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

                                    FORM 10-K

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

                   for the Fiscal Year Ended December 31, 2001

                         Commission File number: 0-22098

                           INSILCO TECHNOLOGIES, INC.
             (Exact name for Registrant as specified in its charter)

                 DELAWARE                                  NO. 06-0635844
     (State or other jurisdiction of                     (I.R.S. Employer
      incorporation or organization                     Identification No.)

                       425 METRO PLACE NORTH, FIFTH FLOOR
                               DUBLIN, OHIO 43017
                    (Address of principal executive offices,
                               including zip code)

                                 (614) 792-0468
                         (Registrant's telephone number,
                              including area code)

        Securities registered pursuant to Section 12(b) of the Act: None

        Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) for the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to the filing
requirements for at least 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. As of March 19, 2002, 100,000
shares of common stock, $.001 par value, were outstanding. The registrant is a
wholly owned subsidiary of Insilco Holding Co.

The registrant meets the conditions set forth in General Instruction I (i) (a)
and (b) of Form 10-K and is therefore filing this Form 10-K with the reduced
disclosure format.
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<PAGE>

                                Table of Contents
                                                                           Page
                                                                           ----
PART I

Item 1.    Business                                                          2

Item 2.    Properties                                                       13

Item 3.    Legal Proceedings                                                14

Item 4.    Submission of Matters to a Vote of Security Holders              14

PART II

Item 5.    Market for the Registrant's Common Equity and Related
             Stockholder Matters                                            14

Item 6.    Selected Financial Data                                          15

Item 7.    Management's Discussion and Analysis of Financial
             Condition and Results of Operations
                                                                            16
Item 7A.   Quantitative and Qualitative Disclosures
             About Market Risk                                              27

Item 8.    Financial Statements and Supplementary Data                      27

Item 9.    Changes in and Disagreements With Accountants on
            Accounting and Financial Disclosure
                                                                            27
PART III

Item 10.   Directors and Executive Officers of the Registrant               29

Item 11.   Executive Compensation                                           29

Item 12.   Security Ownership of Certain Beneficial Owners and Management   29

Item 13.   Certain Relationships and Related Transactions                   29

PART IV

Item 14.   Exhibits, Financial Statement Schedules, and Reports
             on Form 8-K                                                    30

           Signatures                                                       34

           Consolidated Financial Statements                               F-1


<PAGE>

NOTE REGARDING FORWARD-LOOKING STATEMENTS

Our actual results could differ materially from those projected in
forward-looking statements. All statements other than historical facts are
forward-looking statements, including the statements made in the outlook
section. Although we believe that the expectations reflected in the
forward-looking statements contained herein are reasonable, we can give no
assurance that such expectations will prove to be correct. Factors that could
cause actual results to differ materially are set forth under the caption
"Business - Critical Risk Factors" in this Annual Report on Form 10K and other
factors detailed from time to time in our filings with the Securities and
Exchange Commission, including, without limitation, the following:

     o   changes in arrangements with our lenders
     o   delays in new product introductions
     o   lack of market acceptance of new products
     o   changes in demand for the products
     o   large customer concentration
     o   dependence on key personnel
     o   foreign exchange fluctuations
     o   control exhibited by majority holders
     o   changes in market trends
     o   liquidity of common stock
     o   operating hazards
     o   general competitive pressures from existing and new competitors
     o   effects of governmental regulations, including environmental matters
     o   changes in interest rates
     o   adverse economic conditions that could affect the amount of cash
         available for debt servicing and capital investments

All subsequent written and oral forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by the
cautionary statements.

                                     PART I

AS USED IN THIS ANNUAL REPORT ON FORM 10-K AND EXCEPT AS THE CONTEXT OTHERWISE
MAY REQUIRE, THE TERMS "WE," "US," "OUR," "INSILCO" OR THE "COMPANY" MEANS
INSILCO TECHNOLOGIES, INC. AND ALL ENTITIES OWNED OR CONTROLLED BY US, EXCEPT
WHERE IT IS MADE CLEAR THAT THE TERM ONLY MEANS INSILCO TECHNOLOGIES, INC.

ITEM 1. BUSINESS
----------------

                                   THE COMPANY
OVERVIEW

We are Insilco Technologies, Inc., formerly Insilco Corporation. We are a
Delaware corporation originally incorporated in New Jersey in 1898 and a
wholly-owned subsidiary of Insilco Holding Co. or Holdings. We manufacture
telecommunication and electrical component products for the computer networking,
telephone digital switching, premises wiring, main frame computer, automotive
and medical equipment markets.

We are currently in default on our 12% Senior Subordinated Notes due 2007, or
12% Notes, as well as in a cross-default on our senior secured credit facility.
As a result of this default, the debt under the senior secured credit facility
and the 12% Notes has been reclassified to current. At this time, we are having
on-going discussions with our senior secured lenders and an ad hoc committee of
holders of the 12% Notes in an effort to reach an agreement on a consensual
restructuring of our capital structure. However, as with any

                                        2
<PAGE>

negotiation, there can be no assurance as to when and if such an agreement will
be reached. If an agreement is not reached, it will impact our principal
resources of liquidity and our ability to meet future cash requirements. Such
limitations could force us to consider alternatives that may include negotiating
further amendments to the senior secured credit facility, attempting to obtain
commitments for additional new tranche loans or notes, asset sales, a sale of
the Company or other remedies appropriate for the circumstances. See further
discussion at Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations.

We own and operate a number of subsidiaries and report our financial results
through three primary product line segments: Custom Assemblies, Passive
Components, and Precision Stampings. The percentage of our total net sales for
each of these segments over the last three fiscal years is:

                              1999     2000     2001
                            -------  -------  -------
Custom Assemblies              27%      51%      44%
Passive Components             36%      28%      32%
Precision Stampings            30%      21%      24%
Other (1)                       7%       0%       0%
                            -------  -------  -------
           Total              100%     100%     100%
                            =======  =======  =======

(1)   Our Other segment includes two businesses, a manufacturer of machinery and
      equipment for the heat exchanger market and a welded stainless steel
      tubing manufacturer, which were divested in 1999.

On August 17, 1998, our management, Holdings, and Silkworm Acquisition
Corporation or Silkworm, an affiliate of DLJ Merchant Banking Partners, II, L.P.
or DLJMB, completed a series of merger transactions (see Note 2 of the Notes to
the Consolidated Financial Statements). As a result, we became a wholly owned
subsidiary of Holdings and are included in Holdings' consolidated financial
statements and are a part of Holdings' consolidated group for tax purposes.

On January 25, 1999, we purchased the stock of Eyelets for Industry, Inc., or
EFI, a precision stamping operation with facilities in Connecticut and Texas.
EFI is included in our Precision Stampings segment.

On June 30, 1999, we closed our McKenica business, which manufactured high speed
welded tube mills and other machinery and equipment for the heat exchanger
market. McKenica was included in our Other segment.

On August 23, 1999, we sold our Romac business, which manufactured stainless
steel tubing for a variety of marine, architectural, automotive and decorative
applications at its facility in North Carolina. Romac was included in our Other
segment.

Neither of these divestitures met the classification requirements for
Discontinued Operations. Therefore, the costs and gain or loss associated with
these divestitures are included in restructuring costs or Other Income in the
Consolidated Statement of Operations.

On February 11, 2000, we sold our Taylor Publishing Company, or Taylor, which
designed and printed student yearbooks. Taylor represented our discontinued
Specialty Publishing segment.

On February 17, 2000, we acquired the stock of T.A.T. Technologies, or TAT. TAT,
headquartered in Montreal, Canada, designs and provides custom wire and cable
assemblies, and door, panel and electromechanical assemblies to
telecommunication equipment manufacturers. TAT is included in our Custom
Assemblies segment.

                                        3
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On August 25, 2000, we purchased Precision Cable Manufacturing, or PCM. PCM is
headquartered in Rockwall, Texas, and is a cable and wire assembly provider
primarily to the telecommunications industry. PCM is included in our Custom
Assemblies segment. Also on August 25, 2000, we, through Holdings, sold our
"Automotive Businesses" to Holdings' majority stockholders. These "Automotive
Businesses," which previously comprised our now discontinued Automotive
Components segment, manufactured, sold and distributed tubing and heat exchanger
products and transmission and suspension components.

On January 10, 2001, we acquired the stock of InNet Technologies, Inc., or
InNet. InNet is headquartered in San Diego, California, and is a designer,
developer and marketer of a broad range of magnetic interface products for
networking, computer and telecommunications original equipment manufacturers.
InNet is included in our Passive Components segment.

Our principal executive offices are located at 425 Metro Place North, Fifth
floor, Dublin, Ohio 43017, and our telephone number is (614) 792-0468.

PASSIVE COMPONENTS

Our Passive Components segment consists of three business units: Signal
Transformer, or Signal, InNet, which was purchased on January 10, 2001, and
Stewart Connector Systems, or SCS. The businesses in this segment provide
products and services for OTEMs, EMS providers, and industrial original
equipment manufacturers, or OEMs. Our products in this segment include
transformers, data-grade connectors and magnetic interface products used in a
broad range of applications, including network servers, computers and related
peripherals, network bridges and routers, telephone switching equipment, home
and retail security systems, medical instrumentation, gaming and entertainment,
and process controls.

DATA-GRADE CONNECTORS AND INTEGRATED MAGNETIC COMPONENTS: Through the SCS and
InNet business units, we design and manufacture specialized high speed data
connector systems, including modular plugs, modular jacks, shielded and
non-shielded specialized connectors, and integrated magnetic components.

We have numerous domestic and foreign competitors, some of which have
substantially more resources than we have. Competition is based principally on
price with respect to older product lines and on technology and product features
for newer products. Competition for newer products is also based, to a lesser
extent, on patent protection.

We sell our products throughout the world, directly and through sales
subsidiaries, and through a network of manufacturers' representatives. We also
maintain a direct sales office (and to a lesser extent, distribution operations)
in Germany. We sold 44% in 1999, 48% in 2000 and 67% in 2001 of these products
to foreign markets.

We manufacture our products through our manufacturing facilities in
Pennsylvania, Mexico and China. As of December 31, 2001, we had 3,256 employees
in these business units.

TRANSFORMERS: Through the Signal business unit, we design, manufacture and
distribute globally 50/60 megahertz and heavy power transformers, as well as
high frequency and planar transformers for the telecommunications, data
transmission, electronics and home and retail security markets. Our PRONTO
Shipment Program offers 24 hour delivery of over 1,000 different transformer
models, which are stocked for immediate delivery. Our certified testing lab is a
substitute for the approval processes of global standards agencies enabling us
to reduce our time for new product introductions.

The transformer industry is highly fragmented with a major portion of production
remaining captive within OEMs. We have numerous competitors, including both
domestic and foreign manufacturers. Competition in our markets is based
primarily on price, engineering, quick delivery, and product quality.
Transformers

                                        4
<PAGE>

are found in a broad range of electronic products and end-use markets. These
products are used to control current flow in a circuit. Transformers are
somewhat of a more complex inductor device, consisting of two or more coils
coupled together, designed to transmit energy from one circuit to another via
mutual induction.

We market our products directly, utilizing catalogs and print advertising. We
also market our products indirectly through selective independent sales
representatives in targeted regions of the country. We have a customer base of
over 9,000 accounts, consisting of both OEMs and after-market resellers.

We have production facilities located in the Dominican Republic, Mexico, and New
York. As of December 31, 2001, we had 458 employees in this business unit.

CUSTOM ASSEMBLIES

The Custom Assemblies segment consists of three operating units: ITG Global (fka
Escod Industries), or ITG, a division of our Company, TAT and PCM. Through these
businesses, we design, engineer and manufacturer custom cable assemblies and
electromechanical assemblies primarily for original telecommunications equipment
manufacturers, or OTEMs, and their electronic manufacturing service, or EMS,
providers. Our customers' end products are used primarily in the data
communications and telecommunications industries. Therefore, the demand for our
products depends on the demand for our customers' end products and our
customers' utilization of their own production sites and their EMS providers.

The cable assembly industry is highly fragmented and competition in our markets
is based primarily on price and on responsiveness to customers' needs, product
quality and proximity to customers. Cable assemblies are found in a broad range
of electronic equipment, including computers and related peripherals, network
bridges and routers, telephone switching equipment, central offices and
electrical controls. These products are assembled from bulk, coaxial, fiber
optic or other cables and discrete wire and various electronic connectors that
are attached to one or more cable ends. We offer customers sophisticated
in-house product design and technical support capabilities, including support
teams that work closely with the customer through all stages of product planning
and production.

We believe the trend toward outsourcing, which is fueled by a trend among
high-technology companies to outsource their cable assembly needs to contract
manufacturers will continue. These technology companies are particularly seeking
to consolidate their supplier base, reduce inventories and improve inventory
management, reduce component costs, increase flexibility, and improve component
product quality and technical support with larger suppliers with much more
significant resources.

Our close proximity and coordination with customers, adherence to strict quality
control standards and our investment in production facilities and equipment help
us attract and retain our customer base. We have developed long-term
relationships with a select group of OTEMs and their EMS providers in the data
processing and telecommunications industries to provide custom cable and other
electronic assemblies.

Although we provide custom assembly services to medical, global-positioning, and
industrial original equipment manufacturers, OTEMs account for the bulk of the
sales in this segment. Moreover, two OTEMs directly or indirectly accounted for
approximately 51% of our cable and wire assembly revenues in 1999, 61% in 2000
and 34% in 2001. Because of our dependence on these two major customers, revenue
and EBITDA (earnings before interest expense (net), income taxes, depreciation
and amortization and non-operating items) associated with this segment are
sensitive to changes in demand from these customers. In addition, due to the
nature of customers' end products and their product life cycles and the various
cost structures and utilization of our locations, EBITDA margins can vary
greatly between locations. During 2001 and 2000, one location accounted for
approximately 52% and 76%, respectively, of the total EBITDA of this segment.

                                        5
<PAGE>

We provide services and manufacture approximately 7,500 different types of
assemblies through our manufacturing facilities in North Carolina, South
Carolina, Florida, Texas, Mexico, Ireland and Canada. As of December 31, 2001,
we had 1,256 employees in these business units.

PRECISION STAMPINGS

Through our Precision Stampings segment, we use tool and die design capabilities
and high-speed presses to manufacture high volume, precision stampings and
wire-formed components for automotive, telecommunications, data networking,
electronics and electrical customers. These components are then used in
connectors, circuit breakers, electric fuses, lighting and process control
capacitors, sensor contacts and battery cans. We are capable of high speed,
tight tolerance manufacturing, progressive and transfer die stamping, and slide,
deep draw, and wire forming. We manufacture our products in our facilities in
New York, Connecticut and Texas.

We sell our capabilities to a broad customer base primarily in the U.S. through
a network of manufacturers' representatives. One electrical products customer,
directly or indirectly, accounted for approximately 13% of our Precision
Stampings revenues in 1999, 11% in 2000, and 15% in 2001.

Our competitors in each of our product lines are numerous. In the case of metal
stampings, our own customers are competitors. These competitors, however,
traditionally have not focused on the highly customized products and services
that we provide.

In January 1999, we acquired Eyelets for Industry to expand our production
capabilities to deep drawn and wireformed parts. This business was combined with
our existing stamping operations and we consolidated duplicate El Paso
operations, which eliminated one facility. We now operate our Precision
Stampings businesses under the name StewartEFI.

As of December 31, 2001, we had 402 employees in these business units.

DIVESTED BUSINESSES

On June 30, 1999, we closed our McKenica business, which manufactured high speed
welded tube mills and other machinery and equipment for the heat exchanger
market.

On August 23, 1999, we sold our Romac business, which manufactured stainless
steel tubing for a variety of marine, architectural, automotive and decorative
applications at its facility in North Carolina.

Neither of these divestitures met the classification requirements for
Discontinued Operations. Therefore, the costs and gain or loss associated with
these divestitures are included in restructuring costs or Other Income in the
Consolidated Statement of Operations.

On February 11, 2000, we sold our specialty publishing business, Taylor
Publishing Company. More information on this sale is provided in Item 7
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Discontinued Operations."

On August 25, 2000, through Holdings, we sold our "Automotive Businesses" to
Holdings' majority stockholders. More information on this sale is provided in
Item 7 "Management's Discussion and Analysis of Financial Condition and Results
of Operations - Discontinued Operations".

For further discussion on all divested businesses, see Note 2 of the Notes to
the Consolidated Financial Statements.

                                        6
<PAGE>

PATENTS AND TRADEMARKS

We hold patents or trademarks in most of our businesses that have expiration
dates ranging from 2001 to 2018. We expect to maintain such patents and to renew
them prior to expiration. We do not believe the expiration of any one of our
patents will have material adverse effect on any of our businesses.

RAW MATERIALS AND SUPPLIES

We rely on the following principal raw materials and supplies for the day-to-day
production of our products:

     o    copper wire;
     o    steel;
     o    brass;
     o    aluminum;
     o    plastics;
     o    ceramics; and
     o    precious metals.

We purchase these materials and supplies on the open market to meet current
requirements. We believe these sources of supply are adequate for our needs and
anticipate no difficulty in receiving any of our needed raw materials and
supplies.

BACKLOG

Our backlog by business segment, which we believed to be firm at December 31,
2000 and 2001, is as follows (in thousands):

                                  December 31,
                             ---------------------
                                2000         2001
                             ---------   ---------
Custom Assemblies            $  40,321   $  14,084
Passive Components              21,984      17,108
Precision Stampings             41,161      35,018
                             ---------   ---------
       Total                 $ 103,466   $  66,210
                             =========   =========

We believe that approximately all of our 2001 backlog will be filled in 2002.

                                        7
<PAGE>

EMPLOYEES AND LABOR RELATIONS

At December 31, 2001, we employed approximately 5,385 people on a full-time
basis. Approximately 721, or 13%, of these employees were covered by collective
bargaining agreements with various unions. The largest collective bargaining
unit covers approximately 406 employees. We consider relations with our
employees to be good.

We have defined benefit and defined contribution pension plans covering
substantially all employees. For information regarding defined benefit pension
plans, see Note 12 to the Consolidated Financial Statements.

ENVIRONMENTAL REGULATION AND PROCEEDINGS

Our manufacturing operations are subject to extensive Federal, state and local
environmental laws and regulations. We generate a variety of waste materials
including cooling oils, degreasing agents, etching acids, chemicals from plating
and trimming operations, and metals scraps from stamping operations. We use
offsite disposal facilities owned by third parties to dispose of these wastes
and we do not store any waste to the extent such storage would require obtaining
a permit. We do not treat, store or dispose of waste for others. We obtain
permits, where required, to operate all of our facilities. These permits may be
subject to revocation or modification.

We have taken significant measures to (1) address emissions, discharges and
waste generation and disposal, (2) improve management practices and operations
in response to legal requirements, and (3) internally review compliance with
applicable environmental regulations and approved practices. In order to achieve
these goals, we have instituted several programs including (1) raw material and
process substitution, recycling and material management, (2) periodic review of
hazardous waste storage and disposal practices, and (3) review of compliance and
financial status and management practices of our offsite third-party waste
management firms.

During our 1993 bankruptcy reorganization, we settled all claims of the United
States relating to our pre-petition date conduct at previously owned or third
party sites arising under the federal Comprehensive Environmental Response,
Compensation, and Liability Act, or CERCLA. This settlement (1) discharged us
from contribution claims of the United States at a number of hazardous waste
sites, (2) protects us from contribution claims of the remaining potentially
responsible parties, (3) limits the amount we may be required to pay the United
States in any one year on pre-petition claims, and (4) provides that any such
payment may be made in cash or, at our option, common stock valued at 30% of the
allowed claim.

We are also currently engaged in clean up programs at sites located in Newtown,
Connecticut; Thomaston, Connecticut; and Mount Vernon, New York. We have
established what we believe are appropriate reserves for anticipated remedial
obligations. Because of the establishment of these reserves and our settlements
with the United States, we do not believe that environmental compliance or
remedial requirements are likely to have a material adverse effect on our
results of operations or financial position.

FINANCIAL INFORMATION ABOUT INTERNATIONAL SALES

Our international sales have been revised to exclude our discontinued
operations. In 1999, our international sales were $36.3 million or 15% of
consolidated sales. We sold $23.8 million to Europe, $8.2 million to Asia, $2.8
million to Canada and $0.5 million to Mexico. The remaining $1.0 million
accounts for the rest of the world. In 2000, our international sales were $59.1
million or 16% of consolidated sales. We sold $29.1 million to Europe, $21.5
million to Asia, $5.5 million to Canada and $1.3 million to Mexico. The
remaining $1.7 million accounts for the rest of the world. In 2001, our
international sales were $76.9 million or 31% of consolidated sales. We sold
$31.8 million to Europe, $18.3 million to Asia, $16.5 million to Canada and $9.6
million to Mexico. The remaining $0.7 million accounts for the rest of the
world. Primarily, we conduct our transactions in U.S. currency.

                                        8
<PAGE>

CRITICAL RISK FACTORS

SUBSTANTIAL LEVERAGE; LIQUIDITY; STOCKHOLDERS' DEFICIT

We are currently in default on our 12% Senior Subordinated Notes due 2007 as
well as in a cross-default on our senior secured credit facility. As a result of
this default, the debt under the senior secured credit facility and the 12%
Notes has been reclassified to current. At this time, we are having on-going
discussions with our senior secured lenders and an ad hoc committee of holders
of the 12% Notes in an effort to reach an agreement on a consensual
restructuring of our capital structure. However, as with any negotiation, there
can be no assurance as to when and if such an agreement will be reached. If an
agreement is not reached, it will impact our principal resources of liquidity
and our ability to meet future cash requirements. Such limitations could force
us to consider alternatives that may include negotiating further amendments to
the senior secured credit facility, attempting to obtain commitments for
additional new tranche loans or notes, asset sales, a sale of the Company or
other remedies appropriate for the circumstances.

Our level of indebtedness could have important consequences to us, including:
(i) limiting cash flow available for general corporate purposes, including
acquisitions, because a substantial portion of the our cash flow from operations
must be dedicated to debt service; (ii) limiting our ability to obtain
additional debt financing in the future for working capital, capital
expenditures or acquisitions; (iii) limiting our flexibility in reacting to
competitive and other changes in the industry and economic conditions generally;
and (iv) exposing us to risks inherent in interest rate fluctuations because
certain of the of our borrowings may be at variable rates of interest, which
could result in higher interest expense in the event of increases in interest
rates.

CUSTOMER CONCENTRATION; ABSENCE OF LONG-TERM CONTRACTS

A significant portion of our sales are made to a relatively small group of major
customers. Two OTEMs directly or indirectly accounted for approximately 51% of
our cable and wire assembly revenues in 1999, 61% in 2000 and 34% in 2001. The
current size of our telecommunications customer base exposes us to the risk of
changes in the business condition of our major customers and to the risk that
the loss of a major customer could adversely affect our results of operations.
While we have supplied these companies for years, they are not contractually
bound to purchase supplies from us in the future. Thus, our relationship with
these customers is subject to termination at any time. If we were to lose these
companies as a customer, our results of operations would be adversely affected.

CYCLICAL MARKETS

A substantial portion of our revenues derive from sales to markets that have
been historically, and are likely to continue to be, cyclical. For the year
ended December 31, 2001, approximately 48% of our net sales were attributable to
the telecom and data networking markets. These markets have experienced
recessionary or slow growth conditions for substantial periods in the past,
currently and may experience recessionary condition in the future. Any
substantial weakening of these markets would have an adverse effect on our
results of operations.

                                        9
<PAGE>

COMPETITION

The businesses in which we are engaged are highly competitive and in some cases
highly fragmented, with many small manufacturers. In some of our businesses,
especially the data grade connector business, we compete with entities having
significantly more resources. In certain other businesses, we compete with
entities that have a greater share of the relevant market and lower costs. As
competition increases, profit margins on some of our significant business lines
could decrease, and in the more fragmented markets, consolidation could occur,
resulting in the creation of larger and financially stronger competitors. We
believe that, to remain competitive and maintain or increase our profitability,
we must pursue a strategy focusing on growth and product innovation. However,
our competitors can be expected to continue to seek their own growth, to improve
the design and performance of their products, to reduce costs of existing
competitive products and to introduce new products with competitive price and
performance characteristics. Although we believe that, with respect to most of
our businesses, we have certain technological, manufacturing and other
advantages over our competitors, maintaining these advantages will require
continued investment by us in research and development, sales and marketing,
productivity improvements and information systems. There can be no assurance
that we will have sufficient resources to continue to make such investments,
that such investments will be successful or that we will be able to maintain our
existing competitive advantages.

TECHNOLOGY AND THE DEVELOPMENT OF NEW PRODUCTS

The markets for many of our products, particularly the products produced by
Stewart Connector and InNet, are characterized by technological change, evolving
industry standards, frequent new product introductions and product
customization. Many of our products require significant planning, design,
development and testing at the technological, product and manufacturing process
levels. In addition, the introduction of new products and technologies may
render existing or proposed products noncompetitive or obsolete. Moreover, many
of our customers utilize our products and proprietary technologies as components
of other products, which they manufacture or assemble, which may become
uncompetitive or obsolete. Although we work closely with our customers to stay
informed with respect to product development, there can be no assurance that any
of the products currently being developed by us, or those to be developed in the
future, will be completed in any particular time frame or that we or our
customers' products or proprietary technologies will not become uncompetitive or
obsolete.

ACQUISITION GROWTH STRATEGY; MANAGEMENT AND FUNDING OF GROWTH

We have historically pursued an acquisition strategy. There are various risks
associated with pursuing a growth strategy of this nature. Any future growth
will require us to manage our expanding domestic and international operations,
integrate new businesses and adapt our operational and financial systems to
respond to changes in our business environment, while maintaining a competitive
cost structure. Our acquisition strategy of will continue to place demands on us
and our management to improve our operational, financial and management
information systems, to develop further the management skills of our managers
and supervisors, and to continue to retain, train, motivate and effectively
manage our employees. Our failure to manage our prior or any future growth
effectively could have a material adverse effect on us. There also can be no
assurance that suitable acquisition candidates will be available or that
acquisitions can be completed on reasonable terms.

Additionally, our ability to maintain and increase our revenue base and to
respond to a shift in customer demand and changes in industry trends will
partially depend on our ability to general sufficient cash flow or obtain
sufficient capital for the purpose of, among other things, financing
acquisitions, satisfying customer contractual requirements and financing
infrastructure growth. There can be no assurance that we will be able to
generate sufficient cash flow or that financing will be available on acceptable
terms to fund our future growth.

                                       10
<PAGE>

ENVIRONMENTAL MATTERS

Our operations are subject to federal, state, local and foreign laws and
regulations relating to the storage, handling, generation, treatment, emission,
release, discharge and disposal of certain substances and wastes. As a result,
we are involved from time to time in administrative or legal proceedings
relating to environmental matters and have incurred in the past and will
continue to incur capital costs and other expenditures relating to environmental
matters. Certain properties now or previously owned by us are undergoing
remediation. Liability under environmental laws may be imposed on current and
prior owners of property or businesses without regard to fault or to knowledge
about the condition or action causing the liability. As an owner and operator,
we may be required to incur costs relating to the remediation of such owned or
operated properties, and environmental conditions could lead to claims for
personal injury, property damage or damages to natural resources. We have in the
past and may in the future be named a potentially responsible party, or PRP, at
off-site third-party disposal sites to which we have sent waste.

We believe, based on current information, that any costs we may incur relating
to environmental matters will not have a material adverse effect on our
business, financial condition or result of operations. There can be no
assurance, however, that we will not incur significant fines, penalties or other
liabilities associated with noncompliance or clean-up liabilities or that future
events, such as changes in laws or the interpretation thereof, the development
of new facts or the failure of other PRPs to pay their share will not cause us
to incur additional costs that could have a material adverse effect on our
business, financial condition or results of operations.

DEPENDENCE ON KEY PERSONNEL

Our success depends to a significant extent upon the services of our senior
management and other management in our various businesses. We could be adversely
affected if any of these persons were unwilling or unable to continue in our
employ.

RISKS ASSOCIATED WITH FOREIGN OPERATIONS; EXCHANGE RATE FLUCTUATIONS

Our products are manufactured and assembled at facilities in the United States,
the Dominican Republic, Canada, China and Mexico and sold in many foreign
countries. In 2001, approximately 31% of our net sales and costs of goods sold
occurred outside the United States. International manufacturing and sales are
subject to inherent risks, including changes in local economic or political
conditions, the impositions of currency exchange restrictions, unexpected
changes in regulatory environments, potentially adverse tax consequences and
exchange rate risk. There can be no assurance that these factors will not have a
material adverse impact on our production capabilities or otherwise adversely
affect our business and operating results.

CONTROL BY THE DLJMB FUNDS

Approximately 70.5% of the outstanding shares of Holding's common stock are held
by the DLJMB Funds. As a result of their stock ownership, the DLJMB Funds
control Holdings and have the power to elect all of the members of the Board of
Directors, appoint new management and approve any action requiring the approval
of the holders of Holding's common stock, including adopting certain amendments
to our certificate of incorporation, and approving any acquisition or approving
sales of all or substantially all of the assets of us or Insilco. The directors
elected by the DLJMB Funds will have the authority to effect decisions affecting
our capital structure, including the issuance of additional capital stock and
the implementation of stock repurchase programs.

                                       11
<PAGE>

LIQUIDITY OF COMMON STOCK

Holding's common stock trades only on the over-the-counter market. Although
prices in respect of trades are published by the National Association of
Securities Dealers, Inc., periodically in the "pink sheets", quotes for such
shares will likely not be readily available.
























                                       12
<PAGE>

ITEM 2. PROPERTIES
------------------

We manufacture our products in various locations, primarily in the United
States. We believe that our facilities generally are well maintained and
adequate for the purposes for which they are used. Our principal operating
plants and offices at December 31, 2001, included the following properties:
<TABLE><CAPTION>
                                                                                            Approximate       Terms of
Business Segment        Location                                 Principal Use            Square Footage     Occupancy
----------------        --------                                 -------------            --------------     ---------
<S>                     <C>                                      <C>                          <C>              <C>
Custom Assemblies       N. Myrtle Beach, SC                      Office/Manufacturing         46,506           Owned
-----------------       Lake Wales, FL                           Office/Manufacturing         42,000           Owned
                        Hiddenite, SC                            Office/Manufacturing         44,350           Owned
                        Loris, SC                                Warehouse/Idle               36,960           Owned
                        Galway, Ireland Carraoe County           Office/Manufacturing         25,000           Leased
                        Larne, Northern Ireland Antrim County    Warehouse                    25,000           Owned
                        Rockwall, TX                             Office/Manufacturing         75,000           Owned
                        Rockwall, TX                             Manufacturing                15,000           Leased
                        Reynosa, Mexico                          Office/Manufacturing         75,000           Leased
                        Montreal, Canada                         Office/Manufacturing         65,000           Owned

Passive Components      Inwood, NY                               Office/Manufacturing         39,361           Owned
------------------      San Piedras, PR                          Office                          250           Leased
                        Itabo, Haina Dominican Rep.              Office/Manufacturing         28,809           Leased
                        Apodaca, N.L. Mexico                     Office/Manufacturing         50,000           Leased
                        Glen Rock, PA                            Office/Manufacturing         84,000           Owned
                        Friedrichsdorf, Germany                  Office/Warehouse              9,460           Leased
                        Cananea, Mexico                          Warehouse/Manufacturing      73,263           Leased
                        Hong Kong                                Office/Warehouse              3,012           Leased
                        Dong Guan, China                         Manufacturing/Dormitory     645,000           Leased
                        San Diego, CA                            Office                        7,000           Leased

Precision Stampings     Yonkers, NY                              Office/Manufacturing        190,000           Owned
-------------------     El Paso, TX                              Office/Manufacturing         60,000           Leased
                        Thomaston, CT                            Office Manufacturing         73,598           Owned
                        Waterbury, CT                            Warehouse                    22,500           Leased

Corporate               Dublin, OH                               Office                        7,535           Leased
---------
</TABLE>

Substantially all of our material domestic assets, including the owned
properties set forth above, are subject to major encumbrances collateralizing
our obligations under the senior secured credit facility.

We believe that all of our production facilities have additional production
capacity.

                                       13
<PAGE>

ITEM 3. LEGAL PROCEEDINGS
-------------------------

From time to time, we are involved in litigation relating to claims arising out
of our operations in the normal course of our business. We maintain insurance
coverage against potential general liability and certain other claims in an
amount we believe to be adequate. In our opinion, the outcome of these matters
will not have a material adverse effect on our financial condition, liquidity or
results of operations.

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

Not Applicable.

                                     PART II

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

Our common stock is our only class of authorized equity securities. All of the
common stock is owned by Holdings following the Mergers described herein. Prior
to the Mergers, our common stock was traded on the Nasdaq National Market under
the symbol "INSL". The following table sets forth, for the periods indicated,
the high and low sale prices for our common stock as reported by the Nasdaq
National Market through the date of the Mergers.

                                             Low Sale    High Sale
                                             --------    ---------
1998:
First Quarter                                $ 32.000    $ 43.375
Second Quarter                               $ 42.875    $ 44.625
Third Quarter (through August 17, 1998)      $ 43.750    $ 45.000


On August 17, 1998, we completed a series of transactions, which included, among
other things, the formation by Holdings (then a wholly-owned subsidiary of our
Company) of a wholly-owned subsidiary ("ReorgSub"), followed by the merger of
ReorgSub with and into our Company (the "Reorganization Merger"). As a result of
these transactions, each of our stockholders had his or her shares of our
Company converted into the same number of shares of Holdings and the right to
receive $0.01 per share in cash, and Holdings became our parent.

Promptly following the Reorganization Merger, a second merger took place
pursuant to which Silkworm, an affiliate of DLJMB, merged with and into Holdings
(the "Merger," and together with the Reorganization Merger, the "Mergers") and
each share of Holdings common stock was converted into the right to receive
$43.47 in cash and 0.03378 of a share of Holdings common stock. Thus, as a
result of the Mergers, each of our stockholders, in respect of each of his or
her shares, received $43.48 in cash and retained 0.03378 of a share of Holdings
common stock.

Following the Mergers, (1) our existing stockholders retained, in the aggregate,
approximately 10.1% (9.4% on a fully diluted basis) of the outstanding shares of
Holdings common stock; (2) DLJMB held approximately 69.0% (69.8% on a fully
diluted basis) of the outstanding shares of Holdings common stock; (3) 399
Venture Partners Inc., an affiliate of Citibank, N.A. ("CVC"), purchased shares
of Silkworm which in the Merger were converted into approximately 19.3% (17.8%
on a fully diluted basis) of the outstanding shares of Holdings common stock;
(4) our management purchased approximately 1.7% (1.5% on a fully diluted basis)
of the outstanding shares of Holdings common stock; and (5) we no longer had
public equity securities.

                                       14
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA
--------------------------------

The following table sets forth selected financial information (dollars in
thousands) derived from our Consolidated Financial Statements.
<TABLE><CAPTION>
                                                                                 Year Ended December 31,
                                                        ------------------------------------------------------------------------
                                                              1997           1998           1999           2000           2001
<S>                                                        <C>             <C>            <C>            <C>            <C>
Operations Data (1)
   Sales (net)                                              $236,172        220,939        248,042        370,848        246,119
   Costs of Products Sold                                    167,030        159,727        191,295        266,938        210,666
   Depreciation and Amortization                               7,852          8,332         10,176         14,834         20,418
   Merger Expenses                                                 -         20,890              -              -              -
   Goodwill Impairment Charge                                      -              -              -              -        150,260
   Restructuring charge                                            -              -          5,787              -          1,319
   Operating Income (loss)                                    21,524         (9,413)           570         37,476       (171,622)
   Other Income
     Interest Expense                                        (19,924)       (28,575)       (36,452)       (38,271)       (39,601)
     Interest Income                                           2,779            933            391            391          3,630
     Other Income (expense), net                               1,078          3,101          9,993         (1,035)          (377)
   Income (loss) from continuing operations
     before discontinued operations, extraordinary
     items and income taxes                                    5,457        (33,954)       (25,498)        (1,439)      (207,970)
   Income tax  benefit (expense)                              (1,968)         9,974         13,632          6,124         15,482
   Income (loss) from continuing operations
     before discontinued operations and
     extraordinary items                                       3,489        (23,980)       (11,866)         4,685       (192,488)
   Income from discontinued operations,
     net of tax                                               78,883         19,787         21,634         69,531              -
   Income (loss) before extraordinary items                   82,372         (4,193)         9,768         74,216       (192,488)
   Extraordinary items, net of tax                              (728)        (5,888)             -         (3,064)             -
   Net Income (loss)                                          81,644        (10,081)         9,768         71,152       (192,488)


                                                                                    As of December 31,
                                                        ----------------------------------------------------------------------------
Balance Sheet Data at Period End (1)                          1997           1998           1999           2000           2001

   Working Capital (2)                                      $119,817        137,812        149,898         75,486       (286,594)
   Working Capital, excluding reclassification
     of long-term debt                                       119,817        137,812        149,898         75,486         54,117
   Total Assets                                              229,969        249,503        273,490        352,493        171,940
   Long-term Debt (2)                                        256,631        312,409        319,104        285,001            341
   Other Long-term Liabilities                                26,160         29,063         30,916         40,009         25,909
   Stockholders' Equity (Deficit)                           (102,328)      (136,909)      (125,003)       (50,321)      (246,508)

                                                                                 Year Ended December 31,

                                                        ----------------------------------------------------------------------------
Cash Flow Data (1)                                           1997            1998           1999           2000           2001

   Net cash provided by (used in) operating activities      $ 44,723          3,070         13,048         15,987         (9,459)
   Net cash provided by (used in) investing activities        95,217        (22,432)       (23,305)        46,050        (50,200)
   Net cash provided by (used in) financing activities      (133,256)        16,881          9,016        (40,210)        59,444
</TABLE>

(1)  We have consummated several material transactions over the five-year period
     presented here, which significantly affect the comparability of the
     information shown. (See Note 2 of the Notes to the Consolidated Financial
     Statements.)

(2)  Reflects the classification of long term debt under the senior secured
     credit facility and the 12% Notes to current.

                                       15
<PAGE>

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

                                    OVERVIEW

We are currently in default on our 12% Senior Subordinated Notes due 2007, as
well as in a cross-default on our senior secured credit facility. As a result of
this default, the debt under the senior secured credit facility and the 12%
Notes has been reclassified to current. At this time, we are having on-going
discussions with our senior secured lenders and an ad hoc committee of holders
of the 12% Notes in an effort to reach an agreement on a consensual
restructuring of our capital structure. However, as with any negotiation, there
can be no assurance as to when and if such an agreement will be reached. If an
agreement is not reached, it will impact our principal resources of liquidity
and our ability to meet future cash requirements. Such limitations could force
us to consider alternatives that may include negotiating further amendments to
the senior secured credit facility, attempting to obtain commitments for
additional new tranche loans or notes, asset sales, a sale of the Company or
other remedies appropriate for the circumstances.

Our performance continues to be impacted by a number of external factors,
including: the continued decelerating U.S. macroeconomic landscape; ongoing
financial issues with emerging telecom service providers; and cautious capital
spending by larger, well capitalized telecom service providers. These factors
have created a significant reduction in demand for our customers' end products
and have created excessive inventory levels throughout the supply-chain.

We continue to respond decisively to current market conditions with headcount
reductions and limited spending throughout our organization. In fact, for the
year ended December 31, 2001, we have eliminated 2,321 hourly and 175 salary
personnel representing approximately $33.0 million in annualized wages and
fringes, reducing our total personal approximately 50% to 2,498, excluding
China.

We consummated several material transactions in 1999, 2000 and 2001 that
resulted in significant changes to our debt and capital structure. A summary of
these transactions is as follows:

1999

DIVESTITURES: On July 16, 1999, we sold certain assets and intellectual property
relating to our heat exchanger machinery and equipment business (McKenica).

On August 20, 1999, we sold the assets of our welded stainless steel tubing
business (Romac).

Neither of these divestitures met the classification requirements for
Discontinued Operations. Therefore, the costs and gain or loss associated with
these divestitures are included in restructuring costs or Other Income in the
Consolidated Statement of Operations.

ACQUISITIONS: On January 25, 1999, we purchased the stock of EFI, a
precision-stamping manufacturer. EFI is included in our Precision Stampings
segment.

2000

DIVESTITURES: On February 11, 2000, we sold our specialty publishing business,
Taylor Publishing Company, to TP Acquisition Corp., a wholly owned subsidiary of
Castle Harlan Partners III, L.P. Our accompanying consolidated statements of
operations and cash flows are reclassified to account for the sale of the
Specialty Publishing Business as a discontinued operation.

                                       16
<PAGE>

On August 25, 2000, through Holdings, we sold our "Automotive Businesses," which
manufactured, sold and distributed tubing and heat exchanger products and
transmission and suspension components to Holdings' majority stockholders. These
"Automotive Businesses" previously comprised our Automotive Components segment.
As a result of this sale, the accompanying consolidated statements of operations
and cash flows are reclassified to account for the sale of the "Automotive
Businesses" as a discontinued operation.

ACQUISITIONS: On February 17, 2000, we executed a definitive agreement to
purchase 9011-7243 Quebec, Inc., known as TAT Technologies. TAT Technologies, is
a Montreal-based provider of cable and wire assemblies. TAT is included in our
Custom Assemblies segment.

On August 25, 2000, we purchased Precision Cable Manufacturing a Rockwall, Texas
based cable and wire assembly provider primarily to the telecommunications
industry. PCM is included in our Custom Assemblies segment.

In addition, on August 25, 2000, we amended and restated our senior secured
credit facility. The senior secured credit facility provides for three credit
facilities (the "Credit Facilities"): a $50.0 million, 6 year senior secured
revolving loan ("Revolving Facility"), a $35.0 million, 6 year senior secured
amortizing Term A loan ("Term A Facility") and a $125.0 million, 7 year senior
secured amortizing Term B loan ("Term Facility").

2001

ACQUISITIONS: On January 10, 2001, we acquired the stock of InNet Technologies,
Inc., or InNet. InNet is headquartered in San Diego, California, and is a
designer, developer and marketer of a broad range of magnetic interface products
for networking, computer and telecommunications original equipment
manufacturers. InNet is included in our Passive Components segment.

On June 30, 2001, we were not in compliance with certain financial covenants
under our senior secured credit facility. In response to this situation, we
entered into negotiations with our lenders and Holding's equity holders which
resulted, on August 15, 2001, in waivers by our lenders of such defaults, an
amendment and restatement of the senior secured credit facility and the
investment by certain of Holding's equity holders of an additional $15.0 million
in senior unsecured loans to us under the senior secured credit facility.

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations
is based upon our consolidated financial statements, which have been prepared in
accordance with generally accepted accounting principles in the U.S. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities.

Furthermore, these statements are prepared on a going concern basis. A basis now
challenged by our recent losses and highly leveraged position. Thus, these
statements do not include any adjustments relating to recoverability and
classification of recorded asset amounts or the amount and classification of
liabilities that might be necessary should we be unable to continue as a going
concern. Moreover, our ability to continue as a going concern and the
appropriateness of using the going concern basis depends upon, among other
things, (i) our ability to reach an agreement on a consensual restructuring of
our capital structure with our senior secured lenders and an ad hoc committee of
the 12% Note holders, (ii) our ability to create and implement a strategic
business plan, and (iii) our ability to generate sufficient cash from operations
to meet our obligations.

On a periodic basis we evaluate our estimates including those related to bad
debts, inventories, income taxes, prepaid tooling, long-lived assets,
contingencies and litigation. These estimates are based on historical

                                       17
<PAGE>

experience and on various other assumptions that we believe to be reasonable
under the circumstances. Thus, our results may vary under different assumptions
or conditions, for these estimates.

While many operational aspects of our business are complex, the accounting for
our business is generally straightforward. The following summarizes our critical
accounting policies, including our processes for determining estimates:

TRADE RECEIVABLES

We record trade receivables when products are shipped, invoiced and title
transfers to the customer. We have a monthly process for estimating and
recording reserves for doubtful amounts based on the aging of our accounts
receivable, past collection history with individual customers and known
circumstances involving specific balances all of which involve judgement. We
further believe that the collectibility of our receivables is directly linked to
our customers' future operating performances, cash flows, general economic
conditions and specific market conditions relating to our customers' end markets
which, due the numerous markets and products we serve, are often difficult to
access. Therefore, the adequacy of our reserves for doubtful amounts could be
materially impacted by changes in these factors.

INVENTORIES

We record the purchase of inventory upon receipt and transfer of title and
relieve this value on a first-in, first-out cost method. We review inventory
values periodically and record reserves to adjust inventory to its lower of cost
or market value. In addition, we have a monthly process for estimating and
recording reserves for excess and obsolete inventory items based on a variety of
factors. These factors include but are not limited to engineering and customer
change orders, changes in material availability, new product introductions and
plan obsolescence, and forecasted future demand, all of which involve judgement.
Thus, the adequacy of our reserves could be materially impacted by changes in
these factors.

DEFERRED TOOLING

We often develop tools and dies for customer products and our own priority
products. The costs incurred relating to these items are often billed directly
to the customer at various stages of completion in the case of customer specific
tooling and capitalized in the case of tooling for propriety products. Revenue
and costs relating to tooling are matched and recorded when billed to the
customer or amortized into the piece price and cost of the product.

GOODWILL

We record goodwill when the cost of the net assets we acquire in a business
combination exceeds the purchase price we paid for those assets. We then
amortize this goodwill on a straight-line basis over an estimated useful life
for the asset determined at the time the asset is acquired based on the assets
estimated ability to generate future cash flows. We periodically perform a
series of tests to review the value of our long-lived assets when events or
changes in circumstances occur that indicate the carrying value of the asset may
be impaired. The first test includes the following steps: (1) estimating the
undiscounted future cash flows of the asset based on estimated growth levels;
(2) estimating the terminal value of the asset based on an appropriate multiple
of earnings before interest expense (net), income taxes, depreciation and
amortization and non-operating items, or EBITDA; and (3) comparing the sum of
the future cash flows and terminal value to the carry value of long lived assets
to determine if an impairment has occurred. If an impairment has occurred we
perform a second test as follows: (1) discounting the future cash flows and
terminal value, using EBITDA as a proxy for cash flow, to a present value using
an appropriate discount rate; and (2) comparing the discounted net present value
to the carrying value of long lived assets to determine the amount of the
impairment. Each step involves judgement and the results could therefore be
materially impacted by changes in any of the input factors. (For further
discussion see Note 19 of the Notes to the Consolidated Financial Statements.)

                                       18
<PAGE>

RELATED PARTY ACTIVITY

On August 25, 2000, Holdings sold its "Automotive Businesses" to ThermaSys
Holding Company, ThermaSys Corporation, a wholly owned subsidiary of ThermaSys
Holding Company, ThermaSys I, Inc., ThermaSys II, Inc., and ThermaSys III, Inc.,
for net proceeds of $144.5 million. The ThermaSys companies are owned by
Holdings' majority stockholders.

We received $915,000 from ThermaSys for management fees and other miscellaneous
items year to date December 31, 2001, respectively. At December 31, 2001 and
December 31, 2000, we had net receivables from ThermaSys of $48,000 and
$152,000, respectively. The December 31, 2001 receivable consisted of $48,000
for management services provided to ThermaSys by us. The December 31, 2000
receivable consisted of $148,000 for management services provided to ThermaSys
by us and $4,000 for services shared with and reimbursable to us.

We paid Credit Suisse First Boston ("CSFB") retainer fees of $150,000 and
underwriting fees of $625,000 year to date December 31, 2001. We paid Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJSC") advisory fees of $1.1 million
and retainer fees of $300,000 during fiscal 2000. CSFB acquired DLJSC during
2000. At December 31, 2001 and 2000, we had retainer fees payable to CSFB of
$212,500 and $75,000, respectively, for investment banking services.

In 2000, in connection with the amendment and restatement of our senior secured
credit facility, we paid DLJ Capital Funding approximately $5.3 million for
services as lead arranger and syndication agent.

                              RESULTS OF OPERATIONS

We use EBITDA as a basis and manner for presenting and using financial data to
assist us in making internal operating decisions. EBITDA is not intended to
represent and should not be considered more meaningful than, or an alternative
to, operating income, cash flows from operating activities or other measures of
performance in accordance with generally accepted accounting principles. EBITDA
data are included because we understand that such information is used by certain
investors as one measure of an issuer's historical ability to service debt.
While EBITDA is frequently used as a measure of operations and the ability to
meet debt service requirements, it is not necessarily comparable to other
similarly titled captions of other companies, or used in the Company's
debentures, credit or other similar agreements, due to potential inconsistencies
in the method of calculation.

The table included in our segment data footnote (Note 18 of the Notes to the
Consolidated Financial Statements) is a summary (in thousands) of our net sales,
income (loss) from continuing operations before income taxes and extraordinary
items, and our net income (loss) for the periods ended December 31, 1999, 2000,
and 2001.

2000 COMPARED TO 2001

CONSOLIDATED RESULTS OF OPERATIONS: Our net sales from continuing operations in
2001 decreased $124.7 million, or 34%, to $246.1 million from $370.8 million in
2000. The decrease in sales reflects the current economic conditions and
significantly reduced demand for our customers' end products. Our performance
continues to be impacted by a number of external factors, including: the
continued decelerating U.S. macroeconomic landscape; ongoing financial issues
with emerging telecom service providers; and cautious capital spending by larger
well capitalized telecom service providers. We were also significantly impacted
by the decrease in worldwide demand from optical and networking equipment
manufacturers for custom

                                       19
<PAGE>

assemblies and electronic components. The current year decrease was offset
somewhat by our current year acquisition of InNet, a designer and manufacturer
of integrated magnetic components, which accounted for $20.8 million in new
revenues in 2001. Revenue by segment for 2001 was as follows:

    o      Custom Assemblies decreased 42%, to $108.4 million from $187.5
           million in 2000, reflecting the decline in the optical and networking
           equipment industries. Full year sales of custom assemblies used in
           optical equipment declined $80.4 million, or 83% from 2000;
    o      Passive Components decreased 25%, to $78.8 million from $105.1
           million in 2000, due to lower transformer and connector sales
           resulting from the weak economic conditions. This decrease was
           partially offset by the sales from our acquisition of InNet in
           January of 2001; and
    o      Precision Stampings decreased 25%, to $58.9 million from $78.2
           million in 2000, reflecting lower automotive production rates,
           reduced demand from a large customer in the electrical market, which
           was in the process of restructuring its Far East distribution
           channels and the continued general slowdown in the economic and
           manufacturing activity.

For 2001, our EBITDA decreased 87% to $6.8 million, compared to $54.2 million
recorded in 2000. This decrease is due to the sharp decline in sales in the
optical equipment, automotive and electronics markets as well as a general shift
toward lower margin products. EBITDA by segment for 2001 was as follows:

     o     Custom Assemblies decreased $25.1 million, or 85%, to $4.5 million
           reflecting the sharp decline in the optical equipment market. EBITDA
           margins for 2001 decreased to 4.1% from 15.8% in 2000;
     o     Passive Components decreased $14.4 million, or 84%, to $2.8 million
           reflecting lower connector and transformer sales, a mix shift toward
           lower margin products and the expense of certain acquisition costs
           relating to InNet. EBITDA margins for 2001 decreased to 3.6% from
           16.4% in 2000; and
     o     Precision Stampings decreased $8.9 million, or 82%, to $2.0 million
           reflecting lower sales volumes due to the slow down in the automotive
           and electronics markets. EBITDA margins for 2001 decreased to 3.3%
           from 13.9% in 2000.

For the year, unallocated corporate operating expenses declined to $2.5 million
from $3.6 million in 2000. The decrease is due to expense reimbursements covered
under an August 25, 2000 Management Services Agreement with ThermaSys
Corporation, the former "Automotive Businesses." The Company expects this
agreement will terminate by the end of April 2002.

Depreciation and amortization expenses increased $5.6 million to $20.4 million
from $14.8 million in 2000 as a result of our recent acquisitions.

During 2001, as a result of the dramatic decline in capital spending in the
telecommunications industry, the Company determined that the growth prospects
from TAT, PCM and InNet acquisitions were significantly less than previously
expected and those of historical periods. As a result of extensive reviews
completed in both the second and fourth quarters, the Company determined that
the goodwill resulting from these acquisitions and several other smaller earlier
acquisitions was impaired. Therefore, the Company wrote down all of the goodwill
relating to these acquisitions to zero, taking a $150.3 million charge in 2001.
For further information see Note 19 of the Notes to the Consolidated Financial
Statements.

During 2001, we recorded $7.7 million of other unallocated expenses relating to
restructuring, facility closings and general rationalization activities. Of this
amount $3.9 million was severance expenses, $1.3 million was idle asset
writeoffs, $1.0 million was impaired inventory and receivable writeoffs relating
to one specific custom assemblies customer, $0.6 million was start-up costs for
our Monterey, Mexico facility, $0.7 million was lease cancellation costs and
$0.2 million related to other miscellaneous activities. At year-end, $1.4
million, of the total $7.7 million, remains to be paid. The majority of this
amount will be paid in 2002.

                                       20
<PAGE>

Of the total $7.7 million, we recorded a restructuring charge on the income
statement of $1.3 million for specific restructuring and plant closings.
Specifically, this restructuring charge relates to the consolidation of our
Custom Assemblies facilities located in Ireland and the United Kingdom, the
closure of a Passive Components sales office located in Japan, the closure of
our Custom Assemblies headquarters in Morrisville, North Carolina and the
closure of one of our Precision Stampings facilities in Thomaston, Connecticut.
These closings and consolidations were completed to reduce operating costs. The
costs include employee separation costs of $747,000, asset impairments of
$140,000, noncancelable lease costs of $385,000 and other costs of $47,000.

As of December 31, 2001, we have an accrual of $771,000 relating to these
restructuring charges, which is included in accrued expenses on the balance
sheet. A summary of this accrual is as follows (in thousands):

                                 As of     Additional                    As of
                                December    Accruals        2001       December
                                31, 2000     in 2001    Cash Outlays   31, 2001
                                -----------------------------------------------
Restructuring charges:
  Employee separations          $     -        747          (322)         425
  Other exit costs                    -         47           (25)          22
  Remaining noncancellable
     lease costs                      -        385           (61)         324
                                -----------------------------------------------
   Subtotal                     $     -      1,179          (408)         771
                                ===============================================

  Asset impairment                             140
                                           -------
  Total restructuring charge                 1,319
                                           =======

The headcount reduction from these activities was approximately 62 employees.

Operating income for 2001 decreased $209.1 million to a loss of $171.6 million,
from income of $37.5 million recorded in 2000. This operating loss includes a
charge for goodwill impairment of $150.3 million. Excluding the goodwill
impairment, operating income decreased $58.8 million to a loss of $21.3 million.
This decrease is due to the decrease in EBITDA coupled with the increase in
depreciation and amortization and the increase in other unallocated
non-operating amounts discussed above.

Interest expense for 2001 increased $1.3 million to $39.6 million from $38.3
million last year. This increase is due to non-cash interest charges on the Term
C Loans and an additional non-cash 2% per annum rate increase on the Revolver
and Term Loans offset somewhat by the decrease in interest rates as compared to
the prior year.

Interest income for 2001 increased by $3.2 million to $3.6 million from $0.4
million last year due mainly to a one-time tax interest refund of $2.8 million.

Our loss from continuing operations before income taxes was $208.0 million
compared to a loss of $1.4 million for the same period in 2000. Before the
goodwill impairment of $150.3 million, our loss from continuing operations
before income taxes was $57.7 million, a decrease of $56.3 million from the
prior year. This decrease was attributable to the decline in operating income.

For 2001, we recorded an income tax benefit of $15.5 million as compared to tax
benefit of $6.1 million in 2000. The tax benefit for 2001 and 2000 reflects a
$5.4 million and $7.6 million reduction in the valuation allowance,
respectively. The 2001 increase in the tax benefit reflects the adjustment of
the valuation allowance,

                                       21
<PAGE>

the benefit of a NOL carryback and differences in the tax deductibility of
certain expenses. As a result of the Job Creation and Workers Assistance Act of
2002, enacted in March 2002, we will be eligible for a refund of Federal taxes
in the amount of $1.8 million.

1999 COMPARED TO 2000

CONSOLIDATED RESULTS OF OPERATIONS: Our net sales from continuing operations in
2000 increased $122.8 million, or 50%, to $370.8 million from $248.0 million in
1999. Excluding sales from the divested Other Segment, which amounted to $18.1
million in 1999, consolidated net sales increased $140.9 million in 2000 as
compared to 1999. The improved sales results reflect strong worldwide demand
from optical and networking equipment manufacturers for custom assemblies and
electronic components and our current year acquisitions of two custom assembly
businesses, which accounted for $122.7 million in new revenues in 2000. Revenue
by segment for 2000 was as follows:

     o     Custom Assemblies increased 182% reflecting new revenues from our
           acquisition of TAT on February 11, 2000, and of PCM on August 25,
           2000, as well as higher domestic sales;
     o     Passive Components increased 19% due to strong sales of high-speed
           data grade connectors and our new MagJack product line, which
           combines high-speed modular connector technology with discrete
           magnetic technology; and
     o     Precision Stampings increased 4%, which includes approximately $2.3
           million of new revenues from our acquisition of EFI on January 25,
           1999.

For 2000, our EBITDA increased 132% to $54.2 million, compared to $23.3 million
recorded in 1999. A favorable sales mix for higher-margin data grade connector
products, improved margins on precision stampings, the contributions from our
current year acquisitions, and lower corporate expenses all contributed to the
strong EBITDA performance. Partially offsetting these gains was the missing
EBITDA from the divested Other Segment, which amounted to $1.1 million in 1999.
EBITDA by segment for 2000 was as follows:

     o     Custom Assemblies increased $23.9 million reflecting the contribution
           of our recent acquisitions. EBITDA margins for 2000 improved to 15.8%
           from 8.6% in 1999;
     o     Passive Components increased $3.5 million due to strong sales of
           high-speed data grade connectors and strong market fundamentals in
           the electronic component industry. EBITDA margins for 2000 increased
           to 16.4% from 15.5% in 1999; and
     o     Precision Stampings increased $2.2 million, reflecting the
           incremental earnings on higher sales and cost reduction initiatives
           and our acquisition of EFI on January 25, 1999. EBITDA margins for
           2000 improved to 13.9% from 11.4% in 1999.

Operating income for 2000 increased to $37.5 million, from $0.6 million recorded
in 1999. This increase is due to the increase in EBITDA and lower legal,
severance and write-down expenses as we have completed our initiatives to
restructure the corporate office and close certain businesses. Depreciation and
amortization expenses increased in 2000 as a result of our recent acquisitions.

Our loss from continuing operations before income taxes was $1.4 million
compared to a loss of $25.5 million for the same period in 1999. The improvement
during this period reflects the higher operating income, and the lack of the
large restructuring charges, which were incurred in 1999. Income from continuing
operations was also impacted by increases in interest expense reflecting higher
short-term borrowing rates and borrowings to finance our acquisition activities.
Interest expense for 2000 increased $1.8 million to $38.3 million from $36.5
million last year, reflecting the higher interest rates of our higher debt
levels as a result of our acquiring TAT and PCM.

                                       22
<PAGE>

Other income, net, decreased by $11.0 million, due mainly to the gain on the
sales of the Romac business and the McKenica equipment recorded in 1999.

For 2000, we recorded an income tax benefit of $6.1 million as compared to tax
benefit of $13.6 million in 1999. The tax benefit for 2000 and 1999 reflects
$7.6 million and $1.3 million reduction in valuation allowance, respectively.
The decrease reflects differences in tax deductibility of certain expenses,
adjustment of valuation allowance, and the improved earnings performance.

We incurred a $3.1 million, net of tax of $1.8 million, extraordinary item
relating to the write-off of unamortized 1998 debt issuance costs as a result of
restructuring our Bank Credit Facility. See "Liquidity and Capital Resources" in
this section.

On February 11, 2000, we sold our "Specialty Publishing Business" for $93.5
million. On August 25, 2000, we sold a combination of stock and assets of our
"Automotive Businesses" to Holdings' majority stockholders for net proceeds of
$144.5 million. As a result of these transactions, we recorded income from
discontinued operations of $69.5 million for 2000 and $21.6 million for 1999.

After accounting for the extraordinary item and discontinued operations, net
income was $71.2 million for 2000 compared to $9.8 million recorded in 1999.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2001, we were in full compliance with the terms of the senior
secured credit facility. However, we are currently in default on our 12% Senior
Subordinated Notes due 2007 as well as in a cross-default on our senior secured
credit facility. As a result of this default, the debt under the senior secured
credit facility and the 12% Notes has been reclassified to current. At this
time, we are having on-going discussions with our senior secured lenders and an
ad hoc committee of holders of the 12% Notes in an effort to reach an agreement
on a consensual restructuring of our capital structure. However, as with any
negotiation, there can be no assurance as to when and if such an agreement will
be reached. If an agreement is not reached, it will impact our principal
resources of liquidity and our ability to meet future cash requirements. Such
limitations could force us to consider alternatives that may include negotiating
further amendments to the senior secured credit facility, attempting to obtain
commitments for additional new tranche loans or notes, asset sales, a sale of
the Company or other remedies appropriate for the circumstances.

Our recent losses and highly leveraged position raise doubt about our ability to
continue as a going concern. The consolidated financial statements do not
include any adjustments relating to recoverability and classification of
recorded asset amounts or the amount and classification of liabilities that
might be necessary should we be unable to continue as a going concern. Our
ability to continue as a going concern and the appropriateness of using the
going concern basis depends upon, among other things, (i) our ability to
negotiate with our senior secured lenders and an ad hoc committee of holders of
the 12% Notes, (ii) our ability to create and implement a strategic business
plan, and (iii) our ability to generate sufficient cash from operations to meet
our obligations. See discussion under "Outlook" in the next section for further
comments.

Cash flows from operations were a use of $9.5 million for the year ended
December 31, 2001, as compared to a source of $16.0 million for the same period
in 2000. The decrease in net cash provided in operating activities reflects the
lower net income, the payment of approximately $15.1 million of acquisition
related incentives, which were accrued at December 31, 2000, both partially
offset by decreased working capital requirements, especially in receivables and
inventories. We also received net tax refunds, including interest, of $4.7
million during the year. Full year 2001, we paid $14.4 million in interest on
our 12% Senior Subordinated Notes due 2007. We are currently in default on the
February 15, 2002 interest payment, of $7.2 million, related to these notes. We
paid $17.9 million in interest on our Credit Facility

                                       23
<PAGE>

borrowings for 2001 and on January 31, 2002 paid an additional $1.1 million. Due
to the default, the senior secured lenders have the option to increase the
interest rate on the outstanding debt, under the senior secured credit facility,
by 2%.

We paid quarterly mandatory prepayments on the term facility of $1.2 million in
the first quarter of 2001, and $1.25 million in April, July, October and
December 2001. Under terms of the senior secured credit facility, the next term
loan mandatory prepayment of $1.25 million is due in April of 2002.

Capital expenditures for 2001 were $3.7 million less than 2000 ($6.2 million
versus $9.9 million). The Company reduced capital spending in the third and
fourth quarters of 2001 and will continue to curtail future capital expenditures
to coincide with market conditions. Capital spending allocations during the
current period by segment were 24% to Custom Assemblies, 31% to Passive
Components, and 45% to Precision Stampings.

On February 11, 2000, we sold our "Specialty Publishing Business" for $93.5
million. Closing proceeds of approximately $72.8 million from this transaction
plus approximately $21.2 million in retained customer deposits, net of other
working capital adjustments, were used to reduce borrowings under the revolving
and term credit facilities.

On February 17, 2000, we purchased TAT for $91.2 million, using $90.0 million of
borrowings from the term loan facility and $1.2 million from the revolving
credit facility. On April 5, 2000, we paid $10.9 million in post closing
adjustments to the previous owners of TAT out of cash acquired in the
acquisition and borrowings under the revolving credit facility.

On August 25, 2000, we sold our "Automotive Businesses" to our majority
stockholders for net proceeds of $144.5 million. Proceeds from the sale were
used to reduce our borrowings under our senior secured credit facility and to
purchase PCM. We also amended our senior secured credit facility on August 25,
2000, to provide for three credit facilities (the "Credit Facilities"): a $50.0
million, 6 year senior secured revolving loan ("Revolving Facility"), a $35.0
million 6 year senior secured amortizing Term A loan ("Term A Facility") and a
$125.0 million, 7 year senior secured amortizing Term B loan ("Term B
Facility").

On January 10, 2001, we acquired the stock of InNet Technologies, Inc. for a
gross purchase price of $44.9 million, using cash and additional borrowings of
$25.0 million under our Term B Facility, as permitted under the senior secured
credit facility.

On August 14, 2001, we amended and restated our senior secured credit facility
effective June 30, 2001 to, among other things, amend the Applicable Margin
pricing grids, provide for a minimum of $7.0 million in deferred interest and
fees on outstanding loans and letters of credit at a rate of 2.00% per annum
until certain financial conditions are met, to replace existing financial
covenants, and to provide for $15.0 million of additional funds to be invested
by certain of Holdings' existing equity holders in the form of a new tranche of
senior, unsecured loans ("Term C Loans") under the senior secured credit
facility. The proceeds from these loans were received on August 14, 2001.
Interest, which compounds quarterly at a rate based on our leverage ratio,
accrues on the new tranche of loans and is not paid in cash until June 25, 2007,
the maturity date of the loans. In addition, the senior secured credit facility
also permits the Insilco to incur up to $15.0 million of additional new tranche
loans under the senior secured credit facility on the same basis and up to
another $15.0 million of senior subordinated notes with a stated maturity and
interest rate substantially identical to the new tranche loan but otherwise with
terms substantially similar to our outstanding 12% Senior Notes due 2007. While
the senior secured credit facility permits us to incur such additional loans and
issue such notes, we have not sought or obtained any commitments to make any
such loans or purchase any such notes and there can be no assurance that any
such commitments will be forthcoming if we seek them. See Note 8 of the Notes to
the Consolidated Financial Statements for complete details of the senior secured
credit facility.

                                       24
<PAGE>

The Term A Facility is subject to mandatory quarterly prepayments in each of its
six years, beginning with December 2000, as follows: $875,000 for the first two
years, $1,312,500 for the third year, $1,750,000 for the fourth and fifth years
and $2,187,500 for the final year. The Term B Facility, including the amounts
borrowed in January 2001, is subject to mandatory quarterly prepayments of
$375,000 for the first six years and payments of $35.3 million and $105.8
million in the seventh year. Term C Loans are due on June 25, 2007. There are no
mandatory prepayments on the Term C Loans.

Future minimum lease payments under contractually noncancellable operating
leases (with initial lease terms in excess of one year) for years subsequent to
December 31, 2001 are as follows: 2002, $2.4 million; 2003, $1.9 million; 2004,
$1.1 million; 2005, $0.9 million; 2006, $0.3 million and thereafter, none.
Future minimum rental income to be received under noncancellable subleases for
years subsequent to December 31, 2001, are as follows: 2002, $0.1 million and
thereafter, none.

At March 19, 2002, we had cash availability of approximately $21.1 million.

As of December 31, 2001, our stockholders' deficit totaled $246.5 million, which
is the result of operating losses and both the 1998 Mergers and the 1997 share
repurchases as described in our Annual Report on Form 10-K for the year ended
December 31, 1998.

OUTLOOK

Our ability to meet our future cash requirements for working capital, capital
expenditures, interest, taxes and debt repayments and the execution of our
business strategies is predicated on our ability to negotiate a consensual
restructuring of our capital structure. At this time, we are having on-going
discussions with our senior secured lenders and an ad hoc committee of holders
of the 12% Notes in an effort to reach an agreement on a consensual
restructuring of our capital structure. However, as with any negotiation, there
can be no assurance as to when and if such an agreement will be reached. The
absence of such an agreement could force us to consider alternatives that may
include asset sales, a sale of the Company or other remedies appropriate for the
circumstances. We believe we have sufficient cash available to meet our
operating and working capital requirements through the second quarter of 2002.

We are seeing increased order activity from consumer, cable and networking
customers for our Passive Components product line, and in particular for our
MagJack(R) product line, from the previous quarter. We also have several
precision stamping projects in development that, once placed into production,
will provide as much as $6.0 to $8.0 million in annualized revenues. However, we
continue to experience weak demand from telecom customers for our custom
assembly products and do not see any significant near-term improvement in demand
from these customers. Our visibility remains quite limited making it difficult
to provide a precise short-term forecast. Furthermore, we expect our telecom
customers to continue to experience weak demand for their products as carrier
spending remains soft. Therefore, under these assumptions, we do not expect our
performance to improve prior to the second half of 2002.

MARKET RISK AND RISK MANAGEMENT

Foreign currency exchange rate movements create a degree of risk to our
operations by affecting the U.S. dollar value of sales made in foreign
currencies and the U.S. dollar value of costs incurred in foreign currencies.
Foreign currency exchange rate movements also affect our competitive position,
as exchange rate changes may affect business practices and/or pricing strategies
of non-U.S. based competitors.

As of December 31, 2001, we did not have any derivative instruments in place for
managing foreign currency exchange rate risks. We do not engage in hedging or
other market structure derivative trading activities. Additionally, our debt
obligations are a combination of fixed and variable rate instruments, some of

                                       25
<PAGE>

which are sensitive to changes in interest rates. At December 31, 2001, we had
$226.8 million in variable rate debt outstanding. A one-percentage point
increase in interest rates would increase the amount of annual interest paid by
approximately $2.3 million. We do not believe that changes in our market risk
financial instruments on December 31, 2001, would have a material effect on
future operations or cash flows.

We are unable to obtain a fair market value or calculate a hypothetical fair
market value of our 12% Senior Subordinated Notes Due 2007 for of the following
reasons:

     o    there is no liquidity in the market place for these bonds because they
          are not traded very often;
     o    there is a large variance between the bid and ask prices for the
          bonds; and
     o    the bonds are deeply discounted.

Instead, we have obtained, from DLJMB, a range of 10% to 20% of face value as an
estimate for the fair market value for these bonds. A comparison of the net fair
value of all interest sensitive financial instruments using a hypothetical 100
basis point increase in interest rates along the entire interest rate yield
curve as of December 31, 2001, is as follows (in thousands):

                                                                Hypothetical
                                         Fair Market Value    Fair Market Value
Description of Security                 Range of 10% to 20%  Range of 10% to 20%
--------------------------------------  -------------------  -------------------
12% Senior Subordinated Notes due 2007  $11,984 to $23,967   $11,454 to $22,907


IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In July 2001, the FASB issued Statement No. 141, "BUSINESS COMBINATIONS" and
Statement No. 142, "GOODWILL AND OTHER INTANGIBLE ASSETS." Statement No. 141
requires the use of the purchase method of accounting for all business
combinations initiated after June 30, 2001, establishes specific criteria for
the recognition of intangible assets separately from goodwill and requires
unallocated negative goodwill to be written off immediately as an extraordinary
gain. Statement No. 142 makes the following significant changes: (1) goodwill
and indefinite lived intangible assets will no longer be amortized, (2) goodwill
will be tested for impairment at least annually at the reporting unit level, (3)
intangible assets deemed to have an indefinite life will be tested for
impairment at least annually, and (4) the amortization period of intangible
assets with finite lives will no longer be limited to forty years. We adopted
the provisions of Statement 141 immediately, and Statement 142 effective January
1, 2002. We believe the adoption of these Statements will not have a significant
effect on our results of operations or financial position.










                                       26
<PAGE>
On October 4, 2001 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 144, "ACCOUNTING FOR THE IMPAIRMENT
OR DISPOSAL OF LONG-LIVED ASSETS." SFAS No. 144 supercedes SFAS 121 and applies
to all long-lived assets (including discontinued operations) and consequently
amends Accounting Principles Board Opinion No. 30 (APB 30), Reporting Results of
Operations Reporting the Effects of Disposal of a Segment of a Business. SFAS
144 develops one accounting model (based on the model in SFAS 121) for
long-lived assets that are to be disposed of by sale. This model requires that
long-lived assets that are to be disposed of by sale be measured at the lower of
book value or fair value less cost to sell. Additionally, SFAS 144 expands the
scope of discontinued operations to include all components of an entity with
operations that (1) can be distinguished from the rest of the entity and (2)
will be eliminated from the ongoing operations of the entity in a disposal
transaction. SFAS 144 is effective for our first quarter in fiscal 2002. We are
currently evaluating the impact of adopting SFAS 144. We believe the adoption of
this Statement will not have a significant effect on our results of operations
or financial position.

SEASONALITY AND INFLATION

Our segments are not highly seasonal.

The impact of inflation on our operations has not been significant. However,
there can be no assurance that a high rate of inflation in the future would not
have an adverse effect on our operating results.


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

See discussion in Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations - "Market Risk and Risk Management".


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

Our Consolidated Financial Statements, together with the reports thereon of
PricewaterhouseCoopers LLP (dated March 18, 2002) and KPMG LLP (dated February
2, 2001) are set forth on pages F-1 through F-49 hereof (see Item 14 of this
Annual Report for Index to Financial Statements).


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

On September 24, 2001, Holdings dismissed its independent auditors, KPMG LLP
("KPMG") and appointed PricewaterhouseCoopers LLP ("PricewaterhouseCoopers") as
its new independent auditors for the fiscal year ending December 31, 2001. The
decision to dismiss KPMG and to engage PricewaterhouseCoopers was approved by
the unanimous vote of Holding's Board of Directors.






                                       27
<PAGE>

The reports of KPMG on the consolidated financial statements of Holdings for its
fiscal years ended December 31, 2000 and December 31, 1999 did not contain any
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles. During Holding's two most
recent fiscal years and the subsequent interim periods through September 24,
2001, there were no disagreements between Holdings and KPMG on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure which, if not resolved to the satisfaction of KPMG, would
have caused KPMG to make reference to the subject matter of the disagreement in
connection with its reports (a "Disagreement").

Holdings has not, during its two most recent fiscal years or the subsequent
interim period through September 24, 2001, consulted with PricewaterhouseCoopers
regarding (i) the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on Holding's financial statements, and neither a written
report nor oral advice was provided to Holdings that PricewaterhouseCoopers
concluded was an important factor considered by Holdings in reaching a decision
as to the accounting, auditing or financial reporting issue, or (ii) any matter
that was the subject of a Disagreement with KPMG.

Holdings does not have any disagreements with its current auditors,
PricewaterhouseCoopers.

We have agreed to indemnify and hold KPMG harmless against and from any and all
legal costs and expenses incurred by KPMG in a successful defense of any legal
action or proceeding that arises as a result of KPMG's consent to the inclusion
of its audit report on the Company's past financial statements.






























                                       28
<PAGE>

                                    PART III


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

We meet the conditions set forth in General Instruction I(i)(a) and (b) of Form
10-K. Accordingly, information pertaining to this section is omitted.


ITEM 11. EXECUTIVE COMPENSATION
-------------------------------

We meet the conditions set forth in General Instruction I(i)(a) and (b) of Form
10-K. Accordingly, information pertaining to this section is omitted.


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

We meet the conditions set forth in General Instruction I(i)(a) and (b) of Form
10-K. Accordingly, information pertaining to this section is omitted.


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

We meet the conditions set forth in General Instruction I(i)(a) and (b) of Form
10-K. Accordingly, information pertaining to this section is omitted.































                                       29
<PAGE>

                                     PART IV

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

(a)  The following documents are filed as part of this report:

(1)  Financial Statements

     -    Report of Independent Accountants
     -    Independent Auditor's Report

     -    Consolidated Balance Sheets

          -    December 31, 2001
          -    December 31, 2000

     -    Consolidated Statements of Operations

          -    Year ended December 31, 2001
          -    Year ended December 31, 2000
          -    Year ended December 31, 1999

     -    Consolidated Statements of Stockholders' Deficit

          -    For the years ended December 31, 2001, 2000, and 1999

     -    Consolidated Statements of Cash Flows

          -    Year ended December 31, 2001
          -    Year ended December 31, 2000
          -    Year ended December 31, 1999

     -    Notes to Consolidated Financial Statements

(2)       Financial Statement Schedules

          See Exhibit 99(a) - Schedule II - Valuation and Qualifying
          Accounts.

          All other schedules are omitted because of the absence of the
          conditions under which they are required or because the required
          information is included in financial statements or the notes
          thereto.

(3)      Exhibits:

*2(a)    Agreement and Plan of Merger, dated as of March 24, 1998, among Insilco
         Corporation, INR Holding Co., and Silkworm Acquisition Corporation
         (Exhibit 10(n) to the Registration Statement on Form S-4 (File No.
         333-51145) of Insilco Corporation).

*2(b)    Amendment No. 1 to the Agreement and Plan of Merger, dated June 8,
         1998, among Insilco Corporation, INR Holding Co., and Silkworm
         Acquisition Corporation (Exhibit 10(r) to the Registration Statement on
         From S-4 (File No. 333-51145) of Insilco Corporation).




                                       30
<PAGE>

*2(c)    Transaction Agreement dated July 20, 2000, by and among Insilco Holding
         Co. (and certain of its subsidiaries) and ThermaSys Holding Company
         (and certain of its subsidiaries) (Exhibit 2(a) to the Current Report
         on Form 8-K filed by Insilco Corporation on July 26, 2000 (File No.
         0-22098)).

*3(a)    Certificate of Amendment of Certificate of Incorporation as filed
         August 25, 2000. (Exhibit 3(a) to the Form 10-K for the year ended
         December 31, 2000 (File No. 0-22098)).

*3(b)    Bylaws (Exhibit 3.2 to the Current Report on Form 8-K filed by Insilco
         Corporation on August 18, 1998 (File No. 0-22098)).

*3(c)    Amended Certificate of Incorporation (Exhibit 3(c) to the Form 10-Q for
         the quarter ended September 30, 2001 (File No. 0-22098)).

*4(a)    Investors' Agreement, dated as of August 17, 1998, among Insilco
         Holding Co. and the investors named therein (Exhibit 4.5 to the
         Registration Statement on Form S-1 (File No. 333-65039) of Insilco
         Holding Co.).

*4(b)    Indenture, dated as of November 9, 1998, between Insilco Corporation
         and the Trustee (Exhibit 4(a) to the Form 10-Q for the quarter ended
         September 30, 1998 (File No. 0-22098) of Insilco Corporation).

*4(c)    First Supplemental Indenture, dated as of December 21, 1998, between
         Insilco Corporation and the Trustee (Exhibit 4.3 to the Registration
         Statement on Form S-1 (File No. 333-71947) of Insilco Corporation).

*4(d)    Exchange and Registration Rights Agreement, dated as of November 9,
         1998, between Insilco Corporation and Donaldson, Lufkin & Jenrette
         Securities Corporation (Exhibit 4(b) to the Form 10-Q for the quarter
         ended September 30, 1998 (File No. 0-22098) of Insilco Corporation).

*4(e)    Indenture, dated as of August 12, 1997, between Insilco Corporation and
         the Trustee (Exhibit 4(j) to the Registration Statement on Form S-4
         (File No. 333-36523) of Insilco Corporation).

*4(f)    Form of New Note (included in Exhibit 4(e) above) (Exhibit 4(k) to the
         Registration Statement on Form S-4 (File No. 333-36523) of Insilco
         Corporation).

*4(g)    Purchase Agreement, dated as of August 7, 1997, among Insilco
         Corporation and Goldman Sachs & Co., McDonald & Company Securities,
         Inc. and Citicorp Securities Inc. (the "Initial purchasers") (Exhibit
         4(l) to the Registration Statement on Form S-4 (File No. 333-36523) of
         Insilco Corporation).

*4(h)    Exchange and Registration Rights Agreement, dated as of August 12,
         1997, between Insilco Corporation and the Initial Purchasers (Exhibit
         4(m) to the Registration Statement on Form S-4 (File No. 333-36523) of
         Insilco Corporation).

*4(i)    Second Supplemental Indenture, dated as of January 25, 1999, between
         Insilco Corporation and the Trustee (Exhibit 4.4 to the Registration
         Statement on Form S-1 (File No. 333-71947) of Insilco Corporation).

*10(a)   Insilco Holding Co. Direct Investment Program (Exhibit 4(c) to the
         Registration Statement on Form S-8 (File No. 333-61809) of Insilco
         Holding Co.).**

                                       31
<PAGE>
*10(b)   Insilco Holding Co. Stock Option Plan (Exhibit 4(d) to the Registration
         Statement on Form S-8 (File No. 333-61809) of Insilco Holding Co.).**

*10(c)   Insilco Holding Co. and Insilco Corporation Equity Unit Plan (Exhibit
         4(c) to the Registration Statement on Form S-8 (File No. 333-61811) of
         Insilco Holding Co.).**

*10(d)   Credit Agreement among Insilco Corporation and a syndicate of banks and
         other financial institutions led by Donaldson, Lufkin & Jenrette
         Securities Corporation, DLJ Capital Funding, Inc. and The First
         National Bank of Chicago (Exhibit 10.4 to the Registration Statement on
         Form S-1 (File No. 333-71947) of Insilco Corporation).

*10(e)   Form of Indemnification Agreement adopted by Insilco Corporation as of
         July 30, 1990, entered into between Insilco Corporation and certain of
         its officers and directors individually, together with a schedule
         identifying the other documents omitted and the material details in
         which such documents differ (Exhibit 10(n) to the Form 10 Registration
         Statement (File No. 0-22098) of Insilco Corporation).

*10(f)   Form of Income Protection Agreement adopted by Insilco Corporation as
         of December, 1996, entered into between Insilco Corporation and the
         officers identified in Exhibit 10(f) (Exhibit 10(h) to Form 10-K for
         the year ended December 31, 1996, (File No. 0-22098) of Insilco
         Corporation).

*10(g)   Credit Agreement dated August 25, 2000, among Insilco Technologies,
         Inc., T.A.T. Technology, Inc., Various Financial Institutions, Bank
         One, NA, DLJ Capital Funding, Inc., and Huntington Bank (Exhibit 99(b)
         to Current Report on Form 8-K filed by Insilco Technologies, Inc., on
         September 7, 2000 (File No. 0-22098)).

10(h)    Management Services Agreement dated August 25, 2000, with ThermaSys
         Corporation.

*10(i)   Amendment No. 1 to Second Amended and Restated Credit Agreement dated
         August 14, 2001 (Exhibit 10.1 to the Form 10-Q for the quarter ended
         June 30, 2001 (File No. 0-22098)).

10(j)    Indemnification Agreement with KPMG LLP.

*15(a)   Independent Accountants Awareness Letter (Exhibit 15(a) to the Form
         10-Q for the quarter ended September 30, 2001 (File No. 0-22098)).

*16(a)   Auditor change letter (Exhibit 16.1 to the Current Report on Form 8-K/A
         filed by Insilco Technologies, Inc. on October 2, 2001 (File No.
         0-22098)).

*21      Subsidiaries of Insilco Technologies, Inc. (Exhibit 21 to the Form 10-K
         for the year ended December 31, 2000 (File No. 0-22098)).

23(a)    Consent of PricewaterhouseCoopers LLP.

23(b)    Consent of KPMG LLP.

24       Power of Attorney of officers and directors of Insilco appearing on the
         signature page hereof.

*25      Statement of Eligibility and Qualification Under the Trust Indenture
         Act of 1939 (T-1) of the Bank of New York (bound separately) (Exhibit
         25 to the Registration Statement on Form S-4 (File No. 333-36523) of
         Insilco Corporation).
                                       32
<PAGE>

99(a)    Schedule II - Valuation and Qualifying Accounts.

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

*    Incorporated by reference, as indicated.

**   Designates management contracts and compensatory plans or arrangements
     in which directors or executive officers participate.

(b)  Reports on Form 8-K

     A report, dated November 13, 2001, on Form 8-K was filed with the SEC on
     November 14, 2001, pursuant to Items 5 and 7 of that form.

     A report, dated February 7, 2002, on Form 8-K was filed with the SEC on
     February 8, 2002, pursuant to Items 5 and 7 of that form.

     A report, dated February 15, 2002, on Form 8-K was filed with the SEC on
     February 15, 2002, pursuant to Items 5 and 7 of that form.

     A report, dated March 18, 2002, on Form 8-K was filed with the SEC on
     March 18, 2002, pursuant to Item 5 of that form.

     A report, dated March 25, 2002, on Form 8-K was filed with the SEC on
     March 25, 2002, pursuant to Items 5 and 7 of that form.

(c)  Exhibits

     The Exhibits to this report begin immediately following the Consolidated
     Financial Statements.

(d)  Financial Statements Schedules:

     See Exhibit 99(a) - Schedule II - Valuation and Qualifying Accounts.

     NOTE: ALL OTHER SCHEDULES CALLED FOR UNDER REGULATION S-X NOT INCLUDED
     HEREIN HAVE BEEN OMITTED BECAUSE THEY ARE NOT APPLICABLE, THE REQUIRED
     INFORMATION IS NOT MATERIAL OR THE REQUIRED INFORMATION IS INCLUDED IN THE
     FINANCIAL STATEMENTS OR NOTES THERETO.




















                                       33
<PAGE>

                                   SIGNATURES

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


                                   INSILCO TECHNOLOGIES, INC.


Date: April 1, 2002                By: /s/ Michael R. Elia
                                       ----------------------------------------
                                       Michael R. Elia
                                       Senior Vice President, Chief Financial
                                       Officer and Secretary

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


     David A. Kauer*            President, Chief Executive         April 1, 2002
     ----------------------     Officer and Director
     David A. Kauer             (Principal Executive Officer)


     Michael R. Elia*           Senior Vice President, Chief       April 1, 2002
     ----------------------     Financial Officer and Secretary
     Michael R. Elia            (Principal Accounting Officer and
                                Principal Financial Officer)


     Thompson Dean*             Director                           April 1, 2002
     ----------------------
     Thompson Dean


By:  /s/ David A. Kauer
     ----------------------
     *David A. Kauer
     Attorney-in-Fact


















                                       34
<PAGE>


                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Accountants                                           F-2
Independent Auditors' Report                                                F-3

Consolidated Balance Sheets                                                 F-4
    - December 31, 2001
    - December 31, 2000

Consolidated Statements of Operations                                       F-5
    - Year ended December 31, 2001
    - Year ended December 31, 2000
    - Year ended December 31, 1999

Consolidated Statement of Stockholder's Deficit
    - For the years ended December 31, 2001, 2000, and 1999                 F-6

Consolidated Statements of Cash Flows                                       F-8
    - Year ended December 31, 2001
    - Year ended December 31, 2000
    - Year ended December 31, 1999

Notes to Consolidated Financial Statements                                  F-9














                                       F-1
<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS
                        ---------------------------------


To the Board of Directors and
Shareholder of Insilco Technologies, Inc.:

In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(1) on page 30 present fairly, in all material
respects, the financial position of Insilco Technologies, Inc. and its
subsidiaries at December 31, 2001, and the results of their operations and their
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America. In addition, in our opinion,
the financial statement schedule listed in the index appearing under Item 14 (a)
(2) on page 30 presents fairly, in all material respects, the information set
forth therein when read in conjunction with the related consolidated financial
statements. These financial statements and the financial statement schedule are
the responsibility of the Company's management; our responsibility is to express
an opinion on these financial statements and the financial statement schedule
based on our audit. We conducted our audit of these statements in accordance
with auditing standards generally accepted in the United States of America,
which 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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company has experienced significant
losses from operations and on March 18, 2002, the Company defaulted on their 12%
Senior Subordinated Notes by not making a required interest payment. This
default, along with cross-default provisions triggered under the Company's
Amended Credit Agreement, resulted in substantially all of the Company's debt
being callable immediately. It is probable that the Company will not be able to
cure the default within the next twelve months. These matters raise 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.

/S/ PRICEWATERHOUSECOOPERS LLP
March 18, 2002

                                       F-2

<PAGE>

                          INDEPENDENT AUDITORS' REPORT


The Board of Directors and Stockholder
Insilco Technologies, Inc.:


We have audited the consolidated balance sheet of Insilco Technologies, Inc.
(formerly Insilco Corporation) and subsidiaries as of December 31, 2000, and the
related consolidated statements of operations, stockholder's equity, and cash
flows for the years ended December 31, 2000 and 1999. In conjunction with our
audits of the consolidated financial statements, we also have audited the
financial statement schedule of valuation and qualifying accounts. These
consolidated financial statements and the financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements and the financial statement
schedule based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Insilco
Technologies, Inc. and subsidiaries as of December 31, 2000, and the results of
their operations and their cash flows for the years ended December 31, 2000 and
1999, in conformity with accounting principles generally accepted in the United
States of America. Also in our opinion, the related 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.


/S/ KPMG LLP

Columbus, Ohio
February 2, 2001

                                       F-3
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                           Consolidated Balance Sheets
                           December 31, 2001 and 2000
                        (In thousands, except share data)

                                                               At December 31,
                                                          ----------------------
                            Assets                           2001        2000
                            ------                           ----        ----
Current Assets:
    Cash and cash equivalents                             $  27,160      28,087
    Trade receivables, net                                   34,128      61,609
    Other receivables                                         1,278       1,818
    Inventories, net                                         40,461      58,779
    Deferred taxes                                                -       2,373
    Prepaid expenses and other current assets                 2,158       5,400
                                                          ---------   ---------
      Total current assets                                  105,185     158,066
Property, plant, and equipment, net                          52,430      58,274
Goodwill, net                                                   616     121,326
Other assets and deferred charges                            13,709      14,827
                                                          ---------   ---------
      Total assets                                        $ 171,940     352,493
                                                          =========   =========

            Liabilities and Stockholders' Deficit
            -------------------------------------

Current Liabilities:
    Current portion of long-term debt                     $ 346,312       5,210
    Accounts payable                                         15,373      28,655
    Accrued expenses and other current liabilities           26,618      41,800
    Income taxes payable                                      3,476       6,915
                                                          ---------   ---------
      Total current liabilities                             391,779      82,580
Long-term debt, excluding current portion                       341     279,791
Other long-term liabilities, excluding current portion       25,909      40,009
Loan due to Insilco Holding Co.                                 419         434
                                                          ---------   ---------
      Total liabilities                                     418,448     402,814
                                                          ---------   ---------

Commitments and contingencies
Stockholder's deficit:
    Common stock, $.001 par value; 1,000,000
    shares authorized:
       100,000 and 100 shares issued and outstanding at
       December 31, 2001 and 2000, respectively                   -           -
    Additional paid-in capital                                8,070       8,070
    Accumulated deficit                                    (247,304)    (54,816)
    Accumulated other comprehensive loss                     (7,274)     (3,575)
                                                          ---------   ---------
      Total stockholders' deficit                          (246,508)    (50,321)
                                                          ---------   ---------
      Total liabilities and stockholders' deficit         $ 171,940     352,493
                                                          =========   =========

          See accompanying notes to consolidated financial statements.

                                      F-4
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Condensed Consolidating Statement of Operations
                    Years Ended December 31, 2001, 2000, 1999
                                 (In Thousands)
<TABLE><CAPTION>
                                                                   Year Ended December 31,
                                                          ----------------------------------------
                                                              2001          2000          1999
                                                          ------------  ------------  ------------
<S>                                                       <C>                <C>           <C>
Sales                                                     $    246,119       370,848       248,042
Cost of products sold                                          210,666       266,938       191,295
Depreciation and amortization                                   20,418        14,834        10,176
Selling, general and administrative expenses                    35,078        51,600        40,214
Goodwill impairment charge                                     150,260             -             -
Restructuring charge                                             1,319             -         5,787
                                                          ------------  ------------  ------------
      Operating income (loss)                                 (171,622)       37,476           570
                                                          ------------  ------------  ------------
Other income (expense):
    Interest expense                                           (39,601)      (38,271)      (36,452)
    Interest income                                              3,630           391           391
    Other income (expense), net                                   (377)       (1,035)        9,993
                                                          ------------  ------------  ------------
      Total other expense                                      (36,348)      (38,915)      (26,068)
                                                          ------------  ------------  ------------
      Loss from continuing operations before income taxes,
       discontinued operations and extraordinary items        (207,970)       (1,439)      (25,498)
Income tax benefit                                              15,482         6,124        13,632
                                                          ------------  ------------  ------------
      Income (loss) from continuing operations
        before discontinued operations and
        extraordinary items                                   (192,488)        4,685       (11,866)
Discontinued operations, net of tax:
    Income from operations                                           -         5,948        21,634
    Gain on disposal                                                 -        63,583             -
                                                          ------------  ------------  ------------
      Income from discontinued operations                            -        69,531        21,634
                                                          ------------  ------------  ------------
      Income (loss) before extraordinary items                (192,488)       74,216         9,768
Extraordinary items, net of tax                                      -        (3,064)            -
                                                          ------------  ------------  ------------
         Net income (loss)                                $   (192,488)       71,152         9,768
                                                          ============  ============  ============
</TABLE>
          See accompanying notes to consolidated financial statements.

                                      F-5
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Consolidated Statement of Stockholder's Deficit
              For the Years Ended December 31, 2001, 2000, and 1999
                                 (In Thousands)
<TABLE><CAPTION>
                                                                                                          Accumulated
                                                    Common                    Additional                     Other        Total
                                                   Stock Par     Treasury      Paid-in     Accumulated   Comprehensive Stockholder's
                                                  Value $.001      Stock       Capital       Deficit         Loss         Deficit
                                                 ------------  ------------  ------------  ------------  ------------  ------------
<S>                                              <C>           <C>           <C>           <C>           <C>           <C>
Balance at December 31, 1998                     $          -             -         3,925      (135,736)       (5,098)     (136,909)
  Comprehensive income:
     Net income                                             -             -             -         9,768             -         9,768
     Other comprehensive income:
       Foreign currency translation adjustment              -             -             -             -            70            70
       Minimum pension liability adjustment                                                                     1,805         1,805
                                                                                                                       ------------
  Total comprehensive income                                                                                                 11,643
                                                                                                                       ------------
  Tax benefit from valuation allowance                      -             -           263             -             -           263
                                                 ------------  ------------  ------------  ------------  ------------  ------------
Balance at December 31, 1999                     $          -             -         4,188      (125,968)       (3,223)     (125,003)
  Comprehensive income:
     Net income                                             -             -             -        71,152             -        71,152
     Other comprehensive income:
       Foreign currency translation adjustment              -             -             -             -          (352)         (352)
                                                                                                                       ------------
  Total comprehensive income                                                                                                 70,800
                                                                                                                       ------------
  Tax benefit from valuation allowance                      -             -         3,882             -             -         3,882
                                                 ------------  ------------  ------------  ------------  ------------  ------------
Balance at December 31, 2000                     $          -             -         8,070       (54,816)       (3,575)      (50,321)
</TABLE>
          See accompanying notes to consolidated financial statements.

                                       F-6
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Consolidated Statement of Stockholder's Deficit
              For the Years Ended December 31, 2001, 2000, and 1999
                                 (In Thousands)
<TABLE><CAPTION>
                                                                                                          Accumulated
                                                     Common                   Additional                    Other         Total
                                                   Stock Par     Treasury       Paid-in     Accumulated  Comprehensive Stockholder's
                                                  Value $.001      Stock        Capital       Deficit        Loss         Deficit
                                                 ------------  ------------  ------------  ------------  ------------  ------------
<S>                                              <C>           <C>           <C>           <C>           <C>           <C>
Balance at December 31, 2000                     $          -             -         8,070       (54,816)       (3,575)      (50,321)
  Comprehensive income:
    Net loss                                                -             -             -      (192,488)            -      (192,488)
    Other comprehensive loss:
      Foreign currency translation adjustment               -             -             -             -        (1,139)       (1,139)
      Minimum pension liability adjustment                  -             -             -             -        (2,560)       (2,560)
                                                                                                                       ------------
  Total comprehensive income                                                                                               (196,187)
                                                 ------------  ------------  ------------  ------------  ------------  ------------
Balance at December 31, 2001                     $          -             -         8,070      (247,304)       (7,274)     (246,508)
                                                 ============  ============  ============  ============  ============  ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-7
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows
                  Years Ended December 31, 2001, 2000, and 1999
                                 (In thousands)
<TABLE><CAPTION>
                                                                        Year Ended December 31,
                                                               ----------------------------------------
                                                                   2001          2000          1999
<S>                                                            <C>           <C>           <C>
Cash flows from operating activities:
    Net income (loss)                                          $   (192,488)       71,152         9,768
    Adjustments to reconcile net income (loss) to net cash
     provided by operating activities:
      Net income from discontinued operations                             -        (5,948)      (21,634)
      Depreciation and amortization                                  20,418        14,834        10,176
      Deferred tax benefit (provision)                                2,554        (3,811)       (5,694)
      Gain on sale of Romac and McKenica equipment                        -             -        (9,485)
      Other noncash charges and credits                               8,131         6,620         4,336
      Goodwill impairment charge                                    150,260             -             -
    Changes in operating assets and liabilities:
      Receivables                                                    31,812         3,926        (4,863)
      Inventories                                                    21,520        (9,089)          118
      Prepaids                                                        3,309        (3,094)          535
      Payables                                                      (16,281)       (4,488)        5,503
      Other current liabilities and other                           (38,694)       (5,519)       (2,465)
    Discontinued operations:
      Gain on sale                                                        -       (63,583)            -
      Depreciation                                                        -         6,950        12,751
      Changes in operating assets and liabilities                         -         8,037        14,002
                                                               ------------  ------------  ------------
         Net cash provided by (used in) operating activities         (9,459)       15,987        13,048
                                                               ------------  ------------  ------------
Cash flows from investing activities:
    Acquisitions, net of cash acquired                              (44,174)     (156,193)      (25,340)
    Proceeds from disposal of businesses and other
      investing activities                                              179           120        18,495
    Capital expenditures                                             (6,205)       (9,879)       (7,215)
    Discontinued operations:
      Proceeds from divestitures, net                                     -       217,343             -
      Capital expenditures                                                -        (5,341)       (9,245)
                                                               ------------  ------------  ------------
         Net cash provided by (used in) investing activities        (50,200)       46,050       (23,305)
                                                               ------------  ------------- ------------
Cash flows from financing activities:
    Payments on long term debt                                       (6,559)       (1,445)       (4,955)
    Loan to Insilco Holding Co.                                         (15)         (801)       (1,756)
    Debt issuance and tender costs                                   (1,982)       (6,758)            -
    Proceeds from revolving credit facility                          56,650       137,300       260,886
    Payments on revolving credit facility                           (28,650)     (209,827)     (244,679)
    Payments on term credit facilities                                    -       160,000             -
    Proceeds from term credit facilities                             40,000      (118,679)            -
    Funds received (deposited) in excess of retired
      10 1/4% Notes                                                       -             -         2,032
    Proceeds from sale of minority interest                               -             -           100
    Payment of prepetition liabilities                                    -             -        (1,086)
    Retirement of 10 1/4% Notes                                           -             -        (1,526)
                                                               ------------  ------------  ------------
         Net cash provided by (used in) financing activities         59,444       (40,210)        9,016
                                                               ------------  ------------  ------------
Effect of exchange rate changes on cash                                (712)         (120)          (15)
                                                               ------------  ------------  ------------
         Net increase (decrease) in cash and cash equivalents          (927)       21,707        (1,256)
Cash and cash equivalents at beginning of period                     28,087         6,380         7,636
                                                               ------------  ------------  ------------
Cash and cash equivalents at end of period                     $     27,160        28,087         6,380
                                                               ============  ============  ============
Supplemental information - cash paid for:
    Interest                                                   $     33,021        36,893        31,993
                                                               ============  ============  ============
    Income taxes paid (refunded)                               $     (2,930)        8,611           561
                                                               ============  ============  ============
</TABLE>
          See accompanying notes to consolidated financial statements.

                                      F-8
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

(1)  MANAGEMENT PLANS AND GOING CONCERN MATTERS
     ------------------------------------------

     On February 7, 2002, the Company stated that it has initiated a review of
     its strategic alternatives and had retained Gleacher & Co. LLC to assist
     management and the Board of Directors in this review. On February 15, 2002,
     the Company said it would utilize the 30-day grace period under the
     indenture governing the Company's 12% Senior Subordinated Notes due 2007
     (the "12% Notes"), and would not make the scheduled $7.2 million interest
     payment due February 15, 2002. The 30-day grace period expired on March 18,
     2002 and the Company did not make the payment. The failure to make the
     required interest payment within the 30-day grace period created an event
     of default under the indenture governing the 12% Notes and the Amended
     Credit Agreement. Due to these defaults the debt under the Amended Credit
     Agreement and the 12% Notes has been reclassified to current at December
     31, 2001.

     At this time, the Company is having on-going discussions with its senior
     secured lenders and an ad hoc committee of holders of the 12% Notes in an
     effort to reach an agreement on a consensual restructuring of its capital
     structure. However, as with any negotiation, there can be no assurance as
     to when and if such an agreement will be reached. If an agreement is not
     reached, it will impact the Company's principal resources of liquidity and
     its ability to meet future cash requirements. Such limitations could force
     the Company to consider alternatives that may include negotiating further
     amendments to the Amended Credit Agreement, attempting to obtain
     commitments for additional new tranche loans or notes, asset sales, a sale
     of the Company or other remedies appropriate for the circumstances.

     The Company's recent losses and highly leveraged position raise substantial
     doubt about the Company's ability to continue as a going concern. The
     consolidated financial statements do not include any adjustments relating
     to recoverability and classification of recorded asset amounts or the
     amount and classification of liabilities that might be necessary should the
     Company be unable to continue as a going concern. The ability of the
     Company to continue as a going concern and the appropriateness of using the
     going concern basis are dependent upon, among other things, (i) the
     Company's ability to negotiate with its senior secured lenders and an ad
     hoc committee of the holders of its 12% Notes, (ii) the Company's ability
     to create and implement a strategic business plan, and (iii) the Company's
     ability to generate sufficient cash from operations to meet its
     obligations.

(2)  HISTORY OF THE COMPANY
     ----------------------

     Insilco Technologies, Inc. (the "Company" or "Insilco"), formerly Insilco
     Corporation, a Delaware corporation, is a worldwide producer of
     telecommunications and electronics components. On August 17, 1998, through
     a series of transactions, the Company became a wholly owned subsidiary of
     Insilco Holding Co. ("Holdings") and is included in Holdings' consolidated
     financial statements and consolidated group for tax purposes. The Company
     is required to report separate consolidated financial information under the
     Securities Exchange Act of 1934 because the Company's 12% Senior
     Subordinated Notes (the "12% Notes") are registered debt securities under
     the Securities Act of 1933.

     The transactions completed on August 17, 1998, included, among other
     things, the merging of Insilco ReorgSub Company (then a wholly owned
     subsidiary of Holdings (then a wholly owned subsidiary of Insilco)) with
     and into the Company with Insilco continuing as the surviving corporation
     and as the wholly owned subsidiary of Holdings (the "Reorganization
     Merger"), pursuant to which each stockholder of the Company had his or her
     shares of the Company converted into the same number of shares of Holdings
     and the right to receive $0.01 per share in cash, and Holdings became the
     parent of the Company.

                                       F-9
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     Promptly following the Reorganization Merger, a second merger took place
     pursuant to which Silkworm Acquisition Corporation ("Silkworm"), an
     affiliate of DLJ Merchant Banking Partners, II, L.P. ("DLJMB"), merged with
     and into Holdings (the "Merger," and together with the Reorganization
     Merger, the "Mergers") and each share of Holdings Common Stock was
     converted into the right to receive $43.47 in cash and 0.03378 of a share
     of Holdings Common Stock. Thus, as a result of the Mergers, each
     stockholder of the Company, in respect of each of his or her shares,
     received $43.48 in cash and retained 0.03378 of a share of Holdings Common
     Stock.

     Following the Mergers, (i) the Company's existing stockholders retained, in
     the aggregate, approximately 10.1% (9.4% on a fully diluted basis) of the
     outstanding shares of Holdings Common Stock; (ii) DLJMB held approximately
     69.0% (69.8% on a fully diluted basis) of the outstanding shares of
     Holdings Common Stock; (iii) 399 Venture Partners Inc., an affiliate of
     Citibank, N.A. ("CVC"), purchased shares of Silkworm which in the Merger
     were converted into approximately 19.3% (17.8% on a fully diluted basis) of
     the outstanding shares of Holdings Common Stock; and (iv) management of the
     Company purchased approximately 1.7% (1.5% on a fully diluted basis) of the
     outstanding shares of Holdings Common Stock.

     Immediately prior to the effectiveness of the Reorganization Merger, each
     outstanding option to acquire shares of the common stock of the Company
     granted to employees and directors, whether or not vested (the "Options")
     was canceled and, in lieu thereof, each holder of an Option received a cash
     payment in an amount equal to (x) the excess, if any, of $45.00 over the
     exercise price of the Option multiplied by (y) the number of shares subject
     to the Option, less applicable withholding taxes (the "Option Cash
     Payments"). Certain holders of such Options elected to utilize amounts
     otherwise receivable by them to purchase $1.0 million of equity and $2.7
     million of equity units of Holdings.

     The total amount of cash required to consummate the foregoing transactions
     was approximately $204.4 million. This amount was financed with (i) gross
     proceeds of approximately $70.2 million from the issuance by Silkworm of
     units (which were converted into units of Holdings (the "Holdings Units")
     in the Merger), each unit consisting of $1,000 principal amount at maturity
     of 14% Senior Discount notes due 2008 (the "Holdings Senior Discount
     Notes") and one warrant to purchase 0.325 of a share of Holdings Common
     Stock at an exercise price of $0.01 per share, (ii) the issuance by
     Silkworm to DLJMB, CVC and certain members of management of the Company,
     for an aggregate consideration of approximately $56.1 million, of 1,245,138
     shares of Silkworm common stock (which was converted into Holdings Common
     Stock in the Merger), (iii) the issuance by Holdings to DLJMB, for an
     aggregate consideration of $35.0 million, of 1,400,000 shares of the
     Holding's 15% Senior Exchangeable Preferred Stock due 2012 ("PIK Preferred
     Stock") and warrants to purchase 65,603 shares of Holdings Common Stock at
     an exercise price of $0.001 per share, and (iv) approximately $43.1 million
     of new borrowings under the Company's existing credit facility (the "1997
     Credit Facility"). In addition, the Company paid a cash dividend to
     Holdings of $30.9 million following the Mergers.

     The Company incurred $20,890,000 of costs related to the Merger in 1998.

     DISCONTINUED OPERATIONS

     On August 25, 2000, Holdings sold its "Automotive Businesses" to Thermasys
     Holding Company, ThermaSys Corporation, a wholly owned subsidiary of
     ThermaSys Holding Company, ThermaSys I, Inc., ThermaSys II, Inc., and
     ThermaSys III, Inc., for net proceeds of $144.5 million. The ThermaSys
     companies are owned by Holdings' majority stockholders. The gain on the
     sale was $20.5 million, net of taxes of $17.3 million. The "Automotive
     Businesses" manufacture, sell and distribute tubing and heat exchanger
     products and transmission and suspension components through General
     Thermodynamics and Thermal Components, both divisions of the Company, and
     the following wholly-owned subsidiaries of the Company: Steel Parts
     Corporation, Arup Alu-Rohr und Profil GmbH, Thermal Transfer Products,
     Ltd., Great Lake, Inc., and Thermal Components, Inc., as well as the
     Company's 51% ownership in Dalian General Thermodynamics Incorporated Ltd.
     As a result of this sale, the accompanying

                                      F-10
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     consolidated statements of operations and cash flows are reclassified to
     account for the sale of the "Automotive Businesses" as a discontinued
     operation. Proceeds from the sale were used to reduce bank debt. Revenues
     associated with the discontinued "Automotive Businesses" for the years 2000
     and 1999 were $160.0 million and $228.3 million, respectively.

     On February 11, 2000, the Company executed a definitive sale agreement with
     TP Acquisition Corp., a wholly owned subsidiary of Castle Harlan Partners
     III, LP, to sell its publishing business, Taylor Publishing Company for
     gross proceeds of approximately $93.5 million. Closing proceeds of
     approximately $72.8 million from this transaction plus approximately $21.2
     million in retained customer deposits, net of other working capital
     adjustments were used to reduced borrowings under the Company's Terms
     Credit Facility. The gain on the sale was $43.0 million, net of taxes of
     $23.6 million. The accompanying consolidated statements of operations and
     cash flows are reclassified to account for the sale of the Publishing
     Business as a discontinued operation. Revenues associated with the
     discontinued Publishing Business for the years 2000 and 1999 were $1.6
     million and $103.7 million, respectively.

     ACQUISITIONS

     On January 10, 2001, the Company acquired the outstanding equity interests
     in InNet Technologies, Inc. ("InNet"), excluding approximately 16% of the
     outstanding equity interests that the Company already owned. InNet, now a
     wholly-owned subsidiary, is a California-based designer, developer and
     marketer of a broad range of magnetic interface products for networking,
     computer and telecommunications original equipment manufacturers. The gross
     purchase price paid for the remaining equity interests was $44.9 million
     and was financed with cash and additional borrowings of $25.0 million under
     Insilco's Term B Facility provided for under the Credit Agreement. The
     purchase method of accounting has been used to account for the purchase;
     accordingly the results of operations of InNet have been included in the
     Company's consolidated financial statements from January 10, 2001. The
     purchase price, net of cash acquired and including costs incurred directly
     related to the transaction, was $44.2 million. The excess of the purchase
     price over identifiable assets acquired was $37.9 million, which was being
     amortized on a straight-line basis over 20 years. At June 30, 2001, the
     Company evaluated the fair value of the InNet goodwill and recorded a
     pre-tax charge of $7.5 million and changed the useful life of the remaining
     goodwill to 7 years. In the fourth quarter of 2001, the Company recorded an
     additional pre-tax charge of $27.7 million. For further discussion see Note
     19 Impairment of Goodwill.

     On August 25, 2000, the Company purchased Precision Cable Manufacturing
     ("PCM") for a gross purchase price of $54.8 million, including final
     working capital adjustments. The purchase price, net of cash acquired, and
     including estimated costs incurred directly related to the transaction and
     final working capital adjustments, was $55.0 million. PCM is a Rockwall,
     Texas-based cable and wire assembly provider primarily to the
     telecommunications industry. The purchase price was financed with
     borrowings under the Company's amended credit facility. The purchase method
     of accounting has been used to account for the purchase, accordingly, the
     results of operations of PCM have been included in the Company's
     consolidated financial statements from August 25, 2000. The excess of the
     purchase price over net identifiable assets acquired was $37.6 million,
     which was being amortized on a straight-line basis over 20 years. At June
     30, 2001, the Company evaluated the fair value of the PCM goodwill and
     recorded a pre-tax charge of $14.9 million and changed the useful life of
     the remaining goodwill to 7 years. In the fourth quarter of 2001, the
     Company recorded an additional pre-tax charge of $19.6 million. For further
     discussion see Note 19 Impairment of Goodwill.

     On February 17, 2000, the Company, through two newly created wholly owned
     subsidiaries, Insilco Technology (Canada) Corporation and 9087-3498 Quebec
     Inc., executed a definitive agreement to purchase 9011-7243 Quebec Inc.,
     known as TAT Technologies. 9087-3498 Quebec Inc., purchased 9011-7243
     Quebec Inc. The surviving company, TAT Technologies ("TAT") is a wholly
     owned subsidiary of Insilco Technology (Canada) Corporation

                                      F-11
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     and is a Montreal-based provider of cable and wire assemblies. The entire
     purchase price was financed with borrowings under the Company's Term Credit
     Facility. The gross purchase price paid by the Company was $102.1 million.
     The purchase price, net of cash acquired and including estimated costs
     incurred directly related to the transaction was $100.6 million. The
     purchase method of accounting has been used to account for the purchase,
     accordingly, the results of operations of TAT have been included in the
     Company's consolidated financial statements from February 17, 2000. The
     excess of the purchase price over net identifiable assets acquired was
     $82.4 million, and was being amortized on a straight-line basis over 20
     years. At June 30, 2001, the Company evaluated the fair value of the TAT
     Technologies goodwill and recorded a pre-tax charge of $74.9 million and
     changed the useful life of the remaining goodwill to 7 years. In the fourth
     quarter of 2001, the Company recorded an additional pre-tax charge of $1.7
     million. For further discussion see Note 19, Impairment of Goodwill.

     On January 25, 1999, the Company purchased the stock of Eyelets for
     Industry, Inc. ("EFI") a precision stamping manufacturer, for $25.3
     million, including costs incurred directly related to the transaction. The
     entire purchase was financed from borrowings under the Company's Revolving
     Credit Facility. The acquisition has been accounted for using the purchase
     method of accounting. The excess of the purchase price over the net
     identifiable assets acquired of $3.7 million includes costs for employee
     terminations, facility closure and related costs of $0.4 million, and was
     recorded as goodwill and was being amortized on a straight-line basis over
     20 years. At December 31, 2001, the Company evaluated the fair value of the
     EFI goodwill and recorded a pre-tax charge of $3.5 million. For further
     discussion see Note 19, Impairment of Goodwill. In addition, the Company
     also entered into a Sales Participation Agreement, which provides for
     additional payments over the next 13 years contingent on future sales of a
     specific product line. To date there have been no payments under this
     agreement.

     For the above noted acquisitions, the purchase prices have been allocated
     to the assets and liabilities acquired based on their fair values at the
     acquisition dates. The fair value of the assets acquired totaled $104.0
     million and the liabilities assumed totaled $39.7 million.

     These transactions affect the comparability of the Company's financial
     position, results of operations and cash flows for 2001 compared to prior
     periods. As a result of these transactions, the Company's condensed
     consolidated results for the periods presented are not directly comparable.
     Pro forma results of operations for the years ended 2001 and 2000, which
     assume the transactions occurred at the beginning of the period are as
     follows (in thousands) (unaudited):

                                                         Year Ended
                                                         December 31,
                                                     2001          2000
                                                   ---------      ---------
     Net Sales                                     $ 246,119        425,998

     Income (loss) from continuing operations
       before extraordinary items                  $(192,488)         5,427

     Net income (loss)                             $(192,488)         2,363

                                      F-12
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

(3)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     ------------------------------------------

     PRINCIPLES OF CONSOLIDATION
     ---------------------------

     The consolidated financial statements include the financial statements of
     the Company and its wholly owned subsidiaries. All significant intercompany
     balances and transactions have been eliminated.

     CASH EQUIVALENTS
     ----------------

     Cash equivalents include time deposits and highly liquid investments with
     original maturities of three months or less.

     TRADE RECEIVABLES
     -----------------

     Trade receivables are presented net of allowances for doubtful accounts and
     sales returns of $2.6 million and $1.8 million at December 31, 2001 and
     2000, respectively.

     INVENTORIES
     -----------

     Inventories are valued at the lower of cost or market. Cost is generally
     determined using the first-in, first-out cost method.

     PROPERTY, PLANT AND EQUIPMENT
     -----------------------------

     Property, plant and equipment are stated at cost. Depreciation of plant and
     equipment is calculated on the straight-line method over the assets'
     estimated useful lives, which is 25 years for new buildings and ranges from
     3 to 9 years for machinery and equipment. The cost of assets sold or
     retired and the related accumulated depreciation are removed from the
     accounts with any resulting gain or loss included in net income.
     Maintenance and repairs are charged to expense as incurred. Major renewals
     and betterments that extend service lives are capitalized.

     Long-lived assets are reviewed for impairment whenever events or changes in
     circumstances indicate that full recoverability is questionable. Factors
     used in the valuation include, but are not limited to, management's plans
     for future operations, recent operating results and projected cash flows.

     DEFERRED FINANCING COSTS
     ------------------------

     Deferred financing costs are being amortized using the effective interest
     method over the life of the related debt.

     REVENUE RECOGNITION
     -------------------

     Revenue from product sales is recognized upon shipment to customers.
     Provisions for returns and other adjustments are provided for in the same
     period the related sales are recorded.

                                      F-13
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     DEFERRED TOOLING
     ----------------

     Deferred tooling are costs incurred to develop tools and dies for customer
     products and the Company's own priority products. The costs incurred
     relating to these items are often billed directly to the customer at
     various stages of completion in the case of customer specific tooling and
     capitalized in the case of tooling for propriety products. Revenue and
     costs relating to tooling are matched and recorded when billed to the
     customer or amortized into the piece price and cost of the product.

     GOODWILL
     --------

     Goodwill represents the excess of cost of net assets acquired in business
     combinations over their fair values. It is amortized on a straight-line
     basis over estimated periods to be benefited (not exceeding 20 years). The
     recovery of the carrying value of goodwill is periodically evaluated in
     relation to the operating performance and future undiscounted net cash
     flows of the related businesses acquired (see Note 19).

     ENVIRONMENTAL REMEDIATION AND COMPLIANCE
     ----------------------------------------

     Environmental remediation and compliance expenditures are expensed or
     capitalized in accordance with generally accepted accounting principles.
     Liabilities are recorded when it is probable the obligations have been
     incurred and the amounts can be reasonably estimated.

     FAIR VALUE OF FINANCIAL INSTRUMENTS
     -----------------------------------

     Fair value of cash, accounts receivable, accounts payable and accrued
     liabilities approximate book value at December 31, 2001 and 2000. Fair
     value of debt is based upon market value, if traded, or discounted at the
     estimated rate the Company would incur currently on similar debt (See Note
     9).

     INCOME TAXES
     ------------

     Income taxes are accounted for under the asset and liability method.
     Deferred tax assets and liabilities are determined based upon differences
     between the financial reporting and tax basis of assets and liabilities and
     are measured by applying enacted tax rates and laws to taxable years in
     which such differences are expected to reverse. Determination of the amount
     of valuation allowance recognized is based upon an assessment that it is
     more likely than not that all or some portion of the deferred tax assets
     will not be realized.

     COMPREHENSIVE INCOME (LOSS)
     ---------------------------

     Comprehensive income (loss) consists of net income (loss), minimum pension
     liability and foreign currency translation adjustments and is presented in
     the consolidated financial statements of stockholder's deficit.

     ESTIMATES
     ---------

     In conformity with generally accepted accounting principles, the
     preparation of our financial statements requires management to make
     estimates and assumptions that affect the amounts reported in the financial
     statements and therefore actual results may ultimately differ from those
     estimates.

                                      F-14
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     RECLASSIFICATIONS
     -----------------

     Certain prior year amounts have been reclassified to conform to the current
     year presentation.

     IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
     ----------------------------------------------

     In July 2001, the FASB issued Statement No. 141, "BUSINESS COMBINATIONS"
     and Statement No. 142, "GOODWILL AND OTHER INTANGIBLE ASSETS." Statement
     No. 141 requires the use of the purchase method of accounting for all
     business combinations initiated after June 30, 2001, establishes specific
     criteria for the recognition of intangible assets separately from goodwill
     and requires unallocated negative goodwill to be written off immediately as
     an extraordinary gain. Statement No. 142 makes the following significant
     changes:(1) goodwill and indefinite lived intangible assets will no longer
     be amortized, (2) goodwill will be tested for impairment at least annually
     at the reporting unit level, (3) intangible assets deemed to have an
     indefinite life will be tested for impairment at least annually, and (4)
     the amortization period of intangible assets with finite lives will no
     longer be limited to forty years. The Company adopted the provisions of
     Statement 141 immediately, and Statement 142 effective January 1, 2002. The
     adoption of these statements did not have a significant effect on the
     Company's results of operations or financial position.

     On October 4, 2001 the Financial Accounting Standards Board issued
     Statement of Financial Accounting Standards ("SFAS") No. 144, "ACCOUNTING
     FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS." SFAS No. 144
     supercedes SFAS 121 and applies to all long-lived assets (including
     discontinued operations) and consequently amends Accounting Principles
     Board Opinion No. 30 (APB 30), Reporting Results of Operations Reporting
     the Effects of Disposal of a Segment of a Business. SFAS 144 develops one
     accounting model (based on the model in SFAS 121) for long-lived assets
     that are to be disposed of by sale. This model requires that long-lived
     assets that are to be disposed of by sale be measured at the lower of book
     value or fair value less cost to sell. Additionally, SFAS 144 expands the
     scope of discontinued operations to include all components of an entity
     with operations that (1) can be distinguished from the rest of the entity
     and (2) will be eliminated from the ongoing operations of the entity in a
     disposal transaction. SFAS 144 is effective for the Company's first quarter
     in fiscal 2002. The Company is currently evaluating the impact of adopting
     SFAS 144, but it is the opinion of management that the adoption of this
     statement will not have a significant effect on results of operations or
     financial position

(4)  INVENTORIES
     -----------

     A summary of inventories at December 31 follows (in thousands):

                                                      2001            2000
                                                    -------         -------
     Raw materials and supplies                     $22,994          31,620
     Work in process                                  6,317          11,234
     Finished goods                                  11,150          15,925
                                                    -------         -------
                                                    $40,461          58,779
                                                    =======         =======

                                      F-15
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

(5)  PROPERTY, PLANT AND EQUIPMENT
     -----------------------------

     A summary of property, plant and equipment at December 31 follows (in
     thousands):

                                                   2001             2000
                                                 ---------       ---------
     Land                                        $   4,071           4,088
     Buildings                                      20,203          20,239
     Machinery and equipment                        91,361          85,162
                                                 ---------       ---------
                                                   115,635         109,489
          Less accumulated depreciation            (63,205)        (51,215)
                                                 ---------       ---------
                                                 $  52,430          58,274
                                                 =========       =========

(6)  GOODWILL AND OTHER ASSETS AND DEFERRED CHARGES
     ----------------------------------------------

     A summary of goodwill and other assets at December 31 follows (in
     thousands):

                                                            2001         2000
                                                          --------     --------
     Goodwill, net                                        $    616      121,326

       Deferred financing costs                             10,220       10,456
       Cash surrender value of life insurance                3,036        2,878
       Other                                                   453        1,493
                                                          --------     --------
        Subtotal of other assets and deferred charges       13,709       14,827
                                                          --------     --------
                                                          $ 14,325      136,153
                                                          ========     ========

     Goodwill amortization for the years ended December 31, 2001, 2000, and 1999
     was $8.0 million, $4.5 million, and $0.2 million, respectively. Accumulated
     amortization at December 31, 2001, and 2000 was $12.7 million and $4.7
     million, respectively. For discussion of goodwill impairment see Note 19.

(7)  ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
     ----------------------------------------------

     A summary of accrued expenses and other current liabilities at December 31
     follows (in thousands):

                                                       2001        2000
                                                      -------     -------
     Salaries and wages payable                       $ 1,853       4,440
     Accrued performance-related bonus expenses          --        15,538
     Pension                                           10,642       7,456
     Accrued interest payable                           6,441       6,542
     Current portion of the long term liabilities         904         864
     Other accrued expenses                             6,778       6,960
                                                      -------     -------
                                                      $26,618      41,800
                                                      =======     =======

                                      F-16
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

(8)  LONG-TERM DEBT AND WARRANTS
     ---------------------------

     A summary of long-term debt at December 31 follows (in thousands):

                                          2001           2000
                                       ---------      ---------
     Term A Facility                   $  30,624         35,000
     Term B Facility                     148,187        125,250
     Term C Loan                          15,000           --
     12% Senior Subordinated Notes       119,837        119,807
     Revolving Facility                   32,500          4,500
     Miscellaneous                           505            444
                                       ---------      ---------
                                         346,653        285,001
     Less current portion               (346,312)        (5,210)
                                       ---------      ---------
                                       $     341        279,791
                                       =========      =========

     As of December 31, 2001, the Company was in full compliance with the terms
     of the Amended Credit Agreement. However, the Company is currently in
     default on its 12% Senior Subordinated Notes due 2007 as well as in a
     cross-default on its Amended Credit Agreement. As a result of this default,
     the debt under the Amended Credit Agreement and the 12% Notes has been
     reclassified to current. At this time, the Company is having on-going
     discussions with its senior secured lenders and an ad hoc committee of
     holders of the 12% Notes in an effort to reach an agreement on a consensual
     restructuring of its capital structure. However, as with any negotiation,
     there can be no assurance as to when and if such an agreement will be
     reached. If an agreement is not reached, it will impact the Company's
     principal resources of liquidity and its ability to meet future cash
     requirements. Such limitations could force the Company to consider
     alternatives that may include negotiating further amendments to the Amended
     Credit Agreement, attempting to obtain commitments for additional new
     tranche loans or notes, asset sales, a sale of the Company or other
     remedies appropriate for the circumstances.

     At March 21, 2002, the Company had cash availability of approximately $21.1
     million.

     On June 30, 2001, the Company was not in compliance with certain financial
     covenants under its Credit Agreement. In response to this situation, the
     Company entered into negotiations with its lenders and Holding's equity
     holders which resulted, on August 14, 2001, in waivers by the Company's
     lenders of such defaults, an amendment and restatement of the Credit
     Agreement ("Amended Credit Agreement" or "Amendment") and the investment by
     certain of Holding's equity holders of an additional $15.0 million in
     senior unsecured loans to the Company under the Amended Credit Agreement.

     Pursuant to the Amended Credit Agreement, the cash interest rate on
     existing loans, and the fees payable with respect to outstanding letters of
     credit, were increased by 0.75% and the unused commitment fee under the
     revolving credit portion of the Amended Credit Agreement was increased by
     0.25%. The Amendment also requires the Company to accrue deferred interest
     and fees on outstanding loans and letters of credit at a rate of 2.00% per
     annum until the later of the delivery of the Company's financial statements
     for the fiscal quarter ending December 31, 2002 and the Company achieving
     $38.0 million of EBITDA in a twelve month period for two consecutive fiscal
     quarters, with such accrued interest to be subject to an aggregate minimum
     of $7.0 million. Such deferred interest and fees will be payable on the
     maturity date of the corresponding loans and commitments but will,
     beginning on the date such deferred amounts cease to accrue, bear cash
     interest, payable monthly, at a rate equal to one-month LIBOR plus 4.00%.

                                      F-17
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     The Amendment also replaced the existing financial covenants with a minimum
     EBITDA test, a maximum indebtedness test, and, with effect from the fiscal
     quarter ending December 31, 2003, a minimum fixed charge coverage ratio
     test. In addition, the Company's ability to make capital expenditures and
     investments and to incur indebtedness were further restricted and the
     Company agreed to provide certain additional collateral to its existing
     lenders under the Amended Credit Agreement.

     The Amendment also provided for $15.0 million of additional funds to be
     invested by certain of Holding's existing equity holders in the form of a
     new tranche of senior, unsecured loans ("Term C Loans") under the Amended
     Credit Agreement. The proceeds on these new loans were received on August
     14, 2001. These new loans accrue interest, which will compound quarterly
     but not be paid in cash until the maturity date of the loans on June 25,
     2007, at a rate based on the Company's leverage ratio as follows:


     Leverage Ratio                                      Interest Rate
     --------------                                      -------------
     Greater than 6.0:1                                  30.0%
     Greater than 5.0:1 but not greater than 6.0:1       25.0%
     Greater than 4.0:1 but not greater than 5.0:1       20.0%
     Less than or equal to 4.0:1                         15.0%

     At December 31, 2001, the interest rate on these Term C Loans was 30%.

     In conjunction with the borrowing of the Term C Loans, the Company granted
     the lenders making such loans warrants to purchase approximately 60,000
     shares of its common stock at $0.01 per share, which would, upon exercise,
     constitute approximately 38% of the common stock then outstanding. At
     December 31, 2001, the warrants were still outstanding.

     In addition to this $15.0 million of loans made at the closing of the
     Amendment, the Amendment permits the incurrence of (i) up to $15.0 million
     of further senior, unsecured loans under the Amended Credit Agreement on
     the same basis and (ii) up to another $15.0 million of senior subordinated
     notes with a stated maturity and interest rate substantially identical to
     the new loans under the Amended Credit Agreement but otherwise with terms
     substantially similar to the Company's outstanding 12% Senior Notes due
     2007. The lenders of any such loans and the purchasers of any such notes
     are entitled to receive warrants to purchase four shares of the Company's
     common stock for every $1,000 principal amount of loans made or notes
     purchased. Proceeds of any such additional loans or notes will be included
     as EBITDA under the Amended Credit Agreement for purposes of determining
     the Company's compliance with the new minimum EBITDA covenant contained in
     the Amended Credit Agreement. While the Amendment permits the Company to
     incur such additional loans and issue such notes, the Company has not
     sought or obtained any commitments to make any such loans or purchase any
     such notes and there can be no assurance that any such commitments will be
     forthcoming if the Company seeks them.

     In anticipation of the amendment and restatement of its Credit Agreement,
     on August 13, 2001, the Company permanently reduced the commitments under
     the revolving credit portion of its Credit Agreement from $50 million to
     $44 million.

     Also, in anticipation of such amendment and restatement, the making of the
     $15.0 million of additional loans thereunder and the issuance of warrants
     to purchase the Company's common stock, on August 14, 2001, (i) the
     Company's charter was amended to increase the number of its authorized
     shares of common stock from 1,000 to 1,000,000 and (ii) the Company
     effected a 1,000:1 stock split, thereby increasing the number of its
     outstanding shares of common stock from 100 to 100,000.

                                      F-18
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     On August 25, 2000, the Company amended and restated its Bank Credit
     Agreement ("Bank Credit Agreement"). The Bank Credit Agreement provides for
     three credit facilities (the "Credit Facilities"): a $50.0 million, 6 year
     senior secured revolving loan ("Revolving Facility"), a $35.0 million 6
     year senior secured amortizing Term A loan ("Term A Facility") and a $125.0
     million, 7 year senior secured amortizing Term B loan ("Term B Facility").
     The Company also had the option to increase the Credit Facilities by an
     additional $25.0 million. On January 10, 2001, the Company used this option
     to increase the Credit Facility by $25.0 million to partially fund the
     acquisition of InNet.

     As a result of the above amendment and restatement, the Company recorded an
     extraordinary charge of $3.1 million (net of a tax benefit of $1.8 million)
     related to the write-off of unamortized debt issuance costs associated with
     its previous credit agreement.

     The Revolving Facility provides for a $35.0 million sublimit for issuance
     of letters of credit and up to a $15.0 million sublimit for Canadian Dollar
     borrowings and up to a $15.0 million sublimit for Euro borrowings. At
     December 31, 2001, the Company had $5.8 million in outstanding letters of
     credit. At December 31, 2001, the Company didn't have any amounts
     outstanding under the Canadian or Euro dollar borrowings. The Revolving
     Facility matures on the sixth anniversary of the agreement. There are no
     mandatory prepayments.

     The Term A Facility is subject to mandatory quarterly prepayments in each
     of its six years, beginning with December 2000, as follows: $875,000 for
     the first two years, $1,312,500 for the third year, $1,750,000 for the
     fourth and fifth years and $2,187,500 for the final year. The Term B
     Facility, including the amounts borrowed in January 2001, is subject to
     mandatory quarterly prepayments of $375,000 for the first six years and
     payments of $35.3 million and $105.8 million in the seventh year. Term C
     Loans are due on June 25, 2007. There are no mandatory prepayments on the
     Term C Loans.

     Interest accrues under the Credit Facilities at floating rates calculated
     with respect to either the London Interbank Offered Rate ("LIBOR") or Bank
     One's Base Rate, plus an applicable margin. LIBOR at December 31, 2001 was
     1.876%. The margin, in turn, fluctuates based on the leverage ratio (as
     defined in the Bank Credit Agreement). The Company also pays an unused
     commitment fee, which also fluctuates based upon the leverage ratio of the
     Company and is based upon availability under the Revolving Facility. At
     December 31, 2001, the applicable margin for the Term A Facility and the
     Revolving Facility was LIBOR plus 4.0%. At December 31, 2001, the
     applicable margin for the Term B Facility was LIBOR plus 4.5%. The unused
     commitment fee at December 31, 2001, was 0.75%. The unused commitment fee
     is determined by the Company's leverage ratio. Due to the default, the
     senior secured lenders have the option to increase the interest rate on the
     outstanding debt, under the Amended Credit Agreement, by 2%.

     The Credit Facilities are guaranteed by the Company and by all of the
     Company's present and future domestic subsidiaries. The obligations
     thereunder are collateralized by (i) all of the common stock of the
     Company; (ii) all or a substantial portion of the common stock or other
     interests in the Company's present and future subsidiaries; (iii) the
     present and future property and assets, including all accounts receivable,
     inventory, equipment, fixtures, patents, trademarks and specified real
     property of the Company and its present and future domestic subsidiaries
     (subject to certain qualifications and exceptions); and, (iv) a collateral
     assignment of intercompany notes and junior security agreements securing
     all obligations of the domestic subsidiaries to the Company.

                                      F-19
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     The Credit Facilities contain certain consolidated financial covenants
     including, but not limited to, covenants related to minimum EBITDA, maximum
     debt and a limit on annual capital expenditures. The Credit Facilities also
     contain certain negative covenants typical of credit agreements of this
     type including, but not limited to a prohibition on the ability of the
     Company and its domestic subsidiaries to incur additional indebtedness in
     excess of certain agreed upon amounts, the ability to make investments
     other than permitted investments, and restricts the Company and its
     subsidiaries from paying any dividends, redeeming, repurchasing or
     acquiring any of the Company or Holdings shares or paying any principal,
     premium or interest (in excess of certain agreed upon amounts) on any
     subordinated obligations.

     On February 16, 2000, the Company amended certain terms of the Bank Credit
     Agreement to, among other things, (1) permit the Company to consummate the
     TAT acquisition, (2) provide that TAT assume up to $90.0 million in
     aggregate principal amount of the Term Loans, (3) release the Company's
     direct obligations in respect of such assumed portion of the Term Loans and
     (4) increase the interest rate applicable to the loans in certain
     circumstances.

     As a result of the Merger (see Note 2), the Company was required to make an
     Offer to Purchase, as defined in the indenture relating to the 10 1/4%
     Notes (the "10 1/4% Note Indenture"), the entire $150 million of
     outstanding 10 1/4% Notes, which were issued on August 12, 1997, at 101% of
     their aggregate principal amount, plus accrued interest. The Company has
     repurchased all $150.0 million of the 10 1/4 % Notes.

     On November 9, 1998, the Company completed the sale of $120 million of 12%
     Senior Subordinated Notes due 2007 with 120,000 warrants to purchase 62,400
     of Holdings common stock shares at $45 per share. The net proceeds of
     $116.4 million, after payment of $3.6 million in underwriting fees to
     Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC") and other
     expenses, was used (along with borrowings from the credit facilities) to
     fund the repurchase of the 10 1/4% Notes. As of December 31, 2001, all of
     the 120,000 warrants to purchase 62,400 shares of Holdings' Common Stock at
     a purchase price of $45.00 per share remained outstanding and expire on
     August 15, 2007.

(9)  FAIR VALUE OF FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK
     ---------------------------------------------------------------------

     Due to current situation described in Note 1, the Company is not able to
     make a fair determination of fair value of debt.

     The Company was unable to obtain a December 31, 2001 fair market value of
     its 12% Senior Subordinated Notes Due 2007 for of the following reasons:

     o   There is no liquidity in the market place for these bonds because they
         are not traded very often;
     o   There is a large variance between the bid and ask prices for the bonds;
         and
     o   The bonds are deeply discounted.

                                      F-20
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     Instead, the Company obtained, from DLJMB, a range of 10% to 20% as an
     estimate for the fair market value for these bonds as follows (in
     thousands):

   Notes:
                                         2001                        2000
                            -----------------------------  ---------------------
   Description of Security  Book Value  Fair Value Range   Book Value Fair Value
   ------------------------ -----------------------------  ---------------------
   12% Senior Subordinated
     Notes due 2007         $ 119,837  $11,984 to $23,967  $ 119,807   $ 118,609


     The Company is subject to concentration of credit risk relating to cash and
     equivalents. The Company maintains cash and equivalents with various
     financial institutions. The Company monitors the relative credit standing
     of these financial institutions and other entities and limits the amounts
     of credit exposure with any one entity. The Company also monitors the
     creditworthiness of the entities to which it grants credit terms in the
     normal course of business.

     The Company is exposed to market risk for changes in interest rates, but
     has no off-balance sheet risk of accounting loss.

(10) GUARANTOR SUBSIDIARIES
     ----------------------

     In connection with the November 1998 sale of $120 million of 12% Notes, the
     Company permitted its wholly owned domestic subsidiaries ("Guarantors") to
     unconditionally guarantee the 12% Notes on a senior subordinated basis.

     The guarantees are general unsecured obligations of the Guarantors, are
     subordinated in right of payment to all existing and future senior
     indebtedness of the guarantors (including indebtedness of the Credit
     Facilities) and will rank senior in right of payment to any future
     subordinated indebtedness of the Guarantors. The following condensed
     consolidating financial information of the Company includes the accounts of
     the Guarantors, the combined accounts of the non-guarantors and the Company
     for the periods indicated.

                                      F-21
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

                      Condensed Consolidating Balance Sheet
                                December 31, 2001
                                 (In thousands)
<TABLE><CAPTION>
                                                                                        Non
Assets:                                                  Insilco      Guarantors     Guarantors    Consolidated
                                                      ------------   ------------   ------------   ------------
<S>                                                     <C>            <C>            <C>            <C>
     Current assets:
         Cash and cash equivalents                      $  11,099          7,938          8,123         27,160
         Trade receivables, net                              --           33,307            821         34,128
         Other receivables                                    481            673            124          1,278
         Inventories, net                                    (143)        37,868          2,736         40,461
         Deferred taxes                                      --             --             --             --
         Prepaid expenses and other current assets            268          1,865             25          2,158
                                                        ---------      ---------      ---------      ---------

             Total current assets                          11,705         81,651         11,829        105,185

     Property, plant, and equipment, net                       69         50,810          1,551         52,430
     Other assets and deferred charges                      9,262            694          4,369         14,325
                                                        ---------      ---------      ---------      ---------
             Total assets                               $  21,036        133,155         17,749        171,940
                                                        =========      =========      =========      =========

     Liabilities and Stockholders' Equity (Deficit)
     Current liabilities:
         Current portion of long-term debt              $ 256,373            164         89,775        346,312
         Accounts payable                                    --           14,740            633         15,373
         Accrued expenses and other                        14,330         11,526          4,238         30,094
                                                        ---------      ---------      ---------      ---------

             Total current liabilities                    270,703         26,430         94,646        391,779

     Long-term debt, excluding current portion               --              341           --              341
     Other long-term liabilities, excluding current
       portion                                             34,403         (8,494)          --           25,909
     Intercompany payable                                 (78,530)        83,424         (4,475)           419
                                                        ---------      ---------      ---------      ---------

             Total liabilities                            226,576        101,701         90,171        418,448
     Stockholders' equity (deficit)                      (205,540)        31,454        (72,422)      (246,508)
                                                        ---------      ---------      ---------      ---------
             Total liabilities and stockholders'
               equity (deficit)                         $  21,036        133,155         17,749        171,940
                                                        =========      =========      =========      =========
</TABLE>

                                      F-22
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

                 Condensed Consolidating Balance Sheet
                           December 31, 2000
                             (In thousands)
<TABLE><CAPTION>
                                                                                         Non
Assets:                                                   Insilco       Guarantors     Guarantors    Consolidated
                                                       ------------   ------------   ------------   ------------
<S>                                                      <C>            <C>            <C>            <C>
     Current assets:
           Cash and cash equivalents                     $  10,768          3,764        13,555         28,087
           Trade receivables, net                             --           47,932        13,677         61,609
           Other receivables                                   936            710           172          1,818
           Inventories, net                                   --           54,212         4,567         58,779
           Deferred taxes                                    2,373           --            --            2,373
           Prepaid expenses and other current assets           165          5,219            16          5,400
                                                         ---------      ---------     ---------      ---------
               Total current assets                         14,242        111,837        31,987        158,066

     Property, plant, and equipment, net                        69         56,417         1,788         58,274
     Other assets and deferred charges                      10,471         42,053        83,629        136,153
                                                         ---------      ---------     ---------      ---------
               Total assets                              $  24,782        210,307       117,404        352,493
                                                         =========      =========     =========      =========

     Liabilities and Stockholders' Equity (Deficit)
     Current liabilities:
           Current portion of long-term debt             $   5,000            210          --            5,210
           Accounts payable                                   --           25,180         3,475         28,655
           Accrued expenses and other                       11,044         15,907        21,764         48,715
                                                         ---------      ---------     ---------      ---------
               Total current liabilities                    16,044         41,297        25,239         82,580

     Long-term debt, excluding current portion             189,307            484        90,000        279,791
     Other long-term liabilities, excluding current
       portion                                              33,033          6,976          --           40,009
     Intercompany payable                                  (56,094)        67,688       (11,160)           434
                                                         ---------      ---------     ---------      ---------
               Total liabilities                           182,290        116,445       104,079        402,814

     Stockholders' equity (deficit)                       (157,508)        93,862        13,325        (50,321)
                                                         ---------      ---------     ---------      ---------
               Total liabilities and stockholders'
                 equity (deficit)                        $  24,782        210,307       117,404        352,493
                                                         =========      =========     =========      =========
</TABLE>

                                      F-23
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

                 Condensed Consolidating Statement of Operations
                          Year Ended December 31, 2001
                                 (In Thousands)
<TABLE><CAPTION>
                                                                                     Non
                                                     Insilco       Guarantors     Guarantors  Consolidated
                                                   ------------   ------------   ------------ ------------
<S>                                                <C>            <C>            <C>            <C>
     Sales                                            $   --         229,240        16,879       246,119
     Cost of products sold                                 143       199,722        10,801       210,666
     Depreciation and amortization                          51        18,008         2,359        20,418
     Selling, general and administrative expenses        2,745        31,679           654        35,078
     Goodwill impairment charge                           (181)       73,796        76,645       150,260
     Restructuring charge                                 --           1,319          --           1,319
                                                      --------      --------      --------      --------
        Operating loss                                  (2,758)      (95,284)      (73,580)     (171,622)
                                                      --------      --------      --------      --------
     Other income (expense):
       Interest expense                                (30,761)          (57)       (8,783)      (39,601)
       Interest income                                   3,353           129           148         3,630
       Other income, net                                   898        (1,077)         (198)         (377)
                                                      --------      --------      --------      --------
        Total other expense                            (26,510)       (1,005)       (8,833)      (36,348)
                                                      --------      --------      --------      --------
        Loss from continuing operations
          before income taxes                          (29,268)      (96,289)      (82,413)     (207,970)
     Income tax benefit (expense)                        4,688        10,868           (74)       15,482
                                                      --------      --------      --------      --------
        Net Loss                                      $(24,580)      (85,421)      (82,487)     (192,488)
                                                      ========      ========      ========      ========
</TABLE>

                                      F-24
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

                 Condensed Consolidating Statement of Operations
                          Year Ended December 31, 2000
                                 (In Thousands)
<TABLE><CAPTION>
                                                                                     Non
                                                        Insilco     Guarantors    Guarantors   Consolidated
                                                     ------------   ------------ ------------  ------------
<S>                                                <C>            <C>            <C>            <C>
     Sales                                             $   --         273,559        97,289       370,848
     Cost of products sold                                 --         208,571        58,367       266,938
     Depreciation and amortization                           26        11,056         3,752        14,834
     Selling, general and administrative expenses         4,063        31,637        15,900        51,600
                                                       --------      --------      --------      --------
          Operating income (loss)                        (4,089)       22,295        19,270        37,476
                                                       --------      --------      --------      --------
     Other income (expense):
        Interest expense                                (29,287)          (53)       (8,931)      (38,271)
        Interest income                                     202            26           163           391
        Other income, net                                (1,025)       (2,295)        2,285        (1,035)
                                                       --------      --------      --------      --------
          Total other expense                           (30,110)       (2,322)       (6,483)      (38,915)
                                                       --------      --------      --------      --------
          Income (loss) from continuing operations
            before income taxes, discontinued
            operations and extraordinary items          (34,199)       19,973        12,787        (1,439)
     Income tax benefit (expense)                          --          16,178       (10,054)        6,124
                                                       --------      --------      --------      --------
          Income (loss) from continuing operations
            before discontinued operations and
            extraordinary items                         (34,199)       36,151         2,733         4,685
     Discontinued operations, net of tax:
        Income from operations                             --           4,723         1,225         5,948
        Gain on disposal                                   --          56,705         6,878        63,583
                                                       --------      --------      --------      --------
          Income from discontinued operations              --          61,428         8,103        69,531
     Extraordinary item, net of tax                      (3,064)         --            --          (3,064)
                                                       --------      --------      --------      --------
          Net income (loss)                            $(37,263)       97,579        10,836        71,152
                                                       ========      ========      ========      ========
     </TABLE>

                                      F-25
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

                 Condensed Consolidating Statement of Operations
                          Year Ended December 31, 1999
                                 (In Thousands)
<TABLE><CAPTION>
                                                                                     Non
                                                       Insilco      Guarantors    Guarantors  Consolidated
                                                    ------------   ------------  ------------ ------------
<S>                                                <C>            <C>            <C>            <C>
     Sales                                             $   --         248,042          --         248,042
     Cost of products sold                                 --         191,295          --         191,295
     Depreciation and amortization                           49        10,127          --          10,176
     Selling, general and administrative expenses         8,520        31,643            51        40,214
     Restructuring charge                                 3,450         2,337          --           5,787
                                                       --------      --------      --------      --------
          Operating income (loss)                       (12,019)       12,640           (51)          570
                                                       --------      --------      --------      --------
     Other income (expense):
        Interest expense                                (36,430)          (22)         --         (36,452)
        Interest income                                     323            62             6           391
        Other income, net                                 9,762        (1,992)        2,223         9,993
                                                       --------      --------      --------      --------
          Total other income (expense)                  (26,345)       (1,952)        2,229       (26,068)
                                                       --------      --------      --------      --------
          Income (loss) from continuing operations
           before income taxes and discontinued
           operations                                   (38,364)       10,688         2,178       (25,498)
     Income tax benefit (expense)                          --          14,183          (551)       13,632
                                                       --------      --------      --------      --------
          Income (loss) from continuing operations
            before discontinued operations              (38,364)       24,871         1,627       (11,866)
     Discontinued operations, net of tax:
        Income from operations                             --          20,538         1,096        21,634
                                                       --------      --------      --------      --------
        Income from discontinued operations                --          20,538         1,096        21,634
                                                       --------      --------      --------      --------
        Net income (loss)                              $(38,364)       45,409         2,723         9,768
                                                       ========      ========      ========      ========
</TABLE>

                                      F-26
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

                 Condensed Consolidating Statement of Cash Flows
                                December 31, 2001
                                 (In thousands)
<TABLE><CAPTION>
                                                                                      Non
                                                        Insilco     Guarantors    Guarantors  Consolidated
                                                    ------------   ------------  ------------ ------------
<S>                                                <C>            <C>            <C>            <C>
     Net cash provided by (used in)
       operating activities                            $(15,300)         (104)        5,945        (9,459)

     Cash flows from investing activities:
         Acquisitions, net of cash acquired             (44,174)         --            --         (44,174)
         Other investing activities                        --             179          --             179
         Capital expenditures, net                          (51)       (6,114)          (40)       (6,205)
                                                       --------      --------      --------      --------
             Net cash used in investing activities      (44,225)       (5,935)          (40)      (50,200)
                                                       --------      --------      --------      --------
     Cash flows from financing activities:
         Intercompany transfer of funds                   6,415        10,585       (17,000)         --
         Proceeds from revolving credit facility         28,000          --            --          28,000
         Proceeds from term debt facility                40,000          --            --          40,000
         Debt issuance and tender costs                  (1,982)         --            --          (1,982)
         Loan to Insilco Holding Co.                        (15)         --            --             (15)
         Capital and stock transfer                      (7,500)         --           7,500          --
         Payments on long term debt                      (5,062)         (372)       (1,125)       (6,559)
                                                       --------      --------      --------      --------
             Net cash provided by (used in)
               financing activities                      59,856        10,213       (10,625)       59,444
                                                       --------      --------      --------      --------

     Effect of exchange rate changes on cash               --            --            (712)         (712)
                                                       --------      --------      --------      --------
             Net increase (decrease) in cash
               and cash equivalents                         331         4,174        (5,432)         (927)

             Cash and cash equivalents at
               beginning of period                       10,768         3,764        13,555        28,087
                                                       --------      --------      --------      --------
             Cash and cash equivalents at end
               of period                               $ 11,099         7,938         8,123        27,160
                                                       ========      ========      ========      ========
</TABLE>

                                      F-27
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

                 Condensed Consolidating Statement of Cash Flows
                                December 31, 2000
                                 (In thousands)
<TABLE><CAPTION>
                                                                                            Non
                                                             Insilco      Guarantors     Guarantors    Consolidated
                                                          ------------   ------------   ------------   ------------
<S>                                                         <C>            <C>            <C>            <C>
     Net cash provided by (used in)
       operating activities                                 $ (99,006)        80,379         34,614         15,987

     Cash flows from investing activities:
         Acquisitions, net of cash acquired                  (145,333)          --          (10,860)      (156,193)
         Capital expenditures, net                                (11)        (9,507)          (361)        (9,879)
         Other investing activities                              --              120           --              120
         Discontinued operations:
           Proceeds from divestitures, net                    202,343           --           15,000        217,343
           Capital expenditures                                  --           (5,146)          (195)        (5,341)
                                                            ---------      ---------      ---------      ---------

             Net cash provided by investing activities         56,999        (14,533)         3,584         46,050
                                                            ---------      ---------      ---------      ---------

     Cash flows from financing activities:
         Intercompany transfer of funds                        95,108        (63,307)       (31,801)          --
         Payments on revolving credit facility                (72,527)          --             --          (72,527)
         Debt issuance and tender costs                        (6,758)          --             --           (6,758)
         Loan to Insilco Holding Co.                             (801)          --             --             (801)
         Capital and stock transfers                           (6,810)          --            6,810           --
         Proceeds from (payments on) long term debt            39,938            (62)          --           39,876
                                                            ---------      ---------      ---------      ---------
             Net cash provided by (used in)
               financing activities                            48,150        (63,369)       (24,991)       (40,210)
                                                            ---------      ---------      ---------      ---------
     Effect of exchange rate changes on cash                     --             --             (120)          (120)
                                                            ---------      ---------      ---------      ---------
             Net increase in cash and cash equivalents          6,143          2,477         13,087         21,707
             Cash and cash equivalents at
               beginning of period                              4,625          1,287            468          6,380
                                                            ---------      ---------      ---------      ---------
             Cash and cash equivalents at end of period     $  10,768          3,764         13,555         28,087
                                                            =========      =========      =========      =========
</TABLE>

                                      F-28
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

                 Condensed Consolidating Statement of Cash Flows
                                December 31, 1999
                                 (In thousands)
<TABLE><CAPTION>
                                                                                          Non
                                                           Insilco      Guarantors     Guarantors   Consolidated
                                                        ------------   ------------   ------------  ------------
<S>                                                        <C>            <C>            <C>            <C>
     Net cash provided by (used in)
       operating activities                                $(50,451)       58,510         4,989        13,048

     Cash flows from investing activities:
         Acquisitions, net of cash acquired                 (25,340)         --            --         (25,340)
         Capital expenditures, net                              (18)       (7,197)         --          (7,215)
         Proceeds from disposal of business and
           other investing activities                        18,165           330          --          18,495
         Discontinued operations:
           Capital expenditures                                --          (7,844)       (1,401)       (9,245)
                                                           --------      --------      --------      --------
            Net cash used in investing activities            (7,193)      (14,711)       (1,401)      (23,305)
                                                           --------      --------      --------      --------
     Cash flows from financing activities:
         Intercompany transfers to parent                    46,765       (43,578)       (3,187)         --
         Proceeds from revolving credit facility             16,207          --            --          16,207
         Payment of prepetition liabilities                  (1,086)         --            --          (1,086)
         Payments on long term debt                          (4,939)          (16)         --          (4,955)
         Retirement of 101/4% notes                          (1,526)         --            --          (1,526)
         Loan to Insilco Holding Co.                         (1,756)         --            --          (1,756)
         Funds deposited in excess of retired
           10 1/4% notes                                      2,032          --            --           2,032
         Proceeds from minority interest                        100          --            --             100
                                                           --------      --------      --------      --------
            Net cash provided by (used in) financing
              activities                                     55,797       (43,594)       (3,187)        9,016
                                                           --------      --------      --------      --------
     Effect of exchange rate changes on cash                   --            --             (15)          (15)
                                                           --------      --------      --------      --------
            Net increase (decrease) in cash and
              cash equivalents                               (1,847)          205           386        (1,256)
            Cash and cash equivalents at
              beginning of period                             6,472         1,082            82         7,636
                                                           --------      --------      --------      --------
            Cash and cash equivalents at end of period     $  4,625         1,287           468         6,380
                                                           ========      ========      ========      ========
     </TABLE>

                                      F-29
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

(11) OTHER LONG-TERM LIABILITIES
     ---------------------------

     A summary of other long-term liabilities at December 31 follows (in
     thousands):

                                                2001          2000
                                              --------      --------
     Post-retirement benefits, other than
       pensions (Note 12)                     $  4,800         5,123
     Tax  liabilities                           11,001        28,543
     Environmental liabilities                   4,971         5,312
     Deferred compensation and other             6,041         1,895
                                              --------      --------
                                                26,813        40,873
          Less current portion                    (904)         (864)
                                              --------      --------
                                              $ 25,909        40,009
                                              ========      ========

     ENVIRONMENTAL LIABILITIES
     -------------------------

     The Company's operations are subject to extensive Federal, state and local
     laws and regulations relating to the generation, storage, handling,
     emission, transportation and discharge of materials into the environment.
     The Company has a program for monitoring its compliance with applicable
     environmental regulations, the interpretation of which often is subjective.
     We have taken significant measures to (1) address emissions, discharges and
     waste generation and disposal, (2) improve management practices and
     operations in response to legal requirements, and (3) internally review
     compliance with applicable environmental regulations and approved
     practices. In order to achieve these goals, we have instituted several
     programs including (1) raw material and process substitution, recycling and
     material management, (2) periodic review of hazardous waste storage and
     disposal practices, and (3) review of compliance and financial status and
     management practices of our offsite third-party waste management firms.

     The environmental liabilities included in other long-term obligations
     represent the estimate of cash obligations that will be required in future
     years for these environmental remediation activities. The Company has
     estimated the exposure and accrued liability to be approximately $5.0
     million relating to these environmental matters at December 31, 2001, of
     which $0.4 million is included in current liabilities on the balance sheet.
     These liabilities are undiscounted and do not assume any possible
     recoveries from insurance coverage or claims which the Company may have
     against third parties. The estimate is based upon in-house research and the
     professional services of outside consulting and engineering firms. Because
     of uncertainty associated with the estimation of these liabilities and
     potential regulatory changes, it is reasonably possible that these
     estimated liabilities could change in the near term but it is not expected
     that the effect of any such change would be material to the consolidated
     financial statements in the near term.

     During our 1993 bankruptcy reorganization, we settled all claims of the
     United States relating to our pre-petition date conduct at previously owned
     or third party sites arising under the federal Comprehensive Environmental
     Response, Compensation, and Liability Act, or CERCLA. This settlement (1)
     discharged us from contribution claims of the United States at a number of
     hazardous waste sites, (2) protects us from contribution claims of the
     remaining potentially responsible parties, (3) limits the amount we may be
     required to pay the United States in any one year on pre-petition claims,
     and (4) provides that any such payment may be made in cash or, at our
     option, common stock valued at 30% of the allowed claim.

                                      F-30
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     We are also currently engaged in clean up programs at sites located in
     Newtown, Connecticut; Thomaston, Connecticut; and Mount Vernon, New York.
     We have established what we believe are appropriate reserves for
     anticipated remedial obligations. Because of the establishment of these
     reserves and our settlements with the United States, we do not believe that
     environmental compliance or remedial requirements are likely to have a
     material adverse effect on our results of operations or financial position.

(12) PENSION PLANS AND POST-RETIREMENT BENEFITS
     ------------------------------------------

     Pension Plans
     -------------

     The Company has defined benefit pension plans covering certain of its
     employees. The benefits under these plans are based primarily on employees'
     years of service and compensation near retirement. The Company's funding
     policy is consistent with the funding requirements of Federal laws and
     regulations. Plan assets consist principally of equity investments,
     government and corporate debt securities and real estate investments. The
     Company also contributes to various multi-employer plans sponsored by
     bargaining units for its union employees.

                                      F-31
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     A summary of the plans' funded status reconciled with amounts recognized in
     the consolidated balance sheet at December 31 follows (in thousands):

<TABLE><CAPTION>
                                                          2001                 2000
                                                     ------------   ---------------------------
                                                      Accumulated      Assets     Accumulated
                                                        Benefits       Exceed       Benefits
                                                         Exceed     Accumulated      Exceed
                                                         Assets       Benefits       Assets
                                                        --------      --------      --------
<S>                                                 <C>                <C>             <C>
     Changes in benefit obligation:
     Benefit obligation at beginning of year            $ 63,774        63,316         4,273
     Service cost                                          1,632         1,764            56
     Interest cost                                         4,724         4,640           330
     Amendments                                             --            --            --
     Actuarial (gain) loss                                (2,469)        3,381           220
     Benefits paid                                        (7,191)      (13,940)         (266)
                                                        --------      --------      --------
          Benefit obligation at end of year             $ 60,470        59,161         4,613
                                                        --------      --------      --------
     Change in plan assets:

     Fair value of plan assets at beginning of year     $ 56,864        70,895          --
     Actual return on assets                              (3,110)          (91)         --
     Employer contribution                                   276          --             266
     Benefits paid                                        (7,191)      (13,940)         (266)
                                                        --------      --------      --------
          Fair value of plan asset at end of year       $ 46,839        56,864          --
                                                        --------      --------      --------

     Funded status                                      $(13,630)       (2,297)       (4,613)
     Unrecognized net actuarial (gain) loss                6,177           227          (138)
     Unrecognized prior service costs                        (13)         (994)        1,063
                                                        --------      --------      --------
          Accrued benefit cost                          $ (7,466)       (3,064)       (3,688)
                                                        ========      ========      ========
     Amounts recognized in the statement of
       financial position consist of :
     Accrued benefit liability                          $(10,642)       (3,064)       (4,392)
     Accumulated other comprehensive income                2,560          --            --
     Intangible asset                                        616          --             704
                                                        --------      --------      --------
          Net amount recognized                         $ (7,466)       (3,064)       (3,688)
                                                        ========      ========      ========
     </TABLE>

                                      F-32
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     The components of pension cost follow (in thousands):

                                                   Year Ended December 31,
                                              ---------------------------------
                                               2001         2000         1999
                                              -------      -------      -------
     Service cost                             $ 1,632        1,820        2,657
     Interest cost                              4,724        4,970        4,666
     Actual return on assets                   (5,447)      (6,191)      (6,572)
     Net amortization and deferral                 81           81           81
     Recognized net actuarial loss (gain)        --           (254)           5
                                              -------      -------      -------
               Net pension cost               $   990          426          837
                                              =======      =======      =======

     In addition, the Company recognized pension costs of approximately $318,000
     in 2001, $366,000 in 2000 and $358,000 in 1999 related to contributions to
     multi-employer plans.

     The assumptions used in accounting for the pension plans as of December 31
     follow:

                                                        2001      2000
                                                        ----      ----
     Discount Rates                                     7.50%     7.75%
     Rates of increase in compensation levels           4.50%     4.50%
     Expected long-term rate of return on assets        9.00%     9.00%


     In addition to the defined benefit plans described above, the Company
     sponsors a qualified defined contribution 401(k) plan, which covers
     substantially all non-union employees of the Company and its subsidiaries,
     and which covers union employees at one of the Company's subsidiaries. The
     Company matches 50% of non-union participants' voluntary contributions up
     to a maximum of 3% of the participant's compensation. The Company's expense
     was approximately $424,000 in 2001, $445,000 in 2000 and $401,000 in 1999.

     POST-RETIREMENT BENEFITS, OTHER THAN PENSIONS
     ---------------------------------------------

     The Company maintains three post-retirement health care and life insurance
     benefit plans, which cover approximately 109 present retirees (the "Retiree
     Plans"). The Company pays benefits under the plans when due and does not
     fund its plan obligations as they accrue. These plans are frozen. It has
     been assumed that plan participant contributions, if any, under these three
     plans will increase as a result of increases in medical costs.

                                      F-33
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     A summary of the plans' status reconciled with amounts recognized in the
     consolidated balance sheet at December 31 follows (in thousands):

                                                   2001         2000
                                                 -------      -------
     Change in benefit obligation:

     Benefit obligation at beginning of year     $ 2,299        3,932
     Interest cost                                   173          170
     Actuarial gain                                 (366)      (1,663)
     Benefits paid                                  (200)        (140)
                                                 -------      -------
         Benefit obligation at end of year         1,906        2,299
                                                 -------      -------

     Funded status                                (1,906)      (2,299)
     Unrecognized net actuarial gain              (2,127)      (1,912)
     Unrecognized prior service cost                (767)        (912)
                                                 -------      -------
         Accrued benefit cost                    $(4,800)      (5,123)
                                                 =======      =======

     The components of net periodic post-retirement (benefit) cost follow (in
     thousands):

                                              Year Ended December 31,
                                            ---------------------------
                                            2001       2000       1999
                                            -----      -----      -----
     Interest cost                          $ 173        170        288
     Amortization of prior service cost      (145)      (145)      (145)
     Amortization of unrecognized gain       (149)      (155)      --
                                            -----      -----      -----
                                            $(121)      (130)       143
                                            =====      =====      =====

     At December 31, 2001 and 2000, the weighted-average discount rates used in
     determining the accumulated post-retirement benefit obligation were 7.5%
     and 7.75%, respectively. The recorded healthcare cost trend rate assumed in
     measuring the accumulated post-retirement benefit obligation was 8% in
     2001, declining to an ultimate rate of 6% in 2012 and thereafter. Assumed
     healthcare cost trend rates have a significant effect on the amounts
     reported for the healthcare plan. A one-percentage point change in assumed
     healthcare cost trend rates in 2001 would have the following effects (in
     thousands):

                                                   1-Percentage    1-Percentage
                                                  Point Increase  Point Decrease
                                                  --------------  --------------

     Effect on total of interest cost component        $ 10              7

     Effect on post-retirement benefit obligation      $133             91


                                      F-34
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

(13) STOCK-BASED COMPENSATION PLANS
     ------------------------------

     In connection with the Mergers, the Company adopted on August 17, 1998, the
     following plans: the Equity Unit Plan and the Stock Option Plan. Following
     is a description of each respective plan.

     EQUITY UNIT PLAN

     The Equity Unit Plan ("the Plan") allowed members of management of the
     Company to purchase Equity Units, which are considered share equivalents of
     Holding's stock. The purchase price per unit was $45.00 and the units are
     100% vested at the time of issuance. Participants were allowed to use
     either deferred compensation or the deferral of future compensation to
     satisfy the purchase price of the units. The value of the units is
     determined under an Earnings Before Interest, Taxes, Depreciation and
     Amortization ("EBITDA") formula or by market-related value if the actual
     common shares of Holding are listed or quoted for trading on a national
     exchange, NASDAQ or a similar national trading or quotation system and the
     aggregate market value held by non-affiliates is $25,000,000 or greater.
     The total number of units available for purchase under this Plan is 88,194.
     As of December 31, 2001, 2000 and 1999, the number of units outstanding
     under the Plan was 608, 1,938, and 38,484, respectively. Upon the
     occurrence of a Significant Event, (as defined in the Plan), the Company is
     obligated to pay the participant, at the Company's discretion in cash,
     common shares, or a combination of both, the value of any units purchased
     less any purchase price that has not been paid. If the value of the units
     is less than the amount of remaining purchase price, the participant is
     obligated to satisfy the difference or the Company has the right to offset
     any amounts owed the participant against the remaining purchase price. The
     Plan terminates as of the date all payments due under the Plan have been
     made.

     STOCK OPTIONS

     The Insilco Holding Co. Stock Option Plan ("Option Plan") provides for the
     issuance of no more than 200,000 shares of Holdings common stock to
     eligible employees of the Company. The Option Plan was effective as of
     August 14, 1998. The options under the Option Plan vest and become
     exercisable based on the achievement of financial goals over a period of
     time and expire on the tenth anniversary of the effective date of the
     Option Plan.. As of December 31, 2001, the Company has 100,000 shares
     available for future awards under the Option Plan.

     Under Statement of Financial Accounting Standards No. 123 ("SFAS 123"),
     "ACCOUNTING FOR STOCK-BASED COMPENSATION," companies can either record
     expense based on the fair value of stock-based compensation upon issuance
     or elect to remain under the "APB Opinion No. 25" method whereby no
     compensation cost is recognized upon grant if certain conditions are met.
     The Company is continuing to account for its stock-based compensation under
     APB Opinion No. 25. Had the Company determined compensation cost based on
     the fair value at the grant date for its stock options granted in 2001,
     2000 and 1999 under SFAS 123, the Company's net income would have
     approximated the pro forma amounts below:

                                          2001           2000           1999
                                      ------------   ------------   ------------
     Net income (loss)  As reported     $(192,488)      71,152          9,768
                          Pro forma     $(192,488)      71,127          9,745

                                      F-35
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     A summary of the options granted follows:

                                                                    Weighted
                                                       Number        Average
                                                     of Shares        Price
                                                   ------------   ------------
     Options outstanding December 31, 1998                   -
             Granted                                   200,162          45.00
             Forfeited                                 (76,150)         45.00
                                                   ------------
     Options outstanding December 31, 1999             124,012
             Granted                                    27,600          45.00
             Forfeited                                 (37,612)         45.00
                                                   ------------
     Options outstanding December 31, 2000             114,000
             Forfeited                                 (14,000)         45.00
                                                   ------------
     Options outstanding December 31, 2001             100,000
                                                   ============

     Of the options outstanding at December 31, 2001, 2000, and 1999, 40,000, 0
     and 0 were exercisable, respectively.

     There were no options granted in 2001. The per share weighted-average fair
     value of stock options granted during 2000 and 1999 was $27.62 and $14.41,
     respectively, on the date of grant using the Black Scholes option-pricing
     model with the following weighted-average assumptions: for 2000 - expected
     dividend yield 0.0%, risk-free interest rate of 5.50%, volatility of 40%
     and an expected life of 10 years and for 1999 - expected dividend yield
     0.0%, risk-free interest rate of 5.50%, volatility of 30% and an expected
     life of 10 years.


                                      F-36
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

(14) INCOME TAX EXPENSE
     ------------------

     The components of total income tax expense (benefit) follow (in thousands):

<TABLE><CAPTION>
                                                             Year Ended December 31,
                                                      ------------------------------------
                                                        2001          2000          1999
                                                      --------      --------      --------
<S>                                                   <C>            <C>            <C>
     Total income taxes:
     From continuing operations before
       extraordinary item:
             Current:
                 Federal                              $(14,666)       (4,366)          272
                 State and Local                            50           141            54
                 Foreign                                  (164)        6,269           749
                                                      --------      --------      --------
                                                       (14,780)        2,044         1,075
                                                      --------      --------      --------
             Deferred:
                 Federal                                (1,086)       (7,711)      (15,158)
                 State and Local                           412          (530)           45
                 Foreign                                   (28)           73           406
                                                      --------      --------      --------
                                                          (702)       (8,168)      (14,707)
                                                      --------      --------      --------
                 Total from continuing operations
                 before extraordinary item             (15,482)       (6,124)      (13,632)
     Discontinued operations                              --          47,125        11,771
     Extraordinary item                                   --          (1,793)         --
     Stockholders' equity                                 --            --            --
                                                      --------      --------      --------
                 Total income taxes                   $(15,482)       39,208        (1,861)
                                                      ========      ========      ========
     </TABLE>

The significant components of deferred income tax expense (benefit) attributable
to income from continuing operations follow (in thousands):

<TABLE><CAPTION>
                                                              Year Ended December 31,
                                                         ---------------------------------
                                                          2001          2000         1999
                                                         -------      -------      -------
<S>                                                      <C>            <C>            <C>
     Deferred tax expense (benefit) exclusive of the
      effects of other components                        $(5,301)        (922)     (13,725)
     U.S. taxes provided on foreign income                  (767)         349         --
     Changes in the valuation allowance for deferred
      tax assets allocated to income tax expense           5,366       (7,595)        (982)
                                                         -------      -------      -------
                                                         $  (702)      (8,168)     (14,707)
                                                         =======      =======      =======
</TABLE>

                                      F-37
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     Pretax income (loss) from continuing operations by domestic and foreign
     sources follows (in thousands):

                           Year Ended December 31,
                  ---------------------------------------
                     2001           2000           1999
                  ---------      ---------      ---------
     Domestic     $(128,882)       (14,824)       (29,052)
     Foreign        (79,088)        13,385          3,554
                  ---------      ---------      ---------
                  $(207,970)        (1,439)       (25,498)
                  =========      =========      =========

     Income tax expense (benefit) attributable to income from continuing
     operations differs from the amount computed by applying the Federal
     statutory rate to pretax income due to the following (in thousands):

<TABLE><CAPTION>
                                                                 Year Ended December 31,
                                                           ------------------------------------
                                                             2001          2000          1999
                                                           --------      --------      --------
<S>                                                        <C>            <C>          <C>
     Computed statutory tax expense                        $(72,790)         (504)       (8,924)
     State and local taxes                                   (1,663)         (253)         (647)
     Goodwill impairment/amortization of goodwill            51,885         3,924            55
     Foreign tax rate differential                            3,216        (1,685)         (403)
     Federal benefit from Section 172 (f) claim              (1,879)         --            --
     Subpart foreign income deemed taxable in the U.S.          792          --            --
     Interest expense - paid in kind                            423          --            --
     Professional fees                                         --            --             628
     Disposition of operating divisions                        --            --          (2,827)
     U.S. taxes provided on foreign income                     (767)          349          --
     Other, net                                                 (65)         (360)         (248)
     Valuation allowance                                      5,366        (7,595)       (1,266)
                                                           --------      --------      --------
           Income tax benefit                              $(15,482)       (6,124)      (13,632)
                                                           ========      ========      ========
</TABLE>

     The state and local tax benefit reflected above is before the effect of the
     increase in valuation allowance. The effect of the increase in valuation
     allowance is shown separately.

                                      F-38
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     The tax effects of temporary differences that give rise to significant
     portions of the deferred tax assets and deferred tax liabilities at
     December 31 follow (in thousands):

                                                           2001          2000
                                                         --------      --------
     Deferred tax assets:
          Net operating loss carryforwards               $ 14,678        13,048
          Accrued liabilities                               6,249         5,417
          Interest on in kind debt                            189          --
          Pension and other post-retirement benefits        5,216         5,368
          Tax credits                                       1,888         1,218
          Other                                               669         2,856
                                                         --------      --------
             Total gross deferred tax assets               28,889        27,907
                Less valuation allowance                  (22,630)      (17,265)
                                                         --------      --------
             Total gross deferred tax assets after
                valuation allowance                         6,259        10,642
     Deferred tax liabilities:
          Plant and equipment                              (5,548)       (6,308)
          Other                                              (711)       (2,850)
                                                         --------      --------
             Total gross deferred tax liabilities          (6,259)       (9,158)
                                                         --------      --------
                Net deferred tax asset                   $   --           1,484
                                                         ========      ========

     The net increase in (reduction of) the valuation allowance for deferred tax
     assets for the years ended December 31, 2001 and 2000 was $5,365,282 and
     ($14,785,000), respectively. The Company has recorded valuation allowances
     related to its deferred income tax assets due to the uncertainty of the
     ultimate realization of future benefits from such assets. The 2001 net
     change in the valuation allowance is primarily attributable to an
     evaluation of historical and projected future realization potential and/or
     utilization of associated deferred tax assets. The potential decrease or
     increase of valuation allowance in the near term is dependent on the future
     realizability of the deferred tax assets, which are affected by the future
     profitability of operations. A valuation allowance has been provided on the
     Company's net deferred tax asset related to its operations because of the
     uncertainty regarding their realizability due to the expectation that
     deductions from future tax deductions will exceed future taxable income.

     Deferred taxes are not provided on unremitted earnings of certain
     subsidiaries outside the United States because it is expected that the
     earnings are permanently reinvested and determination is not practical.
     Such earnings may become taxable upon the sale or liquidation of these
     subsidiaries or upon the remittance of dividends. Deferred taxes are
     provided in situations where the Company's subsidiaries plan to make future
     dividend distributions.

     The Company is included in the consolidated U.S. Federal income tax return
     of Insilco Holding Co., but has computed its provision for income taxes on
     a separate return basis in accordance with Statement of Financial
     Accounting Standards No. 109. The IRS is presently examining the
     consolidated Federal income tax returns for tax years 1991 through 1998.
     Management believes that the ultimate outcome of this examination will not
     have a material adverse effect on the financial condition, results of
     operations or liquidity of the Company.

                                      F-39
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     At December 31, 2001, the Company has net operating loss carryforwards for
     federal tax purposes of $86,782,067, which will begin to expire in 2008.

     As a result of the Job Creation and Workers Assistance Act of 2002, enacted
     in March 2002, the Company will be eligible for a refund of Federal taxes
     in the amount of $1.8 million.

     As part of the spin-off of the "Automotive Business" to ThermaSys Holding
     Co., on August 25, 2000, the Company remains liable for taxes related to
     periods up to and including the date of the spin-off.

(15) RESTRUCTURING AND PLANT CLOSING COSTS
     -------------------------------------

     During the year ended December 31, 2001, the Company recorded $1,319,000 of
     restructuring and plant consolidation and closing costs relating to the
     consolidation of its Custom Assemblies facilities located in Ireland and
     the United Kingdom, the closure of a Passive Components sales office
     located in Japan, the closure of its Custom Assemblies headquarters in
     Morrisville, North Carolina and the closure of one of its Precision
     Stampings facilities in Thomaston, Connecticut. . These closings and
     consolidations were completed to reduce operating costs. These costs
     include employee separation costs of $747,000, asset impairments of
     $140,000, noncancelable lease costs of $385,000 and other costs of $47,000.

     All of these costs have been reflected in the Restructuring Charge line
     item on the Statement of Operations.

     As of December 31, 2001, the Company has an accrual of $771,000 relating to
     these restructuring charges, which is included in accrued expenses on the
     balance sheet. A summary of this accrual is as follows (in thousands):

                                   As of    Additional                 As of
                                  December   Accruals      2001      December
                                  31, 2000    in 2001  Cash Outlays  31, 2001
                                 ---------------------------------------------
     Restructuring charges:
       Employee separations       $      -       747         (322)        425
       Other exit costs                  -        47          (25)         22
       Remaining noncancellable
          lease costs                    -       385          (61)        324
                                 ---------------------------------------------
        Subtotal                  $      -     1,179         (408)        771
                                 =============================================

       Asset impairment                          140
                                            ---------
       Total restructuring charge              1,319
                                            =========

     The headcount reduction from these activities was approximately 62
     employees.

(16) RELATED PARTY TRANSACTIONS
     --------------------------

     On August 25, 2000, Holdings sold its "Automotive Businesses" to ThermaSys
     Holding Company, ThermaSys Corporation, a wholly owned subsidiary of
     ThermaSys Holding Company, ThermaSys I, Inc., ThermaSys II, Inc., and
     ThermaSys III, Inc., for net proceeds of $144.5 million. The ThermaSys
     companies are owned by Holdings' majority stockholders.

                                      F-40
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     The Company received $915,000 from ThermaSys for management fees and other
     miscellaneous items year to date December 31, 2001, respectively. At
     December 31, 2001 and 2000, the Company had net receivables from ThermaSys
     of $48,000 and $152,000, respectively. The December 31, 2001 receivable
     consisted of $48,000 for management services provided to ThermaSys by the
     Company. The December 31, 2000 receivable consisted of $148,000 for
     management services provided to ThermaSys by the Company and $4,000 for
     services shared with and reimbursable to the Company.

     The Company paid Credit Suisse First Boston ("CSFB") retainer fees of
     $150,000 and underwriting fees of $625,000 year to date December 31, 2001.
     The Company paid Donaldson, Lufkin & Jenrette Securities Corporation
     ("DLJSC") of advisory fees $1.1 million and retainer fees of $300,000
     during fiscal 2000. CSFB acquired DLJSC during 2000. At December 31, 2001
     and 2000, the Company had retainer fees payable to CSFB of $212,500 and
     $75,000, respectively, for investment banking services.

     In 2000, in connection with the amendment and restatement of the Company's
     Bank Credit Agreement, the Company paid DLJ Capital Funding approximately
     $5.3 million for services as lead arranger and syndication agent.

(17) COMMITMENTS AND CONTINGENCIES
     -----------------------------

     Rental expense for operating leases totaled $3.9 million, $3.1 million and
     $3.1 for the years ended December 31, 2001, 2000 and 1999, respectively.
     These leases primarily relate to production facilities. Rental income
     received for subleases for operating leases totaled $0.2 million in 2001,
     $0.4 million in 2000 and $0.3 million in 1999.

     Future minimum lease payments under contractually noncancellable operating
     leases (with initial lease terms in excess of one year) for years
     subsequent to December 31, 2001 are as follows: 2002, $2.4 million; 2003,
     $1.9 million; 2004, $1.1 million; 2005, $0.9 million; 2006, $0.3 million
     and thereafter, none. Future minimum rental income to be received under
     noncancellable subleases for years subsequent to December 31, 2001, are as
     follows: 2002, $0.1 million and thereafter, none.

     The Company is implicated in various claims and legal actions arising in
     the ordinary course of business. It is the Company's policy to accrue for
     amounts related to these legal matters if it is probable that a liability
     has been incurred and an amount is reasonably estimable.

     In the opinion of management, the ultimate disposition of the matters
     discussed above will not have a material adverse effect on the Company's
     consolidated financial position, results of operations or liquidity.

(18) SEGMENT DATA
     ------------

     DESCRIPTION OF SEGMENTS

     The Company disaggregates and discloses its operations into three main
     segments: Custom Assemblies, Passive Components and Precision Stampings.
     The Custom Assemblies segment primarily designs and assembles custom
     electronic and fiber-optic cable, wire harness and electromechanical
     assemblies. The Passive Components segment designs, manufacturers and
     globally distributes high-speed data connector systems and power
     transformers. The Precision Stampings segment designs and manufactures
     precision stampings and wire-formed parts.

                                      F-41
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     The Company has included in its Other segment two operating units that fall
     below the quantitative reporting thresholds and do not meet all the
     criteria for aggregation with the Company's reportable segments. These
     operations are a manufacturer of high speed welded tube mills and other
     machinery and equipment for automotive suppliers and OEM and a welded
     stainless steel tubing manufacturer that provides tubing and tubing
     products to distributors, recreational marine and transportation markets.
     Both of these operating units were divested in 1999.

     MEASUREMENT OF SEGMENT PROFIT OR LOSS AND SEGMENT ASSETS

     The Company uses "EBITDA", which is defined as earnings before interest
     expense (net), income taxes, depreciation and amortization and
     non-operating items, as a basis and manner for presenting and using
     financial data to assist it in making internal operating decisions. EBITDA
     is not intended to represent and should not be considered more meaningful
     than, or an alternative to, operating income, cash flows from operating
     activities or other measures of performance in accordance with generally
     accepted accounting principles. EBITDA data are included because we
     understand that such information is used by certain investors as one
     measure of an issuer's historical ability to service debt. While EBITDA is
     frequently used as a measure of operations and the ability to meet debt
     service requirements, it is not necessarily comparable to other similarly
     titled captions of other companies, or used in the Company's debentures,
     credit or other similar agreements, due to potential inconsistencies in the
     method of calculation. The accounting policies used in preparing the
     following segment data are the same as those described in Note 3,
     "Significant Accounting Policies." The Company has intra-segment sales and
     transfers, which are recorded at cost or, if agreed upon, a price
     comparable to unaffiliated customer sales. These intra-segment sales and
     related profits are eliminated in consolidation and are not presented in
     the segment disclosure. Identifiable assets are those used by each segment
     in its operations. Corporate assets consist primarily of cash, deferred
     financing fees, and deferred tax assets.

     FACTORS USED TO IDENTIFY THE ENTERPRISE'S REPORTABLE SEGMENTS

     The Company's reportable segments are business units that offer different
     products. The reportable segments are each managed separately because they
     manufacture and distribute distinct products with different production
     processes. Reportable segments were determined using a management approach
     and are consistent with the basis and manner in which the Company's
     management internally disaggregates financial information for the purposes
     of assisting in making internal operating decisions.

     Operations within segments have been aggregated on the basis of similar
     economic characteristics, products or services, purposes or end uses,
     production processes, geographic marketing areas and methods, distribution
     methods, and regulatory environments. Consideration has been given to
     ensure that the aggregation of the Company's operations helps users better
     understand the Company's performance and assess its future cash flows.

                                      F-42
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     Summary financial information by business segment is as follows (in
     thousands):

<TABLE><CAPTION>
                                                                     Year Ended December 31,
                                                             ---------------------------------------
                                                               2001            2000          1999
                                                             ---------      ---------      ---------
<S>                                                          <C>            <C>            <C>
     Net Sales:
         Custom assemblies                                   $ 108,402        187,526         66,452
         Precision Stampings                                    58,936         78,209         75,029
         Passive Components                                     78,781        105,113         88,494
                                                             ---------      ---------      ---------
           On-going operations                                 246,119        370,848        229,975
         Other                                                    --             --           18,067
                                                             ---------      ---------      ---------
           Total                                             $ 246,119        370,848        248,042
                                                             =========      =========      =========

     Loss from continuing operations before income taxes
         discontinued operations and extraordinary
           items:
         Custom assemblies                                   $   4,494         29,613          5,725
         Precision stampings                                     1,951         10,867          8,628
         Passive components                                      2,845         17,275         13,795
           Corporate operating expenses                         (2,501)        (3,570)        (5,895)
                                                             ---------      ---------      ---------
           On-going operations                                   6,789         54,185         22,253
         Other                                                    --             --            1,136
                                                             ---------      ---------      ---------
           Earnings before interest, taxes
             depreciation and amortization (EBITDA)              6,789         54,185         23,389
         Depreciation and amortization                         (20,418)       (14,834)       (10,176)
         Goodwill impairment charge                           (150,260)          --             --
         Significant legal expense                                (198)          (493)        (2,653)
         Severance and other                                    (6,216)        (1,382)        (4,203)
         Restructuring charge                                   (1,319)          --           (5,787)
                                                             ---------      ---------      ---------

             Total operating income (loss)                    (171,622)        37,476            570
         Interest expense                                      (39,601)       (38,271)       (36,452)
         Interest income                                         3,630            391            391
         Other income, net                                        (377)        (1,035)         9,993
                                                             ---------      ---------      ---------
           Loss from continuing operations before
           income taxes discontinued operations and
           extraordinary items                               $(207,970)        (1,439)       (25,498)
                                                             =========      =========      =========
         Net income (loss)                                   $(192,488)        71,152          9,768
                                                             =========      =========      =========
</TABLE>

                                      F-43
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     A summary of depreciation and amortization expense by segment at December
     31 follows (in thousands):

                               2001       2000        1999
                             -------     -------     -------
     Custom assemblies       $ 7,766       5,986       1,434
     Precision stampings       4,434       4,303       3,895
     Passive components        8,167       4,519       4,248
     Other                      --          --           550
     Corporate                    51          26          49
                             -------     -------     -------
          Total              $20,418      14,834      10,176
                             =======     =======     =======

     A summary of capital expenditures by segment at December 31 follows (in
     thousands):

                              2001       2000       1999
                             ------     ------     ------
     Custom assemblies       $1,459      2,531      1,267
     Precision stampings      2,775      4,442      3,705
     Passive components       1,920      2,886      2,161
     Other                     --         --           64
     Corporate                   51         20         18
                             ------     ------     ------
          Total              $6,205      9,879      7,215
                             ======     ======     ======

     A summary of identifiable assets by segment at December 31 follows (in
     thousands):

                               2001         2000
                             --------     --------
     Custom assemblies       $ 57,931      217,739
     Precision stampings       42,250       52,563
     Passive components        50,473       57,431
     Corporate                 21,286       24,760
                             --------     --------
          Total              $171,940      352,493
                             ========     ========

     The significant decrease in identifiable assets of Custom Assemblies
     relates to the goodwill impairment charge recorded in 2001. For further
     discussion see Note 19.

     A summary of long-lived assets by geographic region is as follows (in
     thousands):

                                    2001        2000
                                  -------     -------
     United States                $57,159     109,018
     Other than United States       7,840      85,409
                                  -------     -------
          Total                   $64,999     194,427
                                  =======     =======

                                     F-44
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     Summary of international sales by geographic region is as follows (in
     thousands):

                    2001        2000        1999
                  -------     -------     -------
     Europe       $31,797      29,130      23,843
     Asia          18,327      21,473       8,248
     Canada        16,456       5,480       2,771
     Mexico         9,583       1,330         532
     Other            745       1,647         900
                  -------     -------     -------
        Total     $76,908      59,060      36,294
                  =======     =======     =======

     Net sales are attributed to countries based on the location of customers.

     MAJOR CUSTOMERS

     In 2001, no company accounted for more than 10% of the Company's
     consolidated revenues. In 2000, revenues from two telecommunication and
     computer OEMs accounted for approximately 16% each of the Company's
     consolidated revenues. In 1999, no company accounted for more than 10% of
     the Company's consolidated revenues.

(19) IMPAIRMENT OF GOODWILL
     ----------------------

     During the first half of 2001, the Company experienced a significant
     decrease in the rate of growth of its Custom Assemblies and Passive
     Components segments due to a dramatic decline in capital spending in the
     telecommunications industry. During the second quarter, major customers of
     the companies in these segments further reduced their order forecasts and
     canceled orders already placed. Management now believes that the growth
     prospects for these business segments are significantly less than
     previously expected and those of historical periods.

     The Company reviews the value of its long-lived assets when events or
     changes in circumstances occur that indicate the carrying value of the
     asset may be impaired. As a result of the business conditions noted above,
     the Company concluded such a review was required for its three most recent
     acquisitions, TAT, acquired in February 2000; PCM, acquired in August 2000;
     and, InNet, acquired in January 2001, and their related goodwill. The
     review was completed in a series of tests. The first test included the
     following steps: (1) the Company estimated the undiscounted future cash
     flows of the asset based on estimated growth levels; (2) the Company
     estimated the terminal value of the asset based on an appropriate multiple
     of EBITDA; and (3) the Company compared the sum of the future cash flows
     and terminal value to the carry value of long lived assets to determine if
     an impairment has occurred. If an impairment had occurred the Company
     performed a second test as follows: (1) the Company discounted the future
     cash flows and terminal value, using EBITDA as a proxy for cash flow, to a
     present value using an appropriate discount rate; and (2) the Company
     compared the discounted net present value to the carrying value of long
     lived assets to determine the amount of the impairment.

     As a result of this review, the Company determined that the goodwill
     related to these acquisitions was impaired and in accordance with Company
     policy it was necessary to write-down the goodwill to fair value. Thus, in
     June 2001, the Company recorded pre-tax charges of $97.3 million to impair
     a significant portion of goodwill. Of the total charge of $97.3 million,
     $74.9 million related to the

                                      F-45
<PAGE>

                   INSILCO TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

     goodwill resulting from the acquisition of TAT, $14.9 million related to
     the goodwill resulting from the acquisition of PCM and $7.5 million related
     to goodwill resulting from the acquisition of InNet.

     In the fourth quarter of 2001, the Company repeated the above discussed
     analysis and based on this analysis recorded an additional goodwill charge
     totaling $53.0 million. Of the total charge of $53.0 million; $1.7 million
     related to the remaining goodwill resulting from the acquisition of TAT,
     $19.6 million related to the remaining goodwill resulting from the
     acquisition of PCM, $27.7 million related to the remaining goodwill
     resulting from the acquisition of InNet, $3.5 million relating to the
     goodwill resulting from the acquisition of EFI and $0.5 million related to
     the remaining goodwill resulting from earlier acquisitions. The year to
     date December 31, 2001 pre-tax charge for the writedown of goodwill was
     $150.3 million.

(20) SUBSEQUENT EVENT
     ----------------

     On February 7, 2002, the Company stated that it has initiated a review of
     its strategic alternatives and had retained Gleacher & Co. LLC to assist
     management and the Board of Directors in this review. On February 15, 2002,
     the Company said it would utilize the 30-day grace period under the
     indenture governing the Company's 12% Senior Subordinated Notes due 2007,
     and would not make the scheduled $7.2 million interest payment due February
     15, 2002. The 30-day grace period expired on March 18, 2002 and the Company
     did not make the payment. The failure to make the required interest payment
     within the 30-day grace period created an event of default under the
     indenture governing the 12% Notes and the Amended Credit Agreement. Due to
     the default, the debt under the Amended Credit Agreement and the 12% Notes
     has been reclassified to current.

     At this time, the Company is having on-going discussions with its senior
     secured lenders and an ad hoc committee of holders of the 12% Notes in an
     effort to reach an agreement on a consensual restructuring of its capital
     structure. However, as with any negotiation, there can be no assurance as
     to when and if such an agreement will be reached. If an agreement is not
     reached, it will impact the Company's principal resources of liquidity and
     its ability to meet future cash requirements. Such limitations could force
     the Company to consider alternatives that may include negotiating further
     amendments to the Amended Credit Agreement, attempting to obtain
     commitments for additional new tranche loans or notes, asset sales, a sale
     of the Company or other remedies appropriate for the circumstances.

                                      F-46
<PAGE>

                                  EXHIBIT INDEX
                                  -------------

*2(a)    Agreement and Plan of Merger, dated as of March 24, 1998, among Insilco
         Corporation, INR Holding Co., and Silkworm Acquisition Corporation
         (Exhibit 10(n) to the Registration Statement on Form S-4 (File No.
         333-51145) of Insilco Corporation).

*2(b)    Amendment No. 1 to the Agreement and Plan of Merger, dated June 8,
         1998, among Insilco Corporation, INR Holding Co., and Silkworm
         Acquisition Corporation (Exhibit 10(r) to the Registration Statement on
         From S-4 (File No. 333-51145) of Insilco Corporation).

*2(c)    Transaction Agreement dated July 20, 2000, by and among Insilco Holding
         Co. (and certain of its subsidiaries) and ThermaSys Holding Company
         (and certain of its subsidiaries) (Exhibit 2(a) to the Current Report
         on Form 8-K filed by Insilco Corporation on July 26, 2000 (File No.
         0-22098)).

*3(a)    Certificate of Amendment of Certificate of Incorporation as filed
         August 25, 2000. (Exhibit 3(a) to the Form 10-K for the year ended
         December 31, 2000 (File No. 0-22098)).

*3(b)    Bylaws (Exhibit 3.2 to the Current Report on Form 8-K filed by Insilco
         Corporation on August 18, 1998 (File No. 0-22098)).

*3(c)    Amended Certificate of Incorporation (Exhibit 3(c) to the Form 10-Q for
         the quarter ended September 30, 2001 (File No. 0-22098)).

*4(a)    Investors' Agreement, dated as of August 17, 1998, among Insilco
         Holding Co. and the investors named therein (Exhibit 4.5 to the
         Registration Statement on Form S-1 (File No. 333-65039) of Insilco
         Holding Co.).

*4(b)    Indenture, dated as of November 9, 1998, between Insilco Corporation
         and the Trustee (Exhibit 4(a) to the Form 10-Q for the quarter ended
         September 30, 1998 (File No. 0-22098) of Insilco Corporation).

*4(c)    First Supplemental Indenture, dated as of December 21, 1998, between
         Insilco Corporation and the Trustee (Exhibit 4.3 to the Registration
         Statement on Form S-1 (File No. 333-71947) of Insilco Corporation).

*4(d)    Exchange and Registration Rights Agreement, dated as of November 9,
         1998, between Insilco Corporation and Donaldson, Lufkin & Jenrette
         Securities Corporation (Exhibit 4(b) to the Form 10-Q for the quarter
         ended September 30, 1998 (File No. 0-22098) of Insilco Corporation).

*4(e)    Indenture, dated as of August 12, 1997, between Insilco Corporation and
         the Trustee (Exhibit 4(j) to the Registration Statement on Form S-4
         (File No. 333-36523) of Insilco Corporation).

*4(f)    Form of New Note (included in Exhibit 4(e) above) (Exhibit 4(k) to the
         Registration Statement on Form S-4 (File No. 333-36523) of Insilco
         Corporation).

*4(g)    Purchase Agreement, dated as of August 7, 1997, among Insilco
         Corporation and Goldman Sachs & Co., McDonald & Company Securities,
         Inc. and Citicorp Securities Inc. (the "Initial purchasers") (Exhibit
         4(l) to the Registration Statement on Form S-4 (File No. 333-36523) of
         Insilco Corporation).

                                      F-47
<PAGE>

*4(h)    Exchange and Registration Rights Agreement, dated as of August 12,
         1997, between Insilco Corporation and the Initial Purchasers (Exhibit
         4(m) to the Registration Statement on Form S-4 (File No. 333-36523) of
         Insilco Corporation).

*4(i)    Second Supplemental Indenture, dated as of January 25, 1999, between
         Insilco Corporation and the Trustee (Exhibit 4.4 to the Registration
         Statement on Form S-1 (File No. 333-71947) of Insilco Corporation).

*10(a)   Insilco Holding Co. Direct Investment Program (Exhibit 4(c) to the
         Registration Statement on Form S-8 (File No. 333-61809)
                of Insilco Holding Co.).**

*10(b)   Insilco Holding Co. Stock Option Plan (Exhibit 4(d) to the Registration
         Statement on Form S-8 (File No. 333-61809) of Insilco Holding Co.).**

*10(c)   Insilco Holding Co. and Insilco Corporation Equity Unit Plan (Exhibit
         4(c) to the Registration Statement on Form S-8 (File No. 333-61811) of
         Insilco Holding Co.).**

*10(d)   Credit Agreement among Insilco Corporation and a syndicate of banks and
         other financial institutions led by Donaldson, Lufkin & Jenrette
         Securities Corporation, DLJ Capital Funding, Inc. and The First
         National Bank of Chicago (Exhibit 10.4 to the Registration Statement on
         Form S-1 (File No. 333-71947) of Insilco Corporation).

*10(e)   Form of Indemnification Agreement adopted by Insilco Corporation as of
         July 30, 1990, entered into between Insilco Corporation and certain of
         its officers and directors individually, together with a schedule
         identifying the other documents omitted and the material details in
         which such documents differ (Exhibit 10(n) to the Form 10 Registration
         Statement (File No. 0-22098) of Insilco Corporation).

*10(f)   Form of Income Protection Agreement adopted by Insilco Corporation as
         of December, 1996, entered into between Insilco Corporation and the
         officers identified in Exhibit 10(f) (Exhibit 10(h) to Form 10-K for
         the year ended December 31, 1996, (File No. 0-22098) of Insilco
         Corporation).

*10(g)   Credit Agreement dated August 25, 2000, among Insilco Technologies,
         Inc., T.A.T. Technology, Inc., Various Financial Institutions, Bank
         One, NA, DLJ Capital Funding, Inc., and Huntington Bank (Exhibit 99(b)
         to Current Report on Form 8-K filed by Insilco Technologies, Inc., on
         September 7, 2000 (File No. 0-22098)).

10(h)    Management Services Agreement dated August 25, 2000, with ThermaSys
         Corporation.

*10(i)   Amendment No. 1 to Second Amended and Restated Credit Agreement dated
         August 14, 2001 (Exhibit 10.1 to the Form 10-Q for the quarter ended
         June 30, 2001 (File No. 0-22098)).

10(j)    Indemnification Agreement with KPMG LLP.

*15(a)   Independent Accountants Awareness Letter (Exhibit 15(a) to the Form
         10-Q for the quarter ended September 30, 2001 (File No. 0-22098)).

*16(a)   Auditor change letter (Exhibit 16.1 to the Current Report on Form 8-K/A
         filed by Insilco Technologies, Inc. on October 2, 2001 (File No.
         0-22098)).

                                      F-48
<PAGE>

*21      Subsidiaries of Insilco Technologies, Inc. (Exhibit 21 to the Form 10-K
         for the year ended December 31, 2000 (File No. 0-22098)).

23(a)    Consent of PricewaterhouseCoopers LLP.

23(b)    Consent of KPMG LLP.

24       Power of Attorney of officers and directors of Insilco appearing on the
         signature page hereof.

*25      Statement of Eligibility and Qualification Under the Trust Indenture
         Act of 1939 (T-1) of the Bank of New York (bound separately) (Exhibit
         25 to the Registration Statement on Form S-4 (File No. 333-36523) of
         Insilco Corporation).

99(a)    Schedule II - Valuation and Qualifying Accounts.

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

*              Incorporated by reference, as indicated.

**              Designates management contracts and compensatory plans or
                arrangements in which directors or executive officers
                participate.

















                                      F-49