##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

WASHINGTON, D.C. 20549




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Form 10-K

|           |  |                                                                                           
|---------- |  | ------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                           
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
	15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended December 31,
	2001                                              
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR
	15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-10218



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Collins & Aikman Corporation

(Exact name of registrant as specified in its
charter)


|                                                                |  |                                         
|--------------------------------------------------------------- |  | ----------------------------------------
|Delaware                                                        |  | 13-3489233                              
|(State or other jurisdiction of
	incorporation or organization) |  | (I.R.S. Employer
	Identification Number)

250 Stephenson

Troy, Michigan 48083


(Address of principal executive offices,
including zip code)


Registrants telephone number, including
area code:

(248) 824-2500


Securities registered pursuant to
Section 12(b) of the Act:

|                             |  |                                          
|---------------------------- |  | -----------------------------------------
|Title of each class          |  | Name of each exchange on which registered
|                             |  |                                          
|Common Stock, $.01 par value |  | New York Stock Exchange                  

Securities registered pursuant to
Section 12(g) of the Act:

None


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

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. þ

The aggregate
market value of voting stock held by non-affiliates of the
Registrant was $391,879,266 as of March 20, 2002. (Treats
as non-affiliates certain holders of restricted shares who have
relinquished Board designation and other rights and as an
affiliate a shareholder as to whom there is an issue.)

As of
March 20, 2002, the number of outstanding shares of the
Registrants common stock, $.01 par value, was 167,993,798
shares.

DOCUMENTS INCORPORATED BY REFERENCE:

The
information required by Part III (Items 10, 11, 12 and
13) is incorporated by reference to portions of the
registrants definitive Proxy Statement for the 2002 Annual
Meeting of Stockholders, which will be filed within
120 days of December 31, 2001.



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TABLE OF CONTENTS



|                                                                                                          |  |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|FORM 10-K ANNUAL REPORT INDEX                                                                            
|PART III                                                                                                 
|PART IV                                                                                                  
|SIGNATURES                                                                                               
|REPORT OF INDEPENDENT ACCOUNTANTS                                                                        
|REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                                                 
|CONSOLIDATED STATEMENTS OF OPERATIONS                                                                    
|CONSOLIDATED BALANCE SHEETS                                                                              
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                    
|CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS EQUITY (DEFICIT)                                         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                               
|SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS CONSOLIDATING STATEMENT OF INCOME    
|SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS CONSOLIDATING STATEMENT OF INCOME    
|SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS CONSOLIDATING BALANCE SHEET          
|SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS CONSOLIDATING BALANCE SHEET          
|SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS CONSOLIDATING STATEMENT OF CASH FLOWS
|SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS CONSOLIDATING STATEMENT OF CASH FLOWS
|SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT                                              
|SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS                                                         
|EXHIBIT INDEX                                                                                            
|Services Agreement                                                                                       
|Agreement of Sale & Purchase                                                                             
|Lease Agreement                                                                                          
|Agreement of Sale & Purchase                                                                             
|Lease Agreement                                                                                          
|Stockholders Agreement                                                                                   
|Registration Rights Agreement                                                                            
|First Amendment to Services Agreement                                                                    
|Equipment Lease                                                                                          
|Registration Rights Agreement                                                                            
|Registration Rights Agreement                                                                            
|Registration Rights Agreement                                                                            
|Preferred Stock Registration & Other Rights Agrmnt                                                       
|Intellimold Technology License & Support Agrmnt                                                          
|Technology License Agreement                                                                             
|Technology License Agreement                                                                             
|Subsidiaries of the Registrant                                                                           
|Consent of PricewaterhouseCoopers LLP                                                                    
|Consent of Arthur Andersen LLP                                                                           



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES






FORM 10-K ANNUAL REPORT INDEX


|         |  |                                                                                        |  |      |    | 
|-------- |  | -------------------------------------------------------------------------------------- |  | ---- | -- | 
|         |  |                                                                                        |  | Page
|         |  |                                                                                        |  |     
|Item 1.  |  | Business                                                                               |  |      | 2  | 
|Item 2.  |  | Properties                                                                             |  |      | 11 | 
|Item 3.  |  | Legal Proceedings                                                                      |  |      | 11 | 
|Item 4.  |  | Submission of Matters to a Vote of Security
	Holders                                   |  |      | 13 | 
|Item 5.  |  | Market for Registrants Common Equity and
	Related Stockholder Matters                 |  |      | 13 | 
|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                            |  |      | 32 | 
|Item 8.  |  | Financial Statements and Supplementary Data                                            |  |      | 33 | 
|Item 9.  |  | Changes in and Disagreements With Accountants on
	Accounting and Financial Disclosure  |  |      | 33 | 
|Item 10. |  | Directors and Executive Officers of the Registrant                                     |  |      | 34 | 
|Item 11. |  | Executive Compensation                                                                 |  |      | 34 | 
|Item 12. |  | Security Ownership of Certain Beneficial Owners
	and Management                        |  |      | 34 | 
|Item 13. |  | Certain Relationships and Related Transactions                                         |  |      | 34 | 
|Item 14. |  | Exhibits, Financial Statement Schedules, and
	Reports on Form 8-K                      |  |      | 35 | 

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PART I

This Report on Form 10-K contains
forward-looking information, as that term is defined
by the federal securities laws, about our financial condition,
results of operations and business. You can find many of these
statements by looking for words such as may,
will, expect, anticipate,
believe, estimate, should,
continue, predict, and similar words
used in this Annual Report. The forward-looking statements in
this Form 10-K are intended to be subject to the safe
harbor protection provided by the federal securities laws.

These forward-looking statements are subject to
numerous assumptions, risks and uncertainties (including trade
relations and competition). Because the statements are subject
to risks and uncertainties, actual results may differ materially
from those expressed or implied by the forward-looking
statements. We caution readers not to place undue reliance on
the statements, which speak only as of the date of this Annual
Report.

The cautionary statements set forth above should
be considered in connection with any subsequent written or oral
forward-looking statements that the Company or persons acting on
its behalf may issue. We do not undertake any obligation to
review or confirm analysts expectations or estimates or to
release publicly any revisions to any forward-looking statements
to reflect events or circumstances after the date of this report
or to reflect the occurrence of unanticipated events.

This Annual Report contains forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Actual results and events may
differ materially from those that are anticipated because of
certain risks and uncertainties, including but not limited to
general economic conditions in the markets in which the Company
operates and industry based factors such as:



| |   |                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------
| |  | declines in the North American, South American
	and European automobile and light truck builds,               
|
| |  | labor costs and strikes at our major customers
	and at our facilities,                                        
|
| |  | changes in consumer preferences,                                                                              
|
| |  | dependence on significant automotive customers,                                                               
|
| |  | the level of competition in the automotive supply
	industry and pricing pressure from automotive customers and
|
| |  | risks associated with conducting business in
	foreign countries.                                              

In addition, factors more specific to us could
cause actual results to vary materially from those anticipated
in the forward-looking statements included in this report such
as substantial leverage, limitations imposed by the
Companys debt instruments, the Companys ability to
successfully integrate acquired businesses including actions it
has identified as providing cost saving opportunities, and
pursue our prime contractor business strategy, the
Companys customer concentration and risks associated with
the formerly owned operations of the Company.

The Companys divisions may also be affected
by changes in the popularity of particular vehicle models or
particular interior trim packages or the loss of programs on
particular vehicle models.

For a discussion of certain of these and other
important factors which may affect our operations, products and
markets, see ITEM 1. BUSINESS and
ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS and also our
other filings with the Securities and Exchange Commission.

Item 1.     Business

The Company

The Company is a global leader in the design,
engineering and manufacturing of automotive interior components,
including instrument panels, fully assembled cockpit modules,
floor and acoustic systems, automotive fabric, interior trim and
convertible top systems and has the number one or two North
American market share position in seven out of ten major
automotive interior categories tracked by CSM Worldwide. The
Company is also the largest North American supplier of
convertible top systems. The Company expects the fully assembled
cockpit modules market to grow significantly over the next five
years and has positioned itself as a leading global supplier in
this market with the recent acquisition of TAC-Trim. Sales are
diversified among North American, European and South American
Tier I integrators and automotive OEMs. In North

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America, the Company manufactures components for
approximately 90% of all light vehicle production platforms. The
Company has over 25,000 employees and more than 120 plants
worldwide. The Company is a Delaware corporation formed on
September 21, 1988. The Company conducts all of its
operating activities through its wholly owned Collins &
Aikman Products Co, (Products) subsidiary.
Predecessors of Products have been in operation since 1843.


In February 2001, Heartland Industrial Partners,
L.P. acquired a controlling interest in the Company. Since the
investment, the Company has pursued acquisitions that have
furthered a strategy of serving as a prime contractor to both
Tier I integrators, which are shifting capital and emphasis
away from interior components manufacturing and towards
electronics and the delivery of fully integrated interior
modules, and to OEMs, which continue to increase their
outsourcing of complete interior manufacturing.



| |   |                                                                                                                                                                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | On July 3, 2001, the Company acquired the
	Becker Group, a leading supplier of plastic components to the
	automotive industry.                                                                                                                                                                                                    
|
| |  | On September 21, 2001, the Company acquired
	Joan Automotive Industries, a leading supplier of bodycloth to
	the automotive industry, and the assets of Joans
	affiliated automotive yarn dyeing operation, Western Avenue
	Dyers, L.P.                                                                                          
|
| |  | On December 20, 2001, the Company acquired
	the Textron Automotive Companys Trim division (TAC-Trim),
	one of the largest suppliers of instrument panels and fully
	assembled cockpit modules and a major automotive plastics
	manufacturer of interior and exterior trim components in North
	America, Europe and South America.

The combination of Collins & Aikman, Becker,
Joan and TAC-Trim created one of the industrys largest and
most broadly based manufacturers of automotive interior
components, systems and modules. The Company has the capability
to supply diverse combinations of stylistically matched,
functionally engineered and acoustically integrated interior
trim components, systems and modules and markets interior
products to customers through a single global commercial
operations group, which supplies products from three
primary categories: plastic components and cockpits, carpet and
acoustics and automotive fabrics. In addition, the Company
continues to market its convertible top systems through the Dura
convertible group.

Industry Trends

The Companys strategy is to capitalize on
several important automotive industry trends, which are expected
to drive demand for its products. These trends include:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Increasing OEM Demand for Modules, Systems and
	Complete Interiors.To reduce costs
	and simplify assembly processes and design, OEMs increasingly
	expect their large-scale suppliers to provide fully engineered
	systems, pre-assembled combinations of components (systems or
	modules) and complete automotive interiors rather than
	individual components.                                                                                                                                                   
|
| |  | Accelerating Manufacturing Outsourcing by
	Tier I Total Interior Integrators.The large total interior Tier I
	integrators are repositioning their assets and resources to
	focus on electronics design, assembly and
	just-in-time sequencing of modules, systems and
	complete interiors. As a result, they are seeking to divest or
	outsource the manufacturing of many component categories.                                                                                                                 
|
| |  | Growing Technological Content and Acoustical
	Performance Requirements.The
	electronic and technological content of vehicles continues to
	expand, largely driven by demand for greater functionality and
	convenience. Changes to vehicle interiors, including hands-free
	cell phone systems, entertainment and navigational systems and
	voice-activated dashboard functions, are expected to require
	enhanced acoustical properties and increased sound field
	engineering relative to todays light vehicles.
|
| |  | Global Customer Requirements.Due to the opportunity for significant
	cost savings, reduced product development cycle times, common
	global platforms and improved product quality and consistency,
	automotive manufacturers favor suppliers with the capability to
	manufacture automotive interior systems and components in
	multiple geographic markets.                                                                                                                                                       

Corporate Strategy

The Companys goal is to become the leading
manufacturer of automotive interior trim components to OEMs and
Tier I integrators and to realize the integration, synergy and
cost savings opportunities created by

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the combination of Collins & Aikman, Becker,
Joan and TAC-Trim. The following are the key elements of the
strategy:




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Provide integrated product solutions that
	combine interior styling, component systems and acoustical
	technologies. The ability to bundle
	multiple components into integrated, custom packages
	distinguishes the Company from its competitors and provides an
	opportunity to increase content per vehicle. The Company is a
	leader in product innovation, design and styling in all of its
	business lines, producing components that cover substantially
	all of the non-glass interior surfaces of automobiles. This
	breadth of product offering affords the Company a significant
	advantage as OEMs increasingly view the vehicle interior as a
	major point of differentiation and rely upon automotive
	suppliers for research, engineering, design and styling
	capabilities. By employing a cross-disciplinary approach to
	acoustics, surface styling and product engineering that takes
	advantage of product development and technological capabilities,
	the Company can offer integrated product solutions to its
	customers.
|
| |  | Capitalize on position as prime contractor to
	OEMs and Tier I total interior integrators.The Company believes that OEMs will
	accelerate modular and system sourcing in order to lower costs,
	reduce time to market and accommodate global platforms and that
	Tier I total interior integrators will increase the redeployment
	of assets and capital into the integrated design, assembly and
	just in time sequenced delivery of complete interior
	systems. The Company is well positioned to capitalize on these
	opportunities. Furthermore, the Companys products are used
	in approximately 90% of North American vehicle platforms and are
	sold to all North American OEMs, transplants such as Toyota and
	Honda, and major Tier I integrators. The Company is also well
	positioned with respect to its Tier II competitors that have
	comparatively narrower product lines and significantly less
	size, scale and technological capabilities.                                                                                
|
| |  | Increase content per vehicle.The Company intends to take advantage
	of its current position to increase content per vehicle and has
	substantial new business awards from customers across all
	product categories, with the strongest growth in fully assembled
	cockpit modules. Projected sales growth is primarily
	attributable to TAC- Trims expanded book of full cockpit
	programs. By increasing content per vehicle, sales are expected
	to increase at a rate in excess of changes in industry
	production rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Leverage technology to improve manufacturing
	efficiency.The Company believes it
	has many opportunities to improve manufacturing efficiency and
	cost structure by rationalizing existing operations and
	incorporating manufacturing best practices,
	processes, procedures and technologies into its operations. For
	example, TAC- Trim is believed to be among the most efficient
	plastics suppliers in North America and Europe due to numerous
	proprietary manufacturing technologies, such as
	InvisitecTM and IntellimoldTM and
	EnvirosoftTM patented processes that allow the
	Company to manufacture and combine multiple products to produce
	complex integrated interiors products. The Company believes the
	application of technologies such as IntellimoldTM to
	Becker and the Companys operations, as well as the
	continued roll-out of these technologies throughout
	TAC-Trims operations, will significantly improve plastics
	manufacturing cycle times, labor costs and scrap rates.                             
|
| |  | Pursue cost savings opportunities arising from
	our acquisitions.The Becker, Joan and
	TAC-Trim acquisitions create the opportunity to realize cost
	savings in the first full year of operation. The Company expects
	to realize these savings through a number of initiatives,
	including purchasing savings, in-sourcing the majority of our
	plastics tooling and yarn dyeing requirements, consolidating
	research and development and engineering functions, capacity
	rationalization and reducing global headquarters costs. In
	an effort to achieve cost savings, the Company may also elect to
	implement restructuring activities in future periods above and
	beyond activities initiated during 2001.                                                                                                                                                                                                                                                                                                                            

Segment and Geographical Information

For a discussion of the Companys operating
segments and the geographic regions in which the Company
operates, refer to Item 7, Managements
Discussion and Analysis of Financial Condition and Results of
Operations  Results of Operations and to
Note 20, Information About the Companys
Segments of the financial statements included in this
report.

Products

The Company markets the majority of its products
to customers through a single global commercial
operations group, which supplies products from three
primary categories including plastic components and

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cockpits, carpet and acoustics and automotive
fabrics. In addition, the Company markets convertible top
systems through the Dura convertible group. Products include the
following:


Plastic Components and Cockpits

The Company manufactures substantially all of the
components of the plastic interior trim within a vehicle,
including automotive instrument panels, door panels, sidewall
trim, overhead systems, headrests and armrests, cupholders, air
registers and bezels, slush molded skins, pillar trim, floor
console systems, instrument panel components, and fully
assembled cockpit modules. This broad portfolio of plastic
components and cockpits products allows the Company to offer
customers modules and systems that incorporate individual
components. Some major products include:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Instrument Panels (IP):As the most structurally important
	plastic component in the vehicle and as the plastic substrate
	directly in front of the driver, the IP occupies the most
	important piece of real estate in the interior. The
	Company believes that it is the number one IP supplier in
	North America. The advanced materials we employ include
	EnvirosoftTM castable thermoplastic materials, high
	performance PVC alloys, high-definition grain and texture
	formulation and vacuum forming. TAC-Trim has also developed the
	InvisitecTM invisible passenger air bag system, which
	provides improved appearance and craftsmanship at reduced cost.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | Cockpits:The
	Company is a leading North American and European supplier of
	cockpits. The complete array and breadth of our plastic
	component offerings has enabled the Company to become a leader
	in offering customers a fully assembled IP system
	(cockpit) delivered on a just-in-time basis. As most
	of the ancillary interior trim components revolve around the IP
	placement, the Company believes that it will be able to
	penetrate effectively the customer base by offering the IP along
	with complementary plastic accoutrements and additional products
	from our other business units. We source various other parts
	that make up a fully assembled modular cockpit from outside
	suppliers (including radios, wire harnesses, cross-vehicle beams
	and steering columns). The Company expects that its position as
	a cockpit integrator will provide significant opportunities to
	in-source more manufactured content in the future. Through the
	proprietary Intelliquence TM software, finished
	cockpits can be delivered to the OEMs on a just-in-time basis
	and installed on the assembly line.
|
| |  | Door Panels:The
	Company believes that it is the second largest supplier of door
	panels in North America. This decorative plastic interior trim
	component is an important element to the overall styling theme
	of a vehicles interior.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | Exteriors:Exterior
	trim components include plastic molded fascia systems, bodyside
	cladding, signal lamps, cowl grilles and wheel flares. The
	Company has taken advantage of the systems trend in the exterior
	trim product market by producing and assembling fascia with
	radiator grilles, energy absorbers, trim moldings and lamps to
	be delivered in sequence directly to the OEMs assembly
	line.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

Carpet and Acoustics

The Company evolved from a North American carpet
producer to become a market leader in a broad range of
automotive floor systems, luggage compartment trim, dash
insulators and other acoustic products with production
capabilities in both North America and Europe. While acoustical
products are often combined with molded floor carpet to provide
complete interior floor systems, it is useful to describe four
carpet and acoustics product categories:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Molded Floor Systems:Molded floor systems consist of
	thermoformed compression molded carpets. These carpets are
	provided in either a barrier or an absorptive NVH (noise,
	vibration and harshness) system. The barrier system includes
	polyethylene, barrier back, and a fiber underlay system or a
	foam-in-place system. Products include TuflorTM, our
	proprietary thermoplastic flooring product, which is rugged,
	durable and washable. The products in molded floor systems are
	highly engineered, and their manufacture requires a high degree
	of precision and draws on our robotics capabilities. The Company
	believes it is the number one producer of molded floor and
	acoustic systems in the North American market and manufactures
	molded floor systems for all of the North American and Japanese
	OEMs as well as a number of the European OEMs.
|
| |  | Luggage Compartment Trim.The other major carpeted area of the
	vehicle is the luggage compartment, which includes one-piece
	molded trunk systems and assemblies, wheelhouse covers and center                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | pan mats, seatbacks, tireboard covers and other
	trunk trim products. The Company believes that it is the number
	two supplier of luggage compartment trim in the North American
	market.                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | Accessory Floormats.The Company manufactures automotive
	accessory floormats by vulcanizing rubber backing to tufted
	carpet and also manufactures cargo mats with value-added
	distinctive aesthetic and practical features such as hand-sewn
	appearance of edges and moisture trapping construction with our
	patented Akro Edge® floormats. Largely due to this product
	differentiation, the Company has become the largest fully
	integrated auto floormat producer in North America.                                                                                     
|
| |  | Acoustical Products.Acoustical products include interior
	dash insulators that insulate the passenger compartment from
	engine compartment noise and heat; damping materials that
	control noise in the floor, overhead system and sides of the
	vehicle; and engine compartment NVH systems. Changes to vehicle
	interiors, including hands-free cell phone systems, navigational
	systems, entertainment systems and voice-activated Internet
	access, will require enhanced acoustical properties and
	increased sound field engineering relative to todays light
	vehicles.

Automotive Fabrics

The combination of the Companys existing
fabrics products with Joan makes us one of the largest
automotive fabrics manufacturers. The principal automotive
fabrics are bodycloth (woven or knitted fabric primarily for the
seats of the vehicle) and headliner (knitted fabric laminated
with foam such as that on the inside roof of the vehicle).
Automotive fabrics are woven or knit based on the styling and
cost preference of the customer. The Company offers every major
fabric variation, including dobby velours, jacquard woven
velours, flat wovens, double needle-bar knits, circular knits
and tricot knits.

The Companys styling capability is one of
its principal strengths, and is a reason for strong sales to
OEMs. With the acquisition of Joan, the production of fabrics is
vertically integrated with an expandable dye house operation.
Due to stringent OEM color fastness standards, the
dyeing and color application process is a key value-added aspect
of auto fabric production and contributes significantly to
price-per-yard.

Dura Convertible Top Systems

The Company is a vertically integrated full
service supplier of convertible roof systems, and can design,
engineer and manufacture all aspects of a convertible top
including the framework, trim set, backlights, well slings,
tonneau covers and power actuating system. In order to
differentiate products in the marketplace, OEMs have been
increasing the number of convertible models on both existing and
new platforms. Management believes that this trend will continue
to drive demand for convertible systems.
Top-in-a-BoxTM, a system pioneered by Dura
Convertibles, is an assembly-line-ready module containing all of
the components of a convertible top that enables the OEM to
install a complete convertible top system on the production
line. This modular, bolt-on assembly significantly
reduces the time and labor traditionally required to manufacture
a convertible model, enabling OEMs to more profitably produce
and sell convertibles. Dura Convertibles has the industrys
most complete line of fabric coverings for convertible and sport
utility top covers for OEMs globally. The Company maintains
final assembly and trim operations near the OEMs plants,
and thereby offers customers complete just-in-time delivery and
sequencing capabilities.

Customers

Customers include both OEMs and Tier I total
interior integrators, which have been increasingly divesting
component manufacturing. In the past, OEMs have been typical
direct customers for the Companys plastic components,
cockpits, carpet and acoustic and convertible products, while
Tier I total interior integrators have typically been
direct customers for fabrics. The Company believes that over
time, sales to Tier I total interior integrators will
increase as a percentage of total sales as OEMs source
increasingly larger sections of vehicle interiors to Tier I
total interior integrators who in turn shift their capital and
emphasis towards electronics and the delivery of fully
integrated interior modules.

Through strategic acquisitions, the Company has
broadened its customer base globally, with European sales
representing 14% of total sales for 2001 versus 3% in 1996.
DaimlerChrylser AG (including Mercedes, Chrysler, Mitsubishi and
Smart), General Motors Corporation (including General Motors,
Opel, Vauxhall and Saab) and Ford Motor Company (including Ford,
Jaguar, Land Rover, Aston Martin and Volvo) directly

6



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##### Table of Contents



and indirectly represented approximately 18.7%,
29.0% and 21.5% of 2001 sales, respectively. These percentages
are likely to change with the recent acquisition of TAC-Trim.
The following is a list of customers:


 Alpha Romeo

 Audi


 BMW


 CAMMI


 DaimlerChrysler


 Faurecia


 Fiat


 Ford


 Freightliner


 General Motors


 Honda


 Hyundai


 Intier


 Isuzu


 Jaguar


 Johnson Controls


 Kia


 Lear Corporation


 Magna


 Man


 Mazda


 Mitsubishi


 Nissan


 NUMMI


 Opel


 Porsche


 PSA


 Renault


 Rover


 Scania


 Seat


 Subaru


 Toyota


 Visteon


 Volkswagen


 Volvo


The Companys supply relationships are
typically sole-source and extend over the life of the model,
which is generally four to seven years, and do not normally
require the purchase by the customer of any minimum number of
products. The Company receives blanket purchase orders that
normally cover annual requirements for products to be supplied
for a particular vehicle model which may be terminated at any
time. In order to reduce reliance on any one model, the Company
produces automotive interior systems and components for a broad
cross-section of both new and more established models.

Marketing, Engineering and
Development

As a global leader in automotive interior
components, the Company differentiates itself in the marketplace
by consistently providing high quality products, outstanding
customer service and program management and cost effective
automotive solutions to global customers. Historically, the
Company marketed individual components, modules and complete
systems to customers. With the implementation of
Mega Tier II strategy, the Company realigned
marketing efforts to sell integrated product bundles
to customers in an effort to increase growth in sales and
operating income while enhancing the value-add provided to
customers. Central to this marketing strategy has been the
development of products that enhance both the vehicles
interior aesthetics as well as its acoustic performance. Equally
important, and unlike many other Tier I or Tier II
automotive suppliers, is the development of marketing and
program management teams specifically focused on supporting not
only OEMs, but major Tier I customers as well. These
dedicated teams, consisting of automotive interior personnel who
are able to meet a customers entire interior needs,
provide a single interface for our customers and help avoid
duplication of our sales and engineering efforts.

Products are sold directly to customers under
sales contracts that are obtained primarily through competitive
bidding. These sales are originated almost entirely by sales
staff. This marketing effort is augmented by design and
manufacturing engineers that work closely with automotive
manufacturers from the preliminary design to the manufacture and
supply of automotive interior modules, systems or components. A
key element employed to increase sales is to develop
increasingly higher value-added products through innovations in
materials construction, product design, engineering and styling.
In recognition of this, in April of 2000, the Company formed the
Global Product Development Division (GPDD) and also created an
Advanced Sales and Program Management Group. The primary focus
of the GPDD is to work closely with customer engineering
personnel to develop new products, processes, innovations, etc.
that are central to winning new business from customers. The
Advanced Sales and Program Management Group serves as a
bridge between the GPDD and customer focused sales
groups who market the Companys products and are
responsible for ensuring that customers needs are being
met.

Through sales offices in North America, South
America, Europe and Asia-Pacific, our marketing personnel
maintain regular contact with our various customers
engineers and purchasing agents. The Company continually seeks
new business from existing customers, as well as developing
relationships with new customers. The Company markets its
products by maintaining strong customer relationships, developed
over an 80-plus year history in the automotive industry through:



| |   |                                                           
| | - | ----------------------------------------------------------
| |  | extensive technical and product development
	capabilities;
|
| |  | reliable just-in-time delivery of high-quality
	products; 
|
| |  | strong customer service;                                  
|
| |  | innovative new products; and                              
|
| |  | a competitive cost structure.                             

7



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##### Table of Contents



The emergence of modular sourcing favors
suppliers with broad manufacturing capabilities and product
lines, experience with diverse materials and modular
coordination. Management believes that the Companys broad
base of manufacturing expertise with interior surface resins and
materials and its global leadership in delivering cockpits, will
favorably position the Company in the global automotive interior
industry. Automotive manufacturers have increasingly looked to
suppliers to assume responsibility for introducing product
innovations, shortening the development cycle of new models,
decreasing tooling investment and labor costs, reducing the
number of costly design changes in the early phases of
production and improving automotive interior acoustics, comfort
and functionality. Once the Company is engaged to develop the
design for the automotive interior system or component of a
specific vehicle model, it is also generally engaged to supply
these items when the vehicle goes into production. Substantial
resources have been dedicated toward improving engineering and
technical capabilities, establishing strong in-house tooling
capabilities (which have been strengthened by both the Becker
and TAC-Trim acquisitions) and developing advanced technology
centers in the United States and in Europe. Similarly, research
and development are an integral part of the sales and marketing
effort. Especially noteworthy are TAC-Trims proprietary
Intellimold injection molding control process,
Invisitecinvisible passenger air bag door system and
Envirosoft castable TPU and TPO materials.

In order to effectively develop automotive
interior systems, it is necessary to have global capabilities in
the engineering, research, design, development and validation of
the interior components, systems and modules being produced. The
Company conducts research and development at design and
technology centers in Dearborn, Michigan; Dover, New Hampshire;
Auburn Hills, Michigan; Plymouth, Michigan; Heidelberg, Germany
and Tyngsboro, Massachusetts and at several worldwide product
engineering centers. At these centers, the Company designs,
develops and engineers products to comply with applicable safety
standards, meet quality and durability standards, respond to
environmental conditions and conform to customer aesthetic and
acoustic requirements. In particular, acoustic requirements and
cockpit aesthetics have become more important than ever with the
advent of in-vehicle telematics. Technologically advanced
acoustics testing centers are maintained in Plymouth, Michigan
and Heidelberg, Germany and cockpit development centers are
located in Auburn Hills and Dearborn Michigan in order to
capitalize on both of these trends.

Manufacturing

The Company focuses on combining smaller
manufacturing plants into larger scale plants that have
efficient layouts and the ability to absorb core fixed costs.

The Company possesses cross-disciplinary
manufacturing expertise, including an ability to form and
assemble multi-material combinations of hard-molded plastics,
slush-molded soft skins and surfaces, carpet, fabric, foam,
insulation, and other trim materials. Management believes the
sophistication of the Companys carpet tufting and dying
processes, the foam-in-place process for molded floors and its
small-part plastic moldings and assemblies capabilities creates
a competitive advantage. Recent acquisitions have added to the
Companys manufacturing capabilities:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | With the Joan acquisition, the Company gained a
	scaleable, low-cost package automotive yarn dyeing facility
	thereby bringing in-house an important source of supply for the
	manufacture of our fabrics products.                                                                                                                                                                                                                                                                                  
|
| |  | The acquisition of Becker, originally established
	as a tool shop, has supplemented existing operations with one of
	the industrys leading tool developers allowing the
	in-sourcing of a significant portion of the Companys
	tooling requirements. The addition of Beckers tooling
	expertise complemented the Companys manufacturing
	capabilities for carpet and acoustics products and
	TAC-Trims large part injection molding process.                                                    
|
| |  | The TAC-Trim acquisition added advanced process
	technologies such as slush-molded skinning for high-end
	instrument panels, thermoplastic casting, and
	molded-in color and decoration insert capability and
	overall manufacturing discipline and acumen. Specific product
	and process additions brought on by TAC-Trim include: the
	patented Intellimold feedback control system for injection
	molding control which dramatically reduces cycle times, labor
	costs and scrap rates; and the

8



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##### Table of Contents



| |  |                                                                                                                                                                                                                                                                                                                                  
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | proprietary Intelliquence software
	sequencing system which should enable product delivery on a
	just-in-time basis to global OEM customers. In addition,
	TAC-Trim significantly expands plastic manufacturing
	capabilities allowing the Company to provide substantially all
	of an automobiles interior plastic components.

Technology and Intellectual Property

Significant resources are dedicated to research
and development in order to maintain the position as a leading
developer of technology innovations, some of which have been
patented or are in the process of being patented, in the
automotive interior industry. The Company has developed a number
of patented and proprietary designs for innovative interior
features, all focused on increasing value to the customer.
Examples include the Company developed proprietary slimline
cupholders, Cavelflex (stretch woven) fabrics and the
AcT family of acoustically tunable products.

Patents and patent applications exist in five
primary areas: automotive floor mats, automotive fabric
products, acoustics, plastics and convertible systems. With
respect to floormats, the Company holds several U.S. and foreign
patents relating to the Akro Edge® floormats. Akro
Edge® floormats are the industry standard for their
functional and aesthetic appeal to OEMs and their customers.
With respect to automotive fabric patents, the Company has
numerous patents on headliners, trunkliners and floor panels. In
the acoustics area, in addition to the proprietary Comet®
acoustics software, the Company is actively seeking protection
of various aspects of its AcT fiber technology and various
other means for improving sound deadening and sound absorption
in automotive interiors. The Company has various patents and
patent applications directed to cup holders, air outlet
assemblies, storage systems and convertible mechanisms.

In connection with the TAC-Trim acquisition the
Company acquired intellectual property rights to various
products and processes including the patented Intellimold
injection molding control process for use in its business. The
Intellimold patents are related to methods and/or
apparatus for injection molding. TAC-Trim has also developed
certain skin materials and compounding solutions that provide
the capability to design cost-effective materials with
outstanding performance and aesthetic qualities. Examples of
these materials include Envirosoft castable thermoplastic
materials, high performance PVC alloys, high-definition grain
and texture formulation and vacuum thermoplastic applications.
TAC-Trim has also developed the Invisitec invisible
passenger air bag system, which provides improved appearance and
craftsmanship at reduced cost. Invisitec systems, which
integrate the air bag door with the panel and top cover, have
been commercialized for soft-cast and vacuum-formed panels and
hard injection molded instrument panels. In total, TAC-Trim
holds approximately 270 U.S. and approximately 1200 foreign
active patents and has approximately 350 patents pending. The
intellectual property acquired in the TAC-Trim Acquisition is
subject to certain limitations on the Companys use and
creates continuing obligations to Textron.

As part of the TAC-Trim acquisition, the Company
entered into three intellectual property license agreements with
Textron. In two of these agreements, the Company licensed back
to Textron certain intellectual property that was acquired in
the transaction (the Intellimold Agreement and the
Licensed-Back IP Agreement). In the third agreement,
the Company licensed from Textron other intellectual property
that it did not acquire in the transaction (the Retained
IP Agreement). The Company is providing general
descriptions of these agreements although these descriptions do
not contain all the material terms in the contracts.



| |   |                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In all three agreements, the ability to use the
	intellectual property is limited based on whether the proposed
	use falls inside or outside a defined field of automotive
	products (the Restricted Field).

In the Intellimold Agreement, the Company gave
Textron an exclusive worldwide, perpetual, irrevocable license
to use outside the Restricted Field its rights in the
Intellimold process and any enhancements developed by it.
Textron was also granted a royalty-free, worldwide, perpetual,
irrevocable license to use the Companys rights in the
Intellimold process and any enhancements developed by the
Company within the Restricted Field solely in connection with
its and certain affiliates manufacturing, sales and
development operations. The Intellimold Agreement also includes
an exclusive royalty-free, worldwide, perpetual, irrevocable
license for the Company to use within the Restricted Field any
enhancements to the Intellimold process

9



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##### Table of Contents



developed by Textron. In the Licensed-Back IP
Agreement, the Company granted Textron a non-exclusive,
worldwide, royalty-free, perpetual and irrevocable license to
use solely outside the Restricted Field certain intellectual
property including over 50 U.S. patents on air bag related
products. In the Retained IP Agreement, Textron granted to the
Company a non-exclusive, worldwide, royalty-free, perpetual and
irrevocable license to use solely within the Restricted Field
certain intellectual property. These patents could have
applicability to the automotive industry but such use is
somewhat secondary to the use of such technology outside the
automotive field.


As described below under the heading
Managements Discussion and Analysis of Financial
Condition and Results of Operations 
Liquidity  Leases, the Company leases certain
equipment from Textron. When those leases terminate, if Textron
and its affiliates continue to own any interest in the
equipment, they will be allowed to use the equipment for certain
purposes and to use related intellectual property.

Raw Materials

Raw materials and other supplies used in our
continuing operations are normally available from a variety of
competing suppliers. With respect to most materials, the loss of
a single or even a few suppliers would not have a material
adverse effect on the Company. The Company is sensitive to price
movements in its raw materials supply base and has not hedged
against price fluctuations in commodity supplies, such as
plastics and resins. While the Company may not be able to pass
on any future raw materials price increases to customers, a
significant portion of increased cost may be offset through
volume purchase savings, value engineering/ value analysis in
conjunction with our major customers and reductions in the cost
of off-quality products and processes. The Company may evaluate
commodities hedging opportunities from time to time.

Competition

The Company is a leading supplier in automotive
molded carpet and acoustics, auto fabrics, convertible top
systems and automotive plastics components and cockpits, within
each segment. Customers rigorously evaluate suppliers on the
basis of product, quality, price competitiveness, technical
expertise and development capability, new product innovation,
reliability and timeliness of delivery, product design
capability, leanness of facilities, operational flexibility,
customer service and overall management. Some competitors may
have greater financial resources than the Company or a
competitive advantage in the production of any given product
that the Company manufactures, and there can be no assurance
that the Company will be able to successfully compete in the
markets for the products it currently provides.

Joint Ventures

The Company participates in two certified
minority business enterprises in the U.S. (Aguirre and Collins
& Aikman Plastics, L.L.C., and Engineered Plastic Products,
Inc.). These joint ventures play an important role in securing
new business as automotive manufacturers continue to promote
economic diversity by proactively increasing the amount of
business they source to minority suppliers. These joint ventures
were instrumental in our obtaining contracts with General Motors
and Johnson Controls to supply them with various plastic
components and systems for a number of vehicle models.

In connection with the TAC-Trim acquisition, the
Company acquired a 50% interest in an Italian joint venture.
Textron Automotive Holdings (Italy) S.r.L. is an Italian company
that will offer interior and exterior automotive trim products
to customers in Italy. Textron indirectly owns the other 50% of
the Italian joint venture interests. A recent project of the
Italian joint venture is to service certain cockpit needs for
three new Fiat lines at a facility being built at Fiats
Cassina, Italy plant. The Company will not control the joint
venture but will be required to provide certain administrative,
technical and engineering services and to license certain
patents and other know how to the Italian joint venture. The
Company expects to receive certain fees and reimbursement of
certain expenses in providing these services and licensing these
rights. Refer to Item 7, Management Discussion and
Analysis of Financial Condition and Results of Operations
for additional discussion regarding a put and call arrangement
that the Company entered into with respect to acquiring the
remaining 50% interest in the Italian joint venture.

10



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##### Table of Contents



Labor Matters and Employees

As of December 31, 2001, the Companys
continuing operations employed approximately 25,850 persons on a
full-time or full-time equivalent basis. Approximately 55% of
such employees were represented by labor unions in the United
States, Canada and other countries. Each facility has its own
collective bargaining unit and management believes that our
relations with our employees represented by labor unions and our
other employees are generally good. From time to time in the
ordinary course of our business, grievances are filed against
the Company by employees and unions.

Environmental Matters

A discussion of environmental matters is included
in Item 3, Legal Proceedings and Item 7,
Management Discussion and Analysis of Financial Condition
and Results of Operations and in Note 21,
Commitments and Contingencies of the financial
statements included in this report.

Item 2.     Properties

The Company has over 120 plants and facilities in
North America, South America, Europe and Asia. Approximately 70%
of the total square footage of these facilities is owned and the
remainder is leased. Many facilities are strategically located
to provide product delivery to our customers on a just-in-time
basis.

Facilities by Geographic Region

|                                                       |  |         |    |         |  |        |   |      |  |       |    |  |  |  |   |  |  |  |     | 
|------------------------------------------------------ |  | ------- | -- | ------- |  | ------ | - | ---- |  | ----- | -- |  |  |  | - |  |  |  | --- | 
|                                                       |  | North   |    | South   |  |        |   |      |  |      
|Type of Facility                                       |  | America |    | America |  | Europe |   | Asia |  | Total
|                                                       |  |         |    |         |  |        |   |      |  |      
|Manufacturing                                          |  |         | 59 |         |  |        | 5 |      |  |       | 24 |  |  |  |  |  |  |  | 88  | 
|Design, Research & Development, and Technical
	Centers |  |         | 14 |         |  |        |  |      |  |       | 8  |  |  |  |  |  |  |  | 22  | 
|Sales Branches, Offices, Other                         |  |         | 19 |         |  |        |  |      |  |       | 7  |  |  |  | 2 |  |  |  | 28  | 
|Total(1)                                               |  |         | 92 |         |  |        | 5 |      |  |       | 39 |  |  |  | 2 |  |  |  | 138 | 



---



|    |                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Total facilities shown per the table exceeds the
	120 plants and facilities indicated above because certain
	facilities listed in the table serve in more than one of the
	indicated capacities.

Item 3.     Legal
Proceedings

Except as described below, the Company and its
subsidiaries are not party to any material pending legal
proceedings, but is involved in ordinary routine litigation
incidental to the business.

Environmental:The
Company is subject to federal, state, local and foreign
environmental, and health and safety, laws and regulations that
(i) affect ongoing operations and may increase capital
costs and operating expenses in order to maintain compliance
with such requirements and (ii) impose liability relating
to contamination at facilities, and at other locations such as
former facilities, facilities where we have sent wastes for
treatment or disposal, and other properties to which the Company
may be linked. Such liability may include, for example,
investigation and clean-up of the contamination, personal injury
and property damage caused by the contamination, and damages to
natural resources. Some of these liabilities may be imposed
without regard to fault, and may also be joint and several
(which can result in a liable party being held responsible for
the entire obligation, even where other parties are also liable).

Management believes that it has obtained, and is
in material compliance with those material environmental permits
and approvals necessary to conduct our various businesses.
Environmental compliance costs for continuing businesses are
accounted for as normal operating expenses or capital
expenditures. Environmental compliance costs relating to
conditions existing at the time of an acquisition are generally
charged to reserves established in purchase accounting. The
Company accrues for environmental remediation costs when such
obligations are known and reasonably estimable. In the opinion
of management, based on the facts presently

11



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##### Table of Contents



known to it, such environmental compliance and
remediation costs will not have a material effect on the
business, consolidated financial condition, future results of
operations or cash flows.


The Company is legally or contractually
responsible or alleged to be responsible for the investigation
and remediation of contamination at various sites, and for
personal injury or property damages, if any, associated with
such contamination. At some of these sites the Company has been
notified that it is a potentially responsible party
(PRP) under the federal Superfund law or similar
state laws. The Company may be identified in other sites in the
future and may be responsible for contamination, including with
respect to divested and acquired businesses.

The Company is currently engaged in investigating
or remediating certain sites. In estimating cost of
investigation and remediation, the Company considered, among
other things, prior experience in remediating contaminated
sites, remediation efforts by other parties, data released by
the United States Environmental Protection Agency
(USEPA), the professional judgment of the
Companys environmental experts, outside environmental
specialists and other experts, and the likelihood that other
identified PRPs will have the financial resources to fulfill
their obligations at sites where they may be jointly and
severally liable. It is difficult to estimate the total cost of
investigation and remediation due to various factors including:



| |   |                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------
| |  | incomplete information regarding particular sites
	and other PRPs;                                                            
|
| |  | uncertainty regarding the nature and extent of
	environmental problems and our share, if any, of liability for
	such problems;
|
| |  | the ultimate selection among alternative
	approaches by governmental regulators;                                              
|
| |  | the complexity and evolving nature of
	environmental laws, regulations and governmental directives; and                       
|
| |  | changes in cleanup standards.                                                                                                 

The Company has established reserves for
environmental investigation and non-capital remediation costs.
Management believes such reserves comply with generally accepted
accounting principles. The Company records reserves for these
environmental costs when litigation has commenced or a claim or
assessment has been asserted or is imminent, the likelihood of
an unfavorable outcome is probable, and the financial impact of
such outcome is reasonably estimable. As of December 31,
2001, total reserves for these environmental costs are
approximately $59.6 million. Approximately half of those
environmental reserves are for the three sites discussed below.
The balance relates to approximately 40 additional locations
where the Company is participating in the investigation or
remediation of the site, either directly or through financial
contribution or where the company is alleged to be responsible
for costs of investigation or remediation.

The Company is implementing a 1991 Administrative
Order issued by USEPA concerning the remediation of soil and
groundwater contamination associated with the Stamina Mills
Superfund Site in North Smithfield, Rhode Island. Although the
outcome of ongoing litigation with the government could reduce
this expense, the environmental reserve assumes that we will
have full responsibility for this matter. In addition, in March
2001 the Company received notice of a suit filed in Rhode Island
state court on behalf of a person alleging medical conditions
caused by exposure over a number of years, through drinking
water and otherwise, to a chlorinated solvent in contaminated
groundwater associated with the site. The Company filed an
answer denying liability. Although management believes the
Company has significant defenses, the suit is in its early
stages.

The Company is also implementing a 1990
Administrative Order by Consent with the New Hampshire
Department of Environmental Services (DES) concerning the
investigation and remediation of the Cardinal Landfill. Among
other things, the Company also paid for alternative water
supplies to residences impacted by groundwater contamination
associated with the landfill and investigation and, if
necessary, remediation of off-site impacts from the landfill.
The DES is in the process of selecting a remedy to address
conditions at the landfill. Concern about conditions in the soil
and groundwater at and in the vicinity of the site have prompted
a lawsuit in state court, on behalf of several families that
reside in a mobile home park near the landfill, against the park
owner. Although the Company believes it would have significant
defenses, no assurance can be given

12



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##### Table of Contents



that litigation will not be brought against the
Company arising out of the contamination or, if so, that the
matter would be resolved in a way that is not material.


As a result of the TAC-Trim acquisition, the
Company is also one of 11 PRPs implementing a 1993 Consent
Decree with USEPA and the State of New Hampshire concerning the
remediation of soil, groundwater and sediment contamination
associated with the Dover Municipal Landfill Superfund Site in
Dover, New Hampshire. Under a related 1997 Administrative Order
on Consent with the USEPA, the PRPs are in the process of
assessing a possible alternative to the remedy previously
selected for this site.

In the opinion of management, based on
information presently known to it, identified environmental
costs and contingencies will not have a material adverse effect
on the consolidated financial condition or future results of
operations. However, no assurance can be given that management
has identified or properly assessed all potential environmental
liability arising from the Companys business or
properties, and those of present and former subsidiaries and
their corporate predecessors.

During 2001, the Company received payments of
$14.5 million on environmental claims related to
discontinued operations. Of the $14.5 million in payments,
the Company recorded $8.8 million, net of income taxes, as
income from discontinued operations.

During 2000, the Company settled claims for
certain other environmental matters related to discontinued
operations for a total of $20.0 million. Settlement
proceeds are being paid to the Company in three installments.
Installments of $7.5 million were received in both 2000 and
2001. The Company anticipates receiving the final payment of
$5.0 million on June 30, 2002. Of the
$20.0 million settlement, the Company recorded the present
value of the settlement as $7.0 million of additional
reserves, based on its assessment of potential environmental
exposures, and $6.6 million, net of income taxes, as income
from discontinued operations.

Other Claims:As of
March 18, 2002, the Company is party to approximately 662
pending cases alleging personal injury from exposure to asbestos
containing materials used in boilers manufactured before 1966 by
former operations of the Company which were sold in 1966.
Asbestos-containing refractory bricks lined the boilers and, in
some instances, the Companys former operations installed
asbestos-containing insulation around the boilers. These pending
cases do not include cases that have been dismissed or are
subject to agreements to dismiss due to the inability of the
plaintiffs to establish exposure to a relevant product and cases
that have been settled or are subject to settlement agreements.
Total settlement costs for these cases have been less than
$85,000 or an average of less than $2,500 per settled case. The
defense and settlement costs have been substantially covered by
our primary insurance carriers under a claims handling agreement
that expires in August 2006. The Company has primary, excess and
umbrella insurance coverage for various periods available for
asbestos-related boiler and other claims. The Companys
primary carriers have agreed to cover approximately 80% of
certain defense and settlement costs up to a limit of
approximately $70.5 million for all claims made, subject to
reservations of rights. The excess insurance coverage, which
varies in availability from year to year, is approximately
$620 million in aggregate for all claims made. Based on the
age of the boilers, the nature of the claims and settlements
made to date, and the insurance coverage, management does not
believe that these cases will have a material impact on the
Companys financial condition, results of operations or
cash flows. However, it cannot assure that the Company will not
be subjected to significant additional claims in the future,
that insurance will be available as expected or that
unanticipated damages or settlements in the future would not
exceed insurance coverage.

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

None during the fourth quarter of 2001

Item 5. Market for
Registrants Common Equity and Related Stockholder
Matters

The Companys Common Stock has been traded
on the New York Stock Exchange under the symbol CKC
since July 7, 1994. At March 20, 2002, there were
approximately 12,000 beneficial holders. The

13



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##### Table of Contents



following table lists the high and low closing
prices for the Common Stock for the full quarterly periods
during the two most recent years.


|               |  |      |         |      |  |      |        |     |  |  |        |  |  |  |        | 
|-------------- |  | ---- | ------- | ---- |  | ---- | ------ | --- |  |  | ------ |  |  |  | ------ | 
|               |  |      |         |     
|               |  | 2001 |         | 2000
|               |  |      |         |     
|               |  | High |         | Low  |  | High |        | Low
|               |  |      |         |      |  |      |        |    
|First Quarter  |  |      | 5.6875  |      |  |      | 3.5800 |     |  |  | 6.1250 |  |  |  | 4.5000 | 
|Second Quarter |  |      | 6.2000  |      |  |      | 4.0500 |     |  |  | 7.0000 |  |  |  | 5.1250 | 
|Third Quarter  |  |      | 8.5700  |      |  |      | 3.9500 |     |  |  | 6.1250 |  |  |  | 4.6875 | 
|Fourth Quarter |  |      | 10.3000 |      |  |      | 4.7600 |     |  |  | 4.9375 |  |  |  | 2.8750 | 

During the first quarter of 2001, Heartland
acquired a controlling interest in the Company. As part of the
transaction, Heartland purchased 25 million shares of
common stock (of which approximately 8.49 million shares
were treasury shares) directly from the Company. Heartland is
entitled to designate a majority of the Companys Board of
Directors. Mr. McCallum and Mr. Becker were elected to
the Board of Directors and Textron has the right to name one of
the directors. Heartland has been a significant source of recent
equity financing. There can be no assurances that Heartland will
provide us with additional equity financing in the future. The
Company also issued 79.8 million shares of common stock in
relation to the acquisition of Becker Group, LLC, Joan Fabrics
and Tac-Trim. See Note 3, Acquisitions and Joint
Ventures of the financial statements included in this
report.

On December 31, 2001, Heartland owned
approximately 40% of the outstanding shares; Blackstone Partners
and WP Partners owned approximately 15%; Joan Fabrics Corp. and
Mr. Elkin McCallum and associates owned approximately 8%;
Mr. Charles E. Becker approximately 11% and Textron
owned approximately 11%.

Although the Companys common stock is
publicly traded, the small public float of C&A common stock
and registration rights granted to certain C&A stockholders,
may preclude C&A from being able to issue common stock in a
future public offering. Blackstone and certain of its
affiliates, Wasserstein and certain of its affiliates, Heartland
and certain of its affiliates, Charles E. Becker, Joan
Fabrics Corporation, Textron and certain other co-investors in
the TAC-Trim acquisition are entitled to demand registration
rights and piggy-back registration rights at various
times with respect to Company common stock held by them. Based
on a review of Schedule 13Ds filed by the respective
parties through March 20, 2002 and other information
available to the Company, these parties, in the aggregate, hold
approximately 160 million shares of Company common stock.

The Company has paid no dividends or made similar
distributions with respect to its common stock during 2001. Any
payment of future dividends and the amounts thereof will be
dependent upon the Companys earnings, financial
requirements and other factors deemed relevant by the
Companys Board of Directors. Certain restrictive covenants
contained in the agreements governing the Companys credit
facilities and senior subordinated notes limit the
Companys ability to make dividend and other payments. See
ITEM 7. Managements Discussion and
Analysis of Financial Condition and Results of
Operations  Liquidity and Capital Resources and
Note 10, Long-Term Debt, Mandatorily Redeemable
Preferred Stock and Short-Term Borrowings of the financial
statements included in this report.

14



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Item 6.     Selected
Financial Data

|                                         |                                                                                                     |                       |   |                                      |   |              |   |              |   |              |   |         |   |  |   |         |   |  |   |         |  
|---------------------------------------- | --------------------------------------------------------------------------------------------------- | --------------------- | - | ------------------------------------ | - | ------------ | - | ------------ | - | ------------ | - | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                         |                                                                                                     |                      
|                                         |                                                                                                     | Fiscal Year Ended (1)
|                                         |                                                                                                     |                      
|                                         |                                                                                                     | December 31,          |   | December 31,                         |   | December 25, |   | December 26, |   | December 27,
|                                         |                                                                                                     | 2001                  |   | 2000                                 |   | 1999         |   | 1998         |   | 1997        
|                                         |                                                                                                     |                       |   |                                      |   |              |   |              |   |             
|                                         |                                                                                                     |                       |   |                                      |   |             
|                                         |                                                                                                     |                       |   | (in millions, except per share data) |   |             
|Statement of Operations Data:            |                                                                                                     |                       |   |                                      |   |              |   |              |   |              |   |         |   |  |   |         |   |  |   |        
|                                         | Net Sales                                                                                           |                       | $ | 1,823.3                              |   |              | $ | 1,901.8      |   |              | $ | 1,898.6 |   |  | $ | 1,825.5 |   |  | $ | 1,629.3 |  
|                                         | Gross Margin                                                                                        |                       |   | 218.8                                |   |              |   | 266.6        |   |              |   | 284.7   |   |  |   | 248.2   |   |  |   | 233.2   |  
|                                         | Selling, general and administrative expenses
	(excluding goodwill amortization)                     |                       |   | 157.3                                |   |              |   | 151.4        |   |              |   | 145.8   |   |  |   | 142.7   |   |  |   | 119.4   |  
|                                         | Restructuring charge and impairment of long-lived
	assets (2)                                       |                       |   | 18.8                                 |   |              |   |             |   |              |   | 33.4    |   |  |   |        |   |  |   | 22.6    |  
|                                         | Goodwill amortization                                                                               |                       |   | 7.1                                  |   |              |   | 7.1          |   |              |   | 7.0     |   |  |   | 7.0     |   |  |   | 6.7     |  
|                                         | Operating income                                                                                    |                       |   | 35.6                                 |   |              |   | 108.1        |   |              |   | 98.5    |   |  |   | 98.5    |   |  |   | 84.5    |  
|                                         | Interest expense, net(3)                                                                            |                       |   | 84.3                                 |   |              |   | 96.6         |   |              |   | 92.1    |   |  |   | 82.0    |   |  |   | 77.6    |  
|                                         | Subsidiary Preferred Stock Requirements                                                             |                       |   | 2.4                                  |   |              |   |             |   |              |   |        |   |  |   |        |   |  |   |        |  
|                                         | Loss on sale of receivables(4)                                                                      |                       |   | 10.8                                 |   |              |   | 9.2          |   |              |   | 5.4     |   |  |   | 6.1     |   |  |   | 4.7     |  
|                                         | Income (loss) from continuing operations
	before Income taxes                                       |                       |   | (68.3                                | ) |              |   | 0.8          |   |              |   | (1.2    | ) |  |   | 5.2     |   |  |   | 2.9     |  
|                                         | Income tax expense (benefit)                                                                        |                       |   | (18.6                                | ) |              |   | 2.2          |   |              |   | 0.2     |   |  |   | 5.3     |   |  |   | 13.0    |  
|                                         | (Loss) from continuing operations                                                                   |                       |   | (49.7                                | ) |              |   | (1.4         | ) |              |   | (1.4    | ) |  |   | (.1     | ) |  |   | (10.1   | )
|                                         | Income from discontinued operations, including
	disposals, net of income taxes                      |                       |   | 8.8                                  |   |              |   | 6.6          |   |              |   |        |   |  |   |        |   |  |   | 166.0   |  
|                                         | Income (loss) before extraordinary items and
	cumulative effect of a change in accounting principle |                       |   | (40.9                                | ) |              |   | 5.2          |   |              |   | (1.4    | ) |  |   | (.1     | ) |  |   | 156.0   |  
|                                         | Net income (loss)(5)                                                                                |                       |   | (46.2                                | ) |              |   | 4.5          |   |              |   | (10.2   | ) |  |   | (3.8    | ) |  |   | 155.2   |  
|Per Share Data:                          |                                                                                                     |                       |   |                                      |   |              |   |              |   |              |   |         |   |  |   |         |   |  |   |        
|                                         | (Loss) from continuing operations per basic and
	diluted share                                      |                       |   | (0.51                                | ) |              |   | (0.03        | ) |              |   | (0.02   | ) |  |   |        |   |  |   | (0.15   | )
|                                         | Dividends per share                                                                                 |                       |   |                                     |   |              |   |             |   |              |   | 0.81    |   |  |   |        |   |  |   |        |  
|Balance Sheet Data (at period end):      |                                                                                                     |                       |   |                                      |   |              |   |              |   |              |   |         |   |  |   |         |   |  |   |        
|                                         | Total assets                                                                                        |                       | $ | 2,993.4                              |   |              | $ | 1,280.3      |   |              | $ | 1,348.9 |   |  | $ | 1,382.2 |   |  | $ | 1,302.4 |  
|                                         | Long-term debt, including current portion                                                           |                       |   | 1,301.9                              |   |              |   | 884.0        |   |              |   | 912.5   |   |  |   | 866.0   |   |  |   | 772.9   |  
|                                         | Common stockholders equity (deficit)                                                               |                       |   | 374.7                                |   |              |   | (154.9       | ) |              |   | (151.1  | ) |  |   | (79.8   | ) |  |   | (66.9   | )
|Other Data (from Continuing Operations): |                                                                                                     |                       |   |                                      |   |              |   |              |   |              |   |         |   |  |   |         |   |  |   |        
|                                         | Capital expenditures                                                                                |                       | $ | 54.5                                 |   |              | $ | 69.0         |   |              | $ | 86.4    |   |  | $ | 95.8    |   |  | $ | 56.5    |  
|                                         | Depreciation and amortization                                                                       |                       |   | 81.8                                 |   |              |   | 74.8         |   |              |   | 71.5    |   |  |   | 67.1    |   |  |   | 58.8    |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The year 2001 was a calendar year; fiscal year
	2000 had 53 weeks; all other fiscal years had 52 weeks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(2) | In 2001, the Company recorded a restructuring
	charge consisting of $7.6 million in asset impairments and
	$11.2 million primarily related to severance accruals. In
	1999, the Company recorded a restructuring charge consisting of
	$13.4 million in asset impairments and $20.0 million
	primarily related to severance accruals. In 1997, the Company
	wrote down fixed assets by $5.1 million and reduced
	goodwill by $17.5 million to reflect impairments in the
	carrying values of certain assets and goodwill associated with
	two of its manufacturing facilities.

15



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|    |                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Excludes amounts allocated to discontinued
	operations totaling $12.5 million in 1997. No amounts were
	allocated to discontinued operations in 2001, 2000, 1999 and
	1998.
|   
|(4) | Excludes amounts allocated to discontinued
	operations totaling $0.6 million in 1997. No amounts were
	allocated to discontinued operations in 2001, 2000, 1999 and
	1998. 
|   
|(5) | In 1999, the Company recorded an
	$8.8 million charge for the cumulative effect of a change
	in accounting principle related to start-up costs.                            

Item 7.     Managements
Discussion and Analysis of Financial Condition and Results of
Operations

General

The Company is a global leader in the design,
engineering and manufacturing of automotive interior components,
including instrument panels, fully assembled cockpit modules,
floor and acoustic systems, automotive fabric, interior trim and
convertible top systems. The Company has the number one or two
North American market share position in seven out of ten major
automotive interior categories tracked by CSM Worldwide and is
also the largest North American supplier of convertible top
systems. As a result of the TAC-Trim acquisition, the Company
became a leading global supplier of fully assembled cockpit
modules, a growing market segment. Sales are primarily made to
North American and European automotive OEMs and Tier I total
interior integrators. In North America, the Company manufactures
components for approximately 90% of all light vehicle production
platforms. The automotive supply industry in which the Company
competes is cyclical and is influenced by the level of North
American and European vehicle production.

The Companys net sales in 2001 were
$1,823.3 million compared to $1,901.8 million in 2000.
In fiscal year 2000, the Company changed its year-end to a
calendar year-end. The 2000 fiscal year consisted of
53 weeks. Capitalized terms that are used in this
discussion and not defined herein have the meanings assigned to
such terms in the Notes to Consolidated Financial Statements.

In February 2001, Heartland acquired a
controlling interest in C&A. Heartland is a private equity
firm formed to focus on investments in industrial companies. As
a result of the transaction, Heartland is entitled to designate
a majority of the Companys Board of Directors.
Heartlands strategy is to facilitate the growth of its
controlled companies through acquisitions and internal growth.
Since Heartlands initial investment in February 2001, the
Company has aggressively pursued acquisitions in furtherance of
its strategy to become a prime contractor to Tier I integrators
and OEMs.

Recent Acquisitions

The Company completed three key acquisitions in
2001. The acquisition of Becker Group L.L.C. (Becker), a leading
supplier of plastic components to the automotive industry, was
completed in July 2001; the acquisition of Joan Automotive
Fabrics (Joan), a leading supplier of body cloth to the
automotive industry, and Joans affiliated yarn dyeing
operation, Western Avenue Dyers, L.P., in September 2001. The
Becker and Joan acquisitions were financed through issuances of
the Companys common stock, warrants to purchase the
Companys common stock, cash on hand and borrowings under a
revolving credit facility and sales of the acquired
companies accounts receivable under the receivables
facility. The TAC-Trim acquisition completed in December 2001,
the refinancing of the Companys then existing credit
agreement and the replacement of the receivables facility were
funded through the offering of $500 million in notes, the
issuance of $160 million of the Companys common stock
for cash, borrowings under a new senior secured credit facility
and sales of receivables under a new receivables facility. The
Company also issued to Textron, the seller, 18 million
shares of the Companys common stock and 0.3 million
shares of preferred stock with an estimated fair value at the
time of the acquisition of $160.9 million and
$146.8 million respectively. Commitments under the new
senior secured credit facility total $575.0 million, and
are comprised of $400.0 million of term loans, and a
$175.0 million revolving credit facility that allows
funding of up to $75.0 million for Canadian subsidiaries in
Canadian dollars.

These acquisitions and financing transactions
will substantially increase revenues and cash flow and have
materially altered the Companys capital and operating
structure. As a result of these acquisitions and

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financing transactions, historical results of
operations are not necessarily indicative of future results and
will not be comparable. Key ratios and indicators may change as
a result of the acquisitions. For example, while cockpit sales
are expected to comprise an increasing portion of gross
revenues, cockpits generally have a lower gross margin,
partially offset by lower selling, general and administrative
expenses. The cockpit business is generally less asset-intensive
then the Companys traditional businesses. Additionally,
the integration of these three acquisitions into the Company
will be challenging and the Company may not realize any or all
of the cost savings or benefits that it expects.


Results of Operations



| |                      
| | ---------------------
| | 2001 Compared to 2000

Net Sales:Net sales
for 2001 decreased 4.1% to $1,823.3 million, down
$78.5 million from 2000. Excluding the favorable impact of
sales from acquired businesses during 2001 of approximately
$127.2 million, net sales would have decreased 10.8%. The
reduction in net sales, excluding the effect of acquisitions,
was primarily driven by a decrease in North American vehicle
production of 10% versus 2000. The Company was particularly
adversely impacted by the recession and declining consumer
confidence as well as by the recent terrorist attacks in the
United States. These factors led to substantially reduced
inventory levels at the Companys customers in the fourth
quarter as customers sold vehicles in an uncertain and difficult
economic environment. Sales for the 2001 period were also
impacted by customer price reductions, and weaker Canadian and
European currencies, partially offset by increased content and
volume on certain North American vehicles.

Net sales for North America Automotive Interior
Systems (NAAIS) during 2001 were down 2.6% to
$1,145.0 million, a decrease of $30.6 million from
fiscal 2000. Excluding the favorable impact of sales from the
Tac-Trim and Becker acquisition during 2001 of approximately
$95.8 million, net sales would have decreased 10.8%. While
the decline in net sales, excluding the effect of the Becker
acquisition, is consistent with North American vehicle
production, we benefited from increased acoustics content on the
Ford Explorer and Chrysler Minivans, and higher volumes on
GMs GMT 800 Series trucks versus the prior year. These
increases were more than offset by greater volume reductions on
the Cadillac Deville and other GM passenger cars, and the Ford
Taurus and Econoline, where the Company has significant plastics
content.

Net sales for European Automotive Interior
Systems (EAIS) were down $26.3 million to
$258.2 million during 2001, a decrease of 9.2% from fiscal
2000. The decrease in Europe was primarily due to the negative
impact caused by changes in foreign currency exchange rates and
customer price reductions. In addition, certain unprofitable
product lines divested in the second half of 2000 as part of the
closure of the Vastra Frolunda plant in 2000 accounted for the
remaining decline in 2001.

Net sales for the Specialty Automotive Products
division decreased 4.9% to $420.1 million in 2001, down
$21.6 million from 2000. Excluding the favorable impact of
sales from the Joan acquisition during 2001 of approximately
$31.4 million, net sales would have decreased 12.0%. The
decrease, excluding the impact of the Joan acquisition, was due
primarily to lower North American vehicle production and a
reduction in headliner fabric business offset partially by
increased Chrysler Sebring and Ford Thunderbird convertible
volumes, as compared to fiscal 2000.

Gross Margin:For
2001, gross margin was 12.0%, down from 14.0% in 2000. This
decrease is primarily a result of decreased operating leverage
related to lower volumes in both North America and Europe.
Additionally, during 2001 gross margin was adversely impacted by
the following items:



| |   |                                                                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | TAC-Trim Acquisition:Due to the closing of the TAC-Trim
	acquisition on December 20, 2001, the Company incurred
	eleven days of fixed costs during a normal industry shutdown
	period with less than $6 million in sales. This resulted in
	a gross margin loss for the eleven days of $4.2 million.   
|
| |  | Launch Costs:The
	Company incurred launch costs during the second and third
	quarters of 2001 related to the Ford Thunderbird convertible
	program in the Companys Specialty Automotive Products
	division. In Europe, the Companys plastics facility in the
	UK experienced difficulties principally

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| |   |                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | related to an outside paint supplier on the
	launch of the new BMW R50 (Mini) program during the second half
	of 2001.                                                                                                                 
|
| |  | Integration Costs:The Company incurred $2.5 million
	of costs during the fourth quarter of 2001 related to
	acquisition integration. The majority of these costs related to
	the Becker and Joan acquisitions.                         
|
| |  | Facility Closure Costs:In addition, during 2001, the Company
	incurred $2.5 million of costs related to the sale of the
	retail/commercial floormat business in North America and the
	shutdown of a small accessory floormat facility.

These unfavorable items as well as the impact of
customer price reductions were partially offset by purchasing
savings, commercial recoveries and improvements in operating
performance at NAAIS and our fabrics operations.

Selling, General and Administrative
Expenses:Selling, general and
administrative expenses for 2001 were $164.4 million,
compared to $158.5 million in 2000. Relative to 2001, the
comparable 2000 period included an extra week of costs due to
the fiscal year change mentioned earlier. The increase is
primarily due to additional costs assumed from acquisitions
($7.4 million), credits in 2000 relating to a pension
related actuarial benefit and the sale of property (totaling
$2.0 million) and additional expense in 2001 related to
management incentive compensation plans of $3.0 million.
These items more than offset the benefit in 2001 of cost
reductions from earlier restructuring programs and reduced
spending. As a percentage of sales, selling, general and
administrative expenses were 9.0% and 8.3% for 2001 and 2000,
respectively.

Restructuring
Charge:During 2001, the Company
undertook two restructuring programs resulting in charges
totaling $18.8 million. The goal of the first quarter of
2001 restructuring program (charge of $9.2 million) was to
de-layer management in the North American, European and
Specialty operations. The second program resulted in a fourth
quarter charge of $9.6 million. The objective of this
program was to downsize three facilities in North America via
better utilization of manufacturing and warehouse floor space
(including associated headcount reductions) and to reduce
headcount in our Mexican operations. The pre-tax
$18.8 million charge includes $11.2 million of
severance costs and $7.6 million of asset impairment
charges.

Operating Income Highlights by
Division:Operating income at NAAIS
declined to $73.9 million for 2001 from $87.2 million
for the prior year. The decline in NAAIS operating income
primarily reflected the impact of lower North American
production volumes as well as customer price reductions and
restructuring charges, partially offset by purchasing savings
and improvements in operating performance at certain carpet and
acoustic facilities in the United States. The results for 2001
also included costs of $3.2 million related to the sale of
the retail/commercial floormat business and the shutdown of a
small accessory floormat facility. These items were somewhat
offset by commercial recoveries, changes in customer pricing
accruals, incremental operating income from the Becker
acquisition and benefits from restructuring actions.

Operating income at EAIS declined to a loss of
$22.3 million for 2001 from income of $1.1 million for
2000. The decline in EAIS operating income primarily reflected
the impact of product mix and customer price reductions along
with the recognition of restructuring charges. Additionally,
EAIS operating performance was adversely impacted by launch
costs associated with the BMW R50 (Mini) during the second half
of 2001 as well as a $1.1 million loss on the sale of a
small metal pressing operation in the UK in the third quarter of
2001. Benefits from earlier restructuring programs and
purchasing savings reduced the negative impact of these items.

Operating income at the Specialty Automotive
Products division declined to $13.0 million for 2001 from
$22.8 million for 2000. The decline in Specialty Automotive
Products division operating income primarily reflects expenses
incurred due to the ramp-up of the Chrysler Sebring convertible
in the early part of 2001, the start-up of the new Ford
Thunderbird convertible in mid-year 2001 and the impact of
restructuring charges. Margins, as a percentage of sales, for
the fabrics business remained consistent with 2000, as better
operating performance and benefits of added volume from the Joan
acquisition offset the margin impact of lower net sales driven
by lower industry production and reduction in headliner fabric
business.

18



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##### Table of Contents



Interest Expense:Interest expense for 2001 decreased $12.3 million to
$84.3 million as compared to 2000. The decrease in interest
expense is primarily attributed to lower average debt balances
resulting from the Heartland Transaction, and lower borrowing
rates in North America partially offset by increased
amortization of debt issue costs resulting from the Heartland
Transaction. The benefit of working capital reductions and sale
and leaseback transactions also offset increased borrowings
related to acquisitions.

Loss on Sale of
Receivables:The Company sells on a
continuous basis, through its Carcorp subsidiary, an interest in
a pool of accounts receivable. In connection with the sale of
accounts receivables, a loss of $10.8 million was
recognized during 2001, compared to a loss of $9.2 million
for 2000. Included in the 2001 and 2000 losses were up-front
fees related to the new accounts receivable facilities put in
place during both periods. In December 2001, the Company entered
into a new larger facility in connection with the TAC-Trim
acquisition, resulting in up-front fees of $5.6 million.
During the first quarter of 2000, the Company incurred fees of
$1.6 million associated with a new accounts receivable
securitization replacing one that had expired. Excluding these
expenses, the remaining decrease of $2.4 million, is
primarily due to lower interest rates during 2001.

Subsidiary Preferred Stock
Requirements:The Companys
subsidiary, Collins & Aikman Products Co. (C&A
Products) issued to the seller preferred stock with a
$326 million liquidation value and an estimated fair market
value of $146.9 million in connection with the TAC-Trim
acquisition. The 2001 charge represents dividends accrued of
$1.5 million and accretion of discount of $0.9 million.

Other Expense
(Income):The Company recognized other
expense of $6.4 million in 2001, compared to other expense
of $1.5 million in 2000. The increase in other expense
resulted primarily from an $8.1 million loss on the sale
and leaseback of real estate transactions completed during the
second and fourth quarters of 2001, offset by a gain of
$6.1 million on shares received as result of the Prudential
Financial demutualization and Initial Public Offering. The
remaining increase in expense is primarily due to higher foreign
currency transaction losses.

Income Taxes:The
Company recognized an income tax benefit of $18.6 million
in 2001 compared to an income tax expense of $2.2 million
in 2000. The overall effective tax rate for 2001 was
27.2 percent compared to 276 percent for 2000. Certain
state taxes and permanent differences, that do not fluctuate
with income, such as non-deductible goodwill and dividends and
accretion of preferred stock impacted the effective rate by:
(1) reducing the effective tax rate when a loss exists and
a tax benefit is recorded, or (2) increasing the effective
tax rate when we have income and tax expense is recorded.

Discontinued
Operations:During 2001, the Company
received payments on environmental claims related to
discontinued operations of $14.5 million. During 2000, the
Company settled claims for certain other environmental matters
for $20.0 million. In fiscal 2001 and 2000,
$8.8 million and $6.6 million were recorded as income
from discontinued operations, respectively, net of income taxes
of $5.7 million and $4.4 million, respectively.

Extraordinary
Charge:During 2001 and 2000, the
Company recognized extraordinary charges of $5.3 million
and $0.7 million, respectively. Of the 2001 charge,
$5.0 million represents a charge off of debt issue costs
associated with our old credit facility, which was replaced by a
new credit facility entered into in conjunction with the
Companys TAC-Trim acquisition. In addition, during 2001
and 2000 charges were recorded in connection with the repurchase
of JPS Automotive Senior Notes at prices in excess of carrying
values of $0.3 million and $0.7 million, respectively.

Net Income:The
combined effect of the foregoing resulted in a net loss of
$46.2 million for 2001, compared to net income of
$4.5 million in 2000.

2000 Compared
to 1999

The Companys 2000 fiscal year consisted of
53 weeks as compared to a 52-week year in fiscal 1999.
Therefore, all sales and associated costs and expenses were
impacted by the longer reporting period in fiscal 2000. In a
53-week year, the Companys policy is to include the
additional week in the first quarter of the year.

19



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##### Table of Contents



Net Sales:Net sales
of $1,901.8 million for 2000 were relatively flat compared
to the prior year. Net sales for the NAAIS division increased
2.1% to $1,175.6 million, up $23.9 million from 1999.
The increase in sales was primarily driven by higher industry
production volume as well as a favorable product mix. Net sales
for the EAIS division decreased 7.1% to $284.5 million,
down $21.9 million from 1999. This decrease was primarily
due to the negative impact of foreign currency translation
offset by slightly higher industry production volume. Net sales
for the Specialty Automotive Products division were relatively
flat with the prior year at $441.7 million. Production
volume increases in the fabrics business were offset largely by
lower convertible volumes, primarily due to a reduction in
Chrysler Sebring production levels.

Gross Margin:Gross
margin was 14.0% in 2000, down from 15.0% in 1999. This decrease
was primarily due to one-time costs related to various
commercial customer recovery issues, performance issues at the
Springfield operation, certain asset write-offs, lower
convertible build volumes and operating issues relating to the
relocation of headliner production to the Farmville facility.
These decreases were partially offset by the benefits recognized
from a restructuring program implemented in 1999 and 2000 and
improved performance at the Manchester, Michigan plastics
facility.

Selling, General and Administrative
Expenses:Selling, general and
administrative expenses increased 3.8% to $158.6 million,
up $5.8 million from 1999. The increase is primarily due to
one-time costs related to the aforementioned commercial customer
recovery issues and the impact of an additional week in the
first quarter of fiscal 2000 partially offset by one-time
pension-related actuarial benefits driven by the restructuring
program and the reduction of the Companys bonus accrual.
As a percentage of sales, selling, general and administrative
expenses increased to 8.3% in 2000, compared to 8.0% in 1999.

Operating Income Highlights by
Division:Operating income for the
NAAIS division decreased by 2.5% to $87.2 million,
operating income for the EAIS division decreased to
$1.1 million from $2.3 million and operating income
for the Specialty Automotive Products division decreased by
42.4% to $22.8 million for the reasons described above.

Restructuring
Charge:the Company recognized a
$33.4 million charge in 1999 relating to its 1999
reorganization plan.

Interest Expense:Interest expense, net of interest income of $3.4 million
and $2.5 million in 2000 and 1999, respectively, increased
$4.6 million to $96.6 million in 2000. The increase is
primarily attributed to higher average interest rates and higher
average debt balances in 2000. The weighted average interest
rates were 10.0% and 9.6% at December 31, 2000 and
December 25, 1999, respectively.

Loss on the Sale of
Receivables:In connection with
receivables sales, a loss of $9.2 million was recognized in
2000, compared to a loss of $5.4 million in 1999. During
the first quarter of 2000, the Company entered into a new
accounts receivable securitization arrangement resulting in
one-time expenses for initial fees totaling $1.6 million.
The remaining increase is due to higher interest rates and
increased sales of eligible receivables. The prior
securitization facility expired and a new facility came into
effect on December 27, 1999.

Other Expense:The
Company recognized other expense of $1.5 million, compared
to other expense of $2.2 million in 1999. The decrease is
primarily due to lower option premiums resulting from a lower
volume of hedging activity in 2000 offset, partially by
increased foreign exchange transaction losses and higher losses
from joint ventures in 2000.

Income Taxes:The
Company recognized income tax expense of $2.2 million in
2000, compared to income tax expense of $0.2 million in
1999. The Companys effective tax rate was 276% in 2000,
compared to (22%) in 1999. The increase in the Companys
effective tax rate is primarily due to the impact of prior year
non-recurring tax credits, along with the effects of certain
state taxes and non-deductible goodwill, which do not fluctuate
with income.

Discontinued
Operations:In 2000, the Company
settled environmental claims related to discontinued operations
for a total of $20 million. Of this amount,
$6.6 million was recorded as income from discontinued
operations, net of income taxes of $4.4 million.

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Extraordinary
Charge:In 2000, the Company
recognized an extraordinary charge of $0.7 million, net of
income taxes of $0.5 million, in connection with the
repurchase of $38 million principal amount of JPS
Automotive Senior Notes on the market at prices in excess of
carrying values.

Cumulative Effect of a Change in Accounting
Principle:The Company adopted the
provisions of Statement of Position No. 98-5,
Reporting on the Cost of Start-Up Activities
(SOP 98-5) at the beginning of 1999.
SOP 98-5 provides guidance on the financial reporting of
start-up costs and organization costs and requires that all
non-governmental entities expense the costs of start-up
activities as these costs are incurred instead of being
capitalized and amortized. The cumulative effect of adopting SOP
98-5 resulted in a charge of $8.8 million, net of income
taxes of $5.1 million, in 1999.

Net Income (Loss):The combined effect of the foregoing resulted in net income of
$4.5 million in 2000, compared to a net loss of $(10.2)
million in 1999, which included a restructuring charge of
$33.4 million.

Liquidity and Capital Resources

The Company and its subsidiaries had cash and
cash equivalents totaling $73.9 million and $20.9 million
at December 31, 2001 and December 31, 2000,
respectively. The Company had $253.1 million of unutilized
availability under its credit facility and the accounts
receivable facility as of December 31, 2001. The total was
comprised of $106.4 million under the Companys
revolving credit facility (including $75.0 million
available to certain Canadian subsidiaries), $118.6 under the
accounts receivable facility and approximately
$28.1 million under bank demand lines of credit in Canada,
Austria, South America and other European locations.
Availability under the revolving credit facility was reduced by
outstanding letters of credit of $68.6 million as of
December 31, 2001.

The Companys principal source of funds is
cash generated from continuing operating activities, borrowings
under credit agreement facilities, and the sale of accounts
receivable under accounts receivable facilities and the issuance
of common stock. The Company continues to seek means to generate
additional cash for debt reduction and its growth strategy.
Among other things, the Company seeks to further improve working
capital management and continue to utilize a lease financing
strategy.

Operating
Activities

Net cash provided by the continuing operating
activities of the Company was $131.4 million for the year
ended December 31, 2001, compared to $130.9 million
for the year ended December 31, 2000. The increase in cash
provided by operating activities is due primarily to the
increase in cash generated from reductions in working capital
(primarily facilitated by receivable collections at TAC-Trim and
a decrease in inventory volumes), partially offset by a decrease
in income from continuing operations.

Investing
Activities

During 2001, C&A Products entered into sale
and leaseback transactions that generated net proceeds of
$86.2 million. See the information under the heading
 Leases for additional discussion.

As discussed above in  Recent
Acquisitions, during 2001 the Company completed several
key acquisitions. Cash consideration, net of cash received and
including acquisition fees, was $61.8 million for Becker,
$102.0 million for Joan and $589.4 million for
TAC-Trim.

Additional acquisition costs in the amount of
$7.3 million resulted from purchasing the remaining 50%
interest of a joint venture established in the UK to manufacture
automotive interior fabrics and the acquisition of the remaining
25% interest in Collins & Aikman Carpet and Acoustics, SA.
De C.V (an automotive supply operation primarily of acoustical
and plastic components in Sweden, Belgium and France).

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Financing
Activities

At December 31, 2001, the Company had total
outstanding indebtedness of $1,301.9 million (excluding
short-term borrowings and approximately $68.6 million of
outstanding letters of credit) at a weighted average interest
rate of 9.82% per annum. Comparatively, at December 31,
2000, the Company had total indebtedness of $884.0 million.

During 2001, Heartland, and certain other
investors, acquired 57.0 million shares of common stock
from the Company at a price of $5.00 per share, representing a
cash investment in the Company of $285.0 million before
fees and expenses. Net proceeds paid to the Company from the
equity transactions were $264.3 million. A portion of the
proceeds were used to pay $10.7 million in transaction
related costs to obtain change in control consents, fees related
to term loan facilities and other amendments to credit agreement
facilities. The remaining proceeds of $253.6 million were
used to pay down a revolving credit facility and to fund part of
the TAC-Trim acquisition.

During 2001, C&A Products used proceeds from
an amended and restated credit facility to retire all
outstanding JPS Automotive 11 1/8% Senior Notes. The notes
which were due June 2001, were repaid in full on March 28,
2001, at a redemption price equal to their principal amount with
interest accrued to the redemption date. The Company recognized
an extraordinary charge of $0.3 million in connection with
this repurchase of the remaining outstanding JPS Automotive
Senior Notes at prices in excess of carrying values. The amended
and restated credit facility was repaid during 2001 with
proceeds from various financing arrangements that the Company
entered into as part of the TAC-Trim acquisition. These
financing arrangements included entering into new Senior Credit
Facilities and a new Receivables Facility along with the
issuance of preferred stock of a subsidiary and Senior Notes due
in 2011.

The new senior credit facility consists of a
revolving credit facility and tranche A and tranche B
term loan facilities. The revolving credit facility will provide
for revolving loans and extensions of credit up to a maximum
principal amount of $175.0 million. A portion of the
revolving credit facility will be available to Canadian
subsidiaries in Canadian dollars and a portion of the revolving
credit facility will be available in the form of letters of
credit. The tranche A facility is comprised of term loans
in an aggregate principal amount of $100.0 million and the
tranche B facility is comprised of term loans in an
aggregate principal amount of $300.0 million. The revolving
credit facility, the tranche A term loan and the tranche B term
loan mature in December 2005. Borrowings under the new senior
credit facilities will bear interest at variable rates based on
a spread to the adjusted LIBOR or a base rate, at our option. At
December 31, 2001 the company had $400 million in term
loans outstanding under this facility.

On an ongoing basis, the Company has entered into
an agreement to sell trade accounts receivable of certain
business operations to a bankruptcy-remote, special purpose
subsidiary, wholly owned by the Company. The Companys
receivables subsidiary will, subject to certain conditions, from
time to time, sell an undivided fractional ownership interest in
a pool of domestic and certain Canadian receivables, up to a
balance of $250 million, to bank-sponsored multi-seller
commercial paper conduits under a committed facility. As of
December 31, 2001, the Company had $118.6 million
undrawn under the receivables facility.

New receivables will be added to the pool as
collections reduce previously sold receivables. The Company
expects to service, administer and collect the receivables on
behalf of the receivables subsidiary and the conduits. The
proceeds of sale will be less than the face amount of accounts
receivable sold by an amount that approximates the
purchasers financing costs. The receivables facility has a
term of 364 days, extendible for additional 364-day periods
with the agreement of all parties. The new receivables facility
will be an important source of ongoing liquidity to the Company.
This facility could be extended on less favorable terms and if
it were not extended, the Company may be unable to obtain a
replacement facility or otherwise find an alternative source of
funds providing it with comparable liquidity.

C&A Products issued Textron 182,700 shares of
its series A redeemable preferred stock, 123,700 shares of
series B redeemable preferred stock and 20,000 shares of
series C redeemable preferred stock. The preferred stock
was recorded at its estimated fair value of $146.9 million,
which is less than the liquidation

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value of $1,000 per share or $326.4 million.
The estimated fair value is based on market prices for
securities with similar terms, maturities and risk
characteristics, and includes a liquidation discount to reflect
market conditions.


C&A Products also issued $500 million of
10 3/4% Senior Notes due in 2011 in connection with the
TAC-Trim acquisition. The Company also amended the existing
$400 million of 11 1/2% senior subordinated notes due
in 2006 to make each subsidiary guarantor of the Senior Notes a
senior subordinated guarantor of the existing notes.

Outlook

The Companys principal uses of funds from
operating activities and borrowings for the next several years
are expected to fund interest and principal payments on its
indebtedness, net working capital increases, costs associated
with the Companys previously divested businesses, capital
expenditures and lease expenses. The completion of the TAC-Trim
acquisition on December 20, 2001 significantly increased
debt levels and has added significant new liquidity requirements
in order to launch part of TAC-Trims projected new book of
business and to finance capital expenditures at TAC-Trim.
Management believes the recent inflow of capital, debt
financings and related refinancings of indebtedness provide
adequate sources of liquidity for the Company.

Contractual
Obligations:

Below is table that identifies the Companys
significant contractual obligations. Following the table is a
more detailed description of these obligations.

|                     |  |                       |         |           |  |           |      |           |  |               |       |  |  |   |       |  |  |   |       | 
|-------------------- |  | --------------------- | ------- | --------- |  | --------- | ---- | --------- |  | ------------- | ----- |  |  | - | ----- |  |  | - | ----- | 
|                     |  |                      
|                     |  | Payment due by Period
|                     |  |                      
|                     |  |                       |         | Less than |  |          
|                     |  | Total                 |         | 1 year    |  | 1-3 years |      | 4-5 years |  | After 5 years
|                     |  |                       |         |           |  |           |      |           |  |              
|                     |  |                      
|                     |  | (in Millions)        
|Long-Term Debt       |  | $                     | 1,301.9 |           |  | $         | 19.5 |           |  | $             | 51.4  |  |  | $ | 731.0 |  |  | $ | 500.0 | 
|Preferred Stock*     |  |                       | 326.4   |           |  |           |      |           |  |               |       |  |  |   |       |  |  |   | 326.4 | 
|Operating Leases     |  |                       | 284.0   |           |  |           | 57.2 |           |  |               | 94.1  |  |  |   | 47.5  |  |  |   | 85.2  | 
|Capital Expenditures |  |                       | 8.2     |           |  |           | 8.2  |           |  |               |       |  |  |   |       |  |  |   |       | 
|Total Obligations    |  | $                     | 1,920.5 |           |  | $         | 84.9 |           |  | $             | 145.5 |  |  | $ | 778.5 |  |  | $ | 911.6 | 



---



|  |                                                      
|- | -----------------------------------------------------
|* | Mandatorily Redeemable Preferred Stock of
	Subsidiary

Senior
Secured Credit Facilities

General:As noted in
the liquidity section, the Company entered into a new senior
secured credit facility that allows funding in the aggregate of
up to $575 million. Borrowings under the credit facility
are secured by all the assets of the Company and C&A
Products and certain subsidiaries of each, and are
unconditionally and irrevocably guaranteed jointly and severally
by the Company and each existing and subsequently acquired or
organized domestic subsidiaries (other than by the
Companys receivables subsidiary). Available funding under
this credit facility is reduced if the program size or
commitment level under the Companys new receivable
facility (discussed below) exceeds $250.0 million.

Interest Rates and Fees:Borrowings bear interest, at the
Companys option, at either (a) adjusted LIBOR plus a
3.75% margin in the case of the revolving credit and
tranche A facilities and 4.75% margin in the case of the
tranche B facilities, in all cases subject to a minimum
LIBOR of 3.00% or (b) the highest of (i) JPMorgan
Chase Banks prime rate, (ii) the federal funds
effective rate plus 1/2 of 1.00% and (iii) the base CD rate
plus 1.0%. A commitment fee on any unused commitments under the
revolving portion of the credit facility equal to 1% per annum
is payable quarterly in arrears and is subject to adjustment
based on attaining certain performance targets.

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Covenants:The
credit facility requires that the Company meet certain financial
tests, including, without limitation, the following tests: a
maximum leverage ratio, a minimum interest coverage ratio and
certain prescribed limitations on capital expenditures at levels
to be agreed upon between the Company and the agents. The credit
facility also contains customary covenants and restrictions,
including, among others, limitations or prohibitions on
declaring dividends and other distributions, redeeming and
repurchasing capital stock, prepaying, redeeming and
repurchasing other indebtedness, loans and investments,
additional indebtedness, liens, sale-leaseback transactions,
preferred stock, capital expenditures, recapitalizations,
mergers, acquisitions and asset sales and transactions with
affiliates.

Events of Default:The credit facility contains certain
customary events of default, including, among others
cross-default and cross-acceleration to other indebtedness
(including to the receivables facility).

11 1/2% Senior Subordinated Notes due
2006

C&A Products has outstanding
$400 million in principal amount of 11 1/2% senior
subordinated notes due 2006. In connection with the TAC-Trim
acquisition, the Company amended the indenture governing these
notes to make each subsidiary guarantor of the 10 3/4%
Senior Notes due in 2011 a guarantor of these notes on a senior
subordinated basis. The indenture governing these notes contains
restrictive covenants (including, among others, limitations on
indebtedness, restricted payments, liens, asset dispositions,
change of control and transactions with affiliates) that are
customary for such securities.

10 3/4% Senior Notes due 2011

As discussed above, in connection with the
TAC-Trim acquisition, Products sold $500,000,000 principal
amount of 10 3/4% senior notes due 2011. The indenture
governing these notes contains restrictive covenants (including,
among others, limitations on indebtedness, restricted payments,
liens, asset dispositions, change of control and transactions
with affiliates) that are customary for such securities.

Mandatorily Redeemable Preferred Stock of
Subsidiary

General:As
discussed above, as part of the consideration paid to Textron
for the TAC-Trim acquisition, C&A Products issued
mandatorily redeemable preferred stock to Textron with an
estimated fair market value of $146.9 million and a
liquidation value of $326.4 million.

Dividends:Holders
of this preferred stock are entitled to receive dividends
accruing on the liquidation preference thereof at a rate of
11% per annum, in respect of dividend periods ending on or
prior to July 1, 2003, and 15% per annum, in respect of
dividend periods ending after July 1, 2003, in the case of
the series A preferred stock, 12% per annum, in
respect of dividend periods ending on or prior to July 1,
2003, and 16% per annum, in respect of dividend periods
ending after July 1, 2003, in the case of the series B
preferred stock, 12% per annum, in respect of dividend
periods ending on or prior to July 1, 2003, and
16% per annum, in respect of dividend periods ending after
July 1, 2003 and in the case of the series C preferred
stock, in each case payable quarterly in arrears, commencing on
April 1, 2002 and accumulating from the date of issuance.
C&A Products may, at its option, elect to accrue up to an
amount equivalent to 7% per annum of the dividends on the
series A preferred stock, an amount equivalent to
8% per annum of the dividends on the series B
preferred stock and an amount equivalent to 8% per annum of the
dividends on the series C preferred stock in lieu of cash
payment of such dividends and, in each case, any accrued
dividends will be added to the liquidation preference of the
applicable series of preferred stock. Under certain
circumstances, C&A Products may, at its option, at all times
through and including January 1, 2004 accrue up to the full
amount of all dividends on the preferred stock in lieu of cash
payment of such dividends and, in each case, any accrued
dividends will be added to the liquidation preference of the
applicable series of preferred stock.

Liquidation Preference:Upon any voluntary or involuntary
liquidation, dissolution or winding-up of C&A Products,
holders of the preferred stock will be entitled to be paid out
of the assets of C&A Products available for distribution to
stockholders in the amount of $1,000 per share plus the
aggregate amount of accrued dividends prior to any distribution
to any holders of equity securities which rank junior to the
preferred stock. In addition, upon any voluntary or involuntary
liquidation, dissolution or winding-up of C&A

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Products, the holders of series C preferred
stock will be entitled to a participation in distributions to
C&A Products common equity tied to any appreciation in
the value of C&A Products common equity subsequent the
issuance date, not to exceed an aggregate of $2 million for
all series C preferred stock outstanding.


Mandatory
Redemption:C&A Products is
required to redeem all of the series A preferred stock and
series B preferred Stock outstanding on January 1,
2013 at a redemption price equal to 100% of the liquidation
preference thereof, plus accrued and unpaid dividends to the
date of redemption. C&A Products is also required to redeem
all of the series C preferred stock outstanding on
February 1, 2022 at a redemption price equal to 100% of the
liquidation preference thereof, plus accrued and unpaid
dividends to the date of redemption, plus common equity
participation.

Leases

During 2001, C&A Products entered into sale
and leaseback transactions for certain manufacturing equipment
and non-manufacturing properties. The transactions resulted in
the recognition of a $4.4 million net deferred asset that
is being amortized over the lease term, and the recognition of
an $8.7 million loss.

During 2001, the Company received net proceeds
(after fees) of approximately $86.2 million from sale and
leasebacks of real property and equipment, which it used to
reduce outstanding debt. The aggregate lease expenses associated
with these leases will be $88.8 million, $12.5 million
of which relates to 2002. To the extent permitted by the credit
facility, the Company may enter into additional similar leasing
arrangements from time to time. As part of these sale-leaseback
transactions, C&A Products sold and contemporaneously leased
back real property from unrelated third parties, and received
net proceeds (after fees) of $46.4 million.

In June 2001, the Company entered into
sale-leaseback transactions with each of New King, L.L.C.
(New King) and Anchor Court, L.L.C. (Anchor
Court), which are affiliates of Becker Ventures LLC.
Becker Ventures is controlled by Charles Becker, a Company
director. See the information under the heading
 Other Information  Effect of
Transactions with Related Parties.

In connection with these sale-leaseback
transactions, C&A Products sold and contemporaneously leased
back real property located in Troy, Michigan and Plymouth,
Michigan from New King and Anchor Court, respectively, for net
proceeds of $15.1 million in aggregate. The initial lease
term in each transaction is 20 years and each lease has two
successive ten year renewal options. The basic rent for the
Troy, Michigan property is $1.3 million per year, and the
basic rent for the Plymouth, Michigan property is
$.5 million per year. The rental rates in each case are
subject to adjustment after expiration of the initial term.

Prior to the TAC Trim acquisition, TAC-Trim
entered into an $86.9 million sale and leaseback
transaction (the Textron Leasing Transaction) with
two separate single purpose affiliates of Textron Financial
Corporation, as lessor and purchaser, with respect to a
portfolio of manufacturing equipment situated in different
locations throughout the United States and Canada. Payments
under the Textron leasing transaction are guaranteed by C&A
Products and secured by a first perfected mortgage lien over
certain real property with a value equal to $25 million.
Each lease is for an initial term of three years with three
one-year renewal options. As is customary, the documentation for
the Textron leasing transaction incorporates covenants by
reference, from the Companys credit facility, that may be
amended or waived by the senior lenders, and also contain events
of default. See the information under the heading
 Other Information  Effect of
Transactions with Related Parties.

The Company also has other equipment lease
agreements with several lessors that, subject to specific
approval, provide availability of funding for operating leases
and sale and leasebacks as allowed in its other financing
agreements.

Refer to Note 12, Leases of the
financial statements included in this report for information
regarding future minimum lease payments.

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Capital
Expenditures

The Company makes capital expenditures on a
recurring basis for replacements and improvements. During 2001,
the Company had approximately $54.5 million in capital
expenditures for continuing operations. Capital expenditures
will materially increase with the expanded book of business in
2002 and in future years will depend upon demand for our
products and changes in technology. Estimates for capital
expenditures in 2002 range from approximately $130 to
$150 million. A portion of capital expenditures may be
financed through leasing arrangements.

Sources of
Liquidity

The table below identifies the Companys
significant sources of liquidity:

|                             |  |                                    |       |           |  |           |       |           |  |               |   |  |  |   |       |  |  |   |   | 
|---------------------------- |  | ---------------------------------- | ----- | --------- |  | --------- | ----- | --------- |  | ------------- | - |  |  | - | ----- |  |  | - | - | 
|                             |  |                                   
|                             |  | Availability Expiration Per Period
|                             |  |                                   
|                             |  | Maximum                            |       |          
|                             |  | Amount                             |       | Less than |  |          
|                             |  | Available                          |       | 1 year    |  | 1-3 years |       | 4-5 years |  | After 5 years
|                             |  |                                    |       |           |  |           |       |           |  |              
|                             |  |                                   
|                             |  | (in millions)                     
|Receivable Facility          |  |                                    | 250.0 |           |  | $         | 250.0 |           |  |               |  |  |  |   |      |  |  |   |  | 
|Revolving Credit Facility(1) |  |                                    | 175.0 |           |  |           |      |           |  |               |  |  |  |   | 175.0 |  |  |   |  | 
|Lines of Credit              |  |                                    | 55.0  |           |  |           | 55.0  |           |  |               |  |  |  |   |      |  |  |   |  | 
|Total Available              |  | $                                  | 480.0 |           |  | $         | 305.0 |           |  |               |   |  |  | $ | 175.0 |  |  | $ |  | 



---



|    |                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------
|(1) | At December 31, 2001, $68.6 million of
	outstanding letters of credit reduce the maximum amount
	available under the Revolving Credit Facility.

Receivables
Facility

General:As
discussed above, in connection with the TAC-Trim acquisition,
the Company entered into an agreement to sell, on an ongoing
basis, the trade accounts receivable of certain business
operations to a bankruptcy-remote, special purpose subsidiary,
wholly owned and consolidated by the Company. The receivables
subsidiary (Carcorp) will, subject to certain conditions, from
time to time, sell an undivided fractional ownership interest in
a pool of domestic and certain Canadian receivables, up to
$250 million, to various multi-seller commercial paper
conduits supported by a committed liquidity facility. Upon sale
to the conduit, Carcorp will hold a subordinated retained
interest in the receivables. Under the terms of the agreement,
new receivables are added to the pool as collections reduce
previously sold receivables. The Company expects to service,
administer and collect the receivables on behalf of Carcorp and
the conduit. The proceeds of sale will be less than the face
amount of accounts receivable sold by an amount that
approximates the purchasers financing costs. The term of
the receivables facility will initially be 364 days, and
may be extended for additional 364-day periods with the
agreement of all parties.

Restrictions:This
receivables facility contains certain restrictions on Carcorp
(including maintenance of $60.0 million net worth) and on
the sellers (including limitations on liens on receivables,
modifications of the terms of receivables, and changes in credit
and collection practices) customary for facilities of this type.
The commitments under the receivables facility are subject to
termination prior to their term upon the occurrence of certain
events, including payment defaults, breach of covenants,
including defined interest coverage and leverage ratios,
bankruptcy, default by the Company in servicing the receivables
and failure of the receivables to satisfy certain performance
criteria.

Commercial
Commitments

Following is a discussion of significant
commercial commitments of the Company.

Letters of Credit:The Company acquired a 50% interest in
an unconsolidated Italian joint venture as part of the TAC-Trim
acquisition. The Italian joint venture will incur indebtedness
in connection with its ongoing capital expenditure program to
service three new vehicle lines of Fiat at Fiats Cassina
plant and other planned capital expenditures. The Company agreed
to initially issue letters of credit of up to $10.0 million
to

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support this debt. If such letters of credit are
drawn, there can be no assurance that this Italian joint venture
will have sufficient assets to reimburse the Company.


Put and Call Arrangement:The Company entered into a put and
call arrangement with respect to the 50% interest in the Italian
joint venture. The arrangement permits Textron to require the
Company to purchase Textrons interests in the joint
venture for an aggregate of approximately $23.1 million,
subject to an increase by $5.0 million under certain
circumstances, after the third anniversary of closing.
Additionally, the arrangement permits the Company to require
Textron to sell its interests in the joint venture to the
Company for fair market value following the third anniversary of
the closing. The Company cannot be sure that it will have
adequate liquidity to satisfy any put, or exercise any call, of
the Textron interest.

In addition, the Companys credit facility
may restrict such further acquisition or any further financing
of the joint venture. While the Company will be permitted, and
required, to provide certain guarantees and letters of credit
support, it may not be permitted to further finance the joint
venture and this may adversely affect the value of the interests
which the Company could be required to purchase at a fixed price
in the future.

Contingent Consideration and Purchase Price
Adjustments:Under the TAC-Trim
acquisition agreement, the purchase price paid by the Company is
subject to adjustment based upon working capital and debt levels
and the seller is entitled to a return of any cash left in the
business at closing and reimbursement of certain capital
expenditures made by it after September 30, 2001. These
payments may be considerable and are presently subject to review
under the terms of the acquisition agreement. Becker Ventures
holds 4.0 million shares of the Company which were acquired as
part of the financing for the TAC-Trim acquisition.
Mr. Becker is the managing member of Becker Ventures and
holds a controlling interest in Becker Ventures.

As part of the TAC-Trim acquisition agreement,
the Company may be obligated to make additional aggregate
payments to Textron of $15 million to $125 million in
the event that the Companys cumulative EBITDA (which is
defined in the purchase agreement to adjust for the expected
effect of acquisitions after the closing of the TAC-Trim
acquisition and the related financings) for the five year period
ending December 31, 2006 is between $2,908 million and
$4,691 million.

If the Companys material debt instruments
prohibit this payment, then it will be entitled to issue
additional preferred stock having terms equivalent to the
series B preferred stock, except that it will be required
to mandatorily redeem such preferred stock at its liquidation
preference, with accrued and unpaid dividends, at such time as,
and to the extent that, it is permitted to do so under our
material debt instruments. In addition, under the TAC-Trim
acquisition agreement, the Company is permitted to use the
Textron name for 18 months in exchange for
payments of $13.0 million on December 15, 2002 and
$6.5 million on December 15, 2003.

Other Information

Effects of Certain Transactions with Related
Parties

Heartland
Transactions

The Company is a party to a services agreement
with Heartland under which Heartland provides it with advisory
and consulting services, including services with respect to
developments in the automotive industry and supply markets,
advice on financial and strategic plans and alternatives and
other matters as it may reasonably request and are within
Heartlands expertise. The services agreement terminates on
the earlier of its 10th anniversary or the date upon which
Heartland ceases to own Company shares equivalent to 25% of that
owned by them on February 23, 2001.

Under the services agreement, the Company is
obligated to pay to Heartland a $4.0 million annual
advisory fee on a quarterly basis and to reimburse its
out-of-pocket expenses related to the services it provides. The
Company has also agreed to pay a fee of 1% of the total
enterprise value of certain acquisitions and dispositions. In
connection with Heartlands initial investment in the
Company on February 23, 2001, it paid Heartland a fee of
$12.0 million and reimbursed it for its reasonable
out-of-pocket expenses incurred in

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connection with its initial investment. A fee of
$12.5 million was paid by the company to Heartland as a
result of its advisory services in connection with the TAC-Trim
acquisition.


Charles E.
Becker Transactions

In July 2001, the Company completed the
acquisition of Becker. As a result of the Becker acquisition and
a purchase of Company common stock immediately afterwards,
Charles Becker became one of the Companys principal
stockholders. Charles Becker became Vice Chairman and a member
of the Companys Board of Directors upon closing of the
Becker acquisition. The Company agreed to make
$18.0 million in non-compete payments over five years to
Mr. Becker at the time of the acquisition. In addition,
Becker Ventures, an affiliate of Mr. Becker, acquired
additional shares of Company common stock as part of the
financings in connection with the TAC-Trim acquisition at a
price of $5.00 per share.

As discussed above under
Leases, the Company is a party to certain
sale-leaseback transactions with certain affiliates of Becker
Ventures LLC, an entity that is controlled by Charles Becker, a
director of the Company. The purpose of these sale-leaseback
transactions was to reduce the Companys outstanding debt.
The Company believes that the terms of the sale-leaseback
transactions with Becker Ventures are on terms substantially
similar to those which could have been negotiated in arms-length
transactions of the same type. These sale-leaseback transactions
were authorized by the independent members of the Companys
board of directors.

Elkin
McCallum Transactions

In September 2001, the Company completed the
acquisition of Joan Automotive Industries, a leading supplier of
bodycloth to the automotive industry, and all of the operating
assets of Joans affiliated yarn dying operation, Western
Avenue Dyers, L.P. As a result of the Joan acquisition, Joan
Fabrics Corp., a company controlled by Elkin McCallum, became a
principal stockholder of the Company. Upon completion of the
Joan acquisition, Mr. McCallum became a member of the
Companys Board of Directors.

In connection with the Joan acquisition, the
Company entered into a Supply Agreement dated September 21,
2001 (the Supply Agreement) with Main Street
Textiles, L.P. (Main Street). Main Street is
controlled by Elkin McCallum, a director of the Company. Under
the Supply Agreement, the Company agreed to purchase all of its
requirements for flat woven automotive fabric from Main Street
for a five year period beginning on the date of the Supply
Agreement. The prices which the Company will pay for fabric
under the agreement will equal the costs of the raw materials
plus an amount which represents Main Streets standard
labor and overhead costs incurred in manufacturing fabric for
us. During the term of the Supply Agreement, Main Street is
prohibited from manufacturing automotive fabric products for
third parties without the Companys prior consent but may
sell seconds and close-out items in bona fide transactions. The
Supply Agreement is also terminable by mutual written consent,
upon the occurrence of certain events of bankruptcy, the
appointment of a receiver or trustee, an assignment for the
benefit of creditors, or in the event of a material breach. In
addition, either party may terminate the Supply Agreement upon
270 days prior notice to the other party in the event that
the parties are unable to agree on the pricing of fabric covered
by the Supply Agreement.

The Company is also a party to a Transition
Services Agreement dated September 21, 2001 with Joan Fabrics
Corporation (Joan Fabrics), another company
controlled by Mr. McCallum. Under this agreement Joan
Fabrics will provide C&A Products with transitional and
support services for a period not to exceed twelve months in
order to support the continued and uninterrupted operation of
the businesses acquired by C&A Products in the Joan
acquisition. As a part of these services, pending the
Companys disassembly and removal of machinery and
equipment that we purchased from Joan Fabrics, Joan Fabrics will
use that machinery and equipment to manufacture for us all of
our requirements for some types of knitted and woven automotive
fabrics. The terms of the Companys agreement with respect
to this fabric production are substantially similar to those
under the Supply Agreement.

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Mr. McCallum became a related party as a
result of the Joan acquisition. The terms of the Supply
Agreement and the Transition Agreement were reached through
arms-length negotiations prior to Mr. McCallum becoming a
related party.

Textron
Transactions

As discussed above under
Leases, Business  Technology
and Intellectual Property, Business 
Joint Ventures and  Put and Call
Arrangement the Company is a party to various agreements
and transactions with Textron. Textron became a related party as
a result of its receipt of the consideration in the TAC-Trim
acquisition.

Discontinued Operations

Net cash flows from discontinued operations in
2001 were $12.2 million, representing recoveries, net of
cash outflows. However, the Company has significant obligations
related to post-retirement, casualty, environmental, product
liability, lease and other liabilities of discontinued
operations. The nature of many of these contingent liabilities
is such that they are difficult to quantify and uncertain in
terms of amount. The company has accrued $10.0 million for
casualty reserves, $38.9 million for post retirement costs
and $40.7 million for environmental and product liability
costs. Based upon the information available to management and
the Companys experience to date, the Company believes that
these liabilities will not have a material effect on our
financial condition, results of operations or cash flows. In
addition, the Company has primary, excess and umbrella insurance
coverage for various periods that the Company expects to cover
certain of these liabilities. However, there can be no
assurances that contingent liabilities will not arise or that
known contingent liabilities or related claims will not exceed
the Companys expectations or that insurance will be
available to cover these liabilities. Because the cash
requirements of the Companys operations are substantially
a function of these contingencies, it is possible that actual
net cash requirements could differ materially from the
Companys estimates.

Recent and Future Reorganization
Plans

In 1999 a reorganization was undertaken to reduce
costs, improve operating efficiencies throughout the operations
and to more effectively respond to the OEMs demand for
complete interior trim systems and more sophisticated
components. In general, the reorganization involved, among other
things; the reorganization of Companys operating segments,
the closure or sale of various facilities, and the termination
of approximately 1,000 employees.

Upon final completion of the 1999 reorganization
plan, as modified in 2000, the Company recognized a pre-tax
restructuring charge of $33.4 million, including
$13.4 million of asset impairments, $15.0 million of
severance costs and $5.0 million related to the termination
of sales commission contracts.

During the first quarter of 2001, the Company
undertook a restructuring program resulting in a charge of
$9.2 million. The goal of this restructuring program is to
further de-layer management in the North American, European and
Specialty operations. The pre-tax $9.2 million charge
includes $8.4 million of severance costs and
$0.8 million of asset impairments.

During the fourth quarter of 2001, the Company
incurred charges totaling $9.6 million including
$2.8 million of severance costs and $6.8 million for
the write-off of long-lived assets. The Company may elect to
implement additional restructuring activities as opportunities
to achieve cost savings arise in future periods.

Equity Financing

Heartland has been a significant source of recent
equity financing. There can be no assurances that Heartland will
provide additional equity financing in the future. Although the
Companys common stock is publicly traded, the small public
float of Company common stock and registration rights granted to
certain Company stockholders may preclude the Company from being
able to issue common stock in a future public offering.

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Stock Repurchase Plan

At December 31, 2001, approximately
$1.0 million remained authorized by the Companys
Board of Directors to repurchase shares of the Companys
common stock at managements discretion. The Company
believes it has sufficient liquidity under its existing credit
arrangements to effect the repurchase program. The Company made
no repurchases during the fiscal 2001 compared to share
repurchases of approximately $.5 million for fiscal 2000.

Accounting Policies

The preparation of consolidated financial
statements in conformity with accounting principles generally
accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses
during the reporting period. Considerable judgment is often
involved in making these determinations, and therefore, actual
results could differ from those estimates.

Goodwill Impairment
Testing:In June 2001, the FASB
approved SFAS No. 142, Goodwill and Other Intangible
Assets effective for fiscal years beginning after
December 15, 2001. Under SFAS No. 142, goodwill will
no longer be amortized. Amortization of goodwill resulting from
business combinations initiated prior to July 1, 2001, will
cease as of January 1, 2002, and beginning July 1,
2001, goodwill resulting from business combinations initiated
after June 30, 2001 was not amortized. Beginning in 2002,
all goodwill and intangible assets will be tested at least
annually for impairment in accordance with the provisions of
SFAS No. 142. The Company continues to review the
provisions of SFAS No. 142, but cannot determine the
complete impact of the standard until such time as it can
complete the first-step of a two-step impairment test. The
first-step will be performed by June 30, 2002. If an
impairment loss were identified as a result of these tests, it
would be reported as a cumulative effect of a change in
accounting principle.

Realization of Deferred Tax Assets:Assessing the need for and amount of a
valuation allowance for deferred tax assets requires significant
judgment. The fact that a benefit may be expected for a portion
but not all of a deferred tax asset increases the judgmental
complexity. Future realization of deferred tax assets ultimately
depends on the existence of sufficient taxable income of the
appropriate character in either the carryback or carryforward
period under the tax law.

During 2001, Heartland acquired approximately
60 percent of the outstanding shares of the Company. This
constituted a change in control that results in
annual limitations on the Companys use of its NOLs and
unused tax credits. This annual limitation on the use of NOLs
and tax credits depends on the value of the equity of the
Company and the amount of built-in gain or
built-in loss in the Companys assets at the
date of the change in control. Based on the
expiration dates of the NOLs and tax credits as well as
anticipated levels of domestic income, management does not
believe that the transaction will have a material impact on
these deferred tax assets. Management has reviewed the
Companys operating results for recent years as well as the
outlook for its continuing operations and concluded that it is
more likely than not that the net deferred tax assets of
$141.7 million at December 31, 2001 will be realized.

Management took into consideration, among other
factors, the expected impact of current year acquisitions, the
impact of recent restructuring plans, and the infusion of cash
from Heartland. These factors along with the timing of the
reversal of its temporary differences, certain tax planning
strategies and the expiration date of its NOLs were also
considered in reaching this conclusion. The Companys
ability to generate future taxable income is dependent on
numerous factors, including general economic conditions, the
state of the automotive industry and other factors beyond
managements control. Therefore, there can be no assurance
that the Company will meet its expectation of future taxable
income.

Environmental Contingencies:The Company is subject to federal,
state, local and foreign environmental, and health and safety,
laws and regulations that (i) affect ongoing operations and
may increase capital costs and operating expenses in order to
maintain compliance with such requirements and (ii) impose
liability relating to contamination at facilities, and at other
locations such as former facilities, facilities where the

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Company has sent wastes for treatment or
disposal, and other properties to which the Company may be
linked. Such liability may include, for example, investigation
and clean-up of the contamination, personal injury and property
damage caused by the contamination, and damages to natural
resources. Some of these liabilities may be imposed without
regard to fault, and may also be joint and several (which can
result in a liable party being held responsible for the entire
obligation, even where other parties are also liable).


Management believes that it has obtained, and is
in material compliance with, those material environmental
permits and approvals necessary to conduct the Companys
various businesses. Environmental compliance costs for
continuing businesses are accounted for as normal operating
expenses or capital expenditures, except for certain costs
incurred at acquired locations. Environmental compliance costs
relating to conditions existing at the time of an acquisition
are generally charged to reserves established in purchase
accounting. The Company accrues for environmental remediation
costs when such obligations are known and reasonably estimable.
In the opinion of management, based on the facts presently known
to it, such environmental compliance and remediation costs will
not have a material adverse effect on the Companys
business, consolidated financial condition or future results of
operations.

The Company is legally or contractually
responsible or alleged to be responsible for the investigation
and remediation of contamination at various sites, and for
personal injury or property damages, if any, associated with
such contamination. At some of these sites the Company has been
notified that it is a potentially responsible party
(PRP) under the federal Superfund law or similar
state laws. Other sites at which we may be responsible for
contamination may be identified in the future, including with
respect to divested and acquired businesses.

The Company is currently engaged in investigating
or remediating certain sites. In estimating the cost of
investigation and remediation, the Company has considered, among
other things, prior experience in remediating contaminated
sites, remediation efforts by other parties, data released by
the United States Environmental Protection Agency
(USEPA), the professional judgment of the
Companys environmental experts, outside environmental
specialists and other experts, and the likelihood that other
identified PRPs will have the financial resources to fulfill
their obligations at sites where they and the Company may be
jointly and severally liable. It is difficult to estimate the
total cost of investigation and remediation due to various
factors including:



| |   |                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------
| |  | incomplete information regarding particular sites
	and other PRPs;                                                                      
|
| |  | uncertainty regarding the nature and extent of
	environmental problems and the Companys share, if any, of
	liability for such problems;
|
| |  | the ultimate selection among alternative
	approaches by governmental regulators;                                                        
|
| |  | the complexity and evolving nature of
	environmental laws, regulations and governmental directives; and                                 
|
| |  | changes in cleanup standards.                                                                                                           

The Company has established accruals for certain
contingent environmental liabilities and management believes
such reserves comply with generally accepted accounting
principles. The Company records reserves for environmental
investigatory and non-capital remediation costs when litigation
has commenced or a claim or assessment has been asserted or is
imminent, the likelihood of an unfavorable outcome is probable,
and the financial impact of such outcome is reasonably
estimable. As of December 31, 2001, total reserves for
those contingent environmental liabilities are approximately
$59.6 million.

In the opinion of management, based on
information presently known to it, identified environmental
costs and contingencies will not have a material adverse effect
on our consolidated financial condition, future results of
operations or cash flows. However, we can give no assurance that
we have identified or properly assessed all potential
environmental liability arising from our business or properties,
and those of our present and former subsidiaries and their
corporate predecessors.

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Allowance for uncollectible accounts:The allowance for uncollectibles
provides for losses believed to be inherent within the
companys Accounts and Other Receivables,
(primarily trade receivables and the retained interest in the
receivables facility). Management evaluates both the
creditworthiness of specific customers and the overall
probability of losses based upon an analysis of the overall
aging of receivables, past collection trends and general
economic conditions. Management believes, based on its review,
that the allowance for uncollectibles is adequate to cover
potential losses. Actual results may vary as a result of
unforeseen economic events and the impact those events could
have on our customers.

Valuation of Mandatorily Redeemable Preferred
Stock of Subsidiary:The Company
issued preferred stock as part of the consideration given to
Textron in the TAC-Trim acquisition. The preferred stock is
recorded at fair value, which is less than the liquidation value
of $1,000 per share or $326.4 million. Since the preferred
stock is not publicly traded the use of an estimated fair value
was required. The Company estimated the fair value to be
$146.9 million based on market prices for securities with
similar terms, maturities and risk characteristics, and included
a liquidation discount to reflect market conditions. The
difference between the initial recorded value and the initial
liquidation preference will be accreted over the life of the
stock.

Item 7A. Quantitative and
Qualitative Disclosures About Market Risk

Risk Management

The Company is exposed to market risk from
changes in interest rates and foreign exchange rates. To
mitigate the risk from these interest rate and foreign currency
exchange rate fluctuations, the Company enters into various
hedging transactions that have been authorized pursuant to
policies and procedures. The Company does not use derivative
financial instruments for trading purposes.

Interest Rate Exposure

The Companys exposure to market risk for
changes in interest rates relates primarily to the
Companys variable rate debt obligations. While the Company
has used interest rate swaps and other interest rate protection
agreements to modify its exposure to interest rate movements and
to reduce borrowing rates, no such agreements were in place at
December 31, 2001.

The tables below provide information about the
Companys derivative financial instruments and other
financial instruments that are sensitive to changes in interest
rates, including debt obligations. The table presents principal
cash flows and related interest rates by expected maturity dates
for the Companys debt obligations. The instruments
actual cash flows are denominated in U.S. dollars (dollar
amounts in millions).

|      |                       |                        |  |              |   |      |  |      |   |      |  |            |   |       |  |       |   |  |  |       |      |   |  |       |       |   |  |       |   |  |  |       |  | 
|----- | --------------------- | ---------------------- |  | ------------ | - | ---- |  | ---- | - | ---- |  | ---------- | - | ----- |  | ----- | - |  |  | ----- | ---- | - |  | ----- | ----- | - |  | ----- | - |  |  | ----- |  | 
|      |                       |                        |  |             
|      |                       | Expected Maturity Date |  | Fair Value  
|      |                       |                        |  | December 31,
|      |                       | 2002                   |  | 2003         |   | 2004 |  | 2005 |   | 2006 |  | Thereafter |   | Total |  | 2001 
|      |                       |                        |  |              |   |      |  |      |   |      |  |            |   |       |  |      
|      |                       |                       
|      |                       | (in millions)         
|Debt: |                       |                        |  |              |   |      |  |      |   |      |  |            |   |       |  |       |   |  |  |       |      |   |  |       |       |   |  |       |   |  |  |      
|      | Fixed rate ($US)      |                        |  |             |   |      |  |     |   |      |  |           |   |       |  |      |   |  |  | 400.0 |      |   |  | 500.0 |       |   |  | 900.0 |   |  |  | 830.5 | 
|      |                       | Average interest rate  |  |              |  |      |  |      |  |      |  |            |  |       |  |       |  |  |  |       | 11.5 | % |  |       | 10.75 | % |  |       |   |  |  |       |  | 
|      | Variable rate ($US)   |                        |  | 18.0         |   |      |  | 23.0 |   |      |  | 28.0       |   |       |  | 331.0 |   |  |  |      |      |   |  |      |       |   |  | 400.0 |   |  |  | 400.0 | 
|      | Average interest rate |                        |  | (A           | ) |      |  | (A   | ) |      |  | (A         | ) |       |  | (A    | ) |  |  |      |      |   |  |      |       |   |  | (A    | ) |  |  |       | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) | Borrowings bear interest at variable rates based
	on a spread to the adjusted LIBOR rate or, at the Companys
	option, a base rate. The Company is sensitive to interest rate
	changes and based upon amounts outstanding at December 31,
	2001, a 0.5% increase in the weighted average interest rate
	(6.9% at December 31, 2001) would increase interest costs
	by approximately $2.0 million annually.

Currency Rate Exposure

The Company is subject to currency rate exposure
primarily related to foreign currency purchase and sale
transactions and intercompany and third party loans. The primary
purpose of the Companys foreign currency

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hedging activities is to protect against the
volatility associated with these foreign currency exposures. The
Company primarily utilizes forward exchange contracts and
purchased options with durations of generally less than
12 months.


At December 31, 2001, the Company had
outstanding the following foreign currency forward and option
contract amounts (amounts in millions, except average contract
rate):

|         |  |           |      |                 |  |                           |       |             |  |  |                      |  |  |  |      |  
|-------- |  | --------- | ---- | --------------- |  | ------------------------- | ----- | ----------- |  |  | -------------------- |  |  |  | ---- | -
|Currency |  | Currency  |      |                 |  | Weighted Average Contract |       | Unrealized 
|(Pay)    |  | (Receive) |      | Contract Amount |  | Rate Per Convention       |       | Gain (loss)
|         |  |           |      |                 |  |                           |       |            
|Euro     |  |           | GBP  |                 |  | $                         | 27.7  |             |  |  | 0.62202 GBP per EUR  |  |  |  | 0.3  |  
|GBP      |  |           | Euro |                 |  | $                         | 15.4  |             |  |  | 0.61071 GBP per EUR  |  |  |  |      |  
|GBP      |  |           | USD  |                 |  | $                         | 113.1 |             |  |  | 1.44536 USD per GBP  |  |  |  | (0.5 | )
|USD      |  |           | GBP  |                 |  | $                         | 13.0  |             |  |  | 1.43382 USD per GBP  |  |  |  | 0.2  |  
|Euro     |  |           | USD  |                 |  | $                         | 40.1  |             |  |  | 0.89524 USD per Euro |  |  |  | 0.3  |  
|USD      |  |           | Euro |                 |  | $                         | 1.5   |             |  |  | 0.89799 USD per Euro |  |  |  |      |  
|CAD      |  |           | USD  |                 |  | $                         | 400.7 |             |  |  | 1.59286 CAD per USD  |  |  |  | 2.1  |  
|USD      |  |           | CAD  |                 |  | $                         | 21.1  |             |  |  | 1.57137 CAD per USD  |  |  |  | (0.3 | )
|SEK      |  |           | GBP  |                 |  | $                         | 38.3  |             |  |  | 15.69660 SEK per GBP |  |  |  | (1.1 | )
|GBP      |  |           | SEK  |                 |  | $                         | 4.1   |             |  |  | 15.31879 SEK per GBP |  |  |  |      |  
|SEK      |  |           | USD  |                 |  | $                         | 1.7   |             |  |  | 10.73600 SEK per USD |  |  |  |      |  
|SEK      |  |           | Euro |                 |  | $                         | 0.9   |             |  |  | 9.74950 SEK per EUR  |  |  |  |      |  
|MXN      |  |           | USD  |                 |  | $                         | 2.8   |             |  |  | 9.85200 MXN per USD  |  |  |  | (0.2 | )

These amounts include option contracts with an
aggregate notional amount of $122.2 million outstanding at
December 31, 2001 with a weighted average strike price of
$1.62 CAD per USD. For additional information on hedging
activity see Note 5.  Notes to
Consolidated Financial Statements.

The information presented does not fully reflect
the net foreign exchange rate exposure of the Company because it
does not include the intercompany funding arrangements
denominated in foreign currencies and the foreign
currency-denominated cash flows from anticipated sales and
purchases. Management believes that the foreign currency
exposure relating to these items would substantially offset the
exposure discussed above.

On January 1, 2001, eleven of the fifteen
member countries of the European Union adopted the Euro as their
common currency. The conversion did not have a material adverse
effect on the Companys consolidated financial position or
results of operations.

Item 8.     Financial
Statements and Supplementary Data

See the Consolidated Financial Statements of
Collins & Aikman Corporation and subsidiaries included
herein and listed on the Index to Financial Statements set forth
in Item 14 (a) of this Form 10-K report.

Item 9.     Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure

On April 10, 2001, the Company notified
Arthur Andersen LLP that it was changing its independent
accountants to PricewaterhouseCoopers LLP for the fiscal year
ending December 31, 2001. The Audit Committee of the Board
of Directors and the Board of Directors of the Company approved
the decision to replace Arthur Andersen LLP. The Companys
Annual Report on Form 10-K for the fiscal year ended
December 31, 2000 was filed on April 2, 2001. It
included financial statements covering each of the past two
fiscal years ended December 31, 2000 and December 25,
1999, accompanied by the report of Arthur Andersen LLP. Such
report did not include any adverse opinion or disclaimer of
opinion, or any qualification as to audit scope or accounting
principles.

During the fiscal years ended December 31,
2000 and December 25, 1999 there were no disagreements with
Arthur Andersen LLP on any matter of accounting principles or
practices, financial statement disclosure or audit scope. During
this period, there were also no disagreements which, if not
resolved to the satisfaction of

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Arthur Andersen LLP, would have caused them to
make reference to the subject matter of such disagreement in
their reports on the financial statements for such years.


During the fiscal years ended December 31,
2000 and December 31, 1999, PricewaterhouseCoopers LLP had
not been engaged as an independent accountant to audit either
the financial statements of the Company or any of its
subsidiaries, nor had it been consulted regarding the
application of the Companys accounting principles to a
specified transaction, either completed or proposed, or the type
of audit opinion that might be rendered on the Companys
financial statements.

As a result of its 1999 audit, Arthur Andersen
LLP reported material weaknesses in the Companys internal
control systems. The identified conditions specifically related
to four of the Companys foreign locations, most of which
were recently acquired. These weaknesses were primarily
attributable to the effects of implementing a new computer
system as part of the Companys acquisition integration
strategy and Year 2000 compliance efforts. Issues at these
locations primarily related to the detail records supporting the
general ledger and staff training needs. As a result, in 2000,
the Company committed significant resources to addressing the
issues, including the re-implementation of certain systems,
implementing an internal audit function and replacing
controllers at three of the four locations. The Company made
significant progress in addressing these issues; however, Arthur
Andersen LLP continued to report material weaknesses following
its 2000 audit because two of these four foreign locations were
assessed as continuing to have similar material weaknesses as in
1999. Improvement efforts at these locations were hampered by
personnel turnover and continuing acquisition integration
efforts.

Arthur Andersen LLP did not modify its report on
the Companys 1999 and 2000 audited financial statements as
a consequence of these material weaknesses.

The Company is continuing its efforts to address
these matters and believes that it has corrected all these
matters during 2001.




PART III

Item 10.     Directors
and Executive Officers of the Registrant

There is incorporated herein by reference the
information required by this Item in the Companys
definitive proxy statement for the 2002 Annual Meeting of
Stockholders which will be filed with the Securities and
Exchange Commission no later than 120 days after the close
of the year ended December 31, 2001.

Item 11.     Executive
Compensation

There is incorporated herein by reference the
information required by this Item in the Companys
definitive proxy statement for the 2002 Annual Meeting of
Stockholders which will be filed with the Securities and
Exchange Commission no later than 120 days after the close
of the year ended December 31, 2001.

Item 12.     Security
Ownership of Certain Beneficial Owners and
Management

There is incorporated herein by reference the
information required by this Item in the Companys
definitive proxy statement for the 2002 Annual Meeting of
Stockholders which will be filed with the Securities and
Exchange Commission no later than 120 days after the close
of the year ended December 31, 2001.

Item 13.     Certain
Relationships and Related Transactions

There is incorporated herein by reference the
information required by this Item in the Companys
definitive proxy statement for the 2002 Annual Meeting of
Stockholders which will be filed with the Securities and
Exchange Commission no later than 120 days after the close
of the year ended December 31, 2001.

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##### Table of Contents






PART IV



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

(a)(1) Financial Statements:

|                                                                                                                                                          |  |        |     | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------ | --- | 
|                                                                                                                                                          |  | Page  
|                                                                                                                                                          |  | Number
|                                                                                                                                                          |  |       
|Report of Independent Accountants                                                                                                                         |  |        | F-1 | 
|Report of Independent Accountants                                                                                                                         |  |        | F-2 | 
|Consolidated Statements of Operations for the
	fiscal years ended December 31, 2001, December 31,
	2000 and December 25, 1999                             |  |        | F-3 | 
|Consolidated Balance Sheets at December 31,
	2001 and December 31, 2000                                                                                   |  |        | F-4 | 
|Consolidated Statements of Cash Flows for the
	fiscal years ended December 31, 2001, December 31,
	2000 and December 25, 1999                             |  |        | F-5 | 
|Consolidated Statements of Common
	Stockholders Equity (Deficit) for the fiscal years ended
	December 31, 2001, December 31, 2000 and
	December 25, 1999 |  |        | F-6 | 
|Notes to Consolidated Financial Statements                                                                                                                |  |        | F-7 | 

(a)(2) Financial Schedules:

The following financial statement schedules of
Collins & Aikman Corporation for the fiscal years ended
December 31, 2001, December 31, 2000, and
December 25, 1999 are filed as part of this Report and
should be read in conjunction with the Consolidated Financial
Statements of Collins & Aikman Corporation.

|                                                                |  |        |     | 
|--------------------------------------------------------------- |  | ------ | --- | 
|                                                                |  | Page  
|                                                                |  | Number
|                                                                |  |       
|Schedule I  Condensed Financial
	Information of the Registrant |  |        | S-1 | 
|Schedule II  Valuation and
	Qualifying Accounts                |  |        | S-1 | 

All other schedules, for which provision is made
in the applicable accounting regulations of the Securities and
Exchange Commission are omitted because they are not required,
are inapplicable, or the information is included in the
Consolidated Financial Statements or Notes thereto.

(a) (3) Exhibits:

Please note that in the following description of
exhibits, the title of any document entered into, or filing
made, prior to July 7, 1994 reflects the name of the
entity, a party thereto or filing, as the case may be, at
such time. Accordingly, documents and filings described below
may refer to Collins & Aikman Holdings Corporation,
Collins & Aikman Group, Inc. or Wickes Companies, Inc., if
such documents and filings were made prior to July 7, 1994.

|        |     |             |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|------- | --- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |            
|Number  |     | Description
|        |     |            
|        | 2.1 |             |  | Agreement and Plan of Merger dated May 14,
	2001 by and among Collins & Aikman Corporation, Collins
	& Aikman Products Co., Becker Group, L.L.C., CE Becker Inc.,
	ME McInerney Inc., J Hoehnel Inc. and the individuals party
	thereto as sellers is hereby incorporated by reference to
	Exhibit 2.1 of Collins & Aikman Corporations
	Current Report on Form 8-K dated July 13, 2001.                  
|        | 2.2 |             |  | Agreement and Plan of Merger dated as of
	August 17, 2001 by and among Collins & Aikman
	Corporation, Collins & Aikman Products Co., JAII Acquisition
	Co., Elkin McCallum, Joan Fabrics Corporation and Joan
	Automotive Industries, Inc is hereby incorporated by reference
	to Exhibit 2.1 of Collins & Aikman Corporations
	Current Report on Form 8-K dated September 21, 2001.                      
|        | 2.3 |             |  | First Amendment to Agreement and Plan of Merger
	by and among Collins & Aikman Corporation, Collins &
	Aikman Products Co., JAII Acquisition Co., Elkin McCallum, Joan
	Fabrics Corporation and Joan Automotive Industries, Inc dated as
	of September 21, 2001 is hereby incorporated by reference
	to Exhibit 2.2 of Collins & Aikman Corporations
	Current Report on Form 8-K dated September 21, 2001.

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|        |     |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------- | --- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |            
|Number  |     | Description
|        |     |            
|        | 2.4 |             |  | Purchase Agreement dated as of August 7,
	2001, as amended and restated as of November 30, 2001, by
	and among Textron Inc., Collins & Aikman Corporation and
	Collins & Aikman Products Co., including Exhibit 1
	(Certificate of Designation of the 15% Series A Redeemable
	Preferred Stock, the 16% Series B Redeemable Preferred
	Stock and the 16% Series C Redeemable Preferred Stock) and
	Exhibit 7 (Asset Purchase Agreement dated as of
	August 7 by and between Textron Automotive Exteriors Inc.
	and JPS Automotive, Inc.), which is incorporated by reference to
	Collins and Aikman Corporation Current Report on Form 8-k
	dated December 20, 2001 and filed on January 4, 2002.
	The Table of Contents of the Purchase Agreement listed as
	Exhibit 2.4 contains a list briefly identifying the
	contents of all omitted schedules and exhibits. Collins &
	Aikman Corporation will supplementally furnish a copy of any
	omitted schedule or Exhibit to the Commission upon request.
|        | 2.5 |             |  | Asset Purchase Agreement dated as of
	August 7, 2001, as amended and restated as of
	November 30, 2001, by and between Textron Automotive
	Exteriors Inc. and JPS Automotive, Inc., which is incorporated
	herein by reference to Exhibit 2.2 of Collins &
	Aikman Corporations Current Report on Form 8-K dated
	December 20, 2001 and filed on January 4, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | 2.6 |             |  | Asset Purchase Agreement dated as of
	August 17, 2001 by and among Collins & Aikman
	Products Co., Western Avenue Dyers, L.P., Elkin McCallum, Kerry
	McCallum, Penny Richards and Tyng Textiles LLC, which is
	incorporated by reference to Exhibit 2.3 to
	Collins & Aikman Corporations Current Report on
	Form 8-K filed on October 4, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 2.7 |             |  | First Amendment to Asset Purchase Agreement dated
	as of September 21, 2001, which is incorporated by
	reference to Exhibit 2.4 to Collins & Aikman
	Corporations Current Report on Form 8-K filed on
	October 4, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 3.1 |             |  | Restated Certificate of Incorporation of Collins
	& Aikman Corporation is hereby incorporated by reference to
	Exhibit 3.1 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	June 26, 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 3.2 |             |  | Certificate of Amendment to the Restated
	Certificate of Incorporation of Collins & Aikman
	Corporation, which is incorporated by reference to
	Exhibit 3.2 of Collins & Aikman Corporations
	Annual Report on Form 10-K for the fiscal year ended
	December 31, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | 3.3 |             |  | By-laws of Collins & Aikman Corporation, as
	amended, are hereby incorporated by reference to
	Exhibit 3.2 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended January 27,
	1996.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 3.4 |             |  | Certificate of Elimination of Cumulative
	Exchangeable Redeemable Preferred Stock of Collins & Aikman
	Corporation is hereby incorporated by reference to
	Exhibit 3.3 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	October 28, 1995.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 4.1 |             |  | Specimen Stock Certificate for the Common Stock
	is hereby incorporated by reference to Exhibit 4.3 of
	Amendment No. 3 to Collins & Aikman Holdings
	Corporations Registration Statement on Form S-2
	(Registration No. 33-53179) filed June 21, 1994.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 4.2 |             |  | Indenture, dated as of June 1, 1996, between
	Collins & Aikman Products Co., Collins & Aikman
	Corporation and First Union National Bank of North Carolina, as
	Trustee, is hereby incorporated by reference to Exhibit 4.2
	of Collins & Aikman Corporations Report on
	Form 10-Q for the fiscal quarter ended April 27, 1996.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 4.3 |             |  | First Supplemental Indenture dated as of
	June 1, 1996, between Collins & Aikman Products Co.,
	Collins & Aikman Corporation and First Union National Bank
	of North Carolina, as Trustee, is hereby incorporated by
	reference to Exhibit 4.3 of Collins & Aikman
	Corporations Report on Form 10-Q for the fiscal
	quarter ended April 27, 1996.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 4.4 |             |  | Waiver dated as of October 27, 1998 under
	the Credit Agreement dated as of May 28, 1998, among
	Collins & Aikman Products Co., Collins & Aikman Canada,
	Inc. and Collins & Aikman Plastics, Ltd., as Canadian
	Borrowers, Collins & Aikman Corporation, as Guarantor, the
	Lender Parties thereto, Bank of America, N.T.S.A., as
	Documentation Agent, The Chase Manhattan Bank, as Administrative
	Agent, and The Chase Manhattan Bank of Canada, as Canadian
	Administrative Agent is hereby incorporated by reference to
	Exhibit 4.5 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	September 26, 1998.                                                                                                                                                                                                                                                                                                                                                    

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|        |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- | ---- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |            
|Number  |      | Description
|        |      |            
|        | 4.5  |             |  | Waiver dated as of December 22, 1998 under
	the Credit Agreement dated as of May 28, 1998, among
	Collins & Aikman Products Co., Collins & Aikman Canada,
	Inc. and Collins & Aikman Corporation, as Guarantor, the
	Lender Parties thereto, Bank of America, N.T.S.A., as
	Documentation Agent, The Chase Manhattan Bank, as Administrative
	Agent, and The Chase Manhattan Bank of Canada, as Canadian
	Administrative Agent is hereby incorporated by reference to
	Exhibit 4.6 of Collins & Aikman Corporations
	Report on Form 10-K for the year ended December 26,
	1998.                                                     
|        | 4.6  |             |  | Amendment and Waiver dated as of March 8,
	1999, among Collins & Aikman Products Co., Collins &
	Aikman Canada, Inc., Collins & Aikman Plastics Ltd., Collins
	& Aikman Corporation, as Guarantor, the Lender Parties
	thereto, Bank of America N.T.S.A., as Documentation Agent, The
	Chase Manhattan Bank, as Administrative Agent, and The Chase
	Manhattan Bank of Canada, as Canadian Administrative Agent is
	hereby incorporated by reference to Exhibit 4.7 of Collins
	& Aikman Corporations Report on Form 10-K for the
	year ended December 26, 1998.                                                                    
|        | 4.7  |             |  | Tranche C Term Loan Supplement dated as of
	May 12, 1999 to the Credit Agreement dated as of
	May 28, 1998 among Collins & Aikman Products Co.,
	Collins & Aikman Canada, Inc., Collins & Aikman
	Plastics, Ltd., Collins & Aikman Corporation, the Financial
	Institutions parties thereto, Bank of America N.T.S.A., as
	Documentation Agent, The Chase Manhattan Bank, as Administrative
	Agent, and The Chase Manhattan Bank of Canada, as Canadian
	Administrative Agent is hereby incorporated by reference to
	Exhibit 4.1 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	June 26, 1999.
|        | 4.8  |             |  | Indenture dated as of June 28, 1994, between
	JPS Automotive Products Corp., as Issuer, JPS Automotive L.P.,
	as Guarantor and Shawmut Bank Connecticut, N.A., as Trustee, is
	hereby incorporated by reference to Exhibit 4.2 of JPS
	Automotive Corp.s Registration Statement on Form S-1,
	Registration No. 33-75510.                                                                                                                                                                                                                                                                                                            
|        | 4.9  |             |  | First Supplemental Indenture, dated as of
	October 5, 1994, between JPS Automotive Products Corp. and
	JPS Automotive L.P., as Co-Obligors, and Shawmut Bank
	Connecticut, N.A., as Trustee is hereby incorporated by
	reference to Exhibit 4.48A of JPS Automotive L.P.s
	and JPS Automotive Products Corp.s Report on
	Form 10-Q for the fiscal quarter ended October 2, 1994.                                                                                                                                                                                                                                                   
|        | 4.10 |             |  | Second Supplemental Indenture, dated as of
	February 8, 2001, by and among Collins & Aikman
	Products Co., as Issuer, Collins & Aikman Corporation, as
	Guarantor, and First Union National Bank, as Trustee, which is
	incorporated by reference to Exhibit 4.11 of
	Collins & Aikman Corporations Annual Report on
	Form 10-K for the fiscal year ended December 31, 2000.                                                                                                                                                                                                                                                        
|        | 4.11 |             |  | Form of Warrant is hereby incorporated by
	reference to Exhibit 4.1 of Collins & Aikman
	Corporations Current Report on Form 8-K dated
	July 13, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 4.12 |             |  | Certificate of Designation of Series A
	Redeemable Preferred Stock, Series B Redeemable Preferred
	Stock and Series C Redeemable Preferred Stock, which is
	incorporated herein by reference to Exhibit 4.1 of Collins
	& Aikman Corporations Current Report of Form 8-K
	dated December 20, 2001 and filed on January 4, 2002.                                                                                                                                                                                                                                                                                                     
|        | 4.13 |             |  | Indenture dated as of December 20, 2001 by
	and among Collins & Aikman Products Co., as Issuer, the
	Guarantors parties thereto, and BNY Midwest Trust Company, as
	Trustee, which is incorporated herein by reference to
	Exhibit 4.2 of Collins & Aikman Corporations
	Current Report on Form 8-K dated December 20, 2001 and
	filed on January 4, 2002.                                                                                                                                                                                                                                                                          
|        | 4.14 |             |  | Receivables Transfer Agreement dated as of
	December 20, 2001 by and among Carcorp, Inc., as
	Transferor, Collins & Aikman Products Co., individually and
	as Collection Agent, the persons parties thereto, as CP Conduit
	Purchasers, Committed Purchasers and Funding Agents and JPMorgan
	Chase Bank, as Administrative Agent, which is incorporated
	herein by reference to Exhibit 4.3 of Collins & Aikman
	Corporations Current Report on Form 8-K dated
	December 20, 2001 and filed on January 4, 2002.                                                                                                                    

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|        |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------- | ---- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |            
|Number  |      | Description
|        |      |            
|        | 4.15 |             |  | Amended and Restated Receivables Purchase
	Agreement dated as of December 20, 2001 among Collins &
	Aikman Products Co. and its wholly-owned direct and indirect
	subsidiaries named therein, as Sellers, and Carcorp, Inc., as
	Purchaser, and the other Sellers from time to time named
	therein, which is incorporated herein by reference to
	Exhibit 4.4 of Collins & Aikman Corporations
	Current Report on Form 8-K dated December 20, 2001 and
	filed on January 4, 2002.                                                                                                                                                                                                                                                          
|        | 4.16 |             |  | Credit Agreement dated as of December 20,
	2001 among Collins & Aikman Products Co., as Borrower,
	Collins & Aikman Canada Inc., as a Canadian Borrower,
	Collins & Aikman Plastics, Ltd., as a Canadian Borrower,
	Collins & Aikman Corporation, the Lenders named therein,
	Deutsche Banc Alex. Brown Inc. and Merrill Lynch Capital
	Corporation, as Co-Documentation Agents, Credit Suisse First
	Boston Corporation, as Syndication Agent, JPMorgan Chase Bank,
	as Administrative Agent, and J.P.Morgan Bank Canada, as Canadian
	Administrative Agent, which is incorporated herein by reference
	to Exhibit 4.5 of Collins & Aikman Corporations
	Current Report on Form 8-K dated December 20, 2001 and
	filed on January 4, 2002.
|        | 4.17 |             |  | Guarantee and Collateral Agreement dated as of
	December 20, 2001 by and among Collins & Aikman
	Corporation, Collins & Aikman Products Co. and certain of
	their subsidiaries and JPMorgan Chase Bank, as Collateral Agent,
	which is incorporated herein by reference to Exhibit 4.6 of
	Collins & Aikman Corporations Current Report on
	Form 8-K dated December 20, 2001 and filed on
	January 4, 2002.                                                                                                                                                                                                                                                                                                                                
|        | 4.18 |             |  | Third Supplemental Indenture, dated as of
	December 20, 2001, among Collins & Aikman Products Co.,
	Collins & Aikman Corporation, the Subsidiary Guarantors
	listed on the signature page thereto, and First Union National
	Bank (as successor in interest to First Union National Bank of
	North Carolina), which is incorporated herein by reference to
	Exhibit 4.7 of Collins & Aikman Corporations
	Current Report on Form 8-K dated December 20, 2001 and
	filed on January 4, 2002.                                                                                                                                                                                                                                                
|        | 10.1 |             |  | Stockholders Agreement, dated February 23,
	2001, by and among Collins & Aikman Corporation, Heartland
	Industrial Partners, L.P. and other investor stockholders listed
	on Schedule 1 thereto, Blackstone Capital Company II,
	L.L.C., Blackstone Family Investment Partnership I L.P.,
	Blackstone Advisory Directors Partnership L.P., Blackstone
	Capital Partners L.P., and Wasserstein/C&A Holdings, L.L.C.,
	incorporated by reference to Annex E to Exhibit 10.1
	to Collins & Aikman Corporations Current Report
	on Form 8-K dated January 12, 2001.                                                                                                                                                                            
|        | 10.2 |             |  | Employment Agreement dated as of July 18,
	1990 between Wickes Companies, Inc. and an executive officer is
	hereby incorporated by reference to Exhibit 10.3 of Wickes
	Companies, Inc.s Report on Form 10-K for the fiscal
	year ended January 26, 1991.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        | 10.3 |             |  | Employment Agreement dated as of July 22,
	1992 between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to Exhibit 10.7
	of Collins & Aikman Holdings Corporations Report on
	Form 10-K for the fiscal year ended January 30, 1993.*                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 10.4 |             |  | First Amendment to Employment Agreement dated as
	of February 24, 1994 between Collins & Aikman
	Corporation and an executive officer is hereby incorporated by
	reference to Exhibit 10.7 of Collins & Aikman Holdings
	Corporations Registration Statement on Form S-2
	(Registration No. 33- 53179) filed April 19, 1994.*                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 10.5 |             |  | Second Amendment, dated as of October 3,
	1996, to the Employment Agreement, dated as of July 22,
	1992, as amended, between Collins & Aikman Products Co. and
	an executive officer is hereby incorporated by reference to
	Exhibit 10.26 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	October 26, 1996.*                                                                                                                                                                                                                                                                                                                                                                                          
|        | 10.6 |             |  | Third Amendment dated as of August 1, 1997,
	to the Employment Agreement dated as of July 22, 1992, as
	amended, between the Corporation and an executive officer is
	hereby incorporated by reference to Exhibit 10.35 of
	Collins & Aikman Corporations Report on Form 10-Q
	for the fiscal quarter ended September 27, 1997.*                                                                                                                                                                                                                                                                                                                                                                                                           
|        | 10.7 |             |  | Letter Agreement dated March 23, 1999 with
	an executive officer is hereby incorporated by reference to
	Exhibit 10.7 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended
	December 26, 1998.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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|        |       |             |  |                                                                                                                                                                                                                                                                                  
|------- | ----- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|Number  |       | Description
|        |       |            
|        | 10.8  |             |  | Amended and Restated Employment Agreement dated
	as of January 20, 1999 between Collins & Aikman
	Products Co. and an executive officer is hereby incorporated by
	reference to Collins & Aikman Corporations Report on
	Form 10-K for the fiscal year ended December 26, 1998.*
|        | 10.9  |             |  | Employment Agreement dated as of January 20,
	1999 between Collins & Aikman Products Co. and an executive
	officer is hereby incorporated by reference to Exhibit 10.9
	of Collins & Aikman Corporations Form 10-K for
	the fiscal year ended December 26, 1998.*               
|        | 10.10 |             |  | Employment Agreement dated as of April 22,
	1999 between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.10 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	March 27, 1999.*      
|        | 10.11 |             |  | Employment Agreement, dated as of March 29,
	2000, between Collins & Aikman Products Co. and an executive
	officer is hereby incorporated by reference to Exhibit 10.1
	of Collins & Aikman Corporations Report on
	Form 10-Q for the fiscal quarter ended April 1, 2000.*      
|        | 10.12 |             |  | Employment Agreement, dated as of April 1,
	2000, between Collins & Aikman Products Co. and an executive
	officer is hereby incorporated by reference to Exhibit 10.3
	of Collins & Aikman Corporations Report on
	Form 10-Q for the fiscal quarter ended July 1, 2000.*        
|        | 10.13 |             |  | Employment Agreement, dated as of August 1,
	2000, between Collins & Aikman Products Co. and an executive
	officer is hereby incorporated by reference to Exhibit 10.6
	of Collins & Aikman Corporations Report on
	Form 10-Q for the fiscal quarter ended September 30,
	2000.*
|        | 10.14 |             |  | Employment Agreement, dated as of August 1,
	2000, between Collins & Aikman Products Co. and an executive
	officer is hereby incorporated by reference to Exhibit 10.8
	of Collins & Aikman Corporations Report on
	Form 10-Q for the fiscal quarter ended September 30,
	2000.*
|        | 10.15 |             |  | Letter agreement, dated as of May 12, 1999,
	with an executive officer is hereby incorporated by reference to
	Exhibit 10.2 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	June 26, 1999.*                                                 
|        | 10.16 |             |  | Letter agreement, dated as of April 7, 2000,
	between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.12 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	September 30, 2000.*     
|        | 10.17 |             |  | Letter agreement, dated as of July 13, 2000,
	between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.11 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	September 30, 2000.*     
|        | 10.18 |             |  | Service contract between Collins & Aikman
	Products GmbH and an executive officer is hereby incorporated by
	reference to Exhibit 10.5 of Collins & Aikman
	Corporations Report on Form 10-Q for the fiscal
	quarter ended September 30, 2000.                                  
|        | 10.19 |             |  | Settlement Agreement dated as of April 27,
	2000, between Collins & Aikman Products Co. and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.10 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	September 30, 2000. 
|        | 10.20 |             |  | Collins & Aikman Corporation 1998 Executive
	Incentive Compensation Plan is hereby incorporated by reference
	to Exhibit 10.10 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended December 26,
	1998.*                                             
|        | 10.21 |             |  | Collins & Aikman Products Co. 2000 Executive
	Incentive Compensation Plan is hereby incorporated by reference
	to Exhibit 10.5 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended July 1,
	2000.                                                
|        | 10.22 |             |  | Collins & Aikman Corporation Supplemental
	Retirement Income Plan is hereby incorporated by reference to
	Exhibit 10.23 of Amendment No. 5 to Collins &
	Aikman Holdings Corporations Registration Statement on
	Form S-2 (Registration No. 33-53179) filed
	July 6, 1994.*     
|        | 10.23 |             |  | Amendment to Collins & Aikman Corporation
	Supplemental Retirement Income Plan is hereby incorporated by
	reference to Exhibit 10.12 of the Collins & Aikman
	Corporations Report on Form 10-K for the fiscal year ended
	December 26, 1998.*                                   
|        | 10.24 |             |  | 1993 Employee Stock Option Plan, as amended and
	restated, is hereby incorporated by reference to
	Exhibit 10.13 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended April 29,
	1995.*                                                           

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|        |       |             |  |                                                                                                                                                                                                                                                                                  
|------- | ----- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|Number  |       | Description
|        |       |            
|        | 10.25 |             |  | 1994 Employee Stock Option Plan, as amended
	through February 7, 1997, is hereby incorporated by
	reference to Exhibit 10.12 of Collins & Aikman
	Corporations Report on Form 10-Q for the fiscal quarter
	ended March 29, 1997.*                                               
|        | 10.26 |             |  | 2000 Employee Stock Option Plan is hereby
	incorporated by reference to Exhibit 10.6 of Collins &
	Aikman Corporations Report on Form 10-Q for the fiscal
	quarter ended July 1, 2000.                                                                                          
|        | 10.27 |             |  | 1994 Directors Stock Option Plan as amended and
	restated is hereby incorporated by reference to
	Exhibit 10.15 to Collins & Aikman Corporations
	Report on Form 10-K for the year ended December 26, 1998.*                                                                    
|        | 10.28 |             |  | Excess Benefit Plan of Collins & Aikman
	Corporation is hereby incorporated by reference to Exhibit 10.25
	of Collins & Aikman Corporations Report on Form 10-K
	for the fiscal year ended January 28, 1995.*                                                                   
|        | 10.29 |             |  | 1994 Employee Stock Option Plan, as amended and
	restated through June 3, 1999 is hereby incorporated by
	reference to Exhibit 10.2 of Collins & Aikman
	Corporations Report on Form 10-Q for the fiscal quarter
	ended June 26, 1999                                           
|        | 10.30 |             |  | Change in Control Agreement, dated March 17,
	1998, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.17 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended December 27,
	1997.*   
|        | 10.31 |             |  | Change in Control Agreement, dated March 17,
	1998, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.18 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended December 27,
	1997.*   
|        | 10.32 |             |  | Change in Control Agreement, dated March 17,
	1998, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.19 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended December 27,
	1997.*   
|        | 10.33 |             |  | Change in Control Agreement, dated March 17,
	1998, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.20 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended December 27,
	1997.*   
|        | 10.34 |             |  | Change in Control Agreement, dated March 17,
	1998, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.22 of Collins & Aikman Corporations
	report on Form 10-Q for the fiscal quarter ended March 28,
	1998.*   
|        | 10.35 |             |  | Change in Control Agreement, dated August 9,
	1999, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.25 of Collins & Aikman
	Corporations Report on Form 10-K for the fiscal year
	ended December 25, 1999.*   
|        | 10.36 |             |  | Change in Control Agreement, dated March 17,
	1998, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.26 of Collins & Aikman
	Corporations Report on Form 10-K for the fiscal year
	ended December 25, 1999.*   
|        | 10.37 |             |  | Change in Control Agreement, dated March 17,
	1998, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.27 of Collins & Aikman
	Corporations Report on Form 10-K for the fiscal year
	ended December 25, 1999.*   
|        | 10.38 |             |  | Change in Control Agreement, dated July 26,
	1999, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.28 of Collins & Aikman
	Corporations Report on Form 10-K for the fiscal year
	ended December 25, 1999.*    
|        | 10.39 |             |  | Change in Control Agreement, dated March 17,
	1998, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.29 of Collins & Aikman
	Corporations Report on Form 10-K for the fiscal year
	ended December 25, 1999.*   
|        | 10.40 |             |  | Change in Control Agreement, dated as of April,
	2000, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to Exhibit 10.2
	of Collins & Aikman Corporations Report on
	Form 10-Q for the fiscal quarter ended July 1, 2000.*    
|        | 10.41 |             |  | Change in Control Agreement, dated as of
	April 1, 2000, between Collins & Aikman Products Co.
	and an executive officer is hereby incorporated by reference to
	Exhibit 10.4 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	July 1, 2000.*

40



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##### Table of Contents



|        |       |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------- | ----- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|Number  |       | Description
|        |       |            
|        | 10.42 |             |  | Change in Control Agreement, dated as of
	August 1, 2000, between Collins & Aikman Corporation
	and an executive officer is hereby incorporated by reference to
	Exhibit 10.7 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	September 30, 2000.*                                                                                                                                                                                                                                                        
|        | 10.43 |             |  | Change in Control Agreement, dated as of
	August 1, 2000, between Collins & Aikman Corporation
	and an executive officer is hereby incorporated by reference to
	Exhibit 10.9 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	September 30, 2000.*                                                                                                                                                                                                                                                        
|        | 10.44 |             |  | Lease, executed as of the 1st day of
	June 1987, between Dura Corporation and Dura Acquisition
	Corp. is hereby incorporated by reference to Exhibit 10.24
	of Amendment No. 5 to Collins & Aikman Holdings
	Corporations Registration Statement on Form S-2
	(Registration No. 33-53179) filed July 6, 1994.                                                                                                                                                                                                                                 
|        | 10.45 |             |  | Master Equipment Lease Agreement dated as of
	September 30, 1994, between NationsBanc Leasing Corporation
	of North Carolina and Collins & Aikman Products Co. is
	hereby incorporated by reference to Exhibit 10.27 of
	Collins & Aikman Corporations Report on Form 10-Q
	for the fiscal quarter ended October 29, 1994.                                                                                                                                                                                                                    
|        | 10.46 |             |  | Equity Purchase Agreement by and among JPSGP,
	Inc., Foamex-JPS Automotive L.P. and Collins & Aikman
	Products Co. dated August 28, 1996 is hereby incorporated
	by reference to Exhibit 2.1 of Collins & Aikman
	Corporations Report on Form 10-Q for the fiscal
	quarter ended July 27, 1996.                                                                                                                                                                                                                                               
|        | 10.47 |             |  | Amendment No. 1 to Equity Purchase Agreement
	by and among JPSGP, Inc., Foamex-JPS Automotive L.P., Foamex
	International Inc. and Collins & Aikman Products Co. dated
	as of December 11, 1996 is hereby incorporated by reference
	to Exhibit 2.2 of Collins & Aikman Corporations
	Current Report on Form 8-K dated December 10, 1996.                                                                                                                                                                                                     
|        | 10.48 |             |  | Equity Purchase Agreement by and among Seiren
	U.S.A. Corporation, Seiren Automotive Textile Corporation,
	Seiren Co., Ltd. and Collins & Aikman Products Co. dated
	December 11, 1996, is hereby incorporated by reference to
	Exhibit 2.3 of Collins & Aikman Corporations
	Current Report on Form 8-K dated December 10, 1996.                                                                                                                                                                                                             
|        | 10.49 |             |  | Acquisition Agreement between Perstorp A.B. and
	Collins & Aikman Products Co. dated December 11, 1996
	is hereby incorporated by reference to Exhibit 2.4 of
	Collins & Aikman Corporations Current Report on
	Form 8-K dated December 10, 1996.                                                                                                                                                                                                                                                                                             
|        | 10.50 |             |  | Agreement among Perstorp A.B., Perstorp GmbH,
	Perstorp Biotec A.B. and Collins & Aikman Products Co. dated
	December 11, 1996 is hereby incorporated by reference to
	Exhibit 2.5 of Collins & Aikman Corporations
	current report on Form 8-K dated December 10, 1996.                                                                                                                                                                                                                                                                      
|        | 10.51 |             |  | Settlement and Amendment Agreement dated as of
	December 16, 1997 by and among Collins & Aikman
	Products Co., Perstorp A.B., Perstorp GmbH, Collins & Aikman
	Holding A.B., Collins & Aikman Automotive Systems GmbH,
	Collins & Aikman Automotive Systems N.V., Collins &
	Aikman Automotive Systems A.B. and Perstorp Components GmbH and
	related Letter Amendment Agreement is hereby incorporated by
	reference to Exhibit 10.38 of Collins & Aikman
	Corporations Report or Form 10-Q for the fiscal
	quarter ended September 26, 1998.
|        | 10.52 |             |  | Acquisition Agreement dated as of
	December 9, 1996 among Collins & Aikman Products Co.,
	Collins & Aikman Floor Coverings Group, Inc., Collins &
	Aikman Floor Coverings, Inc., CAF Holdings, Inc., and CAF
	Acquisition Corp. is hereby incorporated by reference to
	Exhibit 2.7 of Collins & Aikman Corporations
	Current Report on Form 8-K dated December 10, 1996.                                                                                                                                                                     
|        | 10.53 |             |  | Mastercraft Group Acquisition Agreement dated as
	of April 25, 1997 among Collins & Aikman Products Co.,
	Joan Fabrics Corporation and MC Group Acquisition Company
	L.L.C., is hereby incorporated by reference to Exhibit 2.1
	of Collins & Aikman Corporations Report on
	Form 10-Q for the fiscal quarter ended March 29, 1997.                                                                                                                                                                                                           
|        | 10.54 |             |  | Asset Purchase Agreement dated as of
	June 30, 1997 by and between JPS Automotive L.P. and Safety
	Components International, Inc. is hereby incorporated by
	reference to Exhibit 2.1 of JPS Automotive L.P.s and
	JPS Automotive Products Corp.s Current Report on
	Form 8-K dated July 24, 1997.                                                                                                                                                                                                                                           

41



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##### Table of Contents



|        |       |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------- | ----- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|Number  |       | Description
|        |       |            
|        | 10.55 |             |  | Closing Agreement dated July 24, 1997
	between JPS Automotive L.P., Safety Components International,
	Inc. and Safety Components Fabric Technologies, Inc. is hereby
	incorporated by reference to Exhibit 2.2 of JPS Automotive
	L.P.s and JPS Automotive Products Corp.s Current
	Report on Form 8-K dated July 24, 1997.                                                                                                                                                                                                                                               
|        | 10.56 |             |  | Amended and Restated Acquisition Agreement dated
	as of November 4, 1997 and amended and restated as of
	March 9, 1998, among Collins & Aikman Products Co.,
	Imperial Wallcoverings Inc. and BDPI Holdings Corporation is
	hereby incorporated by reference to Exhibit 2.4 of Collins
	& Aikman Corporations Report on Form 10-K for the
	fiscal year ended December 27, 1997.                                                                                                                                                                                            
|        | 10.57 |             |  | Share Purchase Agreement, dated as of
	January 12, 2001, between Collins & Aikman Corporation
	and Heartland Industrial Partners, L.P., is hereby incorporated
	by reference to Exhibit 10.1 of Collins & Aikman
	Corporations Report on Form 8-K dated
	January 12, 2001., incorporated by reference to
	Exhibit 10.1 to Collins & Aikman
	Corporations Current Report on Form 8-K dated
	January 12, 2001.                                                                                                                                                              
|        | 10.58 |             |  | Registration Rights Agreement, dated
	February 23, 2001, by and among Collins & Aikman
	Corporation, Heartland Industrial Partners, L.P. and the other
	investor stockholders listed on Schedule 1 thereto, Blackstone
	Capital Company II, L.L.C., Blackstone Family Investment
	Partnership I L.P., Blackstone Advisory Directors Partnership
	L.P., Blackstone Capital Partners, L.P. and Wasserstein/C&A
	Holdings, L.L.C., incorporated by reference to Annex D to
	Exhibit 10.1 to Collins & Aikman
	Corporations Current Report on Form 8-K dated
	January 12, 2001.
|        | 10.59 |             |  | Services Agreement, dated as of February 23,
	2001, by and among Collins & Aikman Corporation, Collins
	& Aikman Products Co. and Heartland Industrial Partners, L.P.                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 10.60 |             |  | Profit Participation Interest Agreement, dated as
	of February 23, 2001, by and among Heartland Industrial
	Partners, L.P. and the other investor stockholders listed on
	Schedule 1 thereto and each of Collins & Aikman Corporation,
	Blackstone Capital Company II, L.L.C. and Wasserstein/C&A
	Holdings, L.L.C., incorporated by reference to Annex B to
	Exhibit 10.1 to Collins & Aikman
	Corporations Current Report on Form 8-K dated
	January 12, 2001.                                                                                                           
|        | 10.61 |             |  | Employment Agreement dated October 1, 1999
	between Collins & Aikman Products Co. and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.30 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended
	December 25, 1999.                                                                                                                                                                                                                                                                                                      
|        | 10.62 |             |  | Severance Benefit Agreement dated July 26,
	1999 between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.31 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended
	December 25, 1999.*                                                                                                                                                                                                                                                                                                 
|        | 10.63 |             |  | Severance Benefit Agreement dated August 9,
	1999 between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.32 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended
	December 25, 1999.*                                                                                                                                                                                                                                                                                                
|        | 10.64 |             |  | Letter agreement dated December 17, 1999
	between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.33 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended
	December 25, 1999.*                                                                                                                                                                                                                                                                                                        
|        | 10.65 |             |  | Employment Agreement dated December 1, 2000
	between Collins & Aikman Products Co. and an executive
	officer, which is incorporated by reference to
	Exhibit 10.75 of Collins & Aikman
	Corporations Annual Report on Form 10-K for the
	fiscal year ended December 31, 2000.*                                                                                                                                                                                                                                                                                             
|        | 10.66 |             |  | Separation Agreement dated as of March 12,
	2001 between Collins & Aikman Products Co. and an
	executive officer, which is incorporated by reference to
	Exhibit 10.1 to the Companys Quarterly Report on
	Form 10-Q for the quarter ended March 31, 2001.*                                                                                                                                                                                                                                                                                                                
|        | 10.67 |             |  | Employment Agreement dated as of March 29,
	2000 between Collins & Aikman Products Co. and an
	executive officer is hereby incorporated by reference to
	Exhibit 10.1 of Collins & Aikman
	Corporations Report on Form 10-Q for the quarter
	ended April 1, 2000.*                                                                                                                                                                                                                                                                                                         
|        | 10.68 |             |  | Change in control agreement dated as of April
	2000, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to Exhibit 10.2
	of Collins & Aikman Corporations Report on Form
	10-Q for the quarter ended July 1, 2000.*                                                                                                                                                                                                                                                                                                        

42



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##### Table of Contents



|        |       |             |  |                                                                                                                                                                                                                                                                                     
|------- | ----- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|Number  |       | Description
|        |       |            
|        | 10.69 |             |  | Employment agreement dated as of April 1,
	2000, between Collins & Aikman Products Co. and an
	executive officer is hereby incorporated by reference to
	Exhibit 10.3 of Collins & Aikman
	Corporations Report on Form 10-Q for the quarter ended
	July 1, 2000.*                  
|        | 10.70 |             |  | Change in control agreement dated as of
	April 1, 2000, between Collins & Aikman Products
	Co. and an executive officer is hereby incorporated by reference
	to Exhibit 10.4 of Collins & Aikman
	Corporations Report on Form 10-Q for the quarter ended
	July 1, 2000.*           
|        | 10.71 |             |  | Service contract between Collins &
	Aikman Products GmbH and an executive officer, which is
	incorporated by reference to Exhibit 10.5 of
	Collins & Aikman Corporations Quarterly Report on
	Form 10-Q for the quarter ended June 30, 2001.*                                      
|        | 10.72 |             |  | Employment agreement dated as of August 1,
	2000, between Collins & Aikman Products Co. and an
	executive officer, which is incorporated by reference to
	Exhibit 10.6 of Collins & Aikman
	Corporations Quarterly Report on Form 10-Q for the quarter
	ended June 30, 2001.*      
|        | 10.73 |             |  | Change in control agreement dated as of
	August 1, 2000, between Collins & Aikman
	Corporation and an executive officer, which is incorporated by
	reference to Exhibit 10.7 of Collins & Aikman
	Corporations Quarterly Report on Form 10-Q for the
	quarter ended June 30, 2001.*
|        | 10.74 |             |  | Employment agreement dated as of August 1,
	2000, between Collins & Aikman Products Co. and an
	executive officer, which is incorporated by reference to
	Exhibit 10.8 of Collins & Aikman
	Corporations Quarterly Report on Form 10-Q for the
	quarter ended June 30, 2001.*      
|        | 10.75 |             |  | Change in control agreement dated as of
	August 1, 2000, between Collins & Aikman
	Corporation and an executive officer, which is incorporated by
	reference to Exhibit 10.9 of Collins & Aikman
	Corporations Quarterly Report on Form 10-Q for the
	quarter ended June 30, 2001.*
|        | 10.76 |             |  | Settlement agreement dated as of April 27,
	2000, between Collins & Aikman Products Co. and an
	executive officer, which is incorporated by reference to
	Exhibit 10.10 of Collins & Aikman
	Corporations Quarterly Report on Form 10-Q for the
	quarter ended June 30, 2001.*     
|        | 10.77 |             |  | Letter agreement dated as of July 13, 2000,
	between Collins & Aikman Corporation and an executive
	officer, which is incorporated by reference to
	Exhibit 10.11 of Collins & Aikman
	Corporations Quarterly Report on Form 10-Q for the
	quarter ended June 30, 2001.*           
|        | 10.78 |             |  | Letter agreement dated as of April 7, 2000,
	between Collins & Aikman Corporation and an executive
	officer, which is incorporated by reference to
	Exhibit 10.12 of Collins & Aikman
	Corporations Quarterly Report on Form 10-Q for the
	quarter ended June 30, 2001.*           
|        | 10.79 |             |  | Collins & Aikman Products Co. 2000 Executive
	Incentive Compensation Plan is hereby incorporated by reference
	to Exhibit 10.5 of Collins & Aikman
	Corporations Report on Form 10-Q for the quarter
	ended July 1, 2000.*                                                         
|        | 10.80 |             |  | 2000 Employee Stock Option Plan is hereby
	incorporated by reference to Exhibit 10.6 of
	Collins & Aikman Corporations Report on
	Form 10-Q for the quarter ended July 1, 2000.*                                                                                                   
|        | 10.81 |             |  | Agreement of Sale and Purchase, dated as of
	June 22, 2001, by and among Collins & Aikman
	Products Co. and New King, L.L.C.                                                                                                                                                        
|        | 10.82 |             |  | Lease Agreement, dated as of June 29, 2001,
	between New King, L.L.C., as landlord, and Collins &
	Aikman Products Co., as tenant.                                                                                                                                                  
|        | 10.83 |             |  | Agreement of Sale and Purchase, dated as of
	June 22, 2001, by and among Collins & Aikman
	Products Co. and Anchor Court, L.L.C.                                                                                                                                                    
|        | 10.84 |             |  | Lease Agreement, dated as of June 29, 2001,
	between Anchor Court, L.L.C., as landlord and Collins &
	Aikman Products Co., as tenant.                                                                                                                                               
|        | 10.85 |             |  | Stockholders Agreement dated July 3, 2001,
	by and among Collins & Aikman Corporation, Heartland
	Industrial Partners, L.P. and the other Heartland Entities named
	therein, the Becker Stockholders party thereto and the Joan
	Stockholders party thereto.                        
|        | 10.86 |             |  | Registration Rights Agreement, dated July 3,
	2001, by and among Collins & Aikman Corporation,
	Charles E. Becker, Michael E. McInerney and Jens
	Höhnel and, together with the Joan Investors (as defined
	therein).                                                               

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##### Table of Contents



|        |       |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------- | ----- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|Number  |       | Description
|        |       |            
|        | 10.87 |             |  | First Amendment to Services Agreement, dated as
	of August 7, 2001, among Collins & Aikman
	Corporation, Collins & Aikman Products Co. and
	Heartland Industrial Partners, L.P.                                                                                                                                                                                                                                                                        
|        | 10.88 |             |  | Equipment Lease, dated as of December 18,
	2001, among Textron Automotive Exteriors Inc. and Textron
	Automotive Interiors Inc., collectively as lessee, and IAC
	TAX V, LLC, as lessor.                                                                                                                                                                                                                                                               
|        | 10.89 |             |  | Registration Rights Agreement, dated
	December 20, 2001, by and among Collins & Aikman
	Products Co., Collins & Aikman Corporation, and each of
	the subsidiaries listed on the signature pages thereof, and J.P.
	Morgan Securities Inc., Credit Suisse First Boston Corporation,
	Deutsche Banc Alex. Brown Inc. and Merrill Lynch, Pierce,
	Fenner & Smith Incorporated and the other several
	initial purchasers parties to the Purchase Agreement.
|        | 10.90 |             |  | Registration Rights Agreement dated as of
	December 20, 2001 by and among Becker Ventures, LLC,
	Dresdner Kleinwort Capital Partners 2001 LP, Masco Capital
	Corporation, ML IBK Positions, Inc. and Collins &
	Aikman Corporation.                                                                                                                                                                                                                    
|        | 10.91 |             |  | Registration Rights Agreement, dated
	December 20, 2001, by and between Collins & Aikman
	Corporation, Textron Inc., and Textron Holdco Inc.                                                                                                                                                                                                                                                                                                           
|        | 10.92 |             |  | Preferred Stock Registration and Other Rights
	Agreement, dated as of December 20, 2001, by and among
	Collins & Aikman Products Co. and Textron Inc.                                                                                                                                                                                                                                                                                                  
|        | 10.93 |             |  | Intellimold Technology License and Support
	Agreement, dated as of December 20, 2001, by and between
	Textron, Inc. and Collins & Aikman Corporation and
	Collins & Aikman Products Co.                                                                                                                                                                                                                                                                
|        | 10.94 |             |  | Technology License Agreement (Retained IP), dated
	as of December 20, 2001, by and between Textron, Inc. and
	Collins & Aikman Corporation and Collins &
	Aikman Products Co.                                                                                                                                                                                                                                                                          
|        | 10.95 |             |  | Technology License Agreement (Licensed-Back IP),
	dated as of December 20, 2001, by and between Textron, Inc.
	and Collins & Aikman Corporation and Collins &
	Aikman Products Co.                                                                                                                                                                                                                                                                     
|        | 21    |             |  | Subsidiaries of the Registrant.                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 23.1  |             |  | Consent of PricewaterhouseCoopers LLP.                                                                                                                                                                                                                                                                                                                                                                                                                 
|        | 23.2  |             |  | Consent of Arthur Andersen LLP.                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 99    |             |  | Voting Agreement between Blackstone Capital
	Partners L.P. and Wasserstein Perella Partners, L.P. is hereby
	incorporated by reference to Exhibit 99 of Amendment
	No. 4 to Collins & Aikman Holdings Corporations
	Registration Statement on Form S-2 (Registration
	No. 33-53179) filed June 27, 1994.                                                                                                                                              



---



|  |                                                                                                                                                  
|- | -------------------------------------------------------------------------------------------------------------------------------------------------
|* | Management contract or compensatory plan or
	arrangement required to be filed as an exhibit to this
	Form pursuant to Item 14 (c) of this report.

Copies of any exhibits may be obtained by
stockholders upon written request to Investor Relations
accompanied by a check in the amount of $5.00 payable to Collins
& Aikman Corporation to cover processing and mailing costs.

44



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##### Table of Contents



(b) Reports on Form 8-K

The Company filed the following Reports on
Form 8-K covering the following items:

|                 |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                    
|---------------- |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|December 4, 2001 |  |  |  | Item 9 (Regulation FD Disclosure)                                                                                                                                                                                                                                                                                                                                                                  
|January 4, 2002  |  |  |  | Item 2 (Acquisition or Disposition of
	Assets) and Item 7 (Exhibits)                                                                                                                                                                                                                                                                                                                               
|January 14, 2002 |  |  |  | Item 2 (Acquisition or Disposition of
	Assets) and Item 7 (Financial Statements of Business
	Acquired, Pro Forma Financial Information and Exhibits) Audited
	financial statements are presented for the years ended
	December 31, 2000, January 1, 2000 and January 2,
	1999. Unaudited financial statements are presented for the nine
	months ended September 29, 2001 and September 30,
	2000.*



---



|  |                                                                                                     
|- | ----------------------------------------------------------------------------------------------------
|* | This Report was filed on Form 8-K/ A in
	accordance with Item 7(a)(4) and item 7(b)(2) of
	Form 8-K.

45



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##### Table of Contents








SIGNATURES


Pursuant to the requirements of Section 13
or 15(d) of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on the
28th day of March 2001.



| |                             
| | ----------------------------
| | COLLINS & AIKMAN CORPORATION



| |     |                    
| | --- | -------------------
| | BY: | /s/ THOMAS E. EVANS

| |                                   
| | ----------------------------------
| |                                   
| | Thomas E. Evans                   
| | Chairman of the Board of Directors

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

|                                             |  |                                                                                               |  |               
|-------------------------------------------- |  | --------------------------------------------------------------------------------------------- |  | --------------
|Signature                                    |  | Title                                                                                         |  | Date          
|                                             |  |                                                                                               |  |               
|/s/ THOMAS E. EVANSThomas E. Evans           |  | Chairman of the Board of Directors and Chief
	Executive Officer (Principal Executive Officer) |  | March 28, 2002
|/s/ J. MICHAEL STEPPJ. Michael Stepp         |  | Interim Chief Financial Officer and Director
	(Principal Financial and Accounting Officer)    |  | March 28, 2002
|/s/ CHARLES E. BECKERCharles E. Becker       |  | Vice Chairman of the Board of Directors                                                       |  | March 28, 2002
|/s/ ROBERT C. CLARKRobert C. Clark           |  | Director                                                                                      |  | March 28, 2002
|/s/ MARSHALL A. COHENMarshall A. Cohen       |  | Director                                                                                      |  | March 28, 2002
|/s/ CYNTHIA HESSCynthia Hess                 |  | Director                                                                                      |  | March 28, 2002
|/s/ TIMOTHY D. LEULIETTETimothy D. Leuliette |  | Director                                                                                      |  | March 28, 2002
|/s/ ELKIN MCCALLUMElkin McCallum             |  | Director                                                                                      |  | March 28, 2002
|/s/ W. GERALD MCCONNELLW. Gerald McConnell   |  | Director                                                                                      |  | March 28, 2002
|/s/ WARREN B. RUDMANWarren B. Rudman         |  | Director                                                                                      |  | March 28, 2002
|/s/ DAVID A. STOCKMANDavid A. Stockman       |  | Director                                                                                      |  | March 28, 2002
|/s/ DANIEL P. TREDWELLDaniel P. Tredwell     |  | Director                                                                                      |  | March 28, 2002
|/s/ SAMUEL VALENTISamuel Valenti             |  | Director                                                                                      |  | March 28, 2002

46



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##### Table of Contents






REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders

of Collins & Aikman Corporation:


In our opinion, the 2001 consolidated financial
statements listed in the index appearing under
Item 14(a)(1) present fairly, in all material respects, the
financial position of Collins & Aikman Corporation 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 schedules listed in the index appearing
under Item 14(a)(2) present fairly, in all material
respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
These financial statements and financial statement schedules are
the responsibility of the Companys management; our
responsibility is to express an opinion on these financial
statements and financial statement schedules 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.



| |                           
| | --------------------------
| | PRICEWATERHOUSECOOPERS LLP

Detroit, Michigan

February 21, 2002


F-1



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##### Table of Contents








REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS


To Collins & Aikman Corporation:

We have audited the accompanying consolidated
balance sheet of Collins & Aikman Corporation (a Delaware
Corporation) and subsidiaries as of December 31, 2000 and
the related consolidated statements of operations, cash flows,
and common stockholders deficit for each of the two fiscal
years in the period ended December 31, 2000, as listed in
the index appearing under Item 14(a)(1). These financial
statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with
auditing standards generally accepted in the United States.
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 financial statements referred
to above present fairly, in all material respects, the financial
position of Collins & Aikman Corporation and subsidiaries as
of December 31, 2000 and the results of their operations
and their cash flows for each of the two fiscal years in the
period ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States.

Our audit was made for the purpose of forming an
opinion on the basic financial statements taken as a whole. The
schedule listed in the index appearing under item 14(a)(2)
is presented for purposes of complying with the Securities and
Exchange Commissions rules and is not part of the basic
financial statements. This schedule has been subjected to the
auditing procedures applied in the audit of the basic financial
statements and, in our opinion, fairly states in all material
respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.



| |                    
| | -------------------
| | ARTHUR ANDERSEN LLP

Charlotte, North Carolina,

February 14, 2001 (except with respect to
the matter discussed in Note 24,


as to which the date is March 28, 2002)


F-2



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES






CONSOLIDATED STATEMENTS OF
OPERATIONS

(in millions, except per share data)


|                                                                                                                      |                                                        |                   |         |              |       |              |         |       |      |   |         |       |       |  
|--------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------ | ----------------- | ------- | ------------ | ----- | ------------ | ------- | ----- | ---- | - | ------- | ----- | ----- | -
|                                                                                                                      |                                                        |                  
|                                                                                                                      |                                                        | Year Ended       
|                                                                                                                      |                                                        |                  
|                                                                                                                      |                                                        | December 31,      |         | December 31, |       | December 25,
|                                                                                                                      |                                                        | 2001              |         | 2000         |       | 1999        
|                                                                                                                      |                                                        |                   |         |              |       |             
|Net sales                                                                                                             |                                                        | $                 | 1,823.3 |              |       | $            | 1,901.8 |       |      | $ | 1,898.6 |      
|Cost of goods sold                                                                                                    |                                                        |                   | 1,604.5 |              |       |              | 1,635.2 |       |      |   | 1,613.9 |      
|                                                                                                                      |                                                        |                   |         |              |       |              |         |       |      |   |         |      
|Gross profit                                                                                                          |                                                        |                   | 218.8   |              |       |              | 266.6   |       |      |   | 284.7   |      
|Selling, general and administrative expenses                                                                          |                                                        |                   | 164.4   |              |       |              | 158.5   |       |      |   | 152.8   |      
|Restructuring charge and impairment of long-lived
	assets                                                             |                                                        |                   | 18.8    |              |       |              |        |       |      |   | 33.4    |      
|                                                                                                                      |                                                        |                   |         |              |       |              |         |       |      |   |         |      
|Operating income                                                                                                      |                                                        |                   | 35.6    |              |       |              | 108.1   |       |      |   | 98.5    |      
|Interest expense, net of interest income of $2.0,
	$3.4 and $2.5                                                      |                                                        |                   | 84.3    |              |       |              | 96.6    |       |      |   | 92.1    |      
|Loss on sale of receivables                                                                                           |                                                        |                   | 10.8    |              |       |              | 9.2     |       |      |   | 5.4     |      
|Subsidiary preferred stock requirements                                                                               |                                                        |                   | 2.4     |              |       |              |        |       |      |   |        |      
|Other expense, net                                                                                                    |                                                        |                   | 6.4     |              |       |              | 1.5     |       |      |   | 2.2     |      
|                                                                                                                      |                                                        |                   |         |              |       |              |         |       |      |   |         |      
|Income (loss) from continuing operations
	before income taxes                                                         |                                                        |                   | (68.3   | )            |       |              | 0.8     |       |      |   | (1.2    | )    
|Income tax (benefit) expense                                                                                          |                                                        |                   | (18.6   | )            |       |              | 2.2     |       |      |   | 0.2     |      
|                                                                                                                      |                                                        |                   |         |              |       |              |         |       |      |   |         |      
|Loss from continuing operations before
	extraordinary loss and cumulative effect of a change in
	accounting principle |                                                        |                   | (49.7   | )            |       |              | (1.4    | )     |      |   | (1.4    | )    
|Income from discontinued operations, net of
	income taxes of $5.7 and $4.4                                            |                                                        |                   | 8.8     |              |       |              | 6.6     |       |      |   |        |      
|                                                                                                                      |                                                        |                   |         |              |       |              |         |       |      |   |         |      
|Income (loss) before extraordinary loss and
	cumulative effect of change in accounting principle                      |                                                        |                   | (40.9   | )            |       |              | 5.2     |       |      |   | (1.4    | )    
|Extraordinary loss on retirement of debt, net of
	income taxes of $2.7 and $0.5                                       |                                                        |                   | (5.3    | )            |       |              | (0.7    | )     |      |   |        |      
|Cumulative effect of a change in accounting
	principle, net of income taxes of $5.1                                   |                                                        |                   |        |              |       |              |        |       |      |   | (8.8    | )    
|                                                                                                                      |                                                        |                   |         |              |       |              |         |       |      |   |         |      
|                                                                                                                      |                                                        | Net income (loss) |         | $            | (46.2 | )            |         | $     | 4.5  |   |         | $     | (10.2 | )
|                                                                                                                      |                                                        |                   |         |              |       |              |         |       |      |   |         |      
|Net income (loss) per basic and diluted
	common share:                                                                |                                                        |                   |         |              |       |              |         |       |      |   |         |      
|                                                                                                                      | Continuing operations                                  |                   | $       | (0.51        | )     |              | $       | (0.03 | )    |   | $       | (0.02 | )    
|                                                                                                                      | Discontinued operations                                |                   |         | 0.09         |       |              |         | 0.11  |      |   |         |      |      
|                                                                                                                      | Extraordinary loss                                     |                   |         | (0.05        | )     |              |         | (0.01 | )    |   |         |      |      
|                                                                                                                      | Cumulative effect of a change in accounting
	principle |                   |         |             |       |              |         |      |      |   |         | (0.14 | )    
|                                                                                                                      |                                                        |                   |         |              |       |              |         |       |      |   |         |      
|                                                                                                                      |                                                        | Net income (loss) |         | $            | (0.47 | )            |         | $     | 0.07 |   |         | $     | (0.16 | )
|                                                                                                                      |                                                        |                   |         |              |       |              |         |       |      |   |         |      
|Average common shares outstanding:                                                                                    |                                                        |                   |         |              |       |              |         |       |      |   |         |      
|                                                                                                                      | Basic and Diluted                                      |                   |         | 97.2         |       |              |         | 61.9  |      |   |         | 62.0  |      
|                                                                                                                      |                                                        |                   |         |              |       |              |         |       |      |   |         |      

The Notes to Consolidated Financial Statements
are an integral part

of these consolidated financial statements.


F-3



---



##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES






CONSOLIDATED BALANCE SHEETS


(in millions, except par value)


|                                                                                                                                                                                                                     |                                                                      |                                             |         |              |       |   |         |       |        |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------- | ------------------------------------------- | ------- | ------------ | ----- | - | ------- | ----- | ------ | -
|                                                                                                                                                                                                                     |                                                                      | December 31,                                |         | December 31,
|                                                                                                                                                                                                                     |                                                                      | 2001                                        |         | 2000        
|                                                                                                                                                                                                                     |                                                                      |                                             |         |             
|ASSETS                                                                                                                                                                                                              
|Current Assets:                                                                                                                                                                                                      |                                                                      |                                             |         |              |       |   |         |      
|                                                                                                                                                                                                                     | Cash and cash equivalents                                            |                                             | $       | 73.9         |       |   | $       | 20.9  |       
|                                                                                                                                                                                                                     | Accounts and other receivables, net of allowances
	of $14.6 and $8.1 |                                             |         | 406.1        |       |   |         | 196.5 |       
|                                                                                                                                                                                                                     | Inventories                                                          |                                             |         | 132.6        |       |   |         | 131.7 |       
|                                                                                                                                                                                                                     | Other                                                                |                                             |         | 131.9        |       |   |         | 75.9  |       
|                                                                                                                                                                                                                     |                                                                      |                                             |         |              |       |   |         |      
|                                                                                                                                                                                                                     |                                                                      | Total current assets                        |         |              | 744.5 |   |         |       | 425.0  |  
|Property, plant and equipment, net                                                                                                                                                                                   |                                                                      |                                             | 618.1   |              |       |   | 434.1   |      
|Deferred tax assets                                                                                                                                                                                                  |                                                                      |                                             | 136.5   |              |       |   | 97.3    |      
|Goodwill, net                                                                                                                                                                                                        |                                                                      |                                             | 1,253.8 |              |       |   | 245.5   |      
|Investment in joint ventures                                                                                                                                                                                         |                                                                      |                                             | 23.0    |              |       |   | 4.8     |      
|Other assets                                                                                                                                                                                                         |                                                                      |                                             | 217.5   |              |       |   | 73.6    |      
|                                                                                                                                                                                                                     |                                                                      |                                             |         |              |       |   |         |      
|                                                                                                                                                                                                                     |                                                                      | $                                           | 2,993.4 |              |       | $ | 1,280.3 |      
|                                                                                                                                                                                                                     |                                                                      |                                             |         |              |       |   |         |      
|LIABILITIES AND COMMON STOCKHOLDERS
	EQUITY (DEFICIT)                                                                                                                                                              
|Current Liabilities:                                                                                                                                                                                                 |                                                                      |                                             |         |              |       |   |         |      
|                                                                                                                                                                                                                     | Short-term borrowings                                                |                                             | $       | 35.7         |       |   | $       | 3.8   |       
|                                                                                                                                                                                                                     | Current maturities of long-term debt                                 |                                             |         | 19.5         |       |   |         | 84.3  |       
|                                                                                                                                                                                                                     | Accounts payable                                                     |                                             |         | 468.7        |       |   |         | 178.5 |       
|                                                                                                                                                                                                                     | Accrued expenses                                                     |                                             |         | 245.2        |       |   |         | 123.1 |       
|                                                                                                                                                                                                                     |                                                                      |                                             |         |              |       |   |         |      
|                                                                                                                                                                                                                     |                                                                      | Total current liabilities                   |         |              | 769.1 |   |         |       | 389.7  |  
|Long-term debt                                                                                                                                                                                                       |                                                                      |                                             | 1,282.4 |              |       |   | 799.7   |      
|Other, including post-retirement benefit
	obligations                                                                                                                                                                |                                                                      |                                             | 404.3   |              |       |   | 245.8   |      
|Commitments and contingencies                                                                                                                                                                                        |                                                                      |                                             |         |              |       |   |         |      
|Minority interest in consolidated subsidiary                                                                                                                                                                         |                                                                      |                                             | 15.2    |              |       |   |        |      
|Mandatorily redeemable preferred stock of
	subsidiary                                                                                                                                                                |                                                                      |                                             | 147.7   |              |       |   |        |      
|Common stock ($.01 par value, 300.0 shares
	authorized, 168.0 shares issued and outstanding at
	December 31, 2001 and 150.0 shares authorized, 70.5 shares
	issued and 62.0 shares outstanding at December 31, 2000) |                                                                      |                                             | 1.7     |              |       |   | 0.7     |      
|Other paid-in capital                                                                                                                                                                                                |                                                                      |                                             | 1,123.1 |              |       |   | 585.5   |      
|Accumulated deficit                                                                                                                                                                                                  |                                                                      |                                             | (682.8  | )            |       |   | (636.6  | )    
|Accumulated other comprehensive loss                                                                                                                                                                                 |                                                                      |                                             | (67.3   | )            |       |   | (42.9   | )    
|Treasury stock, at cost, 8.5 shares at
	December 31, 2000                                                                                                                                                            |                                                                      |                                             |        |              |       |   | (61.6   | )    
|                                                                                                                                                                                                                     |                                                                      |                                             |         |              |       |   |         |      
|                                                                                                                                                                                                                     |                                                                      | Total common stockholders equity (deficit) |         | $            | 374.7 |   |         | $     | (154.9 | )
|                                                                                                                                                                                                                     |                                                                      |                                             |         |              |       |   |         |      
|                                                                                                                                                                                                                     |                                                                      | $                                           | 2,993.4 |              |       | $ | 1,280.3 |      
|                                                                                                                                                                                                                     |                                                                      |                                             |         |              |       |   |         |      

The Notes to Consolidated Financial Statements
are an integral part

of these consolidated financial statements.


F-4



---



##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES






CONSOLIDATED STATEMENTS OF CASH
FLOWS


(in millions)


|                     |                                                                                                  |                                                       |                                                         |              |        |              |   |       |       |       |   |       |       |       |  
|-------------------- | ------------------------------------------------------------------------------------------------ | ----------------------------------------------------- | ------------------------------------------------------- | ------------ | ------ | ------------ | - | ----- | ----- | ----- | - | ----- | ----- | ----- | -
|                     |                                                                                                  |                                                      
|                     |                                                                                                  | Year Ended                                           
|                     |                                                                                                  |                                                      
|                     |                                                                                                  | December 31,                                          |                                                         | December 31, |        | December 25,
|                     |                                                                                                  | 2001                                                  |                                                         | 2000         |        | 1999        
|                     |                                                                                                  |                                                       |                                                         |              |        |             
|OPERATING ACTIVITIES |                                                                                                  |                                                       |                                                         |              |        |              |   |       |       |       |   |      
|                     | Loss from continuing operations                                                                  |                                                       | $                                                       | (49.7        | )      |              | $ | (1.4  | )     |       | $ | (1.4  | )    
|                     | Adjustments to derive cash flow from continuing
	operating activities:                           |                                                       |                                                         |              |        |              |   |       |       |       |   |       |      
|                     |                                                                                                  | Impairment of long-lived assets                       |                                                         |              | 7.6    |              |   |       |      |       |   |       | 13.4  |      
|                     |                                                                                                  | Deferred income tax expense                           |                                                         |              | (26.0  | )            |   |       | (10.0 | )     |   |       | (6.8  | )    
|                     |                                                                                                  | Subsidiary preferred stock requirements               |                                                         |              | 2.4    |              |   |       |      |       |   |       |      |      
|                     |                                                                                                  | Depreciation and leasehold amortization               |                                                         |              | 64.2   |              |   |       | 59.1  |       |   |       | 58.2  |      
|                     |                                                                                                  | Goodwill amortization                                 |                                                         |              | 7.1    |              |   |       | 7.1   |       |   |       | 7.0   |      
|                     |                                                                                                  | Amortization of other assets                          |                                                         |              | 10.5   |              |   |       | 8.5   |       |   |       | 6.2   |      
|                     |                                                                                                  | Loss (gain) on sale of property, plant and
	equipment |                                                         |              | 8.7    |              |   |       | (1.0  | )     |   |       | (0.3  | )    
|                     |                                                                                                  | Decrease in accounts and other receivables            |                                                         |              | 135.0  |              |   |       | 78.2  |       |   |       | 1.8   |      
|                     |                                                                                                  | Decrease in inventories                               |                                                         |              | 53.4   |              |   |       | 0.9   |       |   |       | 20.2  |      
|                     |                                                                                                  | Increase (decrease) in interest payable               |                                                         |              | (4.1   | )            |   |       | 3.4   |       |   |       | 0.9   |      
|                     |                                                                                                  | Increase (decrease) in accounts payable               |                                                         |              | (31.9  | )            |   |       | (20.0 | )     |   |       | 28.7  |      
|                     |                                                                                                  | Other, net                                            |                                                         |              | (45.8  | )            |   |       | 6.1   |       |   |       | (27.8 | )    
|                     |                                                                                                  |                                                       |                                                         |              |        |              |   |       |       |       |   |      
|                     |                                                                                                  |                                                       | Net cash provided by continuing operating
	activities   |              |        | 131.4        |   |       |       | 130.9 |   |       |       | 100.1 |  
|                     |                                                                                                  |                                                       |                                                         |              |        |              |   |       |       |       |   |      
|                     |                                                                                                  |                                                       | Net cash provided by (used in) discontinued
	operations |              |        | 12.2         |   |       |       | 0.4   |   |       |       | (16.8 | )
|                     |                                                                                                  |                                                       |                                                         |              |        |              |   |       |       |       |   |      
|INVESTING ACTIVITIES |                                                                                                  |                                                       |                                                         |              |        |              |   |       |       |       |   |      
|                     |                                                                                                  | Additions to property, plant and equipment            |                                                         |              | (54.5  | )            |   |       | (69.0 | )     |   |       | (86.4 | )    
|                     |                                                                                                  | Sales of property, plant and equipment                |                                                         |              | 88.1   |              |   |       | 5.6   |       |   |       | 10.1  |      
|                     |                                                                                                  | Acquisitions of businesses, net of cash acquired      |                                                         |              | (760.9 | )            |   |       |      |       |   |       | (0.4  | )    
|                     |                                                                                                  | Sale of business                                      |                                                         |              | 3.5    |              |   |       |      |       |   |       |      |      
|                     |                                                                                                  | Other, net                                            |                                                         |              |       |              |   |       |      |       |   |       | (0.8  | )    
|                     |                                                                                                  |                                                       |                                                         |              |        |              |   |       |       |       |   |      
|                     |                                                                                                  |                                                       | Net cash used in investing activities                   |              |        | (723.8       | ) |       |       | (63.4 | ) |       |       | (77.5 | )
|                     |                                                                                                  |                                                       |                                                         |              |        |              |   |       |       |       |   |      
|FINANCING ACTIVITIES |                                                                                                  |                                                       |                                                         |              |        |              |   |       |       |       |   |      
|                     | Issuance of long-term debt                                                                       |                                                       |                                                         | 950.0        |        |              |   |      |       |       |   | 100.0 |      
|                     | Proceeds from (reduction of) participating
	interests in accounts receivable, net of redemptions |                                                       |                                                         | (2.6         | )      |              |   | (34.0 | )     |       |   | 2.0   |      
|                     | Cost of debt issuance                                                                            |                                                       |                                                         | (59.4        | )      |              |   |      |       |       |   | (2.4  | )    
|                     | Repayment of long-term debt                                                                      |                                                       |                                                         | (383.2       | )      |              |   | (66.6 | )     |       |   | (20.6 | )    
|                     | Increase (decrease) in short-term borrowings                                                     |                                                       |                                                         | 10.1         |        |              |   | 0.2   |       |       |   | (7.4  | )    
|                     | Net borrowings (repayments) on revolving
	credit facilities                                      |                                                       |                                                         | (150.2       | )      |              |   | 39.0  |       |       |   | (35.3 | )    
|                     | Net proceeds from issuance of common stock                                                       |                                                       |                                                         | 207.2        |        |              |   |      |       |       |   |      |      
|                     | Reissue (purchase) treasury stock, net                                                           |                                                       |                                                         | 61.3         |        |              |   | 0.4   |       |       |   | (1.7  | )    
|                     | Dividends paid                                                                                   |                                                       |                                                         |             |        |              |   |      |       |       |   | (50.2 | )    
|                     |                                                                                                  |                                                       |                                                         |              |        |              |   |       |       |       |   |      
|                     |                                                                                                  |                                                       | Net cash provided by (used in) financing
	activities    |              |        | 633.2        |   |       |       | (61.0 | ) |       |       | (15.6 | )
|                     |                                                                                                  |                                                       |                                                         |              |        |              |   |       |       |       |   |      
|                     | Increase (decrease) in cash and cash
	equivalents                                                |                                                       |                                                         | 53.0         |        |              |   | 6.9   |       |       |   | (9.8  | )    
|                     | Cash and cash equivalents at beginning of year                                                   |                                                       |                                                         | 20.9         |        |              |   | 14.0  |       |       |   | 23.8  |      
|                     |                                                                                                  |                                                       |                                                         |              |        |              |   |       |       |       |   |      
|                     | Cash and cash equivalents at end of year                                                         |                                                       | $                                                       | 73.9         |        |              | $ | 20.9  |       |       | $ | 14.0  |      
|                     |                                                                                                  |                                                       |                                                         |              |        |              |   |       |       |       |   |      

The Notes to Consolidated Financial Statements
are an integral part

of these consolidated financial statements.


F-5



---



##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES






CONSOLIDATED STATEMENTS OF COMMON
STOCKHOLDERS EQUITY (DEFICIT)


(in millions)


|                                        |                                         |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |   |   | 
|--------------------------------------- | --------------------------------------- | ---------------------------------------- | ----- | ----- | ----- | ----------- | ------ | ------------- | ----- | ------ | ------ | ------- | - | -------- | ----- | - | ----- | - | --- | - | - | - | ------- | - | - | - | ----- | - | - | 
|                                        |                                         | Current Year                             |       |       |       |             |        | Accumulated   |       |        |        |         |   |         
|                                        |                                         | Comprehensive                            |       |       |       |             |        | Other         |       |        |        | Other   |   |         
|                                        |                                         | Income                                   |       |       |       | Accumulated |        | Comprehensive |       | Common |        | Paid-in |   | Treasury
|                                        |                                         | (Loss)                                   |       | Total |       | Deficit     |        | Loss(a)       |       | Stock  |        | Capital |   | Stock   
|                                        |                                         |                                          |       |       |       |             |        |               |       |        |        |         |   |         
|Balance at December 26, 1998            |                                         |                                          |       |       |       | $           | (79.7  | )             |       | $      | (580.7 | )       |   | $        | (23.5 | ) |       | $ | 0.7 |   |   | $ | 585.5   |   |   | $ | (61.7 | )
|Comprehensive income:                   |                                         |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |  
|                                        | Net loss                                |                                          | $     | (10.2 | )     |             |        | (10.2         | )     |        |        | (10.2   | ) |          |       |  |       |   |     |  |   |   |         |  |   |   |       |  |  
|                                        | Other comprehensive income, net of tax: |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |   |  
|                                        |                                         | Foreign currency translation adjustments |       |       | (10.6 | )           |        |               | (10.6 | )      |        |         |  |          |       |   | (10.6 | ) |     |   |  |   |         |   |  |   |       |   |  | 
|                                        |                                         | Pension equity adjustment                |       |       | 0.8   |             |        |               | 0.8   |        |        |         |  |          |       |   | 0.8   |   |     |   |  |   |         |   |  |   |       |   |  | 
|                                        |                                         |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |  
|                                        |                                         | $                                        | (20.0 | )     |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |  
|                                        |                                         |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |  
|Compensation expense                    |                                         |                                          |       |       |       |             | 0.5    |               |       |        |       |         |   |          |      |   |       |   |    |   |   |   | 0.5     |   |   |   |      |  
|Dividends                               |                                         |                                          |       |       |       |             | (50.2  | )             |       |        | (50.2  | )       |   |          |      |   |       |   |    |   |   |   |        |   |   |   |      |  
|Purchase of treasury stock (3.7 shares) |                                         |                                          |       |       |       |             | (2.1   | )             |       |        |       |         |   |          |      |   |       |   |    |   |   |   |        |   |   |   | (2.1  | )
|Exercise of stock options (0.1 shares)  |                                         |                                          |       |       |       |             | 0.4    |               |       |        |        |         |   |          |      |   |       |   |    |   |   |   | (0.5    | ) |   |   | 0.9   |  
|                                        |                                         |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |  
|Balance at December 25, 1999            |                                         |                                          |       |       |       |             | (151.1 | )             |       |        | (641.1 | )       |   |          | (33.3 | ) |       |   | 0.7 |   |   |   | 585.5   |   |   |   | (62.9 | )
|Comprehensive income:                   |                                         |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |  
|                                        | Net Income                              |                                          | $     | 4.5   |       |             |        | 4.5           |       |        |        | 4.5     |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |   |  
|                                        | Other comprehensive income, net of tax: |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |   |  
|                                        |                                         | Foreign currency translation adjustments |       |       | (10.4 | )           |        |               | (10.4 | )      |        |         |  |          |       |   | (10.4 | ) |     |   |  |   |         |   |  |   |       |   |  | 
|                                        |                                         | Pension equity adjustment                |       |       | 0.8   |             |        |               | 0.8   |        |        |         |  |          |       |   | 0.8   |   |     |   |  |   |         |   |  |   |       |   |  | 
|                                        |                                         |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |  
|                                        |                                         | $                                        | (5.1  | )     |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |  
|                                        |                                         |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |  
|Compensation expense                    |                                         |                                          |       |       |       |             | 0.9    |               |       |        |       |         |   |          |      |   |       |   |    |   |   |   | 0.9     |   |   |   |      |  
|Purchase of treasury stock (0.4 shares) |                                         |                                          |       |       |       |             | (0.5   | )             |       |        |       |         |   |          |      |   |       |   |    |   |   |   |        |   |   |   | (0.5  | )
|Exercise of stock options (0.2 shares)  |                                         |                                          |       |       |       |             | 0.9    |               |       |        |       |         |   |          |      |   |       |   |    |   |   |   | (0.9    | ) |   |   | 1.8   |  
|                                        |                                         |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |  
|Balance at December 31, 2000            |                                         |                                          |       |       |       | $           | (154.9 | )             |       | $      | (636.6 | )       |   | $        | (42.9 | ) |       | $ | 0.7 |   |   | $ | 585.5   |   |   | $ | (61.6 | )
|Comprehensive income:                   |                                         |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |  
|                                        | Net loss                                |                                          | $     | (46.2 | )     |             |        | (46.2         | )     |        |        | (46.2   | ) |          |       |   |       |   |     |   |   |   |         |   |   |   |       |   |  
|                                        | Other comprehensive income:             |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |   |  
|                                        |                                         | Foreign currency translation adjustments |       |       | (9.0  | )           |        |               | (9.0  | )      |        |         |  |          |       |   | (9.0  | ) |     |   |  |   |         |   |  |   |       |   |  | 
|                                        |                                         | Pension equity adjustment, net of tax    |       |       | (15.4 | )           |        |               | (15.4 | )      |        |         |  |          |       |   | (15.4 | ) |     |   |   |   |         |   |   |   |       |   |   | 
|                                        |                                         |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |  
|                                        |                                         | $                                        | (70.6 | )     |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |  
|                                        |                                         |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |  
|Compensation expense                    |                                         |                                          |       |       |       |             | 1.2    |               |       |        |       |         |   |          |      |   |       |   |    |   |   |   | 1.2     |   |   |   |      |  
|Issue of common stock                   |                                         |                                          |       |       |       |             | 533.0  |               |       |        |       |         |   |          |      |   |       |   | 1.0 |   |   |   | 532.0   |   |   |   |      |  
|Reissue of treasury stock (8.5 shares)  |                                         |                                          |       |       |       |             | 61.3   |               |       |        |       |         |   |          |      |   |       |   |    |   |   |   | (0.3    | ) |   |   | 61.6  |  
|Exercise of stock options (1.1 shares)  |                                         |                                          |       |       |       |             | 4.7    |               |       |        |       |         |   |          |      |   |       |   |     |   |   |   | 4.7     |   |   |   |      |  
|                                        |                                         |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |  
|Balance at December 31, 2001            |                                         |                                          |       |       |       | $           | 374.7  |               |       | $      | (682.8 | )       |   | $        | (67.3 | ) |       | $ | 1.7 |   |   | $ | 1,123.1 |   |   | $ |      |  
|                                        |                                         |                                          |       |       |       |             |        |               |       |        |        |         |   |          |       |   |       |   |     |   |   |   |         |   |   |   |       |  



---



|    |                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The components of Accumulated Other Comprehensive
	Loss are $51.7 million of foreign currency translation
	adjustment and $15.6 million of pension equity adjustment
	as of December 31, 2001.

The Notes to Consolidated Financial Statements
are an integral part

of these consolidated financial statements.


F-6



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES






NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS


1.     Organization

Collins & Aikman Corporation (the
Company) is a Delaware corporation, headquartered in
Troy, Michigan. The Company conducts all of its operating
activities through its wholly owned Collins & Aikman
Products Co. (Products) subsidiary. The Company is a
global leader in design, engineering and manufacturing of
automotive interior components, including instrument panels,
fully assembled cockpit modules, floor and acoustic systems,
automotive fabric, interior trim and convertible top systems.
The Company operates through three divisions: North American
Automotive Interior Systems, European Automotive Interior
Systems and Specialty Automotive Products.

As of December 31, 2000, Blackstone Capital
Partners L.P. and its affiliates (Blackstone
Partners) and Wasserstein Perella Partners L.P. and its
affiliates (WP Partners) collectively owned
approximately 87% of the common stock of the Company.

During February 2001, Heartland Industrial
Partners, L.P. and its affiliates (Heartland)
acquired a controlling interest equal to approximately 60% of
the Company through a purchase of 25 million shares of
common stock from the Company and a purchase of 27 million
shares from Blackstone Partners and WP Partners. As a result of
the sale of shares, the Company received gross proceeds of
$125.0 million, or approximately $94.6 million after
fees and expenses associated with the transactions. The Company
also received a profit participation right on certain future
common stock sales by Heartland. As a result of the above
transactions (Heartland Transaction), Heartland is
entitled to designate a majority of the Companys Board of
Directors (Note 3).

The Company completed its acquisition of Becker
Group, LLC, a supplier of plastic components to the automotive
industry and the automotive fabric operations of Joan Fabrics
and an affiliate in July and September 2001, respectively. The
acquisitions included the issuance of approximately 30 million
shares of common stock with a market value of
$169.3 million (Note 3).

In December 2001, the Company completed it
acquisition of Textron Automotive Companys
(Textrons) automotive trim division
(TAC-Trim) for $940 million. The purchase price
consisted primarily of: $632.2 million in cash and assumed
debt; 18 million shares of common stock, with a market
value of $160.9 million; and preferred stock of Products
with an aggregate liquidation preference of $326.4 million,
valued at $146.9 million. The cash purchase price was
financed through a combination of the sale of an additional
32 million shares of common stock, valued at
$160.0 million, to Heartland and debt financing
(Note 3).

As a result of the above transactions, the
Companys total shares outstanding increased from
approximately 62 million shares to approximately
168 million shares. On December 31, 2001, Heartland
owned approximately 40% of the outstanding shares; Blackstone
Partners and WP Partners owned approximately 15%;
Joan Fabrics Corp., Mr. Elkin McCallum and associates owned
approximately 8%; Mr. Charles E. Becker and Textron, Inc.
each owned approximately 11% (Note 3).

2.     Summary of
Significant Accounting Policies

Basis of Presentation  The
consolidated financial statements include the accounts of the
Company and its consolidated subsidiaries. Investments in
entities in which the Company has control are consolidated.
Investments in 50% or less owned entities in which the Company
has significant influence have been accounted for under the
equity method. All significant intercompany items have been
eliminated in the preparation of the consolidated financial
statements. Certain prior year items have been reclassified to
conform with the fiscal 2001 presentation.

Use of Estimates  The preparation of
consolidated financial statements in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect the

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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

Fiscal Year  During fiscal 2000, the
Company changed its fiscal year-end to a calendar year-end. The
2000 fiscal year consisted of 53 weeks, which ended on
December 31, 2000 whereas, fiscal 1999, which ended on
December 25, 1999 had 52 weeks.

Earnings Per Share  Basic earnings per
share is based on income available to common shareholders
divided by the weighted average number of common shares
outstanding. Diluted earnings per share is based on income
available to common shareholders divided by the sum of the
weighted average number of common shares outstanding and all
potentially dilutive common shares. Potentially dilutive common
shares include shares which may be issued upon the assumed
exercise of employee stock options less the number of treasury
shares assumed to be purchased from the proceeds, including
applicable compensation expense (Note 23).

Cash and Cash Equivalents  Cash and
cash equivalents include all cash balances and highly liquid
investments with an original maturity of three months or less.

Accounts and Other Receivables 
Accounts and other receivables consist primarily of the
Companys trade receivables and the retained interest in
the Receivables Facility (See Note 11). The Company has
provided an allowance against uncollectible accounts.

Inventories  Inventories are valued at
the lower of cost or market, but not in excess of net realizable
value. Cost is determined on the first-in, first-out basis.

Property, Plant and Equipment 
Property, plant and equipment are stated at cost. Normal repairs
and maintenance are expensed as incurred. Provisions for
depreciation are primarily computed on a straight-line basis
over the estimated useful lives as follows: 10-20 years for
land improvements, 20-40 years for buildings, and
3-11 years for machinery and equipment. Leasehold
improvements are amortized over the lesser of the lease term or
the estimated useful lives of the improvements.

Long-Lived Assets  Statement of
Financial Accounting Standards (SFAS) No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of, establishes
accounting standards for the impairment of long-lived assets,
certain identifiable intangibles, and goodwill related to those
assets to be held and used and for long-lived assets and certain
identifiable intangibles to be disposed of. SFAS No. 121
requires that long-lived assets and certain identifiable
intangibles to be held and used by an entity be reviewed for
impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable, and
that certain long-lived assets and identifiable intangibles to
be disposed of be reported at the lower of carrying amount or
fair value less cost to sell. During 2001, the Company incurred
asset impairment charges of $7.6 million recognized as part
of restructuring programs (Note 15). In addition, during
fiscal 1999, the Company incurred a charge of $13.4 million
relating to asset impairments recognized in the Reorganization
(See Note 15).

Goodwill and Intangibles  Goodwill,
representing the excess of purchase price over the fair value of
net assets of the acquired entities, obtained prior to
June 30, 2001 is being amortized on a straight-line basis
over a period of forty years. Amortization of goodwill
applicable to continuing operations was $7.1 million for
the year ended December 31, 2001 and $7.1 million for
fiscal 2000 and $7.0 million for fiscal 1999. Accumulated
amortization at December 31, 2001 and December 30,
2000 was $35.7 million and $32.0 million,
respectively. The carrying value of goodwill is reviewed
periodically based on the non-discounted cash flows and pretax
income of the entities acquired over the remaining amortization
periods. The Company believes that no adjustment for impairment
is required for the $1.3 billion of goodwill at
December 31, 2001. In accordance with SFAS No. 142,
Goodwill and Other Intangible Assets, goodwill in
the amount of $1.0 billion acquired subsequent to
June 30, 2001 is not being amortized (Note 3).
Beginning in 2002, as required by SFAS

F-8



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

No. 142, goodwill will no longer be
amortized, but will be subject to annual impairment tests. Other
intangible assets that do not have an indefinite life will
continue to be amortized over their useful lives.

Revenue Recognition  The Company
recognizes revenue from product sales when it has shipped the
goods. The Company generally allows its customers the right of
return only in the case of defective products. The Company
provides a reserve for estimated defective product costs at the
time of the sale of the products.

Customer Engineering and Tooling 
Engineering and tooling balances represent tools, dies and other
items used in the manufacture of customer components. Amounts
included in the consolidated balance sheets include
Company-owned tools and costs incurred on customer-owned tools
which are subject to reimbursement, pursuant to the terms of a
customer contract. Company-owned tools balances are amortized
over the tools expected life or the life of the related
vehicle program, whichever is shorter. Engineering, testing and
other costs incurred in the design and development of production
parts are expensed as incurred, unless the costs are
reimbursable, as specified in a customer contract.

Emerging Issue Task Force EITF Issue
No. 99-5, Accounting for Pre-Production Costs Related
to Long-Term Supply Arrangements (EITF No. 99-5)
requires that design and development costs for products to be
sold under long-term supply arrangements be expensed as
incurred, and costs incurred for molds, dies and other tools
that will be used in producing the products under long-term
supply arrangements be capitalized and amortized over the
shorter of the expected useful life of the assets or the term of
the supply arrangement. The Company adopted the provisions of
EITF No. 99-5 on a prospective basis on December 26,
1999. At December 31, 2001, the Company had assets of
approximately $22.7 million recognized pursuant to
agreements that provide for contractual reimbursement of
pre-production design and development costs, approximately
$90.2 million (of which substantially all is reimbursable)
for molds, dies and other tools that are customer-owned and
approximately $9.1 million for molds, dies and other tools that
the Company owns.

Derivative Financial Instruments  The
Company utilizes derivative financial instruments to manage risk
associated with foreign exchange rate volatility. Currently,
most of the Companys derivative transactions do not
utilize the hedge provisions of SFAS No. 133,
Accounting for Derivative Instruments and Hedging
Activities. The Company uses derivatives to hedge economic
risks even though these derivatives may not qualify for hedge
accounting in accordance with SFAS No. 133. Accordingly,
these derivative instruments are marked to fair market value and
reported on the balance sheet. Gains and losses on these
instruments are reported in Other Income on the
Consolidated Statements of Operations. From a risk management
perspective, these gains and losses are intended to offset
foreign currency transaction losses or gains. The Company also
has several credit default swaps, with a notional amount of
175 million. The purpose of entering these swaps is to
reduce a potential loss in liquidity (provided by the
Companys Receivable Facility) that would result from the
downgrading of an obligor (Note 11). The fair value of
these instruments was approximately $3.1 million as of
December 31, 2001. These instruments do not qualify for
hedge accounting under SFAS No. 133 and are marked to
market with gains and losses reported in Other
Income on the Consolidated Statement of Operations.
Corporate policy prescribes the range of allowable risk
management activity. The Company does not enter into derivative
transactions for speculative purposes. Refer to Note 5.
Foreign Currency Protection Programs for additional
discussion.

Foreign Currency  Foreign currency
activity is reported in accordance with SFAS No. 52,
Foreign Currency Translation. SFAS No. 52
generally provides that the assets and liabilities of foreign
operations be translated at the current exchange rates as of the
end of the accounting period and that revenues and expenses be
translated using average exchange rates. The resulting
translation adjustments arising from foreign currency
translations are accumulated as a component of other
comprehensive income.

Gains and losses resulting from foreign currency
transactions are recognized in other income (expense). The
Company recognized a loss from foreign currency transactions of
$2.8 million for the year ended December 31, 2001, a
loss of $0.4 million in fiscal 2000 and a gain of
$0.5 million in fiscal 1999.

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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Environmental  The Company records an
estimated loss when it is probable that an environmental
liability has been incurred and the amount of the loss can be
reasonably estimated. The Company also considers estimates of
certain reasonably possible environmental liabilities in
determining the aggregate amount of environmental reserves. The
Company reviews all environmental claims from time to time and
adjusts the reserves accordingly. Accruals for environmental
liabilities are generally included in the consolidated balance
sheet as other non-current liabilities at undiscounted amounts
and exclude claims for recoveries from insurance or other third
parties. Accruals for insurance or other third party recoveries
for environmental liabilities are recorded when it is probable
that the claim will be realized.

Newly Issued Accounting Standards  In
August 2001, the FASB issued SFAS No. 144, Accounting for
the Impairment or Disposal of Long-Lived Assets effective
for fiscal years beginning after December 15, 2001. The
provisions of SFAS 144 are to be applied prospectively and have
no impact on the accompanying financial statements. SFAS
No. 144, supercedes SFAS No. 121 Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of and the provisions of APB Opinion
No. 30,  Reporting the Results of
Operations  Reporting the Effects of Disposal of a
Segment of a Business, for the disposal of segments of a
business. SFAS No. 144 requires that one accounting model
be used for long-lived assets to be disposed of by sale and
extends the use of this accounting to discontinued operations.
Long-lived assets will be measured at the lower of carrying
amount or fair value less cost to sell, regardless of whether it
is reported in continuing or discontinued operations.
Additionally, SFAS No. 144 broadens the reporting of
discontinued operations to include certain disposal transactions
that were not included in previous standards.

In June 2001, the FASB approved SFAS
No. 141, Business Combinations and SFAS
No. 142, Goodwill and Other Intangible Assets
effective for fiscal years beginning after December 15,
2001. SFAS No. 141 requires that the purchase method of
accounting be used for all business combinations initiated after
June 30, 2001. Under SFAS No. 142, amortization of
goodwill, including goodwill recorded in past business
combinations, will discontinue upon adoption of this standard.
In addition, goodwill recorded as a result of business
combinations completed during the six-month period ending
December 31, 2001 will not be amortized. All goodwill and
intangible assets will be tested for impairment in accordance
with the provisions of SFAS No. 142. The Company is
currently reviewing the provisions of SFAS No. 141 and 142
and assessing the impact of adoption. The Company cannot
determine the complete impact of SFAS 142 until such time as it
can complete the first-step of a two-step impairment test. The
Company is gathering information to prepare the first-step of
the impairment test and expects to complete this step by
June 30, 2002. If an impairment loss were identified as a
result of these tests, it would be reported as a cumulative
effect of a change in accounting principle. In accordance with
the provisions of SFAS No. 142 the Company is not
amortizing any of the goodwill associated with its acquisitions
made subsequent to June 30, 2001 (Note 3).

In September 2000, the Financial Accounting
Standards Board (FASB) issued SFAS No. 140,
Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities, which replaced SFAS
No. 125, also titled Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities. SFAS No. 140 provides accounting and
reporting standards for transfers and servicing of financial
assets and extinguishments of liabilities. Those standards are
based on consistent application of a financial-components
approach that focuses on control. After a transfer of financial
assets, an entity recognizes the financial and servicing assets
it controls and the liabilities it has incurred, derecognizes
financial assets when control has been surrendered, and
derecognizes liabilities when extinguished. SFAS No. 140
became effective for recognition and reclassification of
collateral and for disclosures relating to securitization
transactions and collateral for fiscal years ending after
December 15, 2000 (See Note 11) and for transfers and
servicing of financial assets and extinguishments of liabilities
occurring after March 31, 2001.

In June 1998, the FASB issued SFAS No. 133
which established accounting and reporting standards requiring
that every derivative instrument (including certain derivative
instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its
fair value. SFAS

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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

No. 133 requires that changes in the
derivatives fair value be recognized currently in earnings
unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivatives
gains and losses to offset related results on the hedged item in
the income statement, and requires that a company formally
document, designate, and assess the effectiveness of
transactions that receive hedge accounting. In June 1999, the
FASB issued SFAS No. 137, Accounting for Derivative
Instruments and Hedging Activities  Deferral of the
Effective Date of FASB Statement No. 133, an Amendment of
FASB Statement No. 133. Under SFAS No. 137, SFAS
No. 133 was made effective for fiscal years beginning after
June 15, 2000. In June 2000, the FASB issued SFAS
No. 138, Accounting for Certain Derivative
Instruments and Certain Hedging Activities  An
Amendment of FASB Statement No. 133, which provides
additional guidance for certain derivative instruments and
hedging activities addressed in SFAS No. 133. SFAS
No. 138 must be adopted concurrently with the adoption of
SFAS No. 133.

SFAS No. 133 and SFAS 138 were effective for
the Company as of January 1, 2001. Adoption of these new
accounting standards had no material effect on net income, other
comprehensive income, assets and liabilities.

3.     Acquisitions
and Joint Ventures

In December 2001, the Company completed its
acquisition of Textron Automotive Companys automotive trim
division (TAC-Trim). TAC-Trim is a leading supplier
of fully-integrated cockpits and a major automotive plastics
manufacturer in North America, Europe, and South America for
instrument panels, interior trim and exterior components. The
purchase price consisted primarily of: $632.2 million in
cash (net of cash received and assumed debt); 18 million
shares of common stock, with a market value of
$160.9 million; and preferred stock of Products with an
aggregate liquidation preference of $326.4 million, valued
at $146.9 million. The cash purchase price was financed
through a combination of the sale of an additional
32 million shares of common stock, valued at
$160.0 million, to Heartland and debt financing. As part of
the Textron purchase agreement, the Company may be obligated to
make additional payments of up to $125.0 million to Textron
based on cumulative cash flow performance for the five year
period ended December 31, 2006. If the then existing debt
instruments prohibit these additional payments, then the Company
is entitled to issue additional mandatorily redeemable preferred
stock of its subsidiary.

In September 2001, the Company completed its
acquisition of the automotive fabric operations of Joan Fabrics,
a leading supplier of bodycloth to the automotive industry, and
all of the operating assets in Joan Fabrics affiliated
yarn dying operation, Western Avenue Dyers (collectively
Joan). Consideration included $102.0 million in
cash, including acquisition fees, and 12.76 million shares
of the Companys common stock, valued at $90.2 million.

In July 2001, the Company completed its
acquisition of Becker Group, LLC (Becker), a
supplier of plastic components to the automotive industry.
Consideration included $61.8 million in cash, including
acquisition fees, $18.0 million in non-compete agreements (to be
paid out over 5 years), 17.0 million shares of the
Companys common stock, valued at $79.1 million, and
warrants to purchase 500,000 shares of the Companys common
stock at an exercise price of $5.00 per share, valued at
$0.7 million.

During the first quarter of 2001, the Company
purchased the remaining 50% from Courtaulds Textiles (Holdings)
Limited (Courtaulds) for $3.8 million, net of
cash acquired. In December 1997, the Company had entered into a
50% joint venture with Courtaulds to manufacture automotive
interior fabrics in the United Kingdom.

Also during the first quarter of 2001, the
Company acquired the remaining 25% of the Collins & Aikman
Carpet and Acoustics, S.A. de C.V. joint venture and related
intangible assets for $3.5 million. As part of the 1996
acquisition of Perstorp, the Company acquired the initial 75% of
Collins & Aikman Carpet and Acoustics, S.A. de C.V. joint
venture.

F-11



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The results of operations of the acquired
companies are included in the Companys consolidated
statements of operations from the dates of acquisition.

The acquisitions were accounted for under the
purchase method of accounting. In accordance with SFAS
No. 142, goodwill recorded as a result of business
combinations completed during the six-month period ending
December 31, 2001 was not amortized. Beginning in 2002, all
goodwill and intangible assets will be tested for impairment in
accordance with the provisions of SFAS No. 142. Under SFAS
No. 142, amortization of goodwill, including goodwill
recorded in past business combinations, will discontinue upon
adoption of this standard. For acquisitions completed prior to
July 1, 2001, the excess of the purchase price for each
acquisition over the estimated fair value of the tangible and
identifiable intangible net assets acquired was being amortized
over a period of 40 years on a straight-line basis.

The following unaudited pro forma summary
presents information as if the acquisition of TAC-trim, Joan and
Becker became effective at the beginning of the respective
periods noted in the table below. The acquisitions have been
accounted for using the purchase method. The allocation of the
purchase price is preliminary and may be revised upon the
completion of our appraisals. Appraisals are in progress for
TAC-Trim. Appraisals for Becker and Joan were preformed during
2001. For the Becker and Joan acquisitions, the Company recorded
approximately $286.3 million as goodwill. These
acquisitions are intended to solidify the Companys
position as a Mega Tier 2 supplier of interior
components and automotive fabrics.

The unaudited pro forma information does not
reflect any benefits from synergies that might be achieved from
combining operations and does not reflect the actual results
that would have occurred nor is it necessarily indicative of
future results of operations of the combined companies. Included
in the proforma amounts are charges related to the acquired
subsidiaries; $11.4 million and $21.7 million of
restructuring charges at December 31, 2001 and 2000,
respectively; a $42.6 million loss on a sale-leaseback
transaction at December 31, 2001; and a $59.1 million
charge for a cumulative effect of a change in accounting
principle (net of tax) at December 31, 2000. The unaudited
pro forma amounts include adjustments that are based upon
available information and various assumptions that the Company
believes are reasonable.

|                                                      |  |                          |         |            |  |   |         |  
|----------------------------------------------------- |  | ------------------------ | ------- | ---------- |  | - | ------- | -
|                                                      |  |                         
|                                                      |  | Year Ended              
|                                                      |  |                         
|                                                      |  | 2001                     |         | 2000      
|                                                      |  | (52 weeks)               |         | (53 weeks)
|                                                      |  |                          |         |           
|                                                      |  |                         
|                                                      |  | (in millions, except for
|                                                      |  | per share data)         
|Net sales                                             |  | $                        | 3,485.2 |            |  | $ | 4,030.4 |  
|Restructuring charges                                 |  | $                        | 30.2    |            |  | $ | 21.7    |  
|Income (loss) from continuing operations              |  | $                        | (126.8  | )          |  | $ | (1.3    | )
|Income (loss) before extraordinary charge             |  | $                        | (118.0  | )          |  | $ | 5.3     |  
|Net income (loss)                                     |  | $                        | (118.3  | )          |  | $ | (54.5   | )
|Net income (loss) per basic and diluted common
	share |  | $                        | (0.70   | )          |  | $ | (0.33   | )

F-12



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Following is the preliminary opening condensed
balance sheet of the three significant acquisitions made during
2001:

|                                           |                     |               |       |       |  |          |       |       |  |  |       |       | 
|------------------------------------------ | ------------------- | ------------- | ----- | ----- |  | -------- | ----- | ----- |  |  | ----- | ----- | 
|                                           |                     | Becker        |       | Joan  |  | TAC-Trim
|                                           |                     |               |       |       |  |         
|                                           |                     |              
|                                           |                     | (in millions)
|Assets                                     |                     |               |       |       |  |          |       |       |  |  |       |      
|                                           | Current Assets      |               | $     | 53.6  |  |          | $     | 40.2  |  |  | $     | 335.0 | 
|                                           | Goodwill            |               |       | 130.5 |  |          |       | 155.8 |  |  |       | 730.3 | 
|                                           | Other Assets        |               |       | 21.9  |  |          |       | 14.4  |  |  |       | 387.6 | 
|Liabilities                                |                     |               |       |       |  |          |       |       |  |  |       |      
|                                           | Current Liabilities |               |       | 67.7  |  |          |       | 18.2  |  |  |       | 432.1 | 
|                                           | Other Liabilities   |               |       | 14.7  |  |          |       |      |  |  |       | 80.8  | 
|Cash Paid, net of cash received            |                     |               | 61.8  |       |  |          | 102.0 |       |  |  | 596.6 |      
|Common Stock, Preferred Stock and Warrants |                     |               | 79.8  |       |  |          | 90.2  |       |  |  | 307.8 |      
|Assumed Debt and Other Consideration       |                     |               | 18.0  |       |  |          |      |       |  |  | 35.6  |      
|Total Consideration                        |                     | $             | 159.6 |       |  | $        | 192.2 |       |  |  | 940.0 |      

4.     Change in
Accounting Principle

In April 1998, the AICPA issued SOP 98-5,
Reporting on the Costs of Start-up Activities.
SOP 98-5 provides guidance on the financial reporting of
start-up costs and organization costs and requires that all
non-governmental entities expense the costs of start-up
activities as these costs are incurred instead of being
capitalized and amortized. The Company adopted SOP 98-5 on
December 27, 1998. The initial impact of adopting
SOP 98-5 resulted in a charge of approximately
$8.8 million, net of income taxes of $5.1 million,
which has been reflected as a cumulative effect of a change in
accounting principle in the accompanying consolidated statement
of operations for the fiscal year ended December 25, 1999.

5.     Foreign
Currency Protection Programs

The primary purpose of the Companys foreign
currency risk management activities is to protect against the
volatility associated with intercompany funding arrangements,
third party loans and foreign currency purchase and sale
transactions. The Company primarily utilizes forward exchange
contracts and purchased options with durations of generally less
than 12 months.

The Company has in place forward exchange
contracts, with third parties, denominated in multiple
currencies which will mature during fiscal 2002. These forward
contracts, which in notional terms aggregated a U.S. dollar
equivalent of $558.2 million at December 31, 2001, are
to manage the currency volatility associated with intercompany
funding arrangements, third party loans and foreign currency
purchase and sales transactions.

During fiscal 2001, 2000 and 1999, the Company
purchased option contracts giving the Company the right to
purchase U.S. dollars for use by its Canadian operations. During
2000 and 1999, the premiums associated with these contracts were
amortized over the contracts terms which were one year or
less. Beginning January 1, 2001, the contracts are marked
to fair market value and recorded on the balance sheet, per the
requirements of SFAS No. 133. The total notional amount
purchased over these three fiscal years was $114.2 million
with associated premiums of $1.5 million. At
December 31, 2001, the notional amount outstanding was
$30.7 million.

In addition, during 2001, the Company purchased
option contracts giving the Company the right to sell Canadian
dollars received by its U.S. operations. The contracts are
marked to fair market value and recorded on the balance sheet,
per the requirements of SFAS No. 133. The total notional
amount purchased was $28.7 million with associated premiums
of $0.3 million. At December 31, 2001, the notional
amount outstanding was $6.8 million.

F-13



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

During 2001, in order to comply with the
provisions of the Receivables Facility, the Company purchased a
series of option contracts, each of which gave Carcorp Inc., a
wholly-owned bankruptcy remote subsidiary of the Company (See
Note 11), the right to sell a total of $360.0 million
Canadian dollars in exchange for U.S. dollars. The option
contracts are marked to fair market value and recorded on the
balance sheet, per the requirements of SFAS No. 133. The
total U.S. dollar notional amount purchased to comply with the
Receivables Facility was $226.0 million, with associated
net premiums of $1.1 million. The total notional amount
outstanding at December 31, 2001 was $84.7 million.

6.     Inventories

Inventory balances are summarized below (in
millions):

|                |  |              |       |              |  |   |       | 
|--------------- |  | ------------ | ----- | ------------ |  | - | ----- | 
|                |  | December 31, |       | December 31,
|                |  | 2001         |       | 2000        
|                |  |              |       |             
|Raw materials   |  | $            | 73.8  |              |  | $ | 80.8  | 
|Work in process |  |              | 25.6  |              |  |   | 28.5  | 
|Finished goods  |  |              | 33.2  |              |  |   | 22.4  | 
|                |  |              |       |              |  |   |       | 
|                |  | $            | 132.6 |              |  | $ | 131.7 | 
|                |  |              |       |              |  |   |       | 

7.     Other Current
Assets

Other current asset balances are summarized below
(in millions):

|                     |  |              |       |              |  |   |      | 
|-------------------- |  | ------------ | ----- | ------------ |  | - | ---- | 
|                     |  | December 31, |       | December 31,
|                     |  | 2001         |       | 2000        
|                     |  |              |       |             
|Deferred tax asset   |  | $            | 25.3  |              |  | $ | 19.1 | 
|Reimbursable tooling |  |              | 53.7  |              |  |   | 27.7 | 
|Other                |  |              | 52.9  |              |  |   | 29.1 | 
|                     |  |              |       |              |  |   |      | 
|                     |  | $            | 131.9 |              |  | $ | 75.9 | 
|                     |  |              |       |              |  |   |      | 

8.     Property,
Plant and Equipment, Net

Property, plant and equipment, net, are
summarized below (in millions):

|                                               |  |              |         |              |  |   |        |  
|---------------------------------------------- |  | ------------ | ------- | ------------ |  | - | ------ | -
|                                               |  | December 31, |         | December 31,
|                                               |  | 2001         |         | 2000        
|                                               |  |              |         |             
|Land and improvements                          |  | $            | 25.5    |              |  | $ | 18.7   |  
|Buildings                                      |  |              | 168.8   |              |  |   | 155.0  |  
|Machinery and equipment                        |  |              | 828.8   |              |  |   | 549.7  |  
|Leasehold improvements                         |  |              | 11.7    |              |  |   | 18.8   |  
|Construction in progress                       |  |              | 45.0    |              |  |   | 35.1   |  
|                                               |  |              |         |              |  |   |        |  
|                                               |  |              | 1,079.8 |              |  |   | 777.3  |  
|Less accumulated depreciation and amortization |  |              | (461.7  | )            |  |   | (343.2 | )
|                                               |  |              |         |              |  |   |        |  
|                                               |  | $            | 618.1   |              |  | $ | 434.1  |  
|                                               |  |              |         |              |  |   |        |  

F-14



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

9.     Accrued
Expenses

Accrued expenses are summarized below (in
millions):

|                              |  |              |       |              |  |   |       | 
|----------------------------- |  | ------------ | ----- | ------------ |  | - | ----- | 
|                              |  | December 31, |       | December 31,
|                              |  | 2001         |       | 2000        
|                              |  |              |       |             
|Payroll and employee benefits |  | $            | 48.4  |              |  | $ | 26.9  | 
|Interest                      |  |              | 14.8  |              |  |   | 17.0  | 
|Insurance                     |  |              | 39.0  |              |  |   | 17.2  | 
|Restructuring reserves        |  |              | 13.5  |              |  |   | 2.5   | 
|Other                         |  |              | 129.5 |              |  |   | 59.5  | 
|                              |  |              |       |              |  |   |       | 
|                              |  | $            | 245.2 |              |  | $ | 123.1 | 
|                              |  |              |       |              |  |   |       | 

10.     Long-Term
Debt, Mandatorily Redeemable Preferred Stock and Short-Term
Borrowings

a.     Long-term
Debt

Long-term debt is summarized below (in millions):

|                          |                                                                                                      |              |         |              |  |   |       |       | 
|------------------------- | ---------------------------------------------------------------------------------------------------- | ------------ | ------- | ------------ |  | - | ----- | ----- | 
|                          |                                                                                                      | December 31, |         | December 31,
|                          |                                                                                                      | 2001         |         | 2000        
|                          |                                                                                                      |              |         |             
|Senior Credit Facilities: |                                                                                                      |              |         |              |  |   |       |      
|                          | Tranche A Term Loan Facility                                                                         |              | $       | 100.0        |  |   | $     |      | 
|                          | Tranche B Term Loan Facility                                                                         |              |         | 300.0        |  |   |       |      | 
|                          | Revolving Credit Facility                                                                            |              |         |             |  |   |       |      | 
|Bank Credit Facilities:   |                                                                                                      |              |         |              |  |   |       |      
|                          | Term Loan A Facility                                                                                 |              |         |             |  |   |       | 66.3  | 
|                          | Term Loan B Facility                                                                                 |              |         |             |  |   |       | 118.0 | 
|                          | Term Loan C Facility                                                                                 |              |         |             |  |   |       | 96.0  | 
|                          | Revolving Credit Facility, including
	$17.3 million by the Canadian borrowers at
	December 31, 2000. |              |         |             |  |   |       | 150.2 | 
|Public Debt:              |                                                                                                      |              |         |              |  |   |       |      
|                          | 11 1/2% Senior Subordinated Notes, due 2006                                                          |              |         | 400.0        |  |   |       | 400.0 | 
|                          | 10 3/4% Senior Notes, due 2011                                                                       |              |         | 500.0        |  |   |       |      | 
|                          | JPS Automotive 11 1/8% Senior Notes,
	including premiums of $ and $0.3 million                      |              |         |             |  |   |       | 48.3  | 
|Other                     |                                                                                                      |              | 1.9     |              |  |   | 5.2   |      
|                          |                                                                                                      |              |         |              |  |   |       |      
|Total debt                |                                                                                                      |              | 1,301.9 |              |  |   | 884.0 |      
|Less current maturities   |                                                                                                      |              | (19.5   | )            |  |   | (84.3 | )    
|                          |                                                                                                      |              |         |              |  |   |       |      
|                          |                                                                                                      | $            | 1,282.4 |              |  | $ | 799.7 |      
|                          |                                                                                                      |              |         |              |  |   |       |      

Bank Credit
Facilities

In December 2001, in conjunction with the
TAC-Trim acquisition, the Company entered into new Senior Credit
Facilities, which refinanced its Bank Credit Facilities. The
principal and interest on the Bank Credit Facilities totaled
$362.5 million. The cost and expenses associated with the
refinancing of the bank credit facilities totaling
$25.7 million were deferred and will be amortized over the
four-year life of the term loans

F-15



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

described below. In addition, the Company
incurred a $5.0 million, net of tax, extraordinary charge
in connection with the retirement of the old Bank Credit
Facilities.

The new Senior Credit Facilities include a
floating rate Revolving Facility and two new floating rate Term
Loan Facilities that mature on December 31, 2005. The
Revolving Facility allows the Company to borrow revolving loans
up to $175.0 million including Canadian dollars up to
$75.0 million. The facility can be utilized for letters of
credit. The Term Loan Facilities consist of a Tranche A
Term Loan with a principal balance of $100.0 million and a
Tranche B Term Loan with a principal balance of
$300.0 million. As required by the credit agreement, the
full amounts of the Term Loan Facilities were drawn down on the
closing date. Amounts borrowed under the Term Loan Facilities
that are repaid or prepaid cannot be reborrowed. The
Tranche A Term Loan Facility is payable in quarterly
installments that increase in amounts each year until maturity.
The Tranche B Term Loan Facility is payable in quarterly
installments of $0.8 million for the first three years and
quarterly installments of $72.7 million during the final
year.

Under the new Senior Credit Facilities, the
interest rate on the Revolving Facility is, at the
Companys option, London Inter-Bank Offer Rate
(LIBOR) plus 3.75% or the Alternate Base Rate
(ABR) plus 2.75%. The ABR is the highest of The JP
Morgan Chase (Chases) announced prime rate,
the Federal Funds Rate plus 0.5% and Chases base
certificate of deposit rate plus 1%. A per annum fee equal to
the spread over the LIBOR plus a fronting fee of 0.25% accrue on
the face amount of letters of credit. Also, there is a 1.00%
commitment fee on the unused portion of the facility. The
interest rates on the Canadian-dollar denominated debt is at the
Companys option (the Canadian Prime Rate) plus
3.75% or the bill of exchange rate (Bankers
Acceptance or BA) denominated in Canadian
dollars for one, two, three or six months plus 2.75%. The
interest rate on the Tranche A Term Loan Facility is, at
the Companys option, LIBOR plus 3.75% or the ABR plus
2.75%. The interest rates and commitment fees on the Revolving
Facility and the Tranche A Term Loan Facility are subject
to adjustment quarterly starting six months after the closing
date based on performance targets. The interest rate on the
Tranche B Term Loan Facility is, at our option, either
LIBOR plus 4.75% or ABR plus 3.75%. On any Tranche B Term
Loans repaid whether voluntary or mandatory there is a
prepayment premium of 3.00% the first year, 2.00% the second
year and 1.00% the third year. The Company may elect interest
periods of 1, 2, 3, or 6 months (or 9 or 12 months, if
available) for LIBOR borrowings. LIBOR shall not be less than
3.00% per annum. At December 31, 2001, LIBOR for 1, 3
and 6 months were 1.87%, 1.88% and 1.98%, respectively. The
weighted average rate of interest on the new Senior Credit
Facilities at December 31, 2001 was 7.67%.

In May 1998, Products entered into Bank Credit
Facilities (old Bank Credit Facilities) consisting
of a senior secured Revolving Credit Facility and Term Loan
Facilities. The Revolving Credit Facility allowed borrowings in
an aggregate principal amount of up to $250.0 million,
terminating on December 31, 2003, of which
$60.0 million (or the equivalent thereof in Canadian
dollars) was available to two of the Companys Canadian
subsidiaries (the Canadian Borrowers) and of which
up to $50.0 million was available as a letter of credit
facility (the Revolving Credit Facility, and
together with the Term Loan Facilities, the Credit
Agreement Facilities). The Term Loan Facilities consisted
of a Term Loan A Facility in the amount of
$100 million payable in quarterly installments until final
maturity on December 31, 2003 and a Term Loan B
Facility in the amount of $125 million payable in quarterly
installments until final maturity on June 30, 2005. In
addition, the Term Loan Facilities included a provision for a
Term Loan C Facility of up to $150 million. In May
1999, the Company closed on the Term Loan C Facility in the
principal amount of $100 million. The Term Loan C
Facility was payable in quarterly installments through final
maturity on December 31, 2005. The Company used
approximately $44 million of the proceeds from the Term
Loan C Facility to pay a special dividend to shareholders
on May 28, 1999 (See Note 16). The remaining proceeds
were used to repay amounts outstanding on the Revolving Credit
Facility and for general corporate purposes.

Effective February 2001, the Company amended and
restated the Credit Agreement Facilities and received waivers of
the interest coverage and leverage ratio covenants for the
period ending December 31,

F-16



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

2000. The Company also received commitments from
its lenders for a Term Loan D Facility in the amount of $50
million maturing January 2006, which was used to retire the
outstanding JPS Automotive 11 1/8% Senior Notes due 2001.
The primary purpose of the amendments was to allow the change of
control precipitated by the Heartland Transaction and to provide
for the Term Loan D Facility.

In March 2001, the proceeds from the Term
Loan D Facility were used to retire all outstanding JPS
Automotive 11 1/8% Senior Notes due June 2001. The Company
recognized an extraordinary charge of $0.3 million in
connection with this repurchase of the remaining outstanding JPS
Automotive Senior Notes at prices in excess of carrying values.

The old Bank Credit Facilities were guaranteed by
the Company and its U.S. subsidiaries (subject to certain
exceptions). As a part of the amendment and restatement
effective February 23, 2001, the Company provided
collateral additional to the previous pledge of stock of
Products and its significant subsidiaries and certain
intercompany debt and guarantees from the Company and its U.S.
subsidiaries (subject to certain exceptions). This additional
collateral consisted of a first priority lien on the assets of
the Company, Products and its U.S. and Canadian subsidiaries
with certain exceptions including assets included in the
Companys receivables facility, certain scheduled assets,
and certain assets whose value relative to cost of lien
perfection was deemed too low to include. Guarantees and
security requirements of the new Senior Credit Facility are
substantially the same as the old bank credit facilities as
amended and restated except that they are extended to
subsequently acquired or organized domestic subsidiaries.

The new Senior Credit Facilities and the old
Credit Facilities contain restrictive covenants including
maintenance of interest coverage and leverage ratios and various
other restrictive covenants that are customary for such
facilities. The covenants of the new Senior Credit Facilities
limit investments, dividends or other distributions of capital
stock, capital expenditures, the purchase of Preferred Stock of
subsidiary, the prepayment of debt other than loans under the
senior credit facilities, liens and certain lease transactions.
Should the Company sell assets or incur debt over
$20.0 million proceeds must be used to pre-pay the term
loans in an amount based on excess cash flow as measured by the
leverage ratio performance. The covenants permit the payment of
dividends on the Preferred Stock not to exceed 8% per annum
unless at least 50% of the Senior Secured Term Loan Facilities
are repaid or the proforma total Leverage Ratio is less than 2.5
to 1. The covenants limit acquisitions including further
investment in the Italian joint venture, Holdings (Italy) S.r.L.
to $23.0 million subject to a purchase price adjustment up to
$5.0 million provided that after the expenditure no default
has occurred. The covenants require that the interest coverage
ratio for any period of four consecutive fiscal quarters be less
than 2.25 to 1.00 on September 30,2002 increasing each
quarter to 3.25 to 1.00 on December 31, 2005 and that the
leverage ratio be no greater than 4.50 to 1.00 on
September 30, 2002 decreasing each quarter to 3.00 to 1.00
on December 31, 2005.

The interest rates under the old Bank Credit
Facilities were at variable rates based determined similar to
the new Senior Credit Facilities. The weighted average rate of
interest on the old Bank Credit Facilities at December 31,
2000 was 9.05%.

Public
Debt

In December 2001, the C&A Products issued
10 3/4% Senior Subordinated Notes due 2011 in a total
principal amount of $500.0 million. The Notes were not
registered under the securities act of 1933 and were offered
only to qualified institutional buyers. The Company used the net
proceeds from the offering together with the proceeds from other
financing to consummate the TAC-Trim acquisition, repay all
principal, interest, fees and other amounts outstanding under
the old Bank Credit Facilities, replace the Companys
existing Receivables Facility and pay related fees and expenses.
The cost of issuing the notes totaling about $23.1 million
was deferred and will be amortized over 10 years.

F-17



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The notes are unconditionally guaranteed on an
unsecured senior basis by the parent and by each wholly owned
domestic subsidiary that is a guarantor of the Bank Credit
Facilities as of the issue date. This is all of the
Companys wholly owned domestic subsidiaries other than its
receivable and insurance subsidiaries. The Debt evidenced by the
Notes and Parent and Subsidiary Guarantees are unsecured senior
obligations of the Company ranking senior in right of payment to
all existing and future Subordinated Debt including the Existing
Notes and related Guarantees and future unsecured and
unsubordinated Debt. The Notes are redeemable prior to
December 31, 2004 only in the event the Company receives
cash proceeds from one or more equity offerings in which case
the Company may at its option use all or a portion of such cash
proceeds to redeem up to 35% of the principal amount of the
notes. The Notes will be subject to redemption at the option of
the Company, in whole or in part at any time after
December 31, 2006 at a stated premium redemption price
expressed as a percentage in excess of the principal amount.
After December 31, 2008, the redemption price is 100%.
Within 30 days of the occurrence of a change of ownership
control, unless the Company has mailed a redemption notice with
respect to all outstanding Notes, the Company will be required
to make an offer to purchase all outstanding Notes at a purchase
price equal to 101% of their principal amount. The indenture
governing the notes limits the Companys ability to issue
more debt, pay dividends and make distributions, repurchase
stock, make investments, merge or consolidate, transfer assets,
enter into transactions with affiliates and issue stock of
subsidiaries. These restrictive covenants are customary for such
securities and are subject to a number of exceptions.

In June 1996, Products, issued at face value
$400 million principal amount of 11 1/2% Senior
Subordinated Notes due 2006 which are guaranteed by the Company.
The indenture governing the 11 1/2% Senior Subordinated
Notes generally prohibits the Company, Products and any
Restricted Subsidiary (as defined) from making certain payments
and investments unless a certain financial test is satisfied and
the aggregate amount of such payments and investments since the
issue date is less than a specified amount. The prohibition is
subject to a number of significant exceptions, including
dividends to stockholders of the Company or stock repurchases
not exceeding $10 million in any fiscal year or
$20 million in the aggregate, dividends to stockholders of
the Company or stock repurchases in the amount of the net
proceeds from the sale of the Companys Imperial
Wallcoverings, Inc. subsidiary (Wallcoverings) and
dividends to the Company to permit it to pay its operating and
administrative expenses. The indenture also contains other
restrictive covenants (including, among others, limitations on
the incurrence of debt, asset dispositions and transactions with
affiliates), which are customary for such securities. These
covenants are also subject to a number of significant exceptions.

The Company solicited and received consent from
holders of a sufficient amount of the outstanding principal of
the 11 1/2% Senior Subordinated Notes allowing the Change
of Control precipitated by the Heartland Transaction. A Second
Supplemental Indenture dated February 8, 2001 amended the
Senior Subordinated Notes indenture to reflect this and certain
other changes, including allowance for the incurrence of debt in
the form of the Term Loan D Facility. In connection with
the TAC-Trim acquisition, we further amended the indenture
governing these notes to make each subsidiary guarantor of the
new 10 3/4% Senior Notes a guarantor of these existing
notes on a senior subordinated basis.

As of August 1998, the JPS Automotive acquisition
date, $180 million principal amount of JPS Automotive
11 1/8% Senior Notes due 2001 (the JPS Automotive
Senior Notes) was outstanding. Of this amount,
$68 million were purchased by the Company in the open
market and subsequently contributed to or repurchased by JPS
Automotive. The remaining $112 million face value of JPS
Automotive Senior Notes were recorded at a market value of
$117.2 million on the date of the acquisition. Through
subsequent retirements of the JPS Automotive Senior Notes, the
Company reduced the outstanding face value to $48.0 million
at December 31, 2000. In March 2001, the Company retired
the remaining JPS Automotive Senior Notes with proceeds from the
Term Loan D Facility described above. The Company
recognized an extraordinary charge of $0.3 million in
connection with the retirement of the notes at prices in excess
of carrying values.

F-18



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

At December 31, 2001, the scheduled annual
maturities of long-term debt are as follows (in millions):

|            |  |   |         | 
|----------- |  | - | ------- | 
|Year Ending |  |  
|            |  |  
|2002        |  | $ | 19.5    | 
|2003        |  |   | 23.4    | 
|2004        |  |   | 28.0    | 
|2005        |  |   | 331.0   | 
|2006        |  |   | 400.0   | 
|Later years |  |   | 500.0   | 
|            |  |   |         | 
|            |  | $ | 1,301.9 | 
|            |  |   |         | 

Total interest paid by the Company on all debt
was $76.3 million, $94.8 million and
$91.9 million for 2001, 2000 and 1999, respectively.

b.     Mandatorily
Redeemable Preferred Stock of Subsidiary

As part of the consideration paid to Textron for
the TAC-Trim acquisition, Products issued to Textron 182,700
shares of its Series A Redeemable Preferred Stock, 123,700
shares of Series B Redeemable Preferred Stock and 20,000
shares of Series C Redeemable Preferred Stock. The
Preferred Stock is recorded at fair value, which is less than
the liquidation value of $1,000 per share or $326.4 million. The
estimated fair value of $146.9 million is based on market
prices for securities with similar terms, maturities and risk
characteristics, and includes a liquidation discount to reflect
market conditions. The difference between the initial recorded
value and the initial liquidation preference will be accreted
over the life of the stock.

Products is required to redeem all Series A
and B Preferred Stock outstanding on January 1, 2013 and
Series C Preferred Stock outstanding on February 1,
2022. The redemption price is equal to 100% of the liquidation
preference plus accrued and unpaid dividends plus common equity
participation for the Series C Preferred Stock. The
Series A and Series B Preferred Stock are redeemable
at Products option, in whole or in part, on or after
January 1, 2007 at a stated percent in excess of the
liquidation preference plus accrued and unpaid dividends. The
Series C Preferred stock is not optionally redeemable.
However, at Products option or the holders of a majority
of outstanding shares of Series C Preferred Stock, the
Series C Preferred Stock is exchangeable for Series B
Preferred Stock at any time following the second anniversary of
its issuance date but prior to the third anniversary of its
issuance date.

Shareholders of Series A Preferred Stock are
entitled to receive dividends accruing annually on the
liquidation preference at a rate of 11% for dividend periods
ending on or prior to July 1, 2003, and 15% thereafter.
Holders of Series B and C Preferred Stock are entitled to
receive dividends accruing annually on the liquidation
preference at a rate of 12% for dividend periods ending on or
prior to July 1, 2003, and 16% thereafter.

Products may at its option through
January 1, 2004 accrue up to the full amount of all
dividends in lieu of cash payment of such dividends. Thereafter,
Products may at its option elect to accrue dividends of up to 7%
of the liquidation value annually on Series A Preferred
Stock and up to 8% of the liquidation value on Series B and
C Preferred Stock. Accrued dividends will be added to the
liquidation preference of the applicable series of Preferred
Stock.

Upon voluntary or involuntary liquidation,
dissolution or winding-up of Products, holders of the Preferred
Stock are entitled to be paid out of the assets of Products
available for distribution to stockholders in the amount of
$1,000 per share plus the total accrued dividends prior to any
distribution to holders of equity securities which ranks junior
to the Preferred Stock. In addition, the holders of
Series C Preferred Stock are entitled to a participation in
distributions to Products common equity tied to appreciation in
the value of

F-19



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Products common equity subsequent to the issuance
date, not to exceed $2.0 million for all Series C
Preferred Stock outstanding.

If Products experiences a change of ownership
control, the holders of the Preferred Stock must be given the
opportunity to sell to Products their Preferred Stock at 100% of
the liquidation preference plus accrued and unpaid dividends,
plus, in the case of Series C Preferred Stock, common
equity participation. In the event that Products does not meet
or exceed certain financial criteria based on interest coverage,
the dividend rate applicable solely to Series A Preferred
Stock will increase by 1.00% for the next full dividend period
and by an additional 0.50% for each dividend period thereafter
provided that the dividend rate does not exceed 20%. The
provision of the certificate of designation limits Products
ability to issue more debt, pay dividends and make
distributions, repurchase stock, make investments, merge or
consolidate, transfer assets, enter into transactions with
affiliates and issue stock of subsidiaries. These covenants are
subject to a number of important exceptions.

The 2001 results included dividends and accretion
calculated using the effective interest method that totaled
$2.4 million.

c.     Short-Term
Borrowings

At December 31, 2001, short-term borrowings
was primarily comprised of borrowings at a newly acquired
subsidiary and carried a fixed interest rate of approximately
23%.

11.     Receivables
Facility

In December 2001, as part of the refinancing
completed in connection with the TAC-Trim acquisition, C&A
Products entered into a new receivables facility (the New
Receivables Facility) and repaid the outstanding balance
of $128.7 million of the Companys previous receivables
facility (the Old Receivables Facility) entered into
in December 1999, which was not renewed. The Receivables
Facility utilizes funding provided by commercial paper conduits.
Carcorp, Inc., a wholly owned, bankruptcy-remote subsidiary of
Products (Carcorp) purchases virtually all trade
receivables generated by Products and certain of its
subsidiaries (the Sellers) in the United States and
Canada, transferring rights to collections on those receivables
to the conduits. The conduits in turn issue commercial paper,
which is collateralized by those rights. The New Receivables
Facility has a 364-day term expiring December 2002. The Old
Receivables Facility had 364-day terms, renewable annually for
up to five years.

The total funding available to the Company on a
revolving basis under the New Receivables facility was increased
to $250.0 million compared to $171.6 million under the
Old Receivables Facility. The funding available under both
facilities depends primarily on the amount of receivables
generated by the Sellers from sales, the rate of collection on
those receivables and other characteristics of those receivables
that affect their eligibility (such as the bankruptcy or
downgrading below investment grade of the obligor, delinquency
and excessive concentration). The Company retains the
receivables collection responsibility.

In December 2001, the Company funded
$79.9 million through the New Receivables Facility. The
Company had $118.6 million available but unutilized at
December 31, 2001. At December 31, 2000, the Old
Receivables Facility was fully utilized at $82.5 million.
The discount on sold interests is equal to the interest rate
paid by the conduits to the holders of the commercial paper plus
a usage fee. The discount rate at December 31, 2001, was
3.53% compared to 7.40% at December 31, 2000. Under the New
Receivables Facility the usage fee was increased to 1.50% from
0.75% under the Old Receivables Facility. In addition, the
Company pays a fee on the unused portion of the facility. Under
the New Receivables Facility that fee was increased from .25% to
..50%. During 2001, the loss on the sale of the receivables
totaled $10.8 million. Included in the loss were fees and
expenses of replacing the Old Receivables Facility totaling
$5.6 million. During 2000 and 1999 the losses on the sale
of receivables totaled $9.2 million and $5.4 million,
respectively. The 2000 loss included $1.6 million in
expenses and fees to replace the prior facility.

F-20



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

As of December 31, 2001 and 2000, the
conduits collectively had invested $79.9 million and
$82.5 million, respectively, to purchase an undivided
senior interest (net of settlements in transit) in the
receivables pool. Accordingly, such receivables were not
reflected in the Companys financial statements as of those
dates. As of December 31, 2001 and 2000, Carcorps
total receivables pool was $334.6 million and
$174.9 million, respectively. When the Company sells
receivables to Carcorp, it retains a subordinated interest in
the receivables sold. The Company estimates the fair value of
its retained interest by considering two key assumptions: the
payment rate, which is derived from the average life of the
accounts receivable, which is less than 60 days, and the rate of
expected credit losses. Based on the Companys favorable
collection experience and the short-term nature of its
receivables, both assumptions are highly predictable. Therefore,
the Companys estimated fair value of its retained
interests in the pool of eligible receivables is approximately
equal to the previous cost, less the associated allowance for
doubtful accounts.

The proceeds received by Carcorp from collections
on receivables, after the payment of expenses and amounts due,
are used to purchase new receivables from the Sellers. During
2001 and 2000, Carcorp had net cash collections of approximately
$1.6 billion and $1.5 billion, respectively. These
funds were used to purchase new receivables from the Sellers,
under the Old Receivables Facility.

The New Receivables Facility contains certain
other restrictions on Carcorp (including maintenance of
$60.0 million of net worth) and on the Sellers (including
limitations on liens on receivables, modifications of the terms
of receivables, and change in credit and collection practices)
customary for facilities of this type. The commitments under the
New Receivables Facility are subject to termination prior to
their term upon the occurrence of certain events, including
payment defaults, breach of covenants, including defined
interest coverage and leverage ratios, bankruptcy, default by
Products in servicing the receivables and failure of the
receivables to satisfy certain performance criteria.

12.     Leases

The Company is the lessee under various long-term
operating leases for land and buildings for periods up to twenty
years. The majority of these leases contain renewal provisions.
In addition, the Company leases transportation, operating and
administrative equipment for periods ranging from one to twelve
years.

The Company has equipment lease agreements and
building lease agreements with several lessors which, subject to
specific approval, provide availability of funding for operating
leases and sale-leasebacks as allowed in its other financing
agreements. The Company has a purchase option on certain
equipment at the end of the lease term based on the fair market
value of the equipment and has additional options to cause the
sale of some or all of the equipment or to purchase some or all
of the equipment at prices determined under the agreement. The
Company has classified the leases as operating.

At December 31, 2001, future minimum lease
payments under operating leases for continuing operations are as
follows (in millions):

|            |  |   |       | 
|----------- |  | - | ----- | 
|Year Ending |  |  
|            |  |  
|2002        |  | $ | 57.2  | 
|2003        |  |   | 50.3  | 
|2004        |  |   | 43.8  | 
|2005        |  |   | 25.0  | 
|2006        |  |   | 22.5  | 
|Later Years |  |   | 85.2  | 
|            |  |   |       | 
|            |  | $ | 284.0 | 
|            |  |   |       | 

F-21



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Rental expense of continuing operations under
operating leases was $29.2 million, $20.8 million, and
$21.5 million for fiscal 2001, 2000 and 1999, respectively.
Obligations under capital leases are not significant.

During 2001, C&A Products entered into sale
and leaseback transactions for certain manufacturing equipment
and non-manufacturing properties. The transactions resulted in
the recognition of a $4.4 million net deferred asset that
is being amortized over the lease term, and the recognition of
an $8.7 million loss.

During 2001, the Company received net proceeds
(after fees) of approximately $86.2 million from sale and
leasebacks of real property and equipment, which it used to
reduce outstanding debt. The aggregate lease expenses associated
with these leases will be $88.8 million, $12.5 million
of which relates to 2002. To the extent permitted by the credit
facility, the Company may enter into additional similar leasing
arrangements from time to time. As part of these sale-leaseback
transactions, C&A Products sold and contemporaneously leased
back real property from unrelated third parties, and received
net proceeds (after fees) of $46.4 million. Refer to Note
19 for a discussion regarding certain sale and leaseback
transactions that were entered into with related parties.

13.     Employee
Benefit Plans

a.     Defined
Benefit Pension and Postretirement Benefit Plans

Subsidiaries of the Company have defined benefit
pension plans covering substantially all employees who meet
eligibility requirements. Plan benefits are generally based on
years of service and employees compensation during their
years of employment. Funding of retirement costs for these plans
complies with the minimum funding requirements specified by the
Employee Retirement Income Security Act. Assets of the pension
plans are invested primarily in equity and fixed income
securities.

Subsidiaries of the Company have also provided
postretirement life and health coverage for certain retirees
under plans currently in effect. Many of the subsidiaries
domestic and Canadian employees may be eligible for coverage if
they reach retirement age while still employed by the Company.
Most of these plans are contributory. In general, future
increases in costs are passed on fully to the retiree. However,
future increases in costs for the Canadian divisions and limited
domestic operations are shared between the Company and the
retiree.

During fiscal year 2000, the Company recognized a
net $1.0 million curtailment gain related to a reduction in
employees participating in the Collins & Aikman Corporation
Supplemental Retirement Income Plan, a plan whose participation
is limited to a select group of key executives. The gain has
been reflected in selling, general and administrative expenses
in the accompanying statements of operations for the year ended
December 31, 2000.

F-22



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following tables provide a reconciliation of
the projected benefit obligation, a reconciliation of plan
assets, the funded status of the plans, and amounts recognized
in the Companys consolidated balance sheets at December
31, 2001 and December 31, 2000 (in millions).

|                                                           |                                                |                                          |   |                         |       |              |   |              |       |   |   |       |       |   |   |       |       |  
|---------------------------------------------------------- | ---------------------------------------------- | ---------------------------------------- | - | ----------------------- | ----- | ------------ | - | ------------ | ----- | - | - | ----- | ----- | - | - | ----- | ----- | -
|                                                           |                                                |                                          |   |                        
|                                                           |                                                | Pension Benefits                         |   | Postretirement Benefits
|                                                           |                                                | Fiscal Year Ended                        |   | Fiscal Year Ended      
|                                                           |                                                |                                          |   |                        
|                                                           |                                                | December 31,                             |   | December 31,            |       | December 31, |   | December 31,
|                                                           |                                                | 2001                                     |   | 2000                    |       | 2001         |   | 2000        
|                                                           |                                                |                                          |   |                         |       |              |   |             
|Change in benefit obligation:                              |                                                |                                          |   |                         |       |              |   |              |       |   |   |       |       |   |   |      
|                                                           | Benefit obligation at beginning of year        |                                          | $ | 175.0                   |       |              | $ | 170.5        |       |   | $ | 52.6  |       |   | $ | 57.5  |      
|                                                           | Service cost                                   |                                          |   | 6.8                     |       |              |   | 6.7          |       |   |   | 1.0   |       |   |   | .9    |      
|                                                           | Interest cost                                  |                                          |   | 12.7                    |       |              |   | 12.8         |       |   |   | 3.8   |       |   |   | 3.6   |      
|                                                           | Employee contributions                         |                                          |   |                        |       |              |   |             |       |   |   | .9    |       |   |   | .9    |      
|                                                           | Amendments                                     |                                          |   | 1.4                     |       |              |   | .4           |       |   |   |      |       |   |   |      |      
|                                                           | Actuarial gain                                 |                                          |   | 2.3                     |       |              |   | (.5          | )     |   |   | (1.3  | )     |   |   | (5.3  | )    
|                                                           | Benefits paid                                  |                                          |   | (14.1                   | )     |              |   | (11.6        | )     |   |   | (4.7  | )     |   |   | (4.7  | )    
|                                                           | Currency adjustment                            |                                          |   | (1.7                    | )     |              |   | (3.3         | )     |   |   | (.5   | )     |   |   | (.3   | )    
|                                                           |                                                |                                          |   |                         |       |              |   |              |       |   |   |       |       |   |   |      
|                                                           |                                                | Benefit obligation at end of year        |   | $                       | 182.4 |              |   | $            | 175.0 |   |   | $     | 51.8  |   |   | $     | 52.6  |  
|                                                           |                                                |                                          |   |                         |       |              |   |              |       |   |   |       |       |   |   |      
|Change in plan assets:                                     |                                                |                                          |   |                         |       |              |   |              |       |   |   |       |       |   |   |      
|                                                           | Fair value of plan assets at beginning of year |                                          | $ | 164.2                   |       |              | $ | 159.3        |       |   | $ |      |       |   | $ |      |      
|                                                           | Actual return on plan assets                   |                                          |   | (24.1                   | )     |              |   | 15.1         |       |   |   |      |       |   |   |      |      
|                                                           | Employer contributions                         |                                          |   | 4.3                     |       |              |   | 4.2          |       |   |   | 3.8   |       |   |   | 3.8   |      
|                                                           | Employee contributions                         |                                          |   |                        |       |              |   |             |       |   |   | .9    |       |   |   | .9    |      
|                                                           | Benefits paid                                  |                                          |   | (14.1                   | )     |              |   | (11.6        | )     |   |   | (4.7  | )     |   |   | (4.7  | )    
|                                                           | Currency adjustment                            |                                          |   | (1.6                    | )     |              |   | (2.8         | )     |   |   |      |       |   |   |      |      
|                                                           |                                                |                                          |   |                         |       |              |   |              |       |   |   |       |       |   |   |      
|                                                           |                                                | Fair value of plan assets at end of year |   | $                       | 128.7 |              |   | $            | 164.2 |   |   | $     |      |   |   | $     |      |  
|                                                           |                                                |                                          |   |                         |       |              |   |              |       |   |   |       |       |   |   |      
|Reconciliation of funded status to net amount
	recognized: |                                                |                                          |   |                         |       |              |   |              |       |   |   |       |       |   |   |      
|                                                           | Funded status                                  |                                          | $ | (53.7                   | )     |              | $ | (10.8        | )     |   | $ | (51.8 | )     |   | $ | (52.6 | )    
|                                                           | Unrecognized net loss (gain)                   |                                          |   | 48.1                    |       |              |   | 7.0          |       |   |   | (21.5 | )     |   |   | (22.0 | )    
|                                                           | Unrecognized prior service cost (gain)         |                                          |   | 4.4                     |       |              |   | 3.3          |       |   |   | (6.4  | )     |   |   | (7.8  | )    
|                                                           |                                                |                                          |   |                         |       |              |   |              |       |   |   |       |       |   |   |      
|                                                           |                                                | Net amount recognized                    |   | $                       | (1.2  | )            |   | $            | (.5   | ) |   | $     | (79.7 | ) |   | $     | (82.4 | )
|                                                           |                                                |                                          |   |                         |       |              |   |              |       |   |   |       |       |   |   |      

The table above does not reflect the results of
the TAC-Trim acquisition as the Company is still completing
purchase accounting for the acquisition. The amounts included in
the balance sheet reflect the preliminary value assigned to the
TAC-Trim assets and obligations.

|                                                                  |                                      |                       |   |       |      |  |   |       |     |   |   |        |        |   |   |       |       |  
|----------------------------------------------------------------- | ------------------------------------ | --------------------- | - | ----- | ---- |  | - | ----- | --- | - | - | ------ | ------ | - | - | ----- | ----- | -
|Amounts recognized in the consolidated balance
	sheet consist of: |                                      |                       |   |       |      |  |   |       |     |   |   |        |        |   |   |      
|                                                                  | Prepaid benefit cost                 |                       | $ | 18.7  |      |  | $ | 14.6  |     |   | $ |       |        |   | $ |      |      
|                                                                  | Accrued benefit liability            |                       |   | (25.6 | )    |  |   | (17.0 | )   |   |   | (179.1 | )      |   |   | (82.4 | )    
|                                                                  | Intangible asset                     |                       |   | 5.8   |      |  |   | 1.5   |     |   |   |       |        |   |   |      |      
|                                                                  | Accumulated other comprehensive loss |                       |   | 19.0  |      |  |   | .4    |     |   |   |       |        |   |   |      |      
|                                                                  |                                      |                       |   |       |      |  |   |       |     |   |   |        |        |   |   |      
|                                                                  |                                      | Net amount recognized |   | $     | 17.9 |  |   | $     | (.5 | ) |   | $      | (179.1 | ) |   | $     | (82.4 | )
|                                                                  |                                      |                       |   |       |      |  |   |       |     |   |   |        |        |   |   |      

F-23



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The projected benefit obligation, accumulated
benefit obligation and fair value of plan assets for the pension
plans with accumulated benefit obligations in excess of plan
assets were $175.2 million, $165.9 million and
$121.7 million, respectively, as of December 31, 2001
and $21.8 million, $20.1 million and $4.2 million,
respectively, as of December 31, 2000.

The net periodic benefit cost of continuing
operations for fiscal 2001, 2000, and 1999 includes the
following components (in millions):

|                                         |                                    |                   |   |              |   |              |   |       |   |  |   |       |  
|---------------------------------------- | ---------------------------------- | ----------------- | - | ------------ | - | ------------ | - | ----- | - |  | - | ----- | -
|                                         |                                    |                  
|                                         |                                    | Pension Benefits 
|                                         |                                    | Fiscal Year Ended
|                                         |                                    |                  
|                                         |                                    | December 31,      |   | December 31, |   | December 25,
|                                         |                                    | 2001              |   | 2000         |   | 1999        
|                                         |                                    |                   |   |              |   |             
|Components of net periodic benefit cost: |                                    |                   |   |              |   |              |   |       |   |  |   |      
|                                         | Service cost                       |                   | $ | 6.8          |   |              | $ | 6.7   |   |  | $ | 9.1   |  
|                                         | Interest cost                      |                   |   | 12.7         |   |              |   | 12.8  |   |  |   | 11.0  |  
|                                         | Expected return on plan assets     |                   |   | (14.6        | ) |              |   | (14.6 | ) |  |   | (12.4 | )
|                                         | Amortization of prior service cost |                   |   | .2           |   |              |   | .1    |   |  |   |      |  
|                                         | Settlement loss (gain)             |                   |   | (.1          | ) |              |   |      |   |  |   |      |  
|                                         | Curtailment gain                   |                   |   |             |   |              |   | (1.0  | ) |  |   |      |  
|                                         | Recognized net actuarial loss      |                   |   | .1           |   |              |   | .1    |   |  |   | .7    |  
|                                         |                                    |                   |   |              |   |              |   |       |   |  |   |      
|                                         | Net periodic benefit cost          |                   | $ | 5.1          |   |              | $ | 4.1   |   |  | $ | 8.4   |  
|                                         |                                    |                   |   |              |   |              |   |       |   |  |   |      

|                                         |                                    |                           |   |              |     |              |   |      |     |  |   |      |     | 
|---------------------------------------- | ---------------------------------- | ------------------------- | - | ------------ | --- | ------------ | - | ---- | --- |  | - | ---- | --- | 
|                                         |                                    |                          
|                                         |                                    | Postretirement Benefits  
|                                         |                                    | Fiscal Year Ended        
|                                         |                                    |                          
|                                         |                                    | December 31,              |   | December 31, |     | December 25,
|                                         |                                    | 2001                      |   | 2000         |     | 1999        
|                                         |                                    |                           |   |              |     |             
|Components of net periodic benefit cost: |                                    |                           |   |              |     |              |   |      |     |  |   |     
|                                         | Service cost                       |                           | $ | 1.0          |     |              | $ | .9   |     |  | $ | 1.5  |    
|                                         | Interest cost                      |                           |   | 3.8          |     |              |   | 3.6  |     |  |   | 4.3  |    
|                                         | Amortization of prior service cost |                           |   | (1.4         | )   |              |   | (1.4 | )   |  |   | (1.4 | )  
|                                         | Recognized net actuarial gain      |                           |   | (1.7         | )   |              |   | (2.0 | )   |  |   | (.9  | )  
|                                         |                                    |                           |   |              |     |              |   |      |     |  |   |     
|                                         |                                    | Net periodic benefit cost |   | $            | 1.7 |              |   | $    | 1.1 |  |   | $    | 3.5 | 
|                                         |                                    |                           |   |              |     |              |   |      |     |  |   |     

Weighted average fiscal year-end assumptions are
summarized as follows:

|                               |  |                  |     |                |  |      |     |      |  |  |     |   |  |  |     |  
|------------------------------ |  | ---------------- | --- | -------------- |  | ---- | --- | ---- |  |  | --- | - |  |  | --- | -
|                               |  |                  |     |                |  |     
|                               |  |                  |     | Postretirement
|                               |  | Pension Benefits |     | Benefits      
|                               |  |                  |     |               
|                               |  | 2001             |     | 2000           |  | 2001 |     | 2000
|                               |  |                  |     |                |  |      |     |     
|Discount rate                  |  |                  | 7.2 | %              |  |      | 7.4 | %    |  |  | 7.5 | % |  |  | 7.6 | %
|Expected return on plan assets |  |                  | 9.0 | %              |  |      | 9.0 | %    |  |  | N/A |   |  |  | N/A |  
|Rate of compensation increase  |  |                  | 3.1 | %              |  |      | 4.5 | %    |  |  | N/A |   |  |  | N/A |  

Health care costs for domestic plans:
(1) Dura Convertible was assumed to increase 11% during
2002; the rates were assumed to grade down by 0.5% per year to
an ultimate rate of 6% and remain at that level thereafter.
(2) Wickes Engineering Materials was assumed to increase 6%
during 2002 and remain at that level thereafter.
(3) TAC-Trim was assumed to increase 12% during 2002; the
rates were assumed to grade down by 0.5% per year to an ultimate
rate of 6% and remain at that level thereafter. Health care
trend rates for Canadian Plans were assumed to increase
approximately 8.5% during 2002 grading down by 0.5% per year to
a constant level of 5% annual increase.

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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Assumed health care cost trend rates may have a
significant effect on the amounts reported for postretirement
benefits. A one-percentage-point change in assumed health care
cost trend rates would have the following effects:

|                                                         |  |               |      |               |  |   |       |  
|-------------------------------------------------------- |  | ------------- | ---- | ------------- |  | - | ----- | -
|                                                         |  | 1-Percentage- |      | 1-Percentage-
|                                                         |  | Point         |      | Point        
|                                                         |  | Increase      |      | Decrease     
|                                                         |  |               |      |              
|Effect on total of service and interest cost
	components |  | $             | .4   |               |  | $ | (.3   | )
|Effect on postretirement benefit obligation              |  | $             | 20.1 |               |  | $ | (16.2 | )

b.     Defined
Contribution Plans

Subsidiaries of the Company sponsor defined
contribution plans covering employees who meet eligibility
requirements. Subsidiary contributions are based on formulas or
are at the Companys discretion as specified in the plan
documents. Contributions relating to continuing operations were
$3.2 million, $4.0 million and $3.0 million in
fiscal 2001, 2000 and 1999, respectively.

14.     Discontinued
Operations

During fiscal 2000, the Company settled claims
for certain environmental matters related to discontinued
operations for a total of $20 million. Settlement proceeds
will be paid to the Company in three installments. The first and
second installments of $7.5 million and $7.5 million
were received in June 2000 and June 2001, respectively with the
third installment of $5.0 million to be received in June
2002. Of the total $20 million settlement, the Company
recorded the present value of the settlement as
$7.0 million of additional environmental reserves, based on
its assessment of potential environmental exposures, and
$6.6 million, net of income taxes, as income from
discontinued operations.

The Company has significant obligations related
to post-retirement, casualty, environmental, product liability,
lease and other liabilities of discontinued operations. The
nature of many of these contingent liabilities is such that they
are difficult to quantify and uncertain in terms of amount. The
company has accrued $10.0 million for casualty reserves,
$38.9 million for post retirement costs and
$40.7 million for environmental and product liability costs.

In connection with retained operating leases of
certain discontinued operations, the Company believes that
future sublease rental receipts will equal or exceed future
minimum lease payments and accordingly has not recorded any
liability for these leases.

15.     Restructuring

In the fourth quarter 2001, the Company undertook
a restructuring program to rationalize operations in North
American, European and Specialty operations resulting in a
restructuring charge of $9.6 million. The charge included
$2.8 million of severance costs and $6.8 million of
asset impairments. The Company recognized severance costs for
over 200 operating personnel at the Companys
convertible tops, fabrics, carpet and acoustics locations in
North America and Specialty operations. The asset impairments,
primarily related to machinery and equipment located at North
American, European and Specialty operations sites, are based on
managements estimates of values to be realized upon
disposition of the assets. The activity related to severance
costs for the fourth quarter 2001 restructuring program is as
follows (in millions):

|                               |  |          |     |          |  |           |     |  |  |   |     | 
|------------------------------ |  | -------- | --- | -------- |  | --------- | --- |  |  | - | --- | 
|                               |  | Original |     | Cash     |  | Remaining
|                               |  | Reserve  |     | Payments |  | Reserve  
|                               |  |          |     |          |  |          
|Anticipated severance benefits |  | $        | 2.8 |          |  | $         | 0.7 |  |  | $ | 2.1 | 

During the first quarter of 2001, the Company
undertook a restructuring program resulting in a charge of
$9.2 million. The goal of the restructuring was to further
de-layer management in North America, European

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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

and Specialty operations. The pre-tax
$9.2 million charge included $8.4 million of severance
costs and $0.8 million of asset impairments. The Company
recognized severance costs for over 700 operating personnel
at the Companys convertible tops, fabrics, accessory
floormats, plastics, carpet and acoustics locations in North
America and the Companys plastics, accessory floormats,
carpet and acoustics operations in Europe. The Company also
recognized severance costs for management and administrative
personnel at its World Headquarters, North American Automotive
Interior Systems division and European Automotive Interior
Systems division. The asset impairments, primarily related to
machinery and equipment located at the site, are based on
managements estimates of values to be realized upon
disposition of the assets. The activity related to severance
costs for 2001 restructuring program is as follows (in millions):

|                               |  |          |     |          |  |           |      |   |  |   |     | 
|------------------------------ |  | -------- | --- | -------- |  | --------- | ---- | - |  | - | --- | 
|                               |  | Original |     | Cash     |  | Remaining
|                               |  | Reserve  |     | Payments |  | Reserve  
|                               |  |          |     |          |  |          
|Anticipated severance benefits |  | $        | 8.4 |          |  | $         | (6.9 | ) |  | $ | 1.5 | 

In fiscal 1999, the Company announced a
comprehensive plan (the Reorganization) to
reorganize its global automotive carpet, acoustics, plastics and
accessory floormats businesses. The Company undertook the
Reorganization to reduce costs and improve operating
efficiencies throughout the Companys operations and to
more effectively respond to the OEMs demand for complete
interior trim systems and more sophisticated components. Upon
final completion of the Reorganization plan, the Company
recognized a pre-tax restructuring charge of $33.4 million,
including $13.4 million of asset impairments,
$15.0 million of severance costs and $5.0 million
related to the termination of sales commission contracts at the
Companys North American plastics operations. The 1999
Reorganization included the closure of three facilities. The
Homer, Michigan plastics facility was closed in August 1999 and
its operations were relocated to an existing plastics facility.
The Cramerton, North Carolina fabrics facility was sold in
September 1999 and the relocation of its operations to another
fabrics facility was completed in fiscal 2000. The acoustics
facility in Vastra Frolunda, Sweden, was closed in September
2000 and its operations were relocated to other facilities in
Europe. The Company recognized $13.4 million in asset
impairments, primarily relating to buildings, machinery and
equipment located at these three sites. In addition to these
closures, the Company recognized severance costs for operating
personnel at the Companys plastics operations in the
United Kingdom and the Companys fabrics, convertibles and
accessory floormats operations in North America. The Company
also recognized severance costs for management and
administrative personnel at the Companys former North
Carolina headquarters and North American Automotive Interior
Systems division.

During fiscal 2000, certain modifications were
made to the Reorganization, which changed the original
estimates. Severance costs for individuals and payments for the
termination of sales commission arrangements originally
contemplated in the Reorganization were approximately
$3.1 million lower than the original estimates. The
reduction consisted of $2.0 million of severance benefits
and $1.1 million of payments for termination of sales
commission arrangements. However, during fiscal 2000, there were
additional personnel terminations made as the Company continued
to reshape its management team. The Company estimates indicate
that the adjustment to reduce the original restructuring
provision approximates the provision required for the additional
personnel terminated in fiscal 2000. As of December 31,
2000, the Companys Reorganization efforts, as modified,
were substantially complete and approximately 1,000 employees
had been terminated.

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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The components of the reserves for the
Reorganization restructuring charges are as follows (in
millions):

|                                                                                  |  |          |      |            |  |           |       |   |  |   |     | 
|--------------------------------------------------------------------------------- |  | -------- | ---- | ---------- |  | --------- | ----- | - |  | - | --- | 
|                                                                                  |  | Original |      | Changes in |  | Remaining
|                                                                                  |  | Reserve  |      | Reserve    |  | Reserve  
|                                                                                  |  |          |      |            |  |          
|Anticipated severance benefits                                                    |  | $        | 15.0 |            |  | $         | (15.0 | ) |  | $ |    | 
|Anticipated payments related to the termination
	of sales commission arrangements |  |          | 5.0  |            |  |           | (3.6  | ) |  |   | 1.4 | 
|                                                                                  |  |          |      |            |  |           |       |   |  |   |     | 
|                                                                                  |  | $        | 20.0 |            |  | $         | (18.6 | ) |  | $ | 1.4 | 
|                                                                                  |  |          |      |            |  |           |       |   |  |   |     | 

16.     Common
Stockholders Equity

Dividends

On February 10, 1999, the Company declared a
special dividend of approximately $6.2 million,
representing $0.10 per share on all outstanding shares of common
stock held by stockholders of record as of the close of business
on February 22, 1999. The dividend was paid on March 1,
1999. On May 13, 1999, the Company declared another special
dividend relating to the distribution of the proceeds from the
sale of Wallcoverings of approximately $44.0 million,
representing $0.71 per share on all outstanding shares of
common stock held by stockholders of record as of the close of
business on May 20, 1999. The dividend was paid on
May 28, 1999.

Stock Option
Plans

The 1994 Employee Stock Option Plan (1994
Plan) was adopted as a successor to the 1993 Employee
Stock Option Plan to facilitate awards to certain key employees
and consultants. The 1994 Plan was amended in 1999 primarily to
increase the number of shares available for issuance under the
Plan from 2,980,534 to 3,980,534. The 1994 Plan provides that no
options may be granted after 10 years from the effective
date of this plan. Options vest, in each case, as specified by
the Companys compensation committee, generally over three
years after issuance. At December 31, 2001, options
representing 1,272,718 shares of common stock were available for
grants.

The Company also adopted the 1994 Directors Stock
Option Plan, which provides for the issuance of options to
acquire a maximum of 600,000 shares of common stock to directors
who are not part of management and are not affiliated with a
major stockholder. As of December 31, 2001, 170,000 options
had been granted.

The Company adopted the 1997 United Kingdom
Scheme, which provides for the issuance of options to key
employees under the 1994 Plan. As of December 31, 2001,
32,474 options had been granted.

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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Stock option activity under the plans is as
follows:

|                              |  |                   |            |                   |  |                   |      |          |  |           |           |          |  |   |      |  |  |  |           |   |  |   |      | 
|----------------------------- |  | ----------------- | ---------- | ----------------- |  | ----------------- | ---- | -------- |  | --------- | --------- | -------- |  | - | ---- |  |  |  | --------- | - |  | - | ---- | 
|                              |  |                   |            |                   |  |                  
|                              |  | December 31, 2001 |            | December 31, 2000 |  | December 25, 1999
|                              |  |                   |            |                   |  |                  
|                              |  |                   |            | Weighted          |  |                   |      | Weighted |  |           |           | Weighted
|                              |  |                   |            | Average           |  |                   |      | Average  |  |           |           | Average 
|                              |  | Number of         |            | Exercise          |  | Number of         |      | Exercise |  | Number of |           | Exercise
|                              |  | shares            |            | Price             |  | shares            |      | Price    |  | shares    |           | Price   
|                              |  |                   |            |                   |  |                   |      |          |  |           |           |         
|Outstanding beginning of year |  |                   | 4,344,432  |                   |  | $                 | 5.47 |          |  |           | 4,720,955 |          |  | $ | 5.70 |  |  |  | 3,141,195 |   |  | $ | 6.23 | 
|Awarded                       |  |                   | 40,000     |                   |  |                   | 5.76 |          |  |           | 827,500   |          |  |   | 5.65 |  |  |  | 2,024,000 |   |  |   | 5.19 | 
|Cancelled                     |  |                   | (458,090   | )                 |  |                   | 7.48 |          |  |           | (983,732  | )        |  |   | 7.07 |  |  |  | (337,000  | ) |  |   | 8.10 | 
|Exercised                     |  |                   | (1,095,422 | )                 |  |                   | 4.31 |          |  |           | (220,291  | )        |  |   | 3.99 |  |  |  | (107,240  | ) |  |   | 3.99 | 
|                              |  |                   |            |                   |  |                   |      |          |  |           |           |          |  |   |      |  |  |  |           |   |  |   |      | 
|Outstanding at end of year    |  |                   | 2,830,920  |                   |  |                   | 5.59 |          |  |           | 4,344,432 |          |  | $ | 5.47 |  |  |  | 4,720,955 |   |  | $ | 5.70 | 
|                              |  |                   |            |                   |  |                   |      |          |  |           |           |          |  |   |      |  |  |  |           |   |  |   |      | 

The following table summarizes information about
stock options outstanding at December 31, 2001:

|                        |  |                  |           |                  |  |                  |     |  |  |  |      | 
|----------------------- |  | ---------------- | --------- | ---------------- |  | ---------------- | --- |  |  |  | ---- | 
|                        |  | Number of Shares |           | Weighted Average |  | Weighted Average
|Range of Exercise Price |  | Outstanding      |           | Remaining Life   |  | Exercise Price  
|                        |  |                  |           |                  |  |                 
|$3.99  $4.43           |  |                  | 267,071   |                  |  |                  | 2.9 |  |  |  | 4.07 | 
|$5.00  $6.00           |  |                  | 1,925,000 |                  |  |                  | 7.6 |  |  |  | 5.19 | 
|$6.01  $11.75          |  |                  | 638,849   |                  |  |                  | 6.4 |  |  |  | 7.41 | 

SFAS No. 123, Accounting for
Stock-Based Compensation, encourages companies to adopt
the fair value method for compensation expense recognition
related to employee stock options. The accounting requirements
of Accounting Principles Board Opinion No. 25 (APB
No. 25) use the intrinsic value method in determining
compensation expense, which represents the excess of the market
price of the stock over the exercise price on the measurement
date. The Company has elected to continue to utilize the
accounting provisions of APB No. 25 for stock options, and
is required to provide pro forma disclosures of net income and
earnings per share had the Company adopted the fair value method
for recognition purposes. The following information is presented
as if the Company had adopted SFAS No. 123 and restated its
results (in millions, except per share amounts):

|                       |             |                   |   |              |   |              |   |      |  |  |   |       |  
|---------------------- | ----------- | ----------------- | - | ------------ | - | ------------ | - | ---- |  |  | - | ----- | -
|                       |             |                  
|                       |             | Fiscal Year Ended
|                       |             |                  
|                       |             | December 31,      |   | December 31, |   | December 25,
|                       |             | 2001              |   | 2000         |   | 1999        
|                       |             |                   |   |              |   |             
|Net income (loss):     |             |                   |   |              |   |              |   |      |  |  |   |      
|                       | As reported |                   | $ | (46.2        | ) |              | $ | 4.5  |  |  | $ | (10.2 | )
|                       | Pro forma   |                   |   | (48.6        | ) |              |   | 2.1  |  |  |   | (12.4 | )
|Basic and Diluted EPS: |             |                   |   |              |   |              |   |      |  |  |   |      
|                       | As reported |                   | $ | (0.47        | ) |              | $ | 0.07 |  |  | $ | (0.16 | )
|                       | Pro forma   |                   |   | (0.50        | ) |              |   | 0.03 |  |  |   | (0.20 | )

For the above information, the fair value of each
option grant was estimated on the date of grant using the
Black-Scholes option pricing model with the following
assumptions used for grants in fiscal 2001, 2000 and 1999:
expected volatility was 99%, 53% and 84% in 2001, 2000 and 1999,
respectively; expected lives of 10 years, which equals the
lives of the grants; a risk free interest rate ranging from
4.24% to 7.32% and a zero expected dividend rate. The weighted
average grant-date fair value of an option granted during fiscal
2001, 2000 and 1999 was $5.22, $4.11 and $4.50, respectively.

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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Because the SFAS No. 123 method of
accounting has not been applied to options granted prior to
January 28, 1995, the above pro forma amounts may not be
representative of the compensation costs to be expected in
future years.

17.     Income
Taxes

The provisions for income taxes applicable to
continuing operations for fiscal 2001, 2000 and 1999 are
summarized as follows (in millions):

|          |         |                    |       |              |       |              |       |      |     |  |      |      |     | 
|--------- | ------- | ------------------ | ----- | ------------ | ----- | ------------ | ----- | ---- | --- |  | ---- | ---- | --- | 
|          |         |                   
|          |         | Fiscal Year Ended 
|          |         |                   
|          |         | December 31,       |       | December 31, |       | December 25,
|          |         | 2001               |       | 2000         |       | 1999        
|          |         |                    |       |              |       |             
|Current:  |         |                    |       |              |       |              |       |      |     |  |      |     
|          | Federal |                    | $     |             |       |              | $     |     |     |  | $    |     |    
|          | State   |                    |       | 2.6          |       |              |       | 1.5  |     |  |      | 2.1  |    
|          | Foreign |                    |       | 4.8          |       |              |       | 10.7 |     |  |      | 4.9  |    
|          |         |                    |       |              |       |              |       |      |     |  |      |     
|          |         |                    | 7.4   |              |       |              | 12.2  |      |     |  | 7.0  |     
|Deferred: |         |                    |       |              |       |              |       |      |     |  |      |     
|          | Federal |                    |       | (19.0        | )     |              |       | (3.5 | )   |  |      | (6.3 | )  
|          | State   |                    |       | (1.3         | )     |              |       | (0.2 | )   |  |      | (0.5 | )  
|          | Foreign |                    |       | (5.7         | )     |              |       | (6.3 | )   |  |      |     |    
|          |         |                    |       |              |       |              |       |      |     |  |      |     
|          |         |                    | (26.0 | )            |       |              | (10.0 | )    |     |  | (6.8 | )   
|          |         |                    |       |              |       |              |       |      |     |  |      |     
|          |         | Income tax expense |       | $            | (18.6 | )            |       | $    | 2.2 |  |      | $    | 0.2 | 
|          |         |                    |       |              |       |              |       |      |     |  |      |     

Domestic and foreign components of income
(loss) from continuing operations before income taxes are
summarized as follows (in millions):

|         |  |                   |       |              |  |              |       |   |  |   |       |  
|-------- |  | ----------------- | ----- | ------------ |  | ------------ | ----- | - |  | - | ----- | -
|         |  |                  
|         |  | Fiscal Year Ended
|         |  |                  
|         |  | December 31,      |       | December 31, |  | December 25,
|         |  | 2001              |       | 2000         |  | 1999        
|         |  |                   |       |              |  |             
|Domestic |  | $                 | (35.8 | )            |  | $            | (11.9 | ) |  | $ | (16.6 | )
|Foreign  |  |                   | (32.5 | )            |  |              | 12.7  |   |  |   | 15.4  |  
|         |  |                   |       |              |  |              |       |   |  |   |       |  
|         |  | $                 | (68.3 | )            |  | $            | 0.8   |   |  | $ | (1.2  | )
|         |  |                   |       |              |  |              |       |   |  |   |       |  

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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

A reconciliation between income taxes computed at
the statutory U.S. Federal rate of 35% and the provisions for
income taxes applicable to continuing operations is as follows
(in millions):

|                                       |  |                   |       |              |  |              |      |   |  |   |      |  
|-------------------------------------- |  | ----------------- | ----- | ------------ |  | ------------ | ---- | - |  | - | ---- | -
|                                       |  |                  
|                                       |  | Fiscal Year Ended
|                                       |  |                  
|                                       |  | December 31,      |       | December 31, |  | December 25,
|                                       |  | 2001              |       | 2000         |  | 1999        
|                                       |  |                   |       |              |  |             
|Amount at statutory Federal rate       |  | $                 | (23.9 | )            |  | $            | 0.3  |   |  | $ | (0.4 | )
|State taxes, net of Federal income tax |  |                   | 0.9   |              |  |              | 0.8  |   |  |   | 1.0  |  
|Tax differential on foreign earnings   |  |                   | 2.9   |              |  |              | (0.3 | ) |  |   | (0.8 | )
|Amortization of goodwill               |  |                   | 1.5   |              |  |              | 1.5  |   |  |   | 1.5  |  
|Preferred stock dividend               |  |                   | 0.8   |              |  |              |     |   |  |   |     |  
|Change in valuation allowance          |  |                   | (1.2  | )            |  |              | 0.4  |   |  |   | 0.3  |  
|General business tax credits           |  |                   | (0.5  | )            |  |              | (1.1 | ) |  |   | (2.0 | )
|Other                                  |  |                   | 0.9   |              |  |              | 0.6  |   |  |   | 0.6  |  
|                                       |  |                   |       |              |  |              |      |   |  |   |      |  
|Income tax expense                     |  | $                 | (18.6 | )            |  | $            | 2.2  |   |  | $ | 0.2  |  
|                                       |  |                   |       |              |  |              |      |   |  |   |      |  

Deferred income taxes are provided for the
temporary differences between the financial reporting and tax
basis of the Companys assets and liabilities. The
components of the net deferred tax assets as of
December 31, 2001 and 2000 were as follows (in millions):

|                          |                                                       |                                |   |              |       |   |   |       |       |  
|------------------------- | ----------------------------------------------------- | ------------------------------ | - | ------------ | ----- | - | - | ----- | ----- | -
|                          |                                                       | December 31,                   |   | December 31,
|                          |                                                       | 2001                           |   | 2000        
|                          |                                                       |                                |   |             
|Deferred tax assets:      |                                                       |                                |   |              |       |   |   |      
|                          | Employee benefits, including postretirement
	benefits |                                | $ | 78.5         |       |   | $ | 37.9  |      
|                          | Net operating loss carryforwards (NOLs)               |                                |   | 134.6        |       |   |   | 116.2 |      
|                          | General business tax credits carryforwards            |                                |   | 11.4         |       |   |   | 10.0  |      
|                          | Alternative minimum tax credit carryforwards          |                                |   | 12.2         |       |   |   | 12.2  |      
|                          | Other liabilities and reserves                        |                                |   | 36.1         |       |   |   | 41.1  |      
|                          | Valuation allowance                                   |                                |   | (49.2        | )     |   |   | (57.1 | )    
|                          |                                                       |                                |   |              |       |   |   |      
|                          |                                                       | Total deferred tax assets      |   |              | 223.6 |   |   |       | 160.3 |  
|                          |                                                       |                                |   |              |       |   |   |      
|Deferred tax liabilities: |                                                       |                                |   |              |       |   |   |      
|                          | Property, plant and equipment                         |                                |   | (74.7        | )     |   |   | (55.4 | )    
|                          | Undistributed earnings of foreign subsidiaries        |                                |   | (7.2         | )     |   |   | (7.2  | )    
|                          |                                                       |                                |   |              |       |   |   |      
|                          |                                                       | Total deferred tax liabilities |   |              | (81.9 | ) |   |       | (62.6 | )
|                          |                                                       |                                |   |              |       |   |   |      
|                          |                                                       | Net deferred tax asset         |   | $            | 141.7 |   |   | $     | 97.7  |  
|                          |                                                       |                                |   |              |       |   |   |      

The valuation allowance at December 31, 2001
and December 31, 2000 provides for certain deferred tax
assets that in managements assessment may not be realized
due to tax limitations on the use of such amounts, due to
expiration prior to utilization or that relate to tax attributes
that are subject to uncertainty due to the long-term nature of
their realization. During fiscal 2001, the valuation allowance
decreased $7.9 million from fiscal 2000. This decrease
resulted primarily from the future expectation of increased
pretax income due to current year acquisitions. During fiscal
2000, the valuation allowance increased $5.0 million from
fiscal 1999. This increase resulted primarily from the increase
in tax credit and loss carryforwards that may not be realized in
future periods.

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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The above amounts have been classified in the
consolidated balance sheets as follows (in millions):

|                                   |                                                                 |              |       |              |   |   |      |       |  
|---------------------------------- | --------------------------------------------------------------- | ------------ | ----- | ------------ | - | - | ---- | ----- | -
|                                   |                                                                 | December 31, |       | December 31,
|                                   |                                                                 | 2001         |       | 2000        
|                                   |                                                                 |              |       |             
|Deferred tax assets (liabilities): |                                                                 |              |       |              |   |   |      |      
|                                   | Current domestic and foreign, included in other
	current assets |              | $     | 25.3         |   |   | $    | 19.1  |  
|                                   | Current foreign, included in accrued expenses                   |              |       | (2.1         | ) |   |      | (2.6  | )
|                                   | Noncurrent domestic and foreign                                 |              |       | 136.5        |   |   |      | 97.3  |  
|                                   | Noncurrent foreign, included in other noncurrent
	liabilities   |              |       | (18.0        | ) |   |      | (16.1 | )
|                                   |                                                                 |              |       |              |   |   |      |      
|                                   |                                                                 | $            | 141.7 |              |   | $ | 97.7 |      
|                                   |                                                                 |              |       |              |   |   |      |      

Management has reviewed the Companys
operating results for recent years as well as the outlook for
its continuing operations and concluded that it is more likely
than not that the net deferred tax assets of $141.7 million
at December 31, 2001 will be realized. Management took into
consideration, among other factors, the expected impact of
current year acquisitions, the impact of recent restructuring
plans, and the infusion of cash from Heartland. These factors
along with the timing of the reversal of its temporary
differences, certain tax planning strategies and the expiration
date of its NOLs were also considered in reaching this
conclusion. The Companys ability to generate future
taxable income is dependent on numerous factors, including
general economic conditions, the state of the automotive
industry and other factors beyond managements control.
Therefore, there can be no assurance that the Company will meet
its expectation of future taxable income.

Deferred income taxes and withholding taxes have
been provided on earnings of the Companys foreign
subsidiaries to the extent it is anticipated that the earnings
will be remitted in the future as dividends. Deferred income
taxes and withholding taxes have not been provided on the
remaining undistributed earnings of foreign subsidiaries as such
amounts are deemed to be permanently reinvested. The cumulative
undistributed earnings as of December 31, 2001 on which the
Company has not provided deferred income taxes and withholding
taxes is approximately $317.0 million.

F-31



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

At December 31, 2001, the Company had the
following tax attribute carryforwards available for U.S. Federal
income tax purposes (in millions):

|                                                 |                                         |        |       |            |  |  |  |           | 
|------------------------------------------------ | --------------------------------------- | ------ | ----- | ---------- |  |  |  | --------- | 
|                                                 |                                         |        |       | Expiration
|                                                 |                                         | Amount |       | Dates     
|                                                 |                                         |        |       |           
|Net operating losses  regular tax:              |                                         |        |       |            |  |  |  |          
|                                                 | Preacquisition, subject to limitations  |        | $     | 4.7        |  |  |  | 2002-2009 | 
|                                                 | Subject to change in control provisions |        |       | 11.7       |  |  |  | 2002-2007 | 
|                                                 | Subject to change in control provisions |        |       | 103.2      |  |  |  | 2008-2012 | 
|                                                 | Subject to change in control provisions |        |       | 199.6      |  |  |  | 2018-2021 | 
|                                                 | Unrestricted                            |        |       | 23.8       |  |  |  | 2021      | 
|                                                 |                                         |        |       |            |  |  |  |          
|                                                 |                                         | $      | 343.0 |            |  |  |  |          
|                                                 |                                         |        |       |            |  |  |  |          
|Net operating losses  alternative
	minimum tax: |                                         |        |       |            |  |  |  |          
|                                                 | Preacquisition, subject to limitations  |        | $     | 2.6        |  |  |  | 2002-2009 | 
|                                                 | Subject to change in control provisions |        |       | 10.6       |  |  |  | 2002-2007 | 
|                                                 | Subject to change in control provisions |        |       | 69.7       |  |  |  | 2008-2012 | 
|                                                 | Subject to change in control provisions |        |       | 205.7      |  |  |  | 2018-2021 | 
|                                                 | Unrestricted                            |        |       | 20.3       |  |  |  | 2021      | 
|                                                 |                                         |        |       |            |  |  |  |          
|                                                 |                                         | $      | 308.9 |            |  |  |  |          
|                                                 |                                         |        |       |            |  |  |  |          
|General business tax credits:                    |                                         |        |       |            |  |  |  |          
|                                                 | Preacquisition, subject to limitations  |        | $     | .6         |  |  |  | 2002-2003 | 
|                                                 | Subject to change in control provisions |        |       | 9.0        |  |  |  | 2004-2021 | 
|                                                 | Unrestricted                            |        |       | .2         |  |  |  | 2021      | 
|                                                 |                                         |        |       |            |  |  |  |          
|                                                 |                                         | $      | 9.8   |            |  |  |  |          
|                                                 |                                         |        |       |            |  |  |  |          
|Alternative minimum tax credits                  |                                         | $      | 12.2  |            |  |  |  |          
|                                                 |                                         |        |       |            |  |  |  |          

As a result of the Heartland Transaction, a
change in control occurred which results in annual limitations
on the Companys use of its NOLs and unused tax credits.
This annual limitation on the use of NOLs and tax credits
depends on the value of the equity of the Company and the amount
of built-in gain or built-in loss in the
Companys assets at the date of the change in control.
Based on the expiration dates of the NOLs and tax credits as
well as anticipated levels of domestic income, management does
not believe that the transaction will have a material impact on
these deferred tax assets.

Future sales of common stock by the Company or
its principal stockholders, or changes in the composition of its
principal stockholders, could constitute a change in control
that would result in additional annual limitations on the
Companys use of its NOLs and unused tax credits.
Management cannot predict whether such a change in control will
occur.

Income taxes paid, net of refunds received, were
$15.5 million, $4.8 million and $3.0 million for
fiscal 2001, 2000 and 1999, respectively.

F-32



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

18.     Disclosures
About Fair Value of Financial Instruments

The estimated fair values of the Companys
continuing operations financial instruments are summarized as
follows (in millions):

|                                                      |  |                   |         |                   |  |          |         |            |  |   |       |  |  |   |       | 
|----------------------------------------------------- |  | ----------------- | ------- | ----------------- |  | -------- | ------- | ---------- |  | - | ----- |  |  | - | ----- | 
|                                                      |  |                   |         |                  
|                                                      |  | December 31, 2001 |         | December 31, 2000
|                                                      |  |                   |         |                  
|                                                      |  | Carrying          |         | Estimated         |  | Carrying |         | Estimated 
|                                                      |  | Amount            |         | Fair Value        |  | Amount   |         | Fair Value
|                                                      |  |                   |         |                   |  |          |         |           
|Long-term debt                                        |  | $                 | 1,301.9 |                   |  | $        | 1,232.4 |            |  | $ | 884.0 |  |  | $ | 812.1 | 
|Mandatorily redeemable preferred stock of
	subsidiary |  | $                 | 147.7   |                   |  | $        | 147.7   |            |  | $ |      |  |  | $ |      | 

The following methods and assumptions were used
to estimate these fair values:

Short-Term and Long-Term Debt  The
fair value of the Senior Subordinated Notes is based upon quoted
market price. The fair value of the other long-term debt of the
Company including the Preferred stock, along with the
Companys and short-term debt approximates the carrying
value.

Carrying amounts reported in the consolidated
balance sheets for cash and cash equivalents, accounts and other
receivables, accounts payable and accrued expenses approximate
fair value due to the short-term nature of these instruments.

Fair value estimates are made at a specific point
in time, based on relevant market information about the
financial instruments. These estimates are subjective in nature
and involve uncertainties and matters of significant judgement
and therefore, cannot be determined with precision. Changes in
assumptions could significantly affect these estimates.

19.     Related Party
Transactions

During the first quarter of 2001, Heartland
acquired a controlling interest equal to approximately 60% of
the Company through a purchase of 25 million shares of
common stock from the Company and a purchase of 27 million
shares from Blackstone Partners and WP Partners. In the sale,
the Company received gross proceeds of $125.0 million, or
approximately $95.0 million after fees and expenses
associated with the transactions. The purchase price also gave
the Company a profit participation right on certain future
common stock sales by Heartland. As a result of the transaction,
Heartland is entitled to designate a majority of the
Companys Board of Directors. Prior to the transaction, as
of December 31, 2000, Blackstone Partners and WP Partners
collectively owned approximately 87% of the Common Stock of the
Company. In connection with the Heartland Transaction, the
Company paid Heartland a transaction fee of $12.0 million and
paid WP Partners an investment banking fee of $2.0 million.

During the first quarter of 2001, the Amended and
Restated Stockholders Agreement was terminated and a new,
10 year Services Agreement was entered into between the
Company, Products and Heartland. Under this Services Agreement,
the Company will pay Heartland an annual advisory fee of $4.0
million. The Services Agreement also provides for the Company to
pay a 1% transaction fee on certain acquisitions and
divestitures commencing on or after February 23, 2002.
Under the former Amended and Restated Stockholders
Agreement among the Company, Products, Blackstone Partners and
WP Partners, the Company paid each of Blackstone Partners and WP
Partners, or their respective affiliates, an annual monitoring
fee of $1.0 million.

In December 2001, Heartland, and certain
co-investors that include a director of the Company, purchased
an additional 32 million shares of common stock at a price
of $5.00 per share, as part of the financing for the TAC-Trim
acquisition. The average closing price of the stock three days
before and three day after the definitive agreement announcement
date was $8.94. Additionally, the Company paid Heartland

F-33



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

transaction fees of $12.5 million in
connection with the TAC-Trim acquisition. The Company also
reimbursed Heartland for $1.5 million of expenses that
Heartland incurred in relation to the Becker acquisition. (See
Note 3)

As part of the TAC-Trim acquisition, the Company
entered into three intellectual property license agreements with
Textron. In two of these agreements, the Company licenses back
to Textron certain intellectual property that was acquired in
the transaction. In the third agreement, the Company licenses
from Textron other intellectual property that was not acquire in
the transaction

Prior to the TAC-Trim acquisition, TAC-Trim
entered into an $86.9 million sale and leaseback
transaction (the Textron Leasing Transaction) with
two separate single purpose affiliates of Textron Financial
Corporation, as lessor and purchaser, with respect to a
portfolio of manufacturing equipment situated in different
locations throughout the United States and Canada. Payments
under the Textron Leasing Transaction are guaranteed by Products
and secured by a first perfected mortgage lien over certain real
property with a value equal to $25 million. Each Lease is
for an initial term of three (3) years with three one
(1) year renewal options. As is customary, the
documentation for the Textron Leasing Transaction incorporates
covenants by reference, from the new Senior Credit Facility,
that may be amended or waived by the senior lenders, and also
contain events of default.

During 2001, the Company entered into sale and
leaseback transactions for certain non-manufacturing properties
with entities that are controlled by one of the Companys
current directors and shareholders. In connection with these
sale-leaseback transactions, Products sold and contemporaneously
leased back real property located in Troy, Michigan and
Plymouth, Michigan for net proceeds of $15.1 million in
aggregate. The initial lease term in each transaction is 20
years and each lease has two successive ten year renewal
options. The basic rent for the Troy, Michigan property is
$1.3 million per year, and the basic rent for the Plymouth,
Michigan property is $0.5 million per year. The rental
rates in each case are subject to adjustment after expiration of
the initial term.

Additionally, in connection with the Joan
acquisition, the Company entered into a Supply Agreement and a
Transition Service Agreement with entities controlled by the
former owner of Joan who is currently a director and shareholder
of the Company. Under the Supply Agreement, the Company has
agreed to purchase all of its requirements for flat woven
automotive fabric from the controlled entities for a five-year
period beginning on the date of the Supply Agreement. The prices
for fabric under the agreement will equal the costs of the raw
materials plus an amount that represents the entities
standard labor and overhead costs incurred in manufacturing
fabric. Under Transition Service Agreement an entity controlled
by the director will provide Products with transitional and
support services for a period not to exceed twelve months in
order to support the continued and uninterrupted operation of
the businesses acquired by Products in the Joan acquisition. As
a part of these services, pending disassembly and removal of
machinery and equipment purchased as part of the acquisition,
the controlled entity will use that machinery and equipment to
manufacture all of the Companys requirements for some
types of knitted and woven automotive fabrics.

On December 31, 2001, Heartland owned
approximately 40% of the outstanding shares of the Company;
Blackstone Partners and WP Partners owned
approximately 15%; Joan Fabrics Corp., Mr. Elkin McCallum
and associates owned approximately 8%; Mr. Charles E.
Becker and Textron, Inc. each owned approximately 11%.

20.     Information
About the Companys Operations

On February 10, 1999, the Company announced
the Reorganization, a comprehensive plan to reorganize its
global automotive carpet, acoustics, plastics and accessory
floormats businesses into two divisions: North American
Automotive Interior Systems, headquartered in the Detroit
metropolitan area, and European Automotive Interior Systems,
headquartered in Germany. As part of the Reorganization, the
Company also

F-34



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

established the Specialty Automotive Products
division, which includes the Companys automotive fabrics
and Dura Convertible Systems businesses. North American
Automotive Interior Systems and European Automotive Interior
Systems include the following product groups: molded floor
carpet, luggage compartment trim, acoustical products, accessory
floormats and plastic-based interior systems. The Specialty
Automotive Products division includes automotive fabrics and
convertible top systems. The three divisions also produce other
automotive and non-automotive products.

The accounting policies of the divisions are the
same as those described in the Summary of Significant Accounting
Policies (See Note 2). The Company evaluates performance based
on profit or loss from operations before interest expense,
foreign exchange gains and losses, loss on sale of receivables,
other income and expense and income taxes.

Information about the Companys divisions is
presented below (in millions):

|                                                                        |  |                              |         |                  |  |            |       |          |  |       |       |  |  |  |       |   |  |  |         | 
|----------------------------------------------------------------------- |  | ---------------------------- | ------- | ---------------- |  | ---------- | ----- | -------- |  | ----- | ----- |  |  |  | ----- | - |  |  | ------- | 
|                                                                        |  |                             
|                                                                        |  | Year Ended December 31, 2001
|                                                                        |  |                             
|                                                                        |  | North American               |         | European         |  | Specialty  |       |         
|                                                                        |  | Automotive                   |         | Automotive       |  | Automotive |       |         
|                                                                        |  | Interior Systems             |         | Interior Systems |  | Products   |       | Other(a) |  | Total
|                                                                        |  |                              |         |                  |  |            |       |          |  |      
|External revenues                                                       |  |                              | 1,145.0 |                  |  |            | 258.2 |          |  |       | 420.1 |  |  |  |       |   |  |  | 1,823.3 | 
|Inter-segment revenues                                                  |  |                              | 12.0    |                  |  |            | 30.2  |          |  |       | 0.2   |  |  |  | (42.4 | ) |  |  |        | 
|Depreciation, amortization and subsidiary
	preferred stock requirements |  |                              | 46.4    |                  |  |            | 21.4  |          |  |       | 14.6  |  |  |  | 1.8   |   |  |  | 84.2    | 
|Operating income (loss)                                                 |  |                              | 73.9    |                  |  |            | (22.3 | )        |  |       | 13.0  |  |  |  | (29.0 | ) |  |  | 35.6    | 
|Total assets                                                            |  |                              | 1,899.1 |                  |  |            | 308.2 |          |  |       | 452.2 |  |  |  | 333.9 |   |  |  | 2,993.4 | 
|Capital expenditures                                                    |  |                              | 27.9    |                  |  |            | 12.1  |          |  |       | 12.2  |  |  |  | 2.3   |   |  |  | 54.5    | 

|                              |  |                                     |         |                  |  |            |       |          |  |       |       |  |  |   |       |   |  |   |         | 
|----------------------------- |  | ----------------------------------- | ------- | ---------------- |  | ---------- | ----- | -------- |  | ----- | ----- |  |  | - | ----- | - |  | - | ------- | 
|                              |  |                                    
|                              |  | Fiscal Year Ended December 31, 2000
|                              |  |                                    
|                              |  | North American                      |         | European         |  | Specialty  |       |         
|                              |  | Automotive                          |         | Automotive       |  | Automotive |       |         
|                              |  | Interior Systems                    |         | Interior Systems |  | Products   |       | Other(a) |  | Total
|                              |  |                                     |         |                  |  |            |       |          |  |      
|External revenues             |  | $                                   | 1,175.6 |                  |  | $          | 284.5 |          |  | $     | 441.7 |  |  | $ |      |   |  | $ | 1,901.8 | 
|Inter-segment revenues        |  |                                     | 22.3    |                  |  |            | 34.7  |          |  |       | 33.8  |  |  |   | (90.8 | ) |  |   |        | 
|Depreciation and amortization |  |                                     | 43.2    |                  |  |            | 16.6  |          |  |       | 13.5  |  |  |   | 1.4   |   |  |   | 74.7    | 
|Operating income (loss)       |  |                                     | 87.2    |                  |  |            | 1.1   |          |  |       | 22.8  |  |  |   | (3.0  | ) |  |   | 108.1   | 
|Total assets                  |  |                                     | 696.8   |                  |  |            | 228.6 |          |  |       | 234.6 |  |  |   | 120.3 |   |  |   | 1,280.3 | 
|Capital expenditures          |  |                                     | 34.3    |                  |  |            | 18.3  |          |  |       | 15.6  |  |  |   | 0.8   |   |  |   | 69.0    | 

|                              |  |                                     |         |                  |  |            |       |          |  |       |       |  |  |   |        |   |  |   |         | 
|----------------------------- |  | ----------------------------------- | ------- | ---------------- |  | ---------- | ----- | -------- |  | ----- | ----- |  |  | - | ------ | - |  | - | ------- | 
|                              |  |                                    
|                              |  | Fiscal Year Ended December 25, 1999
|                              |  |                                    
|                              |  | North American                      |         | European         |  | Specialty  |       |         
|                              |  | Automotive                          |         | Automotive       |  | Automotive |       |         
|                              |  | Interior Systems                    |         | Interior Systems |  | Products   |       | Other(a) |  | Total
|                              |  |                                     |         |                  |  |            |       |          |  |      
|External revenues             |  | $                                   | 1,151.7 |                  |  | $          | 306.4 |          |  | $     | 440.5 |  |  | $ |       |   |  | $ | 1,898.6 | 
|Inter-segment revenues        |  |                                     | 85.2    |                  |  |            | 27.4  |          |  |       | 16.7  |  |  |   | (129.3 | ) |  |   |        | 
|Depreciation and amortization |  |                                     | 38.6    |                  |  |            | 17.2  |          |  |       | 14.8  |  |  |   | 0.8    |   |  |   | 71.4    | 
|Operating income (loss)       |  |                                     | 89.3    |                  |  |            | 2.3   |          |  |       | 39.6  |  |  |   | (32.7  | ) |  |   | 98.5    | 
|Total assets                  |  |                                     | 799.0   |                  |  |            | 241.6 |          |  |       | 234.7 |  |  |   | 73.6   |   |  |   | 1,348.9 | 
|Capital expenditures          |  |                                     | 45.7    |                  |  |            | 23.5  |          |  |       | 12.7  |  |  |   | 4.5    |   |  |   | 86.4    | 



---



|    |                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Other includes the Companys discontinued
	operations (See Note 14), non-operating units, the effect of
	eliminating entries and restructuring charges (See Note 15).

F-35



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Sales by product groups follow (in millions):

|                                    |       |                   |       |              |  |             |       |         |  |   |       |         | 
|----------------------------------- | ----- | ----------------- | ----- | ------------ |  | ----------- | ----- | ------- |  | - | ----- | ------- | 
|                                    |       |                  
|                                    |       | Fiscal Year Ended
|                                    |       |                  
|                                    |       | December 31,      |       | December 31, |  | December 25
|                                    |       | 2001              |       | 2000         |  | 1999       
|                                    |       |                   |       |              |  |            
|Molded floor carpet                 |       | $                 | 476.6 |              |  | $           | 458.2 |         |  | $ | 468.0 |        
|Luggage compartment trim            |       |                   | 61.4  |              |  |             | 71.0  |         |  |   | 90.6  |        
|Acoustical products                 |       |                   | 222.9 |              |  |             | 231.4 |         |  |   | 209.8 |        
|Accessory floormats                 |       |                   | 148.7 |              |  |             | 160.4 |         |  |   | 165.9 |        
|Plastic-based interior trim systems |       |                   | 403.6 |              |  |             | 452.1 |         |  |   | 435.4 |        
|Automotive fabrics                  |       |                   | 278.5 |              |  |             | 290.5 |         |  |   | 269.5 |        
|Convertible top systems             |       |                   | 118.4 |              |  |             | 105.2 |         |  |   | 118.9 |        
|Other                               |       |                   | 113.2 |              |  |             | 133.0 |         |  |   | 140.5 |        
|                                    |       |                   |       |              |  |             |       |         |  |   |       |        
|                                    | Total |                   | $     | 1,823.3      |  |             | $     | 1,901.8 |  |   | $     | 1,898.6 | 
|                                    |       |                   |       |              |  |             |       |         |  |   |       |        

The Company performs periodic credit evaluations
of its customers financial condition. Although the Company
does not generally require collateral, it does require cash
payments in advance when the assessment of credit risk
associated with a customer is substantially higher than normal.
Receivables generally are due within 45 days, and credit
losses have consistently been within managements
expectations and are provided for in the consolidated financial
statements.

Direct and indirect sales to significant
customers in excess of ten percent of consolidated net sales
from continuing operations follow:

|                           |  |                   |       |      |  |      |       |  |  |  |       | 
|-------------------------- |  | ----------------- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                           |  |                  
|                           |  | Fiscal Year Ended
|                           |  |                  
|                           |  | 2001              |       | 2000 |  | 1999
|                           |  |                   |       |      |  |     
|General Motors Corporation |  |                   | 29.0% |      |  |      | 31.4% |  |  |  | 31.5% | 
|Ford Motor Company         |  |                   | 21.5% |      |  |      | 20.6% |  |  |  | 20.4% | 
|DaimlerChrysler AG         |  |                   | 18.7% |      |  |      | 16.8% |  |  |  | 18.9% | 

Information about the Companys continuing
operations in different geographic areas for fiscal 2001, 2000
and 1999 is presented below (in millions):

|               |  |                   |         |                   |  |                   |         |            |  |           |         |            |  |   |       |  |  |   |         |  |  |   |       | 
|-------------- |  | ----------------- | ------- | ----------------- |  | ----------------- | ------- | ---------- |  | --------- | ------- | ---------- |  | - | ----- |  |  | - | ------- |  |  | - | ----- | 
|               |  |                   |         |                   |  |                  
|               |  | Year Ended        |         | Fiscal Year Ended |  | Fiscal Year Ended
|               |  | December 31, 2001 |         | December 31, 2000 |  | December 25, 1999
|               |  |                   |         |                   |  |                  
|               |  |                   |         | Long-Lived        |  |                   |         | Long-Lived |  |           |         | Long-Lived
|               |  | Net Sales         |         | Assets            |  | Net Sales         |         | Assets     |  | Net Sales |         | Assets    
|               |  |                   |         |                   |  |                   |         |            |  |           |         |           
|United States  |  | $                 | 1,346.0 |                   |  | $                 | 1,548.0 |            |  | $         | 1,123.6 |            |  | $ | 518.5 |  |  | $ | 1,092.6 |  |  | $ | 550.8 | 
|Canada         |  |                   | 168.5   |                   |  |                   | 101.9   |            |  |           | 407.6   |            |  |   | 85.1  |  |  |   | 398.4   |  |  |   | 87.7  | 
|Mexico         |  |                   | 50.5    |                   |  |                   | 52.9    |            |  |           | 86.1    |            |  |   | 26.2  |  |  |   | 101.2   |  |  |   | 20.3  | 
|United Kingdom |  |                   | 117.3   |                   |  |                   | 71.8    |            |  |           | 117.2   |            |  |   | 54.3  |  |  |   | 121.7   |  |  |   | 64.3  | 
|Other (a)      |  |                   | 141.0   |                   |  |                   | 337.8   |            |  |           | 167.3   |            |  |   | 73.9  |  |  |   | 184.7   |  |  |   | 74.2  | 
|               |  |                   |         |                   |  |                   |         |            |  |           |         |            |  |   |       |  |  |   |         |  |  |   |       | 
|Consolidated   |  | $                 | 1,823.3 |                   |  | $                 | 2,112.4 |            |  | $         | 1,901.8 |            |  | $ | 758.0 |  |  | $ | 1,898.6 |  |  | $ | 797.3 | 
|               |  |                   |         |                   |  |                   |         |            |  |           |         |            |  |   |       |  |  |   |         |  |  |   |       | 



---



|    |                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Other includes South America, Asia and Europe
	including Sweden, Spain, Belgium, Germany, Austria, France, the
	Netherlands and the Czech Republic.

Intersegment sales between geographic areas are
not material. For fiscal years 2001, 2000 and 1999, export sales
from the United States to foreign countries were
$146.2 million, $87.2 million and $84.7 million,
respectively.

F-36



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

21.     Commitments
and Contingencies

Environmental

The Company is subject to federal, state, local
and foreign environmental, and health and safety, laws and
regulations that (i) affect ongoing operations and may
increase capital costs and operating expenses in order to
maintain compliance with such requirements and (ii) impose
liability relating to contamination at facilities, and at other
locations such as former facilities, facilities where we have
sent wastes for treatment or disposal, and other properties to
which the Company may be linked. Such liability may include, for
example, investigation and clean-up of the contamination,
personal injury and property damage caused by the contamination,
and damages to natural resources. Some of these liabilities may
be imposed without regard to fault, and may also be joint and
several (which can result in a liable party being held
responsible for the entire obligation, even where other parties
are also liable).

Management believes that it has obtained, and is
in material compliance with, those material environmental
permits and approvals necessary to conduct our various
businesses. Environmental compliance costs for continuing
businesses are accounted for as normal operating expenses or
capital expenditures, except for certain costs incurred at
acquired locations. Environmental compliance costs relating to
conditions existing at the time of an acquisition are generally
charged to reserves established in purchase accounting. The
Company accrues for environmental remediation costs when such
obligations are known and reasonably estimable. In the opinion
of management, based on the facts presently known to it, such
environmental compliance and remediation costs will not have a
material effect on our business, consolidated financial
condition, future results of operations or cash flows.

We are legally or contractually responsible or
alleged to be responsible for the investigation and remediation
of contamination at various sites, and for personal injury or
property damages, if any, associated with such contamination. At
some of these sites we have been notified that we are a
potentially responsible party (PRP) under the
federal Superfund law or similar state laws. Other sites at
which we may be responsible for contamination may be identified
in the future, including with respect to divested and acquired
businesses.

We are currently engaged in investigating or
remediating certain sites. In estimating our cost of
investigation and remediation, we have considered, among other
things, our prior experience in remediating contaminated sites,
remediation efforts by other parties, data released by the
United States Environmental Protection Agency
(USEPA), the professional judgment of our
environmental experts, outside environmental specialists and
other experts, and the likelihood that other identified PRPs
will have the financial resources to fulfill their obligations
at sites where they and we may be jointly and severally liable.
It is difficult to estimate the total cost of investigation and
remediation due to various factors including: incomplete
information regarding particular sites and other PRPs;
uncertainty regarding the nature and extent of environmental
problems and our share, if any, of liability for such problems;
the ultimate selection among alternative approaches by
governmental regulators; the complexity and evolving nature of
environmental laws, regulations and governmental directives; and
changes in cleanup standards.

The Company has established accounting reserves
for certain contingent environmental liabilities and management
believes such reserves comply with generally accepted accounting
principles. The Company records reserves for environmental
investigatory and non-capital remediation costs when litigation
has commenced or a claim or assessment has been asserted or is
imminent, the likelihood of an unfavorable outcome is probable,
and the financial impact of such outcome is reasonably
estimable. As of December 31, 2001, total reserves for
those contingent environmental liabilities are approximately
$59.6 million.

In the opinion of management, based on
information presently known to it, identified environmental
costs and contingencies will not have a material effect on our
consolidated financial condition, future results of operations
or cash flows. However, we can give no assurance that we have
identified or properly assessed all

F-37



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

potential environmental liability arising from
our business or properties, and those of our present and former
subsidiaries and their corporate predecessors.

Litigation

The Company and its subsidiaries have lawsuits
and claims pending against them and have certain guarantees
outstanding which were made in the ordinary course of business.

The ultimate outcome of the legal proceedings to
which the Company is a party will not, in the opinion of the
Companys management based on the facts presently known to
it, have a material effect on the Companys consolidated
financial condition, future results of operations or cash flows.

Other
Commitments

As of December 31, 2001, the Companys
continuing operations had approximately $8.2 million in
outstanding capital expenditure commitments. The majority of the
leased properties of the Companys previously divested
businesses have been assigned to third parties. Although
releases have been obtained from the lessors of certain
properties, C&A Products remains contingently liable under
most of the leases. C&A Products future liability for
these leases, in managements opinion, based on the facts
presently known to it, will not have a material effect on the
Companys consolidated financial condition, future results
of operations or cash flows.

22.     Quarterly
Financial Data (Unaudited)

The quarterly financial data is summarized below
(in millions, except per share amounts).

|                                              |      |         |       |         |  |         |       |         |  |   |       |        |  |   |       |         | 
|--------------------------------------------- | ---- | ------- | ----- | ------- |  | ------- | ----- | ------- |  | - | ----- | ------ |  | - | ----- | ------- | 
|                                              |      |        
|                                              |      | 2001   
|                                              |      |        
|                                              |      | First   |       | Second  |  | Third   |       | Fourth 
|                                              |      | Quarter |       | Quarter |  | Quarter |       | Quarter
|                                              |      |         |       |         |  |         |       |        
|Net sales                                     |      | $       | 453.1 |         |  | $       | 457.6 |         |  | $ | 430.5 |        |  | $ | 482.1 |        
|Gross margin                                  |      |         | 58.8  |         |  |         | 64.3  |         |  |   | 53.4  |        |  |   | 42.3  |        
|Income (loss) from continuing operations      |      |         | (7.1  | )       |  |         | 1.8   |         |  |   | (13.8 | )      |  |   | (30.6 | )      
|Income (loss) before extraordinary operations |      |         | (7.1  | )       |  |         | 9.2   |         |  |   | (12.4 | )      |  |   | (30.6 | )      
|Net income (loss)                             |      |         | (7.4  | )       |  |         | 9.2   |         |  |   | (12.4 | )      |  |   | (35.6 | )      
|Basic and diluted earnings (loss) per share   |      |         | (.10  | )       |  |         | .11   |         |  |   | (.12  | )      |  |   | (.29  | )      
|Common stock prices:                          |      |         |       |         |  |         |       |         |  |   |       |        |  |   |       |        
|                                              | High |         |       | 5.6875  |  |         |       | 6.2000  |  |   |       | 8.5700 |  |   |       | 10.3000 | 
|                                              | Low  |         |       | 3.5800  |  |         |       | 4.0500  |  |   |       | 3.9500 |  |   |       | 4.7600  | 

F-38



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                              |      |         |       |         |  |         |       |         |  |   |       |        |  |   |       |        | 
|--------------------------------------------- | ---- | ------- | ----- | ------- |  | ------- | ----- | ------- |  | - | ----- | ------ |  | - | ----- | ------ | 
|                                              |      |        
|                                              |      | 2000   
|                                              |      |        
|                                              |      | First   |       | Second  |  | Third   |       | Fourth 
|                                              |      | Quarter |       | Quarter |  | Quarter |       | Quarter
|                                              |      |         |       |         |  |         |       |        
|Net sales                                     |      | $       | 534.8 |         |  | $       | 507.2 |         |  | $ | 423.0 |        |  | $ | 436.8 |       
|Gross margin                                  |      |         | 83.7  |         |  |         | 84.1  |         |  |   | 53.2  |        |  |   | 45.6  |       
|Income (loss) from continuing operations      |      |         | 7.0   |         |  |         | 11.1  |         |  |   | (4.1  | )      |  |   | (15.4 | )     
|Income (loss) before extraordinary operations |      |         | 7.0   |         |  |         | 17.7  |         |  |   | (4.1  | )      |  |   | (15.4 | )     
|Net income (loss)                             |      |         | 7.0   |         |  |         | 17.7  |         |  |   | (4.8  | )      |  |   | (15.4 | )     
|Basic and diluted earnings (loss) per share   |      |         | .11   |         |  |         | .29   |         |  |   | (.08  | )      |  |   | (.25  | )     
|Common stock prices:                          |      |         |       |         |  |         |       |         |  |   |       |        |  |   |       |       
|                                              | High |         |       | 6.1250  |  |         |       | 7.0000  |  |   |       | 6.1250 |  |   |       | 4.9375 | 
|                                              | Low  |         |       | 4.5000  |  |         |       | 5.1250  |  |   |       | 4.6875 |  |   |       | 2.8750 | 

The Companys operations are not subject to
significant seasonal influences.

23.     Earnings Per
Share

The Company adopted SFAS No. 128,
Earnings Per Share, in December 1997. Basic earnings
per common share were computed by dividing net income (loss) by
the weighted average number of shares of common stock
outstanding during the year. Diluted earnings per common share
were determined assuming the exercise of the stock options
issued under the Companys stock option plans (See
Note 16). There were no reconciling items between basic
earnings per common share and diluted earnings per common share
for 2001, 2000 and 1999.

In 2001, 2000 and 1999, potentially dilutive
securities have been excluded from the diluted earnings per
share calculation since their inclusion would have been
antidilutive. At December 31, 2001, the Companys
potentially dilutive securities included 2.8 million stock
options with a weighted average exercise price of $5.59 and
0.5 million warrants with an exercise price of $5.00. At
December 31, 2000 and December 25, 1999, the
Companys potentially dilutive securities included
4.3 million and 4.7 million stock options,
respectively, with weighted average exercise prices of $5.47 and
$5.70, respectively.

24.     Consolidating
Financial Statements

Products issued 10 3/4% Senior Subordinated
Notes due 2011 in a total principal amount of
$500.0 million in December 2001. These notes are guaranteed
by certain subsidiaries of the Company (Guarantor Subsidiaries).
The Guarantor Subsidiaries also guaranteed the Companys
previously existing old Bank Credit Facilities (as defined in
Note 10).

F-39



---



##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES






SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING
FINANCIAL STATEMENTS


CONSOLIDATING STATEMENT OF INCOME

|                                                              |                                            |                                      |       |        |  |            |       |              |   |              |       |       |   |   |       |       |   |   |        |       |   |   |       |         |  
|------------------------------------------------------------- | ------------------------------------------ | ------------------------------------ | ----- | ------ |  | ---------- | ----- | ------------ | - | ------------ | ----- | ----- | - | - | ----- | ----- | - | - | ------ | ----- | - | - | ----- | ------- | -
|                                                              |                                            |                                     
|                                                              |                                            | For the Year Ended December 31, 2001
|                                                              |                                            |                                     
|                                                              |                                            |                                      |       | Non-   |  |            |       | Consolidated
|                                                              |                                            | Parent                               |       | Issuer |  | Guarantors |       | Guarantors   |   | Eliminations |       | Total
|                                                              |                                            |                                      |       |        |  |            |       |              |   |              |       |      
|                                                              |                                            |                                     
|                                                              |                                            | (in millions)                       
|Operating Income                                              |                                            |                                      |       |        |  |            |       |              |   |              |       |       |   |   |       |       |   |   |        |       |   |   |       |        
|                                                              | Net sales                                  |                                      | $     |       |  |            | $     | 612.2        |   |              | $     | 676.4 |   |   | $     | 577.1 |   |   | $      | (42.4 | ) |   | $     | 1,823.3 |  
|                                                              | Cost of goods sold                         |                                      |       |       |  |            |       | 506.3        |   |              |       | 598.2 |   |   |       | 542.4 |   |   |        | (42.4 | ) |   |       | 1,604.5 |  
|                                                              | Selling, general & administrative expenses |                                      |       | 0.1    |  |            |       | 34.9         |   |              |       | 81.1  |   |   |       | 48.3  |   |   |        |      |   |   |       | 164.4   |  
|                                                              | Restructuring charge                       |                                      |       |       |  |            |       | 7.3          |   |              |       | .9    |   |   |       | 10.6  |   |   |        |      |   |   |       | 18.8    |  
|                                                              |                                            |                                      |       |        |  |            |       |              |   |              |       |       |   |   |       |       |   |   |        |       |   |   |       |        
|Operating income (loss)                                       |                                            |                                      | (0.1  | )      |  |            | 63.7  |              |   |              | (3.8  | )     |   |   | (24.2 | )     |   |   |       |       |   |   | 35.6  |        
|                                                              | Interest Expense, net                      |                                      |       |       |  |            |       | 45.6         |   |              |       | 35.9  |   |   |       | 2.8   |   |   |        |      |   |   |       | 84.3    |  
|                                                              | Intercompany Interest Expense/(Income)     |                                      |       |       |  |            |       | 17.3         |   |              |       | (24.7 | ) |   |       | 7.4   |   |   |        |      |   |   |       |        |  
|                                                              | Loss on sale of receivables                |                                      |       |       |  |            |       | 6.1          |   |              |       |      |   |   |       | 4.7   |   |   |        |      |   |   |       | 10.8    |  
|                                                              | Subsidiaries preferred stock requirements  |                                      |       |       |  |            |       | 2.4          |   |              |       |      |   |   |       |      |   |   |        |      |   |   |       | 2.4     |  
|                                                              | Other expense, net                         |                                      |       |       |  |            |       | 5.0          |   |              |       | 2.9   |   |   |       | 1.8   |   |   |        | (3.3  | ) |   |       | 6.4     |  
|                                                              |                                            |                                      |       |        |  |            |       |              |   |              |       |       |   |   |       |       |   |   |        |       |   |   |       |        
|Income (loss) from continuing operations
	before income taxes |                                            |                                      | (0.1  | )      |  |            | (12.7 | )            |   |              | (17.9 | )     |   |   | (40.9 | )     |   |   | 3.3    |       |   |   | (68.3 | )      
|                                                              | Income Tax Expense (Benefit)               |                                      |       | 0.2    |  |            |       | (11.9        | ) |              |       | (5.6  | ) |   |       | (1.3  | ) |   |        |      |   |   |       | (18.6   | )
|                                                              |                                            |                                      |       |        |  |            |       |              |   |              |       |       |   |   |       |       |   |   |        |       |   |   |       |        
|Loss from continuing operations                               |                                            |                                      | (0.3  | )      |  |            | (.8   | )            |   |              | (12.3 | )     |   |   | (39.6 | )     |   |   | 3.3    |       |   |   | (49.7 | )      
|Discontinued operations income                                |                                            |                                      |      |        |  |            | (8.8  | )            |   |              |      |       |   |   |      |       |   |   |       |       |   |   | (8.8  | )      
|Extraordinary loss                                            |                                            |                                      |      |        |  |            | 5.0   |              |   |              | 0.3   |       |   |   |      |       |   |   |       |       |   |   | 5.3   |        
|Equity in net (income) loss of
	subsidiaries                  |                                            |                                      | 45.9  |        |  |            | 48.9  |              |   |              | 33.5  |       |   |   |      |       |   |   | (128.3 | )     |   |   |      |        
|                                                              |                                            |                                      |       |        |  |            |       |              |   |              |       |       |   |   |       |       |   |   |        |       |   |   |       |        
|NET INCOME (LOSS)                                             |                                            | $                                    | (46.2 | )      |  | $          | (45.9 | )            |   | $            | (46.1 | )     |   | $ | (39.6 | )     |   | $ | 131.6  |       |   | $ | (46.2 | )      
|                                                              |                                            |                                      |       |        |  |            |       |              |   |              |       |       |   |   |       |       |   |   |        |       |   |   |       |        

|                                                              |                                            |                                      |      |        |   |            |       |              |   |              |      |       |   |   |      |       |   |   |       |       |   |   |       |         | 
|------------------------------------------------------------- | ------------------------------------------ | ------------------------------------ | ---- | ------ | - | ---------- | ----- | ------------ | - | ------------ | ---- | ----- | - | - | ---- | ----- | - | - | ----- | ----- | - | - | ----- | ------- | 
|                                                              |                                            |                                     
|                                                              |                                            | For the Year Ended December 31, 2000
|                                                              |                                            |                                     
|                                                              |                                            |                                      |      | Non-   |   |            |       | Consolidated
|                                                              |                                            | Parent                               |      | Issuer |   | Guarantors |       | Guarantors   |   | Eliminations |      | Total
|                                                              |                                            |                                      |      |        |   |            |       |              |   |              |      |      
|                                                              |                                            |                                     
|                                                              |                                            | (in millions)                       
|Operating Income                                              |                                            |                                      |      |        |   |            |       |              |   |              |      |       |   |   |      |       |   |   |       |       |   |   |       |        
|                                                              | Net sales                                  |                                      | $    |       |   |            | $     | 547.7        |   |              | $    | 619.6 |   |   | $    | 815.4 |   |   | $     | (80.9 | ) |   | $     | 1,901.8 | 
|                                                              | Cost of goods sold                         |                                      |      |       |   |            |       | 464.4        |   |              |      | 554.1 |   |   |      | 697.6 |   |   |       | (80.9 | ) |   |       | 1,635.2 | 
|                                                              | Selling, general & administrative expenses |                                      |      | 0.1    |   |            |       | 36.0         |   |              |      | 53.5  |   |   |      | 68.9  |   |   |       |      |   |   |       | 158.5   | 
|                                                              |                                            |                                      |      |        |   |            |       |              |   |              |      |       |   |   |      |       |   |   |       |       |   |   |       |        
|Operating income (loss)                                       |                                            |                                      | (0.1 | )      |   |            | 47.3  |              |   |              | 12.0 |       |   |   | 48.9 |       |   |   |      |       |   |   | 108.1 |        
|                                                              | Interest Expense/(Income)                  |                                      |      | (0.1   | ) |            |       | 86.8         |   |              |      | 7.4   |   |   |      | 2.5   |   |   |       |      |   |   |       | 96.6    | 
|                                                              | Intercompany Interest/(Income)             |                                      |      |       |   |            |       | 19.9         |   |              |      | (16.2 | ) |   |      | (3.7  | ) |   |       |      |   |   |       |        | 
|                                                              | Loss on sale of receivables                |                                      |      |       |   |            |       | 1.6          |   |              |      |      |   |   |      | 7.6   |   |   |       |      |   |   |       | 9.2     | 
|                                                              | Other expense/(income), net                |                                      |      |       |   |            |       | 2.1          |   |              |      | (13.6 | ) |   |      | 9.9   |   |   |       | 3.1   |   |   |       | 1.5     | 
|                                                              |                                            |                                      |      |        |   |            |       |              |   |              |      |       |   |   |      |       |   |   |       |       |   |   |       |        
|Income (loss) from continuing operations
	before income taxes |                                            |                                      |     |        |   |            | (63.1 | )            |   |              | 34.4 |       |   |   | 32.6 |       |   |   | (3.1  | )     |   |   | 0.8   |        
|                                                              | Income Tax Expense (Benefit)               |                                      |      |       |   |            |       | (24.1        | ) |              |      | 15.3  |   |   |      | 12.2  |   |   |       | (1.2  | ) |   |       | 2.2     | 
|                                                              |                                            |                                      |      |        |   |            |       |              |   |              |      |       |   |   |      |       |   |   |       |       |   |   |       |        
|Loss/Income from continuing
	operations                       |                                            |                                      |     |        |   |            | (39.0 | )            |   |              | 19.1 |       |   |   | 20.4 |       |   |   | (1.9  | )     |   |   | (1.4  | )      
|Discontinued operations/income                                |                                            |                                      |     |        |   |            | (6.6  | )            |   |              |     |       |   |   |     |       |   |   |      |       |   |   | (6.6  | )      
|Extraordinary loss                                            |                                            |                                      |     |        |   |            |      |              |   |              | 0.7  |       |   |   |     |       |   |   |      |       |   |   | 0.7   |        
|Equity in net (income) loss of
	subsidiaries                  |                                            |                                      | (4.5 | )      |   |            | 36.9  |              |   |              | (9.2 | )     |   |   |     |       |   |   | 50.6  |       |   |   |      |        
|                                                              |                                            |                                      |      |        |   |            |       |              |   |              |      |       |   |   |      |       |   |   |       |       |   |   |       |        
|NET INCOME (LOSS)                                             |                                            | $                                    | 4.5  |        |   | $          | 4.5   |              |   | $            | 27.6 |       |   | $ | 20.4 |       |   | $ | (52.5 | )     |   | $ | 4.5   |        
|                                                              |                                            |                                      |      |        |   |            |       |              |   |              |      |       |   |   |      |       |   |   |       |       |   |   |       |        

F-40



---



##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES






SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING
FINANCIAL STATEMENTS


CONSOLIDATING STATEMENT OF INCOME

|                                                              |                                            |                                      |       |        |   |            |       |              |   |              |      |       |   |   |      |       |   |   |       |        |   |   |       |         | 
|------------------------------------------------------------- | ------------------------------------------ | ------------------------------------ | ----- | ------ | - | ---------- | ----- | ------------ | - | ------------ | ---- | ----- | - | - | ---- | ----- | - | - | ----- | ------ | - | - | ----- | ------- | 
|                                                              |                                            |                                     
|                                                              |                                            | For the Year Ended December 25, 1999
|                                                              |                                            |                                     
|                                                              |                                            |                                      |       | Non-   |   |            |       | Consolidated
|                                                              |                                            | Parent                               |       | Issuer |   | Guarantors |       | Guarantors   |   | Eliminations |      | Total
|                                                              |                                            |                                      |       |        |   |            |       |              |   |              |      |      
|                                                              |                                            |                                     
|                                                              |                                            | (in millions)                       
|Operating Income                                              |                                            |                                      |       |        |   |            |       |              |   |              |      |       |   |   |      |       |   |   |       |        |   |   |       |        
|                                                              | Net sales                                  |                                      | $     |       |   |            | $     | 547.7        |   |              | $    | 616.9 |   |   | $    | 837.8 |   |   | $     | (103.8 | ) |   | $     | 1,898.6 | 
|                                                              | Cost of goods sold                         |                                      |       |       |   |            |       | 447.3        |   |              |      | 555.6 |   |   |      | 714.8 |   |   |       | (103.8 | ) |   |       | 1,613.9 | 
|                                                              | Selling, general & administrative expenses |                                      |       | 0.5    |   |            |       | 53.6         |   |              |      | 38.7  |   |   |      | 60.0  |   |   |       |       |   |   |       | 152.8   | 
|                                                              | Restructuring charge                       |                                      |       |       |   |            |       | 6.9          |   |              |      | 16.4  |   |   |      | 10.1  |   |   |       |       |   |   |       | 33.4    | 
|                                                              |                                            |                                      |       |        |   |            |       |              |   |              |      |       |   |   |      |       |   |   |       |        |   |   |       |        
|                                                              | Operating income (loss)                    |                                      |       | (0.5   | ) |            |       | 39.9         |   |              |      | 6.2   |   |   |      | 52.9  |   |   |       |       |   |   |       | 98.5    | 
|                                                              | Interest Expense/(Income)                  |                                      |       | (0.1   | ) |            |       | 79.5         |   |              |      | 8.8   |   |   |      | 3.9   |   |   |       |       |   |   |       | 92.1    | 
|                                                              | Intercompany Interest/(Income)             |                                      |       |       |   |            |       | 22.1         |   |              |      | (15.4 | ) |   |      | (6.7  | ) |   |       |       |   |   |       |        | 
|                                                              | Loss on sale of receivables                |                                      |       |       |   |            |       |             |   |              |      |      |   |   |      | 5.4   |   |   |       |       |   |   |       | 5.4     | 
|                                                              | Other expense, (income) net                |                                      |       |       |   |            |       | 7.5          |   |              |      | (19.3 | ) |   |      | 7.3   |   |   |       | 6.7    |   |   |       | 2.2     | 
|                                                              |                                            |                                      |       |        |   |            |       |              |   |              |      |       |   |   |      |       |   |   |       |        |   |   |       |        
|Income (loss) from continuing operations
	before income taxes |                                            |                                      | (0.4  | )      |   |            | (69.2 | )            |   |              | 32.1 |       |   |   | 43.0 |       |   |   | (6.7  | )      |   |   | (1.2  | )      
|                                                              | Income Tax Expense (Benefit)               |                                      |       |       |   |            |       | (26.2        | ) |              |      | 13.6  |   |   |      | 15.4  |   |   |       | (2.6   | ) |   |       | 0.2     | 
|                                                              |                                            |                                      |       |        |   |            |       |              |   |              |      |       |   |   |      |       |   |   |       |        |   |   |       |        
|Income/(Loss) from continuing
	operations                     |                                            |                                      | (0.4  | )      |   |            | (43.0 | )            |   |              | 18.5 |       |   |   | 27.6 |       |   |   | (4.1  | )      |   |   | (1.4  | )      
|Discontinued operations                                       |                                            |                                      |      |        |   |            |      |              |   |              |     |       |   |   |     |       |   |   |      |        |   |   |      |        
|Cumulative effect of accounting
	change                       |                                            |                                      |      |        |   |            | 2.4   |              |   |              | 4.0  |       |   |   | 2.4  |       |   |   |      |        |   |   | 8.8   |        
|Equity in net (income)loss of
	subsidiaries                   |                                            |                                      | 9.8   |        |   |            | (35.6 | )            |   |              | (6.1 | )     |   |   |     |       |   |   | 31.9  |        |   |   |      |        
|                                                              |                                            |                                      |       |        |   |            |       |              |   |              |      |       |   |   |      |       |   |   |       |        |   |   |       |        
|NET INCOME (LOSS)                                             |                                            | $                                    | (10.2 | )      |   | $          | (9.8  | )            |   | $            | 20.6 |       |   | $ | 25.2 |       |   | $ | (36.0 | )      |   | $ | (10.2 | )      
|                                                              |                                            |                                      |       |        |   |            |       |              |   |              |      |       |   |   |      |       |   |   |       |        |   |   |       |        

F-41



---



##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES






SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING
FINANCIAL STATEMENTS


CONSOLIDATING BALANCE SHEET

|                                                      |                                |                                      |       |        |  |            |         |              |   |              |         |       |   |   |       |       |  |   |          |     |  |   |         |       | 
|----------------------------------------------------- | ------------------------------ | ------------------------------------ | ----- | ------ |  | ---------- | ------- | ------------ | - | ------------ | ------- | ----- | - | - | ----- | ----- |  | - | -------- | --- |  | - | ------- | ----- | 
|                                                      |                                |                                     
|                                                      |                                | For the Year Ended December 31, 2001
|                                                      |                                |                                     
|                                                      |                                |                                      |       | Non-   |  |            |         | Consolidated
|                                                      |                                | Parent                               |       | Issuer |  | Guarantors |         | Guarantors   |   | Eliminations |         | Total
|                                                      |                                |                                      |       |        |  |            |         |              |   |              |         |      
|                                                      |                                |                                     
|                                                      |                                | (in millions)                       
|ASSETS                                               
|Current Assets                                        |                                |                                      |       |        |  |            |         |              |   |              |         |       |   |   |       |       |  |   |          |     |  |   |         |      
|                                                      | Cash and cash equivalents      |                                      | $     | 0.2    |  |            | $       | (3.8         | ) |              | $       | 12.7  |   |   | $     | 64.8  |  |   | $        |    |  |   | $       | 73.9  | 
|                                                      | Accounts Receivable, net       |                                      |       |       |  |            |         | 8.7          |   |              |         | 140.6 |   |   |       | 250.9 |  |   |          | 5.9 |  |   |         | 406.1 | 
|                                                      | Inventories                    |                                      |       |       |  |            |         | 37.6         |   |              |         | 55.7  |   |   |       | 39.3  |  |   |          |    |  |   |         | 132.6 | 
|                                                      | Other                          |                                      |       |       |  |            |         | 8.6          |   |              |         | 71.4  |   |   |       | 51.9  |  |   |          |    |  |   |         | 131.9 | 
|                                                      |                                |                                      |       |        |  |            |         |              |   |              |         |       |   |   |       |       |  |   |          |     |  |   |         |      
|Total current assets                                  |                                |                                      | 0.2   |        |  |            | 51.1    |              |   |              | 280.4   |       |   |   | 406.9 |       |  |   | 5.9      |     |  |   | 744.5   |      
|Investment in Subsidiaries                            |                                |                                      | 374.5 |        |  |            | 1,784.9 |              |   |              | 396.5   |       |   |   |      |       |  |   | (2,555.9 | )   |  |   |        |      
|Property, plant and equipment, net                    |                                |                                      |      |        |  |            | 69.4    |              |   |              | 254.7   |       |   |   | 294.0 |       |  |   |         |     |  |   | 618.1   |      
|Goodwill, net                                         |                                |                                      |      |        |  |            | 23.7    |              |   |              | 1,101.3 |       |   |   | 133.0 |       |  |   | (4.2     | )   |  |   | 1,253.8 |      
|Other Assets                                          |                                |                                      |      |        |  |            | 195.9   |              |   |              | 106.6   |       |   |   | 74.5  |       |  |   |         |     |  |   | 377.0   |      
|                                                      |                                |                                      |       |        |  |            |         |              |   |              |         |       |   |   |       |       |  |   |          |     |  |   |         |      
|                                                      |                                |                                      | 374.5 |        |  |            | 2,073.9 |              |   |              | 1,859.1 |       |   |   | 501.5 |       |  |   | (2,560.1 | )   |  |   | 2,248.9 |      
|                                                      |                                |                                      |       |        |  |            |         |              |   |              |         |       |   |   |       |       |  |   |          |     |  |   |         |      
|                                                      |                                | $                                    | 374.7 |        |  | $          | 2,125.0 |              |   | $            | 2,139.5 |       |   | $ | 908.4 |       |  | $ | (2,554.2 | )   |  | $ | 2,993.4 |      
|                                                      |                                |                                      |       |        |  |            |         |              |   |              |         |       |   |   |       |       |  |   |          |     |  |   |         |      
|LIABILITIES & STOCKHOLDERS EQUITY
	(DEFICIT)        
|Current Liabilities                                   |                                |                                      |       |        |  |            |         |              |   |              |         |       |   |   |       |       |  |   |          |     |  |   |         |      
|                                                      | Short Term Borrowings          |                                      |       |       |  |            |         | 10.1         |   |              |         | 0.1   |   |   |       | 25.5  |  |   |          |    |  |   |         | 35.7  | 
|                                                      | Current Portion-Long Term Debt |                                      |       |       |  |            |         | 18.0         |   |              |         | (0.1  | ) |   |       | 1.6   |  |   |          |    |  |   |         | 19.5  | 
|                                                      | Accounts Payable               |                                      |       |       |  |            |         | 100.2        |   |              |         | 247.5 |   |   |       | 121.0 |  |   |          |    |  |   |         | 468.7 | 
|                                                      | Accrued Expenses               |                                      |       |       |  |            |         | 71.4         |   |              |         | 83.7  |   |   |       | 90.1  |  |   |          |    |  |   |         | 245.2 | 
|                                                      |                                |                                      |       |        |  |            |         |              |   |              |         |       |   |   |       |       |  |   |          |     |  |   |         |      
|Total current liabilities                             |                                |                                      |      |        |  |            | 199.7   |              |   |              | 331.2   |       |   |   | 238.2 |       |  |   |         |     |  |   | 769.1   |      
|Long Term Debt                                        |                                |                                      |      |        |  |            | 1,282.0 |              |   |              | (0.3    | )     |   |   | 0.7   |       |  |   |         |     |  |   | 1,282.4 |      
|Intercompany (Receivable)/ Payable                    |                                |                                      |      |        |  |            | (102.4  | )            |   |              | 4.1     |       |   |   | 98.3  |       |  |   |         |     |  |   |        |      
|Other Noncurrent Liabilities                          |                                |                                      |      |        |  |            | 223.5   |              |   |              | 137.4   |       |   |   | 58.6  |       |  |   |         |     |  |   | 419.5   |      
|Mandatorily redeemable preferred stock of
	subsidiary |                                |                                      |      |        |  |            | 147.7   |              |   |              |        |       |   |   |      |       |  |   |         |     |  |   | 147.7   |      
|                                                      |                                |                                      |       |        |  |            |         |              |   |              |         |       |   |   |       |       |  |   |          |     |  |   |         |      
|                                                      |                                |                                      |      |        |  |            | 1,550.8 |              |   |              | 141.2   |       |   |   | 157.6 |       |  |   |         |     |  |   | 1,849.6 |      
|Stockholders Equity                                   |                                | $                                    | 374.7 |        |  | $          | 374.5   |              |   | $            | 1,667.1 |       |   | $ | 512.6 |       |  | $ | (2,554.2 | )   |  | $ | 374.7   |      
|                                                      |                                |                                      |       |        |  |            |         |              |   |              |         |       |   |   |       |       |  |   |          |     |  |   |         |      
|                                                      |                                | $                                    | 374.7 |        |  | $          | 2,125.0 |              |   | $            | 2,139.5 |       |   | $ | 908.4 |       |  | $ | (2,554.2 | )   |  | $ | 2,993.4 |      
|                                                      |                                |                                      |       |        |  |            |         |              |   |              |         |       |   |   |       |       |  |   |          |     |  |   |         |      

F-42



---



##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES






SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING
FINANCIAL STATEMENTS


CONSOLIDATING BALANCE SHEET

|                                              |                                |                                      |        |        |  |            |         |              |   |              |        |       |  |   |       |       |  |   |        |     |  |   |         |       | 
|--------------------------------------------- | ------------------------------ | ------------------------------------ | ------ | ------ |  | ---------- | ------- | ------------ | - | ------------ | ------ | ----- |  | - | ----- | ----- |  | - | ------ | --- |  | - | ------- | ----- | 
|                                              |                                |                                     
|                                              |                                | For the Year Ended December 31, 2000
|                                              |                                |                                     
|                                              |                                |                                      |        | Non-   |  |            |         | Consolidated
|                                              |                                | Parent                               |        | Issuer |  | Guarantors |         | Guarantors   |   | Eliminations |        | Total
|                                              |                                |                                      |        |        |  |            |         |              |   |              |        |      
|                                              |                                |                                     
|                                              |                                | (in millions)                       
|ASSETS                                       
|Current Assets                                |                                |                                      |        |        |  |            |         |              |   |              |        |       |  |   |       |       |  |   |        |     |  |   |         |      
|                                              | Cash and cash equivalents      |                                      | $      | 0.5    |  |            | $       | (4.2         | ) |              | $      | 1.0   |  |   | $     | 23.6  |  |   | $      |    |  |   | $       | 20.9  | 
|                                              | Accounts Receivable, net       |                                      |        |       |  |            |         | 7.8          |   |              |        | 30.9  |  |   |       | 155.2 |  |   |        | 2.6 |  |   |         | 196.5 | 
|                                              | Inventories                    |                                      |        |       |  |            |         | 39.6         |   |              |        | 49.5  |  |   |       | 42.6  |  |   |        |    |  |   |         | 131.7 | 
|                                              | Other                          |                                      |        |       |  |            |         | 20.4         |   |              |        | 14.4  |  |   |       | 41.1  |  |   |        |    |  |   |         | 75.9  | 
|                                              |                                |                                      |        |        |  |            |         |              |   |              |        |       |  |   |       |       |  |   |        |     |  |   |         |      
|Total current assets                          |                                |                                      | 0.5    |        |  |            | 63.6    |              |   |              | 95.8   |       |  |   | 262.5 |       |  |   | 2.6    |     |  |   | 425.0   |      
|Investment in Subsidiaries                    |                                |                                      | (152.9 | )      |  |            | 831.7   |              |   |              | 297.4  |       |  |   |      |       |  |   | (976.2 | )   |  |   |        |      
|Property, plant and equipment, net            |                                |                                      |       |        |  |            | 94.4    |              |   |              | 152.7  |       |  |   | 187.7 |       |  |   | (0.7   | )   |  |   | 434.1   |      
|Goodwill, net                                 |                                |                                      |       |        |  |            |        |              |   |              | 111.5  |       |  |   | 138.2 |       |  |   | (4.2   | )   |  |   | 245.5   |      
|Other Noncurrent Assets                       |                                |                                      |       |        |  |            | 122.4   |              |   |              | 20.7   |       |  |   | 32.6  |       |  |   |       |     |  |   | 175.7   |      
|                                              |                                |                                      |        |        |  |            |         |              |   |              |        |       |  |   |       |       |  |   |        |     |  |   |         |      
|                                              |                                |                                      | (152.9 | )      |  |            | 1,048.5 |              |   |              | 582.3  |       |  |   | 358.5 |       |  |   | (981.1 | )   |  |   | 855.3   |      
|                                              |                                | $                                    | (152.4 | )      |  | $          | 1,112.1 |              |   | $            | 678.1  |       |  | $ | 621.0 |       |  | $ | (978.5 | )   |  | $ | 1,280.3 |      
|                                              |                                |                                      |        |        |  |            |         |              |   |              |        |       |  |   |       |       |  |   |        |     |  |   |         |      
|LIABILITIES & STOCKHOLDERS EQUITY
	(DEFICIT)
|Current Liabilities                           |                                |                                      |        |        |  |            |         |              |   |              |        |       |  |   |       |       |  |   |        |     |  |   |         |      
|                                              | Short Term Borrowings          |                                      |        |       |  |            |         | 0.4          |   |              |        |      |  |   |       | 3.4   |  |   |        |    |  |   |         | 3.8   | 
|                                              | Current Portion-Long Term Debt |                                      |        |       |  |            |         | 35.6         |   |              |        | 48.3  |  |   |       | 0.4   |  |   |        |    |  |   |         | 84.3  | 
|                                              | Accounts Payable               |                                      |        |       |  |            |         | 52.4         |   |              |        | 42.0  |  |   |       | 84.1  |  |   |        |    |  |   |         | 178.5 | 
|                                              | Accrued Liabilities            |                                      |        |       |  |            |         | 58.7         |   |              |        | 13.3  |  |   |       | 51.1  |  |   |        |    |  |   |         | 123.1 | 
|                                              |                                |                                      |        |        |  |            |         |              |   |              |        |       |  |   |       |       |  |   |        |     |  |   |         |      
|Total current liabilities                     |                                |                                      |       |        |  |            | 147.1   |              |   |              | 103.6  |       |  |   | 139.0 |       |  |   |       |     |  |   | 389.7   |      
|                                             
|Long Term Debt                                |                                |                                      |       |        |  |            | 781.7   |              |   |              |       |       |  |   | 18.0  |       |  |   |       |     |  |   | 799.7   |      
|Intercompany (Receivable)/ Payable            |                                |                                      |       |        |  |            | 234.6   |              |   |              | (245.9 | )     |  |   | 11.3  |       |  |   |       |     |  |   |        |      
|Other Noncurrent Liabilities                  |                                |                                      | 2.6    |        |  |            | 101.6   |              |   |              | 96.1   |       |  |   | 45.5  |       |  |   |       |     |  |   | 245.8   |      
|                                              |                                |                                      |        |        |  |            |         |              |   |              |        |       |  |   |       |       |  |   |        |     |  |   |         |      
|                                              |                                |                                      | 2.6    |        |  |            | 1,117.9 |              |   |              | (149.8 | )     |  |   | 74.8  |       |  |   |        |     |  |   | 1,045.5 |      
|                                             
|Stockholders Equity (Deficit)                 |                                | $                                    | (155.0 | )      |  | $          | (152.9  | )            |   | $            | 724.3  |       |  | $ | 407.2 |       |  | $ | (978.5 | )   |  | $ | (154.9  | )    
|                                              |                                |                                      |        |        |  |            |         |              |   |              |        |       |  |   |       |       |  |   |        |     |  |   |         |      
|                                              |                                | $                                    | (152.4 | )      |  | $          | 1,112.1 |              |   | $            | 678.1  |       |  | $ | 621.0 |       |  | $ | (978.5 | )   |  | $ | 1,280.3 |      
|                                              |                                |                                      |        |        |  |            |         |              |   |              |        |       |  |   |       |       |  |   |        |     |  |   |         |      

F-43



---



##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES






SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING
FINANCIAL STATEMENTS


CONSOLIDATING STATEMENT OF CASH
FLOWS

|                                                  |                                                                                                 |                                                      |      |        |   |            |      |              |        |              |      |        |        |   |      |       |        |   |   |   |   |   |      |        |        |  
|------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ---------------------------------------------------- | ---- | ------ | - | ---------- | ---- | ------------ | ------ | ------------ | ---- | ------ | ------ | - | ---- | ----- | ------ | - | - | - | - | - | ---- | ------ | ------ | -
|                                                  |                                                                                                 |                                                     
|                                                  |                                                                                                 | For the Year Ended December 31, 2001                
|                                                  |                                                                                                 |                                                     
|                                                  |                                                                                                 |                                                      |      | Non-   |   |            |      | Consolidated
|                                                  |                                                                                                 | Parent                                               |      | Issuer |   | Guarantors |      | Guarantors   |        | Eliminations |      | Total 
|                                                  |                                                                                                 |                                                      |      |        |   |            |      |              |        |              |      |       
|                                                  |                                                                                                 |                                                     
|                                                  |                                                                                                 | (in millions)                                       
|OPERATING ACTIVITIES                              |                                                                                                 |                                                      |      |        |   |            |      |              |        |              |      |        |        |   |      |       |        |   |   |   |   |   |      |       
|                                                  | Net cash provided by continuing operating
	activities                                           |                                                      | $    | (0.3   | ) |            | $    | (266.6       | )      |              | $    | 237.6  |        |   | $    | 160.7 |        |   | $ |  |   |   | $    | 131.4  |       
|                                                  |                                                                                                 |                                                      |      |        |   |            |      |              |        |              |      |        |        |   |      |       |        |   |   |   |   |   |      |       
|                                                  | Net cash provided by discontinued operating
	activities                                         |                                                      |      |       |   |            |      |             |        |              |      |       |        |   |      | 12.2  |        |   |   |  |   |   |      | 12.2   |       
|                                                  |                                                                                                 |                                                      |      |        |   |            |      |              |        |              |      |        |        |   |      |       |        |   |   |   |   |   |      |       
|INVESTING ACTIVITIES                              |                                                                                                 |                                                      |      |        |   |            |      |              |        |              |      |        |        |   |      |       |        |   |   |   |   |   |      |       
|                                                  | Additions to property, plant and equipment                                                      |                                                      |      |       |   |            |      | (14.8        | )      |              |      | (14.5  | )      |   |      | (25.2 | )      |   |   |  |   |   |      | (54.5  | )     
|                                                  | Sales of property, plant and equipment                                                          |                                                      |      |       |   |            |      | 62.2         |        |              |      | 24.0   |        |   |      | 1.9   |        |   |   |  |   |   |      | 88.1   |       
|                                                  | Acquisitions of businesses, net of cash acquired                                                |                                                      |      |       |   |            |      | (760.9       | )      |              |      |       |        |   |      |      |        |   |   |  |   |   |      | (760.9 | )     
|                                                  | Sale of business                                                                                |                                                      |      |       |   |            |      |             |        |              |      | 3.5    |        |   |      |      |        |   |   |  |   |   |      | 3.5    |       
|                                                  |                                                                                                 |                                                      |      |        |   |            |      |              |        |              |      |        |        |   |      |       |        |   |   |   |   |   |      |       
|                                                  |                                                                                                 | Net cash used in investing activities                |      |        |  |            |      |              | (713.5 | )            |      |        | 13.0   |   |      |       | (23.3  | ) |   |   |  |   |      |        | (723.8 | )
|                                                  |                                                                                                 |                                                      |      |        |   |            |      |              |        |              |      |        |        |   |      |       |        |   |   |   |   |   |      |       
|FINANCING ACTIVITIES                              |                                                                                                 |                                                      |      |        |   |            |      |              |        |              |      |        |        |   |      |       |        |   |   |   |   |   |      |       
|                                                  | Issuance of long-term debt                                                                      |                                                      |      |       |   |            |      | 950.0        |        |              |      |       |        |   |      |      |        |   |   |  |   |   |      | 950.0  |       
|                                                  | Proceeds from (reduction of) participating
	interests in account receivable, net of redemptions |                                                      |      |       |   |            |      |             |        |              |      |       |        |   |      | (2.6  | )      |   |   |  |   |   |      | (2.6   | )     
|                                                  | Cost of debt issuance                                                                           |                                                      |      |       |   |            |      | (59.4        | )      |              |      |       |        |   |      |       |        |   |   |  |   |   |      | (59.4  | )     
|                                                  | Repayment of long-term debt                                                                     |                                                      |      |       |   |            |      | (383.2       | )      |              |      |        |        |   |      |       |        |   |   |  |   |   |      | (383.2 | )     
|                                                  | Increase (decrease) in short-term borrowings                                                    |                                                      |      |       |   |            |      | 9.7          |        |              |      | 2.0    |        |   |      | (1.6  | )      |   |   |  |   |   |      | 10.1   |       
|                                                  | Net borrowings (repayments) on revolving
	credit facilities                                     |                                                      |      |       |   |            |      | (133.4       | )      |              |      |       |        |   |      | (16.8 | )      |   |   |  |   |   |      | (150.2 | )     
|                                                  | Net proceeds from issuance of common stock                                                      |                                                      |      | 207.2  |   |            |      |             |        |              |      |       |        |   |      |      |        |   |   |  |   |   |      | 207.2  |       
|                                                  | Reissue (purchase) treasury stock, net                                                          |                                                      |      | 61.3   |   |            |      |             |        |              |      |       |        |   |      |      |        |   |   |  |   |   |      | 61.3   |       
|                                                  | Intercompany transfers to (from) subsidiary                                                     |                                                      |      | (268.5 | ) |            |      | 596.8        |        |              |      | (240.9 | )      |   |      | (87.4 | )      |   |   |  |   |   |      |       |       
|                                                  |                                                                                                 |                                                      |      |        |   |            |      |              |        |              |      |        |        |   |      |       |        |   |   |   |   |   |      |       
|                                                  |                                                                                                 | Net cash provided by (used in) financing
	activities |      |        |  |            |      |              | 980.5  |              |      |        | (238.9 | ) |      |       | (108.4 | ) |   |   |  |   |      |        | 633.2  |  
|                                                  |                                                                                                 |                                                      |      |        |   |            |      |              |        |              |      |        |        |   |      |       |        |   |   |   |   |   |      |       
|Increase (decrease) in cash and cash
	equivalents |                                                                                                 |                                                      | (0.3 | )      |   |            | 0.4  |              |        |              | 11.7 |        |        |   | 41.2 |       |        |   |  |   |   |   | 53.0 |       
|Cash and cash equivalents at beginning of
	year   |                                                                                                 |                                                      | 0.5  |        |   |            | (4.2 | )            |        |              | 1.0  |        |        |   | 23.6 |       |        |   |  |   |   |   | 20.9 |       
|                                                  |                                                                                                 |                                                      |      |        |   |            |      |              |        |              |      |        |        |   |      |       |        |   |   |   |   |   |      |       
|Cash and cash equivalents at end of
	year         |                                                                                                 | $                                                    | 0.2  |        |   | $          | (3.8 | )            |        | $            | 12.7 |        |        | $ | 64.8 |       |        | $ |  |   |   | $ | 73.9 |       
|                                                  |                                                                                                 |                                                      |      |        |   |            |      |              |        |              |      |        |        |   |      |       |        |   |   |   |   |   |      |       

F-44



---



##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES


SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING
FINANCIAL STATEMENTS

CONSOLIDATING STATEMENT OF CASH
FLOWS  (Continued)

|                                                  |                                                                                                  |                                                      |     |        |   |            |      |              |       |              |      |       |       |   |      |       |       |   |   |   |   |   |      |       |       |  
|------------------------------------------------- | ------------------------------------------------------------------------------------------------ | ---------------------------------------------------- | --- | ------ | - | ---------- | ---- | ------------ | ----- | ------------ | ---- | ----- | ----- | - | ---- | ----- | ----- | - | - | - | - | - | ---- | ----- | ----- | -
|                                                  |                                                                                                  |                                                     
|                                                  |                                                                                                  | For the Year Ended December 31, 2000                
|                                                  |                                                                                                  |                                                     
|                                                  |                                                                                                  |                                                      |     | Non-   |   |            |      | Consolidated
|                                                  |                                                                                                  | Parent                                               |     | Issuer |   | Guarantors |      | Guarantors   |       | Eliminations |      | Total
|                                                  |                                                                                                  |                                                      |     |        |   |            |      |              |       |              |      |      
|                                                  |                                                                                                  |                                                     
|                                                  |                                                                                                  | (in millions)                                       
|OPERATING ACTIVITIES                              |                                                                                                  |                                                      |     |        |   |            |      |              |       |              |      |       |       |   |      |       |       |   |   |   |   |   |      |      
|                                                  | Net cash provided by continuing operating
	activities                                            |                                                      | $   | 0.4    |   |            | $    | 13.2         |       |              | $    | 6.7   |       |   | $    | 110.6 |       |   | $ |  |   |   | $    | 130.9 |      
|                                                  |                                                                                                  |                                                      |     |        |   |            |      |              |       |              |      |       |       |   |      |       |       |   |   |   |   |   |      |      
|                                                  | Net cash provided by discontinued operating
	activities                                          |                                                      |     |       |   |            |      |             |       |              |      | 0.4   |       |   |      |      |       |   |   |  |   |   |      | 0.4   |      
|                                                  |                                                                                                  |                                                      |     |        |   |            |      |              |       |              |      |       |       |   |      |       |       |   |   |   |   |   |      |      
|INVESTING ACTIVITIES                              |                                                                                                  |                                                      |     |        |   |            |      |              |       |              |      |       |       |   |      |       |       |   |   |   |   |   |      |      
|                                                  | Additions to property, plant and equipment                                                       |                                                      |     |       |   |            |      | (20.9        | )     |              |      | (13.9 | )     |   |      | (34.2 | )     |   |   |  |   |   |      | (69.0 | )    
|                                                  | Sales of property, plant and equipment                                                           |                                                      |     |       |   |            |      | 5.6          |       |              |      |      |       |   |      |      |       |   |   |  |   |   |      | 5.6   |      
|                                                  |                                                                                                  |                                                      |     |        |   |            |      |              |       |              |      |       |       |   |      |       |       |   |   |   |   |   |      |      
|                                                  |                                                                                                  | Net cash used in investing activities                |     |        |  |            |      |              | (15.3 | )            |      |       | (13.9 | ) |      |       | (34.2 | ) |   |   |  |   |      |       | (63.4 | )
|                                                  |                                                                                                  |                                                      |     |        |   |            |      |              |       |              |      |       |       |   |      |       |       |   |   |   |   |   |      |      
|FINANCING ACTIVITIES                              |                                                                                                  |                                                      |     |        |   |            |      |              |       |              |      |       |       |   |      |       |       |   |   |   |   |   |      |      
|                                                  | Proceeds from (reduction of ) participating
	interests in account receivable, net of redemptions |                                                      |     |       |   |            |      |             |       |              |      |      |       |   |      | (34.0 | )     |   |   |  |   |   |      | (34.0 | )    
|                                                  | Repayment of long-term debt                                                                      |                                                      |     |       |   |            |      | (27.5        | )     |              |      | (38.1 | )     |   |      | (1.0  | )     |   |   |  |   |   |      | (66.6 | )    
|                                                  | Increase (decrease) in short-term borrowings                                                     |                                                      |     |       |   |            |      |             |       |              |      |      |       |   |      | 0.2   |       |   |   |  |   |   |      | 0.2   |      
|                                                  | Net borrowings (repayments) on revolving
	credit facilities                                      |                                                      |     |       |   |            |      | 64.9         |       |              |      |      |       |   |      | (25.9 | )     |   |   |  |   |   |      | 39.0  |      
|                                                  | Reissue (purchase) treasury stock, net                                                           |                                                      |     | 0.4    |   |            |      |             |       |              |      |      |       |   |      |      |       |   |   |  |   |   |      | 0.4   |      
|                                                  | Intercompany transfers to (from) subsidiary                                                      |                                                      |     | (0.4   | ) |            |      | (37.8        | )     |              |      | 43.7  |       |   |      | (5.5  | )     |   |   |  |   |   |      |      |      
|                                                  |                                                                                                  |                                                      |     |        |   |            |      |              |       |              |      |       |       |   |      |       |       |   |   |   |   |   |      |      
|                                                  |                                                                                                  | Net cash provided by (used in) financing
	activities |     |        |  |            |      |              | (.4   | )            |      |       | 5.6   |   |      |       | (66.2 | ) |   |   |  |   |      |       | (61.0 | )
|                                                  |                                                                                                  |                                                      |     |        |   |            |      |              |       |              |      |       |       |   |      |       |       |   |   |   |   |   |      |      
|Increase (decrease) in cash and cash
	equivalents |                                                                                                  |                                                      | 0.4 |        |   |            | (2.5 | )            |       |              | (1.2 | )     |       |   | 10.2 |       |       |   |  |   |   |   | 6.9  |      
|Cash and cash equivalents at beginning of
	year   |                                                                                                  |                                                      | 0.1 |        |   |            | (1.7 | )            |       |              | 2.2  |       |       |   | 13.4 |       |       |   |  |   |   |   | 14.0 |      
|                                                  |                                                                                                  |                                                      |     |        |   |            |      |              |       |              |      |       |       |   |      |       |       |   |   |   |   |   |      |      
|Cash and cash equivalents at end of
	year         |                                                                                                  | $                                                    | 0.5 |        |   | $          | (4.2 | )            |       | $            | 1.0  |       |       | $ | 23.6 |       |       | $ |  |   |   | $ | 20.9 |      
|                                                  |                                                                                                  |                                                      |     |        |   |            |      |              |       |              |      |       |       |   |      |       |       |   |   |   |   |   |      |      

F-45



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##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES






SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING
FINANCIAL STATEMENTS


CONSOLIDATING STATEMENT OF CASH
FLOWS

|                                                  |                                                                                                 |                                                      |     |        |      |            |      |              |        |              |     |        |        |   |       |        |       |   |   |   |   |   |      |       |       |  
|------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ---------------------------------------------------- | --- | ------ | ---- | ---------- | ---- | ------------ | ------ | ------------ | --- | ------ | ------ | - | ----- | ------ | ----- | - | - | - | - | - | ---- | ----- | ----- | -
|                                                  |                                                                                                 |                                                     
|                                                  |                                                                                                 | For the Year Ended December 25, 1999                
|                                                  |                                                                                                 |                                                     
|                                                  |                                                                                                 |                                                      |     | Non-   |      |            |      | Consolidated
|                                                  |                                                                                                 | Parent                                               |     | Issuer |      | Guarantors |      | Guarantors   |        | Eliminations |     | Total 
|                                                  |                                                                                                 |                                                      |     |        |      |            |      |              |        |              |     |       
|                                                  |                                                                                                 |                                                     
|                                                  |                                                                                                 | (in millions)                                       
|OPERATING ACTIVITIES                              |                                                                                                 |                                                      |     |        |      |            |      |              |        |              |     |        |        |   |       |        |       |   |   |   |   |   |      |      
|                                                  | Net cash provided by continuing operating
	activities                                           |                                                      | $   | 0.1    |      |            | $    | 151.2        |        |              | $   | 152.8  |        |   | $     | (204.0 | )     |   | $ |  |   |   | $    | 100.1 |      
|                                                  |                                                                                                 |                                                      |     |        |      |            |      |              |        |              |     |        |        |   |       |        |       |   |   |   |   |   |      |      
|                                                  | Net cash provided by discontinued operating
	activities                                         |                                                      |     |       |      |            |      | (9.8         | )      |              |     | (7.0   | )      |   |       |       |       |   |   |  |   |   |      | (16.8 | )    
|                                                  |                                                                                                 |                                                      |     |        |      |            |      |              |        |              |     |        |        |   |       |        |       |   |   |   |   |   |      |      
|INVESTING ACTIVITIES                              |                                                                                                 |                                                      |     |        |      |            |      |              |        |              |     |        |        |   |       |        |       |   |   |   |   |   |      |      
|                                                  | Additions to property, plant and equipment                                                      |                                                      |     |       |      |            |      | (32.1        | )      |              |     | (16.6  | )      |   |       | (37.7  | )     |   |   |  |   |   |      | (86.4 | )    
|                                                  | Sales of property, plant and equipment                                                          |                                                      |     |       |      |            |      | 4.6          |        |              |     | 5.5    |        |   |       |       |       |   |   |  |   |   |      | 10.1  |      
|                                                  | Acquisitions of businesses, net of cash acquired                                                |                                                      |     |       |      |            |      | (0.4         | )      |              |     |       |        |   |       |       |       |   |   |  |   |   |      | (0.4  | )    
|                                                  | Other, net                                                                                      |                                                      |     |       |      |            |      | (0.8         | )      |              |     |       |        |   |       |       |       |   |   |  |   |   |      | (0.8  | )    
|                                                  |                                                                                                 |                                                      |     |        |      |            |      |              |        |              |     |        |        |   |       |        |       |   |   |   |   |   |      |      
|                                                  |                                                                                                 | Net cash used in investing activities                |     |        |     |            |      |              | (28.7  | )            |     |        | (11.1  | ) |       |        | (37.7 | ) |   |   |  |   |      |       | (77.5 | )
|                                                  |                                                                                                 |                                                      |     |        |      |            |      |              |        |              |     |        |        |   |       |        |       |   |   |   |   |   |      |      
|FINANCING ACTIVITIES                              |                                                                                                 |                                                      |     |        |      |            |      |              |        |              |     |        |        |   |       |        |       |   |   |   |   |   |      |      
|                                                  | Issuance of long-term debt                                                                      |                                                      |     |       |      |            |      | 100.0        |        |              |     |       |        |   |       |       |       |   |   |  |   |   |      | 100.0 |      
|                                                  | Cost of debt issuance                                                                           |                                                      |     |       |      |            |      | (2.4         | )      |              |     |       |        |   |       |       |       |   |   |  |   |   |      | (2.4  | )    
|                                                  | Proceeds from (reduction of) participating
	interests in account receivable, net of redemptions |                                                      |     |       |      |            |      |             |        |              |     |       |        |   |       | 2.0    |       |   |   |  |   |   |      | 2.0   |      
|                                                  | Repayment of long-term debt                                                                     |                                                      |     |       |      |            |      | (19.4        | )      |              |     |       |        |   |       | (1.2   | )     |   |   |  |   |   |      | (20.6 | )    
|                                                  | Increase (decrease) in short-term borrowings                                                    |                                                      |     |       |      |            |      | (0.4         | )      |              |     |       |        |   |       | (7.0   | )     |   |   |  |   |   |      | (7.4  | )    
|                                                  | Net borrowings (repayments) on revolving
	credit facilities                                     |                                                      |     |       |      |            |      | (18.4        | )      |              |     | (16.9  | )      |   |       |       |       |   |   |  |   |   |      | (35.3 | )    
|                                                  | Reissue (purchase) treasury stock, net                                                          |                                                      |     | (1.7   | )    |            |      |             |        |              |     |       |        |   |       |       |       |   |   |  |   |   |      | (1.7  | )    
|                                                  | Dividends paid                                                                                  |                                                      |     | (50.2  | )    |            |      |             |        |              |     |       |        |   |       |       |       |   |   |  |   |   |      | (50.2 | )    
|                                                  | Dividends paid from (by) subsidiary                                                             |                                                      |     | 50.2   |      |            |      | (50.2        | )      |              |     |       |        |   |       |       |       |   |   |  |   |   |      |      |      
|                                                  | Intercompany transfers to (from) subsidiary                                                     |                                                      |     | 1.6    |      |            |      | (118.2       | )      |              |     | (116.4 | )      |   |       | 233.0  |       |   |   |  |   |   |      |      |      
|                                                  |                                                                                                 |                                                      |     |        |      |            |      |              |        |              |     |        |        |   |       |        |       |   |   |   |   |   |      |      
|                                                  |                                                                                                 | Net cash provided by (used in) financing
	activities |     |        | (0.1 | )          |      |              | (109.0 | )            |     |        | (133.3 | ) |       |        | 226.8 |   |   |   |  |   |      |       | (15.6 | )
|                                                  |                                                                                                 |                                                      |     |        |      |            |      |              |        |              |     |        |        |   |       |        |       |   |   |   |   |   |      |      
|Increase (decrease) in cash and cash
	equivalents |                                                                                                 |                                                      |    |        |      |            | 3.7  |              |        |              | 1.4 |        |        |   | (14.9 | )      |       |   |  |   |   |   | (9.8 | )    
|Cash and cash equivalents at beginning of
	year   |                                                                                                 |                                                      | 0.1 |        |      |            | (5.4 | )            |        |              | 0.8 |        |        |   | 28.3  |        |       |   |  |   |   |   | 23.8 |      
|                                                  |                                                                                                 |                                                      |     |        |      |            |      |              |        |              |     |        |        |   |       |        |       |   |   |   |   |   |      |      
|Cash and cash equivalents at end of
	year         |                                                                                                 | $                                                    | 0.1 |        |      | $          | (1.7 | )            |        | $            | 2.2 |        |        | $ | 13.4  |        |       | $ |  |   |   | $ | 14.0 |      
|                                                  |                                                                                                 |                                                      |     |        |      |            |      |              |        |              |     |        |        |   |       |        |       |   |   |   |   |   |      |      

F-46



---



##### Table of Contents



COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES






SCHEDULE I  CONDENSED FINANCIAL
INFORMATION OF REGISTRANT


The information required under this Schedule is
included in Note 24 to the Notes to the Consolidated Financial
Statements.

COLLINS & AIKMAN CORPORATION AND
SUBSIDIARIES






SCHEDULE II  VALUATION AND
QUALIFYING ACCOUNTS


For the Fiscal Years Ended December 31,
2001, December 31, 2000 and December 25,
1999


|                                      |  |               |      |              |  |           |     |          |  |            |      |             |  |   |     |      |  |   |       |      |  |   |      | 
|------------------------------------- |  | ------------- | ---- | ------------ |  | --------- | --- | -------- |  | ---------- | ---- | ----------- |  | - | --- | ---- |  | - | ----- | ---- |  | - | ---- | 
|                                      |  |               |      | Additions    |  |           |     |          |  |            |      |            
|                                      |  | Balance at    |      | Resulting    |  | Charge to |     | Charged  |  |            |      |            
|                                      |  | Beginning     |      | from         |  | Cost and  |     | to Other |  |            |      | Balance at 
|Description                           |  | of Year       |      | Acquisitions |  | Expenses  |     | Accounts |  | Deductions |      | End of Year
|                                      |  |               |      |              |  |           |     |          |  |            |      |            
|                                      |  |              
|                                      |  | (in millions)
|Fiscal Year Ended December 31,
	2001: |  |               |      |              |  |           |     |          |  |            |      |             |  |   |     |      |  |   |       |      |  |   |      | 
|Allowance for doubtful accounts       |  | $             | 8.1  |              |  | $         | 6.8 |          |  | $          | 6.6  |             |  | $ | (.3 | )(a) |  | $ | (6.6  | )    |  | $ | 14.6 | 
|Restructuring reserves                |  | $             | 2.5  |              |  | $         |     |          |  | $          | 16.2 |             |  | $ |     |      |  | $ |       |      |  | $ | 18.7 | 
|Fiscal Year Ended December 31,
	2000: |  |               |      |              |  |           |     |          |  |            |      |             |  |   |     |      |  |   |       |      |  |   |      | 
|Allowance for doubtful accounts       |  | $             | 8.5  |              |  | $         |    |          |  | $          | 6.6  |             |  | $ | (.9 | )(a) |  | $ | (6.1  | )(b) |  | $ | 8.1  | 
|Restructuring reserves                |  | $             | 13.5 |              |  | $         |    |          |  | $          |     |             |  | $ |    |      |  | $ | (11.0 | )(c) |  | $ | 2.5  | 
|Fiscal Year Ended December 25,
	1999: |  |               |      |              |  |           |     |          |  |            |      |             |  |   |     |      |  |   |       |      |  |   |      | 
|Allowance for doubtful accounts       |  | $             | 7.2  |              |  | $         |    |          |  | $          | 2.4  |             |  | $ | 1.2 | (a)  |  | $ | (2.3  | )(b) |  | $ | 8.5  | 
|Restructuring reserves                |  | $             | 1.9  |              |  | $         |    |          |  | $          | 20.0 |             |  | $ |    |      |  | $ | (8.4  | )(c) |  | $ | 13.5 | 



---



|    |                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Reclassifications and collection of accounts
	previously written off.                                                                                                                                                                                            
|   
|(b) | Reclassifications to other accounts,
	uncollectible amounts written off, and the elimination of
	amounts included in the allowance due from Enjema which was
	considered as a component of the Companys purchase cost
	for the remaining 50% interest in Enjema.
|   
|(c) | Spending against the established reserves. See
	Note 15 to the Notes to Consolidated Financial Statement.                                                                                                                                                        

S-1



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##### Table of Contents






EXHIBIT INDEX

|        |     |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------- | --- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |            
|Number  |     | Description
|        |     |            
|        | 2.1 |             |  | Agreement and Plan of Merger dated May 14,
	2001 by and among Collins & Aikman Corporation, Collins
	& Aikman Products Co., Becker Group, L.L.C., CE Becker Inc.,
	ME McInerney Inc., J Hoehnel Inc. and the individuals party
	thereto as sellers is hereby incorporated by reference to
	Exhibit 2.1 of Collins & Aikman Corporations
	Current Report on Form 8-K dated July 13, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 2.2 |             |  | Agreement and Plan of Merger dated as of
	August 17, 2001 by and among Collins & Aikman
	Corporation, Collins & Aikman Products Co., JAII Acquisition
	Co., Elkin McCallum, Joan Fabrics Corporation and Joan
	Automotive Industries, Inc is hereby incorporated by reference
	to Exhibit 2.1 of Collins & Aikman Corporations
	Current Report on Form 8-K dated September 21, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 2.3 |             |  | First Amendment to Agreement and Plan of Merger
	by and among Collins & Aikman Corporation, Collins &
	Aikman Products Co., JAII Acquisition Co., Elkin McCallum, Joan
	Fabrics Corporation and Joan Automotive Industries, Inc dated as
	of September 21, 2001 is hereby incorporated by reference
	to Exhibit 2.2 of Collins & Aikman Corporations
	Current Report on Form 8-K dated September 21, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | 2.4 |             |  | Purchase Agreement dated as of August 7,
	2001, as amended and restated as of November 30, 2001, by
	and among Textron Inc., Collins & Aikman Corporation and
	Collins & Aikman Products Co., including Exhibit 1
	(Certificate of Designation of the 15% Series A Redeemable
	Preferred Stock, the 16% Series B Redeemable Preferred
	Stock and the 16% Series C Redeemable Preferred Stock) and
	Exhibit 7 (Asset Purchase Agreement dated as of
	August 7 by and between Textron Automotive Exteriors Inc.
	and JPS Automotive, Inc.), which is incorporated by reference to
	Collins & Aikman Corporations Current Report on
	Form 8-K dated December 20, 2001 and filed on
	January 4, 2002. The Table of Contents of the Purchase
	Agreement listed as Exhibit 2.4 contains a list briefly
	identifying the contents of all omitted schedules and exhibits.
	Collins & Aikman Corporation will supplementally furnish a
	copy of any omitted schedule or Exhibit to the Commission
	upon request.
|        | 2.5 |             |  | Asset Purchase Agreement dated as of
	August 7, 2001, as amended and restated as of
	November 30, 2001, by and between Textron Automotive
	Exteriors Inc. and JPS Automotive, Inc., which is incorporated
	herein by reference to Exhibit 2.2 of Collins &
	Aikman Corporations Current Report on Form 8-K dated
	December 20, 2001 and filed on January 4, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 2.6 |             |  | Asset Purchase Agreement dated as of
	August 17, 2001 by and among Collins & Aikman
	Products Co., Western Avenue Dyers, L.P., Elkin McCallum, Kerry
	McCallum, Penny Richards and Tyng Textiles LLC, which is
	incorporated by reference to Exhibit 2.3 to
	Collins & Aikman Corporation Current Report on
	Form 8-K filed on October 4, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 2.7 |             |  | First Amendment to Asset Purchase Agreement dated
	as of September 21, 2001, which is incorporated by
	reference to Exhibit 2.4 to Collins & Aikman
	Corporation Current Report on Form 8-K filed on
	October 4, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | 3.1 |             |  | Restated Certificate of Incorporation of Collins
	& Aikman Corporation is hereby incorporated by reference to
	Exhibit 3.1 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	June 26, 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 3.2 |             |  | Certificate of Amendment to the Restated
	Certificate of Incorporation of Collins & Aikman
	Corporation, which is incorporated by reference to
	Exhibit 3.2 of Collins & Aikman Corporations
	Annual Report on Form 10-K for the fiscal year ended
	December 31, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        | 3.3 |             |  | By-laws of Collins & Aikman Corporation, as
	amended, are hereby incorporated by reference to
	Exhibit 3.2 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended January 27,
	1996.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 3.4 |             |  | Certificate of Elimination of Cumulative
	Exchangeable Redeemable Preferred Stock of Collins & Aikman
	Corporation is hereby incorporated by reference to
	Exhibit 3.3 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	October 28, 1995.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           



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##### Table of Contents



|        |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------- | ---- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |            
|Number  |      | Description
|        |      |            
|        | 4.1  |             |  | Specimen Stock Certificate for the Common Stock
	is hereby incorporated by reference to Exhibit 4.3 of
	Amendment No. 3 to Collins & Aikman Holdings
	Corporations Registration Statement on Form S-2
	(Registration No. 33-53179) filed June 21, 1994.                                                                                                                                                                                                                                                                                                                                                                                           
|        | 4.2  |             |  | Indenture, dated as of June 1, 1996, between
	Collins & Aikman Products Co., Collins & Aikman
	Corporation and First Union National Bank of North Carolina, as
	Trustee, is hereby incorporated by reference to Exhibit 4.2
	of Collins & Aikman Corporations Report on
	Form 10-Q for the fiscal quarter ended April 27, 1996.                                                                                                                                                                                                                                                                                                                   
|        | 4.3  |             |  | First Supplemental Indenture dated as of
	June 1, 1996, between Collins & Aikman Products Co.,
	Collins & Aikman Corporation and First Union National Bank
	of North Carolina, as Trustee, is hereby incorporated by
	reference to Exhibit 4.3 of Collins & Aikman
	Corporations Report on Form 10-Q for the fiscal
	quarter ended April 27, 1996.                                                                                                                                                                                                                                                                                                
|        | 4.4  |             |  | Waiver dated as of October 27, 1998 under
	the Credit Agreement dated as of May 28, 1998, among
	Collins & Aikman Products Co., Collins & Aikman Canada,
	Inc. and Collins & Aikman Plastics, Ltd., as Canadian
	Borrowers, Collins & Aikman Corporation, as Guarantor, the
	Lender Parties thereto, Bank of America, N.T.S.A., as
	Documentation Agent, The Chase Manhattan Bank, as Administrative
	Agent, and The Chase Manhattan Bank of Canada, as Canadian
	Administrative Agent is hereby incorporated by reference to
	Exhibit 4.5 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	September 26, 1998.
|        | 4.5  |             |  | Waiver dated as of December 22, 1998 under
	the Credit Agreement dated as of May 28, 1998, among
	Collins & Aikman Products Co., Collins & Aikman Canada,
	Inc. and Collins & Aikman Corporation, as Guarantor, the
	Lender Parties thereto, Bank of America, N.T.S.A., as
	Documentation Agent, The Chase Manhattan Bank, as Administrative
	Agent, and The Chase Manhattan Bank of Canada, as Canadian
	Administrative Agent is hereby incorporated by reference to
	Exhibit 4.6 of Collins & Aikman Corporations
	Report on Form 10-K for the year ended December 26,
	1998.                                                                   
|        | 4.6  |             |  | Amendment and Waiver dated as of March 8,
	1999, among Collins & Aikman Products Co., Collins &
	Aikman Canada, Inc., Collins & Aikman Plastics Ltd., Collins
	& Aikman Corporation, as Guarantor, the Lender Parties
	thereto, Bank of America N.T.S.A., as Documentation Agent, The
	Chase Manhattan Bank, as Administrative Agent, and The Chase
	Manhattan Bank of Canada, as Canadian Administrative Agent is
	hereby incorporated by reference to Exhibit 4.7 of Collins
	& Aikman Corporations Report on Form 10-K for the
	year ended December 26, 1998.                                                                                  
|        | 4.7  |             |  | Tranche C Term Loan Supplement dated as of
	May 12, 1999 to the Credit Agreement dated as of
	May 28, 1998 among Collins & Aikman Products Co.,
	Collins & Aikman Canada, Inc., Collins & Aikman
	Plastics, Ltd., Collins & Aikman Corporation, the Financial
	Institutions parties thereto, Bank of America N.T.S.A., as
	Documentation Agent, The Chase Manhattan Bank, as Administrative
	Agent, and The Chase Manhattan Bank of Canada, as Canadian
	Administrative Agent is hereby incorporated by reference to
	Exhibit 4.1 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	June 26, 1999.              
|        | 4.8  |             |  | Indenture dated as of June 28, 1994, between
	JPS Automotive Products Corp., as Issuer, JPS Automotive L.P.,
	as Guarantor and Shawmut Bank Connecticut, N.A., as Trustee, is
	hereby incorporated by reference to Exhibit 4.2 of JPS
	Automotive Corp.s Registration Statement on Form S-1,
	Registration No. 33-75510.                                                                                                                                                                                                                                                                                                                          
|        | 4.9  |             |  | First Supplemental Indenture, dated as of
	October 5, 1994, between JPS Automotive Products Corp. and
	JPS Automotive L.P., as Co-Obligors, and Shawmut Bank
	Connecticut, N.A., as Trustee is hereby incorporated by
	reference to Exhibit 4.48A of JPS Automotive L.P.s
	and JPS Automotive Products Corp.s Report on
	Form 10-Q for the fiscal quarter ended October 2, 1994.                                                                                                                                                                                                                                                                 
|        | 4.10 |             |  | Second Supplemental Indenture, dated as of
	February 8, 2001, by and among Collins & Aikman
	Products Co., as Issuer, Collins & Aikman Corporation, as
	Guarantor, and First Union National Bank, as Trustee, which is
	incorporated by reference to Exhibit 4.11 of
	Collins & Aikman Corporations Annual Report on
	Form 10-K for the fiscal year ended December 31, 2000.                                                                                                                                                                                                                                                                      
|        | 4.11 |             |  | Form of Warrant is hereby incorporated by
	reference to Exhibit 4.1 of Collins & Aikman
	Corporations Current Report on Form 8-K dated
	July 13, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            



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##### Table of Contents



|        |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------- | ---- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |            
|Number  |      | Description
|        |      |            
|        | 4.12 |             |  | Certificate of Designation of Series A
	Redeemable Preferred Stock, Series B Redeemable Preferred
	Stock and Series C Redeemable Preferred Stock, which is
	incorporated herein by reference to Exhibit 4.1 of Collins
	& Aikman Corporations Current Report on Form 8-K
	dated December 20, 2001 and filed on January 4, 2002.                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 4.13 |             |  | Indenture dated as of December 20, 2001 by
	and among Collins & Aikman Products Co., as Issuer, the
	Guarantors parties thereto and BNY Midwest Trust Company, as
	Trustee, which is incorporated herein by reference to
	Exhibit 4.2 of Collins & Aikman Corporations
	Current Report on Form 8-K dated December 20, 2001 and
	filed on January 4, 2002.                                                                                                                                                                                                                                                                                                                                                                                  
|        | 4.14 |             |  | Receivables Transfer Agreement dated as of
	December 20, 2001 by and among Carcorp, Inc., as
	Transferor, Collins & Aikman Products Co., individually and
	as Collection Agent, the persons parties thereto, as CP Conduit
	Purchasers, Committed Purchasers and Funding Agents and JPMorgan
	Chase Bank, as Administrative Agent, which is incorporated
	herein by reference to Exhibit 4.3 of Collins & Aikman
	Corporations Current Report on Form 8-K dated
	December 20, 2001 and filed on January 4, 2002.                                                                                                                                                                                                                           
|        | 4.15 |             |  | Amended and Restated Receivables Purchase
	Agreement dated as of December 20, 2001 among Collins &
	Aikman Products Co. and its wholly-owned direct and indirect
	subsidiaries named therein, as Sellers, and Carcorp, Inc., as
	Purchaser, and the other Sellers from time to time named
	therein, which is incorporated herein by reference to
	Exhibit 4.4 of Collins & Aikman Corporations
	Current Report on Form 8-K dated December 20, 2001 and
	filed on January 4, 2002.                                                                                                                                                                                                                                                          
|        | 4.16 |             |  | Credit Agreement dated as of December 20,
	2001 among Collins & Aikman Products Co., as Borrower,
	Collins & Aikman Canada Inc., as a Canadian Borrower,
	Collins & Aikman Plastics, Ltd., as a Canadian Borrower,
	Collins & Aikman Corporation, the Lenders named therein,
	Deutsche Banc Alex. Brown Inc. and Merrill Lynch Capital
	Corporation, as Co-Documentation Agents, Credit Suisse First
	Boston Corporation, as Syndication Agent, JPMorgan Chase Bank,
	as Administrative Agent, and J.P.Morgan Bank Canada, as Canadian
	Administrative Agent, which is incorporated herein by reference
	to Exhibit 4.5 of Collins & Aikman Corporations
	Current Report on Form 8-K dated December 20, 2001 and
	filed on January 4, 2002.
|        | 4.17 |             |  | Guarantee and Collateral Agreement dated as of
	December 20, 2001 by and among Collins & Aikman
	Corporation, Collins & Aikman Products Co. and certain of
	their subsidiaries and JPMorgan Chase Bank, as Collateral Agent,
	which is incorporated herein by reference to Exhibit 4.6 of
	Collins & Aikman Corporations Current Report on
	Form 8-K dated December 20, 2001 and filed on
	January 4, 2002.                                                                                                                                                                                                                                                                                                                                
|        | 4.18 |             |  | Third Supplemental Indenture, dated as of
	December 20, 2001, among Collins & Aikman Products Co.,
	Collins & Aikman Corporation, the Subsidiary Guarantors
	listed on the signature page thereto, and First Union National
	Bank (as successor in interest to First Union National Bank of
	North Carolina), which is incorporated herein by reference to
	Exhibit 4.7 of Collins & Aikman Corporations
	Current Report on Form 8-K dated December 20, 2001 and
	filed on January 4, 2002.                                                                                                                                                                                                                                                
|        | 10.1 |             |  | Stockholders Agreement, dated February 23,
	2001, by and among Collins & Aikman Corporation, Heartland
	Industrial Partners, L.P. and other investor stockholders listed
	on Schedule 1 thereto, Blackstone Capital Company II,
	L.L.C., Blackstone Family Investment Partnership I L.P.,
	Blackstone Advisory Directors Partnership L.P., Blackstone
	Capital Partners L.P., and Wasserstein/C&A Holdings, L.L.C.,
	incorporated by reference to Annex E to Exhibit 10.1
	to Collins & Aikman Corporations Current Report
	on Form 8-K dated January 12, 2001.                                                                                                                                                                            
|        | 10.2 |             |  | Employment Agreement dated as of July 18,
	1990 between Wickes Companies, Inc. and an executive officer is
	hereby incorporated by reference to Exhibit 10.3 of Wickes
	Companies, Inc.s Report on Form 10-K for the fiscal
	year ended January 26, 1991.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        | 10.3 |             |  | Employment Agreement dated as of July 22,
	1992 between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to Exhibit 10.7
	of Collins & Aikman Holdings Corporations Report on
	Form 10-K for the fiscal year ended January 30, 1993.*                                                                                                                                                                                                                                                                                                                                                                                                                                                            



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##### Table of Contents



|        |       |             |  |                                                                                                                                                                                                                                                                                                                                                   
|------- | ----- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|Number  |       | Description
|        |       |            
|        | 10.4  |             |  | First Amendment to Employment Agreement dated as
	of February 24, 1994 between Collins & Aikman
	Corporation and an executive officer is hereby incorporated by
	reference to Exhibit 10.7 of Collins & Aikman Holdings
	Corporations Registration Statement on Form S-2
	(Registration No. 33- 53179) filed April 19, 1994.*                    
|        | 10.5  |             |  | Second Amendment, dated as of October 3,
	1996, to the Employment Agreement, dated as of July 22,
	1992, as amended, between Collins & Aikman Products Co. and
	an executive officer is hereby incorporated by reference to
	Exhibit 10.26 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	October 26, 1996.*
|        | 10.6  |             |  | Third Amendment dated as of August 1, 1997,
	to the Employment Agreement dated as of July 22, 1992, as
	amended, between the Corporation and an executive officer is
	hereby incorporated by reference to Exhibit 10.35 of
	Collins & Aikman Corporations Report on Form 10-Q
	for the fiscal quarter ended September 27, 1997.*                 
|        | 10.7  |             |  | Letter Agreement dated March 23, 1999 with
	an executive officer is hereby incorporated by reference to
	Exhibit 10.7 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended
	December 26, 1998.*                                                                                                                       
|        | 10.8  |             |  | Amended and Restated Employment Agreement dated
	as of January 20, 1999 between Collins & Aikman
	Products Co. and an executive officer is hereby incorporated by
	reference to Collins & Aikman Corporations Report on
	Form 10-K for the fiscal year ended December 26, 1998.*                                                                 
|        | 10.9  |             |  | Employment Agreement dated as of January 20,
	1999 between Collins & Aikman Products Co. and an executive
	officer is hereby incorporated by reference to Exhibit 10.9
	of Collins & Aikman Corporations Form 10-K for
	the fiscal year ended December 26, 1998.*                                                                                
|        | 10.10 |             |  | Employment Agreement dated as of April 22,
	1999 between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.10 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	March 27, 1999.*                                                                       
|        | 10.11 |             |  | Employment Agreement, dated as of March 29,
	2000, between Collins & Aikman Products Co. and an executive
	officer is hereby incorporated by reference to Exhibit 10.1
	of Collins & Aikman Corporations Report on
	Form 10-Q for the fiscal quarter ended April 1, 2000.*                                                                       
|        | 10.12 |             |  | Employment Agreement, dated as of April 1,
	2000, between Collins & Aikman Products Co. and an executive
	officer is hereby incorporated by reference to Exhibit 10.3
	of Collins & Aikman Corporations Report on
	Form 10-Q for the fiscal quarter ended July 1, 2000.*                                                                         
|        | 10.13 |             |  | Employment Agreement, dated as of August 1,
	2000, between Collins & Aikman Products Co. and an executive
	officer is hereby incorporated by reference to Exhibit 10.6
	of Collins & Aikman Corporations Report on
	Form 10-Q for the fiscal quarter ended September 30,
	2000.*                                                                 
|        | 10.14 |             |  | Employment Agreement, dated as of August 1,
	2000, between Collins & Aikman Products Co. and an executive
	officer is hereby incorporated by reference to Exhibit 10.8
	of Collins & Aikman Corporations Report on
	Form 10-Q for the fiscal quarter ended September 30,
	2000.*                                                                 
|        | 10.15 |             |  | Letter agreement, dated as of May 12, 1999,
	with an executive officer is hereby incorporated by reference to
	Exhibit 10.2 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	June 26, 1999.*                                                                                                                  
|        | 10.16 |             |  | Letter agreement, dated as of April 7, 2000,
	between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.12 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	September 30, 2000.*                                                                      
|        | 10.17 |             |  | Letter agreement, dated as of July 13, 2000,
	between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.11 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	September 30, 2000.*                                                                      
|        | 10.18 |             |  | Service contract between Collins & Aikman
	Products GmbH and an executive officer is hereby incorporated by
	reference to Exhibit 10.5 of Collins & Aikman
	Corporations Report on Form 10-Q for the fiscal
	quarter ended September 30, 2000.                                                                                                   
|        | 10.19 |             |  | Settlement Agreement dated as of April 27,
	2000, between Collins & Aikman Products Co. and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.10 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	September 30, 2000.                                                                  



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##### Table of Contents



|        |       |             |  |                                                                                                                                                                                                                                                                               
|------- | ----- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|Number  |       | Description
|        |       |            
|        | 10.20 |             |  | Collins & Aikman Corporation 1998 Executive
	Incentive Compensation Plan is hereby incorporated by reference
	to Exhibit 10.10 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended December 26,
	1998.*                                          
|        | 10.21 |             |  | Collins & Aikman Products Co. 2000 Executive
	Incentive Compensation Plan is hereby incorporated by reference
	to Exhibit 10.5 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended July 1,
	2000.                                             
|        | 10.22 |             |  | Collins & Aikman Corporation Supplemental
	Retirement Income Plan is hereby incorporated by reference to
	Exhibit 10.23 of Amendment No. 5 to Collins &
	Aikman Holdings Corporations Registration Statement on
	Form S-2 (Registration No. 33-53179) filed
	July 6, 1994.*  
|        | 10.23 |             |  | Amendment to Collins & Aikman Corporation
	Supplemental Retirement Income Plan is hereby incorporated by
	reference to Exhibit 10.12 of the Collins & Aikman
	Corporations Report on Form 10-K for the fiscal year ended
	December 26, 1998.*                                
|        | 10.24 |             |  | 1993 Employee Stock Option Plan, as amended and
	restated, is hereby incorporated by reference to
	Exhibit 10.13 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended April 29,
	1995.*                                                        
|        | 10.25 |             |  | 1994 Employee Stock Option Plan, as amended
	through February 7, 1997, is hereby incorporated by
	reference to Exhibit 10.12 of Collins & Aikman
	Corporations Report on Form 10-Q for the fiscal quarter
	ended March 29, 1997.*                                            
|        | 10.26 |             |  | 2000 Employee Stock Option Plan is hereby
	incorporated by reference to Exhibit 10.6 of Collins &
	Aikman Corporations Report on Form 10-Q for the fiscal
	quarter ended July 1, 2000.                                                                                       
|        | 10.27 |             |  | 1994 Directors Stock Option Plan as amended and
	restated is hereby incorporated by reference to
	Exhibit 10.15 to Collins & Aikman Corporations
	Report on Form 10-K for the year ended December 26, 1998.*                                                                 
|        | 10.28 |             |  | Excess Benefit Plan of Collins & Aikman
	Corporation is hereby incorporated by reference to Exhibit 10.25
	of Collins & Aikman Corporations Report on Form 10-K
	for the fiscal year ended January 28, 1995.*                                                                
|        | 10.29 |             |  | 1994 Employee Stock Option Plan, as amended and
	restated through June 3, 1999 is hereby incorporated by
	reference to Exhibit 10.2 of Collins & Aikman
	Corporations Report on Form 10-Q for the fiscal quarter
	ended June 26, 1999                                        
|        | 10.30 |             |  | Change in Control Agreement, dated March 17,
	1998, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.17 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended December 27,
	1997.*
|        | 10.31 |             |  | Change in Control Agreement, dated March 17,
	1998, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.18 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended December 27,
	1997.*
|        | 10.32 |             |  | Change in Control Agreement, dated March 17,
	1998, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.19 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended December 27,
	1997.*
|        | 10.33 |             |  | Change in Control Agreement, dated March 17,
	1998, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.20 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended December 27,
	1997.*
|        | 10.34 |             |  | Change in Control Agreement, dated March 17,
	1998, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.22 of Collins & Aikman Corporations
	report on Form 10-Q for the fiscal quarter ended March 28,
	1998.*
|        | 10.35 |             |  | Change in Control Agreement, dated August 9,
	1999, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.25 of Collins & Aikman
	Corporations Report on Form 10-K for the fiscal year
	ended December 25, 1999.*
|        | 10.36 |             |  | Change in Control Agreement, dated March 17,
	1998, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.26 of Collins & Aikman
	Corporations Report on Form 10-K for the fiscal year
	ended December 25, 1999.*



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##### Table of Contents



|        |       |             |  |                                                                                                                                                                                                                                                                                                                                           
|------- | ----- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|Number  |       | Description
|        |       |            
|        | 10.37 |             |  | Change in Control Agreement, dated March 17,
	1998, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.27 of Collins & Aikman
	Corporations Report on Form 10-K for the fiscal year
	ended December 25, 1999.*                                                            
|        | 10.38 |             |  | Change in Control Agreement, dated July 26,
	1999, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.28 of Collins & Aikman
	Corporations Report on Form 10-K for the fiscal year
	ended December 25, 1999.*                                                             
|        | 10.39 |             |  | Change in Control Agreement, dated March 17,
	1998, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.29 of Collins & Aikman
	Corporations Report on Form 10-K for the fiscal year
	ended December 25, 1999.*                                                            
|        | 10.40 |             |  | Change in Control Agreement, dated as of April,
	2000, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to Exhibit 10.2
	of Collins & Aikman Corporations Report on
	Form 10-Q for the fiscal quarter ended July 1, 2000.*                                                             
|        | 10.41 |             |  | Change in Control Agreement, dated as of
	April 1, 2000, between Collins & Aikman Products Co.
	and an executive officer is hereby incorporated by reference to
	Exhibit 10.4 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	July 1, 2000.*                                                         
|        | 10.42 |             |  | Change in Control Agreement, dated as of
	August 1, 2000, between Collins & Aikman Corporation
	and an executive officer is hereby incorporated by reference to
	Exhibit 10.7 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	September 30, 2000.*                                                   
|        | 10.43 |             |  | Change in Control Agreement, dated as of
	August 1, 2000, between Collins & Aikman Corporation
	and an executive officer is hereby incorporated by reference to
	Exhibit 10.9 of Collins & Aikman Corporations
	Report on Form 10-Q for the fiscal quarter ended
	September 30, 2000.*                                                   
|        | 10.44 |             |  | Lease, executed as of the 1st day of
	June 1987, between Dura Corporation and Dura Acquisition
	Corp. is hereby incorporated by reference to Exhibit 10.24
	of Amendment No. 5 to Collins & Aikman Holdings
	Corporations Registration Statement on Form S-2
	(Registration No. 33-53179) filed July 6, 1994.                            
|        | 10.45 |             |  | Master Equipment Lease Agreement dated as of
	September 30, 1994, between NationsBanc Leasing Corporation
	of North Carolina and Collins & Aikman Products Co. is
	hereby incorporated by reference to Exhibit 10.27 of
	Collins & Aikman Corporations Report on Form 10-Q
	for the fiscal quarter ended October 29, 1994.               
|        | 10.46 |             |  | Equity Purchase Agreement by and among JPSGP,
	Inc., Foamex-JPS Automotive L.P. and Collins & Aikman
	Products Co. dated August 28, 1996 is hereby incorporated
	by reference to Exhibit 2.1 of Collins & Aikman
	Corporations Report on Form 10-Q for the fiscal
	quarter ended July 27, 1996.                                          
|        | 10.47 |             |  | Amendment No. 1 to Equity Purchase Agreement
	by and among JPSGP, Inc., Foamex-JPS Automotive L.P., Foamex
	International Inc. and Collins & Aikman Products Co. dated
	as of December 11, 1996 is hereby incorporated by reference
	to Exhibit 2.2 of Collins & Aikman Corporations
	Current Report on Form 8-K dated December 10, 1996.
|        | 10.48 |             |  | Equity Purchase Agreement by and among Seiren
	U.S.A. Corporation, Seiren Automotive Textile Corporation,
	Seiren Co., Ltd. and Collins & Aikman Products Co. dated
	December 11, 1996, is hereby incorporated by reference to
	Exhibit 2.3 of Collins & Aikman Corporations
	Current Report on Form 8-K dated December 10, 1996.        
|        | 10.49 |             |  | Acquisition Agreement between Perstorp A.B. and
	Collins & Aikman Products Co. dated December 11, 1996
	is hereby incorporated by reference to Exhibit 2.4 of
	Collins & Aikman Corporations Current Report on
	Form 8-K dated December 10, 1996.                                                                                        
|        | 10.50 |             |  | Agreement among Perstorp A.B., Perstorp GmbH,
	Perstorp Biotec A.B. and Collins & Aikman Products Co. dated
	December 11, 1996 is hereby incorporated by reference to
	Exhibit 2.5 of Collins & Aikman Corporations
	current report on Form 8-K dated December 10, 1996.                                                                 



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##### Table of Contents



|        |       |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------- | ----- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|Number  |       | Description
|        |       |            
|        | 10.51 |             |  | Settlement and Amendment Agreement dated as of
	December 16, 1997 by and among Collins & Aikman
	Products Co., Perstorp A.B., Perstorp GmbH, Collins & Aikman
	Holding A.B., Collins & Aikman Automotive Systems GmbH,
	Collins & Aikman Automotive Systems N.V., Collins &
	Aikman Automotive Systems A.B. and Perstorp Components GmbH and
	related Letter Amendment Agreement is hereby incorporated by
	reference to Exhibit 10.38 of Collins & Aikman
	Corporations Report or Form 10-Q for the fiscal
	quarter ended September 26, 1998.                             
|        | 10.52 |             |  | Acquisition Agreement dated as of
	December 9, 1996 among Collins & Aikman Products Co.,
	Collins & Aikman Floor Coverings Group, Inc., Collins &
	Aikman Floor Coverings, Inc., CAF Holdings, Inc., and CAF
	Acquisition Corp. is hereby incorporated by reference to
	Exhibit 2.7 of Collins & Aikman Corporations
	Current Report on Form 8-K dated December 10, 1996.                                                                                                                                                                                                  
|        | 10.53 |             |  | Mastercraft Group Acquisition Agreement dated as
	of April 25, 1997 among Collins & Aikman Products Co.,
	Joan Fabrics Corporation and MC Group Acquisition Company
	L.L.C., is hereby incorporated by reference to Exhibit 2.1
	of Collins & Aikman Corporations Report on
	Form 10-Q for the fiscal quarter ended March 29, 1997.                                                                                                                                                                                                                                        
|        | 10.54 |             |  | Asset Purchase Agreement dated as of
	June 30, 1997 by and between JPS Automotive L.P. and Safety
	Components International, Inc. is hereby incorporated by
	reference to Exhibit 2.1 of JPS Automotive L.P.s and
	JPS Automotive Products Corp.s Current Report on
	Form 8-K dated July 24, 1997.                                                                                                                                                                                                                                                                        
|        | 10.55 |             |  | Closing Agreement dated July 24, 1997
	between JPS Automotive L.P., Safety Components International,
	Inc. and Safety Components Fabric Technologies, Inc. is hereby
	incorporated by reference to Exhibit 2.2 of JPS Automotive
	L.P.s and JPS Automotive Products Corp.s Current
	Report on Form 8-K dated July 24, 1997.                                                                                                                                                                                                                                               
|        | 10.56 |             |  | Amended and Restated Acquisition Agreement dated
	as of November 4, 1997 and amended and restated as of
	March 9, 1998, among Collins & Aikman Products Co.,
	Imperial Wallcoverings Inc. and BDPI Holdings Corporation is
	hereby incorporated by reference to Exhibit 2.4 of Collins
	& Aikman Corporations Report on Form 10-K for the
	fiscal year ended December 27, 1997.                                                                                                                                                                                            
|        | 10.57 |             |  | Share Purchase Agreement, dated as of
	January 12, 2001, between Collins & Aikman Corporation
	and Heartland Industrial Partners, L.P., is hereby incorporated
	by reference to Exhibit 10.1 of Collins & Aikman
	Corporations Report on Form 8-K dated
	January 12, 2001., incorporated by reference to
	Exhibit 10.1 to Collins & Aikman
	Corporations Current Report on Form 8-K dated
	January 12, 2001.                                                                                                                                                              
|        | 10.58 |             |  | Registration Rights Agreement, dated
	February 23, 2001, by and among Collins & Aikman
	Corporation, Heartland Industrial Partners, L.P. and the other
	investor stockholders listed on Schedule 1 thereto, Blackstone
	Capital Company II, L.L.C., Blackstone Family Investment
	Partnership I L.P., Blackstone Advisory Directors Partnership
	L.P., Blackstone Capital Partners, L.P. and Wasserstein/C&A
	Holdings, L.L.C., incorporated by reference to Annex D to
	Exhibit 10.1 to Collins & Aikman
	Corporations Current Report on Form 8-K dated
	January 12, 2001.
|        | 10.59 |             |  | Services Agreement, dated as of February 23,
	2001, by and among Collins & Aikman Corporation, Collins
	& Aikman Products Co. and Heartland Industrial Partners, L.P.                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 10.60 |             |  | Profit Participation Interest Agreement, dated as
	of February 23, 2001, by and among Heartland Industrial
	Partners, L.P. and the other investor stockholders listed on
	Schedule 1 thereto and each of Collins & Aikman Corporation,
	Blackstone Capital Company II, L.L.C. and Wasserstein/C&A
	Holdings, L.L.C., incorporated by reference to Annex B to
	Exhibit 10.1 to Collins & Aikman
	Corporations Current Report on Form 8-K dated
	January 12, 2001.                                                                                                           
|        | 10.61 |             |  | Employment Agreement dated October 1, 1999
	between Collins & Aikman Products Co. and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.30 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended
	December 25, 1999.                                                                                                                                                                                                                                                                                                      
|        | 10.62 |             |  | Severance Benefit Agreement dated July 26,
	1999 between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.31 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended
	December 25, 1999.*                                                                                                                                                                                                                                                                                                 



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##### Table of Contents



|        |       |             |  |                                                                                                                                                                                                                                                                                     
|------- | ----- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|Number  |       | Description
|        |       |            
|        | 10.63 |             |  | Severance Benefit Agreement dated August 9,
	1999 between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.32 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended
	December 25, 1999.*        
|        | 10.64 |             |  | Letter agreement dated December 17, 1999
	between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to
	Exhibit 10.33 of Collins & Aikman Corporations
	Report on Form 10-K for the fiscal year ended
	December 25, 1999.*                
|        | 10.65 |             |  | Employment Agreement dated December 1, 2000
	between Collins & Aikman Products Co. and an executive
	officer, which is incorporated by reference to
	Exhibit 10.75 of Collins & Aikman
	Corporations Annual Report on Form 10-K for the
	fiscal year ended December 31, 2000.*     
|        | 10.66 |             |  | Separation Agreement dated as of March 12,
	2001 between Collins & Aikman Products Co. and an
	executive officer, which is incorporated by reference to
	Exhibit 10.1 to Collins & Aikman
	Corporations Quarterly Report on Form 10-Q for the
	quarter ended March 31, 2001.*      
|        | 10.67 |             |  | Employment Agreement dated as of March 29,
	2000 between Collins & Aikman Products Co. and an
	executive officer is hereby incorporated by reference to
	Exhibit 10.1 of Collins & Aikman
	Corporations Report on Form 10-Q for the quarter
	ended April 1, 2000.*                 
|        | 10.68 |             |  | Change in control agreement dated as of April
	2000, between Collins & Aikman Corporation and an executive
	officer is hereby incorporated by reference to Exhibit 10.2
	of Collins & Aikman Corporations Report on Form
	10-Q for the quarter ended July 1, 2000.*                
|        | 10.69 |             |  | Employment agreement dated as of April 1,
	2000, between Collins & Aikman Products Co. and an
	executive officer is hereby incorporated by reference to
	Exhibit 10.3 of Collins & Aikman
	Corporations Report on Form 10-Q for the quarter ended
	July 1, 2000.*                  
|        | 10.70 |             |  | Change in control agreement dated as of
	April 1, 2000, between Collins & Aikman Products
	Co. and an executive officer is hereby incorporated by reference
	to Exhibit 10.4 of Collins & Aikman
	Corporations Report on Form 10-Q for the quarter ended
	July 1, 2000.*           
|        | 10.71 |             |  | Service contract between Collins &
	Aikman Products GmbH and an executive officer, which is
	incorporated by reference to Exhibit 10.5 of
	Collins & Aikman Corporations Quarterly Report on
	Form 10-Q for the quarter ended June 30, 2001.*                                      
|        | 10.72 |             |  | Employment agreement dated as of August 1,
	2000, between Collins & Aikman Products Co. and an
	executive officer, which is incorporated by reference to
	Exhibit 10.6 of Collins & Aikman
	Corporations Quarterly Report on Form 10-Q for the quarter
	ended June 30, 2001.*      
|        | 10.73 |             |  | Change in control agreement dated as of
	August 1, 2000, between Collins & Aikman
	Corporation and an executive officer, which is incorporated by
	reference to Exhibit 10.7 of Collins & Aikman
	Corporations Quarterly Report on Form 10-Q for the
	quarter ended June 30, 2001.*
|        | 10.74 |             |  | Employment agreement dated as of August 1,
	2000, between Collins & Aikman Products Co. and an
	executive officer, which is incorporated by reference to
	Exhibit 10.8 of Collins & Aikman
	Corporations Quarterly Report on Form 10-Q for the
	quarter ended June 30, 2001.*      
|        | 10.75 |             |  | Change in control agreement dated as of
	August 1, 2000, between Collins & Aikman
	Corporation and an executive officer, which is incorporated by
	reference to Exhibit 10.9 of Collins & Aikman
	Corporations Quarterly Report on Form 10-Q for the
	quarter ended June 30, 2001.*
|        | 10.76 |             |  | Settlement agreement dated as of April 27,
	2000, between Collins & Aikman Products Co. and an
	executive officer, which is incorporated by reference to
	Exhibit 10.10 of Collins & Aikman
	Corporations Quarterly Report on Form 10-Q for the
	quarter ended June 30, 2001.*     
|        | 10.77 |             |  | Letter agreement dated as of July 13, 2000,
	between Collins & Aikman Corporation and an executive
	officer, which is incorporated by reference to
	Exhibit 10.11 of Collins & Aikman
	Corporations Quarterly Report on Form 10-Q for the
	quarter ended June 30, 2001.*           
|        | 10.78 |             |  | Letter agreement dated as of April 7, 2000,
	between Collins & Aikman Corporation and an executive
	officer, which is incorporated by reference to
	Exhibit 10.12 of Collins & Aikman
	Corporations Quarterly Report on Form 10-Q for the
	quarter ended June 30, 2001.*           
|        | 10.79 |             |  | Collins & Aikman Products Co. 2000 Executive
	Incentive Compensation Plan is hereby incorporated by reference
	to Exhibit 10.5 of Collins & Aikman
	Corporations Report on Form 10-Q for the quarter
	ended July 1, 2000.*                                                         



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##### Table of Contents



|        |       |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------- | ----- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|Number  |       | Description
|        |       |            
|        | 10.80 |             |  | 2000 Employee Stock Option Plan is hereby
	incorporated by reference to Exhibit 10.6 of
	Collins & Aikman Corporations Report on
	Form 10-Q for the quarter ended July 1, 2000.*                                                                                                                                                                                                                                                                      
|        | 10.81 |             |  | Agreement of Sale and Purchase, dated as of
	June 22, 2001, by and among Collins & Aikman
	Products Co. and New King, L.L.C.                                                                                                                                                                                                                                                                                                                           
|        | 10.82 |             |  | Lease Agreement, dated as of June 29, 2001,
	between New King, L.L.C., as landlord, and Collins &
	Aikman Products Co., as tenant.                                                                                                                                                                                                                                                                                                                     
|        | 10.83 |             |  | Agreement of Sale and Purchase, dated as of
	June 22, 2001, by and among Collins & Aikman
	Products Co. and Anchor Court, L.L.C.                                                                                                                                                                                                                                                                                                                       
|        | 10.84 |             |  | Lease Agreement, dated as of June 29, 2001,
	between Anchor Court, L.L.C., as landlord and Collins &
	Aikman Products Co., as tenant.                                                                                                                                                                                                                                                                                                                  
|        | 10.85 |             |  | Stockholders Agreement dated July 3, 2001,
	by and among Collins & Aikman Corporation, Heartland
	Industrial Partners, L.P. and the other Heartland Entities named
	therein, the Becker Stockholders party thereto and the Joan
	Stockholders party thereto.                                                                                                                                                                                           
|        | 10.86 |             |  | Registration Rights Agreement, dated July 3,
	2001, by and among Collins & Aikman Corporation,
	Charles E. Becker, Michael E. McInerney and Jens
	Höhnel and, together with the Joan Investors (as defined
	therein).                                                                                                                                                                                                                                  
|        | 10.87 |             |  | First Amendment to Services Agreement, dated as
	of August 7, 2001, among Collins & Aikman
	Corporation, Collins & Aikman Products Co. and
	Heartland Industrial Partners, L.P.                                                                                                                                                                                                                                                                        
|        | 10.88 |             |  | Equipment Lease, dated as of December 18,
	2001, among Textron Automotive Exteriors Inc. and Textron
	Automotive Interiors Inc., collectively as lessee, and IAC
	TAX V, LLC, as lessor.                                                                                                                                                                                                                                                               
|        | 10.89 |             |  | Registration Rights Agreement, dated
	December 20, 2001, by and among Collins & Aikman
	Products Co., Collins & Aikman Corporation, and each of
	the subsidiaries listed on the signature pages thereof, and J.P.
	Morgan Securities Inc., Credit Suisse First Boston Corporation,
	Deutsche Banc Alex. Brown Inc. and Merrill Lynch, Pierce,
	Fenner & Smith Incorporated and the other several
	initial purchasers parties to the Purchase Agreement.
|        | 10.90 |             |  | Registration Rights Agreement dated as of
	December 20, 2001 by and among Becker Ventures, LLC,
	Dresdner Kleinwort Capital Partners 2001 LP, Masco Capital
	Corporation, ML IBK Positions, Inc. and Collins &
	Aikman Corporation.                                                                                                                                                                                                                    
|        | 10.91 |             |  | Registration Rights Agreement, dated
	December 20, 2001, by and between Collins & Aikman
	Corporation, Textron Inc., and Textron Holdco Inc.                                                                                                                                                                                                                                                                                                           
|        | 10.92 |             |  | Preferred Stock Registration and Other Rights
	Agreement, dated as of December 20, 2001, by and among
	Collins & Aikman Products Co. and Textron Inc.                                                                                                                                                                                                                                                                                                  
|        | 10.93 |             |  | Intellimold Technology License and Support
	Agreement, dated as of December 20, 2001, by and between
	Textron, Inc. and Collins & Aikman Corporation and
	Collins & Aikman Products Co.                                                                                                                                                                                                                                                                
|        | 10.94 |             |  | Technology License Agreement (Retained IP), dated
	as of December 20, 2001, by and between Textron, Inc. and
	Collins & Aikman Corporation and Collins &
	Aikman Products Co.                                                                                                                                                                                                                                                                          
|        | 10.95 |             |  | Technology License Agreement (Licensed-Back IP),
	dated as of December 20, 2001, by and between Textron, Inc.
	and Collins & Aikman Corporation and Collins &
	Aikman Products Co.                                                                                                                                                                                                                                                                     
|        | 21    |             |  | Subsidiaries of the Registrant.                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 23.1  |             |  | Consent of PricewaterhouseCoopers LLP.                                                                                                                                                                                                                                                                                                                                                                                                                 
|        | 23.2  |             |  | Consent of Arthur Andersen LLP.                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 99    |             |  | Voting Agreement between Blackstone Capital
	Partners L.P. and Wasserstein Perella Partners, L.P. is hereby
	incorporated by reference to Exhibit 99 of Amendment
	No. 4 to Collins & Aikman Holdings Corporations
	Registration Statement on Form S-2 (Registration
	No. 33-53179) filed June 27, 1994.                                                                                                                                              



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|  |                                                                                                                                                  
|- | -------------------------------------------------------------------------------------------------------------------------------------------------
|* | Management contract or compensatory plan or
	arrangement required to be filed as an exhibit to this
	Form pursuant to Item 14 (c) of this report.