<PAGE>

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

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

                                _______________

                                   FORM 10-Q

(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal quarter ended December 31, 2001

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

                       Commission File Number 1 - 11263

                                _______________

                              EXIDE TECHNOLOGIES
            (Exact Name of Registrant as Specified in Its Charter)



                Delaware                                    23-0552730
     (State or other jurisdiction of                     (I.R.S. Employer)
     incorporation or organization)                     Identification Number)

     210 Carnegie Center, Suite 500                              08540
          Princeton, New Jersey                               (Zip Code)
(Address of principal executive offices)

                                (609) 627-7200
             (Registrant's telephone number, including area code)
                                _______________

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

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

                              ----------
     As of February 15, 2002, 27,370,402 shares of common stock were
                              ----------
outstanding.

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

                                       1
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                   Page
                                                                                                                 ---------

                                                 PART I. FINANCIAL INFORMATION

<S>                                                                                                              <C>
ITEM 1.       FINANCIAL STATEMENTS (UNAUDITED)                                                                           3

              CONDENSED CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2001 AND MARCH 31, 2001                                 3

              CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2001 AND
              DECEMBER 31, 2000                                                                                          4


              CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED DECEMBER 31, 2001 AND DECEMBER
              31, 2000                                                                                                   5


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2001                                     6

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                     24

ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS                                               42

                                                    PART II. OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS                                                                                         44

ITEM 2.       CHANGES IN SECURITIES AND USE OF PROCEEDS                                                                 47

ITEM 3.       DEFAULTS UPON SENIOR SECURITIES                                                                           47

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                       47

ITEM 5.       OTHER INFORMATION                                                                                         47

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K                                                                          47

SIGNATURE                                                                                                               48
</TABLE>

                                       2
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
               (Unaudited, in thousands, except per-share data)

<TABLE>
<CAPTION>
                                                                      December 31,             March 31,
                                                                          2001                    2001
                                                                      ------------             ----------
<S>                                                                  <C>                       <C>
        ASSETS

CURRENT ASSETS:
 Cash and cash equivalents                                            $     38,761             $   23,072
 Receivables, net of allowance for doubtful
     accounts of $49,431 and $33,597, respectively (Note 14)               346,859                429,455
 Inventories (Note 4)                                                      481,814                511,411
 Prepaid expenses and other                                                 25,481                 19,817
 Deferred income taxes                                                      29,637                 28,478
                                                                      ------------             ----------
        Total current assets                                               922,552              1,012,233
                                                                      ------------             ----------
PROPERTY, PLANT AND EQUIPMENT                                              936,304                961,233
 Less-accumulated depreciation                                            (383,059)              (328,298)
                                                                      ------------             ----------
     Property, plant and equipment, net                                    553,245                632,935
                                                                      ------------             ----------

OTHER ASSETS:
 Goodwill, net (Note 3 and 7)                                              434,772                540,395
 Other intangibles, net (Note 7)                                            48,885                    -
 Investments in affiliates                                                   6,363                  5,782
 Deferred financing costs, net                                              13,352                 26,777
 Deferred income taxes                                                      42,509                 40,716
 Other                                                                      51,560                 40,087
                                                                      ------------             ----------
                                                                           597,441                653,757
                                                                      ------------             ----------
        Total assets                                                  $  2,073,238             $2,298,925
                                                                      ============             ==========

        LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
 Short-term borrowings (Note 12)                                      $     15,784             $   10,387
 Current maturities of long-term debt (Note 12)                            672,982                 28,117
 Accounts payable                                                          316,386                350,712
 Accrued expenses                                                          397,389                439,399
                                                                      ------------             ----------
        Total current liabilities                                        1,402,541                828,615

LONG-TERM DEBT (Note 12)                                                   717,004              1,308,542
NONCURRENT RETIREMENT OBLIGATIONS                                          168,401                164,447
OTHER NONCURRENT LIABILITIES                                               236,502                235,587
                                                                      ------------             ----------
        Total liabilities                                                2,524,448              2,537,191
                                                                      ------------             ----------

COMMITMENTS AND CONTINGENCIES (Notes 5, 6 and 10)
MINORITY INTEREST                                                           18,703                 18,373
                                                                      ------------             ----------

        STOCKHOLDERS' DEFICIT
Common stock, $.01 par value 100,000 shares authorized;
 27,370 and 25,449 shares issued and outstanding                               274                    255
Additional paid-in capital (Note 12 and 13)                                570,096                531,179
Accumulated deficit                                                       (727,248)              (485,986)
Notes receivable - stock award plan                                           (665)                  (665)
Accumulated other comprehensive loss (Note 1)                             (312,370)              (301,422)
                                                                      ------------             ----------
        Total stockholders' deficit                                       (469,913)              (256,639)
                                                                      ------------             ----------
        Total liabilities and stockholders' deficit                   $  2,073,238             $2,298,925
                                                                      ============             ==========
</TABLE>


       The accompanying notes are an integral part of these statements.

                                       3
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

               (Unaudited, in thousands, except per-share data)

<TABLE>
<CAPTION>
                                                             For the Three Months Ended            For the Nine Months Ended
                                                           December 31,      December 31,        December 31,      December 31,
                                                               2001              2000                2001              2000
                                                           ------------      ------------        ------------      ------------
<S>                                                        <C>               <C>                 <C>               <C>
NET SALES                                                  $    633,194      $    764,385        $  1,888,677      $  1,724,359

COST OF SALES                                                   511,292           582,089           1,476,037         1,283,222
                                                           ------------      ------------        ------------      ------------
    Gross profit                                                121,902           182,296             412,640           441,137
                                                           ------------      ------------        ------------      ------------

OPERATING EXPENSES:
  Selling, marketing and advertising                             97,351            93,285             260,073           240,415
  General and administrative                                     56,710            40,414             134,709            93,850
  Restructuring and other (Note 9)                               13,626             9,181              24,684            39,181
  Goodwill impairment charge (Note 3)                           105,000                 -             105,000                 -
  Purchased research and development  (Note 15)                       -                 -              (8,185)                -
  Goodwill amortization                                               -             3,780                   -            10,870
                                                           ------------      ------------        ------------      ------------
                                                                272,687           146,660             516,281           384,316
                                                           ------------      ------------        ------------      ------------

    Operating income (loss)                                    (150,785)           35,636            (103,641)           56,821
                                                           ------------      ------------        ------------      ------------

INTEREST EXPENSE, net                                            35,462            34,597             102,654            85,154
OTHER EXPENSE, net                                                5,676            (8,718)             23,861            (4,887)
                                                           ------------      ------------        ------------      ------------

 Income (loss) before income taxes,
     minority interest and cumulative
     effect of change in accounting principle                  (191,923)            9,757            (230,156)          (23,446)

INCOME TAX PROVISION (BENEFIT)                                    8,262             5,279               8,991            (4,730)
                                                           ------------      ------------        ------------      ------------

  Income (loss) before minority interest and
     cumulative effect of change
     in accounting principle                                   (200,185)            4,478            (239,147)          (18,716)

MINORITY INTEREST                                                   286               510                 568             1,205
                                                           ------------      ------------        ------------      ------------

  Net income (loss) before cumulative effect
     of change in accounting principle                         (200,471)            3,968            (239,715)          (19,921)

CUMULATIVE EFFECT OF
    CHANGE IN ACCOUNTING PRINCIPLE                                    -                 -                (496)                -
                                                           ------------      ------------        ------------      ------------

    Net income (loss)                                      $   (200,471)     $      3,968        $   (240,211)     $    (19,921)
                                                           ============      ============        ============      ============

NET  INCOME (LOSS) PER SHARE, BEFORE CUMULATIVE EFFECT
     OF CHANGE IN ACCOUNTING PRINCIPLE (Note 1):
     Basic                                                 $      (7.33)     $       0.16        $      (9.01)     $      (0.88)
                                                           ============      ============        ============      ============
     Diluted                                               $      (7.33)     $       0.15        $      (9.01)     $      (0.88)
                                                           ============      ============        ============      ============
CUMULATIVE EFFECT OF CHANGE
     IN ACCOUNTING PRINCIPLE PER SHARE                     $          -      $          -        $      (0.02)     $          -
                                                           ============      ============        ============      ============

NET INCOME (LOSS) PER SHARE (Note 1):
    Basic                                                  $      (7.33)     $       0.16        $      (9.03)     $      (0.88)
                                                           ============      ============        ============      ============
    Diluted                                                $      (7.33)     $       0.15        $      (9.03)     $      (0.88)
                                                           ============      ============        ============      ============
WEIGHTED AVERAGE SHARES (Note 1):
    Basic                                                        27,345            25,470              26,602            22,762
                                                           ============      ============        ============      ============
    Diluted                                                      27,345            26,091              26,602            22,762
                                                           ============      ============        ============      ============
</TABLE>

       The accompanying notes are an integral part of these statements.

                                       4
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (Unaudited, in thousands)

<TABLE>
<CAPTION>
                                                                      For the Nine Months Ended

                                                                   December 31,       December 31,
                                                                        2001               2000
                                                                  ---------------    ---------------
<S>                                                               <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                        $  (240,211)       $   (19,921)
    Adjustments to reconcile net loss to net
       cash provided by operating activities -
          Depreciation and amortization                                  75,763             69,714
          Gain on asset sales                                            (1,391)           (13,000)
          Deferred income taxes                                          (3,340)           (12,467)
          Amortization of original issue discount on notes                8,056              8,225
          Provision for losses on accounts receivable                    22,472              5,777
          Provision for non-cash restructuring and other                 19,191             39,181
          Goodwill impairment charge                                    105,000                  -
          Minority interest                                                 128              1,205
          Amortization of deferred financing costs                       12,534              3,530
          Lion Compact Energy agreement termination                      (8,185)                 -
          Debt to equity conversion-non-cash charge                      13,873                  -
          Net change from sales of receivables                            1,237            161,821
    Changes in assets and liabilities excluding
       effects of acquisitions and divestitures -
          Receivables                                                    58,246            (65,452)
          Inventories                                                    23,641              2,365
          Prepaid expenses and other                                      1,330              1,059
          Payables                                                      (35,936)           (33,957)
          Accrued expenses                                              (58,223)            (9,313)
          Noncurrent liabilities                                          8,169            (21,857)
          Other, net                                                     (1,378)           (26,949)
                                                                  ---------------    ---------------
                  Net cash provided by operating activities                 976             89,961
                                                                  ---------------    ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    GNB acquisition, net of cash acquired $17,098 in fiscal 2001           (965)          (320,902)
    Capital expenditures                                                (53,466)           (38,248)
    Investment in joint venture                                          (1,007)                 -
    Proceeds from sales of assets                                         4,833             36,919
                                                                  ---------------    ---------------
                  Net cash used in investing activities                 (50,605)          (322,231)
                                                                  ---------------    ---------------


CASH FLOWS FROM FINANCING ACTIVITIES:
    Increase in short-term borrowings                                     5,127                967
    Borrowings under Global Credit Facilities Agreement                 738,138            523,617
    Repayments under Global Credit Facilities Agreement                (664,943)          (491,514)
    GNB acquisition debt                                                      -            250,000
    Decrease in other debt                                               (6,856)                 -
    Financing costs and other                                            (5,489)           (12,000)
    Dividends paid                                                       (1,051)            (1,364)
                                                                  ---------------    ---------------
                  Net cash provided by financing activities              64,926            269,706
                                                                  ---------------    ---------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
       CASH EQUIVALENTS                                                     392               (988)
                                                                  ---------------    ---------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                15,689             36,448
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                           23,072             28,110
                                                                  ---------------    ---------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                            $    38,761        $    64,558
                                                                  ===============    ===============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
    Cash paid for -
          Interest (net of amount capitalized)                      $    88,910        $    75,364
          Income taxes (net of refunds)                             $     9,548        $     7,682
</TABLE>

       The accompanying notes are an integral part of these statements.

                                       5
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                               December 31, 2001
                     (In thousands, except per-share data)
                                  (Unaudited)



(1)    BASIS OF PRESENTATION

     The condensed consolidated financial statements include the accounts of
Exide Technologies (the "Company") and all of its majority-owned subsidiaries.
The accompanying financial statements are presented in accordance with the
requirements of Form 10-Q and consequently do not include all of the disclosures
normally required by generally accepted accounting principles or those normally
made in the Company's annual Form 10-K filing. Accordingly, the reader of this
Form 10-Q may wish to refer to the Company's Form 10-K for the year ended March
31, 2001 for further information. The financial information contained herein is
unaudited.

     The financial information has been prepared in accordance with the
Company's customary accounting practices. In the opinion of management, the
accompanying consolidated financial information includes all adjustments of a
normal recurring nature necessary for a fair statement of the results of
operations and financial position for the periods presented.

     Going Concern. The accompanying condensed consolidated financial statements
have been prepared on a going concern basis, which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of business.

     The Company has obtained waivers through April 12, 2002 with respect to
noncompliance with certain financial covenants included in its Senior Secured
Global Credit Facility (the "Senior Facility"). In connection with securing this
waiver, certain additional security interests were provided to the senior
lenders. Due to its recent operating losses, cash flow constraints and continued
weakness in the Company's business markets, the Company believes it is probable
that upon expiration of the waivers, it will not be in compliance with certain
financial covenants included in the Company's Senior Facility. (see Note 12) In
accordance with generally accepted accounting principles, the Company classified
all obligations under the Senior Facility as short-term in the accompanying
condensed consolidated financial statements.

     In addition, the counterparty to the Company's $200,000 domestic
receivables sale facility has taken the position that it has the right to
terminate such facility. At this point it has not given notice of termination,
but instead has put the facility on a daily, rather than monthly, settlement
basis. Termination of this facility would require the Company to seek other
sources of accounts receivable financing. The Company's $175,000 European
securitization program expires on June 30, 2002. The Company may not be able to
renegotiate the European securitization program on terms acceptable to the
Company.

     The matters described above or other unfavorable developments could lead to
defaults under the Company's credit arrangements.  In the case of default, most
if not all of the Company's indebtedness, in addition to the Senior Facility,
would become due and payable. If the Company defaults under any of its credit
arrangements, it believes it would have limited alternate financing
arrangements.  Consequently, the Company is currently considering both out-of-
court and in-court reorganization plans.  These plans may involve a combination
of new financing, asset sales, and restructuring initiatives (See Note 8 and 9).

     The ultimate resolution of these matters may result in the realization of
assets and satisfaction of liabilities outside the normal course of business.

                                       6
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


     Earnings Per Share. Basic loss per share ("EPS") is computed using the
weighted average number of common shares outstanding for the period while
diluted EPS is computed assuming conversion of all dilutive securities such as
options and warrants. Other than for the three months ended December 31, 2000
(which had net income and thus included the effects of dilutive securities),
there is no difference between basic and diluted EPS in the periods presented
since the net loss position causes these options and warrants to be
antidilutive.

     Options to purchase 5,799 and 5,229 common shares with exercise prices
ranging from $7.75 to $25.875 were outstanding at March 31, 2001 and December
31, 2001, respectively. These options expire in the years 2002 to 2010 and 2002
to 2011, respectively.

     The loss per share calculations include the impact of the 4,000 common
shares issued as part of the GNB acquisition consideration from the date of
acquisition (See Note 7).

     Other Comprehensive Income. Total comprehensive income (loss) and its
components are as follows:



<TABLE>
<CAPTION>
                                                                   For the Three Months Ended       For the Nine Months Ended
                                                             ------------------------------------------------------------------
                                                                 December 31,     December 31,    December 31,     December 31,
                                                                    2001             2000            2001             2000
                                                             -----------------  --------------   -------------    -------------
<S>                                                            <C>                <C>             <C>              <C>
Net income (loss)                                                  $  (200,471)        $ 3,968      $ (240,211)       $ (19,921)
Cumulative effect of change in accounting principle                          -               -             541                -
Change in fair value of cash flow hedges                                   810               -          (3,471)               -
Change in cumulative
   translation adjustment                                               (6,477)         15,625          (8,018)          (3,942)
                                                             -----------------  --------------   -------------    -------------
Total comprehensive income (loss)                                  $  (206,138)        $19,593      $ (251,159)       $ (23,863)
                                                             =================  ==============   =============    =============

</TABLE>


(2)    ACCOUNTING FOR DERIVATIVES

     On April 1, 2001, the Company adopted FAS No. 133 "Accounting for
Derivative Instruments and Hedging Activities", as amended by FAS No. 138
"Accounting for Certain Derivative Instruments and Certain Hedging
Activities", ("FAS 133") which establishes accounting and reporting standards
for derivative instruments and hedging activities. FAS 133 requires that all
derivatives be recognized as either assets or liabilities at fair value. The
Company does not enter into derivative contracts for trading purposes.
Derivatives are used only to hedge the volatility arising from movements in a
portion of the cost of lead purchases as well as hedging certain interest rates
and foreign currency exchange rates. The Company's outstanding derivatives that
qualify for hedge accounting are designated as cash flow hedges. The effective
portion of changes in the fair value of lead forward contracts are recorded in
Accumulated Other Comprehensive Loss until the related purchased lead is charged
to earnings. At that time, the effective portion recorded in Accumulated Other
Comprehensive Loss is recognized in the income statement. Changes in the fair
value of cash flow hedges for which the hedged item affects earnings immediately
(foreign currency transaction hedges and interest rate hedges), ineffective
portions of changes in the fair value of cash flow hedges and fair value changes
on certain derivatives that, despite being utilized to effectively manage the
above mentioned activities, do not qualify for hedge accounting, are recognized
in earnings immediately.

                                       7
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


The adoption of FAS 133 resulted in an income statement charge, reflected as a
cumulative effect of change in accounting principle, of $496 or $0.02 per
diluted share. Also, a cumulative effect adjustment reduced Accumulated Other
Comprehensive Loss by $541. Approximately $552 of the amount in Accumulated
Other Comprehensive Loss at December 31, 2001, would be reclassified into
earnings during the fiscal year ended March 31, 2002. The Company currently has
outstanding lead hedge contracts through April 2002. The change in fair value of
cash flow hedges for which the hedged item affects earnings immediately, related
to hedge ineffectiveness and of derivatives not qualifying for hedge accounting
(including the cumulative affect of change in accounting principle), for the
three and nine months ended December 31, 2001 was $78 and $117, respectively and
was recognized in other expense in the corresponding periods. No cash flow
hedges were derecognized or terminated during the period. The fair value of
derivative contracts at December 31, 2001 is a liability of $3,047.

The following table presents activity relating to other comprehensive income
(loss) for derivative instruments classified as cash flow hedges only:


<TABLE>
<CAPTION>
                                                                        Three Months Ended               Nine Months Ended
                                                                            12/31/2001                      12/31/2001
                                                                  ---------------------------     ----------------------------
<S>                                                                 <C>                             <C>
Beginning Balance                                                           $(3,740)                         $   541
Additions and revaluations of derivatives designated as
cash flow hedges                                                                  3                           (5,275)
Less: Clearance of hedge results to earnings                                    807                            1,804
                                                                  ---------------------------     ----------------------------
Ending Balance                                                              $(2,930)                         $(2,930)
                                                                  ===========================     ============================
</TABLE>


(3)  ACCOUNTING FOR GOODWILL AND INTANGIBLES

In June 2001, the Financial Accounting Standards Board issued FAS No. 141
"Business Combinations" ("FAS 141") and FAS No. 142 "Goodwill and Other
Intangible Assets" ("FAS 142"). FAS 141 requires that the purchase method of
accounting be used for all business combinations initiated after June 30, 2001.
FAS 141 also specifies the criteria applicable to intangible assets acquired in
a purchase method business combination to be recognized and reported apart from
goodwill. FAS 142 requires that goodwill and intangible assets with indefinite
useful lives no longer be amortized, but instead be tested for impairment, at
least annually. FAS 142 also requires that intangible assets with definite
useful lives be amortized over their respective estimated useful lives to their
estimated residual values, and be reviewed for impairment.

The Company adopted FAS 141 and 142 effective April 1, 2001. Upon adoption of
FAS 142, the Company no longer amortizes goodwill. The following table reflects
net income (loss) adjusted to exclude amortization expense (including any
related tax effects) recognized in the periods presented related to goodwill:

                                       8
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


<TABLE>
<CAPTION>
                                                    For the three months                           For the nine months
                                                           ended                                         ended
                                          -----------------------------------------    --------------------------------------------
                                               12/31/01               12/31/00               12/31/01                12/31/00
                                          -------------------     -----------------    --------------------     -------------------
<S>                                       <C>                     <C>                  <C>                      <C>
Reported Net Income (Loss)                          $(200,471)            $   3,968               $(240,211)              $ (19,921)
Goodwill Amortization                                       -                 3,780                       -                  10,870
                                          -------------------     -----------------    --------------------     -------------------
Adjusted Net Income (Loss)                          $(200,471)            $   7,748               $(240,211)              $  (9,051)
                                          ===================     =================    ====================     ===================


Basic Earnings Per Share:
Reported Net Income (Loss)                          $   (7.33)            $    0.16               $   (9.03)              $   (0.88)
Goodwill Amortization                                       -                  0.14                       -                    0.48
                                          -------------------     -----------------    --------------------     -------------------
Adjusted Net Income (Loss)                          $   (7.33)            $    0.30               $   (9.03)              $   (0.40)
                                          ===================     =================    ====================     ===================


Diluted Earnings Per Share:
Reported Net Income (Loss)                          $   (7.33)            $    0.15               $   (9.03)              $   (0.88)
Goodwill Amortization                                       -                  0.14                       -                    0.48
                                          -------------------     -----------------    --------------------     -------------------
Adjusted Net Income (Loss)                          $   (7.33)            $    0.29               $   (9.03)              $   (0.40)
                                          ===================     =================    ====================     ===================
</TABLE>


Summarized goodwill activity for the first nine months of fiscal 2002 is as
follows:

<TABLE>
<CAPTION>
                                                                             Total
                                                                       -----------------
          <S>                                                          <C>
          Goodwill, net at March 31, 2001                                    $ 540,395
          Final GNB Purchase Price Allocation (See Note 7)                      (3,500)
          FAS 142 Impairment                                                  (105,000)
          Currency translation effect                                            2,877
                                                                       -----------------
          Goodwill, net at December 31, 2001                                 $ 434,772
                                                                       =================
</TABLE>


In accordance with the requirements of FAS 142, the Company tested goodwill for
impairment as a result of changed circumstances during the third quarter of
fiscal 2002,including a significant deterioration in the Network Power segment,
and the Company's expectation that the current depressed telecommunications
market would not recover in the near term. Further, the Company continued
developing a five-year business plan and related reorganization efforts (See
Notes 8 and 9).

The Company identified an impairment of goodwill within the Network Power
segment and recorded a charge of $105,000 in the third quarter of fiscal 2002.
The impairment charge was recorded based upon a comparison of the book carrying
value of this reporting unit, including goodwill, against the fair value of the
reporting unit, estimated using a discounted cash flow model based upon the
Company's preliminary five year business plan. The charge represents the
Company's current best estimate and will be finalized in the fourth quarter of
fiscal 2002.

If the assumptions used in determining the fair value of reporting units change
or there is any further significant erosion of business results, such changes
could result in additional impairment charges in future periods.

                                       9
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(4)    INVENTORIES

Inventories, valued by the first-in, first-out ("FIFO") method, consist of:

                                            December 31,        March 31,
                                                2001               2001
                                            ------------       ------------


Raw materials                               $    101,240       $    108,582
Work-in-process                                   80,817             79,767
Finished goods                                   299,757            323,062
                                            ------------       ------------
                                            $    481,814       $    511,411
                                            ============       ============

(5)    ENVIRONMENTAL MATTERS

  The Company, particularly as a result of its manufacturing and secondary lead
smelting operations, is subject to numerous environmental laws and regulations
and is exposed to liabilities and compliance costs arising from its past and
current handling, releasing, storing and disposing of hazardous substances and
hazardous wastes. The Company's operations are also subject to occupational
safety and health laws and regulations, particularly relating to the monitoring
of employee health. The Company devotes significant resources to attaining and
maintaining compliance with environmental and occupational health and safety
laws and regulations and does not currently believe that environmental, health
or safety compliance issues will have a material adverse effect on the Company's
long-term business, financial condition or results of operations. The Company
believes that it is in substantial compliance with all material environmental,
health and safety requirements.

 North America

  The Company has been advised by the U.S. Environmental Protection Agency
("EPA") or state agencies that it is a Potentially Responsible Party ("PRP")
under the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA") or similar state laws at 89 federally defined Superfund or state
equivalent sites (including 16 GNB sites). At 61 of these sites, the Company has
either paid or is in the process of paying its share of liability. In most
instances, the Company's obligations are not expected to be significant because
its portion of any potential liability appears to be minor or insignificant in
relation to the total liability of all PRPs that have been identified and are
viable. The Company's share of the anticipated remediation costs associated with
all of the Superfund sites where it has been named a PRP, based on the Company's
estimated volumetric contribution of waste to each site, is included in the
environmental remediation reserves discussed below.

  Because the Company's liability under such statutes may be imposed on a joint
and several basis, the Company's liability may not necessarily be based on
volumetric allocations and could be greater than the Company's estimates.

  Management believes, however, that its PRP status at these Superfund sites
will not have a material adverse effect on the Company's business or financial
condition because, based on the Company's experience, it is reasonable to expect
that the liability will be roughly proportionate to its volumetric contribution
of waste to the sites.

                                       10
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

  The Company currently has greater than 50% liability at three Superfund sites.
Other than these sites, the Company's allocation exceeds 5% at seven sites for
which the Company's share of liability has not been paid as of December 31,
2001. The current allocation at these seven sites averages approximately 22%.

  The Company is also involved in the assessment and remediation of various
other properties, including certain Company owned or operated facilities. Such
assessment and remedial work is being conducted pursuant to a number of state
and federal environmental laws and with varying degrees of involvement by state
and federal authorities. Where probable and reasonably estimable, the costs of
such projects have been accrued by the Company, as discussed below. In addition,
certain environmental matters concerning the Company are pending in federal and
state courts or with certain environmental regulatory agencies.

  International

  The Company is subject to numerous environmental, health and safety
requirements and is exposed to differing degrees of liabilities, compliance
costs, and cleanup requirements arising from its past and current activities in
various international locations. The laws and regulations applicable to such
activities differ from country to country and also substantially differ from
U.S. laws and regulations. The Company believes, based upon reports from its
foreign subsidiaries and/or independent qualified opinions, that it is in
substantial compliance with all material environmental, health and safety
requirements in each country.

  The Company expects that its international operations will continue to incur
capital and operating expenses in order to maintain compliance with evolving
environmental, health and safety requirements or more stringent enforcement of
existing requirements in each country.

  Consolidated

  While the ultimate outcome of the foregoing environmental matters is
uncertain, after consultation with legal counsel, management does not believe
the resolution of these matters, individually or in the aggregate, will have a
material adverse effect on the Company's long-term business, financial condition
or results of operations.

  The Company has established reserves for on-site and off-site environmental
remediation costs and believes that such reserves are adequate. At December 31,
2001 and March 31, 2001 the amount of such reserves were $71,280 and $88,100,
respectively. At December 31, 2001, $55,885 of the total reserve was included in
other noncurrent liabilities.

  Because environmental liabilities are not accrued until a liability is
determined to be probable and reasonably estimable, not all potential future
environmental liabilities have been included in the Company's environmental
reserves and, therefore, additional earnings charges are possible. Also, future
findings or changes in estimates could have a material effect on the recorded
reserves and cash flows.

(6)  COMMITMENTS AND CONTINGENCIES

  Former Management Team

  Exide established a $13,400 reserve in fiscal 2000 to cover litigation with
respect to allegations that used batteries were sold as new.  The Company has
now

                                       11
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

resolved these claims, including the third quarter fiscal 2002 settlement of the
sole remaining "legacy" action, Houlihan v. Exide. As a result of the Houlihan
settlement, the Company recorded an additional expense in the third quarter of
fiscal 2002 of $1,400 for reimbursement of legal fees. At December 31, 2001,
there is approximately a $2,500 reserve remaining, representing the Company's
estimate of its remaining battery discount under the Houlihan and other "legacy"
settlements.

  On March 23, 2001, Exide reached a plea agreement with the U.S. Attorney for
the Southern District of Illinois, resolving an investigation of the conduct of
former management. Under the terms of that settlement Exide agreed to a fine of
$27,500 over five years, and agreed to cooperate with the U.S. Attorney in his
prosecution of certain members of the former management team. The payment terms
are dependent upon the Company's compliance with the plea agreement during the
five-year period.  Further costs of $1,000 were reserved in the third quarter of
fiscal 2002. The plea agreement has been lodged with the U.S. District Court for
the Southern District of Illinois, which may accept or reject the plea
agreement. Although the court's decision is not expected until February or
March, management does not believe that the final plea agreement will materially
differ from the plea agreement reached with the U.S. Attorney. The Company
reserved $31,000 for this matter, including preliminary estimates of expected
costs and out-of-pocket expenses in the first quarter of fiscal 2001. At
December 31, 2001, approximately $28,500 of this reserve remains.

  On March 22, 2001, the U.S. Attorney unsealed the indictments of Arthur M.
Hawkins, former Chairman, President & Chief Executive Officer of Exide, Douglas
N. Pearson, the former President, North American Operations of Exide, and Alan
E. Gauthier, the former Chief Financial Officer of Exide, for their conduct
during the time they served as officers of Exide. Superseding indictments were
unsealed in July, 2001. Exide is cooperating fully with the U.S. Attorney in the
criminal prosecution of these former officers. The trial of the former officers
is now scheduled for March 18, 2002.

  Exide is currently involved in litigation with the former members of its
management referenced above. The former management has claims to enforce
separation agreement, reimbursements of legal fees, and other contracts, while
Exide has filed claims and counterclaims asserting fraud, breach of fiduciary
duties, misappropriation of corporate assets and civil conspiracy.

  With respect to these matters, the Company had reserves of $2,100 at
December 31, 2001. Payments of approximately $1,900 were made to its former
management team in prior quarters which were charged against this reserve.

  The company has filed a claim with its insurers for reimbursement of the
amounts paid to its former management team, and expects to obtain substantial
reimbursement for those amounts. However, the Company has not recognized any
receivable for such reimbursements at December 31, 2001.

  On September 17, 1999, Exide sued Sears, Roebuck and Co. in the Circuit Court
of Cook County, Illinois seeking damages for breach of contract in an amount not
less than $15,000. On November 12, 1999, Sears filed a counterclaim against
Exide and a claim against a former Sears purchasing employee alleging inducement
to breach his fiduciary duty to Sears, common law fraud, aiding and abetting and
conspiracy. In April 2001, the parties reached a settlement-in-principle which
will not require any payments to either party. The parties have executed a final
settlement agreement.

  On June 26, 2000, Johnson Controls, Inc. ("JCI") filed a lawsuit in the
United States District Court for the Northern District of Illinois, Eastern
Division,

                                       12
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

against Exide and three of its former officers. JCI alleged that Exide, through
Messrs. Hawkins, Gauthier, Pearson and Calio, paid bribes to a Sears employee,
Gary Marks, to induce him to award Sears' 1994 battery supply contract to Exide
rather than JCI, among other claims. On February 14, 2002, Exide and JCI reached
a settlement which requires JCI to withdraw its complaint with prejudice. The
settlement does not require any payment or other consideration to JCI.

  Hazardous Materials

  Exide is involved in several lawsuits pending in state and federal courts in
South Carolina, Pennsylvania, Indiana, and Tennessee. These actions allege that
Exide and its predecessors allowed hazardous materials used in the battery
manufacturing process to be released from certain of its facilities, allegedly
resulting in personal injury and/or property damage

  In January 2002, the counsel that brought the South Carolina actions filed
additional claims, in the Circuit Court for Greenville County, South Carolina.
The Company's preliminary review of these claims suggest they are without merit,
and the Company plans to vigorously defend itself in these matters.  The Company
does not believe any reserves are currently warranted for these claims.

  GNB Acquisition

  In July 2001, Pacific Dunlop Holdings (US), Inc. ("PDH") and several of its
foreign affiliates (the "Sellers" under the various agreements through which
Exide acquired GNB) filed a breach of contract claim against Exide in the
Circuit Court for Cook County, Illinois. The Sellers maintain they are entitled
to certain additional payments for assets acquired by Exide in the amount of
approximately $17,000 in its acquisition of GNB. Management does not believe
that the Sellers are correct either as to the rights for additional payments
asserted by the Sellers or that any additional amounts are owed. In December,
2001, the Court denied Exide's Motion to Dismiss the Complaint, without
prejudice to re-filing the same motion after discovery proceeds.  Management
remains confident that the claim is without merit.

  In December 2001, PDH filed a separate action in the Circuit Court for Cook
County, Illinois, seeking recovery of $3,100 for amounts allegedly owed by
Exide under various agreements between the parties.  The amounts in question all
relate to security for certain workers compensation insurance policies, which
cover claims by former GNB employees.  Exide's Answer contested the amounts
claimed by PDH and include counter-claims against PDH and/or its affiliates.

  Other

  The Company is involved in various other claims and litigation incidental to
the conduct of its business. Based on consultation with legal counsel,
management does not believe that any such claims or litigation to which the
Company is a party, either individually or in the aggregate, will have a
material adverse effect on the Company's financial condition, cash flows or
results of operations, although quarterly or annual operating results may be
materially affected.

                                       13
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(7)  GNB ACQUISITION

  On September 29, 2000, the Company acquired the global battery business of
Australian-based Pacific Dunlop Limited, including its subsidiary GNB
Technologies, Inc. ("GNB"), a U.S. and Pacific Rim manufacturer of both
industrial and automotive batteries, for consideration of $379,000 (including
$344,000 in cash and 4,000 of the Company's common shares) plus assumed
liabilities. Pacific Dunlop now holds an approximate 14.6 percent interest in
the outstanding shares of common stock of the Company. The 4,000 common shares
issued in connection with this acquisition were valued at approximately $9.00
per common share (or $35,000), which was the average price per share of the
Company's common stock when the terms of the acquisition were agreed to and
announced on May 9, 2000.

  The Company financed the cash portion of the purchase price, including
associated fees and expenses, through an additional $250,000 term loan under its
existing Senior Facility, and $100,000 of securitized GNB accounts receivables.
The Company also issued warrants to acquire 1,286 common shares with an exercise
price of $8.99 per share in conjunction with the term loan financing. These
warrants are immediately exercisable. The warrants were valued using Black
Scholes model with the following assumptions:

          Exercise Price           $8.99 per common share
          Expected Term            5.5 years
          Expected Volatility      34%
          Risk Free Interest Rate  5.92%
          Annual Dividend Yield    0.88%
          Grant Date Stock Price   $9.0625 per common share

  The acquisition has been accounted for using the purchase method. GNB's
results of operations are included in the accompanying consolidated statement of
operations since the date of acquisition. GNB's opening balance sheet is
included in the accompanying consolidated balance sheets as of December 31, 2001
and March 31, 2001.  The allocation of purchase price which follows was
finalized on September 30, 2001.

          Current Assets                   $362,500
          Property, Plant and Equipment     220,000
          Other Assets                        6,000
          Intangible Assets                  49,500
          Goodwill                           75,000
                                           --------
               Total Assets Acquired        713,000
                                           --------
          Current Liabilities               243,000
          Other Liabilities                  91,000
                                           --------
               Total Liabilities Assumed    334,000
                                           --------
          Net Assets Acquired              $379,000
                                           ========

  The final purchase price allocation (completed on September 30, 2001)
reflected the following adjustments from the preliminary allocations included in
the Company's consolidated balance sheets since March 31, 2001:

  Identification and valuation of
  intangible Assets:
     Trademarks                                      $ 38,600
     Technology                                        10,900

  Final Adjustments, net                              (46,000)
                                                     --------
  Net Decrease in Goodwill                           $  3,500
                                                     ========

                                       14
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The final adjustments primarily related to property and plant writedowns due to
planned plant and distribution center rationalizations, and final estimates for
environmental issues and other contingencies.

  Of the $49,500 of acquired identified intangibles, $38,600 was assigned to
trademarks that are not subject to amortization.  The remaining $10,900 of
acquired identified intangibles have a useful life of 10 years and are
technology related.

  Related amortization expense of $365 and $615 was recorded in the three and
nine month periods ended December 31, 2001.  The Company expects to record $820
in related amortization expense for fiscal 2002 and $1,120 in each of the next
nine fiscal years.

  The following unaudited supplemental information reflects the Company's pro
forma results of operations for the period shown by combining the historical
results of the Company and GNB and including the impact of goodwill amortization
and the impact of other applicable purchase accounting adjustments, as well as
interest expense on acquisition financing, together with related income tax
effects, assuming the acquisition had occurred at the beginning of the earliest
period presented. The pro forma earnings per share calculation below also
includes the impact of the four million shares issued as part of the acquisition
consideration. This pro forma information does not purport to represent what the
Company's results of operations would have actually been had the acquisition
occurred as of an earlier date or project the results of any future period.




                                              For Nine Months Ended
                                                December 31, 2000
                                                   (Unaudited)

  Net sales                                        $2,213,674
  Net loss                                         $  (35,837)
  Loss per share:
  Basic                                            $    (1.34)
  Diluted                                          $    (1.34)

These proforma results include the Company's restructuring and other charges
(see Note 9) of $23,900, net of tax or $0.89 per share and GNB restructuring and
environmental charges of $13,237, net of tax or $0.49 per share. Also, the pro
forma results include the charge related to the earnings effect of recording
inventory at market value at the time of GNB acquisition of $4,758, net of tax
or $0.18 per share and the gain on the sale of the Company's Yuasa Interest of
$7,930, net of tax or $0.30 per share.

(8) Operational Reorganization Program/Capital Structure Review

  The Company is currently developing an operational reorganization plan to
generate cost savings and enhance liquidity.

                                       15
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

  The Company has retained Jay Alix Services LLC to support its restructuring
efforts. A principal at Jay Alix, was named Chief Financial Officer and Chief
Restructuring Officer of Exide on October 26, 2001. Additionally, the Company is
working with an investment banking firm, The Blackstone Group, to assist
management in evaluating its capital structure and related strategic
alternatives.

  Current initiatives include development of a five year business plan and
targeted short-term plans designed to improve cash management, including reduced
spending, rationalization of facilities, utilization and effectiveness of
support services and refining material purchasing and overall inventory
management.  In connection with the inventory management component of the
program, during the third quarter of fiscal 2002, the company recorded a charge
to writedown excess inventories by approximately $10,000.  The charge, which was
classified as cost of sales in the accompanying consolidated statement of
operations, was necessitated by a preliminary assessment of the Company's five
year business plan and updated demand forecasts, continued weakening of the
Company's business segments, particularly the telecommunications market and
ongoing stock keeping unit (SKU) rationalization.

  To implement the reorganization plan under development, and to fund associated
restructuring costs and operating losses, the Company will be required to
restructure certain of its outstanding debt and other financing arrangements. In
connection with that plan and as a condition to the waiver from its senior
lenders, the Company is required to present its preliminary five year business
plan to the senior lenders by February 28. (See Notes 1, 12 and 14 for a
description of certain debt and financing arrangements). A number of
alternatives, including out-of-court and in-court financial restructurings, are
being considered in connection with those plans.  Management believes that under
any restructuring scenario, the Company's common stock would likely be subject
to massive dilution as a result of the conversion of debt to equity or
otherwise. Moreover, there can be no assurance as to what value, if any, would
be as ascribed to the Company's Common Stock in a restructuring. In addition,
the Company's senior notes and convertible subordinated notes could suffer
substantial impairment in a restructuring. Due to a number of uncertainties,
many of which are outside the control of the Company, there can be no assurance
that the Company will be able to consummate its operational or financial
reorganization plans.

(9) Restructuring

  The Company previously implemented certain restructuring activities as part of
an overall program to reduce costs, eliminate excess capacity and improve cash
flows, including activities in connection with the GNB acquisition.

Fiscal Year 2002

  In August 2001, the Company announced plans to eliminate 1,300 positions.

  In November 2001, the Company announced further plans to reduce the salaried
workforce by approximately 1,100 jobs and recorded a non-cash charge of $5,369
for the writedown of machinery and equipment at the Maple, Ontario manufacturing
operation, which will now not be reopened as a Network Power facility, given the
continued downturn in the Network Power business and telecommunications market.

  In connection with the second and third quarter fiscal 2002 workforce
reduction programs and Maple closure, the Company recorded severance related
restructuring charges of $11,058 and $8,257, respectively.

                                       16
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

  The Company is continuing to move forward with operational changes designed to
streamline and rationalize Exide's structure in an effort to simplify the
organization and eliminate redundant and/or unnecessary overhead. The Company is
working towards reducing its salaried workforce by approximately 20% by the end
of fiscal year 2002. The Company expects to record additional restructuring
charges during the remainder of fiscal 2002.

Fiscal Year 2001

  With respect to historical Exide employees, contracts and facilities, the
Company recorded restructuring charges aggregating $97,400 in fiscal 2001. These
charges principally resulted from actions taken in connection with the
integration of the operations of the Company and GNB, the exiting of certain
customer relationships and elimination of combined excess capacity, as well as
ongoing cost reduction initiatives worldwide. The charges consisted of $29,200
in severance costs, $39,509 in asset write-downs and $28,691 in closure costs.

The fiscal 2001 restructuring charges comprised the following:

  .  the closure of the Burlington automotive battery plant in the U.S.

  .  workforce reductions at the Cwmbran, Wales and Duisburg, Germany
     manufacturing facilities in Europe

  .  the reorganization of the Company's European Transportation business sales
     and logistics work force, resulting in elimination of approximately 800
     positions

  .  the closing or sale of 27 of the Company's distribution facilities,
     principally in North America

  .  the consolidation of the Company's European accounting activities into a
     shared services operation

  .  the closure of the Maple, Ontario automotive manufacturing operations

  .  the closure of certain branches and offices

  .  severance and other costs for reductions in staff.

  GNB Acquisition

  Coincident with the acquisition of GNB, the Company began formalization of
restructuring plans involving the closure and rationalization of certain
facilities. With respect to acquired GNB employees, contracts and facilities, in
fiscal 2001, the Company closed the Dallas, Texas and Dunmore, Pennsylvania
facilities, and certain distribution centers and sales branches. The Company
included $28,800 of restructuring reserves for severance and closure costs in
the GNB purchase accounting allocation for these actions.

  The Company included an additional $35,000 as part of GNB purchase accounting
allocation for certain fixed asset writedowns due to planned plant and the
recognition of distribution rationalizations in the second quarter of fiscal
2002.

                                       17
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

  During fiscal 2000, the Company recorded restructuring charges of $39,336
consisting of $20,000 in severance benefits and $19,336 for targeted plant and
branch closings.

  The charges related to the:

  .  closure of the Reading, Pennsylvania plant

  .  closure of six branches in the U.S. and

  .  headcount reductions of 168 employees in the U.S. and Europe.

  Summary

  Summarized restructuring reserve activity for these programs are as follows:

<TABLE>
<CAPTION>
                                                        Severance Costs     Closure Costs     Asset Writedowns         Total
                                                        ---------------     -------------     ----------------    ---------------
<S>                                                     <C>                 <C>              <C>                  <C>
Balance at March 31, 2001.............................  $        35,553     $      44,564     $              -    $        80,117
Fiscal 2002 charges to income.........................           16,597             2,718                5,369             24,684
Fiscal 2002 charges to GNB opening balance sheet......              600               800               35,000             36,400
Payments and charge-offs..............................          (22,865)          (14,337)             (40,369)           (77,571)
Currency changes......................................            1,046             1,412                    -              2,458
                                                        ---------------     -------------     ----------------    ---------------
Balance at December 31, 2001..........................  $        30,931     $      35,157                    -    $        66,088
                                                        ===============     =============     ================    ===============
</TABLE>

  The current portion of this reserve is approximately $35,400 at December 31,
2001. Remaining expenditures principally represent (i) severance and related
benefits payable, per employee agreement and or regulatory requirements over
periods up to three years (ii) severance obligations in dispute with the former
management team (iii) lease commitments for certain closed facilitites,
branches, and offices, as well as leases for excess and permanently idle
equipment payable in accordance with contractual terms, over periods up to five
years and (iv) certain other closure costs including dismantlement and costs
associated with removal obligations incurred in connection with the exit of
facilities.

  (10)  Purchase Commitments

  The Company sold its battery separator operations in fiscal 2000 for
approximately $47,000, including $26,100 in cash proceeds, to an unrelated party
(the "Buyer"). In connection with the sale, the Company entered into a ten-year
supply agreement that includes minimum annual purchase commitments, penalty
payments if such minimum annual purchase commitments were not met and above
market purchase price premiums. The agreement also required adjustment for the
minimum annual purchase commitments if the Company acquired any customers of the
Buyer during the term of the agreement. The Company recorded a gain on this sale
of $9,500 and established a liability related to the adverse supply agreement of
$8,500 based on its estimates of future purchases from the Buyer.

  As a result of acquiring GNB, which was a customer of the Buyer, the Company
renegotiated the supply agreement.  Under the renegotiated terms and based on
the Company's estimates of its purchases from the Buyer given the Company's plan
to

                                       18
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

integrate GNB, the Company recorded a charge of $29,000 to cost of sales in the
fourth quarter of fiscal 2001.

  Based on recent development of our preliminary five year business plan, the
Company revised its unit volume outlook. This revision increased its expected
liability related to the minimum annual purchase commitments to a total of
$53,400 for the  remaining eight years of this supply agreement.  This resulted
in recognition of an additional charge to cost of sales of $15,500 in the third
quarter of fiscal 2002.

  (11)  SEGMENT INFORMATION

  Beginning October 1, 2001, the Company changed its organizational structure
such that operations are managed and reported in three segments: Transportation,
Motive Power and Network Power.  The Company previously operated its battery
business within the Transportation and Industrial segments through September 30,
2001. The previous Industrial segment was split between Network Power and Motive
Power. Network Power applications include batteries for telecommunications
systems, fuel cell load leveling, electric utilities, railroads, photovoltaic
and other critical uninterruptible power supply markets. Motive Power
applications include batteries for a broad range of equipment uses including
lift trucks, mining and other commercial vehicles. Transportation uses include
automotive, heavy duty, agricultural, marine and other batteries, as well as new
technologies being developed for hybrid vehicles and new 42-volt automobile
applications. Intersegment sales are not material.

                                       19
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

  Selected financial information concerning the Company's reportable segments
are as follows:

<TABLE>
<CAPTION>
                                                                   For the Three Months Ended December 31, 2001
                                                                   --------------------------------------------

                                               Transportation           Motive Power      Network Power   Other (a)   Consolidated
                                               --------------           ------------      -------------   ---------   ------------
<S>                                            <C>                      <C>                <C>            <C>         <C>
Net sales                                          $  408,440               $120,417      $     104,337    $      -     $  633,194
Gross profit                                           69,890                 31,637             20,375           -        121,902
Operating income (loss)                               (15,566)                 1,148           (121,686)    (14,681)      (150,785)

<CAPTION>
                                                                   For the Three Months Ended December 31, 2000
                                                                   --------------------------------------------

                                               Transportation           Motive Power      Network Power   Other (b)   Consolidated
                                               --------------           ------------      -------------   ---------   ------------
<S>                                            <C>                      <C>               <C>             <C>         <C>
Net sales                                          $  476,460               $127,206      $     160,719    $      -     $  764,385
Gross profit                                           98,568                 36,212             47,516           -        182,296
Operating income (loss)                                22,701                  4,943             18,548     (10,556)        35,636

<CAPTION>
                                                                   For the Nine Months Ended December 31, 2001
                                                                   -------------------------------------------

                                               Transportation           Motive Power      Network Power   Other (c)   Consolidated
                                               --------------           ------------      -------------   ---------   ------------
<S>                                            <C>                      <C>                <C>            <C>         <C>
Net sales                                          $1,180,655               $362,316      $     345,706    $      -     $1,888,677
Gross profit                                          214,980                100,558             97,102           -        412,640
Operating income (loss)                                (5,798)                12,914           (100,922)     (9,835)      (103,641)

<CAPTION>
                                                                   For the Nine Months Ended December 31, 2000
                                                                   -------------------------------------------

                                               Transportation           Motive Power      Network Power   Other (d)   Consolidated
                                               --------------           ------------      ------------    ---------   ------------
<S>                                            <C>                     <C>                <C>             <C>         <C>
Net sales                                          $1,104,822               $313,289      $    306,248     $      -     $1,724,359
Gross profit                                          255,309                 97,969            87,859            -        441,137
Operating income (loss)                                26,163                 22,459            28,509      (20,310)        56,821
</TABLE>

(a) Includes corporate expenses associated with the operational restructuring,
capital structure review and strategic sourcing initiatives.

(b) Includes $3,780 of goodwill amortization.

(c) Includes a credit of $8,185 related to the termination of the Lion Compact
Energy agreement (See Note 15), offset by corporate expenses associated with the
operational restructuring, capital structure review and strategic sourcing
initiatives.

(d) Includes $10,870 of goodwill amortization.


(12)   DEBT ACTIVITY

                                       20
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



     Total debt at December 31, 2001 was $1,405,770, as compared to $1,347,046
at March 31, 2001. Total debt comprised the following:

<TABLE>
<CAPTION>
                                                                                          December 31,             March 31,
                                                                                              2001                   2001
                                                                                          ------------            ----------
<S>                                                                                <C>                      <C>
Senior Secured Global Credit Facilities Agreement                                         $    669,651            $  587,432
9.125% Senior Notes (Deutsche Mark Denominated, due April 15, 2004)                             79,616                78,589
10% Senior Notes, due April 15, 2005                                                           300,000               300,000
Convertible Senior Subordinated Notes, due December 15, 2005                                   317,992               337,011
Other (1)                                                                                       22,727                33,627
Short-term borrowings (2)                                                                       15,784                10,387
                                                                                          ------------            ----------
                                                                                          $  1,405,770            $1,347,046
                                                                                          ============            ==========


Current maturities (included in total debt above)                                         $    688,766            $   38,504
                                                                                          ============            ==========
</TABLE>

(1)  includes capital lease obligations, and other loans

(2)    includes various operating lines of credit and working capital facilities
maintained by certain of the Company's non-US subsidiaries. Certain of these
borrowings are secured by receivables, inventories and/or property.  These
borrowing facilities are typically for one-year receivable terms.


     On January 4, 2002, the Company secured a waiver from its senior lenders
through April 12, 2002 of certain covenants contained in its Senior Facility.
In connection with securing this waiver, certain additional security interests
were provided to the senior lenders. In accordance with generally accepted
accounting principles, the Company classified the long-term portion of this
debt, approximately $669,651 at December 31, 2001, as short-term as it is
probable the Company will not be in compliance with these covenants after
expiration of the waivers. In addition, the Company accelerated amortization of
Senior Facility debt acquisition costs such that all such costs will be
amortized by April 2002. This acceleration results in additional amortization
expense of approximately $6,300 in the third and fourth quarters of fiscal 2002.
See Notes (8) and (9) for further discussion of the Company's reorganization and
capital structure review.

     In July 2001, the Company completed debt-for-equity exchanges whereby
approximately $30,000 face value of the Notes were exchanged for approximately
1,900 shares of common stock. Since these exchanges involved a convertible
security, the Company recognized a non-cash charge of $13,873 in the second
quarter equivalent to the market value of the shares issued in excess of the
original conversion ratio of the Notes.  The non-cash charge was included in the
"Other(income)expense" line of the consolidated statement of operations. The
carrying value of the Notes was $25,539. The Company reduced debt and increased
shareholders' equity by $25,539 as a result of the transaction. This transaction
was treated as a non-cash financing activity in the accompanying consolidated
statement of cash flows.


(13)    DIVIDEND SUSPENSION

        Exide's Board of Directors has suspended the Company's quarterly common
stock dividend of $0.02 per share as of November 8, 2001.


(14)    ACCOUNTING FOR RECEIVABLES SALES AGREEMENTS

                                       21
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



     In September 2000, the FASB issued FAS No. 140 "Accounting for the
Transfer and Servicing of Financial Assets and Extinguishments of Liabilities",
("FAS 140") which replaces FAS 125 (of the same title). FAS 140 revises
certain standards in the accounting for securitizations and other transfers of
financial assets and collateral, and requires certain disclosures relating to
securitization transactions and collateral, but it carries over most of FAS
125's provisions. The collateral and disclosure provisions of FAS 140 were
effective for the Company's fiscal year-end 2001 financial statements; see the
Company's Form 10-K for the fiscal year ended March 31, 2001. The other
provisions of this Statement were effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after March 31,
2001. The Company implemented the revised provisions when effective with no
material impact on the consolidated financial statements.

In addition, the counterparty to the Company's domestic receivables sale
facility has taken the position that it has the right to terminate such
facility. At this point it has not given notice of termination, but instead has
put the facility on a daily, rather than monthly, settlement basis. Termination
of this facility would require the Company to seek other sources of accounts
receivable financing. The Company's $175,000 European securitization program
expires on June 30, 2002. The Company may not be able to renegotiate the
European securitization program on terms acceptable to the Company.

(15) TERMINATION OF LION COMPACT ENERGY AGREEMENT

     On September 27, 1999, the Company entered into an agreement to acquire a
controlling interest in Lion Compact Energy (LCE), a privately held company
conducting research in dual-graphite battery technology. This transaction was
accounted for using the purchase method. In conjunction with the LCE
acquisition, the Company recorded a $14,262 write-off for purchased research and
development costs in fiscal 2000. The purchased in-process research and
development had not yet reached technological feasibility, and the technology
had no alternative future use, as of the date of acquisition.

     The Company paid $3,500 in cash upon closing in December, 1999 and $2,500
in fiscal 2001. The Company expected to pay $9,000, plus certain royalty fees,
over the next several years based upon the performance of LCE and its product
development. The Company had the option to reconvey its interest in LCE at any
time to the seller during this payment period. The Company exercised this option
during the second quarter of fiscal 2002 and recorded a credit of $8,185 equal
to the present value of the expected future payments. All prior payments were
non-refundable.


(16)  FAS 143 and 144

     The Financial Accounting Standards Board recently issued FAS No. 143
"Accounting for Asset Retirement Obligations", ("FAS 143") and FAS No. 144
"Accounting for the Impairment or Disposal of Long-Lived Assets", ("FAS
144"). FAS 143 is effective for financial statements issued for fiscal years
beginning after June 15, 2002. The Company is required to adopt FAS 143 on April
1, 2003.  The provisions of FAS 143 addresses financial accounting and reporting
requirements for obligations associated with the retirement of tangible long-
lived assets and the associated retirement costs and requires companies to
record an asset and related liability for the cost associated with the
retirement of long-lived tangible assets if a legal liability to retire the
asset exists.

                                       22
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


      FAS 144 is effective for financial statement for fiscal years beginning
after December 15, 2001.  The Company will adopt FAS 144 on April 1, 2002.  FAS
144 addresses financial accounting and reporting for the impairment or disposal
of long-lived assets and supersedes FAS No. 121 and the accounting and reporting
provisions of the Accounting Principles Board ("APB") Opinion No. 30. FAS 144
retains the basic principles of FAS 121 for long lived assets to be disposed of
by sale or held and used and broadens discontinued operations presentation to
include a component of an entity that is held for sale or that has been disposed
of.

      The Company is in the process of completing its evaluation of the impact
of these statements.

(17)  NYSE DELISTING

      New York Stock Exchange (NYSE) notified the Company that its common stock
was de-listed prior to the opening on February 15, 2002 due to the Company's
inability to satisfy the NYSE's continued listing standards. The Company's
common stock commenced trading on the OTC Bulletin Board on February 15, 2002
under the symbol "EXDT."

                                       23
<PAGE>

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


Factors Which Affect Our Financial Performance

  Competition. The global Transportation, Motive Power and Network Power battery
markets, particularly in North America and Europe, are highly competitive. In
recent years, competition has continued to intensify and we continue to come
under increasing pressure for price reductions. This competition has been
exacerbated by excess capacity and fluctuating lead prices as well as low-priced
Asian imports impacting our European markets.

  Exchange Rates. We are exposed to foreign currency risk in most European
countries, principally Germany, France, the United Kingdom, Spain, and Italy. We
are also exposed, although to a lesser extent, to foreign currency risk in
Australia and the Pacific Rim. Movements of exchange rates against the U.S.
dollar can result in variations in the U.S. dollar value of our non-U.S. sales.
In some instances, gains in one currency may be offset by losses in another. Our
results for the periods presented herein were adversely impacted by the overall
weakness in European currencies.

  Markets. We are subject to concentrations of customers and sales in a few
geographic locations and are dependent on customers in certain industries,
including the automotive, telecommunications, and material handling markets.
Economic difficulties experienced in these markets and geographic locations have
and continue to impact our financial results.

  Weather. Unusually cold winters or hot summers accelerate automotive battery
failure and increase demand for automotive replacement batteries.

  Interest rates. We are exposed to fluctuations in interest rates on our
variable rate debt.

  Lead. Lead is the principal raw material used in the manufacture of batteries,
representing approximately one-fifth of our cost of goods sold. The market price
of lead fluctuates significantly. Generally, when lead prices decrease, many of
our customers seek disproportionate price reductions from us, and when lead
prices increase, customers tend to be more accepting of price increases.

Critical Accounting Policies and Estimates

     The Company's discussion and analysis of its financial condition and
results of operations are based upon the Company's consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these financial
statements requires the Company to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and the related
disclosure of contingent assets and liabilities. On an on-going basis, the
Company evaluates its estimates, and bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

     The Company believes the following critical accounting policies affect its
more significant judgments and estimates used in the preparation of its
consolidated financial statements.

                                       24
<PAGE>

     Allowance for Doubtful Accounts. The Company maintains allowances for
doubtful accounts for estimated losses resulting from the inability of our
customers to make required payments. We continually assess the adequacy of the
reserves for doubtful accounts. If the financial condition of our customers were
to deteriorate, impairing their ability to make payments, additional allowances
may be required. The Company has several customers with significant receivable
balances. If these customers are unable to pay amounts due it would require
significant increases to the allowance for doubtful accounts reserve and could
have a material adverse effect on the Company's results and liquidity. We are
also subject to concentrations of customers and sales to a few geographic
locations, which may also impact the collectability of certain receivables. If
economic or political conditions were to change in the countries where we do
business, it could have a significant impact on the results of our operations,
and our ability to realize the full value of our accounts receivable. Further,
we are dependent on customers in certain industries, including the automotive
and telecommunications markets. Economic difficulties experienced in those
markets could have a significant impact on the results of our operations, and
our ability to realize the full value of our accounts receivables.

     Inventory Reserves. The Company writes down its inventory for estimated
obsolescence or unmarketable inventory equal to the difference between the cost
of the inventory and the estimated market value based upon assumptions of future
demand and market conditions. If actual market conditions are less favorable
than those projected by management, additional inventory write-downs may be
required.  During the third quarter of fiscal 2002 we began a company-wide
effort to reduce inventory levels.  Based on our preliminary findings, we
determined we will not recover the carrying costs of certain of this excess
inventory.  This excess inventory has been written down to its recoverable
value.  As this effort continues we may determine that actual recoveries differ
from those estimated.

     Valuation of Long-lived Assets. The Company's long-lived assets include
property, plant and equipment, goodwill and identified intangible assets. Long-
lived assets (other than goodwill and indefinite lived intangible assets) are
depreciated over their estimated useful lives, and are reviewed for impairment
whenever changes in circumstances indicate the carrying value may not be
recoverable. The fair value of the goodwill and identified intangible assets are
based upon our estimates of future cash flows and other factors including
discount rates to determine the fair value of the respective assets. If these
assets or their related assumptions change in the future, we may be required to
record impairment charges in accordance with FAS 142 (for goodwill and
indefinite-lived intangibles) and FAS 121 (for definite-lived intangibles).  An
erosion of future business results in any of the business units could create
impairment in goodwill or other long-lived assets and require a significant
write down in future periods.

     Deferred Taxes. The Company records a valuation allowance to reduce our
deferred tax assets to the amount that is more likely than not to be realized.
While we have considered future taxable income and ongoing prudent and feasible
tax planning strategies in assessing the need for the valuation allowance, if we
were to determine that we would be able to realize our deferred tax assets in
the future in excess of our net recorded amount, an adjustment to the deferred
tax asset would increase income in the period such determination was made.
Likewise, should we determine that it would not be able to realize all or part
of our net deferred tax assets in the future, an adjustment to the deferred tax
asset would decrease income in the period such determination was made.

     Warranty Reserves. The Company provides for the estimated cost of product
warranties at the time revenue is recognized. While we engage in product quality
programs and processes, including independent testing of products performance
and


                                       25
<PAGE>

     compliance to ratings, our warranty obligation is affected by product
failure rates and customers' in-store return policies and procedures. Should
actual product return rates differ from Exide's estimates, revisions to the
estimated warranty reserves would be required.

     Environmental Reserves. The Company is subject to numerous environmental
laws and regulations in all the countries in which it operates. In addition, we
can be held liable for investigation and clean up of sites impacted by our past
operating activities. In certain countries including the United States we
maintain reserves for the reasonable cost of addressing these liabilities. These
estimates are determined through a combination of methods, including outside
estimates of likely expense and our extensive experience in the management of
these matters.

     Because environmental liabilities are not accrued until a liability is
determined to be probable and reasonably estimable, not all potential future
environmental liabilities have been included in the Company's environmental
reserves and, therefore, additional charges are possible. Also future findings
or changes in estimates could result in either an increase or decrease in the
reserves.

     Purchase Commitments. The Company has a ten-year supply agreement to
purchase its worldwide battery separator needs. This agreement includes minimum
annual purchase level commitments and purchase prices in excess of market. We
currently have a reserve for the incremental purchase requirements over the
remaining life of the agreement in excess of our projected requirements.
Whenever there is a significant change in our unit volume outlook this reserve
will be adjusted.

     Litigation.  The Company has legal contingencies that have a high degree of
uncertainty.  When a contingency becomes probable and estimable a reserve is
established. Numerous allegations have been made against the Company claiming
bodily harm as a result of exposure to hazardous materials used in the
manufacture of batteries. In addition, in connection with the acquisition of
GNB, certain purchase price disputes are outstanding. The Company believes that
liabilities for these matters are neither probable nor estimable. Therefore no
reserves have been established. If these matters are resolved at a cost
different than the Company's current estimates, they could have a significant
impact on the Company's future results and liquidity.

     Going Concern. The accompanying condensed consolidated financial statements
have been prepared on a going concern basis, which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of business.

     The Company has obtained waivers through April 12, 2002 with respect to
noncompliance with certain financial covenants included in its Senior Secured
Global Credit Facility (the "Senior Facility"). In connection with securing this
waiver, certain additional security interests were provided to the senior
lenders. Due to its recent operating losses, cash flow constraints and continued
weakness in the Company's business markets, the Company believes it is probable
that upon expiration of the waivers, it will not be in compliance with certain
financial covenants included in the Company's Senior Facility (see Note 12). In
accordance with generally accepted accounting principles, the Company classified
all obligations under the Senior Facility as short-term in the accompanying
condensed consolidated financial statements.

     In addition, the counterparty to the Company's domestic receivables sale
facility has taken the position that it has the right to terminate such
facility. At this point it has not given notice of termination, but instead has
put the facility on a daily, rather than monthly, settlement basis. Termination
of this facility would require the Company to seek other sources of accounts
receivable financing. The Company's $175,000 European securitization program
expires on June

                                       26
<PAGE>

                      EXIDE TECHNOLOGIES AND SUBSIDIARIES

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                               December 31, 2001
                     (In thousands, except per-share data)
                                  (Unaudited)

30, 2002. The Company may not be able to renegotiate the European securitization
program on terms acceptable to the Company.

     The matters described above or other unfavorable developments could lead to
defaults under the Company's credit arrangements.  In the case of default, most
if not all of the Company's indebtedness, in addition to the Senior Facility,
would become due and payable. If the Company defaults under any of its credit
arrangements, it believes it would have limited alternate financing
arrangements.  Consequently, the Company is currently considering both out-of-
court and in-court reorganization plans.  These plans may involve a combination
of new financing, asset sales, and restructuring initiatives (See Note 8 and 9).

  The ultimate resolution of these matters may result in the realization of
assets and satisfaction of liabilities outside the normal course of business.


Results of Operations

Overview.

Net loss for the third quarter of fiscal 2002 was ($200,471), or ($7.33) per
diluted share versus net income of $3,968, or $0.15 per diluted share last year.
Net loss for the nine months ended December 31, 2001 was ($240,211) or ($9.03)
per diluted share versus net loss of ($19,921) or $(0.88) per diluted share last
year. Included in the consolidated net loss for the quarter ended December 31,
2001 is a non-cash charge of $105,000 for goodwill impairment resulting from our
evaluation of third quarter results for the Network Power business and our
expectations that the current depressed telecommunication markets will not
recover to fiscal year 2001 levels.

 Three months ended December 31, 2001 compared with the three months ended
 December 31, 2000.

  Net Sales

  Net sales were $633,194 in the third quarter of fiscal 2002 versus $764,385 in
the third quarter of fiscal 2001. The decrease in net sales was due to sales
declines in all three of the Company's business segments. Currency positively
impacted net sales by $7,213.

  Net sales in the Transportation segment were $408,440 in the third quarter of
fiscal 2002 versus $476,460 in the third quarter of fiscal 2001. Transportation
revenues in North America declined due to reduced unit volumes caused by the
following events: 1) Our decision to discontinue certain less profitable
aftermarket accounts in North America, which impacted sales volumes beginning in
the first quarter of fiscal 2002; 2) Volume losses attributable to difficulties
in meeting certain second quarter customer orders as plants and product lines
continued to be integrated due to the GNB acquisition which culminated with
certain customers switching all or a portion of their requirements to other
suppliers; 3) Unseasonably mild weather throughout North America that
negatively impacted consumer demand; 4) Two battery retailers, Kmart and Quality
Stores are experiencing financial difficulties that negatively impacted their
order volumes; and 5) The general downturn in the economy extenuated by the
September 11th crisis.

                                       27
<PAGE>

  Motive Power sales for the third quarter of fiscal 2002 were $120,417 versus
$127,206 in the third quarter of fiscal 2001. The decrease was due to general
softness in the overall economies in Motive Power's two major markets: The
United States and Western Europe.

     Network Power sales for the third quarter of fiscal 2002 were $104,337
versus $160,719 in the third quarter of fiscal 2001. The lower sales volumes
were a direct result of the significantly weaker telecommunications markets.

     Gross Profit

     Gross profit was $121,902 in the third quarter of fiscal 2002 versus
$182,296 in the third quarter in the prior year. The gross profit margin
decreased to 19.3% in the third quarter of fiscal 2002 from 23.8% in the third
quarter of fiscal 2001, primarily due to the lower sales volumes and higher
operating costs. Gross profit was also negatively impacted by a charge of
$15,500 related to the increased reserves for purchase commitments(see Note 10)
and a charge to writedown excess inventories by approximately $10,000 recorded
as a result of the Company's ongoing reorganization efforts (see Notes 8 and 9).

  Further explanation of these charges are detailed in the analysis of the gross
profit variances for each business segment. Stronger European currencies versus
the U.S. dollar impacted gross profit by approximately $2,362.

  Transportation gross profit was $69,890 in the third quarter versus $98,568
last year. Lower North American sales volumes combined with a planned reduction
in the production schedule in the last month of the quarter to bring inventory
levels in balance with expected future demand resulted in higher operating
costs. Gross profit was further reduced by the $15,500 charge to costs of sales
to increase reserves for purchase commitments (See Note 10) and a charge to
writedown excess inventories by approximately $3,000 from ongoing inventory
rationalization efforts.  Gross margins were 17.1% in the current year versus
20.7% in the prior year. We expect that fourth quarter gross profit margins will
also be negatively impacted as we further reduce our North American production
schedules to bring inventories in balance with projected demand for the first
quarter of fiscal 2003.

  Motive Power gross profit was $31,637 this quarter versus $36,212 in the same
quarter last year. The decrease was due to lower sales volumes, an unfavorable
sales mix (smaller size battery systems) and higher production costs related to
under-absorption of fixed overheads. Gross profit was further reduced by an
approximate $4,000 charge to writedown excess inventories in connection with our
company-wide program to significantly reduce inventories. Gross margin as a
percent of net sales was 26.3% in the current year versus 28.5% last year. We
expect that fourth quarter gross profit margins will also be negatively impacted
as we further reduce our production schedules to bring inventories in balance
with projected demand for the first quarter of fiscal 2003.

  Network Power gross profit was $20,375 this quarter versus $47,516 in the same
quarter last year. The decrease was due to significantly weaker demand in the
telecommunications market and higher production costs related to under-
absorption of fixed overheads. In addition, the production schedule was reduced
in the third quarter of fiscal 2002 to reduce on hand finished goods
inventories. Gross profit margins were also negatively impacted by changes in
sales mix and reduced sales of our higher margin 2volt cells, and inventory
related charges of $3,000 to writedown excess inventories in connection with our
company-wide program to significantly

                                       28
<PAGE>

reduce inventories and a $2,200 charge to write-off inventory in our operation
in China. Gross margin as a percent of net sales was 19.5% in the current year
versus 29.6% last year. We expect that fourth quarter gross profit margins will
continue to be negatively impacted as we further reduce our production schedules
to bring inventories in balance with projected demand for the first quarter of
fiscal 2003.

  Operating Expenses. Operating expenses increased from $146,660 in fiscal 2001
to $272,687 in fiscal 2002. Included in operating expense are restructuring
charges of $9,181 last year and $13,626 this year. Fiscal 2002 operating
expenses were negatively impacted by the goodwill impairment of Network Power by
$105,000. Fiscal 2002 operating expenses were favorably impacted by the
Company's cost-reduction programs and the elimination of goodwill amortization
due to the adoption of FAS 142 "Goodwill and Other Intangible Assets". Also,
stronger European currencies unfavorably impacted operating expenses by
approximately $1,240 in fiscal 2002.

  Transportation operating expenses increased from $75,867 in fiscal 2001 to
$85,456 in fiscal 2002. The increase was principally attributed to a $12,600 bad
debt provision on our pre-petition outstanding receivable as a result of Kmart's
Chapter 11 bankruptcy filing in January 2002 and currency exchange losses in our
Canadian operation caused by the weak Canadian dollar. Operating expenses were
favorably impacted by headcount reductions taken over the past twelve months
including the actions announced in the second and third quarters of fiscal 2002.

  Motive Power operating expenses decreased slightly from $31,269 in fiscal 2001
to $30,489 in fiscal 2002, principally from headcount reductions taken over the
past twelve months including the actions announced in the second and third
quarters of fiscal 2002.

  Network Power operating expenses increased from $28,968 in fiscal 2001 to
$142,061 in fiscal 2002. Fiscal 2002 Network Power operating expenses include
the goodwill impairment charge of $105,000. Operating expenses are otherwise
higher due to a provision for bad debts related to our operations in China of
$3,400, with  certain of our customers in China have recently experienced
financial setbacks with the global slowdown of the telecommunications markets.

  Unallocated operating expenses were $10,556 in fiscal 2001 versus of $14,682
in fiscal 2002. The increase is due primarily to the expenses related to the
Company's operational restructuring programs and capital structure review
partially offset by the elimination of goodwill amortization in the current
period versus goodwill amortization of $3,780 in the third quarter of fiscal
2001.

  Operating loss was $150,785, or (23.8)% of net sales in fiscal 2002 third
quarter, versus operating income of $35,636, or 4.7% of net sales due to the
items discussed above.

  Transportation operating loss was $15,566, or (3.8)% of net sales this year,
versus operating income of $22,701, or 4.8% of net sales last year, due to the
items discussed above.

  Motive Power operating income was $1,148, or 1.0% of net sales this year,
versus $4,943, or 3.9% of net sales last year, due to the items discussed above.

  Network Power operating loss was $121,686, or (116.6)% of net sales this year,
versus operating income of $18,548, or 11.5% of net sales last year, due to the
items discussed above.

  Interest expense, net increased $865 from $34,597 in fiscal 2001 to $35,462 in
fiscal 2002. The increase in interest expense is principally attributed to

                                       29
<PAGE>

accelerated amortization of deferred financing fees of $4,900 recognized during
the third quarter of fiscal year 2002, partially offset by lower average
interest rates. The additional amortization was a result of the Company on
January 4, 2002, securing a waiver from its senior lenders through April 12,
2002 of certain covenants contained in its Senior Secured Global Credit
Facility. As a result, the company has shortened the amortization period to
coincide with the expiration of the waiver.

  Other expense, net was $5,676 in the third quarter of fiscal 2002 versus other
income, net of $8,718 in the third quarter of fiscal 2001. The change was
primarily due to other income in the prior year including a gain of $13,000 from
the sale of an equity affiliate, refinancing costs incurred in connection with
debt waivers obtained in the current year and higher losses on sales of
receivables.

  In the third quarter of fiscal 2002, an income tax provision of $8,262 was
recorded on a loss of $191,923. In fiscal 2001, income tax provision of $5,279
was recorded on income of $9,757. The effective tax rate was (4.3)% and 54.0% in
the third quarter of fiscal 2002 and fiscal 2001, respectively.

  The effective tax rate for the third quarter of fiscal year 2002 was impacted
by recognition of valuation allowances on tax benefits generated from current
period loses, in both the United States and certain international regions, as
well as the nondeductibility of the Network Power goodwill impairment charge.

  A net loss of $200,471 in the third quarter of fiscal 2002 versus net income
of $3,968 in the third quarter of fiscal 2001 resulted from the items discussed
above.

 Nine months ended December 31, 2001 compared with the nine months ended
 December 31, 2000.

  Net Sales

  Net sales were $1,888,677 for the first nine months of fiscal 2002 versus
$1,724,359 for the same period last year, due to the inclusion of GNB's
operations in fiscal 2002. GNB's net sales for the first six months of fiscal
2001 were $489,315. This increase resulting from GNB's operations was offset
primarily by lower sales volumes in all three of the Company's business
segments. Net sales were also negatively impacted by $22,308 due to the weaker
Euro.

  Transportation net sales were $1,180,655 for the first nine months this year
versus $1,104,822 in the same period last year. The increase is due to the
inclusion of GNB's operations in fiscal 2002. GNB's net sales for the first six
months of fiscal 2001 was $267,521. The increase resulting from GNB's operations
was offset primarily by lower sales volume in North America due to reduced unit
volumes caused by the following events: 1) Our decision to discontinue certain
less profitable aftermarket accounts in North America, which impacted sales
volumes beginning in the first quarter of fiscal 2001; 2) Volume losses
attributable to difficulties in meeting certain second quarter customer orders
as plants and product lines continued to be integrated due to the GNB
acquisition which culminated with certain customers switching all or a portion
of their requirements to other suppliers; 3) Unseasonably mild weather
throughout North America that negatively impacted consumer demand; 4) Two
battery retailers, Kmart and Quality Stores are experiencing financial
difficulties that negatively impacted their order volumes; and 5) The general
downturn in the economy extenuated by the September 11th crisis.

  Motive Power sales for the first nine months of fiscal 2002 were $362,316
versus $313,289 in the same period last year. GNB's net sales for the first six

                                       30
<PAGE>

months of fiscal 2001 was $74,302. The increase is due to the inclusion of GNB's
operations in fiscal 2002. The increase resulting from the GNB acquisition was
offset by lower sales volumes due to the general softness in the overall
economies in Motive Power's two major markets:  The United States and Western
Europe.

     Network Power sales for the nine months of fiscal 2002 were $345,706 versus
$306,248 in the same period last year. GNB's net sales for the first six months
of fiscal 2001 was $147,499. The increase is due to the inclusion of GNB's
operations in fiscal 2002. The increase resulting from the GNB acquisition was
offset by the significantly weaker demand in the telecommunications market.

     Gross Profit

     Gross profit was $412,640 in the first nine months of fiscal 2002 versus
$441,137 in the same period last year. GNB's gross profit was $89,155 in the
first six months of fiscal 2001.  The gross profit margin decreased to 21.8% in
the first nine months of fiscal 2002 from 25.6% in the first nine months of
fiscal 2001 primarily due to the addition of the less profitable GNB
Transportation business, reduced sales volumes, higher production costs related
to under-absorption of fixed overheads and certain fiscal 2002 purchase
commitments and inventory charges. Weaker European currencies versus the U.S.
dollar impacted gross profit by approximately $5,144.

  Transportation gross profit was $214,980 in the first nine months of fiscal
2002 versus $255,309 last year. GNB's gross profit was $16,220 in the first six
months of fiscal 2001. Lower North American sales volumes combined with higher
production and logistics costs due to plant and product line integration, and a
planned reduction in the production schedule in the last month of the third
quarter to bring inventory levels in balance with expected future demand
impacted results. Gross profit was further reduced by a $15,500 charge to costs
of sales to increase reserves for purchase commitments (See Note 10) and charges
to writedown excess inventories of approximately $3,000 from ongoing inventory
rationalization efforts. Gross margins were 18.2% in the current year versus
23.1% in the prior year. We expect that fourth quarter gross profit margins will
also be negatively impacted as we further reduce our North American production
schedules to bring inventories in line with projected demand for first quarter
of fiscal 2003.

  Motive Power gross profit was $100,558 this year versus $97,969 last year.
GNB's gross profit was $17,889 in the first six months of fiscal 2001. The
addition of GNB's gross profit was offset by lower sales volumes and higher
production costs related to under-absorption of fixed overheads. Gross margin as
a percent of net sales was 27.8% in the current year versus 31.3% last year. The
addition of higher margin GNB Motive Power products was offset by higher
production costs related to under-absorption of fixed overheads, pricing
pressures and an unfavorable product mix.

  Network Power gross profit was $97,102 this year versus $87,859 last year.
GNB's gross profit was $55,046 in the first six months of fiscal 2001. The
addition of GNB's gross profit was offset by lower sales volumes and higher
production costs related to under-absorption of fixed overheads. In addition
gross profit was negatively affected by a $3,000 charge to writedown excess
inventories in connection with our company-wide program to significantly reduce
inventories and a $2,200 million charge to write-off inventory in our operation
in China. Gross margin as a percent of net sales was 28.1% in the current year
versus 28.7% last year. The decline in gross profit margins was the result of
higher production costs related to the under absorption of fixed overheads,
pricing pressure and an unfavorable product mix. The third quarter fiscal 2002
charges described above, were partially offset by the addition of higher margin
GNB Network Power products.

                                       31
<PAGE>

     Operating Expenses. Operating expenses increased from $384,316 in fiscal
2001 to $516,281 in fiscal 2002. Fiscal 2002 operating expenses included the
goodwill impairment of Network Power of $105,000. Included in operating expenses
are restructuring charges of $39,181 last year and $24,684 this year. GNB had
$169,983 operating expenses in the first six months of fiscal 2001. Fiscal 2002
operating expenses were favorably impacted by the Company's cost-reduction
programs and the elimination of goodwill amortization due to the adoption of FAS
142. Also, weaker European currencies favorably impacted operating expenses by
approximately $5,768 in fiscal 2002.

     Transportation operating expenses decreased from $229,146 in fiscal 2001 to
$220,778 in fiscal 2002. GNB had $31,914 of Transportation operating expenses in
the first six months of fiscal 2001. The decrease in operating expenses are a
result of savings from the headcount reductions taken over the past twelve
months including the actions announced in the second and third quarters of
fiscal 2002 offset by the increase from GNB operations, a $12,600 million bad
debt provision on our pre-petition outstanding receivable as a result of Kmart's
Chapter 11 bankruptcy filing in January 2002 and currency exchange losses in our
Canadian operation caused by the weak Canadian dollar.

     Motive Power operating expenses increased from $75,510 in fiscal 2001 to
$87,644 in fiscal 2002. GNB had $12,509 of Motive Power operating expenses in
the first six months of fiscal 2001. Offsetting the inclusion of GNB operations
were savings from the headcount reductions taken over the past twelve months
including the actions announced in the second and third quarters of fiscal 2002.

     Network Power operating expenses increased from $59,350 in fiscal 2001 to
$198,024 in fiscal 2002. Fiscal 2002 Network Power operating expenses include
the goodwill impairment of $105,000. GNB had $17,856 of Network Power operating
expenses in the first six months of fiscal 2001. The remaining increase was due
to the inclusion of GNB operations and a provision for bad debts related to our
operations in China of $3,400, recognized in the third quarter of fiscal 2002.

     Unallocated operating expenses were $20,310 in fiscal 2001 versus $9,835 in
fiscal 2002. GNB had $458 of unallocated operating expenses in the first six
months of fiscal 2001. Current year operating expense includes a gain of $8,185
due to the Lion Compact Energy agreement termination. The decrease is also
impacted by the elimination of goodwill amortization in fiscal 2002. Goodwill
amortization was $10,870 in the first nine months of fiscal 2001.

     Operating loss was $103,641, or (5.5)% of net sales versus operating income
of $56,821, or 3.3% of net sales of last year due to the items discussed above.

     Transportation operating loss was $5,798, or (0.5)% of net sales this year,
versus operating income of $26,163, or 2.4% of net sales last year, due to the
items discussed above.

     Motive Power operating income was $12,914, or 3.6% of net sales this year,
versus operating income of $22,459, or 7.2% of net sales last year, due to the
items discussed above.

     Network Power operating loss was $100,922, or (29.2)% of net sales, this
year versus operating income of $28,509, or 9.3% of net sales, last year due to
the items discussed above.

     Interest expense, net increased $17,500 from $85,154 to $102,654 due to
interest charges related to the GNB acquisition financing and the accelerated
amortization

                                       32
<PAGE>

of deferred financing fees of $4,900 recognized during the third quarter of
fiscal year 2002. The additional amortization was a result of the Company on
January 4, 2002, securing a waiver from its senior lenders through April 12,
2002 of certain covenants contained in its Senior Secured Global Credit
Facility. As a result, the company has shortened the amortization period to
coincide with the expiration of the waiver.

     Other expense, net was $23,861 in the first nine months of fiscal 2002
versus other income, net of $4,887 in the same period last year. The change was
primarily due to $13,873 of charges related to debt for equity exchanges in the
current year, refinancing costs incurred in connection with debt waiver obtained
in the current year, higher losses on sales of receivables, offset by gains on
asset sales of $1,391.

     In the first nine months of fiscal 2002, an income tax provision of $8,991
was recorded on a loss of $230,156. In fiscal 2001, an income tax benefit of
$4,730 was recorded on a loss of $23,446.

     The effective tax rate for the first nine months of fiscal year 2002 was
impacted by the recognition of valuation allowances on tax benefits generated
from current period losses in both the United States and certain international
regions, the tax treatment of the debt for equity exchanges and the Lion Compact
Energy agreement termination as well as the non-deductibility of the Network
Power goodwill impairment charge.

     A net loss of $240,211 in fiscal 2002 versus a net loss of $19,921 in the
same period last year, resulted from the items discussed above.

Acquisition of GNB

     As discussed in Note 7, on September 29, 2000, the Company acquired the
global battery business of GNB, a leading U.S. and Pacific Rim manufacturer of
both industrial and automotive batteries, for consideration of approximately
$379,000 (including $344,000 in cash and 4,000 of the Company's common shares)
plus assumed liabilities. The 4,000 common shares issued in connection with this
acquisition were valued at approximately $9.00 per common share (or $35,000),
which was the average price per share of the Company's common stock when the
terms of the acquisition were agreed to and announced on May 9, 2000.

     The Company financed the cash portion of the purchase price, including
associated fees and expenses, through an additional $250,000 term loan under its
existing Senior Facility, and $100,000 of securitized GNB accounts receivables.
The Company also issued warrants to acquire 1,286 common shares with an exercise
price of $8.99 per share in conjunction with the term loan financing. These
warrants are immediately exercisable. The warrants were valued using Black
Scholes model with the following assumptions:

          Exercise Price             $8.99 per common share
          Expected Term               5.5 years
          Expected Volatility         34%
          Risk Free Interest Rate     5.92%
          Annual Dividend Yield       0.88%
          Grant Date Stock Price     $9.0625 per common share

Liquidity and Capital Resources

     Capital Structure

                                       33
<PAGE>

     On January 4, 2002, the Company secured a waiver from its Senior Facility
lenders through April 12, 2002 for noncompliance as to certain financial
covenants. In connection with securing this waiver, certain additional security
interests were provided to the senior lenders. In accordance with generally
accepted accounting principles, the Company classified the long-term portion of
this debt, approximately $669,651 at December 31, 2001, as short-term as it is
probable the Company will not be in compliance with these covenants upon
expiration of the waivers in April 2002. See Note 9 for further discussion of
our restructuring program and capital structure review.

     In the third quarter of fiscal 2002, Standard & Poor's downgraded the
credit and debt ratings of the Company to "CCC" from "B-minus" and reduced the
Company's senior unsecured rating to "CC" from "CCC" and Exide's senior secured
bank loan to "CCC" from "B-minus". Further, Exide's subordinated debt rating was
lowered to "CC" from "CCC". The Company is currently on S&P's "Credit Watch".

     Moody's also downgraded the credit and debt ratings of the Company to
"Caa2" from "B3" and reduced the Company's senior unsecured rating to "Caa2"
from "B3" and Exide's senior secured bank loan to "Ca" from "B3". Exide's
subordinated debt rating was lowered to "C" from "Ca".

     As a result of these downgrades, the counterparty to the Company's domestic
receivables sale facility has taken the position that it has the right to
terminate such facility. At this point it has not given notice of termination,
but instead has put the facility on a daily, rather than monthly, settlement
basis. Termination of this facility would require the Company to seek other
sources of accounts receivable financing. The Company's $175,000 European
securitization program expires on June 30, 2002. The Company may not be able to
renegotiate the European securitization program on terms acceptable to the
Company.

     The Company is currently developing an operational restructuring plan to
generate cost savings and enhance liquidity. (See Notes 8 and 9)

     The Company has retained Jay Alix Services LLC to support its restructuring
efforts. A principal at Jay Alix, was named Chief Financial Officer and Chief
Restructuring Officer of Exide on October 26, 2001. Additionally, the Company is
working with an investment-banking firm, The Blackstone Group, to assist
management in evaluating its capital structure and related strategic
alternatives.

     To implement the reorganization plan under development, and to fund
associated restructuring costs and operating losses, the Company will be
required to restructure certain of its outstanding debt and other financing
arrangements. In connection with that plan and as a condition to the waiver from
its senior lenders, the Company is required to present its preliminary five year
business plan to the senior lenders by February 28. (See Notes 1, 12, and 14 for
a description of certain debt and financing arrangements). A number of
alternatives including out-of-court and in-court financial restructurings, are
being considered. Management believes that under any restructuring scenario, the
Company's common stock would likely be subject to massive dilution as a result
of the conversion of debt to equity or otherwise. Moreover, there can be no
assurance as to what value, if any, would be ascribed to the Company's Common
Stock in a restructuring. In addition, the Company's senior notes and
convertible subordinated notes could suffer substantial impairment in a
restructuring. Due to a number of uncertainties, many of which are outside the
control of the Company, there can be no assurance that the Company will be able
to consummate its operational or financial reorganization plans.

     In July 2001, the Company completed debt-for-equity exchanges where
approximately $30,000 face value of the Notes were exchanged for approximately
1,900 shares of common stock. Since these exchanges involve a convertible
security, the Company recognized a non-cash charge in the second quarter
equivalent to the market value of the shares issued in excess of the original
conversion ratio of the

                                       34
<PAGE>

Notes of $13,873, including advisory fees. The non-cash charge was included in
the "Other (income) expense" line of the consolidated statement of operations.
The carrying value of the Notes was $25,539. The Company reduced debt and
increased shareholders' equity by $25,539 as a result of the transaction.

     Sources of Cash

     The Company's liquidity requirements have been met historically through
operating cash flows, borrowed funds and the proceeds of sales of accounts
receivable and sale-leaseback transactions. Additional cash has been generated
in recent years from the sale of non-core businesses and assets. The Company has
a U.S. receivables purchase agreement and a European receivables purchase
agreement under which third parties have committed, subject to certain
exceptions, to purchase selected accounts receivable, up to a maximum commitment
of $200,000 and $175,000, respectively. The recent bankruptcy of Kmart has
negatively affected our access to liquidity under the U.S. Securitization
program and as a major customer may further impact net sales.

     Cash flows provided by operating activities were $976 (net of $1,237
related to the net change from sales of receivables) in the first nine months of
fiscal 2002. This compares to cash flows provided by operating activities of
$89,961 (of which $161,821 related to the net change from sales of receivables)
in the same period of fiscal 2001. Primary working capital (inventories plus
receivables less accounts payable) at December 31, 2001 was $512,287, as
compared to $671,261 at December 31, 2000. Primary working capital year on year
decreased $130,123, excluding currency impacts and divestitures. The reduction
in working capital resulted from weakness in each of the Company's reporting
segments and ongoing working capital improvement programs initiated in
connection with the Company's operational and restructuring efforts. Due to
recent operating losses and cash flow constraints in the North America
operations, in the future there can be no assurance that the Company will be
able to obtain trade credit on terms traditionally obtained.

     The Company generated $4,833 and $36,919 in cash from the sale of non-core
businesses and other assets in fiscal 2002 and fiscal 2001, respectively.
Proceeds from these sales were primarily used to reduce debt. No significant
proceeds from the sale of non-core assets are currently expected during the
remainder of fiscal 2002.

     Total debt at December 31, 2001 was $1,405,770, as compared to $1,347,046
at March 31, 2001. See Note 12 for composition of debt.

     Availability under our credit line was $31,689 at December 31, 2001.
Increases in interest rates on such obligations could also adversely affect our
results of operations and financial condition. Weighted average interest rates
on the Company's pre-GNB acquisition Senior Facility debt increased
approximately 1.5% due to the negotiated higher rates in conjunction with the
financing for the GNB acquisition. Interest rates on the Global Credit
Facilities Agreement is based on LIBOR plus 5.25% for the Term B portion and
LIBOR plus 4.75% for the Term A portion and the revolving credit facility.

     Uses of Cash

     The Company's liquidity needs arise primarily from the funding of working
capital needs, obligations on indebtedness and capital expenditures. Because of
the seasonality of our business, more cash has been typically generated in our
third and fourth fiscal quarters than the first and second quarters. Our
greatest cash demands from operations have historically occurred during the
months of June

                                       35
<PAGE>

through October. However, less cash was generated in this year's third quarter
than historically experienced due to our lower general sales volume levels.
Also, we lost 100% of our Les Schwab account and certain regional business with
Wal-Mart due to our previously discussed inability to meet certain customer
orders in the second quarter. Total lost volume is estimated to be 1.8 million
units annually.

     Capital expenditures were $53,466 and $38,248 in the first nine months of
fiscal 2002 and fiscal 2001, respectively. Capital expenditures are expected to
decline significantly during the remainder of fiscal 2002.

     Exide's Board of Directors has suspended the Company's quarterly common
stock dividend of $0.02 per share as of November 8, 2001.

     Adjusted EBITDA

     As reported earnings before interest, taxes, depreciation and amortization
(EBITDA), excluding losses on sales of receivables, was $(128,609) and $(41,206)
for the three and nine months ended December 31, 2001, respectively, versus
$79,040 and $142,611 in the same periods for the prior year. The Adjusted EBITDA
calculation is summarized as follows:

<TABLE>
<CAPTION>
     --------------------------------------------------------------------------------------
                 Adjusted                   Three         Three         Nine         Nine
                  EBITDA                    Months        Months       Months       Months
                                            Ended         Ended        Ended        Ended
                                           December      December     December     December
                                           31, 2001      31, 2000     31, 2001     31, 2000
     --------------------------------------------------------------------------------------
     <S>                                  <C>            <C>         <C>           <C>
     Operating income (loss)              $(150,785)      $35,636    $(103,641)    $ 56,821
     --------------------------------------------------------------------------------------
     Other (income) expense, net              5,676        (8,718)      23,861       (4,887)
     --------------------------------------------------------------------------------------
     Depreciation and amortization           24,656        29,184       75,763       69,714
     --------------------------------------------------------------------------------------
     Loss on the sales of receivables         3,196         5,502       10,533       11,189
     --------------------------------------------------------------------------------------
     Adjusted EBITDA                      $(128,609)      $79,040    $ (41,206)    $142,611
     --------------------------------------------------------------------------------------
</TABLE>

     The definition of EBITDA shown above may not be comparable to similarly
titled measures reported by other companies. Adjusted EBITDA, as calculated by
the company is traditional EBITDA (that is earnings before interest, taxes,
depreciation of property, plant and equipment, amortization of goodwill and
other amortization). adjusted to exclude losses on the sale of receivables.
Losses on and expenses associated with the sale of receivables (included in the
"other (income) expense, net" line of the consolidated statement of operations)
represents financing costs of the company (in effect interest cost) and are
appropriately excluded from the Company's EBITDA calculation. Adjusted EBITDA
should not be considered an alternative to net income as an indicator of the
Company's operating performance or to cash flows as a measure of liquidity, both
determined in accordance with generally accepted accounting principles.

     Restructuring Activities

     The Company previously implemented certain restructuring activities as part
of an overall program to reduce costs, eliminate excess capacity and improve
cash flows, including activities in connection with the GNB acquisition.

     Fiscal Year 2002

                                       36
<PAGE>

     In August 2001, the Company announced plans to eliminate 1,300 positions.

     In November 2001, the Company announced further plans to reduce the
salaried workforce by approximately 1,100 jobs and recorded a non-cash charge of
$5,369 for the writedown of machinery and equipment at the Maple, Ontario
manufacturing operation, which will now not be reopened as a Network Power
facility, given the continued downturn in the Network Power business and
telecommunications market.

     In connection with the second and third quarter fiscal 2002 workforce
reduction programs and Maple closure, the Company recorded severance related
restructuring charges of $11,058 and $8,257 respectively.

     The Company is continuing to move forward with operational changes designed
to streamline and rationalize Exide's structure in an effort to simplify the
organization and eliminate redundant and/or unnecessary overhead. The Company is
working towards reducing its salaried workforce by approximately 20% by the end
of fiscal year 2002. The Company expects to record additional restructuring
charges during the remainder of fiscal 2002.

     Fiscal Year 2001

     With respect to historical Exide employees, contracts and facilities, the
Company recorded restructuring charges aggregating $97,400 in fiscal 2001. These
charges principally resulted from actions taken in connection with the
integration of the operations of the Company and GNB, the exiting of certain
customer relationships and elimination of combined excess capacity, as well as
ongoing cost reduction initiatives worldwide. The charges consisted of $29,200
in severance costs, $39,509 in asset write-downs and $28,691 in closure costs.

The fiscal 2001 restructuring charges comprised the following:

     .  the closure of the Burlington automotive battery plant in the U.S.

     .  workforce reductions at the Cwmbran, Wales and Duisburg, Germany
        manufacturing facilities in Europe

     .  the reorganization of the Company's European Transportation business
        sales and logistic work force, resulting in elimination of approximately
        800 positions

     .  the closing or sale of 27 of the Company's distribution facilities,
        principally in North America

     .  the consolidation of the Company's European accounting activities into a
        shared services operation

     .  the closure of the Maple, Ontario automotive manufacturing operations

     .  the closure of certain branches and offices

     severance and other costs for reductions in staff.

     GNB Acquisition

     Coincident with the acquisition of GNB the Company began formalization of
restructuring plans involving the closure and rationalization of certain
facilities. With respect to acquired GNB employees, contracts and facilities, in
fiscal 2001, the Company closed the Dallas, Texas and Dunmore, Pennsylvania
facilities, and certain distribution centers and sales branches. The Company
included $28,800 of restructuring reserves for severance and closure costs in
the GNB purchase accounting allocation for these actions.

     The Company included an additional $35,000 as part of GNB purchase
accounting allocation for certain fixed asset writedowns due to planned plant
and the recognition of distribution rationalizations in the second quarter of
fiscal 2002.

                                      37
<PAGE>

     During fiscal 2001, the Company also announced the closures of the Dallas,
Texas and Dunmore, Pennsylvania facilities and certain GNB distribution centers
and sales branches. The Company included $28,800 of restructuring reserves for
severance and closure cost in the GNB purchase accounting allocation for these
actions.

     Fiscal Year 2002

     The Company recorded restructuring charges of $39,336 in fiscal 2000,
consisting of $20,000 in severance benefits and $19,336 for targeted plant and
branch closings.

     The charges related to the:

     .  closure of the Reading, Pennsylvania plant

     .  closure of six branches in the U.S. and

     .  headcount reductions of 168 employees in the U.S. and Europe.

     Summary

     Summarized restructuring reserve activity for these programs are as
     follows:

<TABLE>
<CAPTION>
                                                             Severance       Closure        Asset
                                                               Costs          Costs      Writedowns       Total
                                                            ----------     ----------    ----------     ----------
<S>                                                         <C>            <C>           <C>            <C>
Balance at March 31, 2001................................   $   35,553     $   44,564    $        -     $   80,117
Fiscal 2002 charges to income............................       16,597          2,718         5,369         24,684
Fiscal 2002 charges to GNB opening balance sheet.........          600            800        35,000         36,400
Payments and charge-offs.................................      (22,865)       (14,337)      (40,369)       (77,571)
Currency changes.........................................        1,046          1,412             -          2,458
                                                            ----------     ----------    ----------     ----------
Balance at December 31, 2001.............................   $   30,931     $   35,157             -     $   66,088
                                                            ==========     ==========    ==========     ==========
</TABLE>

     The current portion of this reserve is approximately $35,400 at December
31, 2001. Remaining expenditures principally represent (i) severance and related
benefits payable, per employee agreement over periods up to three years and or
regulatory requirements (ii) severance obligations in dispute with the former
management team (iii) lease commitments for certain closed facilitites,
branches, and offices, as well as leases for excess and permanently idle
equipment payable in accordance with contractual terms, over periods up to five
years and (iv) certain other closure costs including dismantlement and costs
associated with removal obligations incurred in connection with the exit of
facilities.

     Financial Instruments and Market Risk

     The Company uses financial instruments, including fixed and variable rate
debt as well as swap, forward and option contracts to finance its operations and
to hedge interest rate currency and certain lead purchasing requirements. The
swap, forward, and option contracts are entered into for periods consistent with
related underlying exposures and do not constitute positions independent of
those

                                       38
<PAGE>

exposures. The Company does not enter into contracts for speculative purposes
nor is it a party to any leveraged instruments.

     The Company's ability to utilize financial instruments has recently been
restricted because of the tightening of credit availability with counterparties.
Accordingly, the Company is now exposed to greater risk with respect to its
ability to manage exposures to fluctuations in foreign currencies, interest
rates, and lead prices.

     During 2001, we had two currency and interest rate swap agreements, which
effectively converted $110,500 of borrowings under the Senior Secured Global
Credit Facilities Agreement and certain intercompany loans into 406,200 French
Francs (U.S. $68,500) and 25,200 British pounds sterling (U.S. $42,000). We
received LIBOR and paid PIBOR and pound sterling LIBOR. The Company terminated
these agreements on December 27, 2000 and received a cash payment of 13,700
Euros and 3,300 British pounds sterling, respectively. There was no impact on
the consolidated statements of operations related to these terminations.
Simultaneously, the Company entered into two six-month forward contracts to
continue to hedge these transactions. During the third quarter of fiscal 2002
the Company discontinued hedging these transactions with forward contracts.

     During the fourth quarter of fiscal 2000 the Company assigned 382,500
French Francs (U.S. $64,500) of its then existing currency and interest rate
swap agreement to a new counter party and received a cash payment of 8,500
Euros. Simultaneously, the Company entered into a new 66,800 Euro (U.S. $64,500)
one-year currency and interest rate hedge agreement. The Company terminated this
agreement in the second quarter of fiscal 2001 and received a cash payment of
6,200 Euros. There was no impact on the consolidated statements of operations
related to these terminations. Simultaneously, the Company entered into a new
73,100 Euro (U.S. $64,500) one-year currency and interest rate hedge agreement
with this same counter party. The Company receives LIBOR plus 2.25% and pays
Euro LIBOR plus 2.27%. The Euro principal amount is reset quarterly. This swap
matures in October 2001 and was replaced with a forward contract. The Company
discontinued hedging these transactions with forward contracts.

     On October 18, 2000, we entered into a $60,000 two year interest rate swap
agreement for which we pay a quarterly fixed rate of 6.55% and receive a three-
month LIBOR rate (currently 3.59%). This swap hedges a portion of the variable
interest exposure on our $900,000 Global Credit Facilities Agreement Tranche B
Term Loans.

     On January 17, 2001, we entered into an interest rate cap agreement, which
reduces the impact of changes in interest rates on a portion of our floating
rate debt. The cap agreement effectively limits the three-month LIBOR based
interest rate on $70,000 of our U.S. borrowings to no more than 6.5% through
July 17, 2002.

     In fiscal 2001, we entered into certain forward contracts and option
contracts to hedge the purchase price of lead on a portion of the Company's lead
usage being sourced through external purchases. Such contracts are effective
through the fourth quarter of fiscal 2002.

     On April 1, 2001, the Company adopted FAS No. 133 "Accounting for
Derivative Instruments and Hedging Activities", as amended by FAS No. 138
"Accounting for Certain Derivative Instruments and Certain Hedging
Activities". See Note 2 for further discussion.

                                       39
<PAGE>

     Based upon progress to date, we believe that use of the Euro has not and
will not have a significant impact on the manner in which we conduct our
business affairs and process our business and accounting records. Accordingly,
conversion to the Euro has not and is not expected to have a material effect on
our financial condition or results of operations.

Receivables Securitization Programs

     The Company has receivables securitization programs in the United States
(the "US program") and Europe (the "European program"). Cash generated from
these programs is used to provide liquidity requirements to the Company.

     Under the US program, the Company sells certain receivables of the U.S.
Company at a discount on a continuous basis to a consolidated company which, in
turn, sells the same receivables at the same discount to third parties.  The
maximum amount of receivables to be sold under this program at any point in time
is $200,000.

     Under the European program, the Company's European subsidiaries sell
certain receivables on a continuous basis to a consolidated company which in
turn sells the same receivables to third parties. The maximum amount of
receivables to be sold under this program at any point in time is $175,000.

     As discussed under EBITDA above, losses in connection with these programs
are reflected in the other (income) expense, net line item of the consolidated
statement of operations.

       In addition, the counterparty to the Company's domestic receivables sale
facility has taken the position that it has the right to terminate such
facility. At this point it has not given notice of termination, but instead has
put the facility on a daily, rather than monthly, settlement basis. Termination
of this facility would require the Company to seek other sources of accounts
receivable financing. The Company's $175,000 European securitization program
expires on June 30, 2002. The Company may not be able to renegotiate the
European securitization program on terms acceptable to the Company.


     Contractual Obligations and Commercial Commitments

     Information related to the Company's contractual obligations and commercial
commitments are summarized in the following tables:

<TABLE>
<CAPTION>

                                             ------------------------------------------------------------------
                                             ------------------------------------------------------------------
                                Total at       2002      2003       2004       2005       2006      2007 and
                                3/31/01                                                              beyond
<S>                            <C>            <C>       <C>       <C>        <C>        <C>         <C>
Long term debt (b),            1,336,659      28,117    25,001    149,001    482,610    645,366       6,564
including capital
leases
Short-term borrowings             10,387      10,387
Operating Leases                 220,214      54,297    46,761     37,147     29,672     21,258      31,079
Unconditional
Purchase Obligations
(a)                              268,700      32,500    32,800     33,100     33,400     33,700     103,200
                               ---------     -------   -------    -------    -------    -------     -------
Total Contractual
Cash Obligations               1,835,960     125,301   104,562    219,248    545,682    700,324     140,843
                               =========     =======   =======    =======    =======    =======     =======
</TABLE>

                                       40
<PAGE>

     (a)  Reflects the Company's projected annual minimum purchase
          commitment, including penalties under the supply agreement entered
          into as a result of the sale of the Company's separator business;
          amounts may vary based on actual purchases (See Note 10).
     (b)  Does not reflect the classification of indebtedness under the Senior
          Facility as a current obligation (See Note 12)
     (c)  At December 31, 2001, the Company had outstanding letters of credit
          amounting to approximately $28,400, not included above.

     The above contractual commitments are based on information reflected in the
Company's Annual Report on Form 10-K for Fiscal 2001.  No significant changes to
this information have occurred other than debt repayment activity reflected in
the accompanying consolidated statement of cash flows.


Trading Activities

     The Company does not have any trading activity that involves non-exchange
traded contracts accounted for at fair value

Related and Certain Other Parties

     The Company has retained Jay Alix Services LLC to support its restructuring
efforts. A principal at Jay Alix, was named Chief Financial Officer and Chief
Restructuring Officer of Exide on October 26, 2001.

                                       41
<PAGE>

ITEM 3. Quantitative and Qualitative Disclosures About Market Risks.

     Changes to the quantitative and qualitative market risks as of December 31,
2001 are described in Management's Discussion and Analysis - Liquidity and
Capital Resources. Also, see our Form 10-K for the fiscal year ended March 31,
2001 for further information.

                                       42
<PAGE>

CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISION OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

Except for historical information, this report may be deemed to contain
"forward-looking" statements. The Company desires to avail itself of the Safe
Harbor provisions of the Private Securities Litigation Reform Act of 1995 (the
"Act") and is including this cautionary statement for the express purpose of
availing itself of the protection afforded by the Act.

Examples of forward-looking statements include, but are not limited to (a)
projections of revenues, cost of raw materials, income or loss, earnings or loss
per share, capital expenditures, growth prospects, dividends, the effect of
currency translations, capital structure and other financial items, (b)
statements of plans of and objectives of the Company or its management or Board
of Directors, including the introduction of new products, or estimates or
predictions of actions by customers, suppliers, competitors or regulating
authorities, (c) statements of future economic performance and (d) statements of
assumptions, such as the prevailing weather conditions in the Company's market
areas, underlying other statements and statements about the Company or its
business.

The Company's core business, the design, manufacture and sale of lead acid
batteries, and the Company's structure involves risk and uncertainty. Important
factors that could affect the Company's results include, but are not limited to
(i) the Company's ability to implement the operational and financial
reorganization and restructuring plans which it is developing (see Note 8 to the
consolidated financial statements, Management's Discussion and Analysis of
Financial Condition and Results of Operations, and Liquidity and Capital
Resources), (ii) unseasonable weather (warm winters and cool summers) which
adversely affects demand for automotive and some industrial batteries, (iii) the
Company's substantial debt and debt service requirements which restrict the
Company's operational and financial flexibility, as well as imposing significant
interest and financing costs, (iv) the Company is subject to a number of
litigation proceedings, the results of which could have a material adverse
effect on the Company and its business, (v) the Company's assets include the tax
benefits of net operating loss carry forwards, realization of which are
dependent upon future taxable income, (vi) lead, which experiences significant
fluctuations in market price and which, as a hazardous material, may give rise
to costly environmental and safety claims, can affect the Company's results
because it is a major constituent in most of the Company's products, (vii) the
battery markets in North America and Europe are very competitive and, as a
result, it is often difficult to maintain margins, (viii) the Company's
consolidation and rationalization of acquired entities requires substantial
management time and financial and other resources and is not without risk, (ix)
foreign operations involve risks such as disruption of markets, changes in
import and export laws, currency restrictions and currency exchange rate
fluctuations and (x) the Company is exposed to fluctuations in interest rates
on our variable debt which can affect the Company's results. Therefore, the
Company cautions each reader of this report to carefully consider those factors
here-in-above set forth, because such factors have, in some instances, affected
and in the future could affect, the ability of the Company to achieve its
projected results and may cause actual results to differ materially from those
expressed herein.

                                       43
<PAGE>

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

     Former Management Team

     Exide established a $13,400 reserve in fiscal 2000 to cover litigation with
respect to allegations that used batteries were sold as new. The Company has now
resolved these claims, including the third quarter fiscal 2002 settlement of the
sole remaining "legacy" action, Houlihan v. Exide. As a result of the Houlihan
settlement, the Company recorded an additional expense in the third quarter of
fiscal 2002 of $1,400 for reimbursement of legal fees. At December 31, 2001,
there is approximately a $2,500 reserve remaining, representing the Company's
estimate of its remaining battery discount under the Houlihan and other "legacy"
settlements.

     On March 23, 2001, Exide reached a plea agreement with the U.S. Attorney
for the Southern District of Illinois, resolving an investigation of the conduct
of former management. Under the terms of that settlement Exide agreed to a fine
of $27,500 over five years, and agreed to cooperate with the U.S. Attorney in
her prosecution of certain members of the former management team. The payment
terms are dependent upon the Company's compliance with the plea agreement during
the five-year period. Further costs of $1,000 were reversed in the third quarter
of fiscal 2002. The plea agreement has been lodged with the U.S. District Court
for the Southern District of Illinois, which may accept or reject the plea
agreement. Although the court's decision is not expected until February or
March, management does not believe that the final plea agreement will materially
differ from the plea agreement reached with the U.S. Attorney. The Company
reserved $31,000 for this matter, including expected costs and out-of-pocket
expenses in the first quarter of fiscal 2001. At December 31, 2001,
approximately $28,500 of this reserve remains.

     On March 22, 2001, the U.S. Attorney unsealed the indictments of Arthur M.
Hawkins, former Chairman, President & Chief Executive Officer of Exide, Douglas
N. Pearson, the former President, North American Operations of Exide, and Alan
E. Gauthier, the former Chief Financial Officer of Exide, for their conduct
during the time they served as officers of Exide. Superseding indictments were
unsealed in July, 2001. Exide is cooperating fully with the U.S. Attorney in the
criminal prosecution of these former officers. The trial of the former officers
is now scheduled for March 18, 2002.

     Exide is currently involved in litigation with the former members of its
management referenced above. The former management has claims to enforce
separation agreement, reimbursements of legal fees, and other contracts, while
Exide has filed claims and counterclaims asserting fraud, breach of fiduciary
duties, misappropriation of corporate assets and civil conspiracy.

     With respect to these matters, the Company had reserves of $2,100 at
December 31, 2001. Payments of approximately $1,900 were made to its former
management team in prior quarters which were charged against this reserve.

     The company has filed a claim with its insurers for reimbursement of the
amounts paid to its former management team, and expects to obtain substantial
reimbursement for those amounts. However, the Company has not recognized any
receivable for such reimbursements at December 31, 2001.

     On September 17, 1999, Exide sued Sears, Roebuck and Co. in the Circuit
Court of Cook County, Illinois seeking damages for breach of contract in an
amount not less than $15,000. On November 12, 1999, Sears filed a counterclaim
against Exide and a claim against a former Sears purchasing employee alleging
inducement to breach his

                                       44
<PAGE>

fiduciary duty to Sears, common law fraud, aiding and abetting and conspiracy.
In April 2001, the parties reached a settlement-in-principle which will not
require any payments to either party. The parties have executed a final
settlement agreement.

     On June 26, 2000, Johnson Controls, Inc. ("JCI") filed a lawsuit in the
United States District Court for the Northern District of Illinois, Eastern
Division, against Exide and three of its former officers. JCI alleged that
Exide, through Messrs. Hawkins, Gauthier, Pearson and Calio, paid bribes to a
Sears employee, Gary Marks, to induce him to award Sears' 1994 battery supply
contract to Exide rather than JCI, among other claims. On February 14, 2002,
Exide and JCI reached a settlement which requires JCI to withdraw its complaint
with prejudice. The settlement does not require any payment or other
consideration to JCI.

     Hazardous Materials

     Exide is involved in several lawsuits pending in state and federal courts
in South Carolina, Pennsylvania, Indiana, and Tennessee. These actions allege
that Exide and its predecessors allowed hazardous materials used in the battery
manufacturing process to be released from certain of its facilities, allegedly
resulting in personal injury and/or property damage

     In January 2002, the counsel that brought the South Carolina actions filed
additional claims, in the Circuit Court for Greenville County, South Carolina.
The Company's preliminary review of these claims suggest they are without merit,
and the Company plans to vigorously defend itself in these matters. The Company
does not believe any reserves are currently warranted for these claims.

     In January, 2002, the counsel that previously brought claims in South
Carolina actions filed nineteen (19) additional claims, also in the Circuit
Court for Greenville County, South Carolina. These claims are: Antonio Snoddy v.
Exide (Case No. 2002-CP-23-18); Adrian Watson v. Exide (Case No. 2002-CP-23-19);
Demetrius Lewis v. Exide (Case No. 2002-CP-23-20); Jacqueline Grayson v. Exide
(Case No. 2002-CP-23-21); Keonna Mansell v. Exide (Case No. 2002-CP-23-22);
Kavita Mcans v. Exide (Case No. 2002-CP-23-23); Satoya Means v. Exide (Case No.
2002-CP-23-24); Jalisha Dodd v. Exide (Case No. 2002-CP-23-25); Justin Dodd v.
Exide (Case No. 2002-CP-23-26); Lashunda Clark v. Exide (Case No.
2002-CP-23-27); Articka Rice v. Exide (Case No. 2002-CP-23-28); James Dunbar v.
Exide (Case No. 2002-CP-23-29); Cornelius Dallenger v. Exide (Case No.
2002-CP-23-30); Cassandra Rice v. Exide (Case No. 2002-CP-23-31); Tamara
Williams v. Exide (Case No. 2002-CP-23-32); Ashleigh Smith v. Exide (Case No.
2002-CP-23-33); Brittney Scott v. Exide (Case No. 2002-CP-23-34); Olden Fielder,
III v. Exide (Case No. 2002-CP-23-35); Ricky Smith v. Exide (Case No.
2002-CP-23-37).

     GNB Acquisition

     In July 2001, Pacific Dunlop Holdings (US), Inc. ("PDH") and several of its
foreign affiliates (the "Sellers" under the various agreements through which
Exide acquired GNB) filed a breach of contract claim against Exide in the
Circuit Court for Cook County, Illinois. The Sellers maintain they are entitled
to certain additional payments for assets acquired by Exide in the amount of
approximately $17,000 in its acquisition of GNB. Management does not believe
that the Sellers are correct either as to the rights for additional payments
asserted by the Sellers or that any additional amounts are owed. In December,
2001, the Court denied Exide's Motion to Dismiss the Complaint, without
prejudice to re-filing the same motion after discovery proceeds.  Management
remains confident that the claim is without merit.

     In December 2001, PDH filed a separate action in the Circuit Court for Cook
County, Illinois, seeking recovery of $3,100 for amounts allegedly owed by Exide
under various agreements between the parties. The amounts in question all relate
to security for certain workers compensation insurance policies, which cover
claims by former GNB employees. Exide's Answer contested the amounts claimed by
PDH and include counter-claims against PDH and/or its affiliates.

     Other

     The Company is involved in various other claims and litigation incidental
to the conduct of its business. Based on consultation with legal counsel,
management does not believe that any such claims or litigation to which the
Company is a party, either individually or in the aggregate, will have a
material adverse effect on the

                                       45
<PAGE>

Company's financial condition, cash flows or results of operations, although
quarterly or annual operating results may be materially affected.

                                       46
<PAGE>

ITEM 2. Changes in Securities and Use of Proceeds.

None.

ITEM 3. Defaults Upon Senior Securities.

None.

ITEM 4. Submission of Matters to a Vote of Security Holders.

None.

ITEM 5. Other Information.

None.

ITEM 6. Exhibits and Reports on Form 8-K.


Exhibits. None.


Reports on Form 8-K.

On January 15, 2002, the Company filed a report on Form 8-K reporting under Item
5 and Item 7 the Third Amendment and Waiver to the Senior Secured Global Credit
Facility.

                                       47
<PAGE>

SIGNATURE

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

                                    Exide Technologies


                                    By:    /s/  Lisa J. Donahue
                                       ------------------------
                                    Lisa J. Donahue
                                    Vice President, Chief Financial Officer

                                    Date: February 19, 2002

                                       48