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                                                       SEC FILE NUMBER
                                                       CUSIP NUMBER
                                                       33-98828

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

                                 FORM 12b-25

                         NOTIFICATION OF LATE FILING

(Check One):

[X} Form 10-K            [ ] Form 11-K

[ ] Form 20-F            [ ] Form 10-Q             [ ] Form N-SAR

For Period Ended: December 31, 2000
                  --------------------------------------------------------------

[ ] Transition Report on Form 10-K

[ ] Transition Report on Form 20-F

[ ] Transition Report on Form 11-K

[ ] Transition Report on Form 10-Q

[ ] Transition Report on Form N-SAR

For the Transition Period Ended:
                                 -----------------------------------------------

--------------------------------------------------------------------------------
    Read Instruction (on back page) Before Preparing Form Please Print or Type.
--------------------------------------------------------------------------------
    NOTHING IN THIS FORM SHALL BE CONSTRUED TO IMPLY THAT THE COMMISSION HAS
VERIFIED ANY INFORMATION CONTAINED HEREIN.
--------------------------------------------------------------------------------

    If the notification relates to a portion of the filing checked above,
identify the Item(s) to which the notification relates:
                                                        ----------------------

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

                                     PART I
                             REGISTRANT INFORMATION


    Full Name of Registrant Pioneer Corporation of America
                            --------------------------------------------------
    Former Name if Applicable Pioneer Americas, Inc.
                              ------------------------------------------------

    Address of principal executive office (Street and number)
                                                              ----------------
    700 Louisiana Street, Suite 4300
    --------------------------------------------------------------------------

    City, state and zip code Houston, Texas 77002
                             -------------------------------------------------

                                    PART II
                            RULES 12b-25(b) AND (c)

    If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed.  (Check box if appropriate.)

[ ]    (a)  The reasons described in reasonable detail in Part III of this form
            could not be eliminated without unreasonable effort or expense;

       (b)  The subject annual report, semi-annual report, transition report on
            Form 10-K, Form 20-F, 11-K, Form N-SAR, or portion thereof,
[X]         will be filed on or before the 15th calendar day following the
            prescribed due date; or the subject quarterly report or transition
            report on Form 10-Q, or portion thereof will be filed on or
            before the fifth calendar day following the prescribed due date; and

[ ]    (c)  The accountant's statement or other exhibit required by Rule
            12b-25(c) has been attached if applicable.

                                    PART III
                                   NARRATIVE

    State below in reasonable detail the reasons why Forms 10-K, 10-KSB, 11-K,
20-F, 10-Q, 10-QSB, N-SAR or the transition report or portion thereof, could not
be filed within the prescribed time period. (Attach extra sheets if needed.)

    As indicated in reports on Form 8-K filed on December 19, 2000, and
January 8, 2001, the Registrant has defaulted in the payment of principal and
interest that is due under outstanding credit obligations, and it is developing
a financial restructuring plan. It has also entered into discussion with senior
creditors, and its senior officers and other personnel have been required to
devote time and attention to the due diligence efforts by representatives of
the creditors. The structure of the Registrant's financial restructuring plan
has been provided to such representatives, and discussions during the next two
weeks will determine whether there is the basis for a successful restructuring.

    The significant uncertainties surrounding the basis of a restructuring plan
and its implementation have delayed the final determination of the Registrant's
asset carrying values and tax attributes. In addition, the Registrant's staff
has devoted significant efforts to the development of the restructuring plan.
As a result, the Registrant has been unable to complete the preparation of the
annual report on Form 10-K for the year ended December 31, 2001, in a timely
manner.


                                    12b25-1
<PAGE>   2

                                    PART IV
                               OTHER INFORMATION

    (1)  Name and telephone number of person to contact in regard to this
notification.

Kent R. Stephenson                             713                570-3257
--------------------------------------------------------------------------------
     (Name)                                 (Area Code)       (Telephone Number)

    (2)  Have all other periodic reports required under Section 13 or 15(d) of
the Securities Exchange Act of 1934 or Section 30 of the Investment Company Act
of 1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed?  If answer is no,
identify report(s).
                                                             [X] Yes      [ ] No

    (3)  Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be reflected by the
earnings statements to be included in the subject report or portion thereof?

                                                             [X] Yes      [ ] No

     If so, attach an explanation of the anticipated change, both narratively
and quantitatively, and, if appropriate, state the reasons why a reasonable
estimate of the results cannot be made.

     The Registrant's operating loss for the year ended December 31, 2000, was
approximately $11.1 million, compared to an operating loss of $37.0 million for
the prior year. Revenues in 2000 were $335.2 million, compared to 1999 revenues
of $284.3 million. Cost of sales in 2000 increased to $304.4 million from $274.2
million in 1999, while selling, general and administrative expenses decreased to
$41.9 million from $47.1 million. Sharply higher energy costs in 2000 hampered
the expected earnings recovery from the results of historically low prices in
1999 for chlorine and caustic soda, the Registrant's principal products.

                         Pioneer Corporation of America
--------------------------------------------------------------------------------
                  (Name of Registrant as Specified in Charter)

has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.


Date:  04/02/2001               By: /s/ Kent R. Stephenson
     ------------------------      ---------------------------------------------
                                    Kent R. Stephenson, Vice President

INSTRUCTION:  The form may be signed by an executive officer of the registrant
or by any other duly authorized representative.  The name and title of the
person signing the form shall be typed or printed beneath the signature.  If the
statement is signed on behalf of the registrant by an authorized representative
(other than an executive officer), evidence of the representative's authority to
sign on behalf of the registrant shall be filed with the form.

                                   ATTENTION

    INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL CRIMINAL
VIOLATIONS (SEE 18 U.S.C. 1001).



                             GENERAL INSTRUCTIONS

1.  This form is required by Rule 12b-25 (17 CFR 240.12b-25) of the General
    Rules and Regulations under the Securities Exchange Act of 1934.

2.  One signed original and four conformed copies of this form and amendments
    thereto must be completed and filed with the Securities and Exchange
    Commission, Washington, D.C. 20549, in accordance with Rule 0-3 of the
    General Rules and Regulations under the Act.  The information contained in
    or filed with the form will be made a matter of public record in the
    Commission files.

3.  A manually signed copy of the form and amendments thereto shall be filed
    with each national securities exchange on which any class of securities of
    the registrant is registered.

4.  Amendments to the notifications must also be filed on form 12b-25 but need
    not restate information that has been correctly furnished.  The form shall
    be clearly identified as an amended notification.

5.  Electronic filers. This form shall not be used by electronic filers unable
    to timely file a report solely due to electronic difficulties. Filers unable
    to submit a report within the time period prescribed due to difficulties in
    electronic filing should comply with either Rule 201 or Rule 202 of
    Regulation S-T (Section 232.201 or Section 232.202 of this chapter) or apply
    for an adjustment in filing date pursuant to Rule 13(b) of Regulation S-T
    (Section 232.13(b) of this Chapter).

http://www.sec.gov/divisions/corpfin/forms/12b-25.htm
Last update: 07/20/2000

                                    12b25-2
<PAGE>   3

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

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

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

                                   FORM 10-K

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

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                       OR

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

             FOR THE TRANSITION PERIOD FROM           TO

                        COMMISSION FILE NUMBER 33-98828

                         PIONEER CORPORATION OF AMERICA
             (Exact name of Registrant as specified in its charter)

<TABLE>
<S>                                              <C>
                    DELAWARE                                        06-1420850
        (State or other jurisdiction of                (I.R.S. Employer Identification No.)
         incorporation or organization)
</TABLE>

             700 LOUISIANA STREET, SUITE 4300, HOUSTON, TEXAS 77002
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (713) 570-3200
              (Registrant's telephone number, including area code)

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

<TABLE>
<S>                                                           <C>
Securities registered pursuant to Section 12(b) of the Act:   NONE.

Securities registered pursuant to Section 12(g) of the Act:   9 1/4% SENIOR SECURED NOTES DUE JUNE 15, 2007
                                                              9 1/4% SENIOR SECURED NOTES DUE OCTOBER 15,
                                                              2007
                                                              (Title of class)
</TABLE>

     On March 30, 2001, there were outstanding 1,000 shares of the Registrant's
Common Stock, $.01 par value. All of such shares are owned by Pioneer Companies,
Inc.

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

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

     Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.  Yes [X],  No [ ].

                   DOCUMENTS INCORPORATED BY REFERENCE: NONE.

     The Registrant meets the conditions set forth in General Instruction
(I)(1)(a) and (b) of Form 10-K, and is therefore filing this Form with the
reduced disclosure format permitted by General Instruction (I)(2) of Form 10-K.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>   4

                         PIONEER CORPORATION OF AMERICA

                               TABLE OF CONTENTS
                       ANNUAL REPORT ON FORM 10-K FOR THE
                          YEAR ENDED DECEMBER 31, 2000

<TABLE>
<CAPTION>
                                                                        PAGE
                                                                        ----
<S>       <C>                                                           <C>
                                   PART I

Item 1.   Business....................................................    1
Item 2.   Properties..................................................    5
Item 3.   Legal Proceedings...........................................    6
Item 4.   Submission of Matters to a Vote of Security Holders.........    6

                                  PART II

Item 5.   Market for Registrant's Common Equity and Related
          Stockholder Matters.........................................    6
Item 6.   Selected Financial Data.....................................    6
Item 7.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations...................................    6
Item 7a.  Quantitative and Qualitative Market Risk Disclosures........    7
Item 8.   Financial Statements and Supplementary Data.................    7
Item 9.   Changes in and Disagreements With Accountants on Accounting
          and Financial Disclosure....................................   32

                                  PART III

Item 10.  Directors and Executive Officers of the Registrant..........   32
Item 11.  Executive Compensation......................................   32
Item 12.  Security Ownership of Certain Beneficial Owners and
          Management..................................................   32
Item 13.  Certain Relationships and Related Transactions..............   32

                                  PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form
          8-K.........................................................   32
</TABLE>
<PAGE>   5

                                     PART I

     Unless the context otherwise requires, (i) the term "Pioneer" refers to
Pioneer Corporation of America and its consolidated subsidiaries, (ii) the term
"Company" refers to Pioneer Corporation of America, (iii) the term "Predecessor
Company" refers to Pioneer and its subsidiaries as they existed on April 20,
1995, the date they were acquired by the Company, and (iv) the term "PCI" refers
to Pioneer Companies, Inc., the parent company of Pioneer.

     Certain statements in this Form 10-K are "forward looking statements"
within the meaning of the Securities Litigation Reform Act. Forward looking
statements relate to matters that are not historical facts. Such statements
involve risks and uncertainties, including, but not limited to, the Company's
high financial leverage, the status and possible outcomes of restructuring
efforts, global economic conditions, Company and industry production problems,
competitive prices, the cyclical nature of the markets for many of the Company's
products and raw materials, and other risks and uncertainties discussed in
detail. Actual outcomes may vary materially from those indicated by the forward
looking statements.

ITEM 1. BUSINESS.

     Pioneer manufactures and markets chlorine and caustic soda and several
related products. Pioneer conducts its primary business through its operating
subsidiaries: Pioneer Americas, Inc. (formerly known as Pioneer Chlor-Alkali
Company, Inc.) ("PAI"), and PCI Chemicals Canada Inc. ("PCI Canada"). In August
2000, Pioneer completed the disposal of substantially all of the assets of a
former operating subsidiary, Kemwater North America Company ("KNA").

     The Company is a wholly-owned subsidiary of PCI. PCI is a publicly-traded
company which, prior to its acquisition of the Predecessor Company in 1995, was
actively seeking acquisitions and had no operations. As of December 31, 2000,
Interlaken Investment Partners, L.P., a Delaware limited partnership (the
"Interlaken Partnership") beneficially owned approximately 34.9% of the voting
power of PCI and William R. Berkley (who may be deemed to beneficially own all
shares of PCI common stock held by the Interlaken Partnership) beneficially
owned approximately 59.8% of the voting power of PCI.

     Pioneer owns and operates five chlor-alkali plants in North America with
aggregate production capacity of approximately 950,000 electrochemical units
("ECUs," each consisting of 1 ton of chlorine and 1.1 tons of caustic soda), as
well as certain related product manufacturing facilities. Management believes
that Pioneer is one of the six largest chlor-alkali producers in North America,
with approximately 6% of North American production capacity. In addition to its
chlor-alkali capacity, Pioneer manufactures hydrochloric acid, bleach, sodium
chlorate and other products.

     Pioneer's five chlor-alkali production facilities are located in Becancour,
Quebec; Tacoma, Washington; St. Gabriel, Louisiana; Henderson, Nevada; and
Dalhousie, New Brunswick. The five facilities produce chlorine and caustic soda
for sale in the merchant markets and for use as raw materials in the manufacture
of downstream products. The Becancour and Henderson facilities also produce
hydrochloric acid and bleach, and the Tacoma facility also produces hydrochloric
acid and calcium chloride. The Dalhousie facility also produces sodium chlorate.
During 2000, Pioneer's U.S. plants faced substantially higher energy costs and
in March 2001, Pioneer announced a fifty percent curtailment in the capacity of
the Tacoma plant due to an inability to obtain sufficient power at reasonable
prices.

     Pioneer also operates three bleach production and chlorine repackaging
facilities in California and Washington, and distributes these products to
municipalities and selected commercial markets in the western United States
through various distribution channels. All of the chlorine and caustic soda used
as raw materials at these facilities is supplied by the Henderson and Tacoma
chlor-alkali facilities. Additional production units at Cornwall, Ontario
produce hydrochloric acid, bleach, chlorinated paraffins under the brand name
Cereclor(R), and proprietary pulping additives, PSR 2000(R) and IMPAQT(R).

     On August 21, 2000, KNA sold its coagulant business and transferred to the
buyer fixed assets, including a plant in Spokane, Washington, and certain
technology-related assets and liabilities associated with the Spokane
operations. The Company received cash of $0.9 million as payment for Spokane. On
the same date,
                                        1
<PAGE>   6

an affiliate of the Company also sold its coagulant business to the same buyer,
transferring assets and liabilities associated with a plant in Savannah,
Georgia, except for a related party payable of $17 million for advances from the
Company which were written off by the Company, and is reflected as a decrease in
due from affiliates on the balance sheet and an increase in other expense on the
income statement. This transaction did not have a material impact on the
Company's cash flows. Also in 2000, a charge of $0.9 million was recorded,
relating to the disposition of KNA's alum coagulant business at Antioch,
California.

     The Company is a holding company with no operating assets or operations. As
of December 31, 2000, Pioneer had outstanding $590.3 million of long-term debt,
most of which is classified as current in the December 31, 2000 Consolidated
Balance Sheet. See Note 10 to the Consolidated Financial Statements. $175.0
million of this debt was issued by PCI Canada in the form of 9 1/4% Senior
Secured Notes due October 15, 2007. There are no restrictions on the ability of
PCI Canada or the Company's other subsidiaries to pay dividends to or make other
distributions to the Company or PCI Canada. Pioneer's debt agreements, including
those related to PCI Canada's indebtedness, contain restrictions, which, among
other things, could limit the ability of the Company to incur additional
indebtedness, to acquire or dispose of assets or operations and to redeem shares
of stock. See Note 10 to the Consolidated Financial Statements for summarized
financial information on PCI Canada.

  Debt Restructuring

     In December 2000 the Company delayed making payments on various debt
obligations due to lack of sufficient liquidity. As a result, at December 31,
2000 Pioneer was not in compliance with the terms of certain of its debt
agreements. Accordingly, $586.3 million of debt outstanding under various
agreements is classified as a current liability on the Company's consolidated
balance sheet. Pioneer's cash flows and liquidity have been substantially
reduced due to the steep decline in ECU prices in 1999 and extraordinarily high
power costs in 2000. Decreased liquidity warranted the suspension of debt
service in favor of funding ongoing operations. Pioneer is developing a
comprehensive financial restructuring program for which it will solicit the
consent of its lenders at the earliest practical time.

     Pioneer has held discussions with an informal committee of holders of the
senior notes and term facilities, as well as other creditors, about a financial
restructuring plan. The objective of the restructuring is to establish a capital
structure that is consistent with Pioneer's cash flows throughout the industry
cycle, and that affords Pioneer adequate funding of capital expenditures,
working capital needs, and debt service requirements. The proposed restructuring
may have to occur under the supervision of a United States Bankruptcy Court.
While the Company believes that these discussions have been productive, there
can be no assurances that an agreement on the proposed restructuring can be
timely completed.

     The accompanying financial statements present the liabilities at face
value. The debt restructuring could result in debt being paid at less than 100%
of its face value and the carrying value of assets could be changed.

     The sufficiency of Pioneer's liquidity and capital resources is dependent
upon the successful completion of the financial restructuring described above,
generating sufficient positive cash flow from operations and obtaining financing
as may be required. While Pioneer believes it will be able to complete a
consensual restructuring during 2001, there can be no assurance that it will be
successful in doing so. Pioneer is reviewing with its financial and legal
advisors the financial alternatives available to Pioneer, including without
limitation, the debt restructuring proposal described above and/or the filing of
a petition under Chapter 11 of the United States Bankruptcy Code.

                                        2
<PAGE>   7

  Results of Operations

     The following table sets forth certain operating data for the periods
indicated (dollars in thousands and percentage of revenues):

<TABLE>
<CAPTION>

                                                              YEAR ENDED DECEMBER 31,
                                                    ---------------------------------
                                                               2000              1999
                                                    ---------------    --------------
<S>                                                 <C>         <C>    <C>        <C>
Revenues..........................................  $ 335,152   100%   $284,312   100%
Cost of sales.....................................    304,357    91     274,181    96
                                                    ---------   ---    --------   ---
Gross profit......................................     30,795     9      10,131     4
Selling, general and administrative expense.......     41,891    12      47,145    17
                                                    ---------   ---    --------   ---
Operating loss....................................    (11,096)   (3)    (37,014)  (13)
Interest expense, net.............................    (54,990)  (17)    (50,313)  (18)
Other income (expense), net.......................    (13,812)    4      14,608     5
                                                    ---------   ---    --------   ---
Loss before income taxes and extraordinary item...    (79,898)  (24)    (72,719)  (26)
Income tax expense (benefit)......................     33,102   (10)    (24,779)    9
                                                    ---------   ---    --------   ---
Net loss..........................................  $(113,000)  (34)%  $(47,940)  (17)%
                                                    =========   ===    ========   ===
</TABLE>

  Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

     Revenues.  Revenues increased by $50.8 million, or approximately 18%, to
$335.2 million for the twelve months ended December 31, 2000, as compared to the
same period in 1999. Pioneer's average ECU sales price for the year ended
December 31, 2000 was $327, an increase of approximately 35% from the average
1999 sales price of $242. Sales volumes during the twelve months ended December
31, 2000 were similar to those during 1999. The sale of KNA resulted in a $7.6
million revenue decrease in 2000 as compared to 1999 due to the inclusion of
only a partial year of operations in 2000.

     Cost of Sales.  Cost of sales increased $30.2 million or approximately 11%
in 2000, as compared to 1999. $10.9 million of this increase was due to the
absence of the gain resulting from the modification of Pioneer's retiree health
care benefits that occurred during the first quarter of 1999. The remaining
increase in cost of sales was principally due to a $17.9 million increase in
power costs and a $7.9 million increase in purchase-for-resale costs for product
purchased from third parties and resold to Pioneer customers, offset by an $8.3
million decrease due to the inclusion of only a partial year of operations of
KNA.

     Gross Profit.  Gross profit margin increased to 9% in 2000 from 4% in 1999,
primarily as a result of higher average ECU sales prices.

     Selling, General and Administrative Expenses.  Selling, general and
administrative expenses decreased $5.3 million in 2000. Decreases related to
overhead expense reductions and the absence of asset impairments recorded in
1999 were partially offset by an increase of $1.6 million due to the absence of
the modification of Pioneer's retiree health care benefits referred to above.

     Interest Expense, Net.  Interest expense, net increased $4.7 million to
$55.0 million in 2000 primarily as a result of interest incurred on higher
revolving credit balances and higher variable interest rates in 2000 as compared
to 1999. Although Pioneer suspended payments of interest under various debt
agreements in December 2000, all amounts owing were expensed and included in
accrued liabilities, or, in the case of the revolving credit facility, added to
the outstanding revolving credit facility balance, at December 31, 2000.

     Other Income(Expense), Net.  Other expense in 2000 included a $17 million
loss from the write off of a related party receivable in connection with an
affiliate of the Company selling its coagulant business offset by a $3.3 million
gain on the sale of excess property at the Henderson plant. In 1999, other
income included a $12.0 million gain on the sale of Pioneer's 15% partnership
interest in Saguaro Power Company.

     Income Taxes.  Pioneer is required to record a valuation allowance for
deferred tax assets when management believes it is more likely than not that the
asset will not be realized. In 2000, based on the

                                        3
<PAGE>   8

uncertainty as to the effect of the Company's restructuring on the availability
and use of Pioneer's net operating loss carryforwards ("NOLs"), and the level of
historical taxable income and projections for future taxable income over the
periods in which the NOLs are available for use, it was estimated that it is
more likely than not that Pioneer will not realize the full benefit of the
deferred tax assets relating to NOLs. Accordingly, Pioneer has recorded a
valuation allowance of $61.9 million for the year ended December 31, 2000.

  Recent Accounting Pronouncements

     Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting
for Derivative Instruments and Hedging Activities," is effective for all fiscal
years beginning after June 15, 2000. SFAS 133, as amended, establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts and for hedging activities.
Under SFAS 133, certain contracts that were not formerly considered derivatives
may now meet the definition of a derivative. The adoption of SFAS 133 effective
January 1, 2001, did not have a significant impact on the financial position,
results of operations, or cash flows of the Company.

  Market Risk Disclosures

     The Company has certain long-term debt instruments that are subject to
market risk. At December 31, 2000, approximately $210.6 million of the Company's
debt had variable interest rates, including LIBOR and U.S. prime rate based
loans. An increase in the market interest rates would increase the Company's
interest expense and its cash requirements for interest payments. For example,
an average increase of 0.25% in the variable interest rate would increase the
Company's interest expense and payments by approximately $0.5 million. The
Company's remaining debt instruments, totaling approximately $379.7 million at
December 31, 2000, are at various fixed interest rates ranging from 8.0% to
9.25%, with the majority at 9.25%.

     The Company, through PCI Canada, operates in Canada and is subject to
foreign currency exchange rate risk. Due to the significance of PCI Canada's
U.S. dollar-denominated long-term debt (and related accrued interest payable)
and certain other U.S. dollar-denominated assets and liabilities, the entity's
functional accounting currency is the U.S. dollar. Certain other items within
PCI Canada's working capital are denominated in Canadian dollars. An average
change of 1% in the currency exchange rate would change total assets by
approximately $0.3 million.

  Risk Factors

  ABILITY TO CONTINUE AS A GOING CONCERN IS DEPENDENT UPON RESTRUCTURING

     Since December 2000, Pioneer has not been in compliance with certain
covenants of its senior notes and term facilities. Pioneer stopped making
payments of interest under the senior notes and principal under the term
facilities in December 2000. Due to cross default provisions in the revolving
facility agreement, the revolving facility is currently in default also. As
Pioneer is not in compliance with the terms of these debt agreements, the debt
outstanding under these debt agreements is classified as a current liability on
Pioneer's December 31, 2000 Consolidated Balance Sheet.

  DISRUPTION OF OPERATIONS DUE TO RESTRUCTURING

     Pioneer's restructuring efforts could adversely affect its relationship
with its customers, suppliers and employees. Employees generally are not party
to employment contracts. Due to uncertainty about Pioneer's financial condition,
it may be difficult to retain or attract high quality employees. If Pioneer's
relationships with its customers, suppliers and employees are adversely
affected, its operations could be materially affected. Weakened operating
results could adversely affect Pioneer's ability to complete the restructuring.

  FINANCIAL UNCERTAINTY

     Until the financial restructuring is completed, there is significant
uncertainty regarding Pioneer. Until the uncertainty is removed and the new
capital structure is in place, the reported financial information discussed in

                                        4
<PAGE>   9

this Annual Report on Form 10-K may not be indicative of operating results or
financial condition. See Note 1 to the Consolidated Financial Statements
included elsewhere herein.

  Forward Looking Statements

     Certain statements in this Form 10-K regarding future expectations of
Pioneer's business and Pioneer's results of operations may be regarded as
"forward looking statements" within the meaning of the Securities Litigation
Reform Act. Such statements are subject to various risks, including Pioneer's
high financial leverage, the outcome of financial restructuring efforts, the
cyclical nature of the markets for many of Pioneer's products and raw materials
and other risks discussed in detail. Actual outcomes may vary materially.

ITEM 2. PROPERTIES.

  Facilities

     The following table sets forth certain information regarding Pioneer's
principal production, distribution and storage facilities as of March 31, 2001.
All property is owned by Pioneer unless otherwise indicated.

<TABLE>
<CAPTION>
LOCATION                                 MANUFACTURED PRODUCTS
--------                                 ---------------------
<S>                                      <C>
Becancour, Quebec.....................   Chlorine and caustic soda
                                         Hydrochloric acid
                                         Bleach
                                         Hydrogen
Tacoma, Washington....................   Chlorine and caustic soda
                                         Hydrochloric acid
                                         Calcium chloride
                                         Hydrogen
St. Gabriel, Louisiana................   Chlorine and caustic soda
                                         Hydrogen
Henderson, Nevada.....................   Chlorine and caustic soda
                                         Hydrochloric acid
                                         Bleach
                                         Hydrogen
Dalhousie, New Brunswick..............   Chlorine and caustic soda
                                         Sodium chlorate
                                         Hydrogen
Cornwall, Ontario*....................   Bleach
                                         Cereclor(R) chlorinated
                                         paraffin
                                         PSR 2000(R) pulping additive
                                         IMPAQT(R) pulping additive
Tracy, California*....................   Bleach
                                         Chlorine repackaging
Santa Fe Springs, California*.........   Bleach
                                         Chlorine repackaging
Tacoma, Washington....................   Bleach
                                         Chlorine repackaging
Various*..............................   Distribution
</TABLE>

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

* Leased property

     Corporate headquarters for Pioneer is located in leased office space in
Houston, Texas under a lease terminating in 2006. Pioneer also leases office
space in Montreal, Quebec under a lease terminating in 2003

                                        5
<PAGE>   10

and owns a technology center in Mississauga, located on 1.2 acres of land in the
Sheridan Park Research Center near Toronto, Ontario, which conducts applications
research, particularly with respect to pulp and paper process technology.

     The acquisition of the chlor-alkali facility in Tacoma was financed with
the proceeds of a nine and one-half year $100 million term facility provided to
the Company (the "PCA Term Facility"), and with a portion of the proceeds of a
$200 million offering of 9 1/4% Senior Secured Notes due 2007 issued by the
Company (the "Senior Notes"). The Senior Notes and obligations outstanding under
the PCA Term Facility are secured by first mortgages on PAI's Tacoma, St.
Gabriel, and Henderson facilities. The acquisition of the PCI Canada facilities
was financed with the proceeds of a nine and one-quarter year $83 million term
facility provided to the Company (the "PCI Canada Term Facility"), and with the
proceeds of a $175 million offering of 9 1/4% Senior Secured Notes due 2007
issued by PCI Canada (the "PCI Canada Senior Notes"). The PCI Canada Senior
Notes and obligations outstanding under the PCI Canada Term Facility are secured
by liens on and security interests in substantially all tangible and intangible
property and assets used in PCI Canada's business in Canada.

ITEM 3. LEGAL PROCEEDINGS.

     From time to time, Pioneer is involved in litigation relating to claims
arising out of its operations in the normal course of its business. Pioneer
maintains insurance coverage against potential claims in amounts which it
believes to be adequate. In the opinion of management, uninsured losses, if any,
resulting from these matters will not have a material adverse effect on the
Pioneer's results of operations, cash flow or financial position.

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

     This item is omitted in accordance with General Instruction (I)(2) of Form
10-K.

                                    PART II

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

     All of the Company's outstanding Common Stock, which is the Company's only
class of equity securities, is owned by PCI.

     Pursuant to the terms of certain debt instruments, there are restrictions
on the ability of Pioneer to transfer funds to PCI, resulting in limitations on
PCI's ability to declare dividends on its Common Stock. See Note 10 to the
Consolidated Financial Statements.

ITEM 6. SELECTED FINANCIAL DATA.

     This item is omitted in accordance with General Instruction (I)(2) of Form
10-K. In accordance with General Instruction (I)(2)(a) of Form 10-K selected
financial data is contained in Item 1 -- Business -- "Results of Operations".

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

     This item is omitted in accordance with General Instruction (I)(2) of Form
10-K. In accordance with General Instruction (I)(2)(a) of Form 10-K,
management's narrative analysis of the results of operations is contained in
Item 1 -- Business -- "Results of Operations".

ITEM 7a. QUANTITATIVE AND QUALITATIVE MARKET RISK DISCLOSURES.

     This item is omitted in accordance with General Instruction (I)(2) of Form
10-K. In accordance with General Instruction (I)(2)(a) of Form 10-K, market risk
disclosures are contained in Item 1 -- Business -- "Results of Operations".

                                        6
<PAGE>   11

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     Index:

<TABLE>
<CAPTION>
                                                                    PAGE
                                                                    ----
<S>  <C>                                                            <C>
(1)  Consolidated financial statements:
     Report of Management........................................     8
     Independent Auditors' Report................................     9
     Consolidated Balance Sheets as of December 31, 2000 and
     1999........................................................    10
     Consolidated Statements of Operations for the years ended
     December 31, 2000,   1999 and 1998..........................    11
     Consolidated Statements of Stockholders' Equity (Deficiency
     in Assets) for the years ended December 31,   2000, 1999 and
     1998........................................................    12
     Consolidated Statements of Cash Flows for the years ended
     December 31, 2000,   1999 and 1998..........................    13
     Notes to consolidated financial statements..................    14
(2)  Supplemental Schedule:
     Schedule II -- Valuation and Qualifying Accounts............    37
</TABLE>

     All schedules, except the ones listed above, have been omitted because they
are either not applicable, not required, or the information called for therein
appears in the consolidated financial statements or notes thereto.

                                        7
<PAGE>   12

                              REPORT OF MANAGEMENT

     Management is responsible for the preparation and content of the financial
statements and other information included in this annual report. The financial
statements have been prepared in conformity with generally accepted accounting
principles appropriate under the circumstances to reflect, in all material
respects, the substance of events and transactions that should be included. The
financial statements reflect management's judgments and estimates as to the
effects of events and transactions that are accounted for or disclosed.

     The accompanying consolidated financial statements have been prepared
assuming that Pioneer will continue as a going concern. As discussed in Note 1,
Pioneer is experiencing difficulty in generating sufficient cash flow to meet
its obligations and sustain its operations, which raises substantial doubt about
its ability to continue as a going concern without a financial restructuring.
Management's plans in regard to these matters are also described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

     Management maintains accounting systems which are supported by internal
accounting controls that provide reasonable assurance that assets are
safeguarded and that transactions are executed in accordance with management's
authorization and recorded properly to permit the preparation of financial
statements in accordance with generally accepted accounting principles. The
concept of reasonable assurance is based on the recognition that the cost of a
system of internal accounting controls should not exceed the benefits.

     An independent auditor performed an audit of Pioneer's financial statements
for the purpose of determining that the statements are presented fairly in
accordance with accounting principles generally accepted in the United States of
America. The independent auditor is appointed by the Board of Directors and
meets regularly with the Audit Committee of the Board. The Audit Committee of
the Board of Directors is composed solely of outside directors. The Audit
Committee meets periodically with Pioneer's senior officers and independent
auditor to review the adequacy and reliability of Pioneer's accounting,
financial reporting and internal controls.

                                            PHILIP J. ABLOVE
                                            Executive Vice President and Chief
                                            Financial Officer
                                            (Principal Financial Officer)

                                            PIERRE PRUD'HOMME
                                            Vice President, Controller
                                            (Principal Accounting Officer)

April 11, 2001

                                        8
<PAGE>   13

                          INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders of
Pioneer Corporation of America

     We have audited the accompanying consolidated balance sheets of Pioneer
Corporation of America and subsidiaries ("Pioneer") as of December 31, 2000 and
1999, and the related consolidated statements of operations, stockholders'
equity (deficiency in assets), and cash flows for each of the three years in the
period ended December 31, 2000. Our audits also included the financial statement
schedule listed in the Index at Item 8. These financial statements and financial
statement schedule are the responsibility of Pioneer's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.

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

     In our opinion, such financial statements present fairly, in all material
respects, the financial position of Pioneer as of December 31, 2000 and 1999,
and the results of its operations and its cash flows for the each of the three
years in the period ended December 31, 2000 in conformity with accounting
principles generally accepted in the United States of America. Also, in our
opinion, such financial statement schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.

     The accompanying consolidated financial statements have been prepared
assuming that Pioneer will continue as a going concern. As discussed in Note 1,
Pioneer is experiencing difficulty in generating sufficient cash flow to meet
its obligations and sustain its operations, which raises substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

DELOITTE & TOUCHE LLP

Houston, Texas
April 11, 2001

                                        9
<PAGE>   14

                         PIONEER CORPORATION OF AMERICA

                          CONSOLIDATED BALANCE SHEETS
                       (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                                                              ---------------------
                                                                2000        1999
                                                              ---------   ---------
<S>                                                           <C>         <C>
                                      ASSETS

Current assets:
  Cash and cash equivalents.................................  $   5,000   $   2,903
  Accounts receivable, less allowance for doubtful accounts:
     2000, $1,392; 1999, $1,592.............................     49,563      50,063
     Inventories............................................     25,067      23,130
     Prepaid expenses.......................................      4,100       5,730
                                                              ---------   ---------
          Total current assets..............................     83,730      81,826
  Property, plant, and equipment, at cost:
     Land...................................................     10,622      10,622
     Buildings and improvements.............................     61,334      61,014
     Machinery and equipment................................    348,695     333,094
     Construction in progress...............................     15,137      19,435
                                                              ---------   ---------
                                                                435,788     424,165
     Less accumulated depreciation..........................   (135,404)   (103,096)
                                                              ---------   ---------
                                                                300,384     321,069
Due from affiliates.........................................      3,939      15,231
Other assets, net of accumulated amortization: 2000,
  $12,004; 1999, $8,956.....................................     25,418      66,965
Excess cost over the fair value of net assets acquired, net
  of accumulated amortization: 2000, $39,945; 1999,
  $32,095...................................................    179,560     192,464
                                                              ---------   ---------
          Total assets......................................  $ 593,031   $ 677,555
                                                              =========   =========

            LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIENCY IN ASSETS)

Current liabilities:
  Accounts payable..........................................  $  43,738   $  28,796
  Accrued liabilities.......................................     43,847      30,716
  Current portion of long-term debt.........................    586,252       2,609
                                                              ---------   ---------
          Total current liabilities.........................    673,837      62,121
Long-term debt, less current maturities.....................      4,086     583,260
Accrued pension and other employee benefits.................     14,984      15,091
Other long-term liabilities.................................     12,256      16,140
Commitments and contingencies...............................         --          --
Stockholder's equity (deficiency in assets):
  Common stock, $.01 par value, 1,000 shares authorized,
     issued and outstanding.................................          1           1
  Additional paid-in capital................................     65,483      65,483
  Retained deficit..........................................   (177,541)    (64,541)
  Accumulated other comprehensive income....................        (76)         --
                                                              ---------   ---------
          Total stockholder's equity (deficiency in
            assets).........................................   (112,133)        943
                                                              ---------   ---------
          Total liabilities and stockholder's equity
            (deficiency in assets)..........................  $ 593,031   $ 677,555
                                                              =========   =========
</TABLE>

                See notes to consolidated financial statements.

                                        10
<PAGE>   15

                         PIONEER CORPORATION OF AMERICA

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                  YEAR ENDED DECEMBER 31,
                                                              -------------------------------
                                                                2000        1999       1998
                                                              ---------   --------   --------
<S>                                                           <C>         <C>        <C>
Revenues....................................................  $ 335,152   $284,312   $361,280
Cost of sales...............................................    304,357    274,181    278,478
                                                              ---------   --------   --------
Gross profit................................................     30,795     10,131     82,802
Selling, general and administrative expenses................     41,891     47,145     44,845
Unusual charges.............................................         --         --      1,385
                                                              ---------   --------   --------
Operating income (loss).....................................    (11,096)   (37,014)    36,572
Equity in net loss of unconsolidated subsidiaries...........         --         --     (2,208)
Interest expense, net.......................................    (54,990)   (50,313)   (48,792)
Other income, net...........................................    (13,812)    14,608        759
                                                              ---------   --------   --------
Loss before taxes...........................................    (79,898)   (72,719)   (13,669)
Income tax provision (benefit)..............................     33,102    (24,779)    (3,357)
                                                              ---------   --------   --------
Net loss....................................................  $(113,000)  $(47,940)  $(10,312)
                                                              =========   ========   ========
Loss per common share:
  Net loss..................................................  $(113,000)  $(47,940)  $(10,312)
                                                              =========   ========   ========
</TABLE>

                See notes to consolidated financial statements.

                                        11
<PAGE>   16

                         PIONEER CORPORATION OF AMERICA

     CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIENCY IN ASSETS)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                   NUMBER OF
                                    COMMON               ADDITIONAL                   OTHER
                                    SHARES      COMMON    PAID-IN     RETAINED    COMPREHENSIVE
                                  OUTSTANDING   STOCK     CAPITAL      DEFICIT        LOSS          TOTAL
                                  -----------   ------   ----------   ---------   -------------   ---------
<S>                               <C>           <C>      <C>          <C>         <C>             <C>
Balance at January 1, 1998......       1         $ 1      $66,169     $  (6,289)        --        $  59,881
  Dividend paid to parent.......      --          --         (686)           --         --             (686)
  Net loss......................      --          --           --       (10,312)        --          (10,312)
                                      --         ---      -------     ---------       ----        ---------
Balance at December 31, 1998....       1           1       65,483       (16,601)        --           48,883
  Net loss......................      --          --           --       (47,940)        --          (47,940)
                                      --         ---      -------     ---------       ----        ---------
Balance at December 31, 1999....       1           1       65,483       (64,541)        --              943
  Comprehensive loss:
     Net loss...................      --          --           --      (113,000)        --
     Other comprehensive loss,
       net of taxes:
       Additional minimum
          pension liability.....      --          --           --            --        (76)
          Comprehensive loss....      --          --           --            --         --         (113,076)
                                      --         ---      -------     ---------       ----        ---------
Balance at December 31, 2000....       1         $ 1      $65,483     $(177,541)      $(76)       $(112,133)
                                      ==         ===      =======     =========       ====        =========
</TABLE>

                See notes to consolidated financial statements.

                                        12
<PAGE>   17

                         PIONEER CORPORATION OF AMERICA

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                  YEAR ENDED DECEMBER 31,
                                                              -------------------------------
                                                                2000        1999       1998
                                                              ---------   --------   --------
<S>                                                           <C>         <C>        <C>
Operating activities:
  Net loss..................................................  $(113,000)  $(47,940)  $(10,312)
  Adjustments to reconcile net loss to net cash provided by
     operating activities:
     Reduction in post-retirement medical expense...........         --    (12,530)        --
     Depreciation and amortization..........................     49,649     51,435     47,675
     Deferred tax expense (benefit).........................     33,419    (24,763)    (3,357)
     Foreign exchange gain (loss)...........................        636     (1,025)        78
     Unusual charges........................................         --         --      1,385
     Loss (gain) on disposal of assets......................     14,860    (10,199)     1,845
     Equity in net loss of unconsolidated subsidiaries......         --         --      2,208
     Net effect of changes in operating assets and
       liabilities..........................................     27,378     (6,576)      (439)
                                                              ---------   --------   --------
          Net cash flows from operating activities..........     12,942    (51,598)    39,083
                                                              ---------   --------   --------
Investing activities:
  Investments in and advances to unconsolidated
     subsidiaries...........................................         --         --     (4,290)
  Capital expenditures, net.................................    (18,697)   (28,318)   (33,596)
  Proceeds from disposal of assets..........................      4,763     13,159        335
                                                              ---------   --------   --------
          Net cash flows from investing activities..........    (13,934)   (15,159)   (37,551)
                                                              ---------   --------   --------
Financing activities:
  Net proceeds under revolving credit arrangements..........      6,418     21,163         --
  Repayments of long-term debt..............................     (1,950)    (2,666)    (2,591)
  Debt issuance and related costs...........................         --       (968)        --
  Dividends paid to parent..................................         --         --       (686)
                                                              ---------   --------   --------
          Net cash flows from financing activities..........      4,468     17,529     (3,277)
                                                              ---------   --------   --------
Effect of exchange rate changes on cash.....................     (1,379)     1,538       (714)
                                                              ---------   --------   --------
Net increase (decrease) in cash.............................      2,097    (47,690)    (2,459)
Cash and cash equivalents at beginning of period............      2,903     50,593     50,995
Cash acquired in acquisitions...............................         --         --      2,057
                                                              ---------   --------   --------
Cash and cash equivalents at end of period..................  $   5,000   $  2,903   $ 50,593
                                                              =========   ========   ========
</TABLE>

                See notes to consolidated financial statements.

                                        13
<PAGE>   18

                         PIONEER CORPORATION OF AMERICA

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION

  Organization

     The consolidated financial statements include the accounts of Pioneer
Corporation of America (the "Company") and its subsidiaries (collectively,
"Pioneer"), Pioneer Americas, Inc. ("PAI"), and PCI Chemicals Canada Inc. ("PCI
Canada"). The Company is a wholly-owned subsidiary of Pioneer Companies, Inc.
("PCI"). All significant intercompany balances and transactions have been
eliminated in consolidation.

     In early 2000, Kemwater North America Company ("KNA") sold its alum
coagulant business at Antioch, California and recorded a charge of $0.9 million.
In August 2000, KNA disposed of its remaining assets (see Note 3). KNA had
revenues of $2.4 million, $10 million and $23 million in 2000, 1999 and 1998,
respectively.

     Pioneer operates in one industry segment, that being the production,
marketing and selling of chlor-alkali and related products. Pioneer operates in
one geographic area, North America.

     Dollar amounts, other than per share amounts in tabulations in the notes to
the consolidated financial statements are stated in thousands of dollars unless
otherwise indicated.

     The accompanying consolidated financial statements have been prepared on
the going concern basis of accounting, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business.
Pioneer has experienced net losses each of the four years in the period ended
December 31, 2000. In December 2000, Pioneer delayed making payments on various
debt obligations due to insufficient liquidity. As a result, at December 31,
2000 Pioneer was not in compliance with the terms of certain of its debt
agreements and the maturity of the debt could be accelerated. Accordingly,
$586.3 million of debt outstanding under various agreements is classified as a
current liability on Pioneer's consolidated balance sheet. Pioneer is developing
a comprehensive financial restructuring program for which it will solicit the
consent of its lenders at the earliest practical time. The consolidated
financial statements do not include any adjustments that may result from the
resolution of these uncertainties.

     Pioneer has held discussions with an informal committee of holders of its
outstanding senior notes and term facilities and their advisers, and
representatives of its revolving credit lender about a financial restructuring
program. Negotiations and discussions with the lenders regarding a restructuring
agreement have recently begun. If a consensual agreement cannot be reached, the
proposed restructuring may occur under the supervision of a United States
Bankruptcy Court. While Pioneer believes that these discussions to date have
been productive, there can be no assurance that an agreement on the proposed
restructuring can be timely completed.

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America ("generally
accepted accounting principles," or "GAAP") requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from the estimates and
judgments made in preparing these financial statements, which include
assumptions made concerning the amounts owed to creditors and realizable values
of assets. Management has reviewed Pioneer's long-lived assets and intangibles
such as goodwill, to assess whether the events and changes in circumstances
described above indicate that the carrying amount of the asset may not be
recoverable. In making these estimates, management has utilized the assessments,
calculations, and determinations made in preparing analyses utilized in
determining operational improvements and in discussions with creditors,
including estimates of overall enterprise value.

     Generally accepted accounting principles require that the amounts owed to
Pioneer's creditors as of December 31, 2000 not be adjusted to reflect any
proposed restructuring as Pioneer continues to be bound by

                                        14
<PAGE>   19
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the provisions of the original credit agreements. If a restructuring agreement
is reached and implemented, the restructuring of debt could give rise to a gain
that will be reported as income in 2001 at the time of plan implementation, in
accordance with GAAP. The amount of such gain, if any, cannot be determined
until the restructuring plan is finalized.

     Pioneer's ability to meet its ongoing liquidity requirements is dependent
upon the successful completion of the financial restructuring described above,
its ability to generate sufficient cash flow to meet its obligations on a timely
basis and its ability to obtain other financing as may be required. While
Pioneer believes it may be able to complete a consensual restructuring during
2001, there can be no assurance that it will be successful in doing so. Pioneer
is reviewing with its financial and legal advisors the financial alternatives
available to Pioneer, including without limitation the debt restructuring
proposal described above and/or the filing of a petition under Chapter 11 of the
United States Bankruptcy Code.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Cash and Cash Equivalents

     All highly liquid investments with a maturity of three months or less when
purchased are considered to be cash equivalents.

  Inventories

     Inventories are valued at the lower of cost or market. Finished goods and
work-in-process costs are recorded under the average cost method, which includes
appropriate elements of material, labor and manufacturing overhead costs, while
the first-in, first-out method is utilized for raw materials, supplies and
parts. Pioneer enters into agreements with other companies to exchange chemical
inventories in order to minimize working capital requirements and to facilitate
distribution logistics. Balances related to quantities due to or payable by
Pioneer are included in inventory.

  Property, Plant and Equipment

     Property, plant and equipment are recorded at cost. Disposals are removed
at carrying cost less accumulated depreciation with any resulting gain or loss
reflected in operations.

     Depreciation is computed primarily under the straight-line method over the
estimated remaining useful lives of the assets. Asset lives range from 5 to 15
years with a predominant life of 10 years, which include buildings and
improvements with an average life of 15 years and machinery and equipment with
an average life of 9 years.

  Other Assets

     Other assets include amounts for deferred financing costs, which are being
amortized on a straight-line basis over the term of the related debt.
Amortization of such costs using the interest method would not result in
material differences in the amounts amortized during the periods presented.
Amortization expense for other assets for the years ended December 31, 2000,
1999, and 1998 was approximately $4.5 million, $5.8 million, and $3.2 million,
respectively.

  Excess Cost Over The Fair Value of Net Assets Acquired

     Excess cost over the fair value of net assets acquired ("goodwill") of
approximately $219.5 million is amortized on a straight-line basis over 25
years. The carrying value of goodwill is reviewed annually and if this review
indicates that such excess cost will not be recoverable, as determined based on
the estimated future undiscounted cash flows of the entity acquired over the
remaining amortization period, Pioneer's carrying

                                        15
<PAGE>   20
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

value of goodwill will be reduced by the estimated deficit of discounted cash
flows or the fair value of the related entity. Amortization expense for excess
cost over the fair value of net assets acquired was approximately $9.0 million,
$9.1 million and $8.9 million for the years ended December 31, 2000, 1999 and
1998, respectively.

  Environmental Expenditures

     Remediation costs are accrued based on estimates of known environmental
remediation exposure. Such accruals are based upon management's best estimate of
the ultimate cost. Ongoing environmental compliance costs, including maintenance
and monitoring costs, are charged to operations as incurred.

  Revenue Recognition

     Pioneer generates revenues through sales in the open market and long-term
supply contracts. Revenue is recognized when the products are shipped and
collection is reasonably assured. Pioneer classifies amounts billed to customers
for shipping and handling as revenues, with the related shipping and handling
costs included in cost of goods sold.

  Research and Development Expenditures

     Research and development expenditures are expensed as incurred. Such costs
totaled $1.4 million in 2000, $1.5 million in 1999 and $1.4 million in 1998.

  Foreign Currency Translation

     Following SFAS No. 52, "Foreign Currency Translation," the functional
accounting currency for PCI Canada is the U.S. dollar; accordingly, gains and
losses resulting from balance sheet translations are included in the
consolidated statement of operations.

  Reclassifications

     Certain amounts have been reclassified in prior years to conform to the
current year presentation. All reclassifications have been applied consistently
for the periods presented.

3. DIVESTITURES

     In March 2000, KNA sold its coagulant business at Antioch, California, and
recorded a $0.9 million loss on the sale.

     On August 21, 2000, the Company sold its coagulant business and transferred
to the buyer fixed assets, including a plant in Spokane, Washington, and certain
technology-related assets and liabilities associated with the Spokane
operations. The Company received cash of $0.9 million as payment for Spokane. On
the same date, an affiliate of the Company also sold its coagulant business to
the same buyer, transferring assets and liabilities associated with a plant in
Savannah, Georgia, except for a related party payable of $17 million for
advances from the Company which were written off by the Company, and is
reflected as a decrease in due from affiliates on the balance sheet and an
increase in other expense on the income statement. This transaction did not have
a material impact on the Company's cash flows.

                                        16
<PAGE>   21
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. SUPPLEMENTAL CASH FLOW INFORMATION

     The net effect of changes in operating assets and liabilities (net of
acquisitions) are as follows:

<TABLE>
<CAPTION>
                                                          2000      1999       1998
                                                         -------   -------   --------
<S>                                                      <C>       <C>       <C>
Accounts receivable....................................  $   522   $(3,005)  $ 21,950
Due from affiliates....................................   (1,731)    1,280     (6,462)
Inventories............................................   (2,225)    3,113     (2,712)
Prepaid expenses.......................................    1,408    (2,087)       102
Other assets...........................................    6,012      (576)    (4,393)
Accounts payable.......................................   16,200    (2,885)   (14,247)
Accrued liabilities....................................   13,239    (1,522)     1,532
Other long-term liabilities............................   (5,039)   (2,443)       302
Accrued pension and other employee benefits............   (1,008)    1,549      3,489
                                                         -------   -------   --------
Net change in operating accounts.......................  $27,378   $(6,576)  $   (439)
                                                         =======   =======   ========
</TABLE>

     Following is supplemental cash flow information:

<TABLE>
<CAPTION>
                                                           2000      1999      1998
                                                          -------   -------   -------
<S>                                                       <C>       <C>       <C>
Cash paid during the period for:
  Interest..............................................  $44,140   $50,531   $49,358
                                                          =======   =======   =======
  Income taxes..........................................  $    11   $   126   $   159
                                                          =======   =======   =======
</TABLE>

5. INVENTORIES

     Inventories consisted of the following at December 31:

<TABLE>
<CAPTION>
                                                               2000      1999
                                                              -------   -------
<S>                                                           <C>       <C>
Raw materials, supplies and parts...........................  $14,329   $16,822
Finished goods and work-in-process..........................    9,391     5,350
Inventories under exchange agreements.......................    1,347       958
                                                              -------   -------
                                                              $25,067   $23,130
                                                              =======   =======
</TABLE>

6. INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED SUBSIDIARIES

  KNA and KWT

     Prior to September 1998, Pioneer indirectly owned a 50% interest in KNA
which owned 100% of KWT, Inc. ("KWT"), an indirect subsidiary of PCI. In
September 1998, KNA exchanged its ownership in KWT for the remaining 50%
ownership in KNA held by PCI. No gain or loss was recognized on this exchange.
Following this transaction, KNA's results of operations and financial position
are included in the Company's consolidated financial statements. Below is a
summary of selected items from the consolidated KNA statements of operations for
the nine months ended September 30, 1998.

<TABLE>
<CAPTION>
                                                              1998
                                                             -------
<S>                                                          <C>
Revenues..................................................   $26,403
Gross loss................................................      (350)
Net loss..................................................    (4,416)
</TABLE>

                                        17
<PAGE>   22
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Investments in Basic Management, Inc. and The Landwell Company, L.P.

     Prior to June 2000 the Company, through its subsidiary PAI, was the record
owner of approximately 32% of the common stock of Basic Management, Inc.
("BMI"), which owns and maintains the water and power distribution network
within a Henderson, Nevada industrial complex. BMI is the general partner of and
has a 50% interest in The LandWell Company, L.P. ("LandWell"), which is a large
landowner in Henderson and Clark County, Nevada. Prior to June 2000 PAI also
owned an approximate 21% limited partnership interest in LandWell. The remainder
of the common stock of BMI and the partnership interests in LandWell is owned by
other companies with facilities located in the same industrial complex.

     Pioneer's interests in BMI and LandWell, together with certain other
California and Louisiana real estate interests, constituted assets that were
held for the economic benefit of the previous owners of PAI. Dividends and
distributions received by Pioneer on account of such interests were deposited in
a separate cash account (the "Contingent Payment Account"), the balance of which
was to be applied in satisfaction of certain obligations of such previous owners
under environmental indemnity obligations in favor of Pioneer, provided that any
amounts not so applied prior to April 20, 2015 were to be remitted to such
persons.

     Pioneer's investment in BMI, LandWell and the California and Nevada real
estate interests, following the equity method, was $18.0 million at December 31,
1999, and the balance in the Contingent Payment Account was $6.7 million on that
date. Within Pioneer's balance sheet as of December 31, 1999, those assets were
offset by liabilities of the same amount because the right of setoff existed, as
Pioneer and the previous owners owed determinable amounts, Pioneer had the right
to set off the amount owed by the previous owners, Pioneer intended to set off
the amount and the setoff was enforceable by law.

     Effective in June 2000 Pioneer and the previous owners effected an
agreement pursuant to which Pioneer agreed to transfer to the previous owners
the record title to the interests in BMI, LandWell and the California and
Louisiana real estate interests, as well as $800,000 of the cash balance in the
Contingent Payment Account. The remaining $5.3 million balance in the Contingent
Payment Account, which was determined as an amount adequate to pay for future
environmental remediation costs that would be subject to the indemnity
obligations of the previous owners, was retained by Pioneer, in exchange for the
release of the indemnity obligations. This transaction resulted in a gain of
$1.8 million.

7. OTHER ASSETS

     Other assets consist of the following at December 31:

<TABLE>
<CAPTION>
                                                               2000      1999
                                                              -------   -------
<S>                                                           <C>       <C>
Debt financing assets and organizational cost assets, net...  $14,646   $17,110
Deferred tax asset..........................................    2,833    33,630
Patents, trademarks and other intangibles, net..............    3,605     6,406
Indemnification of environmental reserve....................    2,367     7,777
Other.......................................................    1,967     2,042
                                                              -------   -------
  Other assets, net.........................................  $25,418   $66,965
                                                              =======   =======
</TABLE>

                                        18
<PAGE>   23
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. ACCRUED LIABILITIES

     Accrued liabilities consist of the following at December 31:

<TABLE>
<CAPTION>
                                                               2000      1999
                                                              -------   -------
<S>                                                           <C>       <C>
Payroll, benefits and pension...............................  $ 6,234   $ 6,213
Interest and bank fees......................................   16,527     5,419
Other accrued liabilities...................................   21,086    19,084
                                                              -------   -------
  Accrued liabilities.......................................  $43,847   $30,716
                                                              =======   =======
</TABLE>

9. EMPLOYEE BENEFITS

  Pension Plans

     Pioneer sponsors various non-contributory, defined benefit plans covering
substantially all union and non-union employees of PAI and PCI Canada. Pension
plan benefits are based primarily on participants' compensation and years of
credited service. Annual pension costs and liabilities for Pioneer under its
defined benefit plans are determined by actuaries using various methods and
assumptions. Pioneer has agreed to contribute such amounts as are necessary to
provide assets sufficient to meet the benefits to be paid to its employees.
Pioneer's present intent is to make annual contributions, which are actuarially
computed, in amounts not more than the maximum nor less than the minimum
allowable under the Internal Revenue Code. Plan assets at December 31, 2000 and
1999 consist primarily of fixed income investments and equity investments.

                                        19
<PAGE>   24
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Information concerning the pension obligation, plan assets, amounts
recognized in Pioneer's financial statements and underlying actuarial
assumptions is stated below.

<TABLE>
<CAPTION>
                                                               2000      1999
                                                              -------   -------
<S>                                                           <C>       <C>
Change in Benefit Obligation:
  Projected benefit obligation, beginning of year...........  $56,966   $55,011
  Service cost..............................................    2,766     3,042
  Interest cost.............................................    4,187     3,850
  Actuarial gains...........................................     (270)   (3,573)
  Benefits paid.............................................   (1,491)   (1,379)
  Plan amendments...........................................      928        15
                                                              -------   -------
  Projected benefit obligation, end of year.................  $63,086   $56,966
                                                              =======   =======
Change in Plan Assets:
  Market value of assets, beginning of year.................  $49,591   $42,643
  Actual return on plan assets..............................    2,465     5,755
  Employer contributions....................................    3,412     2,600
  Benefits paid.............................................   (1,518)   (1,407)
                                                              -------   -------
  Market value of assets, end of year.......................  $53,950   $49,591
                                                              =======   =======
Development of net amount recognized:
  Funded status.............................................  $(9,157)  $(7,375)
  Actuarial gain............................................     (428)   (1,829)
  Unrecognized prior service cost...........................    1,467       666
                                                              -------   -------
  Net amount recognized.....................................  $(8,118)  $(8,538)
                                                              =======   =======
Amounts Recognized in the Consolidated Balance Sheets:
  Accrued pension cost......................................  $(8,194)  $(8,538)
  Accumulated other comprehensive income....................       76        --
                                                              -------   -------
  Net amount recognized.....................................  $(8,118)  $(8,538)
                                                              =======   =======
</TABLE>

<TABLE>
<CAPTION>
                                                           2000      1999      1998
                                                          -------   -------   -------
<S>                                                       <C>       <C>       <C>
Components of net periodic benefit cost:
  Service cost..........................................  $ 2,766   $ 3,042   $ 2,278
  Interest cost.........................................    4,187     3,850     3,232
  Expected return on plan assets........................   (4,109)   (3,311)   (3,020)
  Amortization of prior service cost....................      126       127        49
                                                          -------   -------   -------
  Net period benefit cost...............................  $ 2,970   $ 3,708   $ 2,539
                                                          =======   =======   =======
Weighted-average assumptions as of December 31:
  Discount rate.........................................      7.5%      7.4%      6.8%
  Expected return on plan assets........................      8.0%      8.0%      8.0%
  Rate of compensation increase.........................      4.4%      4.0%      4.0%
</TABLE>

  Defined Contribution Plans

     Pioneer offers defined contribution plans under which employees generally
contribute from 1% to 15% of their compensation. Pioneer also contributes funds
to the plans in the amount of 50% of employee contributions up to 4% to 6% of
employee compensation, depending on the plan. Aggregate expense of Pioneer with
respect to such plans was $1.2 million, $1.5 million and $0.7 million in 2000,
1999 and 1998, respectively.

                                        20
<PAGE>   25
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Post-Retirement Benefits Other Than Pensions

     Effective January 1, 1999, Pioneer modified its retiree health care
benefits plan. Employees retiring on or after January 1, 1999 will not receive
company-paid retiree medical benefits. Eligible employees who retired prior to
January 1, 1999 will continue to receive certain company-paid health care
benefits. Pioneer provides certain life insurance benefits for qualifying
retired employees who reached normal retirement age while working for Pioneer.

     Information concerning the plan obligation, the funded status, amounts
recognized in Pioneer's financial statements and underlying actuarial
assumptions is stated below.

<TABLE>
<CAPTION>
                                                               2000       1999
                                                              -------   --------
<S>                                                           <C>       <C>
Change in Benefit Obligation:
  Accumulated post-retirement benefit obligation, beginning
     of year................................................  $ 6,151   $ 28,396
  Service cost..............................................      122         99
  Interest cost.............................................      579        499
  Actuarial gain............................................      (39)    (1,644)
  Benefits paid.............................................     (260)      (325)
  Plan curtailment..........................................       --    (20,874)
                                                              -------   --------
  Accumulated post-retirement benefit obligation, end of
     year...................................................  $ 6,553   $  6,151
                                                              =======   ========
  Funded status.............................................  $(6,553)  $ (6,151)
  Unrecognized net loss.....................................       68        146
                                                              -------   --------
  Accrued benefit cost......................................  $(6,485)  $ (6,005)
                                                              =======   ========
</TABLE>

<TABLE>
<CAPTION>
                                                              2000   1999    1998
                                                              ----   ----   ------
<S>                                                           <C>    <C>    <C>
Components of net periodic benefit cost:
  Service cost..............................................  $122   $ 99   $  535
  Interest cost.............................................   579    499      776
  Amortization of net loss..................................    37      4      283
                                                              ----   ----   ------
  Net period benefit cost...................................  $738   $602   $1,594
                                                              ====   ====   ======
Weighted-average assumptions as of December 31:
  Discount rate.............................................   7.6%   8.0%     6.8%
</TABLE>

     The weighted-average annual assumed health care trend rate is assumed to be
9% for 2000. The rate is assumed to decrease gradually to 4.5% in 2013 and
remain level thereafter. Assumed health care cost trend rates have a significant
effect on the amounts reported for the health care plans. A one-percentage-point
change in assumed health care trend rates would have the following effects:

<TABLE>
<CAPTION>
                                                             1-PERCENTAGE     1-PERCENTAGE
                                                            POINT INCREASE   POINT DECREASE
                                                            --------------   --------------
<S>                                                         <C>              <C>
Effect on total of service and interest cost components...      $  119          $  (101)
Effect on post-retirement benefit obligation..............       1,291           (1,134)
</TABLE>

                                        21
<PAGE>   26
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. LONG-TERM DEBT

     Long-term debt consisted of the following at December 31:

<TABLE>
<CAPTION>
                                                                2000        1999
                                                              ---------   --------
<S>                                                           <C>         <C>
Revolving credit facility; variable interest rates based on
  U.S. prime rate plus  1/2% and Canadian prime rate plus
  1 1/4%....................................................  $  27,581   $ 21,163
9 1/4% Senior Secured Notes, due June 15, 2007..............    200,000    200,000
9 1/4% Senior Secured Notes, due October 15, 2007...........    175,000    175,000
June 1997 term facility, due in quarterly installments of
  $250 with the balance due 2006; variable interest rate
  based on LIBOR or base rate...............................     96,750     97,500
November 1997 term facility, due in quarterly installments
  of $250 with the balance due 2006; variable interest rate
  based on LIBOR or base rate...............................     80,000     80,750
Other notes, maturing in various years through 2014, with
  various installments, at various interest rates...........     11,007     11,456
                                                              ---------   --------
     Total..................................................    590,338    585,869
Current maturities of long-term debt........................   (586,252)    (2,609)
                                                              ---------   --------
     Long-term debt, less current maturities................  $   4,086   $583,260
                                                              =========   ========
</TABLE>

     Contractual long-term debt maturities (which reflect $0.5 million in 2001
of principal payments due in 2000 on the term loans that were not made) are as
follows: $8.2 million in 2001; $30.2 million in 2002; $2.7 million in 2003; $2.7
million in 2004; $2.7 million in 2005; and $543.8 million thereafter.

     As part of the acquisition of the Tacoma plant in June 1997, Pioneer issued
and sold $200 million of 9 1/4% Senior Secured Notes due June 15, 2007. Interest
is payable semi-annually on June 15 and December 15. Effective December 15,
2000, Pioneer suspended payments of interest on the notes which, after a 30 day
grace period, created a default under the indenture. Accordingly, the amount of
the notes outstanding has been classified as a current liability at December 31,
2000.

     As part of the acquisition of the Tacoma plant in June 1997, Pioneer also
entered into a nine and one-half year $100 million term facility, due in
quarterly installments of $250,000 with the balance due in 2006. Pioneer did not
make a principal payment that was due on December 28, 2000, which created an
event of default under the terms of the facility. Accordingly, the default
interest rate is in effect and the amount of outstanding under the facility has
been classified as a current liability at December 31, 2000.

     As part of the acquisition of the PCI Canada assets in November 1997,
Pioneer issued and sold $175 million of 9 1/4% Senior Secured Notes due October
15, 2007. Interest is payable semi-annually on April 15 and October 15. When
Pioneer defaulted on the $200 million 9 1/4 % Senior Secured Notes due June 15,
2007, it constituted an event of default under the indenture for the $175
million 9 1/4% Senior Secured Notes due October 15, 2007. Accordingly, the
amount of the notes outstanding has been classified as a current liability at
December 31, 2000.

     As part of the acquisition of the PCI Canada assets in November 1997,
Pioneer also entered into a nine and one-quarter year $83 million term facility,
due in quarterly installments of $250,000 with the balance due in 2006. Pioneer
did not make a principal payment that was due on December 28, 2000, which
created an event of default under the terms of the facility. Accordingly, the
default interest rate is in effect and the amount outstanding under the facility
has been classified as a current liability at December 31, 2000.

                                        22
<PAGE>   27
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Pioneer may prepay the June 1997 term facility and the November 1997 term
facility without penalty or premium.

     The Senior Secured Notes due June 15, 2007, and the Senior Secured Notes
due October 15, 2007, are senior obligations of Pioneer, ranking pari passu with
all existing and future senior indebtedness of Pioneer. These notes and both
term facilities are fully and unconditionally guaranteed on a joint and several
basis by all of the Company's direct and indirect wholly-owned subsidiaries and
are secured by first mortgage liens on certain manufacturing facilities. The
senior notes are redeemable at a premium at Pioneer's option starting in 2002.
Upon change of control, as defined in the agreement, Pioneer is required to
offer to purchase all the senior notes for 101% of the principal due.

     In September 1999, PCA entered into a $50.0 million three-year revolving
credit facility with Congress Financial Corporation (Southwest) (the "Revolving
Facility") that replaced an existing $50.0 million revolving facility (the "Bank
Credit Facility"). The Revolving Facility provides for revolving loans in an
aggregate amount up to $50.0 million, subject to borrowing base limitations
related to the level of accounts receivable and inventory, which, together with
certain other collateral, secure borrowings under the facility. The total
borrowing base at December 31, 2000 of $45.8 million was subject to a reserve of
$5.0 million until the ratio of EBITDA to fixed charges, as defined in the
Revolving Facility, exceeds 1.15:1 for a period of two consecutive quarters. As
of December 31, 2000, there were letters of credit outstanding of $3.5 million
and loans outstanding of $27.6 million. Based on the cross default provisions
contained in the Revolving Facility agreement, the facility is currently in
default, may be subject to the default rate of interest and is classified as a
current liability at December 31, 2000.

     Pioneer's long-term debt agreements contain various restrictions, which,
among other things, limit the ability of Pioneer to incur additional
indebtedness and to acquire or dispose of assets or operations.

     The Company is restricted in paying dividends to PCI and making certain
other defined cash investments to the sum of $5.0 million plus 50% of the
cumulative consolidated net income of the Company since June 1997. As of
December 31, 2000, no additional distributions were allowable under the debt
covenants. The Company's ability to incur additional new indebtedness is
restricted by a covenant requiring an interest coverage ratio of at least 2.0 to
1.0 for the prior four fiscal quarters. As of December 31, 2000, the Company did
not meet this requirement and accordingly, additional new indebtedness, other
than borrowing available under the Revolving Facility, is not allowed.

                                        23
<PAGE>   28
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The Company is a holding company with no operating assets or operations.
PCI Canada is the issuer of the $175.0 million 9 1/4% Senior Secured Notes, due
October 15, 2007. These notes are fully and unconditionally guaranteed on a
joint and several basis by the Company and the Company's other direct and
indirect wholly-owned subsidiaries. Together, PCI Canada and the subsidiary note
guarantors comprise all of the direct and indirect subsidiaries of Pioneer.
Summarized financial information of PCI Canada and the guarantors of these notes
are as follows:

<TABLE>
<CAPTION>
                                           PCI         NOTE      INTERCOMPANY   CONSOLIDATED
                                          CANADA    GUARANTORS   ELIMINATIONS     COMPANY
                                         --------   ----------   ------------   ------------
<S>                                      <C>        <C>          <C>            <C>
As of December 31, 2000:
  Current assets.......................  $ 21,976   $  61,754      $     --      $  83,730
  Non-current assets...................   196,832     353,817       (41,348)       509,301
  Current liabilities..................   217,136     456,701            --        673,837
  Non-current liabilities..............     4,932      67,742       (41,348)        31,326
For Year Ended December 31, 2000:
  Revenues.............................  $132,819   $ 286,489      $(84,156)     $ 335,152
  Gross profit.........................    22,668       8,352          (225)        30,795
  Net loss.............................    (3,914)   (108,861)         (225)      (113,000)
As of December 31, 1999:
  Current assets.......................  $ 29,854   $  51,972      $     --      $  81,826
  Non-current assets...................   225,859     392,996       (23,126)       595,729
  Current liabilities..................    24,571      37,550            --         62,121
  Non-current liabilities..............   215,993     421,624       (23,126)       614,491
For Year Ended December 31, 1999:
  Revenues.............................  $113,790   $ 172,324      $ (1,802)     $ 284,312
  Gross profit (loss)..................    14,959      (4,755)          (73)        10,131
  Net loss.............................   (16,334)    (31,533)          (73)       (47,940)
</TABLE>

     Separate financial statements of PCI Canada and the guarantors of the PCI
Canada notes are not included as management does not believe this information
would be material to investors or lenders.

11. FINANCIAL INSTRUMENTS

  Concentration of Credit Risk

     Pioneer manufactures and sells its products to companies in diverse
industries. The Company performs periodic credit evaluations of its customers'
financial condition and generally does not require collateral. Pioneer's sales
are primarily to customers throughout the United States and in eastern Canada.
Credit losses relating to these customers have been immaterial.

     Pioneer maintains cash deposits with major banks, which generally may
exceed federally insured limits. Pioneer periodically assesses the financial
condition of the institutions and believes that any risk of loss is minimal.

  Investments

     It is the policy of Pioneer to invest its excess cash in securities whose
value is not subject to market fluctuations such as master notes of issuers
rated at the time of such investment at least "A-2" or the equivalent thereof by
Standard & Poors or at least "P-2" or the equivalent thereof by Moody's or any
bank or financial institution party to the Revolving Facility.

                                        24
<PAGE>   29
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Fair Value of Financial Instruments

     In preparing disclosures about the fair value of financial instruments,
Pioneer has assumed that the carrying amount approximates fair value for cash
and cash equivalents, receivables, short-term borrowings, accounts payable and
certain accrued expenses because of the short maturities of those instruments.
The fair values of long-term debt instruments are estimated based upon quoted
market values (if applicable), or based on debt with similar terms and remaining
maturities. Considerable judgment is required in developing these estimates and,
accordingly, no assurance can be given that the estimated values presented
herein are indicative of the amounts that would be realized in a free market
exchange. Pioneer held no derivative financial instruments as of December 31,
2000 and 1999.

     At December 31, 2000, the fair market value of all of Pioneer's financial
instruments approximated the book value with the exceptions of the 9 1/4% Senior
Notes due June 15, 2007 and the 9 1/4% Senior Notes due October 15, 2007, which
had a book value of $200.0 million and $175.0 million, respectively and a fair
value, based upon quoted market prices, of $36.0 million and $40.3 million,
respectively.

12. GEOGRAPHIC INFORMATION

     Financial information relating to Pioneer by geographical area is as
follows. Revenues are attributed to countries based on destination.

<TABLE>
<CAPTION>
                                                         2000       1999       1998
                                                       --------   --------   --------
<S>                                                    <C>        <C>        <C>
REVENUES
United States........................................  $243,048   $195,424   $268,186
Canada...............................................    90,387     84,274     87,614
Other................................................     1,717      4,614      5,480
                                                       --------   --------   --------
Consolidated.........................................  $335,152   $284,312   $361,280
                                                       ========   ========   ========
LONG-LIVED ASSETS
United States........................................  $356,356   $337,573   $406,328
Canada...............................................   146,174    186,514    175,655
</TABLE>

     No individual customer constituted 10% or more of the total revenues in
2000, 1999 or 1998.

13. UNUSUAL CHARGES

     During 1998, the Company disposed of its pool chemicals business. This
disposal included the sale of certain packaging and transportation equipment for
bottled bleach and hydrochloric acid. Pioneer recognized a $1.8 million loss
from the disposal of assets plus an unusual charge of approximately $1.0 million
related to closing Pioneer's facility at City of Industry, California. Unusual
charges in 1998 also include approximately $0.4 million related to the
consolidation and downsizing of certain administrative functions. Substantially
all accrued unusual charges were expended by December 31, 1998.

14. INTEREST EXPENSE, NET

     Interest expense, net consisted of the following for the indicated periods:

<TABLE>
<CAPTION>
                                                            YEAR ENDED DECEMBER 31,
                                                          ---------------------------
                                                           2000      1999      1998
                                                          -------   -------   -------
<S>                                                       <C>       <C>       <C>
Interest expense........................................  $55,249   $51,230   $50,136
Interest income.........................................     (259)     (917)   (1,344)
                                                          -------   -------   -------
Interest expense, net...................................  $54,990   $50,313   $48,792
                                                          =======   =======   =======
</TABLE>

                                        25
<PAGE>   30
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Capitalized interest was $0.3 million in 1999. No interest was capitalized
in 2000 or 1998.

15. COMMITMENTS AND CONTINGENCIES

  Letters of Credit

     At December 31, 2000, Pioneer had letters of credit and performance bonds
outstanding of approximately $3.5 million and $1.8 million, respectively. These
letters of credit and performance bonds were issued for the benefit of customers
under sales agreements securing delivery of products sold and state
environmental agencies as required for manufacturers in the state. The letters
of credit expire at various dates in 2001. No amounts were drawn on the letters
of credit at December 31, 2000.

  Purchase Commitments

     Pioneer has various purchase commitments related to its operations. Pioneer
has committed to purchase salt used in its production processes under contracts
which continue through the year 2004 with rates similar to prevailing market
rates. Pioneer also has various commitments related to the purchase of
electricity, which continue through the year 2008 at rates similar to prevailing
market rates. Required purchase quantities of commitments in excess of one year
at December 31, 2000 are as follows:

<TABLE>
<CAPTION>
                                                              SALT-TONS   ELECTRICITY-MWH
                                                              ---------   ---------------
<S>                                                           <C>         <C>
2001........................................................    1,414          333,540
2002........................................................      612          395,940
2003........................................................      447          395,940
2004........................................................       67          395,940
2005........................................................       --          395,940
Thereafter..................................................       --        1,111,840
                                                                -----        ---------
          Total commitment quantities.......................    2,540        3,029,140
                                                                =====        =========
</TABLE>

     During the years ended December 31, 2000, 1999, and 1998 all required
purchase quantities under the above commitments were consumed during normal
operations.

  Operating Leases

     Pioneer leases certain manufacturing and distribution facilities, computer
equipment, and administrative offices under non-cancelable leases. Minimum
future rental payments on such leases with terms in excess of one year in effect
at December 31, 2000 are as follows:

<TABLE>
<S>                                                          <C>
2001.......................................................  $12,905
2002.......................................................    8,992
2003.......................................................    6,379
2004.......................................................    3,985
2005.......................................................    1,708
Thereafter.................................................      967
                                                             -------
          Total minimum obligations........................  $34,936
                                                             =======
</TABLE>

     Lease expense charged to operations for the years ended December 31, 2000,
1999, and 1998 was approximately $20.0 million, $17.3 million and $18.6 million,
respectively.

                                        26
<PAGE>   31
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Litigation

     Pioneer is party to various legal proceedings and potential claims arising
in the ordinary course of its businesses. In the opinion of management, Pioneer
has adequate legal defenses and/or insurance coverage with respect to these
matters and management does not believe that they will materially affect
Pioneer's operations or financial position.

16. INCOME TAXES

     For financial reporting purposes, deferred income taxes are determined
utilizing an asset and liability approach. This method gives consideration to
the future tax consequences associated with differences between the financial
accounting basis and tax basis of the assets and liabilities, and the ultimate
realization of any deferred tax asset resulting from such differences. The
Company considers all foreign earnings as being permanently invested in that
country.

     Components of income (loss) before income taxes and income taxes are as
follows:

<TABLE>
<CAPTION>
                                                         2000       1999       1998
                                                       --------   --------   --------
<S>                                                    <C>        <C>        <C>
Income (loss) before taxes and extraordinary item:
  U.S. ..............................................  $(73,298)  $(52,045)  $(23,242)
  Foreign............................................    (6,600)   (20,674)     9,573
                                                       --------   --------   --------
          Total......................................  $(79,898)  $(72,719)  $(13,669)
                                                       ========   ========   ========
Deferred income tax provision (benefit):
  U.S. ..............................................  $ 34,802   $(16,582)  $ (7,314)
  Foreign............................................    (2,686)    (6,973)     4,374
  State..............................................       986     (1,224)      (417)
                                                       --------   --------   --------
          Total deferred.............................    33,102    (24,779)    (3,357)
                                                       --------   --------   --------
          Total income tax provision (benefit).......  $ 33,102   $(24,779)  $ (3,357)
                                                       ========   ========   ========
</TABLE>

     Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
deferred tax liabilities and assets are as follows at December 31:

<TABLE>
<CAPTION>
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
Deferred tax liabilities:
  Tax versus book basis -- property, plant and equipment....  $(33,092)  $(24,655)
                                                              --------   --------
          Total deferred tax liabilities....................   (33,092)   (24,655)
                                                              --------   --------
Deferred tax assets:
  Post-employment benefits..................................     5,532      3,972
  Environmental reserve.....................................     3,178      4,656
  Equity in partnership.....................................     4,082      4,082
  Tax credit carryovers.....................................     3,037      1,006
  Other deferred assets.....................................       711      1,170
  Net operating loss carryforward ("NOLs") of PCI...........    83,081     48,823
                                                              --------   --------
          Total deferred tax assets.........................    99,621     63,709
Valuation allowance for deferred tax assets.................   (61,899)        --
                                                              --------   --------
Net deferred tax assets.....................................    37,722     63,709
                                                              --------   --------
Net deferred taxes..........................................  $  4,630   $ 39,054
                                                              ========   ========
</TABLE>

                                        27
<PAGE>   32
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The reconciliation of income tax computed at the U.S. federal statutory tax
rates to income tax expense for the periods presented is as follows:

<TABLE>
<CAPTION>
                                       2000                  1999                 1998
                                ------------------    ------------------    -----------------
                                 AMOUNT    PERCENT     AMOUNT    PERCENT    AMOUNT    PERCENT
                                --------   -------    --------   -------    -------   -------
<S>                             <C>        <C>        <C>        <C>        <C>       <C>
Tax at U.S. statutory rates...  $(27,964)    (35)%    $(24,452)    (35)%    $(4,784)    (35)%
State and foreign income
  taxes, net of federal tax
  benefit.....................    (2,683)     (3)       (2,109)     (2)      (1,004)     (7)
Amortization of non-deductible
  goodwill....................     1,850       2         1,782       3        2,431      18
Valuation allowance...........    61,899      77            --      --           --      --
                                --------     ---      --------     ---      -------     ---
                                $ 33,102      41%     $(24,779)    (34)%    $(3,357)    (24)%
                                ========     ===      ========     ===      =======     ===
</TABLE>

     At December 31, 2000, PCI had available to it on a consolidated tax return
basis approximately $224 million of U.S. NOLs which expire in 2009 through 2020
and $20 million of foreign NOLs expiring in 2004 through 2008. The NOLs are
available for offset against future taxable income generated during the
carryforward period. A tax sharing agreement provides that the Company will be
liable to PCI for its separate tax liability only to the extent the consolidated
group has a tax liability. However, as long as PCI's NOLs are available to the
consolidated group to reduce taxable income, the Company's tax liability to PCI
will be substantially reduced. As a result of the tax sharing agreement, the
NOLs are reflected by the Company for financial reporting purposes.

     In assessing the value of the deferred tax assets, management considers
whether it is more likely than not that all of the deferred tax assets will be
realized. Projected future income tax planning strategies and the expected
reversal of deferred tax liabilities are considered in making this assessment.
In 2000, based on the uncertainties as to the effect of the financial
restructuring on the NOLs and the level of historical taxable income and
projections for future taxable income over the periods in which the NOLs are
available for use, it was estimated that it is more likely than not that Pioneer
will not realize the full benefits of deferred tax assets. Accordingly, a
valuation allowance of $61.9 million has been recorded as of December 31, 2000.

17. OTHER LONG-TERM LIABILITIES -- ENVIRONMENTAL

     Pioneer's operations are subject to extensive environmental laws and
regulations related to protection of the environment, including those applicable
to waste management, discharge of materials into the air and water, clean-up
liability from historical waste disposal practices, and employee health and
safety. At several of Pioneer's facilities, investigations or remediation is
underway and at some of these locations regulatory agencies are considering
whether additional actions are necessary to protect or remediate surface or
groundwater resources. Pioneer could be required to incur additional costs to
construct and operate remediation systems in the future. In addition, at several
of its facilities Pioneer is in the process of replacing or closing ponds for
the collection of wastewater. Pioneer plans to spend approximately $1.5 million
during the next three years on improvements to discontinue the use of three
chlor-alkali waste water disposal ponds at the Henderson plant, replacing them
with systems to recycle wastewater. Pioneer believes that it is in substantial
compliance with existing governmental regulations.

     Pioneer's Henderson plant is located within what is known as the "Basic
Complex." Soil and groundwater contamination have been identified within and
adjoining the Basic Complex, including land owned by Pioneer. A groundwater
treatment system was installed at the facility in 1983 and, pursuant to a
Consent Agreement with the Nevada Division of Environmental Protection, studies
are being conducted to further evaluate soil

                                        28
<PAGE>   33
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

and groundwater contamination at the facility and other properties within the
Basic Complex and to determine whether additional remediation will be necessary
with respect to Pioneer's property.

     In connection with the October 1988 acquisition of the chlor-alkali
business by the Company's predecessor (the "Predecessor Company"), ICI Delaware
Holdings, Inc. and ICI Americas, Inc. (such companies or their successors, the
"ZENECA Companies") agreed to indemnify the Predecessor Company for certain
environmental liabilities (the "ZENECA Indemnity"), including liabilities
associated with operations at Pioneer's plant located in Henderson, Nevada (the
"Henderson Plant"). In general, the ZENECA Companies agreed to indemnify the
Predecessor Company for environmental costs which arise from or relate to
pre-acquisition actions which involved disposal, discharge, or release of
materials resulting from non-chlor-alkali manufacturing operations at the
Henderson Plant and at other properties within the same industrial complex.
Payments under the indemnity cannot exceed approximately $65 million.

     Due to the change in ownership resulting from the acquisition of the
Predecessor Company by the Company (the "Pioneer Acquisition"), the ZENECA
Indemnity terminated on April 20, 1999. The ZENECA Indemnity continues to cover
those claims as to which proper notice was given to the ZENECA Companies and
certain other conditions had been satisfied. Management believes that proper
notice was provided to the ZENECA Companies with respect to outstanding claims
under the ZENECA Indemnity, but the amount of such claims has not yet been
determined given the ongoing nature of the environmental work at Henderson.
Pioneer believes that the ZENECA Companies will continue to honor their
obligations under the ZENECA Indemnity for claims properly presented by Pioneer.
It is possible, however, that disputes could arise between the parties and that
Pioneer would have to subject its claims for clean-up expenses, which could be
substantial, to the contractually established arbitration process. In the
opinion of management, any environmental liability in excess of the amount
indemnified and accrued on the consolidated balance sheet would not have a
material adverse affect on the consolidated financial statements.

     In the agreement relating to the Pioneer Acquisition, the sellers agreed to
indemnify Pioneer for certain environmental liabilities that result from certain
discharges of hazardous materials, or violations of environmental laws, arising
prior to April 20, 1995 (the "Closing Date") from or relating to Company plant
sites or arising before or after the Closing Date with respect to certain
environmental liabilities relating to assets held by Pioneer for the benefit of
the sellers (the "Sellers' Indemnity"). Amounts payable pursuant to the Sellers'
Indemnity will generally be payable as follows: (i) out of certain reserves
established on the Predecessor Company's balance sheet at December 31, 1994;
(ii) either by offset against the amounts payable under the notes issued to the
sellers or from deposit account balances held by Pioneer (see Note 5); and (iii)
in certain circumstances and subject to specified limitations, out of the
personal assets of the sellers. Pioneer was required to reimburse the sellers
for amounts paid under the Sellers' Indemnity with amounts recovered under the
ZENECA Indemnity or from other third parties.

     In 1999 disputes arose between the Company and the sellers as to the proper
scope of the indemnity. During June 2000, the Company and the sellers effected
an agreement, pursuant to which the Company, in exchange for cash and other
consideration, relieved the sellers from their environmental indemnity
obligations and agreed to transfer to the sellers the record title to the
Contingent Payment Properties and the $800,000 remaining cash balance in the
Contingent Payment Account that was determined to be in excess of anticipated
environmental liability. The cash balance in the Contingent Payment Account at
the time of this transaction was $6.1 million. This cash balance was not
previously reflected on the Company's balance sheet since a right of setoff
existed. This transaction resulted in a gain of $1.8 million.

     Remediation costs are accrued based on estimates of known environmental
remediation exposure. Such accruals are based upon management's best estimate of
the ultimate cost and are recorded even if significant uncertainties exist over
the ultimate cost of the remediation. Ongoing environmental compliance cost,
including maintenance and monitoring costs, are charged to operations as
incurred. The liabilities are based upon all available facts, existing
technology, past experience and cost-sharing arrangements, including the
                                        29
<PAGE>   34
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

viability of other parties. Charges made against income for recurring
environmental matters, included in "cost of sales" on the statements of
operations, totaled approximately $2.7 million, $2.8 million and $3.4 million
for the year ended December 31, 2000, 1999, and 1998, respectively. Capital
expenditures for environmental-related matters at existing facilities
approximated $1.8 million, $1.2 million and $2.5 million for the year ended
December 31, 2000, 1999, and 1998, respectively. Future environmental-related
capital expenditures will depend upon regulatory requirements, as well as timing
related to obtaining necessary permits and approvals.

     Estimates of future environmental restoration and remediation costs are
inherently imprecise due to currently unknown factors such as the magnitude of
possible contamination, the timing and extent of such restoration and
remediation, the extent to which such costs are recoverable from third parties,
and the extent to which environmental laws and regulations may change in the
future. The Predecessor Company established a reserve at the time of its
acquisition of the Henderson, Nevada and St. Gabriel, Louisiana facilities with
respect to potential remediation costs relating to matters not covered by the
ZENECA Indemnity, consisting primarily of remediation costs that may be incurred
by Pioneer for chlor-alkali-related remediation of the Henderson and St. Gabriel
facilities. The recorded accrual included certain amounts related to anticipated
closure and post-closure actions that may be required in the event that
operation of the present chlor-alkali plants ceases. Such accrual, in the amount
of $5.9 million, is recorded in Pioneer's consolidated balance sheets at
December 31, 2000. However, complete analysis and study has not been completed,
and therefore, additional charges may be recorded in the event a decision for
closure is made.

     In 1994, the Predecessor Company recorded an additional $3.2 million
environmental reserve related to pre-closing actions at sites that are the
responsibility of the ZENECA Companies. In June 2000, based on the results of a
third party environmental analysis, the $3.2 million environmental reserve and
offsetting receivable discussed below were adjusted to the discounted future
cash flows for estimated environmental remediation, which was $2 million. The $2
million and $3.2 million reserve is recorded in Pioneer's consolidated balance
sheets at December 31, 2000 and 1999, respectively. Other assets include an
account receivable of the same amount from the ZENECA Companies. Pioneer
believes it will be reimbursed by the ZENECA Companies for substantially all of
such costs that are incurred at the Henderson Plant and other properties within
the same industrial complex. Additionally, certain other environmental matters
exist which have been assumed directly by the ZENECA Companies. No assurance can
be given that actual costs will not exceed accrued amounts. The imposition of
more stringent standards or requirements under environmental laws or
regulations, new developments or changes respecting site cleanup costs, or a
determination that Pioneer is potentially responsible for the release of
hazardous substances at other sites could result in expenditures in excess of
amounts currently estimated by Pioneer to be required for such matters. Further,
there can be no assurance that additional environmental matters will not arise
in the future.

18. RELATED PARTY TRANSACTIONS

     On December 28, 1999, Pioneer sold its 15% partnership interest in Saguaro
Power Company ("Saguaro"), which owns a cogeneration plant located in Henderson,
Nevada. Pioneer's interest in Saguaro was accounted for using the cost method of
accounting. Prior to this sale, Pioneer sold certain products and services to
and purchased steam from Saguaro at market prices. Transactions with Saguaro
prior to the sale were as follows:

<TABLE>
<CAPTION>
                                                               1999     1998
                                                              ------   ------
<S>                                                           <C>      <C>
Sales to Saguaro............................................  $  874   $  778
Purchases from Saguaro......................................   1,585    1,284
Partnership cash distribution from Saguaro (included in
  other income, net)........................................   1,020      975
</TABLE>

     Accounts receivable from and accounts payable to Saguaro are not
significant to Pioneer's consolidated balance sheet.

                                        30
<PAGE>   35
                         PIONEER CORPORATION OF AMERICA

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Pioneer is a party to an agreement with BMI for the delivery of Pioneer's
water to the Henderson production facility. The agreement provides for the
delivery of a minimum of eight million gallons of water per day. The agreement
expires on December 31, 2014, unless terminated earlier in accordance with the
provisions of the agreement. In addition, BMI owns the power facilities which
transmit electricity to the Henderson facility. For the year ended December 31,
2000, 1999 and 1998, for its services BMI charged operating expenses to Pioneer
of approximately $1.5 million, $1.6 million and $1.3 million, respectively.

     During 1999, Pioneer entered into arrangements with an affiliate of
Strategic Distribution, Inc. ("Strategic") pursuant to which Strategic's
affiliate provides procurement, handling and data management of maintenance,
repair and operating supplies at Pioneer's facilities in Henderson, Nevada and
St. Gabriel, Louisiana. William R. Berkley, Chairman of the Board of Pioneer,
owns approximately twenty-three percent of Strategic's common stock, and serves
as chairman of the board of directors of the company. Andrew R. Bursky, a
Pioneer director, is a director of Strategic, and Jack Nusbaum, a Pioneer
director, is also a director of Strategic. The Strategic affiliate was paid $4.0
million and $2.5 million for the years ended December 31, 2000 and 1999,
respectively, for services rendered to Pioneer under the agreement.

19. RECENT ACCOUNTING PRONOUNCEMENTS

     Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting
for Derivative Instruments and Hedging Activities," is effective for all fiscal
years beginning after June 15, 2000. SFAS 133, as amended, establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts and for hedging activities.
Under SFAS 133, certain contracts that were not formerly considered derivatives
may now meet the definition of a derivative. The adoption of SFAS 133 effective
January 1, 2001 did not have a significant impact on the financial position,
results of operations, or cash flows of the Company.

20. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                              FIRST      SECOND     THIRD      FOURTH
                                             QUARTER    QUARTER    QUARTER    QUARTER
                                             --------   --------   --------   --------
<S>                                          <C>        <C>        <C>        <C>
YEAR ENDED DECEMBER 31, 2000
Revenues...................................  $ 81,687   $ 86,584   $ 86,224   $ 80,657
Operating income (loss)....................      (730)       914     (6,169)    (5,111)
Loss before taxes..........................   (13,704)    (8,200)   (37,906)   (20,088)
Net loss...................................    (9,292)    (5,565)   (23,410)   (74,733)
Loss per common share......................    (9,292)    (5,565)   (23,410)   (74,733)
YEAR ENDED DECEMBER 31, 1999
Revenues...................................  $ 68,039   $ 65,997   $ 71,571   $ 78,705
Operating income (loss)....................     4,882    (13,987)   (11,979)   (15,930)
Loss before taxes..........................    (8,042)   (26,212)   (22,204)   (16,261)
Net loss...................................    (5,711)   (17,696)   (13,939)   (10,594)
Loss per common share......................    (5,711)   (17,696)   (13,939)   (10,594)
</TABLE>

22. SUBSEQUENT EVENT

     In March 2001, Pioneer announced a fifty percent curtailment in the
capacity of the Tacoma plant due to an inability to obtain sufficient power at
reasonable prices. The primary cost related to the Tacoma curtailment is
severance expense, which management expects to be approximately $1.9 million.
Management has reviewed Tacoma's long-lived assets and goodwill to assess
whether the assets are impaired in accordance with SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of." Based on the results of this analysis, management believes that the Tacoma
long-lived assets and goodwill are not impaired.

                                        31
<PAGE>   36

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

     Not applicable.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     This item is omitted in accordance with General Instruction (I)(2) of Form
10-K.

ITEM 11. EXECUTIVE COMPENSATION.

     This item is omitted in accordance with General Instruction (I)(2) of Form
10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     This item is omitted in accordance with General Instruction (I)(2) of Form
10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     This item is omitted in accordance with General Instruction (I)(2) of Form
10-K.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

     (a) List of Documents Filed.

          (1) The financial statements filed as part of this report are listed
     in the Index to Financial Statements under Item 8 on page 8 hereof.

          (2) Additional financial information and schedules included pursuant
     to the requirements of Form 10-K are listed in the Index to Financial
     Statements under Item 8 on page 8 hereof.

          (3) Exhibits

     The exhibits indicated by an asterisk (*) are incorporated by reference.
The exhibits indicated by a plus sign (+) each constitute a management contract
or compensatory plan or arrangement required to be filed as an exhibit pursuant
to the requirements of Item 14(c) of Form 10-K.

<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                             DESCRIPTION OF EXHIBIT
        -------                             ----------------------
<C>                      <S>
        2.1*             -- Stock Purchase Agreement, dated as of March 24, 1995, by
                            and among the Company, PCI and the Sellers parties
                            thereto (incorporated by reference to Exhibit 2 to PCI's
                            Current Report on Form 8-K filed on May 5, 1995).
        2.2*             -- Asset Purchase Agreement, dated as of May 14, 1997, by
                            and between OCC Tacoma, Inc. and PCI (incorporated by
                            reference to Exhibit 2 to the Company's Current Report on
                            Form 8-K filed on July 1, 1997).
        2.3(a)*          -- Asset Purchase Agreement, dated as of September 22, 1997,
                            between PCI Chemicals Canada Inc. ("PCI Canada"), PCI
                            Carolina, Inc. and PCI and ICI Canada Inc., ICI Americas,
                            Inc. and Imperial Chemical Industries plc (incorporated
                            by reference to Exhibit 2 to the Company's Quarterly
                            Report on Form 10-Q for the quarter ended September 30,
                            1997).
</TABLE>

                                        32
<PAGE>   37

<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                             DESCRIPTION OF EXHIBIT
        -------                             ----------------------
<C>                      <S>
        2.3(b)*          -- First Amendment to Asset Purchase Agreement, dated as of
                            October 31, 1997, between PCI Canada, PCI Carolina, Inc.
                            and PCI and ICI Canada Inc., ICI Americas, Inc. and
                            Imperial Chemical Industries plc (incorporated by
                            reference to Exhibit 2 to Pioneer's Current Report on
                            Form 8-K filed on November 17, 1997).
        3.1*             -- Certificate of Incorporation of the Company filed with
                            the Secretary of State of Delaware on March 6, 1995
                            (incorporated by reference to Exhibit 3.1 to the
                            Company's Registration Statement on Form S-4, as amended
                            (file No. 33-98828)).
        3.2*             -- By-laws of the Company (incorporated by reference to
                            Exhibit 3.2 to the Company's Registration Statement on
                            Form S-4, as amended (file no. 33-98828)).
        4.1*             -- Indenture, dated as of June 17, 1997, by and among the
                            Company, the Subsidiary Guarantors defined therein and
                            United States Trust Company of New York, as Trustee,
                            relating to $200,000,000 principal amount of 9 1/4%
                            Series A Senior Notes due 2007, including form of Note
                            and Guarantees (incorporated by reference to Exhibit 2 to
                            the Company's Current Report on Form 8-K filed on July 1,
                            1997).
        4.2(a)*          -- Deed of Trust, Assignment of Leases and Rents, Security
                            Agreement, Fixture Filing and Financing Statement by PAI
                            (Tacoma, Washington) (incorporated by reference to
                            Exhibit 4.2(a) to the Company's Registration Statement on
                            Form S-4, as amended (file no. 333-30683)).
        4.2(b)*          -- Mortgage, Assignment of Leases and Rents, Security
                            Agreement, Fixture Filing and Financing Statement by PAI
                            (St. Gabriel, Louisiana) (incorporated by reference to
                            Exhibit 4.2(b) to the Company's Registration Statement on
                            Form S-4, as amended (file no. 333-30683)).
        4.2(c)*          -- Mortgage, Assignment of Leases and Rents, Security
                            Agreement, Fixture Filing and Financing Statement by PAI
                            (Henderson, Nevada) (incorporated by reference to Exhibit
                            4.2(c) to the Company's Registration Statement on Form
                            S-4, as amended (file no. 333-30683)).
        4.3(a)*          -- Term Loan Agreement, dated as of June 17, 1997, among the
                            Company, various financial institutions as Lenders, DLJ
                            Capital Funding, inc., as the Syndication Agent, Salomon
                            Brothers Holding Company Inc, as the Documentation Agent
                            and Bank of America Illinois, as the Administrative Agent
                            (the "Pioneer Term Loan Agreement") (incorporated by
                            reference to Exhibit 4.3(a) to the Company's Registration
                            Statement on Form S-4, as amended (file no. 333-30683)).
        4.3(b)*          -- Subsidiary Guaranty, dated June 17, 1997, executed by
                            each of the Subsidiaries party thereto, as guarantor,
                            respectively, in favor of the Lenders, guaranteeing the
                            obligations of one another under the Pioneer Term Loan
                            Agreement (incorporated by reference to Exhibit 4.3(b) to
                            the Company's Registration Statement on Form S-4, as
                            amended (file no. 333-30683)).
        4.4*             -- Security Agreement, dated as of June 17, 1997, among PAI
                            and United States Trust Company of New York, as
                            Collateral Agent (incorporated by reference to Exhibit
                            4.4 to the Company's Registration Statement on Form S-4,
                            as amended (file no. 333-30683)).
</TABLE>

                                        33
<PAGE>   38

<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                             DESCRIPTION OF EXHIBIT
        -------                             ----------------------
<C>                      <S>
        4.5*             -- Stock Pledge Agreement, dated as of June 17, 1997, among
                            Pioneer and United States Trust Company of New York, as
                            Collateral Agent (incorporated by reference to Exhibit
                            4.5 to Pioneer's Registration Statement on Form S-4, as
                            amended (file no. 333-30683)).
        4.6*             -- Intercreditor and Collateral Agency Agreement, dated as
                            of June 17, 1997 by and among United States Trust Company
                            of New York, as Trustee and Collateral Agent, Bank of
                            America Illinois, as Agent, the Company and PAI
                            (incorporated by reference to Exhibit 4.7 to the
                            Company's Registration Statement on Form S-4, as amended
                            (file no. 333-30683)).
        4.7*             -- Indenture, dated as of October 30, 1997, by and among PCI
                            Canada, the Guarantors defined therein and United States
                            Trust Company of New York, as Trustee, relating to
                            $175,000,000 principal amount of 9 1/4% Series A Senior
                            Notes due 2007, including form of Note and Guarantees
                            (incorporated by reference to Exhibit 4.1 to PCI Canada's
                            Registration Statement on Form S-4, as amended (file No.
                            333-41221)).
        4.8*             -- Deed of Hypothec, dated as of October 30, 1997, by PCI
                            Canada in favor of United States Trust Company of New
                            York, as Collateral Agent (incorporated by reference to
                            Exhibit 4.2 to PCI Canada's Registration Statement on
                            Form S-4, as amended (file no. 333-41221)).
        4.9*             -- Affiliate Security Agreement, dated as of October 30,
                            1997, among PCI Canada, Pioneer Licensing, Inc. and
                            United States Trust Company of New York, as Collateral
                            Agent (incorporated by reference to Exhibit 4.3 to PCI
                            Canada's Registration Statement on Form S-4, as amended
                            (file No. 333-41221)).
        4.10*            -- Borrower (Canadian) Security Agreement, dated as of
                            October 30, 1997, between PCI Canada and United States
                            Trust Company of New York, as Collateral Agent
                            (incorporated by reference to Exhibit 4.4 to PCI Canada's
                            Registration Statement on Form S-4, as amended (file no.
                            333-41221)).
        4.11(a)*         -- Demand Debenture (Ontario), dated as of October 30, 1997,
                            by PCI Canada in favor of United States Trust Company of
                            New York, as Collateral Agent (incorporated by reference
                            to Exhibit 4.5(a) to PCI Canada's Registration Statement
                            on Form S-4, as amended (file no. 333-41221)).
        4.11(b)*         -- Demand Debenture (Quebec), dated as of October 30, 1997,
                            by PCI Canada in favor of United States Trust Company of
                            New York, as Collateral Agent (incorporated by reference
                            to Exhibit 4.5(b) to PCI Canada's Registration Statement
                            on Form S-4, as amended (file no. 333-41221)).
        4.11(c)*         -- Demand Debenture (New Brunswick), dated as of October 30,
                            1997, by PCI Canada in favor of United States Trust
                            Company of New York, as Collateral Agent (incorporated by
                            reference to Exhibit 4.5(c) to PCI Canada's Registration
                            Statement on Form S-4, as amended (file no. 333-41221)).
        4.12(a)*         -- Demand Pledge Agreement (Ontario), dated as of October
                            30, 1997, by PCI Canada in favor of United States Trust
                            Company of New York, as Collateral Agent (incorporated by
                            reference to Exhibit 4.6(a) to PCI Canada's Registration
                            Statement on Form S-4, as amended (file no. 333-41221)).
        4.12(b)*         -- Demand Pledge Agreement (Quebec), dated as of October 30,
                            1997, by PCI Canada in favor of United States Trust
                            Company of New York, as Collateral Agent (incorporated by
                            reference to Exhibit 4.6(b) to PCI Canada's Registration
                            Statement on Form S-4, as amended (file no. 333-41221)).
</TABLE>

                                        34
<PAGE>   39

<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                             DESCRIPTION OF EXHIBIT
        -------                             ----------------------
<C>                      <S>
        4.12(c)*         -- Demand Pledge Agreement (New Brunswick), dated as of
                            October 30, 1997, by PCI Canada in favor of United States
                            Trust Company of New York, as Collateral Agent
                            (incorporated by reference to Exhibit 4.6(c) to PCI
                            Canada's Registration Statement on Form S-4, as amended
                            (file no. 333-41221)).
        4.13*            -- Subsidiary Security Agreement, dated as of October 30,
                            1997, by PCI Canada in favor of United States Trust
                            Company of New York, as Collateral Agent (incorporated by
                            reference to Exhibit 4.7 to PCI Canada's Registration
                            Statement on Form S-4, as amended (file no. 333-41221)).
        4.14(a)*         -- Term Loan Agreement, dated as of October 30, 1997, among
                            the Company, various financial institutions, as Lenders,
                            DLJ Capital Funding, Inc., as the Syndication Agent,
                            Salomon Brothers Holding Company, Inc, as the
                            Documentation Agent, Bank of America National Trust and
                            Savings Association, as the Administrative Agent and
                            United States Trust Company of New York, as Collateral
                            Agent (incorporated by reference to Exhibit 4.8(a) to PCI
                            Canada's Registration Statement on Form S-4, as amended
                            (file no. 333-41221)).
        4.14(b)*         -- Affiliate Guaranty, dated as of October 30, 1997, by and
                            among PCI Canada, the Guarantors identified therein and
                            the Initial Purchasers identified therein (incorporated
                            by reference to Exhibit 4.8(b) to PCI Canada's
                            Registration Statement on Form S-4, as amended (file no.
                            333-41221)).
        4.15*            -- Consent and Amendment No. 1, dated November 5, 1997, to
                            Loan and Security Agreement, dated June 17, 1997, among
                            the Company, Bank of America National Trust and Savings
                            Association, as Agent and Lender and the other Lenders
                            party thereto (incorporated by reference to Exhibit 4.9
                            to PCI Canada's Registration Statement on Form S-4, as
                            amended (file no. 333-41221)).
        4.16*            -- Intercreditor and Collateral Agency Agreement, dated as
                            of October 30, 1997, by and among United States Trust
                            Company of New York, as Trustee and Collateral Agent,
                            Bank of America National Trust and Savings Association,
                            as Agent, PCI Canada and the Company (incorporated by
                            reference to Exhibit 4.10 to PCI Canada's Registration
                            Statement on Form S-4, as amended (file no. 333-41221)).
        4.17*            -- Amended and Restated Loan and Security Agreement by and
                            among Congress Financial Corporation (Southwest) as U.S.
                            Lender, Congress Financial Corporation (Canada) as
                            Canadian Lender, and Congress Financial Corporation
                            (Southwest) as Agent for Lenders and Pioneer Chlor Alkali
                            Company, Inc., All-Pure Chemical Co., Kemwater North
                            America Company, PCI Chemicals Canada Inc./PCI Chimie
                            Canada Inc., PCI Carolina, Inc. and T.C. Products, Inc.,
                            as Borrowers and the Company, Imperial West Chemical Co.,
                            Black Mountain Power Company, T.C. Holdings, Inc.,
                            Pioneer Licensing, Inc. and Pioneer (East), Inc., as
                            Guarantors, dated as of September 24, 1999 (incorporated
                            by reference to Exhibit 10 to the Company's Quarterly
                            Report on Form 10-Q for the quarter ended September 30,
                            1999.
       10.1*             -- Contingent Payment Agreement, dated as of April 20, 1995,
                            by and among the Company, PCI and the Sellers party
                            thereto (incorporated by reference to Exhibit 10.2 to the
                            Company's Current Report on Form 8-K filed on May 5,
                            1995).
       10.2*             -- Tax Sharing Agreement, dated as of April 20, 1995, by and
                            among the Company, PCI and the Subsidiary Guarantors
                            (incorporated by reference to Exhibit 10.3 to the
                            Company's Registration Statement on Form S-4, as amended
                            (file No. 33-98828)).
</TABLE>

                                        35
<PAGE>   40

<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                             DESCRIPTION OF EXHIBIT
        -------                             ----------------------
<C>                      <S>
       10.3*+            -- Pioneer Companies, Inc. 1995 Stock Incentive Plan
                            (incorporated by reference to Exhibit 10.4 to the
                            Company's Registration Statement on Form S-4, as amended
                            (file No. 33-98828)).
       10.4*+            -- Pioneer Companies, Inc. Key Executive Stock Grant Plan
                            (incorporated by reference to Exhibit 10.2 to the
                            Company's Quarterly Report on Form 10-Q for the quarter
                            ended June 30, 1996).
       10.5*+            -- Stock Purchase Agreement, dated January 4, 1997, between
                            PCI and Michael J. Ferris (incorporated by reference to
                            Exhibit 10.11 to PCI's Annual Report on Form 10-K for the
                            year ended December 31, 1996).
       10.6*+            -- Non-Qualified Stock Option Agreement, dated January 4,
                            1997, between PCI and Michael J. Ferris (incorporated by
                            reference to Exhibit 10.12 to PCI's Annual Report on Form
                            10-K for the year ended December 31, 1996).
       10.7*+            -- Non-Qualified Stock Option Agreement, dated May 15, 1997,
                            between PCI and Andrew M. Bursky (incorporated by
                            reference to Exhibit 10.11 to PCI Canada's Registration
                            Statement on Form S-4, as amended (file no. 333-41221)).
       21                -- Subsidiaries of the Company.
</TABLE>

     (b) Reports on Form 8-K.

     On December 19, 2000, the Company filed a report on Form 8-K. Under Item 5
of the report ("Other Events"), the Company reported that PCI had issued a press
release announcing that the Company was delaying the payment of interest due on
December 15, 2000, on outstanding 9 1/4% Senior Secured Notes due June 2007. The
press release also disclosed that the Company had entered into discussions with
an institutional investor with respect to a three-year credit facility of up to
$35 million subject to specified conditions. It was stated that if the new
financing was consummated within thirty days, Pioneer would be able to pay the
delayed interest payment within the grace period allowed by the Notes, and that
necessary consents would be sought from the holders of the Company's senior
indebtedness. Further, the Company disclosed that if the financing was not
arranged or if the necessary consents were not obtained, the Company would seek
a restructuring of the senior indebtedness.

     In a subsequent Form 8-K filed on January 8, 2001, the Company reported
that a subsequent press release had been issued, announcing that principal
payments due on additional indebtedness had not been paid, that the discussions
with respect to a new credit facility had been terminated, and that the Company
was developing a more comprehensive financial restructuring program.

     (c) Financial Statement Schedule.

     Filed herewith as a financial statement schedule is Schedule II with
respect to Valuation and Qualifying Accounts for the Company. All other
schedules have been omitted because they are not applicable, not required or the
required information is included in the financial statements or notes thereto.

                                        36
<PAGE>   41

                                                                     SCHEDULE II

                         PIONEER CORPORATION OF AMERICA

                       VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                          BALANCE AT   CHARGED TO                             BALANCE AT
                                          BEGINNING    COSTS AND                                END OF
DESCRIPTION                               OF PERIOD     EXPENSE     ADDITIONS   DEDUCTIONS      PERIOD
-----------                               ----------   ----------   ---------   ----------    ----------
<S>                                       <C>          <C>          <C>         <C>           <C>
Year Ended December 31, 2000:
  Allowance for doubtful accounts.......    $1,592        $ 93        $           $(293)(A)     $1,392
Year Ended December 31, 1999:
  Allowance for doubtful accounts.......    $2,017        $320        $ --        $(745)(A)     $1,592
Year Ended December 31, 1998:
  Allowance for doubtful accounts.......    $2,002        $135        $ --        $(120)(A)     $2,017
</TABLE>

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

(A)  Uncollectable accounts written off, net of recoveries.

                                        37
<PAGE>   42

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                            By:    /s/ MICHAEL J. FERRIS
                                              ----------------------------------
                                                      Michael J. Ferris
                                                     President and Chief
                                                      Executive Officer

April 11, 2001

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

<TABLE>
<CAPTION>
                      SIGNATURE                                     TITLE                     DATE
                      ---------                                     -----                     ----
<C>                                                    <S>                               <C>

                /s/ MICHAEL J. FERRIS                  President and Chief Executive     April 11, 2001
-----------------------------------------------------    Officer and Director
                 (Michael J. Ferris)

                /s/ PHILIP J. ABLOVE                   Executive Vice President and      April 11, 2001
-----------------------------------------------------    Chief Financial Officer and
                 (Philip J. Ablove)                      Director (Principal Financial
                                                         Officer)

                /s/ PIERRE PRUD'HOMME                  Vice President, Controller        April 11, 2001
-----------------------------------------------------    (Principal Accounting Officer)
                 (Pierre Prud'homme)

               /s/ WILLIAM R. BERKLEY                  Chairman of the Board             April 11, 2001
-----------------------------------------------------
                (William R. Berkley)

                /s/ ANDREW M. BURSKY                   Director                          April 11, 2001
-----------------------------------------------------
                 (Andrew M. Bursky)

                /s/ DONALD J. DONAHUE                  Director                          April 11, 2001
-----------------------------------------------------
                 (Donald J. Donahue)

             /s/ RICHARD C. KELLOGG, JR                Director                          April 11, 2001
-----------------------------------------------------
              (Richard C. Kellogg, Jr.)

                 /s/ JOHN R. KENNEDY                   Director                          April 11, 2001
-----------------------------------------------------
                  (John R. Kennedy)

                 /s/ JACK H. NUSBAUM                   Director                          April 11, 2001
-----------------------------------------------------
                  (Jack H. Nusbaum)

              /s/ THOMAS H. SCHNITZIUS                 Director                          April 11, 2001
-----------------------------------------------------
               (Thomas H. Schnitzius)
</TABLE>

                                        38
<PAGE>   43

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                             DESCRIPTION OF EXHIBIT
        -------                             ----------------------
<C>                      <S>
        2.1*             -- Stock Purchase Agreement, dated as of March 24, 1995, by
                            and among the Company, PCI and the Sellers parties
                            thereto (incorporated by reference to Exhibit 2 to PCI's
                            Current Report on Form 8-K filed on May 5, 1995).
        2.2*             -- Asset Purchase Agreement, dated as of May 14, 1997, by
                            and between OCC Tacoma, Inc. and PCI (incorporated by
                            reference to Exhibit 2 to the Company's Current Report on
                            Form 8-K filed on July 1, 1997).
        2.3(a)*          -- Asset Purchase Agreement, dated as of September 22, 1997,
                            between PCI Chemicals Canada Inc. ("PCI Canada"), PCI
                            Carolina, Inc. and PCI and ICI Canada Inc., ICI Americas,
                            Inc. and Imperial Chemical Industries plc (incorporated
                            by reference to Exhibit 2 to the Company's Quarterly
                            Report on Form 10-Q for the quarter ended September 30,
                            1997).
        2.3(b)*          -- First Amendment to Asset Purchase Agreement, dated as of
                            October 31, 1997, between PCI Canada, PCI Carolina, Inc.
                            and PCI and ICI Canada Inc., ICI Americas, Inc. and
                            Imperial Chemical Industries plc (incorporated by
                            reference to Exhibit 2 to Pioneer's Current Report on
                            Form 8-K filed on November 17, 1997).
        3.1*             -- Certificate of Incorporation of the Company filed with
                            the Secretary of State of Delaware on March 6, 1995
                            (incorporated by reference to Exhibit 3.1 to the
                            Company's Registration Statement on Form S-4, as amended
                            (file No. 33-98828)).
        3.2*             -- By-laws of the Company (incorporated by reference to
                            Exhibit 3.2 to the Company's Registration Statement on
                            Form S-4, as amended (file no. 33-98828)).
        4.1*             -- Indenture, dated as of June 17, 1997, by and among the
                            Company, the Subsidiary Guarantors defined therein and
                            United States Trust Company of New York, as Trustee,
                            relating to $200,000,000 principal amount of 9 1/4%
                            Series A Senior Notes due 2007, including form of Note
                            and Guarantees (incorporated by reference to Exhibit 2 to
                            the Company's Current Report on Form 8-K filed on July 1,
                            1997).
        4.2(a)*          -- Deed of Trust, Assignment of Leases and Rents, Security
                            Agreement, Fixture Filing and Financing Statement by PAI
                            (Tacoma, Washington) (incorporated by reference to
                            Exhibit 4.2(a) to the Company's Registration Statement on
                            Form S-4, as amended (file no. 333-30683)).
        4.2(b)*          -- Mortgage, Assignment of Leases and Rents, Security
                            Agreement, Fixture Filing and Financing Statement by PAI
                            (St. Gabriel, Louisiana) (incorporated by reference to
                            Exhibit 4.2(b) to the Company's Registration Statement on
                            Form S-4, as amended (file no. 333-30683)).
        4.2(c)*          -- Mortgage, Assignment of Leases and Rents, Security
                            Agreement, Fixture Filing and Financing Statement by PAI
                            (Henderson, Nevada) (incorporated by reference to Exhibit
                            4.2(c) to the Company's Registration Statement on Form
                            S-4, as amended (file no. 333-30683)).
        4.3(a)*          -- Term Loan Agreement, dated as of June 17, 1997, among the
                            Company, various financial institutions as Lenders, DLJ
                            Capital Funding, inc., as the Syndication Agent, Salomon
                            Brothers Holding Company Inc, as the Documentation Agent
                            and Bank of America Illinois, as the Administrative Agent
                            (the "Pioneer Term Loan Agreement") (incorporated by
                            reference to Exhibit 4.3(a) to the Company's Registration
                            Statement on Form S-4, as amended (file no. 333-30683)).
</TABLE>
<PAGE>   44

<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                             DESCRIPTION OF EXHIBIT
        -------                             ----------------------
<C>                      <S>
        4.3(b)*          -- Subsidiary Guaranty, dated June 17, 1997, executed by
                            each of the Subsidiaries party thereto, as guarantor,
                            respectively, in favor of the Lenders, guaranteeing the
                            obligations of one another under the Pioneer Term Loan
                            Agreement (incorporated by reference to Exhibit 4.3(b) to
                            the Company's Registration Statement on Form S-4, as
                            amended (file no. 333-30683)).
        4.4*             -- Security Agreement, dated as of June 17, 1997, among PAI
                            and United States Trust Company of New York, as
                            Collateral Agent (incorporated by reference to Exhibit
                            4.4 to the Company's Registration Statement on Form S-4,
                            as amended (file no. 333-30683)).
        4.5*             -- Stock Pledge Agreement, dated as of June 17, 1997, among
                            Pioneer and United States Trust Company of New York, as
                            Collateral Agent (incorporated by reference to Exhibit
                            4.5 to Pioneer's Registration Statement on Form S-4, as
                            amended (file no. 333-30683)).
        4.6*             -- Intercreditor and Collateral Agency Agreement, dated as
                            of June 17, 1997 by and among United States Trust Company
                            of New York, as Trustee and Collateral Agent, Bank of
                            America Illinois, as Agent, the Company and PAI
                            (incorporated by reference to Exhibit 4.7 to the
                            Company's Registration Statement on Form S-4, as amended
                            (file no. 333-30683)).
        4.7*             -- Indenture, dated as of October 30, 1997, by and among PCI
                            Canada, the Guarantors defined therein and United States
                            Trust Company of New York, as Trustee, relating to
                            $175,000,000 principal amount of 9 1/4% Series A Senior
                            Notes due 2007, including form of Note and Guarantees
                            (incorporated by reference to Exhibit 4.1 to PCI Canada's
                            Registration Statement on Form S-4, as amended (file No.
                            333-41221)).
        4.8*             -- Deed of Hypothec, dated as of October 30, 1997, by PCI
                            Canada in favor of United States Trust Company of New
                            York, as Collateral Agent (incorporated by reference to
                            Exhibit 4.2 to PCI Canada's Registration Statement on
                            Form S-4, as amended (file no. 333-41221)).
        4.9*             -- Affiliate Security Agreement, dated as of October 30,
                            1997, among PCI Canada, Pioneer Licensing, Inc. and
                            United States Trust Company of New York, as Collateral
                            Agent (incorporated by reference to Exhibit 4.3 to PCI
                            Canada's Registration Statement on Form S-4, as amended
                            (file No. 333-41221)).
        4.10*            -- Borrower (Canadian) Security Agreement, dated as of
                            October 30, 1997, between PCI Canada and United States
                            Trust Company of New York, as Collateral Agent
                            (incorporated by reference to Exhibit 4.4 to PCI Canada's
                            Registration Statement on Form S-4, as amended (file no.
                            333-41221)).
        4.11(a)*         -- Demand Debenture (Ontario), dated as of October 30, 1997,
                            by PCI Canada in favor of United States Trust Company of
                            New York, as Collateral Agent (incorporated by reference
                            to Exhibit 4.5(a) to PCI Canada's Registration Statement
                            on Form S-4, as amended (file no. 333-41221)).
        4.11(b)*         -- Demand Debenture (Quebec), dated as of October 30, 1997,
                            by PCI Canada in favor of United States Trust Company of
                            New York, as Collateral Agent (incorporated by reference
                            to Exhibit 4.5(b) to PCI Canada's Registration Statement
                            on Form S-4, as amended (file no. 333-41221)).
        4.11(c)*         -- Demand Debenture (New Brunswick), dated as of October 30,
                            1997, by PCI Canada in favor of United States Trust
                            Company of New York, as Collateral Agent (incorporated by
                            reference to Exhibit 4.5(c) to PCI Canada's Registration
                            Statement on Form S-4, as amended (file no. 333-41221)).
</TABLE>
<PAGE>   45

<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                             DESCRIPTION OF EXHIBIT
        -------                             ----------------------
<C>                      <S>
        4.12(a)*         -- Demand Pledge Agreement (Ontario), dated as of October
                            30, 1997, by PCI Canada in favor of United States Trust
                            Company of New York, as Collateral Agent (incorporated by
                            reference to Exhibit 4.6(a) to PCI Canada's Registration
                            Statement on Form S-4, as amended (file no. 333-41221)).
        4.12(b)*         -- Demand Pledge Agreement (Quebec), dated as of October 30,
                            1997, by PCI Canada in favor of United States Trust
                            Company of New York, as Collateral Agent (incorporated by
                            reference to Exhibit 4.6(b) to PCI Canada's Registration
                            Statement on Form S-4, as amended (file no. 333-41221)).
        4.12(c)*         -- Demand Pledge Agreement (New Brunswick), dated as of
                            October 30, 1997, by PCI Canada in favor of United States
                            Trust Company of New York, as Collateral Agent
                            (incorporated by reference to Exhibit 4.6(c) to PCI
                            Canada's Registration Statement on Form S-4, as amended
                            (file no. 333-41221)).
        4.13*            -- Subsidiary Security Agreement, dated as of October 30,
                            1997, by PCI Canada in favor of United States Trust
                            Company of New York, as Collateral Agent (incorporated by
                            reference to Exhibit 4.7 to PCI Canada's Registration
                            Statement on Form S-4, as amended (file no. 333-41221)).
        4.14(a)*         -- Term Loan Agreement, dated as of October 30, 1997, among
                            the Company, various financial institutions, as Lenders,
                            DLJ Capital Funding, Inc., as the Syndication Agent,
                            Salomon Brothers Holding Company, Inc, as the
                            Documentation Agent, Bank of America National Trust and
                            Savings Association, as the Administrative Agent and
                            United States Trust Company of New York, as Collateral
                            Agent (incorporated by reference to Exhibit 4.8(a) to PCI
                            Canada's Registration Statement on Form S-4, as amended
                            (file no. 333-41221)).
        4.14(b)*         -- Affiliate Guaranty, dated as of October 30, 1997, by and
                            among PCI Canada, the Guarantors identified therein and
                            the Initial Purchasers identified therein (incorporated
                            by reference to Exhibit 4.8(b) to PCI Canada's
                            Registration Statement on Form S-4, as amended (file no.
                            333-41221)).
        4.15*            -- Consent and Amendment No. 1, dated November 5, 1997, to
                            Loan and Security Agreement, dated June 17, 1997, among
                            the Company, Bank of America National Trust and Savings
                            Association, as Agent and Lender and the other Lenders
                            party thereto (incorporated by reference to Exhibit 4.9
                            to PCI Canada's Registration Statement on Form S-4, as
                            amended (file no. 333-41221)).
        4.16*            -- Intercreditor and Collateral Agency Agreement, dated as
                            of October 30, 1997, by and among United States Trust
                            Company of New York, as Trustee and Collateral Agent,
                            Bank of America National Trust and Savings Association,
                            as Agent, PCI Canada and the Company (incorporated by
                            reference to Exhibit 4.10 to PCI Canada's Registration
                            Statement on Form S-4, as amended (file no. 333-41221)).
        4.17*            -- Amended and Restated Loan and Security Agreement by and
                            among Congress Financial Corporation (Southwest) as U.S.
                            Lender, Congress Financial Corporation (Canada) as
                            Canadian Lender, and Congress Financial Corporation
                            (Southwest) as Agent for Lenders and Pioneer Chlor Alkali
                            Company, Inc., All-Pure Chemical Co., Kemwater North
                            America Company, PCI Chemicals Canada Inc./PCI Chimie
                            Canada Inc., PCI Carolina, Inc. and T.C. Products, Inc.,
                            as Borrowers and the Company, Imperial West Chemical Co.,
                            Black Mountain Power Company, T.C. Holdings, Inc.,
                            Pioneer Licensing, Inc. and Pioneer (East), Inc., as
                            Guarantors, dated as of September 24, 1999 (incorporated
                            by reference to Exhibit 10 to the Company's Quarterly
                            Report on Form 10-Q for the quarter ended September 30,
                            1999.
</TABLE>
<PAGE>   46

<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                             DESCRIPTION OF EXHIBIT
        -------                             ----------------------
<C>                      <S>
       10.1*             -- Contingent Payment Agreement, dated as of April 20, 1995,
                            by and among the Company, PCI and the Sellers party
                            thereto (incorporated by reference to Exhibit 10.2 to the
                            Company's Current Report on Form 8-K filed on May 5,
                            1995).
       10.2*             -- Tax Sharing Agreement, dated as of April 20, 1995, by and
                            among the Company, PCI and the Subsidiary Guarantors
                            (incorporated by reference to Exhibit 10.3 to the
                            Company's Registration Statement on Form S-4, as amended
                            (file No. 33-98828)).
       10.3*+            -- Pioneer Companies, Inc. 1995 Stock Incentive Plan
                            (incorporated by reference to Exhibit 10.4 to the
                            Company's Registration Statement on Form S-4, as amended
                            (file No. 33-98828)).
       10.4*+            -- Pioneer Companies, Inc. Key Executive Stock Grant Plan
                            (incorporated by reference to Exhibit 10.2 to the
                            Company's Quarterly Report on Form 10-Q for the quarter
                            ended June 30, 1996).
       10.5*+            -- Stock Purchase Agreement, dated January 4, 1997, between
                            PCI and Michael J. Ferris (incorporated by reference to
                            Exhibit 10.11 to PCI's Annual Report on Form 10-K for the
                            year ended December 31, 1996).
       10.6*+            -- Non-Qualified Stock Option Agreement, dated January 4,
                            1997, between PCI and Michael J. Ferris (incorporated by
                            reference to Exhibit 10.12 to PCI's Annual Report on Form
                            10-K for the year ended December 31, 1996).
       10.7*+            -- Non-Qualified Stock Option Agreement, dated May 15, 1997,
                            between PCI and Andrew M. Bursky (incorporated by
                            reference to Exhibit 10.11 to PCI Canada's Registration
                            Statement on Form S-4, as amended (file no. 333-41221)).
       21                -- Subsidiaries of the Company.
</TABLE>