                                                                              57
<PAGE>

                              CARTER-WALLACE, INC.

                               CONSUMER BUSINESS--
                   EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
                IN THE UNITED STATES AND CANADA AND PET PRODUCTS

                    NOTES TO COMBINED STATEMENTS--(CONTINUED)


     In December 1999, the SEC issued Staff Accounting Bulletin ("SAB") No. 101,
"Revenue Recognition in Financial Statements." SAB No. 101 is applicable to
public companies and provides guidance on applying accounting principles
generally accepted in the United States to revenue recognition issues in
financial statements. Management believes the Company's revenue recognition
criteria are consistent with the guidance provided by SAB No. 101 as their
revenues meet all the revenue recognition criteria in SAB No. 101.

     (c) Use of Estimates

     The preparation of statements in conformity with generally accepted
accounting principles requires management to make estimates and use assumptions
that affect certain reported amounts and disclosures. Actual amounts may differ.

     (d) Cash Equivalents

     Cash equivalents consist of short-term securities with maturities of three
months or less when purchased. The carrying value of cash equivalents
approximates fair value at March 31, 2001.

     (e) Inventories

     Inventories are valued at the lower of cost or market on the first-in,
first-out ("FIFO") method, except for certain domestic inventories which are
stated at cost on the last-in, first-out ("LIFO") method.

     (f) Property, Plant, and Equipment

     Depreciation is provided over the estimated useful lives of the assets,
principally using the straight-line method. Machinery, equipment, and fixtures
are depreciated over a period ranging from 5 to 20 years. Buildings and
improvements are depreciated over a period ranging from 20 to 40 years.
Leasehold improvements are amortized on a straight-line basis over the life of
the related asset or the life of the lease, whichever is shorter. Expenditures
for renewal and betterments are capitalized. Upon sale or retirement of assets,
the appropriate asset and related accumulated depreciation accounts are adjusted
and the resultant gain or loss is reflected in earnings. Maintenance and repairs
are charged to expense as incurred.

     (g) Intangible Assets

The excess of purchase price of businesses acquired over the net assets at date
of acquisition is assessed to the product or group of products which constitute
the business acquired and amortized over no longer than 40 years for amounts
relating to acquisitions subsequent to October 31, 1970. The cost of patents,
formulae, and contracts is amortized on a straight-line basis over their legal
or contractual lives. The cost of trademarks is being amortized over no longer
than 40 years for amounts relating to acquisitions subsequent to October 31,
1970. Amounts related to intangible assets acquired prior to October 31, 1970
are not material.

     The policy of the Consumer Business in assessing the recoverability of
intangible assets is to compare the carrying value of the intangible asset with
the undiscounted cash flow generated by products related to the intangible
asset. In addition, the Consumer Business continually evaluates whether adverse
developments indicate that an intangible asset may be impaired.

     (h) Income Taxes

     The income and expenses for the Consumer Business--Excluding
Antiperspirant/Deodorant Products in the United States and Canada and Pet
Products are included in the tax returns of the Company. The provision for taxes
on income is computed as if this component of the Consumer Business was filing
income tax returns on a stand-alone basis.

     (i) Advertising and Marketing Costs

     Advertising, promotion, and other marketing costs are charged to earnings
in the period in which they are incurred.

     (j) Shipping and Handling Costs

     The Company does not bill shipping and handling costs to its customers.
Shipping and handling costs are included within operating expense under the
caption Distribution Expense.


                                                                              58
<PAGE>

                              CARTER-WALLACE, INC.

                               CONSUMER BUSINESS--
                   EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
                IN THE UNITED STATES AND CANADA AND PET PRODUCTS

                    NOTES TO COMBINED STATEMENTS--(CONTINUED)


     (k) Accrued Expenses

     Accruals related to certain employee costs such as management bonuses and
vacation pay are calculated based upon the proportioned number of employees
designated as part of this component of the Consumer Business.

     (l) Foreign Currency Translation

     The assets and liabilities of foreign subsidiaries are translated at the
year-end rate of exchange, and income statement items are translated at the
average rates prevailing during the year. The effects of foreign exchange gains
and losses arising from these translations of assets and liabilities are
included as a component of comprehensive earnings.

    (m) Accounting for Derivatives

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement requires that companies
recognize all derivatives as either assets or liabilities on the balance sheet
and measure these instruments at fair value. In June 1999, the FASB issued SFAS
No. 137, "Accounting for Derivative Instruments and Hedging Activities--Deferral
of the Effective Date of FASB Statement No. 133." This statement deferred the
effective date of SFAS No. 133 to fiscal years beginning after June 15, 2000. In
June 2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities," which made minor amendments of SFAS
No. 133. The Company has adopted SFAS No. 133, as amended, effective April 1,
2001. The Company's derivatives are all qualified hedges. The derivatives are
comprised of interest rate swaps and foreign exchange forward contracts. The
valuation of these derivatives at September 28, 2001 resulted in a net liability
of approximately $60,000. The adoption of this accounting requirement did not
have a material effect on the accompanying combined statements.

     (n) New Accounting Pronouncements

     In November 2001, the Financial Accounting Standards Board ("FASB")
Emerging Issues Task Force ("EITF") reached a consensus on Issue 01-9 (formerly
EITF issues 00-14 and 00-25), "Accounting for Consideration Given to a Customer
or Reseller of the Vendor's Products." This EITF addressed the recognition,
measurement and income statement classification of consideration from a vendor
to a customer in connection with the customer's purchase or promotion of the
vendor's products. The EITF requires the cost of such items as coupons, slotting
allowances, cooperative advertising arrangements, buydowns, and other allowances
to be accounted for as a reduction of revenues, not included. The accompanying
statements as a marketing expense as the Company did previously. The
accompanying statements have been reclassified to conform with this
pronouncement. The impact was a reduction of net sales of approximately $26.8
million for the six months ended September 28, 2001 and $48.6 million for the
fiscal year ended March 31, 2001. This consensus did not have an effect on net
income.

     Emerging Issues Task Force Issue No. 00-14, "Accounting for Certain Sales
Incentives" ("EITF Issue No. 00-14"), outlines required accounting treatment for
certain sales incentives, including manufacturer's coupons. EITF Issue No. 00-14
requires companies to record coupon expense as a reduction of sales, rather than
marketing expense. The Consumer Business currently records coupon expense as a
component of marketing expense.

     The Consumer Business is required to implement EITF Issue No. 00-14 for the
quarter beginning January 1, 2002. It will require the Consumer Business to
report coupon expense as a reduction of net sales. Coupon expense in this
component of the Consumer Business approximates $3,000,000 per year based on
historical amounts, spread relatively evenly throughout the year.

     Issue No. 00-25, "Vendor Income Statement Characterization of Consideration
from a Vendor to a Retailer" ("EITF Issue No. 00-25"), outlines required
accounting treatment of certain sales incentives, including slotting or
placement fees, cooperative advertising arrangements, buydowns, and other
allowances. The Consumer Business currently records such costs as marketing
expenses. EITF Issue No. 00-25 will require the Consumer Business to report the
paid consideration expense as a reduction of sales, rather than marketing
expense. The Consumer Business is required to implement EITF Issue No. 00-25 for
the quarter beginning January 1, 2002. The Consumer Business has not yet
determined the effect of implementing the guidelines of EITF Issue No. 00-25,
but, in any case, implementation will not have an effect on net earnings.

     In July 2001, the FASB issued SFAS No. 141, "Business Combinations." This
statement addresses the financial accounting and reporting for business
combinations and supersedes Accounting Principles Board Opinion ("APB") No. 16,
"Business


                                                                              59
<PAGE>

                              CARTER-WALLACE, INC.

                               CONSUMER BUSINESS--
                   EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
                IN THE UNITED STATES AND CANADA AND PET PRODUCTS

                    NOTES TO COMBINED STATEMENTS--(CONTINUED)


Combinations," and SFAS No. 38, "Accounting for Preacquisition Contingencies of
Purchased Enterprises." SFAS No. 141 requires "Accounting for Preacquisition
Contingencies of purchased Enterprises." SFAS No 141 requires that the purchase
method of accounting be used for all business combinations initiated after June
30, 2001 and establishes criteria to separately recognize intangible assets
apart from goodwill. In July 2001, the FASB issued SFAS No. 142, "Goodwill and
Other Intangible Assets." This statement addresses financial accounting and
reporting for acquired goodwill and other intangible assets and supersedes APB
No. 17, `Intangible Assets." This statement requires, among other things, that
goodwill and intangible assets that have indefinite useful lives should not be
amortized, but rather should be tested at least annually for impairment, using
the guidance for measuring impairment set forth in the statement and is
effective April 1, 2002. At September 28, 2001, unamortized goodwill amounted to
approximately $52,500,000 and amortization expense related to this goodwill for
the period from April 1, 2001 to September 28, 2001 amounted to approximately
$1,560,000.



                                                                             60
<PAGE>

                              CARTER-WALLACE, INC.

                               CONSUMER BUSINESS--
                   EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
                IN THE UNITED STATES AND CANADA AND PET PRODUCTS

                    NOTES TO COMBINED STATEMENTS--(CONTINUED)


(3)   TAXES ON INCOME

     The provision (benefit) for taxes on income was as follows:

<TABLE>
<CAPTION>
                                                                   PERIOD FROM             YEAR ENDED
                                                                 APRIL 1, 2001 TO           MARCH 31
                                                                SEPTEMBER 28, 2001            2001
                                                                ------------------          ---------
<S>                                                             <C>                        <C>
      Current:
           Domestic...........................................      $18,006,000            $26,366,000
           Foreign............................................        4,166,000              8,868,000
                                                                    -----------            -----------

                                                                     22,172,000             35,234,000
                                                                    -----------            -----------
      Deferred:
           Domestic...........................................         (906,000)              (249,000)
           Foreign............................................         (589,000)               164,000
                                                                    -----------            -----------
                                                                     (1,495,000)               (85,000)
                                                                    -----------            -----------
                Total.........................................      $20,677,000            $35,149,000
                                                                    ===========            ===========
</TABLE>


     Deferred taxes have not been provided on undistributed earnings of foreign
subsidiaries. It has been management's practice and intent to reinvest such
earnings in the operations of these subsidiaries.

     The effective tax rate of the provision for taxes on income as compared
with the U.S. Federal statutory income tax rate was as follows:

<TABLE>
<CAPTION>
                                                PERIOD FROM APRIL 1, 2001
                                                  TO SEPTEMBER 28, 2001                 YEAR ENDED MARCH 31, 2001
                                                  ---------------------                 -------------------------
                                                                      % TO                                  % TO
                                                                     PRETAX                                PRETAX
                                                   TAX AMOUNT        INCOME               TAX AMOUNT       INCOME
                                                   ----------        ------               ----------       ------
<S>                                                <C>               <C>                  <C>              <C>
Computed tax expense......................         $18,941,000        35.0%               $29,653,000       35.0%
Foreign income taxed at a different
   effective rate.........................             116,000         0.5%                 2,421,000        3.6%
State income taxes, net of federal tax
   benefit................................           1,643,000         3.0%                 3,729,000        4.3%
Amortization of intangibles...............             138,000         0.3%                   268,000        0.3%
Other.....................................            (161,000)         --                   (922,000)      (1.1)%
                                                   -----------        ----                -----------       ----
Provision for taxes on income.............         $20,677,000        38.8%               $35,149,000       42.1%
                                                   ===========        ====                ===========       ====
</TABLE>

     The results of this component of the Consumer Business are included in the
income tax returns of Carter-Wallace, Inc. and subsidiaries. The provision for
taxes on income is computed as if this component of the Consumer Business was
filing income tax returns on a stand-alone basis.

     The U.S. Internal Revenue Service completed its examination of
Carter-Wallace, Inc. and subsidiaries' tax returns through fiscal year 1995,
resulting in no material impact on the Company or this component of the Consumer
Business. The statute of limitations for the examination of Carter-Wallace, Inc.
and subsidiaries' U.S. Federal income tax return has expired for fiscal years
1996 and 1997.


                                                                              61
<PAGE>

                              CARTER-WALLACE, INC.

                               CONSUMER BUSINESS--
                   EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
                IN THE UNITED STATES AND CANADA AND PET PRODUCTS

                    NOTES TO COMBINED STATEMENTS--(CONTINUED)


(4)  RETIREMENT PLANS AND OTHER POSTRETIREMENT BENEFITS

     Retirement plan obligations included in the Consumer Business--Excluding
Antiperspirant/Deodorant Products in the United States and Canada and Pet
Products, consist of the Retirement Plan for Bargaining Employees of
Carter-Wallace, Inc., and certain obligations of foreign subsidiaries.
Obligations for the Executive Pension Benefits Plan and the Employees Retirement
Plan of Carter-Wallace, Inc. have been excluded from the accompanying combined
statements, as these are obligations of the Company. Pension expense for
domestic salaried employees has not been included in the accompanying combined
statements because such expense was immaterial in each of the periods presented.

     Postretirement benefit obligations for domestic employees have been
excluded from this component of the Consumer Business as these are obligations
of the Company. However, expense related to postretirement benefits for domestic
employees of the Consumer Business--Excluding Antiperspirant/Deodorant Products
in the United States and Canada and Pet Products is included in the accompanying
combined statements of revenues and expenses. Expense related to the
postretirement benefit obligations for domestic employees of the Consumer
Business--Excluding Antiperspirant/Deodorant Products in the United States and
Canada and Pet Products amounted to $550,000 for the period from April 1, 2001
to September 28, 2001 and $1,044,000 for the fiscal years ended March 31, 2001.

     The components of the pension and postretirement benefit expense reflected
in the accompanying combined statements for the period from April 1, 2001 to
September 28, 2001 and for the years ended March 31, 2001 and 2000 were as
follows:

<TABLE>
<CAPTION>
                                                                             RETIREMENT PLANS         OTHER POSTRETIREMENT BENEFITS
                                                                    -------------------------------   -----------------------------
                                                                      PERIOD FROM                        PERIOD FROM
                                                                    APRIL 1, 2001 TO     YEAR ENDED    APRIL 1, 2001 TO   YEAR ENDED
(in thousands)                                                        SEPTEMBER 28,       MARCH 31,      SEPTEMBER 28,     MARCH 31,
                                                                          2001              2001            2001              2001
                                                                    ----------------     ----------    ----------------   ----------
<S>                                                                 <C>                  <C>           <C>                <C>
Service cost .................................................          $   648           $ 1,208           $  21           $    42
Interest cost ................................................            1,841             3,600              45                90
Expected return on assets ....................................           (2,228)           (4,676)             --                --
Amortization of prior service cost ...........................              (71)               91              --                --
Amortization of transition cost ..............................               38                77             (76)             (156)
Amortization of actuarial gain ...............................               50              (264)             --                --
                                                                        -------           -------           -----           -------
Benefit cost (income) ........................................              278                36             (10)              (24)
Cost for domestic Consumer Business employees ................               --                --
   charged from Carter-Wallace, Inc. .........................               --                --             550             1,044
                                                                        -------           -------           -----           -------
          Total benefit cost .................................          $   278           $    36           $ 540           $ 1,020
                                                                        =======           =======           =====           =======
</TABLE>

     The principal assumptions used in determining 2001 and 2000 actuarial
values were:

<TABLE>
<S>                                                                     <C>
           Discount rate.................................................8%
           Rate of increase in compensation levels.......................4%-6%
           Expected long-term rate of return on plan assets..............7%-10%
                                                                         ------
</TABLE>

     Expense for the employee savings plan under which the Consumer Business
matches the contributions of participating employees up to a designated level
was approximately $175,000 for the period from April 1, 2001 to September 28,
2001 and approximately $350,000 in the year ended March 31, 2001.

     The assumed health care cost trend rate used to measure the accumulated
postretirement benefit obligation for those over age 65 is 8% for 2001 trending
to 5% over a three-year period. For those under age 65, the trend rate is 6.3%
for 2001 trending to 5% over a three-year period. A 1% increase or decrease in
the assumed respective annual medical cost trend rate would change the
accumulated postretirement benefit obligation by approximately $100,000, and the
service and interest components of net postretirement benefit expense would be
immaterially affected.


                                                                              62
<PAGE>

                              CARTER-WALLACE, INC.

                               CONSUMER BUSINESS--
                   EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
                IN THE UNITED STATES AND CANADA AND PET PRODUCTS

                    NOTES TO COMBINED STATEMENTS--(CONTINUED)


(5)  LONG-TERM INCENTIVE PLANS

     Obligations for deferred stock awards and stock option grants made under
the 1996 Long-Term Incentive Plan for Corporate Officers of the Company have
been excluded from the accompanying combined statements of net assets to be sold
of this component of the Consumer Business, as these are obligations of the
Company. As of March 31, 2001, the outstanding stock awards for the four
Consumer Business executives totaled 105,000 shares and the outstanding stock
options totaled 567,000. Outstanding awards of deferred stock become fully
vested and outstanding options become immediately exercisable upon the
occurrence of a change in control of the Company. Expense for stock award
amortization has been included in the accompanying combined statements of
revenues and expenses. This stock award amortization expense amounted to
$116,000 for the period from April 1, 2001 to September 28, 2001 and $232,000
for the fiscal year ended March 31, 2001. The Consumer Business has chosen to
continue to account for options granted under the plan using the intrinsic value
method. Accordingly, no compensation expense has been recognized for these
options. Had the fair value method of accounting, as defined in SFAS No. 123,
"Accounting for Stock-Based Compensation," been applied to these stock options,
revenue in excess of expenses of the Consumer Business would have been reduced
on a pro forma basis by approximately $350,000 in the period from April 1, 2001
to September 28, 2001 and approximately $490,000 in the fiscal year ended March
31, 2001. For purposes of fair market value disclosures, the fair market value
of an option grant was estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted-average assumptions:

<TABLE>
<CAPTION>
                                                                       2001
                                                                       ----
<S>                                                                  <C>
Risk-Free Interest Rate.............................................   6.3%
Expected Life....................................................... 8 yrs.
Volatility..........................................................  31.7%
Dividend Yield......................................................   1.2%
                                                                       ====
</TABLE>

(6)  RENTAL EXPENSE AND LEASE COMMITMENTS

     Rental expense for operating leases with a term greater than one year for
2001 was as follows (amounts in thousands):

<TABLE>
<CAPTION>
                                                                        REAL         EQUIPMENT
                       RENTAL EXPENSE                                 PROPERTY       AND OTHER
                       --------------                                 --------       ---------
<S>                                                                   <C>            <C>
Period from April 1, 2001 to September 28, 2001....................   $   957         $ 3,697
Year ended March 31, 2001..........................................     1,654           6,649
</TABLE>

     Minimum rental commitments under noncancelable leases in effect at March
31, 2001 were as follows (amounts in thousands):

<TABLE>
<CAPTION>
                                                                                                   EQUIPMENT        CAPITAL LEASE
                                MINIMUM RENTAL COMMITMENTS                       REAL PROPERTY     AND OTHER         OBLIGATIONS
                                --------------------------                       -------------     ---------        -------------
<S>                                                                              <C>               <C>              <C>
            2002...............................................................      $ 1,496         $  630             $  275
            2003...............................................................        1,431            412                216
            2004...............................................................          564            233                203
            2005...............................................................          341             69                190
            2006...............................................................           94             15                127
            2007 and thereafter................................................            7             --                 --
                                                                                     =======         ======             ======
                                                                                                                         1,011
            Less interest and executory cost...................................                                           (163)
                                                                                                                        ------
            Present value of minimum lease payments (of which $213 is included
               in accrued expenses)............................................                                         $  848
                                                                                                                        ======
</TABLE>

(7)  LITIGATION

     The Consumer Business is engaged in litigation with Tambrands Inc.
("Tambrands") in the Supreme Court of the State and County of New York ("Supreme
Court"), arising out of a patent infringement and misappropriation suit
previously filed against both companies in the United States District Court,
Southern District of New York, by New Horizons Diagnostics Corporation ("NHDC"),
et al. The NHDC suit, which was settled and discontinued in July 1996, asserted
claims with respect to certain "gold sol" technology (used in First Response and
Answer home pregnancy and ovulation predictor test kits) that the Consumer


                                                                              63
<PAGE>

                              CARTER-WALLACE, INC.

                               CONSUMER BUSINESS--
                   EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
                IN THE UNITED STATES AND CANADA AND PET PRODUCTS

                    NOTES TO COMBINED STATEMENTS--(CONTINUED)


Business had acquired from Tambrands pursuant to a written purchase agreement in
March 1990. The Consumer Business paid an immaterial amount toward that
settlement. In the pending Supreme Court action, Tambrands seeks reimbursement
from the Consumer Business of an unspecified portion of the amount paid by
Tambrands in settlement of the NHDC suit, and for defense costs. Cross-motions
for summary judgment have been filed. The Consumer Business believes it has good
defenses, under the terms of the purchase agreement, to Tambrands' claim.

     The Consumer Business is subject to other legal actions arising out of its
operations. The Consumer Business believes, based on the opinion of counsel,
that it has good defenses to such actions and should prevail.

(8)  EMPLOYMENT AGREEMENTS AND TERMINATION AND CHANGE IN CONTROL ARRANGEMENTS

     The Company has entered into agreements with four executives of the
Consumer Business as well as seven foreign subsidiary general managers, whose
services are being made available to the Consumer Business. These obligations
will be assumed by Armkel as part of the acquisition of the Consumer Business.
These agreements generally provide for payments equal to salary and bonus
multiples, and in the case of the four executives, certain pension enhancements
if the executives' employment is terminated as specified in the agreements after
a change in control of the Company.

     As a result of the acquisition by Armkel, which represents a change in
control, as defined in the agreements, all of the obligations under the
agreements have been assumed by Armkel and totaled approximately $15,000,000.
These obligations are not reflected in the accompanying statements.

(9)  CERTAIN OPERATIONAL AND REVENUE INFORMATION

     Net sales of the continuing operations of this component of the Consumer
Business foreign subsidiaries and branches operating outside of the United
States and the Consumer Business' equity in net assets and revenues in excess of
expenses of such operations of this component were (note 14 has additional
information on international operations):

<TABLE>
<CAPTION>
                                                                         PERIOD FROM
(IN MILLIONS)                                                          APRIL 1, 2001 TO
                                                                      SEPTEMBER 28, 2001      MARCH 31, 2001
                                                                      ------------------      --------------
<S>                                                                   <C>                     <C>
        Net sales................................................                $81.8               $157.9
        Total Revenues in excess of expenses.....................                  8.9                 10.5
                                                                          ============           ==========
</TABLE>

     The following table sets forth our continuing operations' principal product
lines and related data.

                                         DOMESTIC DIVISION

<TABLE>
<CAPTION>
                                                                        NET SALES (IN MILLIONS)
                                                                        -----------------------
                                                                       PERIOD FROM
                                                                    APRIL 1, 2001 TO
                                                                   SEPTEMBER 28, 2001         2001
                                                                   ------------------        ------
<S>                                                                <C>                       <C>
PRODUCT
Condoms............................................................     $  66.1              $109.4
Depilatories and waxes.............................................        22.8                32.3
Home pregnancy and ovulation test kits.............................        23.0                36.7
Other consumer products............................................         4.0                 8.2
                                                                         ------              ------
     Total domestic net sales......................................      $115.9              $186.6
                                                                         ======              ======
</TABLE>


                                                                              64
<PAGE>

                              CARTER-WALLACE, INC.

                               CONSUMER BUSINESS--
                   EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
                IN THE UNITED STATES AND CANADA AND PET PRODUCTS

                    NOTES TO COMBINED STATEMENTS--(CONTINUED)


                             INTERNATIONAL DIVISION

<TABLE>
<CAPTION>
                                                                        NET SALES (IN MILLIONS)
                                                                       PERIOD FROM
                                                                    APRIL 1, 2001 TO
                                                                   SEPTEMBER 28, 2001         2001
                                                                   ------------------        ------
<S>                                                                <C>                       <C>
PRODUCT
Condoms; home pregnancy and ovulation test kits...............            $9.7                $19.3
Depilatories and waxes; face and skin care....................            23.7                 46.6
Oral care.....................................................            10.9                 22.8
OTC products*.................................................            19.2                 39.4
Other consumer products*......................................            18.3                 29.8
                                                                        ------               ------
     Total international net sales............................          $ 81.8               $157.9
                                                                        ======               ======
</TABLE>

----------

*    Includes net sales of approximately $16 million for the period from April
     1, 2001 to September 28, 2001 and $32 million for the years ended March 31,
     2001 and 2000 relating to products distributed by the Carter-Wallace
     consumer business for third parties.

For the period April 1, 2001 to September 28, 2001, our largest domestic
customer represented approximately 19% of our consolidated domestic net sales
and, for the same period, our top ten largest domestic customers in the
aggregate represented approximately 60% of our consolidated domestic net sales.
For the fiscal year ended March 31, 2001, our largest domestic customer
represented approximately 19%, of our consolidated domestic net sales and, for
the same period, our top ten largest domestic customers in the aggregate
represented approximately 60% of our consolidated domestic net sales.




                                                                              65
<PAGE>

                              CARTER-WALLACE, INC.

                               CONSUMER BUSINESS--
                   EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
                IN THE UNITED STATES AND CANADA AND PET PRODUCTS

                    NOTES TO COMBINED STATEMENTS--(CONTINUED)


(10) SUPPLEMENTAL FINANCIAL INFORMATION OF DOMESTIC AND INTERNATIONAL OPERATIONS

     The international subsidiaries and domestic business, owned by the Company,
will be owned by Armkel, LLC, the successor company, after the consummation of
the transaction and the classification between the domestic business and
international subsidiaries is expected to remain the same as a result of the
acquisition. The subordinated notes expected to be registered by Armkel, LLC,
the successor company, are expected to be fully and unconditionally guaranteed
by the new Armkel domestic subsidiaries and are expected to be joint and
several. The classification of domestic vs. international is not expected to
change after the acquisition by Armkel. The following information is being
presented to comply with SEC Regulation SX, Item 3-10.

     Supplemental information for combined condensed revenues in excess of
expenses and cash flows data for the period from April 1, 2001 to September 28,
2001 and for the year ended March 31, 2001 is summarized as follows (amounts in
thousands):

<TABLE>
<CAPTION>
                                                                                                       PERIOD FROM APRIL 1, 2001
                                                                                                         TO SEPTEMBER 28, 2001
                                                                                                 -----------------------------------
                                                                                                                             TOTAL
                                                                                                 DOMESTIC  INTERNATIONAL(1) COMBINED
                                                                                                 --------  -------------    --------
<S>                                                                                              <C>       <C>              <C>
Net sales .................................................................................      $115,875      $81,834      $197,709
Cost of goods sold ........................................................................        43,099       39,721        82,820
                                                                                                 --------      -------      --------
     Gross profit .........................................................................        72,776       42,113       114,889
Operating Expenses ........................................................................        31,234       29,887        61,121
                                                                                                 --------      -------      --------
     Revenues in excess of expenses before provision for taxes
       on income from continuing expenses .................................................        41,542       12,226        53,768
Provision for taxes on income .............................................................        17,100        3,577        20,677
                                                                                                 --------      -------      --------
     Revenues in excess of expenses from continuing operations ............................        24,442        8,649        33,091
     Revenues in excess of expenses from discontinued operation  (net of $503 tax) ........            --          347           347
                                                                                                 --------      -------      --------
     Total  revenues in excess of expenses ................................................      $ 24,442      $ 8,996      $ 33,438
                                                                                                 ========      =======      ========
</TABLE>

<TABLE>
<CAPTION>
                                                                                                       YEAR ENDED MARCH 31, 2001
                                                                                                 -----------------------------------
                                                                                                                             TOTAL
                                                                                                 DOMESTIC  INTERNATIONAL(1) COMBINED
                                                                                                 --------  -------------    --------
<S>                                                                                              <C>       <C>              <C>
Net sales ................................................................................      $186,638      $157,892      $344,530
Cost of goods sold .......................................................................        68,816        79,456       148,272
                                                                                                --------      --------      --------
     Gross profit ........................................................................       117,822        78,436       196,258
Operating Expenses .......................................................................        51,478        60,455       111,933
                                                                                                --------      --------      --------
     Revenues in excess of expenses before provision for taxes
       on income from continuing operations ..............................................        66,344        17,981        84,325
Provision for taxes on income ............................................................        26,910         8,239        35,149
                                                                                                --------      --------      --------
     Revenues in excess of expenses from continuing operations ...........................        39,434         9,742        49,176
     Revenues in excess of expenses from discontinued operation  (net of$1,180 tax) ......            --           750           750
                                                                                                --------      --------      --------
     Revenues in excess of expenses ......................................................      $ 39,434      $ 10,492      $ 49,926
                                                                                                ========      ========      ========
</TABLE>

----------
(1)  International includes primarily the Company's operations in France, the
     United Kingdom and Canada, together with certain smaller locations
     throughout the world. No particular country has a material component of the
     international operations.


                                                                              66
<PAGE>

                              CARTER-WALLACE, INC.

                               CONSUMER BUSINESS--
                   EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
                IN THE UNITED STATES AND CANADA AND PET PRODUCTS

                    NOTES TO COMBINED STATEMENTS--(CONTINUED)


<TABLE>
<CAPTION>
                                                                                                    PERIOD FROM APRIL 1, 2001 TO
                                                                                                          SEPTEMBER 28, 2001
                                                                                                  -------------------------------
                                                                                                                            TOTAL
                                                                                                  DOMESTIC  INTERNATIONAL  COMBINED
                                                                                                  --------  -------------  -------
<S>                                                                                               <C>       <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Revenues in excess of expenses ................................................................   $ 24,442    $ 8,996    $ 33,438
Adjustments to reconcile total revenues in excess of expenses to cash flows from operations:
     Depreciation and amortization ............................................................      2,943      1,199       4,142
     Amortization .............................................................................        409        792       1,201
     Revenues in excess of expenses from discontinued operations, net of taxes ................         --       (346)       (346)

OTHER CHANGES IN ASSETS AND LIABILITIES:
     Increase in accounts receivable ..........................................................    (10,239)    (4,623)    (14,862)
     Increase in inventories ..................................................................      3,571      1,668       5,239
     Increase (decrease) in prepaid expenses ..................................................        347     (2,400)     (2,053)
     (Decrease) increase in accounts payable and accrued expenses .............................     (4,002)       198      (3,804)
     (Increase) decrease in deferred taxes ....................................................     (2,272)      (281)     (2,553)
     Other changes ............................................................................      3,041     (1,103)      1,938
                                                                                                  --------    -------    --------
Changes in assets and liabilities .............................................................     (9,554)    (6,541)    (16,095)
                                                                                                  --------    -------    --------
Cash flows provided by operations .............................................................     18,240      4,100      22,340
                                                                                                  --------    -------    --------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Additions to property, plant and equipment--net of acquisitions ..........................     (2,402)    (2,057)     (4,459)
     Proceeds from sale of property, plant and equipment ......................................         54         25          79
                                                                                                  --------    -------    --------
Cash flows used in investing activities .......................................................     (2,348)    (2,032)     (4,380)
                                                                                                  --------    -------    --------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Payments of debt .........................................................................   $     --    $(1,961)   $ (1,961)
     Cash transferred to CWI ..................................................................    (15,991)    (3,144)    (19,135)
     Increase in borrowings ...................................................................         --        473         473
                                                                                                  --------    -------    --------
Cash flows provided by (used in) financing activities .........................................    (15,991)    (4,632)    (20,623)
                                                                                                  --------    -------    --------
Foreign exchange effect on cash & cash equivalents ............................................         --        (50)        (50)
                                                                                                  --------    -------    --------
Decrease in cash and cash equivalents .........................................................   $    (99)   $(2,614)   $ (2,713)
                                                                                                  ========    =======    ========
</TABLE>


                                                                              67
<PAGE>

                              CARTER-WALLACE, INC.

                               CONSUMER BUSINESS--
                   EXCLUDING ANTIPERSPIRANT/DEODORANT PRODUCTS
                IN THE UNITED STATES AND CANADA AND PET PRODUCTS

                    NOTES TO COMBINED STATEMENTS--(CONTINUED)


<TABLE>
<CAPTION>
                                                                                                     YEAR ENDED MARCH 31, 2001
                                                                                             --------------------------------------
                                                                                                                            TOTAL
                                                                                             DOMESTIC    INTERNATIONAL     COMBINED
                                                                                             --------    -------------     --------
<S>                                                                                          <C>         <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Revenues in excess of expenses ........................................................      $ 39,434       $ 10,492       $ 49,926
Adjustments to reconcile total revenues in excess of expenses
   to cash flows from operations:
  Depreciation and amortization .......................................................         5,439          2,184          7,623
  Amortization ........................................................................         1,071          1,494          2,565
  Revenues in excess of expenses from discontinued operations, net of taxes ...........            --           (750)          (750)
OTHER CHANGES IN ASSETS & LIABILITIES:
     Increase in accounts receivable ..................................................        (1,455)        (7,661)        (9,116)
     Increase in inventories ..........................................................           (73)        (1,620)        (1,693)
     Increase (decrease) in prepaid expenses ..........................................          (271)           (82)          (353)
     (Decrease) increase in accounts payable and  accrued expenses ....................          (984)        13,625         12,641
     (Increase) decrease in deferred taxes ............................................        (1,579)           770           (809)
     Other changes ....................................................................           224            326            550
                                                                                             --------       --------       --------
     Changes in assets & liabilities ..................................................        (4,138)         5,358          1,220
                                                                                             --------       --------       --------
Cash flows provided by operations .....................................................        41,806         18,778         60,584
                                                                                             --------       --------       --------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Additions to property, plant and equipment--net of acquisitions ..................        (6,995)        (3,612)       (10,607)
     Proceeds from sale of property, plant and equipment ..............................         1,086            357          1,443
                                                                                             --------       --------       --------
Cash flows used in investing activities ...............................................        (5,909)        (3,255)        (9,164)
                                                                                             --------       --------       --------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Payments of debt .................................................................            --         (3,596)        (3,596)
     Cash transferred to CWI ..........................................................       (35,798)        (5,899)       (41,697)
     Increase in borrowings ...........................................................            --            194            194
                                                                                             --------       --------       --------
Cash flows provided by (used in) financing activities .................................       (35,798)        (9,301)       (45,099)
                                                                                             --------       --------       --------
Foreign exchange effect on cash & cash equivalents ....................................            --           (553)          (553)
                                                                                             --------       --------       --------
Increase in cash & cash equivalents ...................................................      $     99       $  5,669       $  5,768
                                                                                             ========       ========       ========
</TABLE>

                                                                              68
<PAGE>

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

      None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     The following table sets forth certain information regarding the Company's
directors, executive officers and key employees as of March 2, 2003.Under the
Company's joint venture agreement, three of the Company's directors are
designated by C&D and three are designated by Kelso.The Company's directors do
not receive any compensation except for those directors that also serve as
executive officers.

<TABLE>
<CAPTION>
NAME                                                                   AGE                     POSITION
----                                                                   ---                     --------
<S>                                                                    <C>     <C>
Robert A. Davies, III (1).........................................      67     Chief Executive Officer, Director
Bradley A. Casper (1).............................................      43     President, Domestic Operations; Director
Adrian Huns.......................................................      54     President, International Operations
Maureen K. Usifer.................................................      43     Chief Financial Officer
Philip E. Berney (2)..............................................      39     Director
Zvi Eiref (1)(3)..................................................      64     Vice President, Treasurer; Director
Michael B. Goldberg (2)...........................................      55     Director
Michael B. Lazar (2)(3)...........................................      33     Director
T. Rosie Albright.................................................      55     Advisor to the Board of Directors
</TABLE>

     1.    Designated by C&D.
     2.    Designated by Kelso.
     3.    Member of the Audit Committee.

     Robert A. Davies, III has been chief executive officer of the Company since
the closing of the Acquisition. Mr. Davies has served as chairman of the board
and chief executive officer of C&D since February 2001. He served as president
of C&D from February 1995 until he was elected chairman. From January 1995 to
September 1995, Mr. Davies was president of the Arm & Hammer Division at C&D.
Before joining C&D in 1995, he served as president and chief executive officer
and a member of the board of directors of California Home Brands, Inc. Mr.
Davies is also director of Footstar, Inc.

     Bradley A. Casper became president, domestic operations of the Company on
March 18, 2002. Mr. Casper also serves as president, personal care division of
C&D. From 1985 until March 2002, Mr. Casper held various positions with Procter
& Gamble where he most recently served as vice president, global fabric care. He
served in the global fabric care role for three years prior to which he was
general manager, Hong Kong and China hair care. Mr. Casper began his career with
General Electric.In November 2002, Mr. Casper became a Board member of the
Cosmetic, Toiletry and Fragrance Association, a non-profit organization that
supports the personal care industry.

     Adrian Huns has been the Company's president, international operations
since the closing of the Acquisition. Mr. Huns has served as president,
international division for the Carter-Wallace consumer business since May 1996.
Prior to this time he was managing director of the Carter-Wallace consumer
business' subsidiary operation in the United Kingdom for 6 years. Mr. Huns
worked in Belgium for the Medgenix Group between 1988 and 1989 and served as
director of marketing for the international branded health care operations of
the Boots Company in England between 1978 and 1988.

     Maureen K. Usifer has been the Company's chief financial officer since the
closing of the Acquisition. Ms. Usifer was with C&D from 1988 until she joined
the Company. From May 2000 through October 2001, Ms. Usifer was Division
Controller of C&D's Armus joint venture, which encompassed $500 million in
laundry sales. From 1996 through 2000, Ms. Usifer was a Senior Finance Manager
of C&D, responsible for all of the Arm & Hammer's personal care businesses.

     Philip E. Berney has been a managing director of Kelso since January 1999
and has served as one of the Company's directors since the closing of the
Acquisition. Prior to January 1999, Mr. Berney was a senior managing director
and head of high yield finance at Bear Stearns & Co. Mr. Berney is a director of
CDT Holdings, plc and Key Components, Inc.

     Zvi Eiref has served as one of the Company's directors since the closing of
the Acquisition. Mr. Eiref has been vice president and chief financial officer
of C&D since November 1995. Mr. Eiref also served as chief financial officer of
C&D from 1979 to 1988. From 1988 to 1995, Mr. Eiref was employed by Chanel, Inc.
as senior vice president, finance.

     Michael B. Goldberg has served as one of the Company's directors since the
closing of the Acquisition. Mr. Goldberg has been a managing director of Kelso
since October 1991. Mr. Goldberg served as a managing director and jointly
managed the merger and acquisitions department at The First Boston Corporation
from 1989 to May 1991. Mr. Goldberg was a partner at the law firm of Skadden,
Arps, Slate, Meagher & Flom from 1980 to 1989. Mr. Goldberg is a director of
Consolidated Vision Group,


                                                                              69
<PAGE>
 Inc., Endo Pharmaceuticals, Inc., HCI Direct Inc. and Unilab Corporation. Mr.
Goldberg is also a director of the Phoenix House Foundation and the Woodrow
Wilson Council.

     Michael B. Lazar has served as one of the Company's directors since the
closing of the Acquisition. Mr. Lazar has been a vice president of Kelso since
January 1999 after having joined Kelso in October 1993. Prior to October 1993,
Mr. Lazar served as an associate in the Acquisition Finance Group at Chemical
Securities, Inc.

     T. Rosie Albright, formerly the president of the domestic consumer division
of the Carter-Wallace consumer business, became an advisor to the Company's
board of directors upon closing of the Acquisition. Ms. Albright served as
corporate vice president, consumer products of Carter-Wallace and president,
Carter Products Division of Carter-Wallace from December 1995 until the closing
date of the Acquisition. Prior to 1995, Ms. Albright was general manager and
executive vice president, beauty care with Revlon, Inc.

ITEM 11.  EXECUTIVE COMPENSATION.

     The following table sets forth information concerning annual compensation
earned, paid or accrued by the Company during the fiscal year ended December 31,
2002 and the period following the inception of the Company, from September 28,
2001 to December 31, 2001, to, or for, the Chief Executive Officer, and each of
the next four highest paid executive officers of the Company who served as
executive officers during the fiscal period ended December 31, 2002 and whose
total salary and bonus for the period exceeded $100,000.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                         ANNUAL COMPENSATION
                                            ---------------------------------------------
                                                                                                 LONG TERM COMPENSATION

                                                                                              AWARDS
                                                                                              ------
                                                                             OTHER ANNUAL     RIGHTS    LTIP         ALL OTHER
                                                                             COMPENSATION     (UNITS)  PAYOUTS      COMPENSATION
NAME AND PRINCIPAL POSITION         YEAR    SALARY ($)       BONUS ($)           ($)          ------   --------       (5)(6)(7)
---------------------------         ----    ----------       ---------       ------------                           -------------
<S>                                 <C>     <C>              <C>             <C>              <C>      <C>          <C>
Robert A. Davies, III
   Chief Executive Officer          2002     $600,000(1)      $660,000(1)      $    --            --        --    $ 123,392
                                    2001      126,083          150,375              --            --        --       20,163

Bradley A. Casper
   President                        2002      252,308(2)       216,000(2)(3)    23,623(4)     93,489        --       17,766


Zvi Eiref,
   Vice President, Treasurer        2002      332,000(1)       194,800(1)           --            --        --       63,633
                                    2001       65,000           68,750              --            --        --       10,624

Thomas Gehrmann*
   Chief Financial Officer          2002      211,000          116,008              --        31,200        --       27,614
   International Operations         2001       52,750           89,100              --            --                    854

Adrian Huns,
   President, International         2002      322,583          835,000              --           --         --       25,044
   Operations                       2001       97,890           73,400              --           --         --       11,887

Maureen Usifer,
   Chief Financial Officer          2002      118,750           48,300              --        34,300        --       11,458
                                    2001       96,700           38,700              --            --        --        5,510
</TABLE>


     * Mr. Gehrmann retired from the Company on December 31, 2002. His Equity
       Appreciation Rights expired at such time.

----------
(1)  Mr. Davies and Mr. Eiref render services to the Company and C&D.Mr. Davies
     and Mr. Eiref only receive compensation (which is reflected in the
     compensation table above) from C&D.We estimate that approximately 25% of
     the compensation paid by C&D represents compensation for services rendered
     to the Company.

                                                                              70
<PAGE>

(2)  Mr. Casper renders services to the Company and C&D. Mr. Casper only
     receives compensation (which percentage is reflected in the compensation
     table above) from C&D. We estimate that approximately 48% of the
     compensation paid by C&D to Mr. Casper represents compensation for services
     rendered to the Company. Approximately 52% of the compensation paid by C&D
     to Mr. Casper was for services rendered to C&D.

(3)  Includes $40,000 sign-on bonus paid to Mr. Casper in connection with his
     commencement of employment.

(4)  Includes $23,623 for reimbursement of relocation expenses.

(5)  Includes C&D contributions, vested and unvested, under C&D's Investment
     Savings Plan and the Profit Sharing Plan. Total contributions on behalf of
     named individuals were as follows for 2002 and 2001, respectively: R.A.
     Davies, III $87,154, $14,490; B. Casper $17,469, $0; Z. Eiref $45,385,
     $7,678; T. Gehrmann $26,192, $854; A. Huns $24,041, $11,562; M. Usifer
     $14,927, $1,304.

(6)  Includes compensation deferred pursuant to a deferred compensation
     agreement with C&D, providing certain plan contributions above Internal
     Revenue Code limits. Such amounts are not deferred at the request of the
     individual or C&D. Total compensation deferred on behalf of named
     individuals was as follows for 2002 and 2001 respectively: R.A. Davies, III
     $13,750, $2,475; B. Casper $0, $0; Z. Eiref $5,468, $675; T. Gehrmann
     $6,907, $0; M. Usifer $0, $0.

(7)  Includes premiums paid for life insurance plans. Total premiums paid on
     behalf of named individuals were as follows for 2002 and 2001 respectively:
     R.A. Davies,III $22,488, $3,198; B. Casper $357, $0; Z. Eiref $22,488
     $2,271; A. Huns $1,003, $325; M. Usifer $335, $73.

The board of directors does not have a Compensation Committee.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

     The following table sets forth information with respect to grants of equity
appreciation rights for the Executive Officers named in the Summary Compensation
Table during 2002 pursuant to the Company's Equity Appreciation Plan(1). Also
shown are hypothetical gains for each equity appreciation right based on assumed
rates of annual compound Membership Interest appreciation of five percent and
ten percent from the date the rights were granted.

  EQUITY APPRECIATION RIGHTS GRANTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

<TABLE>
<CAPTION>
                                             INDIVIDUAL GRANTS
                            -------------------------------------------------------       POTENTIAL REALIZABLE
                                                                                        VALUE AT ASSUMED ANNUAL
                                           % OF TOTAL                                    RATES OF APPRECIATION
                            NUMBER OF    RIGHTS GRANTED         BASE                       FOR TERM OF RIGHT
                             RIGHTS     TO EMPLOYEES IN        PRICE     EXPIRATION           (7 YEARS)(2)
NAME                         GRANTED      FISCAL YEAR        ($/ RIGHT)     DATE          5%               10%
-----------------------     ---------   ---------------      ---------   ----------    --------         --------
<S>                         <C>         <C>                  <C>         <C>           <C>              <C>
Robert A. Davies, III           --             --                 --         --            --               --
Bradley A. Casper             93,489         12.12%             15.82      9/29/08      602,100          980,700
Zvi Eiref                       --             --                 --         --            --               --
Thomas Gehrmann (3)             --             --                 --         --            --               --
Adrian Huns                     --             --                 --         --            --               --
Maureen Usifer                34,300          4.45%             15.82      9/29/08      220,903          359,807
</TABLE>

----------

1.   The Company grants Equity Appreciation Awards to senior management
     executives under the Company's Equity Appreciation Plan (the "Plan").The
     Equity Appreciation Award relates to membership interests (each, an
     "Interest") in the Company and operates in a manner similar to a stock
     appreciation right. Upon the occurrence of a "Liquidation Event," a holder
     is entitled to receive, for each vested Interest underlying the Equity
     Appreciation Award, an amount equal to the value of an Interest, as
     determined by the administering board committee (the "Committee") on the
     date of the Liquidating Event, minus $15.82, the deemed value on the date
     of the award. Payment may be made in such form as selected by the
     Committee, including cash and, subject to C&D's approval, discounted stock
     options or restricted stock awards with respect to C&D's Common Stock or
     other C&D securities. If a Liquidation Event does not occur by September
     29, 2008, then the Plan and all Equity Appreciation Awards then outstanding
     will automatically terminate and become void regardless of whether such
     awards have vested in whole or in part.

2.   The value of each equity appreciation right may not exceed $26.31 per
     right.


                                                                              71
<PAGE>

3.   Mr. Gehrmann retired from the Company on December 31, 2002. His Equity
     Appreciation Rights expired at such time.

AGGREGATED SAR EXERCISES FOR THE FISCAL YEAR ENDED AT DECEMBER 31, 2002 AND SAR
VALUE AT DECEMBER 31, 2002

<TABLE>
<CAPTION>
                                                        NUMBER OF SECURITIES UNDERLYING
                                                               UNEXERCISED SARS                VALUE OF UNEXERCISED
                                                VALUE         AT FISCAL YEAR END                  IN-THE-MONEY SARS
                          INTERESTS ACQUIRED  REALIZED    ----------------------------      ----------------------------
NAME                          ON EXERCISE        ($)      EXERCISABLE    UNEXERCISABLE      EXERCISABLE    UNEXERCISABLE
----------------------    ------------------  --------    -----------    -------------      -----------    -------------
<S>                       <C>                 <C>         <C>            <C>                <C>            <C>
ROBERT A. DAVIES, III              -              -           -             -                     -             -
BRADLEY A. CASPER                  -              -           -             93,489                -             -
ZVI EIREF                          -              -           -             -                     -             -
THOMAS GEHRMANN (1)                -              -           -             -                     -             -
ADRIAN HUNS                        -              -           -             -                     -             -
MAUREEN USIFER                     -              -           -             34,300                -             -
</TABLE>

1.   Mr. Gehrmann retired from the Company on December 31, 2002. His Equity
     Appreciation Rights expired at such time.

EMPLOYMENT AGREEMENTS, TERMINATION PROVISIONS AND CHANGE IN CONTROL ARRANGEMENTS

     C&D entered into an Employment Agreement with Mr. Bradley A. Casper on
March 18, 2002 regarding Mr. Casper's employment with C&D as President of the
Domestic Personal Care Division and as President of the Company's Domestic
Division. The Company does not have an employment agreement with Mr. Casper
although 48% of Mr. Casper's annual compensation paid by C&D relates to services
rendered to the Company. The agreement provides for a base salary of $320,000
annually; a "sign-on" bonus of $40,000; a "sign-on" grant of stock options to
purchase 20,000 shares of C&D Common Stock; an annual incentive compensation
bonus target of 55% of annual base salary, such bonus amount not to exceed 110%
of annual base salary; and certain other benefits generally made available to
executives. Under Mr. Casper's Employment Agreement, in the event that he is
terminated without "cause" or if he terminates his employment for "good reason"
(as such terms are defined in the agreement), during the 18 month period
following such termination, he will receive an amount equal to 1.5 times his
annual base salary and payment of his target annual incentive compensation
bonus; continued coverage under the Company health and life insurance employee
benefit plans for 12 months or until such earlier time that Mr. Casper receives
comparable benefits from a subsequent employer; vesting of benefits (including
Company contributions) in profit sharing and savings plans; and, if such
termination occurs within the first three years of Mr. Casper's employment,
immediate vesting of all option grants.In addition, if such termination occurs
prior to the sale of Kelso's and C&D's interest in the Company, Mr. Casper will
retain the vested portion of his Equity Appreciation Award in the Company. In
connection with the agreement, Mr. Casper agreed to certain confidentiality and
non-competition provisions.

     The Company entered into an Employment Agreement with Mr. Adrian Huns
effective on June 1, 2002 regarding Mr. Huns' employment with the Company as
President, International Operations. The agreement provides for a base salary of
$275,000 annually; a "sign-on" bonus of $600,000; an annual incentive
compensation bonus target of 55% of annual base salary, such bonus amount not to
exceed 110% of annual base salary; and certain other benefits generally made
available to executives. In addition Mr. Huns shall be paid a retention bonus in
the amount of $600,000 on October 1, 2003 provided he is an employee of the
Company on such date. In addition during the term of the agreement in the event
C&D purchases Kelso' interest in the Company then Mr. Huns shall be entitled to
a Change of Control Bonus. The Change of Control Bonus shall be equal to
$930,000 plus an equity appreciation award, measured by the return on investment
in the Company, not to exceed $270,000. The Change of Control Bonus, if
applicable, shall be paid in three equal installments commencing on the closing
of the purchase of Kelso's interest in the Company and the next two
anniversaries of such date.Under Mr. Huns' Employment Agreement, in the event
that he is terminated without "cause" or if he terminates his employment for
"good reason" (as such terms are defined in the agreement), he will receive the
retention bonus, if not paid, and the Change of Control Bonus without the equity
appreciation award. In addition if such termination occurs after October 1, 2003
Mr. Huns shall also receive, in addition to the above, an amount equal to 1
times his annual base salary and payment of his target annual incentive
compensation bonus for such year.

     As part of the Employment Agreement Mr. Huns agrees to waive his rights
under his change in control agreement with Carter-Wallace.The change in control
agreement, assumed by the Company, provided that if Mr. Huns' employment is
terminated by the Company for any reason other than for cause or is terminated
by Mr. Huns as a result of a diminution in position, authority, duties or
responsibilities or in certain other circumstances, the Company is obligated to
pay Mr. Huns a lump sum payment equal to two times the annual salary and bonus
and an increased benefit under Executive Pension Benefits Plan based on final
salary and bonus and credit for three additional years of service and treating
such benefit as fully vested. In addition, the Company was required to continue
the benefits for a two-year period following termination of employment or such


                                                                              72
<PAGE>

longer period as an applicable plan or program provides. As a result of the
Acquisition, a change in control has already occurred under the change in
control agreement and Mr. Huns will be entitled to approximately $2.5 million
(which amount excludes an additional payment equal to any applicable excise tax
under the Internal Revenue Code and income taxes associated with such additional
payment), if Mr. Huns' employment is terminated by the Company for any reason
other than for cause or is terminated by Mr. Huns as a result of a diminution in
position, authority, duties or responsibilities or in certain other
circumstances.

               DISCLOSURE OF EQUITY COMPENSATION PLAN INFORMATION
                             AS OF DECEMBER 31, 2002

The following table provides information on all existing Equity Compensation
Plans as of December 31, 2002.

<TABLE>
<CAPTION>
                                                                (a)                  (b)                      (c)
                                                              Number of           Weighted-Average       Number of Securities
                                                           Securities to be      Exercise Price of      Remaining Available for
                                                             Issued Upon            Outstanding          Future Issuance Under
                                                             Exercise of              Rights               Compensation Plans
                                                             Outstanding                                  (excludes securities
Plan Category                                                  Rights                                    reflected in column (a))
-------------                                             ------------------    ------------------      ------------------------
<S>                                                       <C>                     <C>                   <C>
Equity Compensation Plan Approved by Stockholders:

Armkel, LLC Equity Appreciation Plan(1)                        770,764               $15.82                     29,236
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The Company grants Equity Appreciation Awards to senior management
executives under the Company's Equity Appreciation Plan (the "Plan"). The Equity
Appreciation Award relates to membership interests (each, an "Interest") in the
Company and operates in a manner similar to a stock appreciation right. Upon the
occurrence of a "Liquidation Event," a holder is entitled to receive, for each
vested Interest underlying the Equity Appreciation Award, an amount equal to the
value of an Interest, as determined by the administering board committee (the
"Committee") on the date of the Liquidating Event, minus the deemed value on the
date of the award, initially $15.82.Payment may be made in such form as selected
by the Committee, including cash and, subject to C&D's approval, discounted
stock options or restricted stock awards with respect to C&D's Common Stock or
other C&D securities. If a Liquidation Event does not occur by September 29,
2008, then the Plan and all Equity Appreciation Awards then outstanding will
automatically terminate and become void regardless of whether such awards have
vested in whole or in part. Each of the following constitutes a Liquidation
Event under the Plan:(i) the sale, disposition or transfer (a "Sale") of the
Company membership interests, after which Kelso no longer holds any membership
interests or (ii) a Sale to an unaffiliated third party of all or substantially
all of the Company's assets. The total number of Company membership interests
that may be subject to Equity Appreciation Awards under the Plan is 800,000. As
of December 31, 2002, the Company had granted Equity Compensation Awards for an
aggregate 770,764 membership units in the Company. To date, the C&D has not
approved the issuance of any C&D debt or equity to a holder of an Equity
Appreciation Award.If the Board of Directors of the Company (or a committee
thereof that administers the Plan) elects to settle an Equity Appreciation Award
through the grant of options to purchase C&D Common Stock, and C&D approves such
election, the award holder may receive a non-qualified stock option to purchase
shares of C&D Common Stock under the C&D's Amended and Restated 1998 Stock
Option Plan to purchase that number of shares of C&D Common Stock determined by
dividing (x) the dollar amount of the Appreciation subject to settlement by (y)
75% of the fair market value of a share of C&D Common Stock on the date of the
option grant.The per share exercise price of any such option shall equal 25% of
the fair market value of a share of C&D Common Stock as of the date of the
option grant.Any such options will have ten-year terms and will otherwise be
subject to the C&D's Amended and Restated 1998 Stock Option Plan. If the Company
board committee thereof that administers the Plan elects to settle an Equity
Appreciation Award through the grant of restricted C&D Common Stock, and the C&D
approves such election, the award holder may receive restricted C&D Common Stock
having an aggregate fair market value (determined on the date of grant) equal to
the Appreciation of the Equity Appreciation Award subject to settlement. Any
options or restricted stock awards to acquire C&D Common Stock shall vest and
become exercisable on a cumulative basis, as follows:one-third on the tenth day
after the Liquidation Event, and an additional one-third on each of the first
and second anniversaries of the Liquidation Event, provided that the holder is
employed by the C&D on each such anniversary.


                                                                              73
<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS.

     The following table sets forth, as of March 27, 2003, certain information
concerning the beneficial ownership of (a) each director, (b) each nominee for
director, (c) each executive officer, (d) each holder of more than 5% of the
Company's membership interests, and (e) all directors and executive officers as
a group (based on 10,000 membership interests outstanding on such date). Each of
the persons named below has sole voting power and sole investment power with
respect to the membership interests set forth opposite his or her name, except
as otherwise stated.

<TABLE>
<CAPTION>
                                                                                      NUMBER OF         PERCENT OF
                                                                                     MEMBERSHIP         MEMBERSHIP
                             NAME OF BENEFICIAL OWNER                                 INTERESTS          INTERESTS
                             ------------------------                                 ---------          ---------
<S>                                                                                   <C>                <C>
Kelso Investment Associates VI, L.P. and KEP VI, LLC(1)(2)......................        5,000              50.0%
Frank T. Nickell(1)(3)..........................................................        5,000(3)           50.0%(3)
Thomas R. Wall, IV(1)(3)........................................................        5,000(3)           50.0%(3)
George E. Matelich(1)(3)........................................................        5,000(3)           50.0%(3)
Michael B. Goldberg(1)(3)(4)....................................................        5,000(3)           50.0%(3)
David I. Wahrhaftig(1)(3).......................................................        5,000(3)           50.0%(3)
Frank K. Bynum, Jr.(1)(3).......................................................        5,000(3)           50.0%(3)
Philip E. Berney(1)(3)(4).......................................................        5,000(3)           50.0%(3)
Michael B. Lazar(1)(4)(5).......................................................            0               0.0%
Church & Dwight Co., Inc.(6)....................................................        5,000              50.0%
Robert A. Davies, III(4)(7).....................................................            0                 0
Bradley A. Casper(4)(7).........................................................            0                 0
Zvi Eiref(4)(7).................................................................            0                 0
Adrian Huns(7)..................................................................            0                 0
Maureen K. Usifer(7)............................................................            0                 0
Thomas Gehrmann(7)..............................................................            0                 0
T. Rosie Albright...............................................................            0                 0
All directors and executive officers of Armkel as a group (9 persons)(8)........        5,000(3)             50%(3)
</TABLE>

----------
(1)  The business address for these persons is c/o Kelso & Company, 320 Park
     Avenue, 24th Floor, New York, New York 10022.
(2)  Represents the combined ownership of Kelso Investment Associates VI, L.P.
     and KEP VI, LLC. Kelso Investment Associates VI, L.P. and KEP VI, LLC could
     be deemed to beneficially own each of the other's membership interests, but
     disclaim such beneficial ownership.
(3)  Messrs. Nickell, Wall, Matelich, Goldberg, Wahrhaftig, Bynum and Berney may
     be deemed to share beneficial ownership of membership interests owned of
     record by Kelso Investment Associates VI, L.P. and KEP VI, LLC, by virtue
     of their status as managing members of KEP VI, LLC and the general partner
     of Kelso Investment Associates VI, L.P. Messrs. Nickell, Wall, Matelich,
     Goldberg, Wahrhaftig, Bynum and Berney share investment and voting power
     with respect to the membership interests owned by Kelso Investment
     Associates VI, L.P. and KEP VI, LLC but disclaim beneficial ownership of
     such membership interests.
(4)  Members of the Company's board of directors.
(5)  Mr. Lazar is not reporting any beneficial ownership, but could be deemed to
     share beneficial ownership of membership interests owned of record by Kelso
     Investment Associates VI, L.P. and KEP VI, LLC, by virtue of his status as
     a non-managing member of KEP VI, LLC and the general partner of Kelso
     Investment Associates VI, L.P. Mr. Lazar may be deemed to share investment
     and voting power with Messrs. Nickell, Wall, Matelich, Goldberg,
     Wahrhaftig, Bynum and Berney with respect to the membership interests owned
     by Kelso Investment Associates VI, L.P. and KEP VI, LLC but disclaims
     beneficial ownership of such membership interests.
(6)  The business address for Church & Dwight Co., Inc. is 469 North Harrison
     Street, Princeton, New Jersey 08543.
(7)  The business address for these persons is c/o Church & Dwight Co., Inc.,
     469 North Harrison Street, Princeton, New Jersey 08543.
(8)  Includes membership interests the beneficial ownership of which Messrs.
     Berney and Goldberg may be deemed to share, as described in notes 3 and 5
     above.


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<PAGE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

ARRANGEMENTS WITH CHURCH & DWIGHT

     In connection with the consummation of the Acquisition, the Company entered
into a series of agreements with C&D. C&D beneficially owns 50% of the Company's
membership interests. C&D has the right to and has appointed three of the
Company's six directors. The agreements are described below:

     Management Services Agreement. Under a management services agreement (the
"MSA") C&D provides the Company with corporate management and administrative
services primarily for its domestic operations. These services generally
include, but are not limited to, sales, marketing, facilities operations,
finance, accounting, MIS, legal and regulatory, human resources, R&D, Canadian
sales and executive and senior management oversight of each of the above
services, each as more fully described below. The Company employs its own
finance managers and brand managers at C&D's Princeton, New Jersey corporate
headquarters and manufacturing personnel located at the Colonial Heights
facility. In addition, the Company employs its own R&D employees at the
Cranbury, New Jersey facility.

     C&D has agreed that C&D personnel will provide substantially the same level
of service and use substantially the same degree of care as consistent with the
highest level of services, determined on an aggregate basis, provided by C&D to
its own products, divisions or subsidiaries. In addition, C&D has agreed that it
will not favor its own products, divisions or subsidiaries over those services
provided to the Company under the management services agreement (as viewed on an
aggregate basis), that it will make available all resources and personnel
reasonably necessary to perform the services in a manner consistent with the
standards described above and that all employees it designates to provide the
services to the Company will have the appropriate skill sets to perform such
services and that these employees will not, without the Company's prior
approval, have material conflicts of interest or responsibilities that
materially conflict with the services to be provided under the management
services agreement.

     Under the management services agreement, C&D provides the Company with
domestic selling services comparable to those provided at the Carter-Wallace
consumer business historically, including direct selling activities to retail
customers, supervision of broker organizations and operations for non-direct
sales and related administrative functions such as pricing announcements,
promotional bulletins, brand pricing and promotion execution. C&D's Canadian
subsidiary and the Company's Canadian subsidiary provide certain services and
employees to each other for the purposes of efficiently allocating management,
administrative, operations and sales functions. During the year 2002, C&D will
begin to provide general sales support for the Company's Canadian operations,
similar to those C&D provides for the Company's domestic operations. The
marketing services that C&D provides to the Company include creative services,
packaging and graphic development, marketing research and related consumer
testing services, website maintenance, consumer relations and specialized
consumer promotion programs. C&D may, from time to time, contract with an
outside advertising agency for certain creative services, including execution
and production of television, radio and print commercials. The Company employs
its own brand managers who coordinate marketing activities with the designated
C&D employees.

     C&D provides the Company with domestic facilities and operational services
that include customer service functions, production planning, transportation
analysis, inventory control, engineering, purchasing, environmental and safety
analysis, general plant supervision and manufacturing management and oversight,
as well as, distribution services for all of the Company's domestic products, as
described under "Manufacturing and Distribution Agreement."

     C&D also provides the Company with finance services and accounting
services. The finance services consist of promotional payment services
comparable to those provided at the Carter-Wallace consumer business
historically. The Company employs its own personnel to perform budgeting,
forecasting, financial analysis, and financial closing activities. C&D provides
all of the Company's domestic accounting activities, including consolidation and
reporting, accounts payable functions, credit and collections functions, cash
applications to accounts receivables, treasury, risk management, general expense
analysis, projections and external reporting functions. Consolidation and
reporting activities include the Company's international businesses. Certain
plant costs and inventory accounting functions are performed by the Company's
own personnel.


                                                                              75
<PAGE>

     C&D provides the Company with management information services that include
order processing, production of sales reports, deployment and sourcing of
inventory and other inventory control functions, transportation planning,
billing, promotion and pricing functions, maintenance of accounts payable and
accounts receivable, sales forecasting, network maintenance and support,
including desktop support, and data and voice communications and support of
plant MIS functions.

     C&D also provides a full range of legal and regulatory services to the
Company, including regulatory compliance and advertising claims support,
litigation services, tax services, including planning and compliance,
intellectual property management, employment matters, securities laws compliance
and transactional legal services. In addition, international legal services will
be provided on an as needed basis.

     C&D also provides the Company with general human resources corporate
support for domestic and international operations. These services include
employee relations support in all locations, organization development and
executive training, implementation of short and long term incentive plans,
recruiting, surveys of headcount, wages and work practices, general employer,
operations and labor relations support and corporate benefits administration.
The Company performs its own human resources functions at each of its plants and
facilities.

     The Company also performs its own R&D activities, including brand
maintenance and support, existing product development and new product
development. C&D provides supplementary R&D services related to package design
and engineering, process development and engineering, corporate quality control
and assurance functions consisting of system design and quality control auditing
systems, technology development, manufacturing oversight and clinical research
in connection with regulatory compliance, at the direction of the Company's R&D
employees.

     Under the MSA, C&D provides the Company with executive and senior
management supervisory services, including oversight of all of the above
services by designated management personnel, planning and oversight of the
implementation of services under the agreement and development of the Company's
general business strategy. These executive and senior management activities are
to be performed at the direction of the Company's board of directors and under
the supervision of its executive officers.

     In 2002 the Company paid to C&D $22 million for services C&D provides under
the MSA based upon a schedule of costs. The Company paid annual fees of $1.7
million for domestic sales services; $1.6 million for Canadian sales services;
$1.0 million for advertising and creative services; $1.7 million for operations
functions; $2.2 million for accounting services; $1.6 million for management
information services; $1.0 million for human resources functions; and $3.5
million for legal services, including regulatory affairs services; and the
Company reimburses C&D for actual costs incurred for marketing, finance and R&D
functions. In addition, the Company pays a quarterly fee equal to five percent
of its EBITDA (as EBITDA is calculated pursuant to the term loan agreement, for
information regarding EBITDA, see Item 7 "Management's Discussion and Analysis
of Financial Condition and Results of Operations") for the previous quarter,
which fee will be adjusted annually, for executive and senior management
oversight services. However, the Company and C&D have agreed to re-evaluate the
fee structure under the MSA, including the underlying methods used to determine
the allocations thereof, from time to time, and in any event at least annually
and following any increase in the Company's fiscal year net sales by 10% or more
over the prior fiscal year's net sales, to confirm that the fee structure
produces a result consistent with the fair allocation of costs and benefits
incurred by the parties. If the Company and C&D are unable to agree upon
adjustments to the fee structure, the fixed fees paid under the MSA will be
adjusted based on the increase and/or decrease in the consumer price index for
that year.

     The term of the MSA is five years, with automatic one-year renewals unless
the Company provides six months' notice that it does not want to renew the
agreement. The Company may, acting at the direction of Kelso, terminate the MSA
upon a change of control of C&D, upon a bankruptcy of either C&D or the Company,
or upon the sale of C&D's or Kelso's ownership interests in the Company to a
third party. See "The Joint Venture Agreement--Transfers of Interests;
Preferential Purchase or Sale Rights" for a description of the circumstances
under which C&D may transfer its interests in the Company.

     In addition, the MSA contains provisions that permit the Company to
terminate the agreement with respect to any particular service or services
provided by C&D, if:

     -    such service or services have been significantly deficient for a
          period of at least 180 days, compared to how such service or services
          could have been provided by an independent third party who performed
          similar services for a business of the size and type of the Company,
          and such deficiency was within C&D's control;

     -    the Company's chief executive officer recommends to its board of
          directors to terminate such service or services; and

     -    the Company has provided written notice to C&D detailing such
          deficiency and has given C&D an opportunity to cure such deficiency
          for a period of at least 90 days.

     Manufacturing and Distribution Agreement. Pursuant to the manufacturing and
distribution agreement, C&D manufactures products associated with the Nair
product line for the Company using the Company's equipment, which the Company
relocated to


                                                                             76
<PAGE>

a C&D facility in 2002. The products are manufactured in an amount reflecting
the Company's best estimates of its production requirements. The Company pays to
C&D an annual fee (prorated for 2002) of $500,000 for manufacturing overheads,
which includes quality control, maintenance and maintenance supplies, utilities,
general plant supervision, property taxes and insurance, and an annual fee
(prorated for 2002) of $300,000 for facilities operations, which includes
customer service functions, production planning, inventory control, engineering,
purchasing, environmental and safety analysis and implementation and
manufacturing management. In addition, the Company reimburses C&D for their
direct manufacturing labor costs. Under the manufacturing and distribution
agreement, C&D provides distribution services for all of the Company's products,
and the Company reimburses C&D for the actual costs of storage, handling,
freight, raw and packaging materials, plus certain costs of warehousing, labor
and overhead and returned goods processing based on time records, space
utilization or a similar basis. Under certain circumstances, C&D has agreed to
provide the Company manufacturing and distribution services with respect to any
new products the Company may develop at a cost structure to be agreed by C&D and
the Company.

     C&D has agreed that the services they provide to the Company under the
manufacturing and distribution agreement will be in the scope and nature
substantially the same as such services were provided within the Carter-Wallace
consumer business prior to the Acquisition, and that C&D personnel will provide
substantially the same level of service and use substantially the same degree of
care as consistent with the highest level of services, determined on an
aggregate basis, provided by C&D to its own products, divisions or subsidiaries.
In addition, C&D has agreed that it will not favor its own products, divisions
or subsidiaries over those services provided to the Company under the
manufacturing and distribution agreement (as viewed on an aggregate basis), and
that all employees it designates to provide the manufacturing and distribution
services to the Company will have the appropriate skill sets to perform such
services and that these employees will not, without the Company's prior
approval, have material conflicts of interest or responsibilities that
materially conflict with the services to be provided under the manufacturing and
distribution agreement. The agreement contains customary indemnification
provisions.

     The term of the manufacturing and distribution agreement is five years,
with one-year automatic renewals unless either party provides six months'
written notice that it does not wish to renew the agreement. In addition, the
manufacturing and distribution agreement contains provisions for the
re-evaluation of fee structures, the addition of new services and termination of
the agreement with respect to any particular service or services provided by C&D
on similar terms as those described above for the management services agreement.

THE JOINT VENTURE AGREEMENT

     The Company is a Delaware limited liability company. The Company was formed
as a joint venture among C&D, which owns 50%, and an entity wholly owned by
Kelso Investment Associates VI, L.P. and KEP VI, LLC, which the are referred to
as the Kelso funds, which owns 50%, for the purpose of acquiring the consumer
products business of Carter-Wallace. The Company's joint venture agreement
governs the Company's operations. The material provisions of this agreement are
described below.

     Governance. The joint venture agreement contains provisions regarding the
Company's governance, including the following:

     -    Board of Directors. The Company's board of directors consists of three
          directors appointed by C&D and three directors appointed by the Kelso
          funds. Any committee established by the Company's board of directors
          must have an equal number of directors appointed by the Kelso funds
          and by C&D. Any action by the Company's board of directors requires
          the affirmative vote of members holding a majority of membership
          interests present at a meeting at which such matter is voted upon,
          except that in certain matters, approval of at least one C&D director
          and at least one Kelso director is also required. The presence of an
          equal number of Kelso directors and C&D directors constitutes a
          quorum.

     -    Officers and Management.The Company's officers may be removed by its
          board of directors (requiring, in the case of its chief executive
          officer, the approval of at least one Kelso director and one C&D
          director) or the Company's chief executive officer (in the case of its
          other officers). In addition, if certain financial targets are not
          satisfied, Kelso has the right to remove the Company's chief executive
          officer. Vacancies in the Company's officer positions will be filled
          by its board of directors (which, in the case of the Company's chief
          executive officer and chief financial officer positions, require the
          approval of a Kelso director and a C&D director) or the Company's
          chief executive officer.


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<PAGE>

     A number of significant managerial functions are performed for the Company
by C&D. For additional information about the Company's management, see Item 10.
Directors and Executive Officers of the Registrant.

     Transfers of Interests; Preferential Purchase or Sale Rights. Except as
described below, the Company's members may not transfer their interests in the
Company or admit additional members (other than in transactions with certain of
their respective affiliates), without the prior written consent of all of the
other members.

     -    Call Option. The Kelso funds have granted C&D an option to purchase
          the Kelso funds' membership interests in the Company. The option is
          exercisable at any time after the third anniversary and before the
          fifth anniversary of the closing of the Acquisition. The purchase
          price for the Kelso funds' interests in the Company is equal to 50% of
          the Company's fair market value at the time the option exercise notice
          is given, as determined pursuant to a valuation method set forth in
          the joint venture agreement. The purchase price is subject to certain
          floors and caps which are indexed to the Kelso funds' rate of return
          on their investment in the Company.

     -    Right of First Offer and Drag Along Rights. The joint venture
          agreement provides for a mechanism whereby the Company's members may
          dispose of their interests and, in certain circumstances, force a sale
          of the entire entity. At any time after the fifth anniversary of the
          closing of the Acquisition, in the case of a request by the Kelso
          funds, and after the seventh anniversary of the closing of the
          Acquisition, in the case of a request by C&D, the Kelso funds or C&D
          may request that the other party purchase all (but not less than all)
          of the requesting party's ownership interests in the Company at a
          price specified in the request. If the other party declines the
          request, the requesting party may sell all of its interests and all of
          the other member's interest in the Company to a third party, with the
          proceeds of such sale to be distributed to the members in accordance
          with the terms of the joint venture agreement. Under certain
          circumstances, if the proceeds of a proposed third party sale are
          insufficient to provide the Kelso funds with a return of their initial
          investment (less $5.0 million), C&D may elect to purchase the Kelso
          funds' interests at a price equal to the amount of the Kelso funds'
          initial investment (less $5.0 million), or pay the Kelso funds the
          amount of such shortfall, as described below. Under certain
          circumstances in which Kelso requests that C&D purchase its ownership
          interests, and C&D declines, then following a bona fide sales process,
          Kelso may require C&D to purchase the Kelso funds' ownership interests
          for a price equal to Kelso's investment, less $5.0 million (as such
          terms are defined in the joint venture agreement). This amount would
          not be payable until after the seventh anniversary of the Acquisition.

     -    Change of Control Put Option. The joint venture agreement also
          provides that, upon the occurrence of a change of control of C&D (as
          defined in the joint venture agreement), the Kelso funds may require
          C&D to purchase all of the Kelso funds' ownership interests in the
          Company at a price equal to (i) the fair market value of the Company
          at the time the option exercise notice is given, minus $5.0 million,
          multiplied by 50%, plus (ii) $5.0 million.

     The foregoing purchase and sale rights will be subject to various
adjustments and limitations not described above, including the agreement by C&D
that, in the case of a forced sale to a third party, after the seventh
anniversary of the Acquisition it will make up any shortfall to the Kelso funds
relative to the Kelso funds' aggregate initial capital contribution, less $5.0
million.

     Covenants of C&D. Under the joint venture agreement, C&D have agreed that:

     -    without the prior consent of the Kelso funds, C&D will not incur any
          indebtedness unless C&D's ratio of consolidated debt to adjusted
          EBITDA (as defined in C&D's senior credit facility) for the prior four
          fiscal quarters is less than 4.5:1.0, or unless C&D has provided the
          Kelso funds with a letter of credit or other reasonably satisfactory
          credit support in an amount equal to the Kelso funds' initial capital
          contributions, less $5.0 million;

     -    it will not create or cause or permit to exist any restriction on its
          ability to operate the Company or on the Company's ability to engage
          in any line of business; and

     -    if presented with an opportunity to operate or invest in any entity
          engaged in the business of manufacturing, marketing or selling of
          condoms, depilatory products or diagnostic tests, or, with respect to
          non-U.S. operations, cosmetics, over-the-counter drugs or toning and
          exfoliating products, it will first offer such opportunity to the
          Company.

     Covenant of Kelso. Under the joint venture agreement, the Kelso funds have
agreed that, if presented with an opportunity to operate or invest in any entity
engaged in the business of manufacturing, marketing or selling condoms,
depilatory products or diagnostic tests, it will first offer such opportunity to
the Company.

     Termination of the Joint Venture Agreement. The joint venture agreement
will terminate upon the occurrence of any of the following:

     -    the vote of all members in favor of termination;

     -    an initial public offering of the Company's equity interests;

     -    the payment of the proceeds of any sale of the Company to a third
          party, or upon the final liquidating distribution made in connection
          with a dissolution of the Company; or


                                                                              78
<PAGE>

     -    the payment in full by either member of the purchase price for all the
          membership interests of the other member.

     Dissolution of the Company. The Company will be dissolved and its assets
liquidated upon the occurrence of any of the following:

     -    the vote of all members in favor of dissolution;

     -    the sale, exchange or disposition of substantially all of the
          Company's assets;

     -    an insolvency event with respect to any member, if other members
          holding at least 50.0% of the interests vote in favor of dissolution;

     -    it becoming unlawful for a member to conduct its business
          substantially in the manner contemplated by the joint venture
          agreement; or

     -    a judicially ordered dissolution.

ONGOING ARRANGEMENTS WITH CARTER-WALLACE

     General. As a condition to, and as part of, the Acquisition, the Company
entered into a number of agreements to provide certain services to, and receive
certain services from, Medpointe, the successor to Carter-Wallace. These
services relate to certain aspects of the businesses to be operated by the
Company and Medpointe following the Acquisition.During 2002 these agreements and
the related services terminated.On November 27, 2002 Medpointe vacated the
Cranbury facility.

     The Indemnification Agreements. Upon consummation of the Acquisition,
certain stockholders of Carter-Wallace entered into an indemnification
agreement, pursuant to which they are be required to indemnify the merger buyer
and certain related parties from damages suffered by such parties in relation to
the exercise of appraisal rights with respect to the merger under the Delaware
General Corporation Law. The Company has entered into an agreement pursuant to
which it has agreed to indemnify Carter-Wallace and certain related parties from
liabilities of Carter-Wallace relating to any action challenging the validity of
the merger or the Acquisition (other than on antitrust grounds) and 60% of all
liabilities of Carter-Wallace relating to the exercise of appraisal rights with
respect to the merger under the Delaware General Corporation Law. The agreement
to which the Company is a party provides for indemnification after taking into
account any amounts received under the indemnification agreement between
Carter-Wallace and certain of its stockholders described above. The Company
believes that the combined effect of these agreements is that our potential
indemnification obligations with respect to appraisal rights claims are
effectively limited to approximately $12.0 million, although there is no cap on
the Company's indemnification obligation arising out of other
transaction-related liabilities of Carter-Wallace. However, in connection with
the Company's sale of the Disposed Businesses to C&D, C&D agreed to indemnify
the Company for up to 17.38% of amounts that the Company may become liable for
pursuant to the indemnification agreement with Carter-Wallace

     The Company has also agreed to indemnify Carter-Wallace and certain related
parties against liabilities assumed by us pursuant to the Asset Purchase
Agreement. Carter-Wallace has agreed to indemnify the Company and certain
related parties against any liabilities not assumed by the Company in the Asset
Purchase Agreement.

     Other Agreements Related to the Acquisition. The Company has entered into a
number of other agreements in connection with the Acquisition. Pursuant to an
insurance claims agreement, any insurance proceeds received by the Company with
respect to any assets or liabilities excluded from the assets purchased or
liabilities assumed by the Company will be paid to Carter-Wallace, and any
insurance proceeds received by Carter-Wallace with respect to any purchased
assets or assumed liabilities will be paid to the Company. Pursuant to a
consumer products transitional trademark license agreement, Carter-Wallace has
granted to the Company a fully paid, worldwide non-exclusive license for a
period of up to one year to use the "Carter-Wallace" name and related logos used
on any and all consumer and personal care products manufactured or distributed
by the consumer products business purchased by the Company. Pursuant to the
company patent license agreement, the Company has agreed to license for the life
of each patent, on a royalty-free and exclusive basis, specified patents and
related know-how to Carter-Wallace for use in Carter-Wallace's healthcare and
pharmaceuticals business.

OTHER AGREEMENTS

     Kelso Financial Advisory Services Agreement. Kelso has agreed to provide
the Company with financial advisory services for which the Company pays an
annual fee of $1.0 million. The Company has agreed to indemnify Kelso against
certain liabilities and reimburse expenses in connection with its engagement.
For the year ended December 31, 2002, the Company paid Kelso $1.0 million for
2002 financial advisory fees plus prepaid the 2003 financial advisory services
fee of $1.0 million at a discounted value.


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<PAGE>

ITEM 14.  CONTROLS AND PROCEDURES.

     Within the ninety (90) days prior to the date of this report, the Company
carried out an evaluation, under the supervision and with the participation of
the Company's management, including the Company's Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Exchange Act Rule
13a-14.Based upon that evaluation, we have concluded that the Company's
disclosure controls and procedures are effective in recording, processing,
summarizing and reporting within the time periods specified in the SEC's rules
and forms material information relating to the Company (including its
consolidated subsidiaries) required to be included in the Company's periodic SEC
filings.

     Since the Chief Executive Officer's and Chief Financial Officer's most
recent review of the Company's internal controls systems, there have been no
significant changes in internal controls or in other factors that could
significantly affect these controls.


                                     PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(A) 1. FINANCIAL STATEMENTS

    SEE ITEM 8. FINANCIAL STATEMENTS AND OTHER DATA

(A) 2. FINANCIAL STATEMENTS SCHEDULE

    Included in Part IV of this report:

    SEE ITEM 8. FINANCIAL STATEMENTS AND OTHER DATA

(A) 3. EXHIBITS

   EXHIBIT
   NUMBERS                                 DESCRIPTION
   -------                                 -----------
     3.1          Certificate of Formation of Armkel, LLC dated March 9, 2001
                  (Incorporated by Reference to Exhibit 3.1 to the Company's
                  Registration Statement on Form S-4, dated November 9, 2001)

     3.2          Limited Liability Company Agreement of Armkel, LLC, dated as
                  of March 9, 2001 (Incorporated by Reference to Exhibit 3.2 to
                  the Company's Registration Statement on Form S-4, dated
                  November 9, 2001)

     3.3          Amended and Restated Limited Liability Company Agreement of
                  Armkel, LLC, dated as of August 27, 2001 (Incorporated by
                  Reference to Exhibit 3.3 to the Company's Registration
                  Statement on Form S-4, dated November 9, 2001)

     3.4          Amendment No. 1 to the Amended and Restated Limited Liability
                  Company Agreement of Armkel, LLC, dated as of September 24,
                  2001 (Incorporated by Reference to Exhibit 3.4 to the
                  Company's Registration Statement on Form S-4, dated November
                  9, 2001)

     3.5          Amendment No. 2 to the Amended and Restated Limited Liability
                  Company Agreement of Armkel, LLC dated as of September 24,
                  2001 (Incorporated by Reference to Exhibit 3.5 to the
                  Company's Annual Report on Form 10-K dated March 29, 2002)

     4.1          Indenture, dated as of August 28, 2001, by and among Armkel,
                  LLC, Armkel Finance, Inc. and The Bank of New York, as Trustee
                  (Incorporated by Reference to Exhibit 4.1 to the Company's
                  Registration Statement on Form S-4, dated November 9, 2001)

     4.2          Registration Rights Agreement dated as of August 28, 2001 by
                  and among Armkel, LLC, Armkel Finance, Inc., J.P. Morgan
                  Securities Inc. and Deutsche Banc. Alex Brown Inc.
                  (Incorporated by Reference to Exhibit 4.2 to the Company's
                  Registration Statement on Form S-4, dated November 9, 2001)

     10.1         Management Services Agreement dated as of September 28, 2001
                  by and between Church & Dwight Co., Inc. and Armkel, LLC
                  (Incorporated by Reference to Exhibit 10.1 to the Company's
                  Registration Statement on Form S-4, dated November 9, 2001)


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<PAGE>

   EXHIBIT
   NUMBERS                              DESCRIPTION
   -------                              -----------
     10.2         Manufacturing and Distribution Agreement dated as of September
                  28, 2001 by and between Church & Dwight Co., Inc. and Armkel,
                  LLC (Incorporated by Reference to Exhibit 10.2 to the
                  Company's Registration Statement on Form S-4, dated November
                  9, 2001)

     10.3         Arrid Manufacturing Agreement dated as of September 28, 2001
                  by and between Church & Dwight Co., Inc. and Armkel, LLC
                  (Incorporated by Reference to Exhibit 10.3 to the Company's
                  Registration Statement on Form S-4, dated November 9, 2001)

     10.4         Consumer Products Transitional Trademark License Agreement
                  dated as of September 28, 2001 by and between Carter-Wallace,
                  Inc. and Armkel, LLC (Incorporated by Reference to Exhibit
                  10.4 to the Company's Registration Statement on Form S-4,
                  dated November 9, 2001)

     10.7         Insurance Claims Agreement dated as of September 28, 2001 by
                  and between Carter-Wallace, Inc. and Armkel, LLC (Incorporated
                  by Reference to Exhibit 10.7 to the Company's Registration
                  Statement on Form S-4, dated November 9, 2001)

     10.8         Patent License Agreement dated as of September 28, 2001 by and
                  between Carter-Wallace, Inc. and Armkel, LLC (Incorporated by
                  Reference to Exhibit 10.8 to the Company's Registration
                  Statement on Form S-4, dated November 9, 2001)

     10.9         Transition Services Agreement dated as of September 28, 2001
                  by and between Carter-Wallace, Inc. and Armkel, LLC
                  (Incorporated by Reference to Exhibit 10.9 to the Company's
                  Registration Statement on Form S-4, dated November 9, 2001)

     10.10        Credit Agreement dated as of September 28, 2001 among Armkel,
                  LLC, Armkel Holding (Netherlands) B.V., Armkel (Canada),
                  Corp., the Lenders Party thereto, and the Chase Manhattan
                  Bank, as Administrative Agent, J.P. Morgan Securities Inc. and
                  Deutsche Banc. Alex Brown Inc., as Arrangers and Bookrunners
                  and Fleet National Bank, National City Bank and PNC Bank,
                  N.A., as Documentation Agents (Incorporated by Reference to
                  Exhibit 10.10 to the Company's Registration Statement on Form
                  S-4, dated November 9, 2001)

     10.11        The Carter-Wallace, Inc. Change in Control Severance Plan, as
                  amended and restated, effective May 7, 2001 (Incorporated by
                  Reference to Exhibit 10.11 to the Company's Registration
                  Statement on Form S-4, dated November 9, 2001)

     10.12        Church & Dwight Severance Policy, effective March 28, 2001
                  (Incorporated by Reference to Exhibit 10.12 to the Company's
                  Registration Statement on Form S-4, dated November 9, 2001)

     +10.13       Employment Letter, dated as of September 28, 1998, between
                  Adrian Huns and Carter-Wallace, Inc. (Incorporated by
                  Reference to Exhibit 10.13 to the Company's Registration
                  Statement on Form S-4, dated November 9, 2001)

     *+10.14      Employment Agreement between Adrian Huns and the Company,
                  effective June 1, 2002.

     *+10.15      Armkel, LLC Equity Appreciation Plan, effective September 29,
                  2002.

        *21       Subsidiaries of the Registrant

        *23       Consent of Independent Auditors

      *99.1       Statement regarding the Certification of the CEO of Armkel,
                  LLC. Pursuant to 18 U.S.C. Section 1350, as adopted pursuant
                  to 906 of the Sarbanes-Oxley Act of 2002.

      *99.2       Statement regarding the Certification of the CFO of Armkel,
                  LLC.Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                  906 of the Sarbanes-Oxley Act of 2002.

----------
* filed herewith
+ indicates a management contract or compensatory plan or arrangement required
  to be filed as an exhibit to this form.

(B) REPORTS ON FORM 8-K

     No reports on Form 8-K were filed during the fourth quarter of the year
     ended December 31, 2002.


                                                                              81
<PAGE>

                 SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

                                 (IN THOUSANDS)

<TABLE>
<S>                                                                                                <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS (1)
BALANCE AT BEGINNING OF PERIOD 8/28/01 (INCEPTION) ...........................................     $   --

Reserves acquired as part of acquisition of Carter-Wallace Consumer Business
 Excluding anti-perspirants & pet care products...............................................      1,847

Additions
     Charged to expenses & costs..............................................................        751

Deductions:
     Amounts Written off:.....................................................................       (445)
     Foreign currency translation adjustments.................................................        (12)
                                                                                                   ------
BALANCE AT END OF PERIOD 12/31/01.............................................................     $2,141
                                                                                                   ======

Additions
     Charged to expenses & costs..............................................................        784

Deductions:
      Amounts Written off:....................................................................       (799)
      Foreign currency translation adjustments................................................         51
                                                                                                   ------
BALANCE AT END OF PERIOD 12/31/02.............................................................     $2,177
                                                                                                   ======
</TABLE>

(1)  2001 balances reclassified for conformity to 2002 presentation.




                                                                              82
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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 March 27, 2003.

                                      ARMKEL, LLC

                                      By:       /s/ Robert A. Davies, III
                                           ------------------------------------
                                                  ROBERT A. DAVIES, III
                                                 CHIEF EXECUTIVE OFFICER



     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


<TABLE>
<S>                                                             <C>                                             <C>
/s/ ROBERT A. DAVIES,III                                        Chief Executive Officer, Director               March 27, 2003
-----------------------------------------------------------       (Principal Executive  Officer)
ROBERT A. DAVIES, III


/s/ MAUREEN K. USIFER                                           Chief Financial Officer, (Principal             March 27, 2003
-----------------------------------------------------------       Financial Officer and Principal
MAUREEN K. USIFER                                                 Accounting Officer)


/s/ BRADLEY A. CASPER                                           Director                                        March 27, 2003
-----------------------------------------------------------
BRADLEY A. CASPER


/s/ PHILIP E. BERNEY                                            Director                                        March 27, 2003
-----------------------------------------------------------
PHILIP E BERNEY


/s/ ZVI EIREF                                                   Director                                        March 27, 2003
-----------------------------------------------------------
ZVI EIREF


/s/ MICHAEL B. GOLDBERG                                         Director                                        March 27, 2003
-----------------------------------------------------------
MICHAEL B. GOLDBERG


/s/ MICHAEL B. LAZAR                                            Director                                        March 27, 2003
-----------------------------------------------------------
MICHAEL B. LAZAR
</TABLE>


                                                                              83
<PAGE>

                                 CERTIFICATIONS


     I, Robert A. Davies, III, certify that:

     1.   I have reviewed this annual report on Form 10-K of Armkel, LLC;

     2.   Based on my knowledge, this annual 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 annual
report;

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

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

(c)  presented in this annual 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 functions):

(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 annual report whether 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.

                                        By:     /s/ Robert A. Davies, III
                                                -------------------------------
                                                Name:   Robert A. Davies, III
                                                Title:  Chief Executive Officer

                                        Dated:  March 27, 2003



                                                                              84
<PAGE>

                                 CERTIFICATIONS


     I, Maureen K. Usifer, certify that:

     1.   I have reviewed this annual report on Form 10-K of Armkel, LLC;

     2.   Based on my knowledge, this annual 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 annual
report;

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

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

(c)  presented in this annual 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 functions):

(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 annual report whether 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.

                                         By:    /s/ Maureen K. Usifer
                                                --------------------------------
                                                Name:   Maureen K. Usifer
                                                Title:  Chief Financial Officer

                                         Dated: March 27, 2003




                                                                              85