UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                    FORM 10-K

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

  For the fiscal year ended: December 31, 2000  Commission file number: 1-71
                             -----------------                          ----



                                  BORDEN, INC.


         New  Jersey                                     13-0511250
      -------------------                         ----------------------
    (State of incorporation)                (I.R.S. Employer Identification No.)

 180 East Broad St., Columbus, OH 43215                 614-225-4000
 --------------------------------------         ---------------------------
 (Address of principal executive offices)     (Registrant's  telephone  number)


           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title  of  each  class                 Name of each exchange on which registered
----------------------                 -----------------------------------------
8  3/8%  Sinking Fund Debentures                 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    X      No
                                                   --         --

Indicate  by  check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of  registrant's  knowledge,  in  any  amendment  to  this  Form  10-K.  [x].

Aggregate market value in thousands of the voting stock held by nonaffiliates of
the  Registrant  based  upon  the  average bid and asked prices of such stock on
April 2,  2001:  $0.

Number  of  shares of common stock, par value $0.01 per share, outstanding as of
the  close  of  business  on  April 2,  2001:  198,974,994

                       DOCUMENTS INCORPORATED BY REFERENCE

     Document                                         Incorporated
     --------                                         ------------
         none                                              none

================================================================================
  The  Exhibit  Index  is  Located  herein  at  sequential pages 83 through 85.



<PAGE>
                                  BORDEN, INC.



INTRODUCTION
------------

The  following  filing  with  the  Securities and Exchange Commission ("SEC") by
Borden,  Inc.  ("the  Company")  presents  three  separate financial statements:
Borden,  Inc.  Consolidated  Financial  Statements,  Borden, Inc. and Affiliates
Combined  Financial  Statements  and  the  Financial  Statements of Borden Foods
Holdings Corporation ("Foods Holdings"). The consolidated statements present the
Company  after  the  effect of the sale of (i) the Company's former salty snacks
business  ("Wise") to Wise Holdings, Inc. ("Wise Holdings") and its subsidiaries
and  (ii)  the  Company's  former  domestic  and  international  foods  business
("Foods")  to Foods Holdings and its subsidiaries, as explained in Note 1 to the
Consolidated  and  Combined Financial Statements. The Company and Foods Holdings
are  controlled  by  BW  Holdings,  LLC  ("BWHLLC").  The Consolidated Financial
Statements  are  those  of  the  Company,  which  is  the  SEC  Registrant.

The  Borden,  Inc.  and Affiliates ("the Combined Companies") Combined Financial
Statements  are  included herein to present the Company on a combined historical
basis, including the financial position, results of operations and cash flows of
Wise  and  Foods.  The  Combined  Companies'  financial statements are included,
supplementally, to present financial information on a basis consistent with that
on  which  credit  was  originally  extended  to the Company (prior to push down
accounting)  and   because  management  of  the  Company  continues  to  control
significant  financial  and managerial decisions with respect to Foods Holdings.
On  October  30,  2000,  Wise  Holdings  was sold by BWHLLC. For purposes of the
Combined  Financial  Statements,  Wise  Holdings is treated as if its net assets
were  distributed  out  of  the  Combined Companies ("the Wise Distribution") on
October  30,  2000.  As  of October 30, 2000, Wise Holdings financial guarantees
ceased. Accordingly, in the Combined Financial Statements Wise is reflected as a
discontinued operation for all periods presented (See Note 6 to the Consolidated
and  Combined  Financial  Statements)  and separate financial statements of Wise
Holdings  are  no  longer  included in Part IV of this Registration Statement on
Form  10-K.  In  accordance  with  rule  3-10  of  Regulation S-X, the financial
statements  of  Foods  Holdings  are  included  in  Part IV of this Registration
Statement  on  Form  10-K because Foods Holdings is a guarantor of the Company's
credit  facility  and  all  of the Company's outstanding publicly held debt. The
financial  statements  for  Foods Holdings are prepared on a purchase accounting
basis.

                                       2










































<PAGE>
                                  BORDEN, INC.

                                      INDEX



<TABLE>
<CAPTION>


<S>                                                                                                    <C>
PART I
Item 1 - Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
Item 2 - Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
Item 3 - Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
Item 4 - Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . . . . . . . . . .  11

PART II
Item 5 - Market for the Registrant's Common Stock and Related Stockholder Matters . . . . . . . . . .  11
Item 6 - Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations. . . .  13
Item 7A - Quantitative and Qualitative Disclosures about Market Risk. . . . . . . . . . . . . . . . .  26
Item 8 - Financial Statements and Supplementary Data. . . . . . . . . . . . . . . . . . . . . . . . .  27

         BORDEN, INC. ("BORDEN") CONSOLIDATED AND  BORDEN, INC. AND AFFILIATES
         COMBINED FINANCIAL STATEMENTS
         Consolidated Statements of Operations, years ended December 31, 2000, 1999 and 1998. . . . .  27
         Consolidated Balance Sheets, December 31, 2000 and 1999. . . . . . . . . . . . . . . . . . .  29
         Consolidated Statements of Cash Flows, years ended December 31, 2000, 1999 and 1998. . . . .  31
         Consolidated Statement of Shareholders' Equity, years ended December 31, 2000, 1999 and 1998  33
         Combined Statements of Operations, years ended December 31, 2000, 1999 and 1998. . . . . . .  35
         Combined Balance Sheets, December 31, 2000 and 1999. . . . . . . . . . . . . . . . . . . . .  36
         Combined Statements of Cash Flows, years ended December 31, 2000, 1999 and 1998. . . . . . .  38
         Combined Statement of Shareholders' Equity, years ended December 31, 2000, 1999 and 1998 . .  40
         Notes to Consolidated and Combined Financial Statements. . . . . . . . . . . . . . . . . . .  42
         Independent Auditors' Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  69
Item 9 - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . .  71

PART III
Item 10 - Directors and Executive Officers of the Registrant. . . . . . . . . . . . . . . . . . . . .  71
Item 11 - Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  73
Item 12 - Security Ownership of Certain Beneficial Owners and Management. . . . . . . . . . . . . . .  78
Item 13 - Certain Relationships and Related Transactions. . . . . . . . . . . . . . . . . . . . . . .  79

PART IV
Item 14 - Exhibits, Financial Statement Schedules and Reports on Form 8-K . . . . . . . . . . . . . .  80
</TABLE>


                                       3




































<PAGE>
                                     PART I

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

The Company was incorporated on April 24, 1899. The Company is engaged primarily
in  manufacturing,  processing,  purchasing and distributing specialty chemicals
and  consumer  adhesives. The Combined Companies primarily include the specialty
chemicals,  consumer adhesives, Wise and Foods businesses. Corporate departments
provide  certain  governance  functions  for  all  business units. The Company's
executive  and  administrative offices are located in Columbus, Ohio. Production
facilities  are  located  throughout  the  United  States  and  in  many foreign
countries.

As  a  result of a merger completed on March 14, 1995, the Company is controlled
by  affiliates  of  Kohlberg  Kravis  Roberts  &  Co.  ("KKR").

In  1996, the Company sold its Wise business to Wise Holdings and sold its Foods
business  to Foods Holdings.  As a result of the Wise Distribution in 2000, Wise
Holdings  financial  guarantees  ceased.  However,  management  of  the  Company
continues  to exercise significant financial and managerial control with respect
to  Foods  Holdings.  Foods  Holdings  also continues to guarantee the Company's
obligations  under  its  credit  facility and its outstanding publicly held debt
securities.

In  1995,  the Company began the process of redesigning its operating structure.
As  a  result,  management decided to divest certain businesses that did not fit
into  the  Company's  long-term  strategic  plan. The businesses included in the
classification  "businesses  sold  or  distributed" for the segment data are the
printing  inks  business  sold  in  2000, the infrastructure management services
business  distributed  in  2000  to  the Company's parent and the commercial and
industrial  wallcoverings  business sold in 1998 (see Note 4 to the Consolidated
and  Combined  Financial  Statements).

As  a  result  of  the  Wise  Distribution  and  the  March 13, 1998 sale of the
Company's  Decorative  Products  business,  these  businesses  are  included  in
discontinued  operations. (See Note 6 to the Consolidated and Combined Financial
Statements.)

Also  as  part  of  the  redesign  of  its  operating structure, the Company has
acquired  certain  businesses  and  assets  included  as  part  of the Company's
Chemical business ("Chemical") and a business included in the Consumer Adhesives
business.  In  1999,  the  Company  also  invested  in WKI Holding Company, Inc.
("WKI"),  an  affiliate  of  the  Company  and  controlled  by  KKR.

PRODUCTS
Chemical  primarily  includes formaldehyde, melamine, resins, coatings and other
specialty  and  industrial  chemicals.

The Consumer Adhesives business manufactures and markets more than 200 products,
from  school  glues  to  home  repair  and  woodworking  products.

The  Combined Companies includes the Company and its subsidiaries, together with
the  Foods  and  Wise  businesses. Foods is  a  leading  producer  and  marketer
in   North   America   of   pasta,   pasta    sauce,    bouillon,    dry   soups
and  shelf  stable  meals.  In  1996,  Foods  management  announced its strategy
to  focus on grain-based meal solutions and, therefore, its intent to divest all
businesses  not  aligned with this strategy (the "Unaligned" businesses). Foods'
principal  Unaligned businesses included processed cheese, candy coated popcorn,
non-dairy  creamer,  sweetened  condensed  milk,  reconstituted  lemon  and lime
juices,  and  milk  powder.  Certain  of these Unaligned businesses were sold in
December  1997, with the significant remaining businesses sold in early 1998 and
all  Unaligned  business  sales  completed  in  1999. While part of the Combined
Companies,  the Wise business manufactured salty snacks, including potato chips,
pretzels and corn snacks and chips. Its Caribbean based distributorship was sold
in  1998.

MARKETING  AND  DISTRIBUTION
Domestic  products  for Chemical are sold throughout the United States primarily
by in-house sales forces to industrial users. Domestic products for the Consumer
Adhesives  business  are  sold  throughout  the  United  States  by in-house and
independent  sales forces primarily to retailers and distributors. To the extent
practicable,  international  distribution  techniques parallel those used in the
United   States.   However,   raw    materials,    production    considerations,


                                       4









<PAGE>

pricing competition, government policy toward industry and  foreign  investment,
and other factors  may  vary substantially  from  country  to  country.

The  domestic  Foods  products  are  marketed primarily through food brokers and
distributors,  and   directly   to  wholesalers,  retail  stores,  food  service
businesses, food processors, institutions and government agencies. To the extent
practicable,  international  distribution  techniques parallel those used in the
United  States.  Raw materials, production considerations, pricing, competition,
government  policy toward industry and foreign investment, and other factors may
vary  substantially  from  country  to  country.  While  part  of  the  Combined
Companies,  Wise  products  were  marketed  similarly  to  Foods  products.

COMPETITION
Chemical  is  the leading global producer of thermosetting resins for the forest
products  industry and a leading producer of thermosetting resins for industrial
and  foundry applications. These resins are used to bind or coat other materials
during  the manufacturing process. Chemical is also the world's largest producer
of  formaldehyde  and  a  leading  producer  of  melamine  crystal.  Much of the
formaldehyde  and  melamine crystal materials are consumed internally to produce
thermosetting  resins,  with the remainder sold to third parties. Specialty inks
(sold  in  2000)  and  UV Coatings are produced for applications in a variety of
industries.  Chemical  manufactures  and distributes its products worldwide with
the most significant markets being North America, Europe, Latin America, and the
Asia Pacific region and, generally, holds a leading market position in the areas
in  which  it  competes. Chemical resins are  provided  to  a  wide  variety  of
customers for use in  the  manufacture  of,  among  other  products,  structured
panels,  medium density fiberboard, particle board, laminate veneers, insulation
binders, automotive brakes, and to coat cores and molds  in  the  metal  casting
process.  The  major  competitors  of  Chemical  are  Ashland  Chemical, Georgia
Pacific, Nordichem, and several regional domestic and international competitors.
Price, customer service and product performance are the primary  areas  in which
Chemical competes.

Foods  is  the third largest producer and marketer of pasta in the United States
and  has  the  leading  pasta brand in Canada.  Foods also maintains the leading
position  in  the  United  States  and  Canada premium pasta sauce market, while
holding  the  fourth  and  first positions in the total United States and Canada
sauce  markets,  respectively.  Foods also is a leader in both the United States
bouillon  and  dry soups markets. Other markets in which Foods competes includes
the  United  States  retail meal solutions market and pasta in Italy. The pasta,
pasta  sauces,  bouillon, dry soups and shelf stable meals businesses are highly
competitive,  with competition taking place primarily on the basis of price. The
primary  competitors  of  pasta  products  are New World Pasta, American Italian
Pasta  ,  and Barilla  in  the  United States, and Nabisco Brands, Italpasta and
Unico in Canada. Primary pasta sauce competitors  are  Unilever,  Campbell  Soup
and  ConAgra.  Bouillon  and  dry  soups  competitors  include Knorr, Lipton and
Hormel.

Prior  to  the Wise Distribution, Wise operated its salty snacks business in the
eastern  United  States,  held the number two position in the market in which it
operated  and  was  the  largest  regional  snacks company in the United States.
Frito-Lay holds the leading market position throughout the United States as well
as  the  eastern  United  States with a market share in excess of 50%. The salty
snacks  business  is  a  competitively  priced  category.

The  Consumer  Adhesives  business  is  the  leading  United  States producer of
household  and  school glues and manufactures a full line of consumer adhesives,
including home repair products, caulks and sealants. Competition is primarily on
the  basis  of  brand  equity.

MANUFACTURING  AND  RAW  MATERIALS
The  primary  raw  materials used by Chemical are methanol, phenol and urea. The
primary  raw  materials  used  by  Consumer Adhesives are methanol and polyvinyl
alcohol.  Raw  materials  are  generally  available  from  numerous  sources  in
sufficient quantities, but are subject to price fluctuations which cannot always
be  passed  on to the Company's customers. The primary raw materials used by the
Foods  and  Wise  businesses  are  flour,  tomato  products,  oil  and potatoes.

Long-term  purchase  agreements  are  used  in  certain  circumstances to assure
availability  of  adequate  raw material supplies at specified  prices, for both
the  Company  and  the  Combined  Companies.


                                       5











<PAGE>
CUSTOMERS
The  Company and the Combined Companies do not depend on any single customer and
the  businesses are not limited to a group of customers, the loss of which would
have  a  material  adverse  effect  on  their  businesses. The primary customers
consist  of  food  brokers  and  distributors,  retail stores and manufacturers.

PATENTS  AND  TRADEMARKS
The   Company   and  the  Combined  Companies  own  various  patents,  trademark
registrations,  and patent and trademark applications around the world which are
held  for  use  or currently used in their operations. A majority of the patents
relate  to  the  development of new products and processes for manufacturing and
use  thereof,  and  will  expire  at  various  times  between  2001 and 2013. No
individual  patent  is  considered  to  be  material.

RESEARCH  AND  DEVELOPMENT
Research  and  development  expenditures  were  $23.1 million, $23.8 million and
$18.7  million  in  2000, 1999 and 1998, respectively, for the Company and $41.8
million, $43.1 million and $37.3 million for the Combined Companies. Development
and  marketing  of  new  products are carried out at the business unit level and
integrated  with  quality  control  for  existing  product  lines.

WORKING  CAPITAL
Working  capital  for  all  segments  is generally funded through operations and
borrowings  under  the  Company's  credit  facility.

EMPLOYEES
At  December  31,  2000,  the  Company  had  approximately  3,800 employees. The
Combined  Companies  had approximately 5,400 employees. Relationships with union
and  non-union  employees  are  generally  good.

FINANCIAL  INFORMATION  ABOUT  OPERATING  SEGMENTS
In  accordance  with  Statement  of  Financial  Accounting  Standards  No.  131,
"Disclosures  about  Segments  of  an Enterprise and Related Information" ("SFAS
131"), the Company and Combined Companies determined their operating segments on
the  same  basis  that  is  used  internally to evaluate segment performance and
allocate  resources.

The  Company  and Combined Companies have a decentralized organization structure
with  stand-alone  businesses.  Each  of  the  business  units  has  a  separate
management team and infrastructure, and offers different products. In accordance
with SFAS 131, each business is an operating segment that is not aggregated with
another  business  because  the  economic characteristics between the businesses
differ.  The  businesses  within  the  Company include a Chemical business and a
Consumer  Adhesives  business.  The  Combined  Companies  also include the Foods
business  and  the  Wise  business  prior to the Wise Distribution. Prior to its
distribution  to  the  Company's  parent  in  February  2000, the infrastructure
management  services  business  did not meet the quantitative thresholds of SFAS
131.  It  is  included in the businesses sold or distributed classification. The
"Corporate  and  Other"  category  represents  corporate functional departments.

During  1996  the  Company  sold  options  to BWHLLC on what was then all of the
common  stock of the Consumer Adhesives business for 110% of the August 16, 1996
fair  market  value  of  the common stock. The options were issued at fair value
with  a five-year expiration. The exercise price of the options for the Consumer
Adhesives business is $54.1 million. Management expects the 1996 options sold to
BWHLLC  for  Consumer  Adhesives'  common shares to be exercised in 2001. During
2000, additional common shares of the Consumer Adhesives business were issued to
and  are  held  by  the  Company.  The  additional  shares total 3.5 million, or
approximately  26%,  of  the  total  Consumer  Adhesives  common  stock  shares
outstanding  at  December  31,  2000.

In  the  consolidated  and  combined  financial  information  that  follows, the
Decorative  Products  business  and Wise are shown as discontinued operations in
both  the   Depreciation  and   Amortization   Expense  chart  and  the  Capital
Expenditures  chart,  prior  to  the sale of the Decorative Products business on
March 13,  1998  and  the  Wise  Distribution,  respectively.  These businesses,
consistent  with  treatment  as  discontinued  operations, are excluded from the
Sales  to  Unaffiliated  Customers  and  Adjusted  Operating  EBITDA  charts.

In  the  consolidated  and  combined    financial   information  that   follows,
The   businesses  sold  or  distributed       classification     includes    the
Commercial         and        industrial          wallcoverings         business
through    the    date    of    its    sale    on    April     29,  1998,    the

                                       6











<PAGE>
Company's  printing  inks  business  through  the    date    of  its   sale   on
November  22, 2000, and the infrastructure management services business prior to
its  distribution  to  the  Company's  parent  in  February  2000.

Adjusted Operating EBITDA information (as defined below) is presented because it
is  the  primary  measure used by the chief operating decision maker to evaluate
operating  results.

OPERATING  SEGMENTS:
--------------------
SALES  TO  UNAFFILIATED  CUSTOMERS:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                                           CONSOLIDATED                           COMBINED
                                  -------------------------------     -------------------------------
 (Dollars in millions)               2000       1999       1998          2000       1999        1998
-----------------------------------------------------------------------------------------------------
<S>                                   <C>       <C>       <C>             <C>       <C>         <C>
     Foods ongoing                                                    $  570.7   $  536.8    $  586.3
     Foods Unaligned                                                         -       11.1       119.8
     Chemical                     $ 1,336.4  $ 1,223.6  $ 1,235.5      1,336.4    1,223.6     1,235.5
     Consumer Adhesives               147.4      100.5       92.2        147.4      100.5        92.2
     Businesses sold or distributed    40.2       50.6       85.0         40.2       50.6        85.0
                                  ---------  ---------  ---------     --------   --------   ---------
                                  $ 1,524.0  $ 1,374.7  $ 1,412.7     $2,094.7   $1,922.6    $2,118.8
-----------------------------------------------------------------------------------------------------
</TABLE>
TOTAL  ASSETS  AT  YEAR  END:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                                                      CONSOLIDATED              COMBINED
                                               ---------------------     ---------------------
(Dollars in millions)                             2000          1999       2000          1999
-----------------------------------------------------------------------------------------------------
<S>                                               <C>           <C>        <C>           <C>
       Foods ongoing                                                     $  872.3     $  924.8
       Chemical                                $1,078.8     $  984.9      1,078.8        984.9
       Consumer Adhesives                         164.5         58.1        164.5         58.1
       Businesses sold or distributed                 -         38.0            -         38.0
       Combining adjustment                           -            -       (207.0)      (254.0)
       Discontinued operations                        -            -            -         61.8
       Corporate and other                        290.3        646.4        279.2        579.4
                                               --------     --------    ---------     --------
                                               $1,533.6     $1,727.4     $2,187.8     $2,393.0
-----------------------------------------------------------------------------------------------------
</TABLE>


                                       7



































<PAGE>
ADJUSTED  OPERATING  EBITDA:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
                                               CONSOLIDATED                        COMBINED
                                       -----------------------------   -------------------------------
(Dollars in millions)                  2000        1999        1998       2000       1999       1998
------------------------------------------------------------------------------------------------------
<S>                                    <C>         <C>         <C>        <C>        <C>        <C>
     Foods ongoing                                                     $   2.9     $  13.5   $   11.4
     Foods Unaligned                                                         -         1.6       (1.7)
     Chemical                        $ 189.7   $  213.9     $  183.6     189.7       213.9      183.6
     Consumer Adhesives                 23.2       16.9         13.6      23.2        16.9       13.6
     Corporate and other               (22.3)     (10.7)        (9.5)    (26.3)      (11.8)     (10.3)
     Businesses sold or distributed (1)  0.7       (5.2)        (2.2)      0.7        (5.2)      (2.2)
                                     -------   --------     --------    ------      ------    --------
     ADJUSTED OPERATING EBITDA (2)     191.3      214.9        185.5     190.2       228.9      194.4

     Significant or unusual items (3)  (64.6)     (34.2)         5.8     (65.5)       14.9      354.2
     Depreciation and amortization (4) (62.4)     (54.2)       (50.9)   (103.7)      (84.6)     (79.9)
                                     -------   --------     --------    ------      ------    --------
     OPERATING INCOME                $  64.3   $  126.5     $  140.4   $  21.0    $  159.2   $  468.7
------------------------------------------------------------------------------------------------------
<FN>
(1)   Includes  the  Company's  infrastructure  management services business and printing inks business
      for  all  periods  presented and the commercial and industrial wallcoverings business  in  1998.
(2)   Adjusted Operating EBITDA  represents  net income, excluding discontinued operations,  cumulative
      effect of change in accounting principle,  non-operating  income  and expense,  interest,  taxes,
      depreciation,  amortization and Significant or Unusual Items (see  page  8).
(3)   Includes  Significant  or  Unusual Items shown below and page 17 of  Management's  Discussion
      and  Analysis  of  Financial  Condition  and  Results  of  Operations.
(4)   The  increase  in consolidated depreciation and amortization is primarily the result of  the 1999
      Chemical  acquisitions  and  the  2000 Consumer Adhesives acquisition. The combined increase also
      reflects the  depreciation associated  with  Foods  1999 enterprise-wide  systems  implementation
      and  plant  improvements.
</TABLE>
SIGNIFICANT OR UNUSUAL ITEMS AFFECTING COMPARABILITY OF OPERATING EBITDA: (1)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
                                          CONSOLIDATED               COMBINED
                                    ----------------------    ------------------------
<S>                                 <C>      <C>      <C>       <C>      <C>      <C>
(Dollars in millions)               2000     1999     1998      2000     1999     1998
--------------------------------------------------------------------------------------
     Foods ongoing                                            $ (0.9)           $(23.3)
     Foods Unaligned                                               -   $ 50.5    371.7
     Chemical                     $(66.9)  $(41.6)  $  5.8     (66.9)   (41.6)     5.8
     Consumer Adhesives             (0.3)       -        -      (0.3)       -        -
     Corporate and other (2)         2.6      7.4        -       2.6      6.0        -
                                  -------  -------  ------    -------  ------  -------
                                  $(64.6)  $(34.2)  $  5.8    $(65.5)  $ 14.9   $354.2
--------------------------------------------------------------------------------------
<FN>
(1) See page 17 of  the Management's Discussion and Analysis of Financial Condition and Results of
    Operations for further information concerning these items.
(2) In 1999, consolidated includes gains on the 1996 sale of Wise that are eliminated in combined.
</TABLE>
                                       8



























<PAGE>
<TABLE>
<CAPTION>
DEPRECIATION  AND  AMORTIZATION  EXPENSE:
--------------------------------------------------------------------------------------------------
                                            CONSOLIDATED                        COMBINED
                                     ----------------------------     ----------------------------
(Dollars in millions)                 2000       1999        1998       2000      1999        1998
--------------------------------------------------------------------------------------------------
<S>                                   <C>        <C>         <C>       <C>        <C>        <C>
     Foods ongoing                                                    $ 41.3      $30.2     $ 28.1
     Foods Unaligned                                                       -        0.2        0.9
     Chemical                        $ 52.4     $45.7       $41.5       52.4       45.7       41.5
     Consumer Adhesives                 6.7       1.9         1.3        6.7        1.9        1.3
     Businesses sold or distributed     0.8       4.2         6.1        0.8        4.2        6.1
     Discontinued operations              -         -         2.0        6.7        7.5        8.7
     Corporate and other                2.5       2.4         2.0        2.5        2.4        2.0
                                     ------     -----       -----     ------      -----      -----
                                     $ 62.4     $54.2       $52.9     $110.4      $92.1     $ 88.6
--------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CAPITAL  EXPENDITURES:
--------------------------------------------------------------------------------------------------
                                            CONSOLIDATED                        COMBINED
                                     ----------------------------     ----------------------------
(Dollars in millions)                 2000       1999        1998       2000      1999        1998
--------------------------------------------------------------------------------------------------
<S>                                    <C>       <C>         <C>         <C>       <C>        <C>
     Foods ongoing                                                    $ 46.8      $58.1      $36.4
     Foods Unaligned                                                       -        0.1        1.6
     Chemical                        $ 98.7     $66.3       $39.6       98.7       66.3       39.6
     Consumer Adhesives                 5.3       2.1         4.6        5.3        2.1        4.6
     Businesses sold or distributed     0.1       1.2         4.2        0.1        1.2        4.2
     Discontinued operations              -         -         1.1        4.8        8.9       10.8
     Corporate and other                0.4       5.2         3.0        0.4        5.2        3.0
                                     ------     -----       -----     ------      -----      -----
                                     $104.5     $74.8       $52.5     $156.1     $141.9     $100.2
--------------------------------------------------------------------------------------------------
</TABLE>
GEOGRAPHIC  AREAS:
------------------
SALES  TO  UNAFFILIATED  CUSTOMERS:  (3)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
                                              CONSOLIDATED                       COMBINED
                                      --------------------------    -----------------------------
(Dollars in millions)                 2000       1999       1998        2000       1999     1998
-------------------------------------------------------------------------------------------------
<S>                                   <C>         <C>       <C>         <C>        <C>       <C>
     United States                 $1,042.9  $  924.6   $  955.1    $1,480.9   $1,330.7  $1,434.1
     Canada                           166.0     150.4      141.9       272.9      253.4     241.4
     Other International              315.1     299.7      315.7       340.9      338.5     443.3
                                   --------  --------  ---------   ---------  ---------  --------
     Total                         $1,524.0  $1,374.7   $1,412.7  $  2,094.7   $1,922.6  $2,118.8
-------------------------------------------------------------------------------------------------
<FN>
(3)  For  purposes  of  geographic area disclosures, sales are attributed to the
country in which individual business locations reside.
</TABLE>
LONG-LIVED  ASSETS:  (1)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
                                                  CONSOLIDATED                  COMBINED
                                             -------------------         ---------------------
(Dollars in millions)                         2000          1999          2000          1999
---------------------------------------------------------------------------------------------------
<S>                                           <C>           <C>           <C>           <C>
     United States                           $369.6       $374.2         $525.5         $516.0
     Canada                                    64.6         41.9          109.5           83.8
     Other International                      139.0        122.7          144.5          130.4
                                             ------       ------         ------         ------
     Total                                   $573.2       $538.8         $779.5         $730.2
---------------------------------------------------------------------------------------------------
<FN>
(1)  Long-lived assets include property, plant and equipment, net of accumulated
depreciation.
</TABLE>
ITEM  2.   PROPERTIES
-------    ----------
As  of  December  31, 2000, the Company operated 29 domestic Chemical production
and  manufacturing  facilities  in  18  states,  the  most significant being the
Chemical  plant  in  Louisville,  Kentucky. In addition, the Company operated 24
                                       9
<PAGE>
foreign  Chemical  production  and manufacturing facilities primarily in Canada,
South  America,  Europe,  Australia  and  the  Far  East.

As  of December 31, 2000, the Company operated one domestic facility in New York
and  one  foreign  facility in Canada for producing and manufacturing household,
school  and  consumer  glues.

As  of  December  31,   2000,  the  Foods  business  operated  4  domestic  food
manufacturing  facilities in 3 states and operated 4 foreign food  manufacturing
and  processing  facilities  located  in  Canada  and  Italy.

The  Company's   and   the  Combined  Companies'  manufacturing  and  processing
facilities are generally well maintained and effectively utilized. Substantially
all  facilities  are  owned.

The  Company  and  the Combined Companies are actively engaged in complying with
environmental protection laws, as well as various federal and state statutes and
regulations  relating  to  manufacturing, processing and distributing their many
products.  In connection with this, the Company incurred capital expenditures of
$0.8 million in 2000, $2.7 million in 1999 and $2.8 million in 1998. The Company
estimates  that  it will spend $1.7 million for environmental control facilities
during  2001. The Combined Companies incurred environmental capital expenditures
of  $0.8  million  in  2000,  $2.7 million in 1999 and $3.2 million in 1998. The
Combined  Companies  estimate  $1.8  million  will  be spent in 2001 relating to
environmental  control  facilities.

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

Environmental  Proceedings
--------------------------

The  Company  has  been  notified that it is or may be a potentially responsible
party with respect to the cleanup of approximately 50 waste sites in proceedings
brought   under   the   Comprehensive   Environmental   Response,   Compensation
and    Liability    Act    ("CERCLA")    or   similar    state     environmental
laws.     The     Company's     ultimate     liability     will     depend    on
many     factors    including     its     volumetric     share     of     waste,
the   financial   viability  of  other  responsible  parties,  the   remediation
methods  and  technology  used,  the  amount  of  time  necessary  to accomplish
remediation,  and  the  availability  of  insurance  coverage. While the Company
cannot  predict  with  certainty the total cost of such cleanup, the Company has
recorded  approximately $22 million of liabilities for environmental remediation
costs  for  these  and  other sites in amounts that it believes are probable and
reasonably  estimable.  Based  on  currently available information and analysis,
the  Company  believes that it is reasonably possible that costs associated with
such  sites  may exceed current reserves by amounts that may prove insignificant
or  by  amounts,  in  the  aggregate,  of  up to approximately $16 million. This
estimate  of  the  range of reasonably possible additional costs is less certain
than  the estimates upon which reserves are based, and in order to establish the
upper  limit of such range, assumptions least favorable to the Company among the
range of reasonably possible outcomes were used.  In estimating both its current
reserves  for  environmental  remediation  and  the possible range of additional
costs,  the  Company  has  not  assumed  that  it  will  bear the entire cost of
remediation  of  every  site  to  the  exclusion  of  other  known   potentially
responsible  parties  who  may  be  jointly and severally liable.   The  ability
of    other    potentially    responsible    parties    to    participate    has
been    taken    into    account,    based    generally    on    the    parties'
probable contribution on a per site basis. No attempt has been made to  discount
the estimated amounts to net present value, and no amounts  have  been  recorded
for potential recoveries from insurance  carriers.

Private actions against the Company and numerous other defendants are pending in
U.S.  District  Court  in Baton Rouge, Louisiana, alleging personal injuries and
property  damage  in  connection  with  a  waste  disposal  site  in  Louisiana.

The  Company  is  in  negotiations with the New York Department of Environmental
Conservation  relating  to  alleged  air  emission  permit  violations from 1990
through  1996  at  the  Company's  Bainbridge,  New  York  facility.

Borden  Chemicals  and  Plastics  Limited  Partnership
------------------------------------------------------

In  1987  the  Company's  basic chemical and polyvinyl chloride resin businesses
located  at  Geismar,  Louisiana, and Illiopolis, Illinois, were acquired by the
Borden Chemicals and Plastics Limited Partnership ("BCP"). BCP Management, Inc.,
("BCPM"),  a wholly owned subsidiary of the Company serves as general partner of
BCP  and  has  certain fiduciary responsibilities to BCP's unitholders. Under an
Environmental  Indemnity  Agreement  ("EIA"), the Company has agreed, subject to
certain  conditions and limitations, to indemnify BCP from certain environmental

                                       10




<PAGE>
liabilities arising from facts or circumstances that existed and requirements in
effect prior to November 30, 1987, and share on an equitable basis those arising
from  facts  or  circumstances existing and requirements in effect both prior to
and  after  such  date. No claim can be made by BCP under the EIA after November
30,  2002.

Other  Legal  Proceedings
-------------------------

The  Company is involved in other litigation throughout the United States, which
is  considered  to  be  in  the  ordinary  course  of  business.

Anticipated  Impact
-------------------

Management  believes,  based  upon  the  information it currently possesses, and
taking  into  account its established reserves for estimated liability, that the
ultimate  outcome  of  the  foregoing  environmental  and  legal proceedings and
actions  is unlikely to have a material adverse effect on the financial position
or  results  of  operations  of  the  Company.

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

The  Company's  Annual  Shareholder  Meeting  was  held  December 21, 2000.  The
Company's Board of Directors was re-elected in its entirety by unanimous vote of
the  198,974,994  shares  of  the  Company's  common  stock  outstanding.

                                     PART II

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

The  Company's authorized common stock consists of 300,000,000 shares with a par
value  of  $0.01  per share, 198,974,994 of which are issued and outstanding and
controlled  by  affiliates  of  KKR. No shares of such common stock trade on any
exchange. The Company declared $61.6 million in dividends on common stock during
2000,  $64.1  million in dividends on common stock during 1999 and $59.5 million
in dividends on common stock during 1998. The Company's ability to pay dividends
on  its  common  stock is restricted by its credit agreement with certain banks.
See  Notes  9  and  13  to  the  Consolidated and Combined Financial Statements.

                                       11









































<PAGE>
ITEM  6.   SELECTED  FINANCIAL  DATA
--------   -------------------------
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
FIVE  YEAR  SELECTED  FINANCIAL  DATA
(All  dollar  and  share  amounts  in  millions,  except  per  share  data)

The  following  represents five year selected financial data for the Company and
the Combined Companies, restated for discontinued operations. See pages 8 and 16
for  items  impacting  comparability  between  2000,  1999  and  1998.

CONSOLIDATED                 FOR THE YEARS          2000          1999          1998          1997          1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>           <C>          <C>            <C>            <C>
SUMMARY OF EARNINGS
Net sales                                        $  1,524.0   $  1,374.7    $  1,412.7    $  1,498.2   $  2,339.6
(Loss) income from continuing operations              (59.0)        55.3          23.6          17.2         44.7
(Loss) income applicable to common stock              (39.7)       (20.8)        (11.1)        147.6       (333.1)
-------------------------------------------------------------------------------------------------------------------
Basic and diluted (loss) income per common share
  from continuing operations                     $    (0.30)  $      0.28   $      0.12   $      0.09  $      0.23
Basic and diluted (loss) income per common share      (0.20)        (0.10)        (0.06)         0.74        (1.67)
-------------------------------------------------------------------------------------------------------------------
Dividends per share
   Common share                                  $     0.31   $      0.32   $      0.30   $      0.26  $      0.08
   Preferred series A                                  3.00          3.00          3.00          3.00         3.13
-------------------------------------------------------------------------------------------------------------------
Average number of common shares
   outstanding during the year                       199.0         199.0         199.0         199.0        199.0
-------------------------------------------------------------------------------------------------------------------
FINANCIAL STATISTICS
Total Assets                                     $ 1,533.6    $  1,727.4    $  2,004.7    $  2,175.3   $  2,490.0
Long-term debt                                       530.5         541.1         552.0         788.3        567.2
-------------------------------------------------------------------------------------------------------------------
Operating EBITDA (1)                             $   126.7    $    180.7    $    191.3    $    138.4   $    277.7
Adjusted Operating EBITDA (1)                        191.3         214.9         185.5         154.4        215.7
-------------------------------------------------------------------------------------------------------------------
COMBINED                     FOR THE YEARS         2000           1999          1998           1997         1996
-------------------------------------------------------------------------------------------------------------------
SUMMARY OF EARNINGS
Net sales                                        $ 2,094.7    $  1,922.6    $  2,118.8    $  3,249.9   $  4,222.8
(Loss) income from continuing operations             (28.6)         89.6         272.4          90.6         46.3
(Loss) income applicable to common stock             (62.3)          7.1          94.6         131.1          5.1
-------------------------------------------------------------------------------------------------------------------
FINANCIAL STATISTICS
Total Assets                                     $ 2,187.8    $  2,393.0    $  2,673.4    $  2,954.6   $  3,030.4
Long-term debt                                       535.8         544.1         554.6         794.9        581.8
-------------------------------------------------------------------------------------------------------------------
Operating EBITDA (1)                             $   124.7    $    243.8    $    548.6    $    387.0   $    326.2
Adjusted Operating EBITDA (1)                        190.2         228.9         194.4         262.1        270.3
-------------------------------------------------------------------------------------------------------------------
<FN>
(1)  Operating  EBITDA  represents  net  income,  excluding discontinued operations, cumulative effect of change in
accounting  principle,  non-operating  income and expense, interest, taxes, depreciation and amortization. Adjusted
Operating  EBITDA is composed of Operating EBITDA excluding the effects of Significant or Unusual Items as shown on
page 8 and page 17 of Management's Discussion and Analysis for the years 2000, 1999 and 1998. EBITDA information is
presented  because  it  is  the  primary  measure  used by the chief operating decision maker to evaluate operating
results  and  because  management  understands  that  such  information is considered by certain investors to be an
additional  basis  for  evaluating  the  ability to pay interest and repay debt. EBITDA should not be considered an
alternative  to  measures  of  operating performance as determined in accordance with generally accepted accounting
principles, including net income, as a measure of the Company's operating results and cash flows or as a measure of
the Company's liquidity. Because EBITDA is not calculated identically by all companies, the presentation herein may
not  be  comparable  to  other  similarly  titled  measures  of  other  companies.
</TABLE>

                                       12



















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

RESULTS  OF  OPERATIONS  BY  BUSINESS  UNIT:
-------------------------------------------

Following  is  a  comparison  of  net  sales  and  adjusted  operating EBITDA by
operating  segment  for  both  the  Company  and  the  Combined  Companies:

NET  SALES  TO  UNAFFILIATED  CUSTOMERS:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                                            CONSOLIDATED                       COMBINED
                                               ---------------------------------  -----------------------------
(Dollars in millions)                             2000         1999        1998      2000       1999      1998
---------------------------------------------------------------------------------------------------------------
<S>                                               <C>          <C>         <C>       <C>        <C>       <C>
     Foods ongoing                                                                $  570.7   $  536.8  $  586.3
     Foods Unaligned                                                                     -       11.1     119.8
     Chemical                                  $1,336.4     $1,223.6    $1,235.5   1,336.4    1,223.6   1,235.5
     Consumer Adhesives                           147.4        100.5        92.2     147.4      100.5      92.2
     Businesses sold or distributed (1)            40.2         50.6        85.0      40.2       50.6      85.0
                                               --------    ---------    --------   -------    -------  --------
                                               $1,524.0     $1,374.7    $1,412.7  $2,094.7   $1,922.6  $2,118.8
---------------------------------------------------------------------------------------------------------------
</TABLE>
OPERATING INCOME:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                          CONSOLIDATED                       COMBINED
                                              -------------------------------    -------------------------------
(Dollars in millions)                           2000         1999       1998        2000       1999      1998
----------------------------------------------------------------------------------------------------------------
<S>                                              <C>         <C>        <C>         <C>        <C>       <C>
     Adjusted Operating EBITDA
     -------------------------
     Foods ongoing                                                                $    2.9    $   13.5   $ 11.4
     Foods Unaligned                                                                     -         1.6     (1.7)
     Chemical                                $    189.7   $  213.9     $183.6        189.7       213.9    183.6
     Consumer Adhesives                            23.2       16.9       13.6         23.2        16.9     13.6
     Corporate and other                          (22.3)     (10.7)      (9.5)       (26.3)      (11.8)   (10.3)
     Businesses sold or distributed (1)             0.7       (5.2)      (2.2)         0.7        (5.2)    (2.2)
                                              ----------  ---------    -------      -------    --------  -------
     Total Adjusted Operating
       EBITDA (2)                                 191.3      214.9      185.5        190.2       228.9    194.4

     Significant or unusual items (3)             (64.6)     (34.2)       5.8        (65.5)       14.9    354.2
     Depreciation and amortization  (4)           (62.4)     (54.2)     (50.9)      (103.7)      (84.6)   (79.9)
                                              ----------  ---------    -------      -------    --------  -------
     OPERATING INCOME                        $     64.3   $  126.5     $140.4     $   21.0    $  159.2   $468.7
----------------------------------------------------------------------------------------------------------------
<FN>
(1)     See  page  6  for  the  businesses  included  in  this  classification.
(2)     Adjusted  Operating  EBITDA  represents  net  income,  excluding  discontinued  operations,
cumulative  effect  of  change in accounting principle, non-operating income and expense, interest,
taxes,  depreciation,  amortization  and  Significant  or  Unusual  Items  (see  below).
(3)     Includes  Significant  or  Unusual  Items  shown  on  page  8  and  page 17 of Management's
Discussion  and  Analysis  of  Financial  Condition  and  Results  of  Operations.
(4)     The  increase  in  consolidated  depreciation  and  amortization  in 2000 and 1999 resulted
primarily  from  Chemical and Consumer Adhesives acquisitions. Combined Companies' depreciation and
amortization changes reflect that described for consolidated as well as the depreciation associated
with  Foods 1999 enterprise-wide systems implementation and plant improvements, partially offset by
reductions  in depreciation expense due to the sale of Foods unaligned businesses in 2000, 1999 and
1998.
</TABLE>
CONSOLIDATED  SUMMARY

Net  Sales
----------
Consolidated  sales  increased $149.3 million, or approximately 11%, to $1,524.0
million  in  2000  from  $1,374.7  million  in  1999.  The  increase in sales is
attributed  primarily  to  improved  volumes in the Chemical business, increased
Chemical  selling  prices, the impact of Chemical 1999 and 2000 acquisitions and
the  May  2000  Consumer  Adhesives  acquisition.

Adjusted  Operating  EBITDA
---------------------------
Adjusted  operating  EBITDA  decreased  $23.6  million, or approximately 11%, to
$191.3  million  in  2000 from $214.9 million in 1999. The decrease is primarily
due   to  increases  in  raw  material costs in the Chemical business, that more

                                       13
<PAGE>
than  offset  the  impact  of  improved  volumes,  as well as the settlement and
incurrence of  various  corporate  liabilities  and  expenses.

COMBINED  SUMMARY

Net  Sales
----------
Combined  sales  increased  $172.1  million,  or  approximately  9%, to $2,094.7
million  in  2000  from  $1,922.6  million  in  1999.  The increase is primarily
attributed  to  increased Foods volumes due to new product introductions and the
factors  described  above  for  consolidated  net  sales.

Adjusted  Operating  EBITDA
---------------------------
Combined  adjusted  operating  EBITDA  decreased $38.7 million, or approximately
17%,  to  $190.2 million in 2000 from $228.9 million in 1999. In addition to the
consolidated  factors  described  above,  Foods'  adjusted operating EBITDA from
ongoing  operations  decreased  due  primarily  to the absence of 1999 favorable
litigation  settlements  and  2000 new product launch costs, partially offset by
improvements  in  sauce  and  a  reduction  in  administrative  expenses.

2000  VS.  1999

Chemical
--------
Chemical  sales  of  $1,336.4  million  in  2000  were  up  $112.8  million,  or
approximately  9%,  from  $1,223.6  million in 1999.  The most significant items
that  positively  impacted  2000  sales  were  improved volumes of higher-priced
specialty  products, higher selling prices for forest products resins, primarily
in  North America, two acquisitions in the United States, and one acquisition in
Europe.  The  most  significant  items that negatively impacted sales were lower
selling  prices  for melamine products, unfavorable currency exchange rates, and
the  exit  from  certain non-core businesses in the United States, Latin America
and  the  Philippines.

Overall  volume,  excluding the effect of acquisitions and strategic realignment
activities,  was  only  1.2% ahead of prior year, but still had a positive $70.6
million  impact  on  2000  sales.  The  positive  impact was driven primarily by
substantial volume improvements in UV coatings and oilfield products, which have
significantly  higher  per  unit  selling  prices  (as  measured in metric tons)
compared to all other products.  Higher volumes of melamine crystal and melamine
based  resins  also  had a positive impact on 2000 sales.  The improvement in UV
coatings primarily reflects an increase in the Company's share of the market and
market  growth  in demand for optical fiber.  Oilfield products volume benefited
from  increased  drilling  activity, which reflects substantially higher natural
gas and oil prices.  Melamine products volume reflects increased export sales of
melamine crystal, due to tightening global supply, and increased market share of
high-pressure  laminates.  North  America forest products volume was essentially
flat compared to the prior year and reflects aggressive competitor pricing and a
downturn  in housing starts throughout the second half of the year, particularly
in  the  fourth  quarter that offset strong housing and construction activity in
the  first  half  of  the  year.

In  2000,  the Company  acquired  the formaldehyde and certain other assets from
BCP, which  provided incremental 2000 sales of $21.3 million. The second quarter
1999 acquisition of Spurlock Industries, Inc. in the United States and the third
quarter  1999  acquisition  of  Blagden  Chemicals,  Ltd.  in Europe contributed
incremental 2000 sales  of  $12.8  million  and  $22.8  million,  respectively.

Overall higher selling prices in 2000 had a $32.7 million net positive impact on
sales.  The  increase  reflects  generally  higher  selling  prices globally for
forest  products  resins and formaldehyde, partially offset by lower pricing for
melamine  crystal  and  melamine based resins, as well as the impact of downward
pressure  on selling prices due to very competitive market conditions across all
businesses.  The  generally higher selling prices for forest products resins and
formaldehyde  reflect  the  partial  pass-through  of  substantially  higher raw
material  costs.  The  lower  pricing  for melamine products reflects the global
market  imbalance  for  melamine  crystal  that worsened throughout 1999 and has
persisted throughout most of 2000.  A substantial portion of the Company's sales
volume,  especially  for  North America forest products, is sold under contracts
that  provide  for  monthly  or  quarterly  selling  price  adjustments based on
published  cost  indices for the Company's primary raw materials (i.e. methanol,
phenol  and  urea).  During  the  first  quarter of 2000, the costs of these raw
materials  were  generally  lower than prior year, therefore selling prices were
generally  lower; however, the cost of all three primary raw materials escalated
significantly over the last three quarters, which resulted in upward adjustments
in  selling  prices.

                                       14







<PAGE>
Unfavorable  currency  exchange  rates,  primarily  in  the  United  Kingdom and
Ecuador,  had  an unfavorable impact on 2000 sales of approximately $28 million.
The  unfavorable  exchange  rate  for  Ecuador  reflects  significant  currency
devaluation  throughout  1999  and  through  May  2000  when  the local currency
exchange  rate  was  fixed  to  the  United  States  dollar.

The  1999 sale of the non-strategic United States molding compounds business and
closures  or  sales  of  non-strategic  businesses  in  Latin  America  and  the
Philippines  caused 2000 sales to be approximately $23 million lower compared to
the  prior  year.

Adjusted  operating  EBITDA  of  $189.7  million  in  2000 was $24.2 million, or
approximately  11%,  lower  than  prior year adjusted operating EBITDA of $213.9
million.  The decline reflects a very difficult business environment, especially
over  the  second  half of the year.  A slowing economy, escalating raw material
costs,  intense competitor pricing activity, and unprecedented natural gas costs
in  the  latter  part  of  the  year all combined to have a significant negative
impact  on  2000  operating  results.  Substantial  margin erosion and generally
higher  plant operating and distribution costs were partially offset by improved
volume  of higher-priced specialty products, more favorable purchasing contracts
for  certain  raw  materials  and the impact of acquisitions.  Profit margins in
North  America  forest  products were significantly impacted by the inability to
fully  recover rapidly escalating costs of methanol, phenol and urea.  Effective
recovery  of  these  rising  costs  was curtailed by delayed pricing adjustments
allowed under supply contracts and competitive pressures to keep prices down.  A
substantial  amount  of  North America forest products sales are based on supply
contracts  that  provide  only  monthly  or quarterly pricing adjustments, which
cause  price increases to lag raw material cost increases during times of rising
raw  material  costs.  Profit  margins  for  melamine crystal and melamine based
resins  were  also  negatively  impacted  by both the high cost of urea and high
natural  gas  cost  since  the  melamine  crystal  production  process  consumes
significant  energy.  Higher  plant operating costs reflect higher energy costs,
while  higher  distribution  costs  reflect  increased  export sales of melamine
crystal  and  generally  higher  fuel  costs.

Consumer  Adhesives
-------------------
Consumer  Adhesives'  net sales for the year were $147.4 million, an increase of
$46.9  million,  or  approximately  47%, compared to 1999 net sales for the same
period  of  $100.5  million.  The  increase is primarily attributable to the May
2000  acquisition  of  a  Canadian  based business as well as an approximate 15%
increase  of  base  business  volume.

Consumer  Adhesives' adjusted operating EBITDA for the year was $23.2 million, a
$6.3  million, or approximately 37%, increase over 1999 EBITDA of $16.9 million.
The increase is primarily due to higher gross margin from the May acquisition of
the  Canadian  based  business  that  exceeded  increases  in  general  and
administrative  and marketing expenses also associated with the May acquisition.
Higher  volumes  in  the  base  business  were  substantially  offset  by higher
marketing costs and raw material and distribution costs resulting primarily from
higher  natural  gas and oil costs. The increase in Consumer Adhesives marketing
expense  was  the  primary  reason  for the increase in marketing expense on the
Consolidated  Statement  of  Operations.

Corporate  and  Other
---------------------
Adjusted  operating EBITDA decreased $11.6 million to a loss of $22.3 million in
2000 from a loss of $10.7 million in 1999. The higher net expense, classified as
general  and  administrative  expenses,  is  primarily due to the incurrence and
settlement  of various corporate liabilities and expenses of $15.0 million and a
$7.6  million charge for certain benefit plan settlements, partially offset by a
$10.5  million gain on the sale of certain rights to harvest shellfish (see Note
4  to  the  Consolidated  and  Combined  Financial  Statements).

Businesses  Sold  or  Distributed
---------------------------------
The  businesses  sold  or  distributed  classification  represents the Company's
infrastructure  management  services  business  and  printing inks business. The
change  in  net  sales  and  adjusted operating EBITDA of $10.4 million and $5.9
million, respectively, primarily reflects the distribution of the infrastructure
management  services  business  in  February  2000.

Foods
-----
Foods'  sales  for  the year ended December 31, 2000 increased $22.8 million, or
approximately  4%,  to  $570.7  million  from $547.9 million in 1999.  Excluding
sales  of $11.1 million from Foods Unaligned businesses sold in 1999, sales from
Foods'  ongoing  businesses  increased  $33.9 million, or approximately 6%.  The
increase   was   led   by   the   introduction  of  a  new  line  of pasta-based
microwave   meals   called   It's   Pasta    Anytime.    In   addition,   Foods'
sales    improved    with    growth    in     sauce     volumes  as  new product
introductions    and    expanded    distribution   led    to  increased   market


                                       15

<PAGE>
shares  in  the  US  and  Canada.  These  improvements were partially offset  by
declines  in  domestic  pasta  and  bouillon  sales.

Foods'  adjusted operating EBITDA declined $12.2 million to $2.9 million in 2000
from  $15.1 million in 1999.  Excluding the impact of Foods Unaligned businesses
sold  in  1999 and a $9.3 million gain on favorable settlements of litigation in
1999,  ongoing  adjusted  operating EBITDA decreased $1.3 million.  During 2000,
Foods  incurred  significant  product launch costs related to It's Pasta Anytime
that  more than offset gross profit generated by incremental sales.  These costs
included  advertising,  slotting fees paid to retailers to gain shelf space, and
trade  and  consumer  promotion expenditures.  As a result of the launch-related
costs,  It's  Pasta  Anytime's  adjusted  operating EBITDA declined from 1999 by
approximately  $22  million.  The  investment in It's Pasta Anytime overshadowed
significant improvements in the sauce business and decreases in selling, general
and  administrative  costs.   Sauce's   adjusted   operating   EBITDA   improved
approximately  $10  million  due  primarily  to  higher  volumes in domestic and
international  markets and lower raw material costs.  Lower selling, general and
administrative  costs  of  approximately  $11 million were  primarily due to the
absence of 1999 implementation costs associated with enterprise-wide information
technology  systems and a workforce  reduction  program  implemented  in  2000.

1999  vs.  1998

Chemical
--------
Chemical  sales  in  1999 decreased $11.9 million, or approximately 1%, from the
prior  year. The most significant items that negatively impacted 1999 sales were
generally  lower  pricing, unfavorable currency exchange rates in Latin America,
and  the  prior  year  exit  from  certain non-core businesses in North America,
Europe  and  Latin America. These declines were substantially offset by improved
volumes,  primarily  in the North America forest products resins and UV coatings
businesses,  and  two  acquisitions  in  the  United  States  and  Europe.

Significantly  lower  pricing, which negatively impacted sales by $76.5 million,
reflects  competitive  market  conditions  as  well as contractual arrangements,
primarily in North America, that require pass-through of significantly lower raw
material  costs,  primarily  for  methanol,  phenol  and  urea.

Unfavorable  currency  exchange rates, due primarily to the significant currency
devaluation  in Brazil in early 1999, had an unfavorable impact on 1999 sales of
$58.0  million.

The  1998  divestitures  of  the  North  America paper resins business and Latin
America  plastic  films  business  and  the 1998 closure of a European operation
caused  1999  sales  to be $30.7 million lower versus the prior year. The second
quarter  acquisition  of  Spurlock  Industries,  Inc.  and  the  third  quarter
acquisition  of  Blagden  Chemicals,  Ltd. contributed incremental 1999 sales of
$17.5  million  and  $34.1  million,  respectively.

Overall  volume  improvement  of  approximately  10%,  excluding  the  effect of
acquisitions  and  divestitures,  had  a positive impact on 1999 sales of $104.9
million,  with  most  of  the  improvement  coming from the North America forest
products resins and UV coatings businesses. The improved volume in North America
forest  products  resins  is  driven  by continued low interest rates and strong
housing  and  construction activity. The improved volume in UV coatings reflects
significant  demand  for  optical  fiber.

Adjusted  operating  EBITDA  increased $30.3 million, or approximately 17%, from
1998.  The  improvement  is  due  primarily  to the significantly higher volume,
including  increased  volume  from acquisitions, but also reflects overall gross
margin  improvement.  Negatively  impacting adjusted operating EBITDA are higher
selling,  general  and  administrative  expenses  and  the effect of unfavorable
currency  exchange  rates,  primarily  in  Latin  America.  The  gross  margin
improvement  reflects  significantly  lower  raw  material  costs,  which  were
substantially  offset  by  lower  selling  prices  that reflect both contractual
arrangements,  under  which  pricing is tied directly to raw material costs, and
continuing competitive pressures in the market. As a result of specific programs
to  improve  manufacturing  processes and other manufacturing cost reduction and
control  programs,  overall  plant  processing costs were flat compared to prior
year.

Consumer  Adhesives
-------------------
Consumer  Adhesives'  net  sales  increased $8.3 million or approximately 9%, to
$100.5  million  from  $92.2  million.  The  increase reflects higher volume and
improved  mix.

                                       16








<PAGE>
Consumer  Adhesives'  adjusted  operating  EBITDA  increased  $3.3  million  or
approximately  24%  in  1999  to $16.9 million from $13.6 million.  The increase
reflects  higher  volume,  improved  mix  and  productivity  improvements.

Corporate  and  other
---------------------
Adjusted  operating  EBITDA declined $1.2 million, to a loss of $10.7 million in
1999  from a loss of $9.5 million in 1998, principally due to higher general and
administrative  expense.  Lower  net  expense  of  $1.8  million due to gains on
disposal  of  property  in  1999  compared  to  losses in 1998 and improved cost
management  resulting  in lower 1999 salary costs of $1.8 million were more than
offset  by  a  net  increase  in  1999 expenses related to settlement of various
corporate  liabilities  and  administrative  expenses.

Businesses  sold  or  distributed
---------------------------------
The  businesses  sold  or  distributed  classification  includes  the  Company's
infrastructure  management  services business and printing inks business in 1999
and  1998 and the commercial and industrial wallcoverings business in 1998 only.
Net  sales  and  adjusted  operating  EBITDA  for  the infrastructure management
services business and the printing inks business are consistent with prior year.

The  commercial  and  industrial  wallcoverings  business  was divested in 1998,
resulting  in no reported sales or adjusted operating EBITDA in 1999 compared to
sales  and  adjusted  operating  EBITDA  of  $36.7  million  and  $0.5  million,
respectively,  in  1998.

Foods
-----
Foods'  sales  for the year ended December 31, 1999 decreased $158.2 million, or
approximately  22%,  to  $547.9  million  from $706.1 million in 1998. The Foods
Unaligned  businesses sold during 1999 and 1998 accounted for $108.7 million, or
approximately  69%,  of the decline. Net sales from ongoing businesses decreased
$49.5  million.  The  decline  was  driven  by four key factors: 1) management's
decision to shift its promotion strategy on a portion of its pasta line to Every
Day  Low  Pricing,  which  reduced  sales  offset  by  a  reduction in promotion
spending;  2)  reduction  in  customer  inventories,  especially  in  pasta;  3)
management's  decision  to  de-emphasize non-core, lower profit pasta brands and
channels;  4)  increased  competition  in  the foodservice and soup and bouillon
businesses.

Foods'  adjusted  operating EBITDA increased $5.4 million, or approximately 56%,
to  $15.1 million in 1999 from $9.7 million in 1998. This increase is attributed
to the $3.3 million improvement of Foods Unaligned businesses and an improvement
in  Foods'  ongoing  operations  of  $2.1  million.  Most of the Foods Unaligned
businesses  were  sold in 1998 with all Foods Unaligned business sales completed
in  1999.  When  excluding $9.3 million of gains on the favorable settlements of
litigation  in  1999, ongoing operating results declined $7.2 million. Lower raw
material costs and improved pasta manufacturing operations were offset by  costs
associated  with  the  implementation  of new systems. Additionally, incremental
marketing  investments  primarily  related  to  new products and reduced volumes
previously  mentioned,  contributed  to  the  decline.

SIGNIFICANT  OR  UNUSUAL  ITEMS  EXCLUDED  FROM  ADJUSTED  OPERATING  EBITDA:
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                          CONSOLIDATED                           COMBINED
                                              ---------------------------------      -------------------------------
(Dollars in millions)                           2000          1999         1998        2000         1999        1998
--------------------------------------------------------------------------------------------------------------------
<S>                                             <C>           <C>          <C>         <C>          <C>         <C>
(Loss) gain on disposal of businesses, net    $ (0.9)       $  7.4        $ 8.3      $  3.9       $ 56.5      $380.0
Business realignment, asset
    write-offs and other charges               (63.7)        (41.6)        (2.5)      (69.4)       (41.6)      (25.8)
                                              -------       -------       -------    ------       -------     -------
                                              $(64.6)       $(34.2)       $ 5.8      $(65.5)      $ 14.9      $354.2
---------------------------------------------------------------------------------------------------------------------
Note: See also the Significant or Unusual Items on page 8.
</TABLE>

2000
The  Company's  loss  on disposal of businesses primarily relates to the sale of
the printing inks business partially offset by lower than expected costs related
to  the  sale  of  the  commercial  and  industrial wallcoverings business.  The
Combined  Companies gain on disposal of businesses represents the Company's loss
offset  by  Foods'  gains  of $4.8 million due to lower than expected exit costs
related  primarily  to  the  1998  Signature  Flavors  sale.  (See also  Note  4
to the Consolidated and Combined Financial Statements.)


                                       17



<PAGE>
The Company's business realignment, asset write-offs and other charges represent
costs of $38.4 million related to plant closures in the United States, Argentina
and  the  United  Kingdom.  Also  included  is $25.3 million to exit certain raw
material purchase contracts,  which  extended  through  2002,  in  order to take
advantage  of  opportunities  that have arisen to obtain more favorable pricing.
This  charge  is  reflected  in  cost  of sales in the Consolidated and Combined
Statements  of  Operations.  The  Combined Companies also incurred costs of $5.7
million  related  to  a  Foods  corporate  workforce  reduction  program.

1999
The  Company's 1999 gain on disposal of businesses primarily relates to gains on
the  sale  of  the commercial and industrial wallcoverings business due to lower
than  expected  exit  costs.  In  addition  to  the Company's gain, the Combined
Companies' 1999 gain on disposal of businesses primarily includes gains of $48.6
million on the sale of Foods Unaligned businesses due to additional proceeds and
lower  than  expected exit costs related to the 1998 KLIM sale. (See also Note 4
to  the  Consolidated  and  Combined  Financial  Statements.)

The  Company  and  Combined  Companies'  business  realignment  charges of $41.6
million  include a Chemical plant expansion project that was cancelled resulting
in  the write-off of engineering, equipment and other costs of $25.0 million. In
addition,  certain  Chemical  operations in the Philippines, Brazil, and Uruguay
were closed as part of an effort to consolidate operations, resulting in a total
charge  of  $16.6  million.

1998
The  Company's  gain on disposal of businesses relates to the sale of a Chemical
business  in  Latin  America.  The  Combined  Companies'  gain  on  disposal  of
businesses  reflects the Chemical gain as well as gains of $371.7 million on the
sale  of  Foods  Unaligned  businesses. (See also Note 4 to the Consolidated and
Combined  Financial  Statements.)

The Company's business realignment charge of $2.5 million relates to the closure
of  a  European Chemical operation. The Combined Companies' business realignment
charges  include  the  Chemical  charge  as well as charges for the closure of a
Foods  plant  and  impairment of assets of two other Foods plants totaling $23.3
million.

NON-OPERATING  EXPENSES  AND  INCOME  TAX  EXPENSE:
---------------------------------------------------

NON-OPERATING  EXPENSES
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                        CONSOLIDATED                          COMBINED
                                              --------------------------------      ----------------------------
(Dollars in millions)                           2000         1999         1998        2000       1999       1998
----------------------------------------------------------------------------------------------------------------
<S>                                             <C>          <C>          <C>          <C>       <C>        <C>
 Interest expense                             $ 62.7       $ 63.1       $ 64.4      $ 62.7     $ 63.2     $ 65.5
 Affiliated interest expense                    17.0         19.1         22.8         2.4        5.3        5.4
 Interest income and other                     (17.8)       (34.8)       (30.9)      (15.5)     (33.6)     (34.7)
 Investment write-downs and other charges       68.0          3.0         26.7        68.0        3.0       26.7
                                              ------       ------       ------      ------     ------     ------
                                              $129.9       $ 50.4       $ 83.0      $117.6     $ 37.9      $62.9
----------------------------------------------------------------------------------------------------------------
</TABLE>

2000  vs.  1999
---------------
Consolidated  non-operating  expenses increased $79.5 million for the year ended
December  31, 2000 compared to the year ended December 31, 1999. The increase is
primarily  attributable to increased investment write-downs from $3.0 million in
1999  to  $48.0  million  in  2000  (See Note 8 to the Consolidated and Combined
Financial  Statements)  and recording a liability of $20.0 million for potential
costs  related  to  the  financial  decline of a limited partnership for which a
wholly  owned  subsidiary of the Company serves as general partner. (See Note 19
to  the Consolidated and Combined Financial Statements)  Other changes include a
reduction  in  interest income of approximately $15 million due to lower average
cash  balances  in  2000  compared  to  1999  and reduced unrealized gains on an
interest  rate  swap  of approximately $6 million, which terminated in September
2000.  These  decreases  were  partially  offset  by  higher  dividend income of
approximately  $5  million  from  an  affiliate  and reduced affiliated interest
expense due to lower average loan balances outstanding in 2000 compared to 1999.

Combined  non-operating  expenses  increased  $79.7 million  for  the year ended
December  31, 2000 compared to the year ended December 31, 1999. The increase is
primarily  attributable  to  the  consolidated  factors  discussed  above.

                                       18





<PAGE>

1999  vs.  1998
---------------
Consolidated  non-operating  expenses decreased $32.6 million for the year ended
December  31,  1999 to $50.4 million from $83.0 million in 1998. The decrease is
primarily  attributable  to  reduced  investment write-downs. (See Note 8 to the
Consolidated  and  Combined  Financial  Statements.)  Interest  income and other
increased  $3.9 million primarily due to the unrealized gain on an interest rate
swap  which is marked to market, offset partially by lower average cash balances
in  1999.

Combined  non-operating  expenses  decreased  $25.0  million  for the year ended
December 31, 1999 to $37.9 million from $62.9 million. The decrease is primarily
attributable  to  the investment write-downs discussed above.

INCOME  TAX  EXPENSE
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
                                                    CONSOLIDATED                        COMBINED
                                            -----------------------------     ----------------------------
(Dollars in millions)                        2000       1999        1998       2000       1999      1998
----------------------------------------------------------------------------------------------------------
<S>                                          <C>        <C>         <C>        <C>        <C>       <C>
Income tax (benefit) expense               $(6.6)     $ 20.8       $33.8     $(68.0)     $ 31.7   $ 133.4
Effective tax rate                           10%        27%         59%        N/M         26%       33%
----------------------------------------------------------------------------------------------------------
</TABLE>

2000  vs.  1999
---------------
The  2000  consolidated  income tax benefit primarily reflects a settlement with
the  Internal  Revenue  Service  ("IRS")  and the impact of usage limitations on
foreign  tax  credits.  As  a result of a settlement reached with the IRS in the
second  quarter  of  2000,  the  Company  recorded net tax expense of $5 million
consisting  of valuation reserves recorded on foreign tax credits of $30 million
that  are no longer likely to be utilized, substantially offset by a $25 million
reduction  of  amounts  established for tax issues related to the divestiture of
certain  segments  of  the  Company's  business  that  are  no longer considered
necessary.  In  addition,  approximately  $10  million of income tax expense was
recorded  on  foreign  source income because related foreign tax credits are not
expected  to  be  utilized  within the expiration period.  The 1999 consolidated
effective  rate  reflects  a  higher  portion of net income derived from foreign
operations  and  the  effect  of  lower  tax  rates  in  foreign  jurisdictions.

The 2000 combined income tax benefit primarily includes the consolidated factors
discussed  above,  taxes  provided  for  anticipated divestiture liabilities and
amounts  related to the IRS settlement for the sale of Foods that are classified
as  discontinued operations in consolidated are classified as income tax benefit
for  combined.  The  classification of these amounts differ between consolidated
and  combined  because  combined  does  not  reflect  the  sale  of  Foods  as a
discontinued  operation.  (See Note 6 to the Consolidated and Combined Financial
Statements.) The 1999 combined effective rate reflects differences applicable to
foreign  divestitures.

1999  vs.  1998
---------------
The  lower 1999 consolidated effective tax rate reflects net income derived from
foreign  operations,  offset  by  foreign  tax  credits on foreign taxes paid at
significantly  higher  rates than the Company's effective tax rate in the United
States.

In  addition  to  the  discussion  above  for  consolidated  tax rates, the 1999
combined  effective  tax  rate  primarily  reflects  lower  net  taxes primarily
applicable  to  foreign  divestitures.

CASH  FLOWS:
------------

OPERATING

2000  vs.  1999
---------------
Consolidated  operating  activities  provided  cash  of  $23.3  million  in 2000
compared  to  $71.7  million  cash provided in 1999, a decline of $48.4 million.
Significant  outflows  compared  to  prior  year  included a decline in adjusted
operating  EBITDA  of  $23.6  million  (see  page  12),  a  change  in  accounts
receivable   and     inventory     cash     flows     of    $40.4   million  and
$11.8      million,      respectively,     primarily     in     the     Chemical
business    due    to    higher    raw    material     costs    passed   through
to  customers  and  included  in  inventory,  a  $25.3  million  payment in 2000
to exit certain Chemical raw material supply contracts and lower interest income
of  $15.3  million.  These  increased  outflows were partially offset by a $14.1
million  increase   in   trade    payables    primarily    in    the    Chemical
business due to    higher    raw    material    costs,   lower tax  payments  of
                                       19
<PAGE>
$26.9  million, a $3.6 million repayment  received  from  CCPC Acquisition Corp.
for  interest accrued on   the   loan  that  was  repaid in 2000, a $3.7 million
payment received  from   Wise,  upon its sale, related to its retirement benefit
plans, the absence of a 1999 payment of approximately   $13.0  million to settle
certain   long-term   disability claims and the    absence  of  1999  settlement
payments of $6.4 million related to divested businesses.

Combined  cash  provided  by  operating  activities  of  $34.0 million was $44.5
million  less  than  the  $78.5  million  provided  in 1999.  In addition to the
consolidated  factors  discussed above, after eliminating the Wise receipts, the
Combined Companies had additional outflows due to further reductions in adjusted
operating  EBITDA  of  $15.1  million  and  higher  Foods' tax payments of $24.0
million.  These  additional  combined   outflows   were    offset    by    lower
Foods'  inventory balances of $14.0 million primarily due to the use of tomatoes
Purchased  in  the  fourth  quarter of 1999, improved Foods' accounts receivable
Cash  flows  of $11.2 million  due  primarily to the absence  of 1999 collection
issues associated with systems implementations, improvement in  Wise  operations
(classified  as  discontinued  operations)  of  $9.6 million, and the absence of
1999 payments of $7.2  million related to the divestiture  of  Foods'  Unaligned
businesses.

1999  vs.  1998
---------------
Consolidated cash provided by operating activities totaled $71.7 million in 1999
and  $46.0  million  in 1998, an increase of $25.7 million. The most significant
components  of the increase include an overall improvement in adjusted operating
EBITDA  of  $29.4  million  (see  page 12), an increase of $5.4 million due to a
smaller  increase  in  inventories  in  1999  primarily in the Chemical business
caused  by  reduced  raw  material  costs  and inventory reduction programs, and
improvements due to the timing of trade payments of $31.3 million, all partially
offset  by  higher  net  interest  and  tax  payments  of  $32.4  million.

Combined  cash  provided  by operating activities totaled $78.5 million in 1999,
compared to cash used in operations of $33.2 million in 1998. The $111.7 million
improvement  consisted primarily of an overall improvement in adjusted operating
EBITDA  of  $34.5 million (see page 12), improvements due to the timing of trade
payments  of  $38.2  million  and lower tax payments of $67.5 million related to
gains  on  divested  businesses. These improvements were partially offset by net
reduced operating cash inflows related to divested businesses and an increase in
1999  inventories  of  $13.0  million  to  take  advantage of favorable supplier
pricing.

INVESTING

2000  vs.  1999
---------------
Consolidated  investing  activities used $195.7 million cash in 2000 compared to
$229.5  million  cash  used  in  1999, a decrease of $33.8 million. The decrease
primarily  represents the absence of a 1999 $50.0 million investment in the form
of   junior   preferred   stock  in  WKI  and  an  $8.9  million  collection  of
outstanding  debt  in  2000  which eliminated the Company's  investment  in Wise
(See  Note  18  to  the  Consolidated  and   Combined   Financial   Statements),
partially  offset  by  increased capital expenditures of $29.7 million primarily
for Chemical plant expansions. Divestiture proceeds of $10.9  million  in  2000,
primarily from the sale of Chemical's printing inks business, were ahead of 1999
proceeds of $7.6 million from the sale of Chemical's molding compounds business.
Acquisitions  in  2000 of $118.1 million by Consumer Adhesives and Chemical (See
Note  4  to  the  Consolidated and Combined Financial Statements) were less than
1999  acquisitions  of  $119.6  million  for  Spurlock,  Blagden  and the resins
manufacturing  plant  in  Minnesota.

Combined  investing activities used $253.9 million cash in 2000 compared to 1999
cash  used  of  $266.1  million,  a  $12.2 million decrease.  In addition to the
consolidated  factors  described above, after eliminating the Wise collection of
$8.9 million, the decrease in combined investing activities reflects the absence
of  $23.6  million of proceeds from the 1999 sale of Foods Unaligned businesses,
partially  offset by reduced Foods' capital expenditures of $11.4 million due to
the  absence  of  the  1999  enterprise-wide  system  implementation.

1999  vs.  1998
---------------
Consolidated  investing  activities used $229.5 million cash in 1999 compared to
cash  generated  of  $336.6  million  in 1998, a decrease of $566.1 million. The
purchases   of   Spurlock,   Blagden   and  the  resins manufacturing  plant  in
Minnesota by Chemical used $119.6 million in 1999 compared to $14.4 million used
to purchase Sun Coast Industries, Inc. in 1998. The divestiture proceeds in 1999
include $7.6 million from  the  sale  of  Chemical's  molding compounds business
compared  to  divestiture  proceeds  in  1998 of $304.8 million from the sale of
Decorative  Products,  $15.5  million  from the sale of a Latin American plastic
films    business,    and    $15.6    million    from    the    sale   of    the
commercial  and industrial  wallcoverings   business.  Investing   activity   in
1998    also    includes    $67.6    million   relating   to   net repayments of

                                       20


<PAGE>

affiliated borrowings by Foods and Wise, compared to  net  Foods  and  Wise 1999
affiliated borrowings of $2.3 million and a 1999 $50.0 million investment in the
form of 16% cumulative junior preferred stock in WKI.

The  Combined  Companies investing activity used $266.1 million in 1999 compared
to generating cash of $972.4 million in 1998, a decrease of $1,238.5 million. In
addition  to  the  above,  the  Combined  Companies'  1999  divestiture activity
reflects  $23.6  million of proceeds from the sale of Foods Unaligned businesses
compared  to  $733.2  million in 1998. The 1999 and 1998 return from (investment
in)  affiliate  of  ($2.3)  million  and  $67.6  million,  respectively,  in the
consolidated  investing  flows  is eliminated in the combined flows as the Foods
and  Wise  operations  are  included  in  the  Combined  Companies.

Capital  expenditures  for  the Company in 1999 increased $22.3 million to $74.8
million  in  1999  from  $52.5  million  in  1998.  Capital expenditures for the
Combined Companies increased $41.7 million to $141.9 million in 1999 from $100.2
million  in  1998.  The  increase  is  primarily  the  result of plant expansion
projects to increase capacity in the Chemical operations, and the implementation
of  an  enterprise-wide system and new product manufacturing line investments in
the  Foods  business  for  combined.

FINANCING

2000  vs.  1999
---------------
Consolidated  financing  activities  generated  cash  of  $5.0  million  in 2000
compared  to cash used of $319.1 million in 1999.  The $324.1 million difference
is  primarily  due  to 2000 affiliated borrowings and receipts of $86.7 million,
compared  to 1999 net affiliated repayments and loans  of  $225.5  million  (see
1999 vs. 1998). Affiliated activity in 2000 is comprised primarily of borrowings
from BWHLLC of $61.4 million and receipts from CCPC Acquisition Corp.  of  $56.2
million,  partially offset by repayments to Foods of $31.0 million. In addition,
2000  included  short-term  debt  borrowings of  $33.3  million compared to 1999
repayments  of $3.8 million. Partially offsetting these net improved inflows are
$17.6  million  of increased net long-term debt repayments (primarily Industrial
Bonds) and the distribution of $10.3 million in cash  temporarily  held  by  the
infrastructure  management  services  business for the benefit of its customers.
The $10.3 million distribution represents payroll related withholdings for which
the infrastructure management services business was liable when the business was
distributed  to  the  Company's  parent  (See  Note  18  to the Consolidated and
Combined  Financial  Statements).

Combined  financing  activities generated cash of $35.6 million in 2000 compared
to  cash used in 1999 of $279.5 million. The $315.1 million difference primarily
includes  the  consolidated  improvement  above, excluding net affiliated inflow
differences  between  years  related  to  Foods  of  $17.9  million,  which  is
eliminated, additional short-term debt borrowings of $6.3 million and additional
long-term  debt  borrowings  of  $3.0  million.

1999  vs.  1998
---------------
Consolidated  financing  activities used $319.1 million cash in 1999 compared to
cash  generated  of  $105.9 million in 1998. The difference of $425.0 million is
primarily  due  to  $411.8  million  of  1998  affiliated borrowings from Foods,
representing  proceeds  from the sale of Foods Unaligned businesses, and BWHLLC,
compared to 1999 net affiliated repayments and loans of $225.5 million. The 1999
affiliated  activity  includes  repayments to BWHLLC and Foods of $169.3 million
and  a  short-term loan of $56.2 million to CCPC Acquisition Corp., an affiliate
of  the  Company's  parent,  as  described  in  Note  18 to the Consolidated and
Combined  Financial  Statements.  The  1998 borrowings from Foods were partially
offset  by  repayment  of  a  $236.0  million  revolving  line  of  credit.

Combined  financing  activities  used  $279.5 million in 1999 compared to $441.9
million  used  in  1998.  The  $162.4  million increased use of cash in 1998 was
primarily  due  to  $236.7 million repayment of a revolving line of credit using
business  divestiture  proceeds  and  a  $272.2  million distribution to a Foods
affiliate,  partially  offset  by 1998 borrowings from BWHLLC of $134.3 million.
The  1999  financing  activities  include net repayment of affiliated borrowings
from BWHLLC of $123.4 million and a short-term loan of $56.2 million provided to
CCPC  Acquisition  Corp. (See Note 18 to the Consolidated and Combined Financial
Statements).


                                       21











<PAGE>
LIQUIDITY  AND  CAPITAL  RESOURCES:
-----------------------------------

As  of  December  31,  2000,  the  Company and the Combined Companies had $809.0
million  in  contractually committed lines of credit (the "Credit Agreement") of
which  $714.0 million (net of $95.0 million in letters of credit) was available.

The  cash  held  by  the  Company of $27.8 million and the Combined Companies of
$43.2  million  as  of December 31, 2000 and the cash available under the Credit
Agreement  may  be  used  for acquisitions and to fund working capital needs and
capital  expenditures.

As part of the common control exercised over the Company and Combined Companies,
procedures  are  established to enter into borrowings between the business units
at  market  interest  rates.

The  Company's  and  Combined  Companies'  planned 2001 capital expenditures are
approximately  $92  million and $102 million, respectively. The budgeted capital
expenditures  include  plans  to  continue  to increase capacity in the Chemical
operations and to further invest in new product manufacturing lines in the Foods
business.  The  capital expenditures will be financed through operations and, if
necessary,  the  available  lines  of  credit.

The  Company  and  Combined  Companies  expect  to have enough liquidity to fund
working  capital  requirements,  support  capital expenditures and pay preferred
dividends  during  2001  and  in  future  years  due to cash from operations and
amounts  available  under  the  Credit  Agreement.

In  the  third quarter of 2000, the Company entered into a credit agreement with
WKI  to  provide  up  to  $40.0  million  of  short-term financing. The original
maturity date of the agreement was December 31, 2000 and was extended into April
2001.  At  December  31,  2000,  $6.1  million  was   outstanding   under   this
agreement.

As  of  December  31,  2000,  the  Company and the Combined Companies had $198.0
million and $214.4 million, respectively, in deferred tax assets that related to
foreign  and  alternative  minimum  tax  credits  as  well  as  net  operating
loss carryforwards. These credits and carryforwards, net of valuation allowances
of  $101.7  million  and  $102.3 million for the Company and Combined Companies,
respectively,  are  expected  to  reduce  future  tax  liabilities.

RISK  MANAGEMENT:
-----------------

The  Company  and  Combined  Companies enter into various financial instruments,
primarily  to  hedge  interest rate risk and foreign currency exchange risk. The
Company  and  Combined  Companies  also  enter  into  raw  materials  purchasing
contracts  and  contracts  with  customers  to  mitigate  commodity price risks.

FOREIGN  EXCHANGE  RISK

In  2000  and 1999, international operations accounted for approximately 32% and
29%  of  the Company's and Combined Companies' sales, respectively. As a result,
there  is exposure to foreign exchange risk on transactions that are denominated
in  a  currency  other  than  the  business  unit's  functional  currency.  Such
transactions  include  foreign  currency  denominated imports and exports of raw
materials  and  finished  goods  (both  intercompany  and third party), and loan
payments  (both  intercompany  and  third  party).  In  almost  all  cases,  the
functional  currency  is  the  unit's  local  currency.

It  is  the  Company's and Combined Companies' policy to reduce foreign currency
cash flow exposure due to exchange rate fluctuations by hedging firmly committed
foreign currency transactions wherever economically feasible. The use of forward
and  option  contracts  protects  cash  flows  against  unfavorable movements in
exchange  rates,  to  the  extent  of the amount under contract. The Company and
Combined Companies do not hedge foreign currency exposure in a manner that would
entirely  eliminate  the effect of changes in foreign currency exchange rates on
net income and cash flow. The Company and Combined Companies do not speculate in
foreign  currency  and  do  not  hedge  foreign  currency translation or foreign
currency net assets and liabilities. The counterparties to the forward contracts
are  financial  institutions  with  investment  grade  credit  ratings.

Foreign  exchange  risk  is  also  mitigated  because  the  Company and Combined
Companies  operate in many foreign countries, reducing the concentration of risk
in  any  one  currency.  In  addition,  foreign  operations have limited imports
and    exports,   reducing   the   potential   impact   of   foreign    currency
exchange      rate      fluctuations.       With     other     factors     being

                                       22







<PAGE>
equal,  such  as  the performance of individual  foreign  economies, an  average
10%   foreign   exchange  increase  or  decrease  in  any  one country would not
materially  impact  operating  results or cash  flow,  except for  Canada  which
would  significantly impact the Company's operating results. Although considered
unlikely, an average 10% foreign exchange increase  or decrease in all countries
may materially impact operating results of the Company and Combined  Companies.

In  accordance  with  current accounting standards, the Company and the Combined
Companies  defer  unrealized  gains and losses arising from contracts that hedge
existing  and identified foreign currency exposure against commitments until the
related  transactions  occur. Gains and losses arising from contracts that hedge
existing assets and liabilities are offset against gains or losses arising  from
the transactions being hedged. (See Recently Issued Accounting Standards section
for new  rules  impacting  the  current  accounting  treatment.)

A  summary  of  forward currency and option contracts outstanding as of December
31,  2000  and  1999,  follows.  All  contracts summarized for 2000 and 1999 are
entered  into by the Company and Combined Companies except the European Monetary
Unit  which  relates  only to the Combined Companies. Fair values are determined
from  quoted  market  prices  at  December  31,  2000  and  1999.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
                                                2000                                       1999
                         -----------------------------------------------  ------------------------------------------------
                           AVERAGE   AVERAGE    FORWARD      FAIR VALUE     AVERAGE   AVERAGE   FORWARD      FAIR VALUE
                             DAYS    CONTRACT   POSITION       LOSS          DAYS     CONTRACT  POSITION     GAIN/(LOSS)
                         TO MATURITY   RATE  (IN MILLIONS) (IN MILLIONS)  TO MATURITY   RATE  (IN MILLIONS) (IN  MILLIONS)
                         ----------- -------- -----------   -----------   -----------  ------  -----------   ------------
<S>                         <C>        <C>     <C>             <C>         <C>         <C>       <C>           <C>
CURRENCY TO BUY
WITH U.S. DOLLARS
-----------------------
Japanese Yen (1)               -         -          -             -          29       112.42     $ 3.7          $ 0.4

CURRENCY TO SELL
 FOR U.S. DOLLARS
-----------------------
Australian Dollars             -         -          -             -          11         0.65       0.5            -
British Pound                 22       1.47     $88.9         $(1.8)         35         1.61      73.1          (0.3)
Canadian Dollars               -         -          -             -          56         1.46       0.3            -
European Monetary Unit         8       0.89       6.9          (0.4)         60         1.01      14.1           0.1
-------------------------------------------------------------------------------------------------------------------------
<FN>
(1) At December 31, 1999, amounts include option contracts of $2.5 million, with
38 average days to maturity, 111.39 average contract rate and fair value gain of
$0.2  million.
</TABLE>

INTEREST  RATE  RISK

The  Company  and  Combined Companies have utilized interest rate swaps to lower
funding  costs  or  to  alter interest rate exposures between fixed and floating
rates  on  long-term  debt. The Company and Combined Companies do not enter into
speculative  swaps  or  other  financial  contracts. As of December 31, 2000 and
1999,  an  interest  rate  swap  was  outstanding with a notional value of $24.3
million.  Although  originally  entered  into  as a hedge, an interest rate swap
having  a  notional  amount of $200 million was determined to no longer meet the
criteria  for hedge accounting and was marked to market until its termination on
September  1,  2000.

Fair  values  of the swaps are independently provided using estimated mid-market
levels. Under interest rate swaps, the Company and Combined Companies agree with
other  parties  to  exchange, at specified intervals, the difference between the
fixed  rate  and  floating  rate interest amounts calculated by reference to the
agreed notional principal amount. On average, the Company and Combined Companies
paid  10.5%  and  received  6.3% in 2000 and paid 10.4% and received 5.2% on the
swaps in 1999. The remaining outstanding swap as of December 31, 2000 matures on
December  1,  2002.  A  1%  increase  or decrease in market interest rates would
result  in  a $0.2 million increase or decrease, respectively, in the fair value
of  the  interest  rate  swap  agreement  at December 31, 2000. A 1% increase or
decrease  in  market  interest  rates would result in a $2.2 million increase or
decrease,  respectively,   in   the   fair  value  of  the  interest  rate  swap
agreements  at   December  31,  1999.   The  Company  and   Combined   Companies
are     exposed    to     credit   related    losses    in     the    event   of


                                       23







<PAGE>
nonperformance by the counterparties to these swaps, although no such losses are
expected as the counterparties are financial institutions  having an  investment
grade  credit  rating.

A  summary of interest rate swaps for both the Company and Combined Companies as
of  December  31,  2000  and  1999  follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                  2000                                 1999
                                      ----------------------------------   ----------------------------------
  NOTIONAL                                       AVERAGE        FAIR                  AVERAGE       FAIR
   AMOUNT       TRADE   TERMINATION    FIXED     RECEIVE       VALUE         FIXED    RECEIVE       VALUE
(IN MILLIONS)    DATE       DATE      PAY RATE     RATE    (IN MILLIONS)   PAY RATE     RATE    (IN MILLIONS)
-------------   -----   -----------   --------   -------    -----------    --------   -------    -----------
<S>              <C>       <C>          <C>        <C>        <C>             <C>        <C>       <C>
$ 24.3        12/01/92    12/01/02     13.65%      6.7%      $   (3.4)      13.65%      5.4%     $    (4.4)
 200.0         9/17/85     9/01/00         -         -              -       10.00%      5.2%         (10.6)
-------------------------------------------------------------------------------------------------------------
</TABLE>
The  interest  rate on most debt agreements is fixed. A 10% increase or decrease
in  the  interest  rate of the variable debt agreements would have an immaterial
effect  on  the  Company's and Combined Companies' net income. The fair value of
publicly  held  debt  is  based  on  the price at which the bonds are trading at
December  31,  2000  and  1999.  All  other debt fair values are determined from
quoted  market  interest  rates  at  December  31,  2000  and  1999.

A  summary  of  the  Company's outstanding debt as of December 31, 2000 and 1999
follows:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                     2000                                               1999 (1)
                  ----------------------------------------------      -----------------------------------------------
                                   Weighted            Fair                             Weighted           Fair
                       Debt         Average            Value              Debt           Average           Value
 Year             (in millions)  Interest Rate     (in millions)      (in millions)   Interest Rate     (in millions)
 ----             ----------------------------------------------      -----------------------------------------------
<S>                  <C>              <C>              <C>                 <C>           <C>               <C>
2001              $     43.5          7.6%        $     43.5          $     1.8         9.5%            $    1.8
2002                     1.4          5.6%               1.4                3.3         8.1%                 3.3
2003                       -            -                  -                  -           -                    -
2004                       -            -                  -                  -           -                    -
2005                       -            -                  -                  -           -                    -
2006  and  thereafter  529.1          8.5%             404.7              536.0         8.4%               451.1
                  ----------                      ----------          ---------                        ---------
                  $    574.0                      $    449.6          $   541.1                        $   456.2
---------------------------------------------------------------------------------------------------------------------
(1)  December  31,  1999  amounts  reflect  outstanding  debt  for  years shown.

A  summary  of  the Combined Companies' outstanding debt as of December 31, 2000 and  1999  follows:
---------------------------------------------------------------------------------------------------------------------
                                     2000                                               1999 (1)
                  ----------------------------------------------      -----------------------------------------------
                                   Weighted            Fair                             Weighted           Fair
                       Debt         Average            Value              Debt           Average           Value
 Year             (in millions)  Interest Rate     (in millions)      (in millions)   Interest Rate     (in millions)
 ----             ----------------------------------------------      -----------------------------------------------
2001               $      44.1        7.5%        $    44.1           $      2.1          7.9%         $     2.1
2002                       2.0        4.8%              2.0                  3.6          7.3%               3.7
2003                       1.0        1.9%              0.9                  0.7          0.2%               0.7
2004                       1.0        1.9%              0.9                  0.8          0.2%               0.8
2005                       0.6        2.9%              0.6                    -            -                 -
2006 and thereafter      531.2        8.5%            406.8                536.9          8.4%             451.8
                   -----------                    ---------           ----------                      ----------
                   $     579.9                    $   455.3           $    544.1                       $   459.1
---------------------------------------------------------------------------------------------------------------------
<FN>
(1)  December  31,  1999  amounts  reflect  outstanding  debt  for  years  shown.
</TABLE>
The  Company  and Combined Companies do not use derivative financial instruments
in  investment   portfolios.   Cash   equivalent  investments  are  placed  with
instruments  that meet credit quality standards. These standards are established
within  the  Company's investment policies, which also limit the exposure to any
one  issue.  At  December 31, 2000, the Company and Combined Companies had $11.1
million  and  $16.0  million,  respectively, invested primarily in time deposits
with  average maturity periods of 28 days and 20 days, respectively, and average
rates  of 5.2% and 5.4%, respectively. At December 31, 1999,  $173.9 million and
$203.0  million  for  the  Company  and  Combined  Companies,  respectively, was
invested primarily in commercial paper, time deposits and money market funds. At
December  31,  1999,  the  average  maturity  period  of  the  commercial  paper
investments  was  25  days with an average interest rate of 6.2% for the Company
and   Combined  Companies.  The   average   maturity   periods   of   the   time
deposits   outstanding  at  December  31,  1999   were   47  days  and  49  days
and   the   average   rates  were   5.8%  and   5.5%   for   the   Company   and
                                       24
<PAGE>
Combined  Companies, respectively.  The average  rate  on the December  31, 1999
money  market  fund investments was 5.7% for the Company and Combined Companies.
Due to the short maturity of the Company's cash equivalents, the carrying  value
on these investments approximates fair value and the interest rate risk is   not
significant. A 10% increase  or decrease in interest returns  on  invested  cash
would  have  an  immaterial effect on  the Company's and Combined Companies' net
income  and  cash  flow  at December  31,  2000  and  1999.

The  $6.1  million  carrying  value  of the Company and Combined Companies' loan
receivable  from  WKI  approximates  fair  value as management believes the loan
bears  interest  at a market interest rate. (See Note 18 to the Consolidated and
Combined  Financial  Statements.)

COMMODITY  RISK

The  Company  is exposed to price risks associated with raw materials purchases,
most  significantly  with  methanol,  phenol  and  urea. For these commodity raw
materials,  the  Company  has purchase contracts, with periodic price adjustment
provisions.  The  commodity  risk  also  is  moderated  through  use of customer
contracts  with  selling price provisions that are indexed to publicly available
indices for these commodity raw materials as discussed on pages 13 and 14. There
are  no  active futures markets for the major raw materials used by the Company.

In  addition  to  that  described  above for the Company, the Combined Companies
enter into contracts with suppliers with specified prices and volumes. There are
no  active futures markets for major commodities used by the Combined Companies.

EQUITY  PRICE  RISK

Investments  held by the Company and Combined Companies primarily consist of two
common  stock  equity interests received as partial consideration on the sale of
certain businesses and an investment in preferred stock of an affiliate.  One of
the  common  stock  investments  represents approximately 33% of the outstanding
shares  and  is accounted for using the equity method.  At December 31, 2000 and
1999,  the unamortized excess of the Company's investment over its equity in the
underlying  net  assets  was  $16.1  and  $16.5,  respectively.  The  other  two
investments  are  accounted  for  using  the  cost  method.

The  Company's  and  Combined  Companies' investments also include certain other
partnership,  subsidiary  and  joint  venture  interests.

The  Company  and Combined Companies review the carrying value of investments in
accordance  with  existing  accounting  guidance that requires investments to be
adjusted  to  fair value if the decline in value is considered to be "other than
temporary"  based  on  certain  criteria.  The  Company  and  Combined Companies
recorded  investment   write-downs  of  $48.0,  $3.0 and $26.7 in 2000, 1999 and
1998,  respectively.

A summary of investments as of December 31, 2000 and 1999 follows. Fair value is
based  on  the  market stock price as of December 31, 2000 and 1999 for publicly
traded  common  stock.  Fair  value  for other investments  is  based  on  other
similar  financial  instruments.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                                          2000                                1999
                                           ---------------------------------     ------------------------------
                                             CARRYING             FAIR             CARRYING          FAIR
                             DATE             VALUE               VALUE             VALUE           VALUE
    DESCRIPTION            ACQUIRED        (IN MILLIONS)       (IN MILLIONS)     (IN MILLIONS)   (IN MILLIONS)
---------------------     ---------       --------------      --------------     -------------   --------------
<S>                        <C>                <C>                 <C>                <C>             <C>
  Equity method securities  10/11/96          $45.0              $107.8             $47.0           $62.1
  Cost method securities    11/01/99          $10.0              $ 10.0             $51.5           $51.5
---------------------------------------------------------------------------------------------------------------
</TABLE>
Readers  are  cautioned  that  forward-looking  statements  contained  under the
heading  of  "Risk Management" should be read in conjunction with the disclosure
under  the  heading:  "Forward-Looking  and  Cautionary  Statements".

                                       25














<PAGE>
RECENTLY  ISSUED  ACCOUNTING  STANDARDS
---------------------------------------

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments  and  Hedging Activities". This standard requires all derivatives be
measured  at fair value and recorded on a company's balance sheet as an asset or
liability,  depending  upon  the  company's  underlying  rights  or  obligations
associated  with  the  derivative instrument. In June 1999, the FASB issued SFAS
No.  137,  "Accounting  for  Derivative  Instruments  and  Hedging  Activities -
Deferral of the Effective Date of FASB Statement No. 133". This statement defers
the  effective  date  of SFAS No. 133 to all fiscal quarters of all fiscal years
beginning  after  June  15,  2000.  In  June 2000, the FASB issued SFAS No. 138,
"Accounting  for Certain Derivative Instruments and Certain Hedging Activities",
which  is an amendment of SFAS No. 133.  SFAS No. 138 addresses a limited number
of  implementation  issues  resulting from the application of SFAS No. 133.  The
Company  and  Combined  Companies  will  implement SFAS No. 133 as of January 1,
2001.  Adoption  of  this  pronouncement  will  result in a pre-tax loss of $5.2
million  and  $5.6  million  ($3.3  million  and $3.5 million after-tax) for the
Company  and  Combined  Companies,  respectively,  that  will  be  recorded  to
Shareholder's  Equity  in Other Comprehensive Income as a cumulative effect of a
change in accounting principle. Future results are not expected to be materially
impacted  by  the  adoption  of  this  pronouncement.

In  July  2000,  the  Emerging Issues Task Force ("EITF") reached a consensus on
Issue  No. 00-14, "Accounting for Certain Sales Incentives", which addresses the
recognition,  measurement   and   income   statement  classification  for  sales
incentives offered to customers.  Although this EITF is not effective until June
30,  2001,  registrants  who  do not elect early adoption are subject to certain
disclosure  requirements at December 31, 2000.  Upon adoption, approximately $24
million  and  $104 million for the Company and Combined Companies, respectively,
in  2000, $14 million and $86 million in 1999, respectively, and $12 million and
$93  million  in 1998, respectively, will be reclassified from marketing expense
to  net  sales.  The  Company's  and  Combined   Companies'  current  policy  of
recognizing  a  liability for sales incentives at the later of the date at which
the  related  revenue  is  recorded  or the date at which the sales incentive is
offered,  complies  with  the  consensuses  reached  in  this  Issue.

FORWARD-LOOKING  AND  CAUTIONARY  STATEMENTS
--------------------------------------------

The  Company, Combined Companies and their officers may, from time to time, make
written  or  oral  statements regarding the future performance of the Company or
Combined  Companies  including  statements  contained  in  the  filings with the
Securities  and  Exchange  Commission.  Investors  should  be  aware  that these
statements  are based on currently available financial, economic and competitive
data and on current business plans. Such statements are inherently uncertain and
investors should recognize that events could cause the Company's and/or Combined
Companies'  actual  results  to  differ  materially   from  those  projected  in
forward-looking  statements  made by or on behalf of the Company and/or Combined
Companies. Such risks and uncertainties are primarily  in the areas of financial
information about operating segments, results of operations  by  business  unit,
liquidity, legal, environmental liabilities and risk  management.

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

Refer  to  the  "Risk  Management"  section  included  in  Item 7 - Management's
Discussion  and  Analysis  of  Financial  Condition  and  Results  of Operation.


                                       26
























<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
ITEM  8.   FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA
--------   -----------------------------------------------
CONSOLIDATED  STATEMENTS  OF  OPERATIONS
BORDEN,  INC.

                                                                    Year ended December 31,
(In millions, except per share data)                             2000        1999        1998
-----------------------------------------------------------------------------------------------
<S>                                                           <C>           <C>        <C>
  Net sales                                                  $    1,524.0   $1,374.7   $1,412.7
  Cost of goods sold                                              1,120.5      936.0    1,008.2
                                                             ------------  ---------  ---------

  Gross margin                                                      403.5      438.7      404.5
                                                             ------------  ---------  ---------

  Distribution expense                                               75.9       70.5       64.0
  Marketing expense                                                  87.9       75.4       78.9
  General & administrative expense                                  146.2      133.4      126.2
  Loss (gain) on divestiture of businesses                            0.9       (7.4)      (8.3)
  Net (gain) loss on sale of assets                                 (10.1)      (1.3)       0.8
  Business realignment and asset write-offs                          38.4       41.6        2.5
                                                             ------------  ---------  ---------

  Operating income                                                   64.3      126.5      140.4
                                                             ------------  ---------  ---------

  Interest expense                                                   62.7       63.1       64.4
  Affiliated interest expense, net of affiliated
       interest income of $0.3, $0.9 and $2.2, respectively          17.0       19.1       22.8
  Interest income and other                                         (17.8)     (34.8)     (30.9)
  Investment write-downs and other charges                           68.0        3.0       26.7
                                                             ------------  ---------  ---------

  (Loss) income from continuing operations
       before income tax                                            (65.6)      76.1       57.4
  Income tax (benefit) expense                                       (6.6)      20.8       33.8
                                                             ------------  ---------  ---------

  (Loss) income from continuing operations                          (59.0)      55.3       23.6
                                                             ------------  ---------  ---------

  Discontinued operations:
       (Loss) income from operations, net of tax                        -       (0.4)       2.3
       Gain (loss) on disposal, net of tax                           93.0       (2.0)      36.7
                                                             ------------  ---------  ---------

  Net income                                                         34.0       52.9       62.6

  Preferred stock dividends                                         (73.7)     (73.7)     (73.7)
                                                             ------------  ---------  ---------

  Net loss applicable to common stock                        $      (39.7)  $  (20.8)  $  (11.1)
                                                             ============  =========  =========
</TABLE>


                                       27
























<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
CONSOLIDATED  STATEMENTS  OF  OPERATIONS
(CONTINUED)
BORDEN,  INC.


                                                    Year ended December 31,
(In millions, except per share data)                2000      1999     1998
---------------------------------------------------------------------------------
<S>                                              <C>          <C>      <C>
  Basic and Diluted Per Share Data
----------------------------------

  (Loss) income from continuing operations       $  (0.30)  $ 0.28   $ 0.12
  Discontinued operations:
       Income from operations, net of tax               -        -     0.01
       Gain (loss) on disposal, net of tax           0.47    (0.01)    0.18
                                                 ---------  -------  -------


  Net income                                         0.17     0.27     0.31
  Preferred stock dividends                         (0.37)   (0.37)   (0.37)
                                                 ---------  -------  -------

  Net loss applicable to common stock            $  (0.20)  $(0.10)  $(0.06)
                                                 =========  =======  =======

  Dividends per common share                     $   0.31   $ 0.32   $ 0.30
  Dividends per preferred share                  $   3.00   $ 3.00   $ 3.00

  Average number of common shares outstanding
       during the period                           199.0    199.0    199.0
---------------------------------------------------------------------------------
</TABLE>


See  Notes  to  Consolidated  and  Combined  Financial  Statements


                                       28











































<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
CONSOLIDATED  BALANCE  SHEETS
BORDEN,  INC.

(In  millions)

                                                       December 31,    December 31,
ASSETS                                                     2000            1999
------------------------------------------------------------------------------------
<S>                                                   <C>             <C>
CURRENT ASSETS
  Cash and equivalents                                $        27.8   $       195.2
  Accounts receivable (less allowance for doubtful
     accounts of $13.1 in 2000 and $11.8 in 1999)             248.4           215.0
  Loan receivable from affiliate                                6.1            56.2
  Inventories:
     Finished and in-process goods                             68.7            62.8
     Raw materials and supplies                                58.6            50.4
  Deferred income taxes                                        46.6            42.4
  Other current assets                                         15.2            15.3
                                                      --------------  --------------
                                                              471.4           637.3
                                                      --------------  --------------

INVESTMENTS AND OTHER ASSETS
  Investments                                                  61.9            64.0
  Investment in affiliate                                      10.0            51.5
  Deferred income taxes                                        84.6           109.5
  Prepaid pension assets                                      111.5           129.7
  Other assets                                                 41.2            36.3
  Assets sold under contractual arrangement (net of
   allowance of $62.6 in 1999) (See Note 18)                      -            48.2
                                                      --------------  --------------
                                                              309.2           439.2
                                                      --------------  --------------

PROPERTY AND EQUIPMENT
  Land                                                         28.0            25.6
  Buildings                                                    88.0            97.9
  Machinery and equipment                                     778.3           739.1
                                                      --------------  --------------
                                                              894.3           862.6
  Less accumulated depreciation                              (321.1)         (323.8)
                                                      --------------  --------------
                                                              573.2           538.8

INTANGIBLES
  Net of accumulated amortization of $25.1 in 2000
     and $16.1 in 1999                                        179.8           112.1
                                                      --------------  --------------

TOTAL ASSETS                                          $     1,533.6   $     1,727.4
                                                      ==============  ==============
---------------------------------------------------------------------------------------
</TABLE>
See  Notes  to  Consolidated  and  Combined  Financial  Statements


                                       29
























<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
CONSOLIDATED  BALANCE  SHEETS
BORDEN,  INC.

(In  millions,  except  share  data)

                                                                    December 31,    December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY                                    2000            1999
------------------------------------------------------------------------------------------------
<S>                                                                <C>             <C>
CURRENT LIABILITIES
  Accounts and drafts payable                                      $       158.8   $       137.4
  Debt payable within one year                                              43.5            17.7
  Income taxes payable                                                      92.4           244.1
  Loans payable with affiliates                                            283.1           246.6
  Other current liabilities                                                191.0           178.6
                                                                   --------------  --------------
                                                                           768.8           824.4
                                                                   --------------  --------------

OTHER LIABILITIES
  Liabilities sold under contractual arrangement                               -            41.6
  Long-term debt                                                           530.5           541.1
  Non-pension post-employment benefit obligations                          156.0           176.1
  Other long-term liabilities                                               64.0            80.0
                                                                   --------------  --------------
                                                                           750.5           838.8
                                                                   --------------  --------------
COMMITMENTS AND CONTINGENCIES (SEE NOTE 19)

SHAREHOLDERS' EQUITY
  Preferred stock - Issued 24,574,751 shares                               614.4           614.4
  Common stock - $0.01 par value: authorized 300,000,000 shares,
     Issued 198,974,994 shares                                               2.0             2.0
  Paid in capital                                                          353.3           355.7
  Receivable from parent                                                  (414.9)         (414.9)
  Accumulated other comprehensive income                                   (60.3)          (52.5)
  Accumulated deficit                                                     (480.2)         (440.5)
                                                                   --------------  --------------
                                                                            14.3            64.2
                                                                   --------------  --------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                         $     1,533.6   $     1,727.4
                                                                   ==============  ==============
---------------------------------------------------------------------------------------------------
</TABLE>


See  Notes  to  Consolidated  and  Combined  Financial  Statements


                                       30































<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
BORDEN,  INC.

                                                                    Year ended December 31,
(In millions)                                                        2000       1999      1998
---------------------------------------------------------------------------------------------------
<S>                                                                <C>           <C>       <C>
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
  Net income                                                       $   34.0   $  52.9   $  62.6
  Adjustments to reconcile net income to net
  cash from (used in) operating activities:
     (Gain) loss on disposal of discontinued operations, net of tax   (93.0)      2.0     (36.7)
     Loss (gain) on divestiture of businesses                           0.9      (7.4)     (8.3)
     Net (gain) loss on the sale of assets                            (10.1)     (1.3)      0.8
     Deferred tax provision                                            15.0       5.8      84.5
     Depreciation and amortization                                     62.4      54.2      50.9
     Business realignment and asset write-offs                         38.4      41.6       2.5
     Unrealized gain on interest rate swap                             (4.9)    (10.8)     (4.1)
     Investment write-downs and other charges                          68.0       3.0      26.7
  Net change in assets and liabilities:
     Trade receivables                                                (36.5)      3.9      (0.9)
     Inventories                                                      (12.2)     (0.4)     (5.8)
     Trade payables                                                    27.6      13.5     (17.8)
     Income taxes                                                     (45.1)    (30.8)    (47.6)
     Other assets                                                      13.1      (6.3)     44.8
     Other liabilities                                                (34.3)    (48.2)   (108.6)
     Net assets of discontinued operations                                -         -       3.0
                                                                   ----------  --------  --------
                                                                       23.3      71.7      46.0
                                                                   ----------  --------  --------

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
  Capital expenditures                                               (104.5)    (74.8)    (52.5)
  Proceeds from the divestiture of businesses                          10.9       7.6     335.9
  Purchase of businesses                                             (118.1)   (119.6)    (14.4)
  Proceeds from the sale of fixed assets                                9.9       9.6         -
  Purchase of affiliate's receivables, net of cash collected           (0.5)        -         -
  Return from (investment in) affiliate, net                            6.6     (52.3)     67.6
                                                                   ----------  --------  --------
                                                                     (195.7)   (229.5)    336.6
                                                                   ----------  --------  --------

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
  Net short-term debt borrowings (repayments)                          33.3      (3.8)      3.8
  Borrowings of long-term debt                                        122.0         -         -
  Repayment of long-term debt                                        (140.0)     (0.6)   (236.0)
  Affiliated borrowings/receipts (repayments/loans)                    86.7    (225.5)    411.8
  Interest received from parent                                        48.6      48.9      60.4
  Common stock dividends paid                                         (61.6)    (64.4)    (60.4)
  Preferred stock dividends paid                                      (73.7)    (73.7)    (73.7)
  Other distributions                                                 (10.3)        -         -
                                                                   ----------  --------  --------
                                                                        5.0    (319.1)    105.9
                                                                   ----------  --------  --------
---------------------------------------------------------------------------------------------------
</TABLE>


                                       31























<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS  (CONTINUED)
BORDEN,  INC.


                                                                       Year ended December 31,
(In millions)                                                         2000       1999     1998
-------------------------------------------------------------------------------------------------
<S>                                                                <C>           <C>       <C>
  (Decrease) increase in cash and equivalents                      $  (167.4)  $(476.9)  $488.5
  Cash and equivalents at beginning
    of year                                                            195.2     672.1    183.6
                                                                   ----------  --------  -------
  Cash and equivalents at end
    of year                                                        $    27.8   $ 195.2   $672.1
                                                                   ==========  ========  =======


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  Cash paid:
     Interest, net                                                 $    65.0   $  55.1   $ 47.6
     Taxes                                                              19.2      46.1     21.2
  Non-cash activity:
        Distribution of note receivable from Company's parent
            to cancel options                                              -         -     39.2
        Investment retained in IHDG                                        -         -      3.0
        Capital contribution by parent                                  44.3      26.4     42.9
        Accrued dividends on investment in affiliate                     6.5       1.5        -
        Distribution of net assets of infrastructure management
           services business to the Company's parent                     6.0         -        -
        Reclassification of minimum pension liability adjustment
           from/(to) shareholders' equity                                1.8       1.5     (3.6)
---------------------------------------------------------------------------------------------------
</TABLE>


See  Notes  to  Consolidated  and  Combined  Financial  Statements


                                       32











































<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED  STATEMENTS  OF  SHAREHOLDERS'  EQUITY
BORDEN,  INC.

(In  millions)
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Accumulated
                                                              Preferred Common   Paid-in  Receivable    Other    Accumulated
                                                               Stock    Stock    Capital     from   Comprehensive  Deficit  Total
                                                                                            Parent     Income
---------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997                                     $614.4     $2.0    $384.0  $(464.1)   $(48.0)    $(408.6)   $79.7
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>        <C>       <C>     <C>        <C>        <C>        <C>
Net income                                                                                                         62.6     62.6

Translation adjustments and other                                                                       0.6                  0.6

Minimum pension liability (net of $2.0 tax)                                                            (3.6)                (3.6)
                                                                                                                         --------

COMPREHENSIVE INCOME                                                                                                     $  59.6
                                                                                                                         --------
Preferred stock dividends                                                                                        (73.7)    (73.7)

Common stock dividends                                                             (59.5)                                  (59.5)

Interest accrued on notes from parent (net of $19.9 tax)                            30.7       9.6                          40.3

Capital contribution from parent                                                    42.9                                    42.9

Cancel option on Decorative Products                                               (39.2)     39.2                             -
---------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998                                    $ 614.4   $   2.0   $358.9   $(415.3)  $(51.0)   $(419.7)    $89.3
---------------------------------------------------------------------------------------------------------------------------------
Net income                                                                                                        52.9      52.9

Translation adjustments and other                                                                      (3.0)                (3.0)

Minimum pension liability (net of $0.8 tax)                                                             1.5                  1.5
                                                                                                                         --------

COMPREHENSIVE INCOME                                                                                                     $  51.4
                                                                                                                         --------
Preferred stock dividends                                                                                       (73.7)     (73.7)

Common stock dividends                                                            (64.1)                                   (64.1)

Interest accrued on notes from parent (net of $14.0 tax)                           34.5       0.4                           34.9

Capital contribution from parent                                                   26.4                                     26.4
---------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999                                    $ 614.4   $   2.0  $355.7   $(414.9)   $(52.5)  $(440.5)     $64.2
---------------------------------------------------------------------------------------------------------------------------------
See Notes to Consolidated and Combined Financial Statements
</TABLE>


                                       33
























<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED  STATEMENTS  OF  SHAREHOLDERS'  EQUITY
BORDEN,  INC.

(In  millions)
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Accumulated
                                                          Preferred  Common   Paid-in   Receivable    Other     Accumulated
                                                           Stock     Stock    Capital     from    Comprehensive   Deficit    Total
                                                                                          Parent      Income
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>        <C>       <C>        <C>       <C>          <C>         <C>
Balance, December 31, 1999                                  $614.4     $2.0    $355.7    $(414.9)    $(52.5)   $(440.5)    $64.2
----------------------------------------------------------------------------------------------------------------------------------
Net income                                                                                                        34.0      34.0

Translation adjustments                                                                                (9.6)                (9.6)

Minimum pension liability (net of $0.9 tax)                                                             1.8                  1.8
                                                                                                                          --------
COMPREHENSIVE INCOME                                                                                                     $  26.2
                                                                                                                          --------
Preferred stock dividends                                                                                        (73.7)    (73.7)

Common stock dividends                                                          (61.6)                                     (61.6)

Other distributions                                                             (16.3)                                     (16.3)

Interest accrued on notes from parent (net of $17.4 tax)                         31.2                                       31.2

Capital contribution from parent                                                 44.3                                       44.3
---------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2000                                $ 614.4   $   2.0    $353.3   $(414.9)    $(60.3)    $(480.2)    $14.3
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See  Notes  to  Consolidated  and  Combined  Financial  Statements


                                       34












































<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
COMBINED  STATEMENTS  OF  OPERATIONS
BORDEN,  INC.  AND  AFFILIATES


                                                             Year ended December 31,
(In millions)                                                2000        1999       1998
---------------------------------------------------------------------------------------------
<S>                                                     <C>           <C>        <C>
  Net sales                                             $    2,094.7   $1,922.6   $2,118.8
  Cost of goods sold                                         1,408.6    1,202.3    1,405.8
                                                        ------------  ---------  ---------

  Gross margin                                                 686.1      720.3      713.0
                                                        ------------  ---------  ---------

  Distribution expense                                         120.0      113.2      108.6
  Marketing expense                                            302.8      274.1      290.4
  General & administrative expense                             210.7      188.8      205.0
  Gain on divestiture of businesses                             (3.9)     (56.5)    (380.0)
  Net (gain) loss on sale of assets                             (8.6)      (0.1)       0.6
  Business realignment and asset write-offs                     44.1       41.6       19.7
                                                        ------------  ---------  ---------

  Operating income                                              21.0      159.2      468.7
                                                        ------------  ---------  ---------

  Interest expense                                              62.7       63.2       65.5
  Affiliated interest expense                                    2.4        5.3        5.4
  Interest income and other                                    (15.5)     (33.6)     (34.7)
  Investment write-downs and other charges                      68.0        3.0       26.7
                                                        ------------  ---------  ---------

  (Loss) income from continuing operations
     before income tax                                         (96.6)     121.3      405.8
  Income tax (benefit) expense                                 (68.0)      31.7      133.4
                                                        ------------  ---------  ---------

  (Loss) income from continuing operations                     (28.6)      89.6      272.4
                                                        ------------  ---------  ---------

  Discontinued operations:
     Income from operations, net of tax                         3.1        2.2        1.2
     Gain (loss) on disposal, net of tax                       37.0       (3.1)      36.7
                                                        ------------  ---------  ---------

  Income before cumulative effect of change
     in accounting principle                                   11.5       88.7      310.3

  Cumulative effect of change in accounting principle             -       (2.8)         -
                                                        ------------  ---------  ---------

  Net income                                                   11.5       85.9      310.3

  Affiliate's share of income                                  (0.1)      (5.1)    (142.0)

  Preferred stock dividends                                   (73.7)     (73.7)     (73.7)
                                                        ------------  ---------  ---------

  Net (loss) income applicable to common stock          $     (62.3)  $    7.1   $   94.6
                                                        ============  =========  =========
---------------------------------------------------------------------------------------------
</TABLE>
See  Notes  to  Consolidated  and  Combined  Financial  Statements


                                       35
















<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
COMBINED  BALANCE  SHEETS
BORDEN,  INC.  AND  AFFILIATES

(In  millions)

                                                                        December 31,    December 31,
ASSETS                                                                      2000            1999
------------------------------------------------------------------------------------------------------
<S>                                                                    <C>             <C>
CURRENT ASSETS
  Cash and equivalents                                                 $        43.2   $       227.5
  Accounts receivable (less allowance for doubtful accounts of $13.9
     in 2000 and $13.2 in 1999)                                                301.6           274.1
  Loan receivable from affiliate                                                 6.1            56.2
  Inventories:
     Finished and in-process goods                                             115.2           110.9
     Raw materials and supplies                                                 87.2            80.5
  Deferred income taxes                                                         66.7            58.5
  Other current assets                                                          20.6            20.2
  Net assets of discontinued operations (See Note 6)                               -            61.8
                                                                       --------------  --------------
                                                                               640.6           889.7
                                                                       --------------  --------------

INVESTMENTS AND OTHER ASSETS
  Investments                                                                   61.9            64.0
  Investment in affiliate                                                       10.0            51.5
  Deferred income taxes                                                         84.6            81.7
  Prepaid pension assets                                                       122.5           140.8
  Other assets                                                                  31.0            31.8
                                                                       --------------  --------------
                                                                               310.0           369.8
                                                                       --------------  --------------

PROPERTY AND EQUIPMENT
  Land                                                                          38.4            36.0
  Buildings                                                                    163.6           171.2
  Machinery and equipment                                                    1,076.2         1,009.6
                                                                       --------------  --------------
                                                                             1,278.2         1,216.8
  Less accumulated depreciation                                               (498.7)         (486.6)
                                                                       --------------  --------------
                                                                               779.5           730.2

INTANGIBLES
  Net of accumulated amortization of $160.6 in 2000 and
     $141.2 in 1999                                                            457.7           403.3
                                                                       --------------  --------------

TOTAL ASSETS                                                           $     2,187.8   $     2,393.0
                                                                       ==============  ==============
-----------------------------------------------------------------------------------------------------
</TABLE>
See  Notes  to  Consolidated  and  Combined  Financial  Statements


                                       36

























<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------
COMBINED  BALANCE  SHEETS
BORDEN,  INC.  AND  AFFILIATES

(In  millions)

                                              December 31,    December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY              2000            1999
---------------------------------------------------------------------------
<S>                                          <C>             <C>
CURRENT LIABILITIES
  Accounts and drafts payable                $       198.6   $       184.3
  Debt payable within one year                        44.1            18.0
  Income taxes payable                               121.4           254.9
  Loans with affiliates                               79.2            14.5
  Other current liabilities                          233.5           244.9
                                             --------------  --------------
                                                     676.8           716.6
                                             --------------  --------------

OTHER LIABILITIES
  Long-term debt                                     535.8           544.1
  Non-pension post-employment
     benefit obligations                             166.8           183.8
  Other long-term liabilities                         81.8            85.7
                                             --------------  --------------
                                                     784.4           813.6
                                             --------------  --------------
COMMITMENTS AND CONTINGENCIES (SEE NOTE 19)

SHAREHOLDERS' EQUITY
  Preferred stock                                    614.4           614.4
  Common stock                                         2.0             2.0
  Paid in capital                                    623.9           664.4
  Receivable from parent                            (414.9)         (414.9)
  Affiliate's interest in subsidiary                  66.3            66.2
  Accumulated other comprehensive income             (95.5)          (84.1)
  (Accumulated deficit) retained earnings            (69.6)           14.8
                                             --------------  --------------
                                                     726.6           862.8
                                             --------------  --------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $     2,187.8   $     2,393.0
                                             ==============  ==============
---------------------------------------------------------------------------
</TABLE>
See  Notes  to  Consolidated  and  Combined  Financial  Statements


                                       37

































<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
COMBINED  STATEMENTS  OF  CASH  FLOWS
BORDEN,  INC.  AND  AFFILIATES


                                                                       Year ended December 31,
(In millions)                                                           2000      1999      1998
--------------------------------------------------------------------------------------------------
<S>                                                                <C>           <C>       <C>
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
  Net income                                                       $    11.5   $  85.9   $  310.3
  Adjustments to reconcile net income to net
  cash from (used in) operating activities:
     (Gain) loss on disposal of discontinued operations, net of tax    (37.0)      3.1      (36.7)
     Gain on divestiture of businesses                                  (3.9)    (56.5)    (380.0)
     Net (gain) loss on the sale of assets                              (8.6)     (0.1)       0.6
     Deferred tax provision                                             (9.9)     28.7      157.3
     Depreciation and amortization                                     103.7      84.6       79.9
     Business realignment and asset write-offs                          44.1      41.6       25.8
     Unrealized gain on interest rate swap                              (4.9)    (10.8)      (4.1)
     Investment write-downs and other charges                           68.0       3.0       26.7
  Net change in assets and liabilities:
     Trade receivables                                                 (33.9)     (4.7)      49.2
     Inventories                                                        (9.9)    (12.1)      15.2
     Trade payables                                                     21.5       4.5      (33.7)
     Income taxes                                                      (81.3)    (18.9)     (93.4)
     Other assets                                                       17.4      22.0       94.5
     Other liabilities                                                 (48.3)    (87.7)    (250.3)
     Net assets of discontinued operations                               5.5      (4.1)       5.5
                                                                   -----------  --------  ---------
                                                                        34.0      78.5      (33.2)
                                                                   -----------  --------  ---------

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
  Capital expenditures                                                (156.1)   (141.9)    (100.2)
  Proceeds from the divestiture of businesses                           10.9      31.2    1,071.2
  Purchase of businesses                                              (118.1)   (119.6)     (14.4)
  Proceeds from the sale of fixed assets                                 9.9      14.2       15.8
  Purchase of affiliate's receivables, net of cash collected            (0.5)        -          -
  Equity investment in affiliate                                           -     (50.0)         -
                                                                   -----------  --------  ---------
                                                                      (253.9)   (266.1)     972.4
                                                                   -----------  --------  ---------

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
  Net short-term debt borrowings (repayments)                           32.9     (10.5)       6.4
  Borrowings of long-term debt                                         125.0         -          -
  Repayment of long-term debt                                         (140.0)     (0.2)    (236.7)
  Affiliated borrowings/receipts (repayments/loans)                    114.7    (179.6)     134.3
  Distribution to affiliate                                                -         -     (272.2)
  Interest received from parent                                         48.6      48.9       60.4
  Common stock dividends paid                                          (61.6)    (64.4)     (60.4)
  Preferred stock dividends paid                                       (73.7)    (73.7)     (73.7)
  Other distributions                                                  (10.3)        -          -
                                                                   -----------  --------  ---------
                                                                        35.6    (279.5)    (441.9)
                                                                   -----------  --------  ---------
---------------------------------------------------------------------------------------------------
</TABLE>

                                       38






















<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
COMBINED  STATEMENTS  OF  CASH  FLOWS  (CONTINUED)
BORDEN,  INC.  AND  AFFILIATES


                                                                      Year ended December 31,
(In millions)                                                        2000        1999     1998
------------------------------------------------------------------------------------------------------
<S>                                                                  <C>         <C>       <C>
  (Decrease) increase in cash and equivalents                      $ (184.3)  $(467.1)  $497.3
  Cash and equivalents at beginning
       of year                                                        227.5     694.6    197.3
                                                                   --------    ------  -------
  Cash and equivalents at end
       of year                                                     $   43.2   $ 227.5   $694.6
                                                                   ========   =======   ======


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  Cash paid:
       Interest, net                                               $   47.4   $  40.8   $ 32.0
       Taxes                                                           17.9      21.5     89.0
  Non-cash activity:
        Distribution of note receivable from Company's parent
            to cancel options                                             -         -     39.2
        Investment retained in IHDG                                       -         -      3.0
        Capital contribution by parent                                 46.7      26.4     42.9
        Affiliate's share of income                                     0.1       5.1    142.0
        Accrued dividends on investment in affiliate                    6.5       1.5        -
        Distribution of net assets of infrastructure management
           services business to the Company's parent                    6.0         -        -
        Distribution of net assets of Wise to BWHLLC                   58.7         -        -
        Reclassification of minimum pension liability adjustment
           from/(to) shareholders' equity                               1.8       3.3     (5.4)
------------------------------------------------------------------------------------------------------
See Notes to Consolidated and Combined Financial Statements
</TABLE>


                                       39











































<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
COMBINED  STATEMENTS  OF  SHAREHOLDERS'  EQUITY
BORDEN,  INC.  AND  AFFILIATES

(In  millions)
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Accumulated   Retained
                                                                           Receivable  Affiliate's   Other         Earnings
                                                 Preferred  Common  Paid-in  from    Interest in  Comprehensive  (Accumulated
                                                   Stock    Stock   Capital   Parent   Subsidiary    Income         Deficit)  Total
----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997                        $614.4     $2.0   $666.5  $(464.1)    $203.3     $(181.2)       $ (86.9)  $754.0
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>       <C>    <C>     <C>        <C>         <C>            <C>       <C>
Net income                                                                                                          310.3    310.3

Translation adjustments and other                                     (0.2)                           97.4                    97.2

Minimum pension liability (net of $3.0 tax)                                                           (5.4)                   (5.4)
                                                                                                                           --------
COMPREHENSIVE INCOME                                                                                                        $402.1
                                                                                                                           --------
Preferred stock dividends                                                                                          (73.7)    (73.7)

Common stock dividends                                               (59.5)                                                  (59.5)

Interest accrued on notes from parent (net of $19.9 tax)              30.7      9.6                                           40.3

Cancel option on Decorative Products                                 (39.2)    39.2                                              -

Capital contribution from parent                                      42.9                                                    42.9

Affiliate's interest in subsidiary                                    12.3            (142.5)                     (142.0)   (272.2)
-----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998                       $614.4      $2.0   $653.5  $(415.3)  $ 60.8       $ (89.2)       $  7.7    $833.9
-----------------------------------------------------------------------------------------------------------------------------------
Net income                                                                                                          85.9      85.9

Translation adjustments and other                                                                      1.8                     1.8

Minimum pension liability (net of $1.7 tax)                                                            3.3                     3.3
                                                                                                                          --------
COMPREHENSIVE INCOME                                                                                                        $ 91.0
                                                                                                                           -------
Preferred stock dividends                                                                                         (73.7)     (73.7)

Common stock dividends                                              (64.1)                                                   (64.1)

Interest accrued on notes from parent (net of $14.0 tax)             34.5      0.4                                            34.9

Capital contribution from parent                                     26.4                                                     26.4

Increase in foreign tax basis and other                              14.1               0.3                                   14.4

Affiliate's interest in subsidiary                                                      5.1                       (5.1)          -
----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999                      $614.4       $2.0  $664.4  $(414.9)  $ 66.2        $ (84.1)     $ 14.8      $862.8
----------------------------------------------------------------------------------------------------------------------------------
See Notes to Consolidated and Combined Financial Statements
</TABLE>








                                       40














<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
COMBINED  STATEMENTS  OF  SHAREHOLDERS'  EQUITY
BORDEN,  INC.  AND  AFFILIATES

(In  millions)
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Accumulated    Retained
                                                                           Receivable  Affiliate's   Other        Earnings
                                                 Preferred  Common  Paid-in   from    Interest in  Comprehensive (Accumulated
                                                   Stock    Stock   Capital   Parent   Subsidiary    Income       Deficit)   Total
----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999                        $614.4     $2.0    $664.4  $(414.9)     $66.2     $(84.1)        $14.8    $862.8
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>      <C>      <C>      <C>        <C>         <C>          <C>     <C>
Net income                                                                                                          11.5      11.5

Translation adjustments                                                                              (13.2)                  (13.2)

Minimum pension liability (net of $0.9 tax)                                                            1.8                     1.8
                                                                                                                           -------
COMPREHENSIVE INCOME                                                                                                        $  0.1
                                                                                                                           -------
Preferred stock dividends                                                                                          (73.7)    (73.7)

Common stock dividends                                                (61.6)                                                 (61.6)

Other distributions                                                   (52.9)                                       (22.1)    (75.0)

Interest accrued on notes from parent (net of $17.4 tax)               31.2                                                   31.2

Capital contribution from parent                                       46.7                                                   46.7

Decrease in foreign tax basis and other                                (3.9)                                                  (3.9)

Affiliate's interest in subsidiary                                                          0.1                     (0.1)         -
----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2000                        $614.4     $2.0  $  623.9  $(414.9)    $ 66.3    $ (95.5)      $ (69.6)   $726.6
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See  Notes  to  Consolidated  and  Combined  Financial  Statements


                                       41








































<PAGE>
NOTES  TO  CONSOLIDATED  AND  COMBINED  FINANCIAL  STATEMENTS
(Dollars  in  millions  except  per  share  data)

1.     BACKGROUND

As  a  result  of  a  merger  completed  on  March  14,  1995, Borden, Inc. (the
"Company",  the  "Registrant")  is  controlled  by affiliates of Kohlberg Kravis
Roberts  &  Co.  ("KKR").  The  Company is a Registrant under the Securities and
Exchange Commission Rules and Regulations as a result of public debt outstanding
prior  to  the merger and therefore elected not to apply push-down accounting in
its  consolidated  financial  statements.

At  the  time  of the merger, the Company's principal lines of business included
international  and  domestic  food operations ("Foods"), a salty snacks business
("Wise")  as  well  as  other  businesses.  Subsidiaries  of  BW  Holdings,  LLC
("BWHLLC",  an  affiliate  of  KKR),  Wise  Holdings, Inc. ("Wise Holdings") and
Borden  Foods  Holdings Corporation ("Foods Holdings"), purchased Wise and Foods
on  July 2, 1996, and October 1, 1996, respectively. Since these sales, Wise and
Foods,  as  of  their  respective sales dates, are no longer legally part of the
Company on a consolidated basis. However, management of the Company continued to
exercise  significant  operating  and  financial control over Wise and Foods and
both  Wise  Holdings  and Foods Holdings were guarantors of the Company's credit
facility  and  all  of  the  Company's  publicly  held  debt.  Because  of  the
aforementioned  control and guarantees, the Company has included, supplementally
in  this  filing,  combined  financial statements of Borden, Inc. and Affiliates
(the  "Combined Companies") which present the financial condition and results of
operations  and  cash flows of the Company combined with the financial condition
and  results  of  operations  and  cash  flows  of  Wise and Foods. The Combined
Companies'  financial  statements  do  not  reflect  push-down  accounting  and
therefore  present  financial  information  on a basis consistent with that upon
which  credit  was  originally  extended  to  the  Company.

On  October  30, 2000, Wise Holdings was sold by BWHLLC  (see  Note   18).   For
purposes  of  the  Combined Financial Statements, Wise Holdings is treated as if
its  net  assets  were  distributed  out  of  the  Combined Companies ("the Wise
Distribution")  on  October  30,  2000.  On  October  30,  2000,  Wise Holdings'
financial  guarantees  ceased.  As  a  result  of the Wise Distribution, Wise is
reflected  as  a discontinued operation in the Combined Financial Statements for
all  periods  presented.

2.     NATURE  OF  OPERATIONS

The  Company  is  engaged primarily in manufacturing, processing, purchasing and
distributing  primarily  forest  products  and  industrial resins, formaldehyde,
melamine  crystal and other specialty and industrial chemicals worldwide as well
as  consumer  glues  and  adhesives  in North America. The Company also provided
infrastructure  management services  prior  to the distribution of that business
in the first quarter of 2000 (see Note 4).  Prior to its sale on March 13, 1998,
the Company engaged in a Decorative  Products business, which is included in the
Company's  discontinued  operations,  consistent  with  the Company's ownership.

In  addition  to  the  Company's businesses, the Combined Companies includes the
Foods  business and the Wise business, prior to the Wise Distribution, which are
engaged  primarily  in manufacturing, processing and distributing food products.

Domestic  products  for  the  chemical  business  are sold throughout the United
States  to  industrial  users.  To  the  extent  practicable,  international
distribution  techniques  parallel  those  used  in  the  United  States and are
concentrated  in  Canada,  Western  Europe,  Latin America and the Far East. The
Foods  and  Wise  products  included  in  the  Combined  Companies  are marketed
primarily  through  food  brokers  and  distributors  in  the  United  States.

Approximately 54% of the Company's and the Combined Companies' manufacturing and
processing  facilities  are  located  in the United States and the remainder are
located  in  foreign  countries.  The  majority  of the long-lived assets of the
Company  and  the  Combined  Companies  are  located  in  the  United  States.
Approximately  32%  and  29%  of  the  Company and Combined Companies' sales are
generated  in  foreign  countries.

Information about the Company's operating and geographic segments is provided in
Item  1 on pages 6 to 9 and is an integral part of the Consolidated and Combined
Financial  Statements.

                                       42












<PAGE>
3. SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

Significant  accounting  policies  followed by the Company, as summarized below,
are  in  conformity  with generally accepted accounting principles. The Combined
Companies'  policies  are  consistent  with  those  of  the  Company.

PRINCIPLES  OF  CONSOLIDATION  AND  COMBINATION  -  The  Consolidated  Financial
Statements  include  the  accounts  of  Borden, Inc. and its subsidiaries, after
elimination  of  intercompany  accounts and transactions. The Combined Financial
Statements  include  the  accounts of Borden, Inc., Foods and Wise (prior to the
Wise  Distribution),  after  the  elimination  of  intercompany  accounts  and
transactions.  The  Company's  share  of  the  net  earnings of 20% to 50% owned
companies  is  included  in income on an equity basis. The Company amortizes any
excess of cost over the underlying equity in net assets of an equity investment.

USE  OF  ESTIMATES  - The preparation of financial statements in conformity with
generally  accepted  accounting principles requires management to make estimates
and  assumptions  that  affect  the  reported amounts of assets and liabilities,
disclosure  of  contingent  assets  and liabilities at the date of the financial
statements  and  the  reported  amounts  of  revenues  and  expenses  during the
reporting  period.  Significant  estimates  included in the financial statements
include reserves for expenses related to business redesign, valuation allowances
for  deferred  tax  assets,  other  tax  liabilities  and  general  insurance
liabilities.  Other  significant estimates include accruals for trade promotion,
litigation and environmental remediation. Actual results could differ from those
estimates.

CASH  AND  EQUIVALENTS  -  The  Company  considers all highly liquid investments
purchased  with  an  original  maturity  of  three  months  or  less  to be cash
equivalents.  Included  in  the  Company's cash equivalents are interest bearing
time deposits  of $11.1 in 2000 and $103.3 in 1999. The Combined Companies' cash
equivalents included  interest bearing time deposits of $16.0 in 2000 and $132.4
in  1999.  The  effect  of  exchange  rate  changes  on  cash  is  not material.

INVENTORIES  -  Inventories  are  stated  at  lower  of  cost or market. Cost is
determined  using  the  average  cost  and  first-in,  first-out  methods.

PROPERTY  AND  EQUIPMENT  -  Land,  buildings,  and  machinery and equipment are
carried  at cost. Depreciation is recorded on the straight-line basis by charges
to expense at rates based on estimated useful lives of properties (average rates
for  buildings  4%;  machinery and equipment 8%). Major renewals and betterments
are  capitalized.  Maintenance,  repairs  and  minor  renewals  are  expensed as
incurred.  The  Combined Companies have $3.0 of machinery and equipment recorded
under  capital  leases  at  December  31,  2000.

INTANGIBLES  -  The  excess of purchase price over net tangible and identifiable
intangible  assets of businesses acquired ("goodwill") is carried as intangibles
in  the  Consolidated  and  Combined  Balance  Sheets.  It  is the Company's and
Combined  Companies' policy to carry goodwill arising prior to November 1, 1970,
at  cost, while goodwill arising after that date is amortized on a straight-line
basis  over  not  more  than  40 years. Also included in intangibles are certain
trademarks,  patents  and  other intangible assets used in the operations of the
businesses which amounted to $65.9 and $7.9 for the Company ($76.9 and $19.2 for
the  Combined  Companies)  at  December  31,  2000 and 1999, respectively. These
intangibles are amortized on a straight-line basis over the shorter of the legal
or  useful  life  of  the  asset.

IMPAIRMENT  -  The  Company  and  Combined  Companies  periodically evaluate the
recoverability  of property, equipment, investments and intangibles by assessing
whether  the  carrying  value  can  be  recovered over its remaining useful life
through  the expected future undiscounted operating cash flows of the underlying
business.  Any  impairment loss required is determined by comparing the carrying
value  of  the asset to operating cash flows on a discounted basis.

REVENUE  RECOGNITION  -  Revenues  are  recognized when products are shipped and
title  transfers  to  the  buyer.

SHIPPING  AND  HANDLING  -  In  September  2000,  the Emerging Issues Task Force
("EITF")  reached  a  consensus on Issue No. 00-10, "Accounting for Shipping and
Handling  Fees  and  Costs," which addresses the income statement classification
for  shipping  and  handling  fees  and  costs.  In  order  to  conform with the
consensus,  the  Company  and  Combined Companies reclassified freight billed to
customers  of $15.4, $14.5 and $13.0 for the years ended December 31, 2000, 1999
and  1998,  respectively,  from  distribution  expense  to  net  sales.

                                       43










<PAGE>
Shipping  costs  are  incurred  to  move  the  Company's and Combined Companies'
products  from  production  and  storage  facilities to the customers.  Handling
costs are incurred from the point the product is removed from inventory until it
is  provided  to  the  shipper  and  generally  include costs to store, move and
prepare  the products for shipment.  The Company and Combined Companies incurred
shipping  costs  of  $73.0  and $89.4, respectively, in 2000, $68.5 and $83.0 in
1999  and  $62.1  and $77.8 in 1998.  These costs are classified as distribution
expense  in  the Consolidated and Combined Statements of Operations.  Due to the
nature  of  the  Company's  and  Combined  Companies' businesses, handling costs
incurred  prior  to  shipment  are  not  significant.

ADVERTISING AND PROMOTION EXPENSE - Production costs of future media advertising
are deferred until the advertising first occurs. All other advertising costs are
expensed when incurred. Promotional expenses are generally expensed ratably over
the  year  in  relation  to  revenues  or  other  performance  measures.

FOREIGN  CURRENCY  TRANSLATIONS  - Assets and liabilities of foreign affiliates,
other than those located in highly inflationary economies, are translated at the
exchange  rates in effect at the balance sheet date, and the related translation
adjustments  are  reported  as  a  component of shareholders' equity. Income and
expenses  are  translated  at average exchange rates prevailing during the year.

The  Company  and  the  Combined  Companies incurred realized and unrealized net
foreign  exchange (gains) losses aggregating ($0.2) and ($0.0), respectively, in
2000,  ($0.7)  and  ($2.5)  in  1999  and  ($0.3)  and  $1.5  in  1998.

INCOME  TAXES  -  Income  tax expense is based on reported results of operations
before  income  taxes.  Deferred  income  taxes reflect the temporary difference
between  amounts  of  assets  and liabilities recognized for financial reporting
purposes and such amounts recognized for tax purposes. Deferred tax balances are
adjusted to reflect tax rates, based on current tax laws, that will be in effect
in  the  years  in which temporary differences are expected to reverse. Deferred
tax  assets  are  reduced  by  a  valuation  allowance  when,  in the opinion of
management,  it is more likely than not that some portion or all of the deferred
tax  assets  will  not  be  realized.

DERIVATIVE  FINANCIAL  INSTRUMENTS  -  The  Company  primarily uses two types of
derivatives:  interest  rate  swaps  (which effectively convert a portion of the
Company's  variable  rate  obligations  to fixed) and forward exchange contracts
(which  reduce  the  Company's cash flow exposure to changes in foreign exchange
rates).  Under  interest  rate  swaps,  the Company agrees with other parties to
exchange,  at specific intervals, the difference between fixed rate and floating
rate  interest  amounts  calculated by reference to an agreed notional principal
amount.  Interest  rate  swaps that are in excess of outstanding obligations are
marked  to  market  through other income and expense. The fair values of forward
exchange  contracts  that  hedge  firm  third party commitments are deferred and
recognized  as  part  of  the  underlying transactions as they occur, those that
hedge  existing  assets  and liabilities are recognized in income currently, and
offset  gains  and  losses  of  transactions  being  hedged.

EARNINGS  PER  SHARE - Basic and diluted net income attributable to common stock
is  computed  by  dividing  net  income by the weighted average number of common
shares outstanding during the period. Options issued by subsidiaries that enable
the  holder  to  obtain  stock of the subsidiary were assumed to be exercised if
they  were  dilutive.

At  December  31,  2000,  there  were 5.5 million options to purchase subsidiary
stock outstanding, of which 1.1 million were considered dilutive to Earnings Per
Share  ("EPS"). At December 31, 1999, there were 6.2 million options to purchase
subsidiary  stock  outstanding, of which 5.0 million were considered dilutive to
EPS. At December 31, 1998, there were 5.6 million options to purchase subsidiary
stock  outstanding,  none  of  which  were  considered  dilutive  to  EPS.

                                       44






















<PAGE>
The  Company's  diluted  EPS  is  calculated  as  follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                                                     2000            1999           1998
-----------------------------------------------------------------------------------------------------------
<S>                                                                  <C>             <C>            <C>
Net loss applicable to common shareholders                       $   (39.7)     $   (20.8)        $  (11.1)
Effect of dilutive options in subsidiary stock                           -           (0.5)               -
                                                                  ---------      ---------         --------
Diluted EPS - Numerator                                          $   (39.7)     $   (21.3)        $  (11.1)
                                                                  =========      =========         ========
Weighted average shares - Denominator                                199.0          199.0            199.0
                                                                  =========      =========         ========
Diluted EPS                                                      $   (0.20)     $   (0.11)        $  (0.06)
                                                                  =========      =========         ========
-----------------------------------------------------------------------------------------------------------
</TABLE>

CONCENTRATIONS  OF  CREDIT RISK - Financial instruments that potentially subject
the  Company  to  concentrations of credit risk consist principally of temporary
cash  investments and accounts receivable. The Company places its temporary cash
investments  with high quality institutions and, by policy, limits the amount of
credit  exposure  to  any  one  institution.  Concentrations of credit risk with
respect to accounts receivable are limited, due to the large number of customers
comprising  the  Company's  customer  base  and  their  dispersion  across  many
different  industries  and  geographies.  The Company generally does not require
collateral  or  other  security  to  support  customer  receivables.

RECENTLY  ISSUED  ACCOUNTING  STANDARDS  -In June 1998, the Financial Accounting
Standards  Board  ("FASB")  issued  Statement  of Financial Accounting Standards
("SFAS")  No.  133,  "Accounting  for  Derivative  Instruments  and  Hedging
Activities".  This  standard  requires all derivatives be measured at fair value
and  recorded  on  a company's balance sheet as an asset or liability, depending
upon  the  company's  underlying  rights  or  obligations  associated  with  the
derivative  instrument.  In June 1999, the FASB issued SFAS No. 137, "Accounting
for  Derivative  Instruments  and Hedging Activities - Deferral of the Effective
Date  of  FASB  Statement  No. 133". This statement defers the effective date of
SFAS No. 133 to all fiscal quarters of all fiscal years beginning after June 15,
2000.  In  June  2000,  the  FASB  issued  SFAS No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities", which is an amendment of
SFAS  No.  133. SFAS No. 138 addresses a limited number of implementation issues
resulting  from  the  application  of  SFAS  No.  133.  The Company and Combined
Companies  will  implement  SFAS No. 133 as of January 1, 2001. Adoption of this
pronouncement  will  result  in  a  pre-tax loss of $5.2 and $5.6 ($3.3 and $3.5
after-tax)  for  the  Company and Combined Companies, respectively, that will be
recorded  to  Shareholders' Equity in Other Comprehensive Income as a cumulative
effect  of  a change in accounting principle. Future results are not expected to
be  materially  impacted  by  the  adoption  of  this  pronouncement.

In  July  2000,  the  Emerging Issues Task Force ("EITF") reached a consensus on
Issue  No. 00-14, "Accounting for Certain Sales Incentives", which addresses the
recognition,  measurement  and  income  statement  classification  for  sales
incentives offered to customers.  Although this EITF is not effective until June
30,  2001,  registrants  who  do not elect early adoption are subject to certain
disclosure  requirements at December 31, 2000.  Upon adoption, approximately $24
and  $104 for the Company and Combined Companies, respectively, in 2000, $14 and
$86  in 1999 and $12 and $93 in 1998 will be reclassified from marketing expense
to  net  sales.  The  Company's  and  Combined  Companies'  current  policy  of
recognizing  a  liability for sales incentives at the later of the date at which
the  related  revenue  is  recorded  or the date at which the sales incentive is
offered,  complies  with  the  consensuses  reached  in  this  Issue.

RECLASSIFICATION  - Certain prior year amounts have been reclassified to conform
with  the  2000  presentation.

4.  BUSINESS  ACQUISITIONS,  DIVESTITURES,  REALIGNMENT  AND  ASSET  WRITE-OFFS

In  2000, management  continued to review and adjust its structure to streamline
its  operations  in  order  to  improve  business financial results and maximize
returns  to  owners  of  the Company and Combined Companies. As a result of this
process,  the Company  continued  to  make  acquisitions,  committed  to certain
business  realignment  activities and divested a business. The Wise Distribution
and subsequent sale were completed in 2000 because Wise was determined to not be
a long-term strategic fit.  Management  of the Company and Combined Companies is
expected to continue to review its operating structures and strategic options in
2001.

                                       45







<PAGE>
Acquisitions
------------
In  2000,  the  Company  acquired the formaldehyde and certain other assets from
Borden  Chemicals  and Plastics Limited Partnership ("BCP"), an affiliate of the
Company, for $23.8, comprised of $14.1 cash and a $9.7 interest-bearing note due
in  January 2001. The acquisition was accounted for using the purchase method of
accounting  and,  accordingly, its results of operations have been included from
the date of acquisition.  The purchase price  approximates the fair value of the
assets  acquired.

In  the  fourth  quarter of 2000, the Company acquired East Central Wax, Inc., a
manufacturer  of wax emulsions for the wood products industry, for $2.8 in cash.
The acquisition  was  accounted for using the purchase method of accounting and,
accordingly,  its  results  of  operations  have  been included from the date of
acquisition.  Based  on  a  preliminary allocation, the excess of purchase price
over  net  tangible and intangible assets is approximately $1.9 million and will
be  amortized  over  40  years.

In  May  2000, the Company acquired certain assets and liabilities of a Canadian
based  business  for $91.5 in cash. The business manufactures glue, glue sticks,
paints,  tapes  and  craft/stationery  products at its manufacturing facility in
Ontario,  Canada. The acquisition was accounted for using the purchase method of
accounting  and,  accordingly,  the  business'  results  of operations have been
included since the acquisition date. Based  on  a  preliminary  allocation,  the
excess purchase price over net tangible and identifiable  intangible  assets  is
approximately  $16.3  and  will  be  amortized  over  a  period  of  15  years.

In  the  fourth  quarter  of  1999, the Company purchased a resins manufacturing
plant in Minnesota for $7.5 in cash. The facility produces resins for use in the
manufacturing of wood and industrial products. The acquisition was accounted for
using  the  purchase  method  of  accounting  and, accordingly, its  results  of
operations  have  been included from the date of acquisition. The purchase price
approximates  the  fair  value  of  the  assets  acquired.

Early  in  the  third  quarter of 1999, the Company completed the acquisition of
Blagden  Chemicals,  Ltd.  ("Blagden")  for  $71.5  in  cash.  Blagden  produces
formaldehyde  and  resins  for  forest  products,  foundry,  and  industrial
applications  at  three  manufacturing  facilities  in  the United Kingdom and a
fourth  in the Netherlands. The acquisition was accounted for using the purchase
method  of  accounting  and,  accordingly,  its  results of operations have been
included from the date of acquisition. Goodwill of $31 will be amortized over 40
years.

In  May 1999, the Company completed the acquisition of Spurlock Industries, Inc.
("Spurlock")  for  $40.6 in cash. Spurlock is a formaldehyde and resins producer
primarily  for  forest  products  applications  with manufacturing facilities in
Virginia,  Arkansas,  and New York. The acquisition was accounted for using the
purchase  method  of accounting and, accordingly, its results of operations have
been  included  from  the date of acquisition. Goodwill of $14 will be amortized
over  a  period  of  40  years.

In February 1998, the Company acquired the resins and compounds division ("PMC")
of  Sun  Coast  Industries,  Inc.  for  $14.4  in  cash. The acquisition of this
business  further  expanded  the  Company's  growth  in the melamine market. The
acquisition was accounted  for  using  the purchase method and, accordingly, its
results  of operations have been included from the date of acquisition. Goodwill
of  $4.2 was recorded related to this acquisition and is being amortized over 40
years.

Divestitures
------------
In  the  fourth quarter of 2000, the Company sold its printing inks business for
$10.3  resulting  in  a  pre-tax  loss  of  $3.5  ($2.2  after-tax).

On  October  30,  2000,  the  shares  of  Wise  Holdings  were sold by BWHLLC to
Palladium  Equity  Partners,  LLC  for  $92.3  (see  Note  1).

In  the third and fourth quarters of 2000, the Combined Companies recorded gains
of  $3.1  and  $1.7,  respectively,  due  to  lower  than anticipated exit costs
primarily  associated  with  the  1998  divestiture  of  the  Signature  Flavors
business.  This  amount  is recorded as gain on the divestiture of businesses in
the  Combined  Statements  of  Operations.

On  February  25,  2000,  the  Company  distributed 100% of its ownership in the
infrastructure  management services business to its parent. The distribution was
treated  as  a  dividend  at  the  recorded net book value of approximately $16.


                                       46







<PAGE>
Subsequently,  substantially  all of the assets of the infrastructure management
services  business were sold to a subsidiary of Interliant, Inc. in exchange for
$2.5  in  cash  and  1,041,179  shares  of  Interliant,  Inc.  stock.

The  Company's  realignment  which  began in 1996 included the 1998 sales of the
Decorative  Products, commercial and industrial wallcovering, and Latin American
films  businesses.  In  the fourth quarter of 1999, the Company recorded $7.4 of
additional  pre-tax gain due to lower than expected exit costs related primarily
to  the  commercial  and  industrial  wallcoverings  sale.  In  addition to cash
proceeds, consideration received on the sale of the Decorative Products business
included  a  retained  interest  in the buyer (see Note 8). In October 1999, the
Company  sold the molding compounds business, a division of Sun Coast Industries
acquired  in  1998.

Foods substantially completed its divestiture of most of the KLIM operations and
the  Signature  Flavors  businesses  and  the  sale  of  two international Foods
operations in 1998. Certain proceeds for these businesses were received in 1999.
In  1999,  Foods  sold  its  China  KLIM  business for approximately $7.1, which
resulted  in  a  pre-tax  gain of approximately $10.8 ($3.5 after-tax). Also, in
1999,  $37.8 of additional pre-tax gain was recorded due primarily to lower than
expected  exit  costs  related  to  the  1998  KLIM sale. The remaining reserves
related  to  the  KLIM sale are approximately $0.1 and $5.0 at December 31, 2000
and  1999,  respectively.

In  July  1999,  Foods  sold the chocolate milk business located in Denmark. The
sale  generated  proceeds of $6.7 which resulted in a pre-tax gain of $1.9 ($1.2
after-tax).

The  following  schedule summarizes the net cash proceeds, pre-tax and after-tax
gains  and  losses associated with business divestiture activities over the last
three  years.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
                                                         NET CASH PROCEEDS          GAIN (LOSS)
                                                    ------------------------  ----------------------
                                                     2000     1999     1998    2000    1999    1998
                                                    -------  -------  ------  ------  ------  ------
<S>                                                  <C>      <C>      <C>     <C>     <C>     <C>
CONTINUING OPERATIONS
   Printing Inks                                    $ 10.3                    $(3.5)
   Commercial & industrial
     wallcoverings (1)                                                $ 15.6    2.0  $  5.5
   Latin America Films                                                  15.5                  $ 8.3
   Molding compounds business                               $  7.6
   Other                                               0.6                      0.6     1.9
                                                    ------  ------    ------  -----  ------  ------
TOTAL CONSOLIDATED PRE-TAX                          $ 10.9  $  7.6    $ 31.1  $(0.9)  $ 7.4   $ 8.3
                                                    ------  ------    ------  ------ ------  ------

   KLIM                                                     $ 16.9    $339.9         $ 48.6   $55.9
   Signature Flavors                                                   376.5  $ 4.8           304.5
   Cracker Jack & Domestic Cheese                                                               5.7
   Other                                                       6.7      18.9            0.5     5.6
                                                    ------  ------    ------  ------ ------  ------
TOTAL COMBINED PRE-TAX                              $ 10.9  $ 31.2    $766.4  $ 3.9  $ 56.5  $380.0
                                                    ======  ======    ======  ====== ======  ======
CONSOLIDATED AFTER-TAX (LOSS) GAIN                                            $(0.5) $  4.8  $  6.0
                                                                              ====== ======  ======
COMBINED AFTER-TAX GAIN                                                       $ 2.4  $ 45.0  $270.5
                                                                              ====== ======  ======
DISCONTINUED OPERATIONS (SEE NOTE 6)
   Decorative Products                                                $304.8                 $102.7
   Dairy                                                                             $  0.9     8.9
   Other                                                                               (5.8)
                                                    ------  ------    ------  ------ ------  ------
TOTAL COMBINED PRE-TAX                                   -       -     304.8      -    (4.9)  111.6
                                                    ------  ------    ------  ------ ------  ------
   Borden Foods                                                                         1.8
                                                    ------  ------    ------  ------ ------  ------
TOTAL CONSOLIDATED PRE-TAX                          $    -  $    -    $304.8  $   -   $(3.1) $111.6
                                                    ======  ======    ======  ====== ======  ======
COMBINED AFTER-TAX GAIN (LOSS)                                                $ 37.0  $(3.1) $ 36.7
                                                                              ====== ======  ======
CONSOLIDATED AFTER-TAX GAIN (LOSS)                                            $ 93.0  $(2.0) $ 36.7
                                                                              ====== ====== =======
---------------------------------------------------------------------------------------------------
<FN>
(1)     A  loss  on  the  sale  of the business was accrued in a period prior to 1998.
</TABLE>

                                       47




<PAGE>


Business  Realignment  and  Asset  Write-Offs
---------------------------------------------
In  the  fourth  quarter of 2000, the Company recorded a charge of $24.5 related
primarily  to the closure of two forest products plants in the United States and
the  consolidation  of administrative headquarters in the United Kingdom.  These
closures  are  part  of  an  ongoing  program  to reduce the Company's operating
expenses.  The  charge  consists  primarily  of  severance  costs  and  asset
write-downs.  This  amount  is  classified  as  business  realignment  and asset
write-offs  in  the  Consolidated  and  Combined  Statements  of  Operations.

In  the  third quarter of 2000, the Combined Companies recorded a charge of $4.8
related to a Foods corporate workforce reduction program. The program was put in
place to take advantage of the efficiencies generated from the implementation of
enterprise-wide technology systems in 1999. In the fourth quarter, an additional
$0.9  was  recorded  related  to  this  program.  This  amount  is classified as
business  realignment  and  asset  write-offs  in  the  Combined  Statements  of
Operations.

In  the  second  quarter  of 2000, the Company recorded a charge of $9.0 related
primarily  to the closure of a United Kingdom formaldehyde and resins plant as a
result  of  the  acquisition  of  Blagden  Chemicals,  Ltd.  in 1999. The charge
primarily  consists  of  severance  costs. This amount is classified as business
realignment  and asset write-offs in the Consolidated and Combined Statements of
Operations.

In  June  2000,  the Company sold certain rights to harvest shellfish for $10.5,
resulting  in  a pre-tax gain of $10.5 ($6.8 after-tax). This amount is recorded
as  gain  on  the  sale of assets in the Consolidated and Combined Statements of
Operations.

In  the  first quarter of 2000, the Company recorded $2.8 primarily of severance
and  environmental remediation costs related to the closure of Chemical's resins
operations  primarily  in  Argentina  and  California. In the third quarter, the
Company  recorded  an  additional charge of $1.8 related primarily to additional
environmental  remediation costs associated with the plant closure in Argentina.
These amounts are classified as business realignment and asset write-offs in the
Consolidated  and  Combined  Statements  of  Operations.

In  June  1999,  the  Company  finalized  a plan for the closure of the Chemical
resins  operations  in  the Philippines. As part of this plan, long-lived assets
will be disposed of and were written down to net realizable value as of June 30,
1999  based  upon  estimated proceeds of $5.0. This resulted in a 1999 charge of
$13.0  which  is  classified as business realignment and asset write-offs on the
Consolidated  and  Combined  Statement  of  Operations  and  as  a  reduction of
accumulated translation adjustments previously recorded on the balance sheet for
the  Philippines.

In  the  third  quarter  of  1999,  management approved a plan to close a Brazil
Chemical  operation and Uruguay Chemical business. As a result, a charge of $3.6
was recorded which relates primarily to fixed assets and is recorded as business
realignment  and asset write-offs on the Consolidated and Combined Statements of
Operations.

In  1999, management of the Company discontinued a plant expansion project. As a
result,  the  Company  has written off $25.0 of engineering, equipment and other
costs  which  are classified  as  business realignment and asset  write-offs  in
the  Consolidated  and  Combined  Statements  of  Operations.

In  September  1998,  the  Combined Companies approved the closure of a domestic
pasta plant in order to reduce manufacturing capacity. As a result, the Combined
Companies  recorded,  and  classified  as  a  business  realignment  and  asset
write-offs, a $17.2 charge related to the closure of the plant and an additional
charge  of $6.1 to cost of goods sold for the write-down of inventory. The plant
ceased  operations  in  the  fourth  quarter  of  1998.

In  December  1997,  the Company committed to exit a European Chemical operation
and  accrued  a  business  realignment charge on this business in 1997 of $16.0.
During  1998,  the  exit of this business was completed, and a pre-tax charge of
$2.5  was  recorded  in  1998  for  additional  expenses  incurred  to exit this
business,  primarily  severance.

5.     AFFILIATE'S  SHARE  OF  INCOME

In  association  with  a  limited partnership agreement between Foods and Foods'
parent,  Borden  Foods  Holdings  LLC, an affiliate of the Company's parent, the
affiliate was allocated income and gains on the sale of trademarks of $0.1, $5.1

                                          48






<PAGE>
and  $142.0 in   2000,  1999  and  1998, respectively (see accompanying Combined
Statements  of Operations). In addition, a $272.2 cash distribution of a portion
of  the  sale  proceeds  was  made  to  the  affiliate  in  1998.

6.     DISCONTINUED  OPERATIONS

The  Decorative  Products  operations were a separate segment of the Company and
Combined  Companies and Wise was a separate segment of the Combined Companies as
defined  by  generally accepted accounting principles and have been reclassified
to  discontinued  operations in the statements of operations, balance sheets and
cash  flows  for  all  periods  presented.

The summary   of   consolidated   results   below   include the 1999  loss  from
discontinued operations recorded  by the Company's investee, accounted for under
the  equity method, and the 1998 results  of  the  Decorative  Products business
(see Note  4).

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                                           2000               1999               1998
--------------------------------------------------------------------------------------------
<S>                                        <C>                <C>                <C>
    Net  sales                          $     -            $     -           $   73.2
    (Loss) income before income taxes         -               (0.6)               3.5
    Income  tax  (benefit)  expense           -               (0.2)               1.2
    (Loss)  income  from  discontinued
      operations                              -               (0.4)               2.3
--------------------------------------------------------------------------------------------
</TABLE>

As  a  result  of  the Wise Distribution, the combined results include in income
from  discontinued  operations  the  financial  results  of Wise for all periods
presented.  The  following  table  presents  the  consolidated  results above in
addition  to  the  results  of  Wise.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
<S>                                      <C>               <C>               <C>
                                           2000               1999               1998
-------------------------------------------------------------------------------------------
     Net  sales                        $  208.6           $  229.0           $  301.9
     Income  before  income  taxes          4.6                3.2                1.4
     Income  tax  expense                   1.5                1.0                0.2
     Income from discontinued operations    3.1                2.2                1.2
-------------------------------------------------------------------------------------------
</TABLE>
For  the  comparative  balance  sheets  presented,  the  net  assets of Wise are
separately  identified  on  the  Combined  Balance  Sheets  as  net  assets  of
discontinued  operations.

In addition to the amounts shown above, gains and losses (net of tax) recognized
on  the  sale  of  discontinued  operations  are  included  in  the discontinued
operations  of  the Consolidated and Combined Financial Statements.  As a result
of  a settlement reached with the Internal Revenue Service in the second quarter
of  2000,  amounts  established  for  tax  issues  related to the divestiture of
certain segments of the Company's business are no longer considered necessary. A
portion  of  these amounts for the Company and Combined Companies was classified
as  gain  on  the  sale  of discontinued operations in 2000, consistent with the
classification  of  these  amounts when established (see also Item 7 relating to
Management's  discussion on income tax expense). Included as gain on disposal of
discontinued operations for the Company and Combined Companies in 2000 for these
amounts  are  $93.0 and $37.0, respectively. Amounts differ between consolidated
and  combined  because  Foods  is  not  reflected  as  a  sale of a discontinued
operation  in  combined.

The  consolidated 1999 net of tax loss on disposal of discontinued operations of
$2.0  represents  the  loss  of  $3.7  recorded   by  the  Company's   investee,
accounted for under the equity method, offset  by a favorable claim   settlement
related to the 1997 divestiture of Dairy of $0.6, and a gain of   $1.1  due   to
lower than expected exit costs related to the 1996  sale  of the Foods business.

The  Combined  Companies had a 1999 net of tax loss from discontinued operations
of  $3.1.  The  losses  differ from that of the Company because the $1.1 gain on
the  sale  of  the  Foods  business  is  eliminated  in  the  Combined Financial
Statements.

The  consolidated  and combined 1998 net of tax gain on disposal of discontinued
operations  of  $36.7  relates  to  the  sale  of  Decorative  Products.

                                       49




<PAGE>

7.   COMPREHENSIVE  INCOME

Comprehensive  income  included  foreign  currency  translation  adjustment
reclassifications  as  shown  in  the  following  table:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
                                                          CONSOLIDATED                  COMBINED
                                                    ----------------------     -------------------------
                                                     2000     1999    1998      2000     1999     1998
--------------------------------------------------------------------------------------------------------
<S>                                                  <C>     <C>      <C>       <C>      <C>      <C>
 Foreign currency translation adjustments           $(9.6)  $ 10.4   $ 0.6    $(13.2)  $ 11.8   $(11.0)
 Reclassification adjustments                           -    (13.4)      -         -    (10.0)   108.4
                                                    ------  -------  ------   -------  -------  ------
                                                    $(9.6)  $ (3.0)  $ 0.6    $(13.2)  $  1.8   $ 97.4
                                                    ======  =======  ======   =======  =======  ======
--------------------------------------------------------------------------------------------------------
</TABLE>

The  reclassification  adjustments  in  1999 primarily represent the accumulated
translation  adjustment  included  as  part  of the charge to close the Chemical
operations  in the Philippines. The reclassification adjustment in 1998 reflects
the  accumulated  translation  adjustment recognized on the sale of the Combined
Companies'  KLIM  business.

8.     INVESTMENTS

Investments  held by the Company and Combined Companies primarily consist of two
common  stock  equity interests received as partial consideration on the sale of
certain businesses and an investment in preferred stock of an affiliate.  One of
the  common  stock  investments  represents approximately 33% of the outstanding
shares  and  is accounted for using the equity method.  At December 31, 2000 and
1999,  the unamortized excess of the Company's investment over its equity in the
underlying  net  assets  was  $16.1  and  $16.5,  respectively.  The  other  two
investments  are  accounted  for  using  the  cost  method.

The  Company's  and  Combined  Companies' investments also include certain other
partnership,  subsidiary  and  joint  venture  interests.

The  Company  and Combined Companies review the carrying value of investments in
accordance  with  existing  accounting  guidance that requires investments to be
adjusted  to  fair value if the decline in value is considered to be "other than
temporary"  based  on  certain  criteria.  The  Company  and  Combined Companies
recorded  investment  write-downs   of   $48.0, $3.0 and $26.7 in 2000, 1999 and
1998,  respectively.



                                       50



































<PAGE>
9.    DEBT,  LEASE  OBLIGATIONS  AND  RELATED  COMMITMENTS

Debt  outstanding  at  December  31,  2000  and  1999  is  as  follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                                          2000                      1999
                                                             ------------------------- --------------------------
                                                                          Due Within                  Due Within
                                                               Long-Term   One Year       Long-Term    One Year
                                                             ------------ ------------ ------------- ------------
<S>                                                               <C>          <C>        <C>         <C>

9.2% Debentures due 2021                                     $    117.1                  $   117.1

7.875% Debentures due 2023                                        250.0                      250.0

Sinking fund debentures:
     8-3/8% due 2016                                               78.5                       78.5
     9-1/4% due 2019                                               48.7                       48.7

Industrial Revenue Bonds (at an average rate of
9.8% in 2000 and 8.5% in 1999)                                     36.2      $   1.1          43.2    $   10.3

Other (at an average rate of 9.5% in 2000 and 9.8% in
   1999)                                                                         1.8           3.6         7.4
---------------------------------------------------------------------------------------------------------------
Total current maturities of long-term debt                                       2.9                      17.7

Short-term debt (primarily foreign bank loans
  at an average rate of 7.4%)                                                   40.6
---------------------------------------------------------------------------------------------------------------
Total debt - Consolidated                                    $    530.5     $   43.5     $   541.1   $    17.7
---------------------------------------------------------------------------------------------------------------
Other Foods debt (at an average rate of
  3.6% in 2000 and 0.0% in 1999)                                    5.3                        3.0

Foods short-term debt (primarily foreign bank
  loans at an average rate of 2.9% in 2000 and
  6.0% in 1999)                                                                  0.6                       0.3
--------------------------------------------------------------------------------------------------------------
Total debt - Combined                                       $    535.8     $    44.1    $    544.1   $    18.0
--------------------------------------------------------------------------------------------------------------
</TABLE>

In   the   second  quarter  of  1998,  the  Company's  and  Combined  Companies'
contractually committed lines of credit (the "Credit Agreement") was reduced due
to  the sales of certain Foods Unaligned businesses in accordance with the terms
of  the  Credit  Agreement. As a result, the $950.0 five year revolver (maturing
July  13,  2002)  was  reduced  to  $895.0,  and  the $50.0, 364-day convertible
revolver  was  canceled.  In the fourth quarter of 2000, as a result of the Wise
Distribution,  the Credit Agreement was reduced to $809.0 in accordance with the
terms of the Credit Agreement. As of December 31, 2000, the Company and Combined
Companies  had contractually committed lines of credit of $809.0 which mature on
July  13,  2002. Current pricing under the LIBOR based borrowing option is LIBOR
plus 87.5 basis points. The commitment fee on the unused portion of the facility
is  37.5  basis  points.

The Credit Agreement, as amended, contains covenants that significantly limit or
prohibit,  among  other  things,  the Company's and its subsidiaries' ability to
incur  indebtedness,  make  prepayments  of certain indebtedness, pay dividends,
engage  in  transactions  with  affiliates,  create  liens,  make changes in its
businesses  or  control  of  the  Company,  sell  assets,  engage in mergers and
consolidations,  and  use  proceeds from asset sales and certain debt and equity
issuances.  In  addition,  the  Credit  Agreement  requires  that  the  Combined
Companies  limit  its  capital  expenditures  to  certain  specified amounts and
maintain  other  financial ratios, including a minimum ratio of EBITDA (Earnings
Before  Interest, Taxes, Depreciation and Amortization as adjusted by the Credit
Agreement)  to  interest  expense  and  a maximum ratio of total debt to EBITDA.

At December 31, 2000 and 1999, there were no outstanding debt balances under the
Credit  Agreement.  Provisions  under  the  Credit  Agreement  require  Foods to
guarantee  the Company's obligations under the Credit Agreement. The Company had
$714.0  (net  of  $95.0  in letters of credit) available for borrowing under its
Credit  Agreement  at December 31, 2000, and incurred commitment fees of $1.3 in
2000  and  $0.8  in  1999.


                                       51







<PAGE>
Aggregate  maturities  of  total debt and minimum annual rentals under operating
leases  at  December 31, 2000, for the Company and the Combined Companies are as
follows:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
                                                CONSOLIDATED                 COMBINED
                                          -------------------------  -------------------------
                                                        MINIMUM                   MINIMUM
                                                     RENTALS UNDER             RENTALS UNDER
                                            DEBT   OPERATING LEASES    DEBT   OPERATING LEASES
---------------------------------------------------------------------------------------------------
<S>                                         <C>      <C>                <C>     <C>
2001                                      $ 43.5        $ 19.6       $ 44.1       $  21.8
2002                                         1.4          18.9          2.0          21.0
2003                                           -          17.2          1.0          19.0
2004                                           -          15.8          1.0          16.3
2005                                           -          15.1          0.6          15.5
2006 and thereafter                        529.1           5.0        531.2           5.3
                                          ------                     ------
                                          $574.0                     $579.9
--------------------------------------------------------------------------------------------------
</TABLE>

The  Combined Companies' future minimum lease rentals under capital leases as of
December  31,  2000  are shown in the following table. No capital leases were in
place  as  of  December  31,  1999.

<TABLE>
<CAPTION>
----------------------------------------------------------------------
                                                            2000
----------------------------------------------------------------------
<S>                                                         <C>
2001                                                   $     0.5
2002                                                         0.5
2003                                                         0.5
2004                                                         0.5
2005                                                         0.5
2006  and  thereafter                                        3.3
                                                        -------------
                                                             5.8
Less  amounts  representing  interest  at  6.75%             2.8
                                                        -------------
Present value of future minimum capital lease payments       3.0
Less  current  portion  of  capital  lease  obligations      0.3
                                                        -------------
Long-term  portion  of  capital  lease  obligations    $     2.7
---------------------------------------------------------------------
</TABLE>

Consolidated rental expense amounted to $23.9, $22.2 and $17.3 in 2000, 1999 and
1998,  respectively.  Combined rental expense amounted to $25.2, $23.9 and $21.6
in  2000,  1999  and  1998,  respectively.

10.     INCOME  TAXES

Comparative  analysis of the Company's provision (benefit) for income taxes from
continuing  operations  follows:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
                                              CURRENT                        DEFERRED
                                     --------------------------     -------------------------
                                      2000      1999      1998       2000      1999      1998
---------------------------------------------------------------------------------------------
<S>                                   <C>       <C>       <C>        <C>       <C>       <C>
Federal                            $ (19.7)   $ (2.6)   $(58.3)    $ 12.4     $ 7.1     $75.2
State and Local                       (1.1)      1.5       1.6       (1.6)     (0.3)      1.2
Foreign                               (0.8)     16.1       6.0        4.2      (1.0)      8.1
                                   --------   -------   -------    -------    ------    -----
                                   $ (21.6)   $ 15.0    $(50.7)    $ 15.0     $ 5.8     $84.5
---------------------------------------------------------------------------------------------
</TABLE>

The  Company's  income  tax  expense  (benefit)  from  discontinued  operations'
operating  results  was  $0.0,  $(0.2)  and  $1.2  in  2000,  1999  and  1998,
respectively.  The  Company's  income  tax  (benefit)  expense  related  to  the
loss/gain on disposal from discontinued operations was $(93.0), $(1.1) and $74.9
in  2000,  1999  and  1998,  respectively.


                                       52



<PAGE>
The  Combined  Companies'  provision  (benefit) for income taxes from continuing
operations  is  as  follows:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
                                                  CURRENT                     DEFERRED
                                          ------------------------   ------------------------
                                           2000     1999     1998     2000     1999     1998
---------------------------------------------------------------------------------------------
<S>                                        <C>      <C>      <C>      <C>      <C>      <C>
Federal                                  $(57.7)  $(12.0)  $(39.5)  $(11.7)   $22.7   $137.5
State and Local                            (2.1)     1.4      5.8     (2.2)     2.7     12.7
Foreign                                     1.7     13.6      9.8      4.0      3.3      7.1
                                         -------  -------  -------   -----    -----   ------
                                         $(58.1)  $  3.0   $(23.9)  $ (9.9)   $28.7   $157.3
--------------------------------------------------------------------------------------------
</TABLE>

The  Combined  Companies'  income  tax  (benefit)  expense  from  discontinued
operations'  operating results was $(1.5), $0.9 and $0.2 in 2000, 1999 and 1998,
respectively.  The  Combined  Companies' income tax expense (benefit) related to
the  loss/gain  on disposal from discontinued operations was $(37.0), $(1.8) and
$74.9  in  2000,  1999  and  1998,  respectively.

The  income  tax  benefit  from  the  cumulative  effect of change in accounting
principle  for  the  Combined  Companies  was  $1.8  in  1999.

Reconciliations of the Company's and the Combined Companies' differences between
income  taxes  computed at Federal statutory tax rates and provisions for income
taxes  are  as  follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                        CONSOLIDATED                       COMBINED
                                                 -------------------------           ------------------------
                                                   2000     1999     1998             2000     1999     1998
-------------------------------------------------------------------------------------------------------------
<S>                                                <C>      <C>      <C>              <C>      <C>      <C>
Income taxes computed at
  Federal statutory tax rate                     $(23.0)   $26.6    $20.1           $(33.8)  $ 42.5   $142.0
State tax provision, net of
  Federal benefits                                 (2.7)     1.2      2.3             (3.8)     3.1     12.5
Foreign tax differentials                           2.2      0.2     (2.5)             2.7      1.2      1.6
Foreign source income subject
  to U.S. taxation, net of
  valuation allowance                              13.1     (7.2)     8.8             13.1     (7.3)     8.8
Divestiture tax differentials                         -        -        -              7.9    (11.1)   (35.7)
Losses and other expenses
  not deductible for tax                           (1.2)       -      2.1              3.1      2.9      5.1
Adjustment of prior estimates                       5.0        -      3.0            (57.2)     0.4     (0.9)
                                                  ------   ------   ------          -------  -------  -------
Provision for income taxes                        $(6.6)    $20.8    $33.8          $(68.0)  $ 31.7   $133.4
-------------------------------------------------------------------------------------------------------------
</TABLE>

The domestic and foreign components of the Company's and the Combined Companies'
income  from  continuing  operations  before  income  taxes  are  as  follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                       CONSOLIDATED                         COMBINED
                                                       ------------                         --------
                                              2000        1999      1998           2000       1999      1998
-------------------------------------------------------------------------------------------------------------
<S>                                           <C>         <C>        <C>           <C>        <C>       <C>
Domestic                                    $(69.0)      $33.3      $35.4       $(105.3)    $ 76.7     $387.3
Foreign                                        3.4        42.8       22.0           8.7       44.6       18.5
                                             -----       -----      -----        ------     ------    -------
                                            $(65.6)      $76.1      $57.4       $ (96.6)    $121.3     $405.8
-------------------------------------------------------------------------------------------------------------
</TABLE>


                                                 53










<PAGE>
The  tax  effects  of  the  Company's  and  the  Combined Companies' significant
temporary  differences,  and  loss  and credit carryforwards, which comprise the
deferred  tax  assets  and  liabilities  at  December  31, 2000 and 1999 follow:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
                                                  CONSOLIDATED        COMBINED
                                               -----------------  -----------------
                                                 2000     1999      2000     1999
-------------------------------------------------------------------------------------
<S>                                            <C>       <C>      <C>       <C>
ASSETS
Non-pension post-employment benefit
   obligations                                 $  50.6   $ 58.0   $  52.7   $ 60.5
Divestiture reserve                               16.8      9.0      17.5     13.3
Accrued expenses and other expenses               86.5     65.1      91.7     73.0
Foreign accrued expenses, pensions and
   other expenses                                  4.5      6.2       0.6      2.1
Loss and credit carryforwards                    198.0    180.6     214.4    192.5
                                               --------  -------  --------  -------
Gross deferred tax assets                        356.4    318.9     376.9    341.4
Valuation allowance                             (101.7)   (37.7)   (102.3)   (43.0)
                                               --------  -------  --------  -------
                                                 254.7    281.2     274.6    298.4

LIABILITIES
Property, plant, equipment and intangibles        59.8     68.6      51.2     84.2
Foreign property, plant, equipment/other          16.9     21.4      22.3     28.1
Certain foreign intangibles                       (1.2)    (4.3)     11.9      3.5
Pension liability                                 35.7     41.0      35.3     37.6
Deferred gain on sale of partnership interest     17.8     13.7      17.8     13.7
Other prepaids                                     0.7      0.5       2.0      2.7
                                               --------  -------  --------  -------
Gross deferred tax liabilities                   129.7    140.9     140.5    169.8
-------------------------------------------------------------------------------------
Net asset                                      $ 125.0   $140.3   $ 134.1   $128.6
-------------------------------------------------------------------------------------
</TABLE>

The  Company's  and  Combined  Companies'  net  change  of  $64.0  and  $59.3,
respectively, in valuation allowance in 2000 is primarily related to foreign tax
credits  generated  in  1999  and 1998, no longer expected to be utilized by the
Company  and  Combined  Companies  as a result of a settlement resolving federal
examination  issues  for  the years 1996 and 1997 as well as foreign tax credits
identified  in  2000  that  are  no  longer  expected  to  be  utilized.

The  Company's  net  deferred tax asset at December 31, 2000 was $125.0. Of this
amount, $127.3 represents net domestic deferred tax assets related to future tax
benefits.  Included in the domestic deferred tax asset is $27.2 of net operating
loss  carryforward  for U.S. federal tax purposes, which begin expiring in 2021.
Realization  of  the domestic net operating loss is dependent upon generation of
approximately  $78  of  future income before the expiration dates. Also included
within  the  domestic  deferred tax asset is $61.5 of foreign tax credits with a
related  valuation  allowance  of  $(50.8). These foreign tax credits consist of
$59.7  of  foreign tax credit carryover which was generated in 1998 and 1999 and
will  begin  expiring in 2004 and $1.8 of foreign tax credit which was generated
in  2000 and will begin expiring in 2006. Realization of the entire net domestic
deferred  tax  asset  is dependent on generation of approximately $364 of future
taxable  income.

The  Combined Companies' net deferred tax asset at December 31, 2000 was $134.1.
Of  this  amount,  $158.8 represents net domestic deferred tax assets related to
future tax benefits. Included in the domestic deferred tax asset is $37.2 of net
operating  loss carryforward for U.S. federal tax purposes, which begin expiring
in  2021.  Realization  of  the  domestic  net  operating loss is dependent upon
generation  of  approximately $106 of future income before the expiration dates.
Also  included  within  the  domestic deferred tax asset is $67.3 of foreign tax
credits  with  a related valuation allowance of $(50.8). This amount consists of
$65.5  of  foreign tax credit carryover which was generated in 1998 and 1999 and
will  begin  expiring in 2004 and $1.8 of foreign tax credit which was generated
in  2000 and will begin expiring in 2006. Realization of the entire net domestic
deferred  tax  asset  is dependent on generation of approximately $454 of future
taxable  income.

The  Company  has not recorded income taxes applicable to undistributed earnings
of  foreign subsidiaries that are indefinitely reinvested in foreign operations.
Undistributed earnings permanently reinvested amounted to $134.1 at December 31,
2000.

                                       54






<PAGE>

11.     PENSION  AND  RETIREMENT  SAVINGS  PLANS

Most  U.S. employees of the Company and the Combined Companies are covered under
a  non-contributory  defined benefit plan ("the Borden, Inc. Plan"). The Borden,
Inc.  Plan  provides  benefits  for  salaried  employees   based   on   eligible
compensation  and  years  of  credited service and for hourly employees based on
years  of  credited  service.  Certain  employees in other countries are covered
under  contributory  and  non-contributory   defined   benefit   foreign  plans.
Additionally,  eligible salaried and hourly employees may contribute up to 5% of
their pay (7% for certain longer service salaried employees), which is currently
matched by the Company at a range of 50-75%. The Company has the option to match
up to 100% of this amount and in certain cases the Company may match up to 125%,
based on financial performance. Charges to operations for matching contributions
under  the Company's retirement savings plans in 2000, 1999 and 1998 amounted to
$6.2,  $5.9 and $5.3, respectively. Charges for matching contributions under the
Combined  Companies  retirement savings plans in 2000, 1999 and 1998 amounted to
$7.2,  $7.1  and  $6.7,  respectively.

The  Company's and the Combined Companies' funding of their pension plans equals
or  exceeds the minimum funding requirements imposed by Federal and foreign laws
and  regulations.  Subsequent to the 1996 sales of Foods and Wise, the Company's
pension  plan  retained  the  liabilities  related  to  the  employees  of these
businesses.  The  consolidated  projected  benefit  obligation  and  plan assets
include  the domestic obligation and assets for Foods in 2000, and for Foods and
Wise  in  1999.  In  1996, the Company recorded a receivable from Foods for  its
actuarially  determined  liability  which  is  adjusted annually for actuarially
determined expense  and funding payments. The  Wise  liability  was  settled  in
2000, as a result  of  the  Wise  Distribution  (see  Notes  1  and  4).   As  a
result of the settlement  of  this  liability,  in addition to other  lump   sum
settlements made during  2000,  the  Company  and Combined Companies recorded  a
settlement  charge of $8.9  in 2000.

                                       55




















































<PAGE>
The  assets  and  benefit  obligations  of  the  plans  were  as  follows:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
                                                    CONSOLIDATED       COMBINED
                                                 ----------------  ----------------

                                                  2000     1999     2000     1999
--------------------------------------------------------------------------------------
<S>                                              <C>      <C>      <C>      <C>
CHANGE IN BENEFIT OBLIGATION

Benefit obligation at beginning of year          $332.3   $351.0   $353.2   $373.0

Service cost                                        4.7      5.0      5.2      5.4
Interest cost                                      23.5     22.2     24.8     23.3
Actuarial losses (gains)                            8.8     (5.8)     7.8     (7.4)
Foreign currency exchange rate changes             (0.4)     0.2     (1.3)     1.3
Benefits paid                                     (46.6)   (42.0)   (48.4)   (44.1)
Plan amendments                                    (0.7)     2.0     (0.7)     2.0
Acquisitions                                        7.4        -      7.4        -
Settlements/curtailments                          (22.6)    (0.3)   (22.7)    (0.3)
                                                 ------   ------   ------   ------
                                                 $306.4   $332.3   $325.3   $353.2
                                                 ------   ------   ------   ------
CHANGE IN PLAN ASSETS

Fair value of plan assets at beginning of year   $381.0   $347.7   $406.1   $371.3
Actual return on plan assets                       67.4     75.4     72.3     75.9
Foreign currency exchange rate changes             (0.2)     0.2     (1.5)     1.6
Employer contribution                               3.1      0.7      3.5      2.4
Benefits paid                                     (46.6)   (42.0)   (48.4)   (44.1)
Acquisitions                                        8.1        -      8.1        -
Settlements/curtailments                          (25.9)    (1.0)   (25.9)    (1.0)
                                                 ------   ------   ------   ------
Fair value of plan assets at end of year         $386.9   $381.0   $414.2   $406.1
                                                 ------   ------   ------   ------

Plan assets in excess of benefit obligation      $ 80.5   $ 48.7   $ 88.9   $ 52.9

Unrecognized net actuarial loss                    22.3     73.3     23.8     78.5
Unrecognized initial transition gain               (0.1)    (0.4)    (0.1)    (0.4)
Unrecognized prior service cost                     4.7      6.1      4.7      6.1
                                                 -------  -------  -------  -------
Prepaid pension asset                            $107.4   $127.7   $117.3   $137.1
--------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
Amounts  recognized  in  the  balance  sheets  consist  of:
---------------------------------------------------------------------------------------
                                                    CONSOLIDATED            COMBINED
                                                 -----------------     ----------------
                                                   2000      1999        2000     1999
---------------------------------------------------------------------------------------
<S>                                                 <C>      <C>       <C>      <C>
Prepaid benefit cost based on a September 30
  measurement date                                $112.0   $129.9      $122.7   $140.9
Accrued benefit liability                           (5.3)    (5.6)       (6.1)    (7.2)
Accumulated other comprehensive income               0.7      3.4         0.7      3.4
                                                 -------   -------     -------  -------
                                                  $107.4   $127.7      $117.3   $137.1
---------------------------------------------------------------------------------------
</TABLE>

Plan  assets  consist  primarily of equity securities and corporate obligations.


                                       56















<PAGE>
Consolidated  expense  excludes  the  expenses  related  to  the  Foods and Wise
domestic  pension  plan.  Following  are  the  components of net pension expense
recognized  by  the  Company  and  Combined  Companies:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
                                                    CONSOLIDATED               COMBINED
                                              -----------------------   ------------------------
<S>                                             <C>      <C>     <C>      <C>      <C>     <C>
                                                2000     1999    1998     2000    1999     1998
------------------------------------------------------------------------------------------------
Service cost                                  $  2.9   $  3.1  $  6.0   $  5.2   $  5.6   $  9.3
Interest cost on projected benefit obligation   18.8     17.8    29.9     24.8     23.7     36.3
Expected return on assets                      (21.4)   (22.2)  (29.9)   (28.5)   (29.7)   (37.0)
Amortization of prior service cost               0.5      0.7    (2.0)     0.7      0.9     (2.1)
Amortization of initial transition asset        (0.3)    (0.4)   (2.1)    (0.3)    (0.4)    (2.3)
Recognized actuarial loss                        6.4      5.4     9.4      8.2      6.9     11.5
Settlement/curtailment loss                      8.9      0.6    27.1      8.9      0.6     24.2
                                              ------    -----   ------   ------   ------  ------
Net pension expense                           $ 15.8   $  5.0  $ 38.4   $ 19.0   $  7.6   $ 39.9
------------------------------------------------------------------------------------------------
</TABLE>
The weighted average rates used to determine net pension expense for both the
Company and the Combined Companies were as follows:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                                                                     2000           1999           1998
---------------------------------------------------------------------------------------------------------
<S>                                                                  <C>            <C>            <C>
Discount rate                                                        7.7%          6.7%           7.4%
Rate of increase in future compensation levels                       4.7%          4.2%           4.3%
Expected long-term rate of return on plan assets                     8.7%          7.9%           8.4%
---------------------------------------------------------------------------------------------------------
</TABLE>

In  1999,  the  Company  and  Combined Companies elected to update the mortality
table  used  to  determine the projected benefit obligation and pension expense.
The  impact  of  this  change in assumption was an increase in the obligation at
December  31, 1999, of approximately $7.0 for the Company and Combined Companies
and  an  increase in expense for fiscal year 2000 of approximately $0.8 and $1.1
for  the  Company  and  Combined  Companies,  respectively.

The projected benefit obligation and fair value of plan assets for the Company's
pension  plans  with  benefit obligations in excess of plan assets were $5.6 and
$0.0,  respectively,  as of December 31, 2000, and $11.6 and $4.5, respectively,
as  of  December  31,  1999.

The  projected benefit obligation and fair value of plan assets for the Combined
Companies'  pension plans with benefit obligations in excess of plan assets were
$6.1  and  $0.0,  respectively,  as  of  December  31, 2000, and $12.0 and $4.5,
respectively,  as  of  December  31,  1999.

Most  employees  not  covered by the Company's plans are covered by collectively
bargained  agreements,  which  are  generally  effective  for  five years. Under
Federal pension law, there would be continuing liability to these pension trusts
if  the  Company  ceased  all or most participation in any such trust, and under
certain  other  specified  conditions.  The  Consolidated  Financial  Statements
include charges of $0.2, $1.3 and $1.0 in 2000, 1999 and 1998, respectively, for
payments  to  pension trusts on behalf of employees not covered by the Company's
plans.  The Combined Financial Statements include charges of $0.3, $1.8 and $1.7
in  2000,  1999  and  1998,  respectively.

12.  NON-PENSION  POSTRETIREMENT  BENEFIT

The  Company  provides  certain  health and life insurance benefits for eligible
domestic  and Canadian retirees and their dependents. The cost of postretirement
benefits is accrued during employees' working careers. Domestic participants who
are  not  eligible  for  Medicare are provided with the same medical benefits as
active  employees,  while  those who are eligible for Medicare are provided with
supplemental  benefits.  Canadian  participants  are  provided with supplemental
benefits  to the national healthcare plan in Canada. The domestic postretirement
medical  benefits  are  contributory;  the   Canadian   medical   benefits   are
non-contributory.  The  domestic  and  Canadian  postretirement  life  insurance
benefits  are non-contributory.  Benefits  are  funded on a pay-as-you-go basis.

                                       57








<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
                                           CONSOLIDATED        COMBINED
                                         ----------------  ----------------
                                          2000     1999     2000     1999
-----------------------------------------------------------------------------
<S>                                      <C>      <C>      <C>      <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year  $103.4   $107.0   $118.3   $120.7
Interest cost                               7.3      6.7      8.6      7.8
Contributions by plan participants          2.0      2.2      2.5      2.8
Actuarial losses                            8.2      6.4     12.9      8.3
Benefits paid                             (11.8)   (12.4)   (14.2)   (14.8)
Plan amendment                             (1.0)    (6.5)    (1.7)    (6.5)
Divestitures                                  -        -     (6.5)       -
                                         ------    ------  -------  -------
Benefit  obligation at end of year        108.1    103.4    119.9    118.3

Unrecognized net actuarial gain            23.8     35.5     21.2     35.6
Unrecognized prior service benefit         19.5     28.9     20.2     28.9
                                         ------    ------  -------  -------
Accrued postretirement
   obligation at end of year             $151.4   $167.8   $161.3   $182.8
-----------------------------------------------------------------------------
</TABLE>

A  7.7%  and  7.8%  weighted  average  discount rate was used in determining the
postretirement  benefit  obligation at December 31, 2000 and 1999, respectively.
For  measurement  purposes,  health  care costs are assumed to increase 5.8% for
pre-65  benefits  and  9.3%  in  2001  grading down gradually to a constant 5.8%
annual  increase  by  the  year  2008  for  post-65  benefits.  The  comparable
assumptions  for  the  prior  year  were  8.1%  and  5.8%  by  the  year  2004.

In  1999,  the  Company  and  Combined Companies elected to update the mortality
table  used  to  determine the projected benefit obligation and related expense.
The  impact  of  this  change in assumption was an increase in the obligation at
December  31,  1999  of  $3.5  for  the  Company  and Combined Companies, and an
increase  in  the  expense for fiscal year 2000 of $0.4 and $0.5 for the Company
and  Combined  Companies,  respectively.

Following  are the components of net postretirement benefit recognized for 2000,
1999  and  1998:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
                                                     CONSOLIDATED              COMBINED
                                                ----------------------  ----------------------

                                                 2000    1999    1998    2000    1999    1998
----------------------------------------------------------------------------------------------
<S>                                             <C>     <C>     <C>     <C>     <C>     <C>
 Service cost                                                           $ 0.1           $ 0.1
 Interest cost on projected benefit obligation  $ 7.3   $ 6.7   $ 9.2     8.6   $ 7.8    10.5
 Amortization of prior service benefit           (9.3)   (8.7)   (9.5)   (9.3)   (8.7)   (9.5)
 Immediate recognition of
    initial obligation                              -     1.0       -       -     2.2       -
 Recognized actuarial gain                       (1.8)   (2.7)   (1.8)   (2.2)   (3.2)   (2.1)
 Settlement / curtailment gain                   (1.1)      -    (6.1)   (1.1)      -    (6.6)
                                                ------  ------  ------  ------  ------  ------
 Net postretirement benefit                     $(4.9)  $(3.7)  $(8.2)  $(3.9)  $(1.9)  $(7.6)
----------------------------------------------------------------------------------------------
</TABLE>
Assumed  health  care  cost trend rates have a significant effect on the amounts
reported  for  health  care  plans. A one-percentage-point change in the assumed
health  care  cost  trend  rates  would  have  the  following  effects:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                                                              1% increase                 1% decrease
                                                              -----------                 -----------
<S>                                                             <C>                            <C>
Effect on total service cost and interest cost components  $        0.6                  $    (0.6)
Effect on postretirement benefit obligation                         7.5                       (6.8)
-----------------------------------------------------------------------------------------------------
</TABLE>

13.  SHAREHOLDERS'  EQUITY

Preferred  Stock
----------------
The  Company  has  24,574,751  shares  of  series  A  Cumulative Preferred Stock
("Preferred  Stock")  outstanding with a total of 100,000,000 shares authorized.
Each  share  has  a  liquidation preference of $25 and is entitled to cumulative

                                       58
<PAGE>

dividends  at  an  annual rate of 12% payable quarterly in arrears. These shares
are  redeemable,  in  whole or in part, at the Company's discretion. At December
31,  2000,  the  redemption  price  is  105%  of the issuance price and declines
ratably  in  each year to par at June 26, 2005. At this time, the Company has no
plans  to  redeem  these  shares.

Common  Stock
-------------
The  Company  has  198,974,994 shares of $0.01 par value common stock issued and
outstanding  and  300,000,000  shares  authorized. Foods Holdings is capitalized
with  100  shares  of  $0.01  par  value  common  stock.

Other  Shareholders'  Equity
----------------------------
At  December  31,  2000,  the  Company  held $404.9 of notes receivable from its
parent,  which accrue interest at 12% per year, payable quarterly, and mature on
September  29,  2005. The notes were received from an affiliate of the Company's
parent  as  proceeds  from the 1996 sales of Wise ($34.2) and Foods ($365.9) and
the  issuance  of options on the common stock of the Consumer Adhesives business
and Borden Decorative Products Holdings, Inc. ($44.0). Notes totaling $39.2 were
transferred  to  BWHLLC  in  1998 in settlement of the early cancellation of the
Borden  Decorative  Products  Holdings, Inc. option. At December 31, 2000, Other
Shareholders'  Equity  included  accrued  interest of $10.0 related to the notes
receivable  from  the  Company's  parent.

During  1996  the  Company  sold  options  to BWHLLC on what was then all of the
common stock of the Consumer Adhesives business for 110% of the August 16,  1996
fair  market  value  of  the common stock. The options were issued at fair value
with  a five-year expiration. The exercise price of the options for the Consumer
Adhesives business  is $54.1. Management expects the 1996 options sold to BWHLLC
for  Consumer  Adhesives'  common  shares  to be exercised in 2001. During 2000,
additional  common  shares of the Consumer Adhesives business were issued to and
are  held  by  the  Company.  The  additional   shares  total  3.5  million,  or
approximately  26%,  of  the  total  Consumer   Adhesives  common  stock  shares
outstanding  at  December  31,  2000.

At December 31, 2000 and 1999, the Combined Companies' equity includes $66.3 and
$66.2,  respectively,  of  affiliate's  interest  in  subsidiary,  primarily
representing  the 30% interest held by an affiliate of the Company's parent in a
consolidated  subsidiary  of  Foods.  See  Note  5  for  additional information.

The  Company  declared  common  stock  cash  dividends of $61.6, $64.1 and $59.5
during  2000,  1999  and  1998,  respectively.  The dividends were recorded as a
charge  to  paid-in  capital  to  reflect  a  return of capital to the Company's
parent.

As  described in Note 1, the net assets of Wise of $58.7  are treated as if they
were  distributed  out  of  the  Combined  Companies in 2000.

During  2000   the   Company   distributed   100%   of   its  ownership  in  the
infrastructure  management  services  business  to  the  Company's  parent.  The
distribution was recorded at net book value of $16.3, including $8.6 owed by the
Company  to the infrastructure management services business in accordance with a
tax sharing agreement.  Subsequent to the distribution, substantially all of the
assets  of  the  infrastructure  management  services  business  were  sold to a
subsidiary  of  Interliant,  Inc.  (see  Note  4).  Subsequent to this sale, the
remaining  assets of the infrastructure management services business, with a net
book  value of approximately $0.3, were contributed back to the Company from the
Company's  parent.

The  Company's  parent  also  contributed  tax benefits to the Company of $44.0,
$26.4  and  $42.9  during  2000,  1999  and  1998,  respectively. The Company is
included  in  its parent's tax return and the deductible interest expense on the
parent's  notes payable reduces the Company's tax liability. In addition, BWHLLC
made  a  capital  contribution  to  Wise  of  $2.4  in  2000.

The  Company  recorded  a minimum pension liability adjustment of $1.8, $1.5 and
$(3.6),  for  2000,  1999 and 1998, respectively, ($1.8, $3.3 and $(5.4) for the
Combined Companies in 2000, 1999 and 1998, respectively) relating to underfunded
pension  plans,  which  is  reflected in accumulated other comprehensive income.


                                       59












<PAGE>

14.     STOCK  OPTION  PLANS  AND  OTHER  STOCK  BASED  COMPENSATION

Unit  Appreciation  Rights
--------------------------
Effective  January  1, 1996, key employees of the Company and Combined Companies
were  offered  units  and unit appreciation rights ("UAR's") in their respective
holding  companies. Additional UAR's have been granted in subsequent years under
these  plans.  In 2000, 24,071,241 UAR's were granted with a ten year life and a
vesting  period  of  4  years.  The  remaining  UAR's vest over 5 years, and any
compensation  expense  incurred in conjunction with the UAR's will be charged to
the Company or the Combined Companies.  For 2000, 1999 and 1998, the Company has
not recorded any compensation expense attributable to the UAR's. During 2000 and
1999,  Foods  recorded  $0.1  and  $0.9 of compensation expense related to their
UAR's.  Foods  had  no compensation expense in 1998. There were 49,953,789 UAR's
outstanding  at  December  31,  2000,  and  5,080,707 UAR's available for future
grants.

Stock  Options
--------------
Key subsidiaries of the Company and Combined Companies have issued stock options
under  their individual Stock Purchase and Option Plans for Key Employees. Under
these  plans,  equity  in the Chemical, Wise, Consumer Adhesives, infrastructure
management  services,  and  Decorative  Products  business units was sold to key
management  personnel.  Fixed  stock options were granted to purchase additional
shares  at  varying  exercise prices between $5.00 and $11.50. In addition, each
company  has  granted  fixed  stock  options to employees under their respective
broad-based  option  plans.  The  options were issued with exercise prices at or
above fair value, vest over five years and expire ten years from the date of the
grant. As of December 31, 2000 there are 5,488,750 options outstanding among the
companies  and  1,350,813  options  available  for  future  grants.

The  Company  has  adopted  the  disclosure-only  provisions  of  SFAS  No. 123,
"Accounting  for  Stock-Based  Compensation". Under the provisions of Accounting
Principles  Board  ("APB")  25,  "Accounting  for  Stock  Issued  to Employees",
compensation  expense  of $0.1 and $1.5 were recorded in 2000 by the Company and
Combined Companies, respectively. The expense recorded by the Combined Companies
relates to the Wise Distribution. There was no compensation expense attributable
to  these  stock options in 1999. In 1998, compensation cost of $1.6 was related
to  the  sale  of  Decorative  Products. Had compensation cost for the Company's
stock  option  plans  been  determined based on the fair value at the grant date
consistent  with the provisions of SFAS No. 123, the Company's net income (loss)
and  basic  and  diluted net income (loss) per share would have been the amounts
presented  below:

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

                                                             2000    1999     1998
----------------------------------------------------------------------------------------
<S>                                                          <C>    <C>      <C>

Net  loss  applicable to common stock- as reported          $(39.7)  $(20.8)  $(11.1)
Net  loss  applicable to common stock - proforma             (40.8)   (22.1)   (10.7)
Basic and diluted net income (loss) per share - as reported  (0.20)   (0.10)   (0.06)
Basic and diluted net income (loss) per share - proforma     (0.21)   (0.11)   (0.05)
---------------------------------------------------------------------------------------
</TABLE>

Proforma  net  income applicable to common stock for the Combined Companies is a
loss  of  $(63.4)  in  2000,  $5.6  in  1999  and  $95.0  in  1998.

To determine compensation cost according to SFAS No. 123, the fair value of each
Option  grant is estimated on the date of grant using  the Black-Scholes  option
pricing  model with a risk free weighted average  interest  rate  of  6.48%  and
expected  lives  ranging  from  one  to  five  years.

                                       60

















<PAGE>
Information regarding the management stock option plans for the Company and Wise
is  as  follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                                  2000                  1999                    1998
                                           -------------------  ---------------------    -------------------
                                                    Weighted                Weighted                Weighted
                                                     Average                 Average                 Average
                                                    Exercise                Exercise                Exercise
                                            Shares    Price      Shares       Price        Shares     Price
------------------------------------------------------------------------------------------------------------
<S>                                         <C>         <C>         <C>         <C>          <C>       <C>
Options outstanding, beginning of year     6,774,905   $ 5.88   5,624,155   $   5.07     6,912,405   $ 5.18
   Options exercised                        (616,500)   10.06           -          -    (1,306,250)    5.00
   Options granted                           328,000    11.09   1,728,750       8.22     1,203,000     5.00
   Options relating to distributed business (564,655)    5.00           -          -             -        -
   Options forfeited                        (433,000)    5.22    (578,000)      5.00    (1,185,000)    5.92
                                            ---------            ---------              ----------
Options outstanding end of year            5,488,750     5.87   6,774,905       5.88     5,624,155     5.07
------------------------------------------------------------------------------------------------------------
</TABLE>

Options  relating  to   distributed   business   represent   options   for   the
infrastructure  management  services  business  which  was  distributed  to  the
Company's  parent  during  2000  (see Note 18).  These options were subsequently
exercised  upon  the  sale of the business.  The outstanding options at December
31,  1999  and  1998 include outstanding options for Wise of 544,500 and 82,000,
respectively,  with  a  weighted  average  exercise  price  of  $10.00.


Options exercised in 2000 relate to the Wise Distribution. The options exercised
in  1998  related  to  the  sale  of  the  Decorative  Products  business.

The  following  table  summarizes information about fixed-price stock options at
December  31,  2000:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                 OPTIONS OUTSTANDING                                   OPTIONS EXERCISABLE
                 -----------------------------------------------------------------     -------------------
                 Weighted Average                                                                  Weighted
Range of            Fair Value        Number     Weighted Average  Weighted Average     Number     Exercise
Exercise Price       At Grant       Outstanding   Remaining Life    Exercise Price    Exercisable    Price
-----------------------------------------------------------------------------------------------------------------
<S>                  <C>                <C>          <C>               <C>                <C>          <C>
$5.00-7.50            $  1.24       4,892,500         2 years        $  5.38            2,901,400    $  5.13
$8.50-11.50           $  2.56         596,250         4 years        $  9.82              107,900    $  8.68
                                    ---------                                           ---------
$5.00-11.50           $  1.39       5,488,750         3 years        $  5.87            3,009,300    $  5.26
-----------------------------------------------------------------------------------------------------------------
</TABLE>

There  were  2,484,493 options exercisable at December 31, 1999, with a weighted
average  exercise  price  of  $5.13. There were 1,538,531 options exercisable at
December  31,  1998,  with  a  weighted  average  exercise  price  of  $5.09.

15.     DERIVATIVE  FINANCIAL  INSTRUMENTS

Interest  Rate  Swaps
---------------------
The  Company  enters into interest rate swaps to lower funding costs or to alter
interest  rate  exposures  between  fixed  and floating rates on long-term debt.
Under interest rate swaps, the Company agrees with other parties to exchange, at
specified  intervals,  the  difference  between  fixed  rate  and  floating rate
interest amounts calculated by reference to an agreed notional principal amount.
The  notional  amount  of interest rate swaps was $24.3 at December 31, 2000 and
$224.3  at December 31, 1999. The remaining swap has a maturity date of December
1,  2002. The net impact of interest rate swaps was an increase in the Company's
and  the Combined Companies' interest expense of $6.7 in 2000, $11.6 in 1999 and
$10.7  in 1998. The year-end fair value of the interest rate swaps was a loss of
$3.4  in  2000  and  $15.0  in  1999.  See  Note  3  "Recently Issued Accounting
Standards"  for  new  standards  that impact the current accounting treatment of
these  and  all  derivative  instruments.


The following table summarizes the weighted average interest rates for the swaps
used  by  the  Company and Combined Companies. Variable rates change with market
conditions  and  may vary significantly in the future. A 1% increase or decrease
in  market  interest  rates  would  result  in  a  $0.2  increase  or  decrease,
respectively,  in  the  fair  value  of  the  interest  rate  swap  agreements.

                                       61



<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------
                         2000   1999   1998
-------------------------------------------------
<S>                      <C>    <C>    <C>
Pay fixed swaps
  Average rate paid      10.5%  10.4%  10.4%
  Average rate received   6.3%   5.2%   5.6%
-------------------------------------------------
</TABLE>

An  interest  rate  swap,  having a notional amount of $200.0, no longer met the
criteria  for  hedge accounting and was marked to market prior to termination on
September  1,  2000.  On  that date the Company recognized a gain of $4.9 in the
Consolidated  and  Combined  Statements  of Operations. Unrealized gains on this
instrument  of  $10.8  and $4.1 in 1999 and 1998, respectively, were included in
the  Consolidated  and  Combined  Statements  of  Operations and other long-term
liabilities. The Company does not hold or issue derivative financial instruments
for  trading  purposes.

Foreign  Exchange  and  Option  Contracts
-----------------------------------------
International  operations account for a significant portion of the Company's and
Combined  Companies'  revenue  and  operating  income.  It  is the policy of the
Company and Combined Companies to reduce foreign currency cash flow exposure due
to  exchange  rate  fluctuations  by  hedging  anticipated  and firmly committed
transactions  wherever economically feasible (within the risk limits established
in  the  Company's  policy).  These contracts are part of a worldwide program to
minimize  foreign currency exchange operating income and balance sheet exposure.

The  Company  and  Combined Companies closely monitor foreign currency cash flow
transactions and enter into forward and option contracts to buy and sell foreign
currencies  only to reduce foreign exchange exposure and protect the U.S. dollar
value  of  such  transactions  to  the  extent  of  the  amount  under contract.

In  accordance  with current accounting standards, gains and losses arising from
contracts that hedge  future  assets  and  liabilities  are  deferred  until the
related transactions  occur.  Those  arising  from contracts that hedge existing
assets and liabilities (e.g., outstanding  payables   denominated   in   foreign
currency) are recorded in income  and  offset the gains and losses that occur as
exchange rates change. The cash  flows  from  forward   and   option   contracts
accounted for as hedges of  identifiable transactions are  classified consistent
with the cash flows from the  transaction being hedged. See  Note  3   "Recently
Issued Accounting Standards"  for  new   standards  that   impact  the   current
accounting treatment of these and all derivative  instruments.

At December 31, 2000 and 1999, the Company had $88.9 and $75.1, respectively, of
notional  value  of forward foreign currency exchange contracts outstanding. The
Combined  Companies  had  $95.8  and  $89.2 of notional value of forward foreign
exchange  contracts  outstanding at December 31, 2000 and 1999, respectively. At
December  31,  1999,  the  Company  and  Combined Companies had foreign currency
option  contracts  outstanding of $2.5. The unsecured contracts mature within 12
months  and are principally with banks. The Company is exposed to credit loss in
the  event of non-performance by the other parties to the contracts. The Company
evaluates  the  creditworthiness  of the counterparties' financial condition and
does  not  expect  default  by  the  counterparties.

16.  FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

The following table presents the carrying or notional amounts and fair values of
the  Company's  financial  instruments  at  December 31, 2000 and 1999. The fair
value  of a financial instrument is the estimated amount at which the instrument
could  be exchanged in a current transaction between willing parties, other than
in  a  forced or liquidation sale. Fair values are determined from quoted market
prices  where  available  or  based  on  other  similar  financial  instruments.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts
payable  and  other  accruals  are considered reasonable estimates of their fair
values.  The  carrying  value  of  the  loans  receivable  from  and  payable to
affiliates  approximates  fair  values  as  management  believes  the loans bear
interest  at  market  interest  rates.


                                       62










<PAGE>
The following table includes financial instrument carrying and fair  values  for
the Company.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
                                           2000              1999
                                  --------------------  ------------------
                                  Carrying     Fair     Carrying     Fair
                                   Amount     Value      Amount     Value
                                   -------  ----------  -------    -------
<S>                                <C>      <C>         <C>        <C>
Nonderivatives
Assets
   Investment securities           $  55.0  $   117.8    $  98.5    $113.6

Liabilities
   Debt                              574.0      449.6      558.8     473.9

                                  Notional      Fair     Notional    Fair
                                   Amount       Value    Amount      Value
                                   ------   ----------  --------   -------
Derivatives relating to:
Foreign currency contracts - gain                       $   1.7  $    0.2
Foreign currency contracts - loss   $ 88.9     $ (1.8)     73.4      (0.3)
Option contracts - gain                  -          -       2.5       0.2
Interest rate swaps - loss            24.3       (3.4)    224.3     (15.0)
-------------------------------------------------------------------------
</TABLE>
The following table includes financial instrument carrying and fair  values  for
the Combined Companies.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
                                            2000                          1999
                                -------------------------       -----------------------
                                Carrying          Fair          Carrying          Fair
                                 Amount          Value          Amount            Value
                                -------        ----------       -------         -------
<S>                                <C>            <C>            <C>              <C>
Nonderivatives
Assets
     Investment securities        $ 55.0        $117.8          $  98.5         $113.6

Liabilities
     Debt                          579.9         455.3            562.2          477.3

                                Notional          Fair          Notional          Fair
                                 Amount          Value           Amount          Value
                                -------        ----------       -------         -------
Derivatives relating to:
Foreign currency contracts - gain                               $  15.8         $  0.3
Foreign currency contracts - loss $95.8         $(2.2)             73.4           (0.3)
Option contracts - gain               -             -               2.5            0.2
Interest rate swaps - loss         24.3          (3.4)            224.3          (15.0)
--------------------------------------------------------------------------------------
</TABLE>

17.     SUPPLEMENTAL  INFORMATION
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
                                          CONSOLIDATED                   COMBINED
                                     --------------------       -----------------------
                                      2000   1999   1998          2000    1999    1998
------------------------------------------------------------------------------------------
<S>                                    <C>    <C>    <C>          <C>     <C>     <C>
Depreciation                         $53.6  $50.5  $47.5        $ 84.5  $ 70.2  $ 66.2
Amortization                           8.8    3.7    3.4          19.2    14.4    13.7
Advertising                            2.2    2.1    2.9          23.7    16.3    13.0
Promotions                            34.0   22.1   21.1         185.0   160.3   173.2
Research and Development              23.1   23.8   18.7          41.8    43.1    37.3
------------------------------------------------------------------------------------------
</TABLE>


                                       63










<PAGE>
18.     RELATED  PARTY  TRANSACTIONS

Foods  and  Wise
----------------
Wise  and  Foods  were sold to affiliates of the Company during 1996. Because of
the  Company's  continuing  control  over  Wise  and  Foods,  their  assets  and
liabilities,  at  the  date  of  sale, are classified as "sold under contractual
arrangements"   in  the  Consolidated  Financial  Statements,  as  long  as  the
Company had a loan receivable from  Wise  or  Foods. During the third quarter of
2000, Wise repaid its loan receivable to the  Company.   In 1998,  Foods  repaid
its    term    loan    with   the   Company.    These   repayments   ended   the
Company's   remaining   financial  interests  in  Wise and Foods and  therefore,
transactions with Wise and Foods are subsequently  reflected  as  unconsolidated
affiliated   balances,  not   as investments.  The  Company's   net   investment
balance  in  Wise  was  $6.6  at December 31,  1999.  See Note 1 for  additional
information.

In  October  2000,  the shares of Wise Holdings were sold by BWHLLC to Palladium
Equity  Partners,  LLC  in  exchange  for  $92.3  in  cash.  (See  Note  1.)

Wise  repaid its $5.0 term loan to the Company in 1999. A Wise loan facility was
extended  by  the Company providing for borrowings up to $15.0 maturing December
31, 2000. Wise had borrowings of $6.5 outstanding under the facility at December
31,  1999, which were repaid in 2000. The loan facility was cancelled in October
2000.

The  Loan  Agreement with Foods provides a revolving loan feature. For the years
ended  December  31,  2000  and  1999, the Foods revolving loan facility totaled
$10.0  and  $50.0,  respectively, and matured on December 31, 2000. The variable
interest  rate  is  equal  to  the  Company's  cost  of  funds  for 30 day LIBOR
borrowings  plus  0.25%. Foods had no borrowings under this facility at December
31,  2000  or  1999.

Included in consolidated accounts payable at December 31, 2000 and 1999 are $0.7
and  $2.1, respectively, as a net payable to Foods primarily related to interest
earned  on  funds  invested overnight with the Company. Included in consolidated
other  assets at December 31, 2000 and 1999 are $10.9 and $8.8, respectively, as
a  receivable  from  Foods  for  its  portion of the Combined Companies' pension
liability.

Foods  and  Wise  invest  cash overnight at an interest rate set by the Company,
which  generally  approximates  money  market rates. Foods had $206.9 and $234.6
invested at December 31, 2000 and 1999, respectively, which is included in loans
payable  with  affiliates. Wise had $1.2 invested at December 31, 1999, which is
classified  in  assets  sold under contractual arrangements. Affiliated interest
income  of  $0.2, $0.8, and $0.6, net of amounts paid for overnight investments,
was  accrued  related  to  Wise  during  2000,  1999 and 1998, respectively. The
Company  recorded  net  affiliated  interest  expense of $14.9, $14.7, and $18.0
related  to  Foods  during  2000,  1999,  and  1998,  respectively.

The  Company  provides  administrative services to Foods and Wise. Fees received
for  these  services are offset against the Company's general and administrative
expenses,  and  totaled  $2.4, $11.9, and $14.1 for the years ended December 31,
2000, 1999, and 1998, respectively. The amount of services provided were reduced
in 2000 with the distribution and sale of the infrastructure management services
business  (see below).

The  Company  renders management, consulting and financial services to Foods and
Wise  for  an  annual  fee  of  $1.0  and $0.2, respectively, payable monthly in
arrears.  Wise  was  charged a ten-month pro-rata share in 2000 representing the
period  of  time  prior  to  the  Wise  Distribution.

As  guarantors  of the Company's debt, Foods and Wise receive an annual fee from
the  Company  of  $1.1  and  $0.2,  respectively,  paid  annually.

The  effects  of  transactions  among  Wise,  Foods  and  the  Company have been
eliminated  in  the  Combined  Financial  Statements.

Other  Related  Parties
-----------------------
In  February  2000,  the  Company  distributed  100%  of  its  ownership  in the
infrastructure  management  services  business  to  the  Company's  parent.  The
distribution was recorded at net book value of $16.3, including $8.6 owed by the
Company  to the infrastructure management services business in accordance with a
tax sharing agreement.  Subsequent to the distribution, substantially all of the
assets  of  the  infrastructure  management  services  business  were  sold to a
subsidiary   of   Interliant,  Inc.  in  exchange   for   $2.5   in   cash   and
1,041,179    shares   of    Interliant,    Inc.    stock.    In    June    2000,
                                       64







<PAGE>
the  remaining net assets of the infrastructure  management  services  business,
with  a  net  book  value  of  approximately  $0.3,  were  contributed  back  to
the Company from the Company's parent.

In June and September 2000, the Company purchased $50.0 and $40.0, respectively,
of  accounts  receivable  from WKI, in return for certain fees.  At December 31,
2000,  $0.5  of  the  purchased  receivables  was  outstanding, all of which was
collected  in  January  2001.

In  the  third quarter of 2000, the Company entered into a credit agreement with
WKI  to  provide up to $40.0 of short-term financing.  Amounts outstanding under
this agreement bear interest at either (a) a variable rate based on the greatest
of the Prime  Rate, the Federal Reserve  Bank Three-Month CD Rate plus 1% or the
Federal Funds  Effective  Rate plus  0.5% plus (b) 3% or (c) the Eurodollar rate
plus  4%.  The original maturity date of the agreement was December 31, 2000 and
was  extended into  April  2001.  At December 31,  2000,  $6.1  was  outstanding
under  this  agreement.

At  December  31, 1999, the Company had loaned $56.2 in the form of demand notes
to  CCPC  Acquisition  Corp.,  to  provide  temporary  financing to complete the
acquisition of EKCO Group, Inc. ("EKCO"). The loan included variable interest at
the  monthly  prime rate as quoted by The Wall Street Journal. In December 2000,
the  loan  was  repaid.  The  Company  received $60.6 representing principal and
accrued  interest.

During  1998,  CCPC  Acquisition  Corp.,  an affiliate  of the Company's parent,
acquired  a  controlling  interest in Corning Consumer Products Company ("CCPC")
from  Corning  Incorporated  in  a  recapitalization  transaction  valued  at
approximately  $603.  In  connection  with  this transaction, the Company loaned
$346.0  to  CCPC  on  a  short-term  basis  at  rates  which approximated market
conditions.  The  Company recorded $1.2 of interest income related to this loan,
which  is  reflected  in  interest income and other in the 1998 Consolidated and
Combined  Statements  of Operations. CCPC repaid the loan in 1998. In 1999, CCPC
changed  its  name  to  WKI  Holding  Company,  Inc.

In  1999,  the  Company  made  a  $50.0  investment  in WKI, an affiliate of the
Company,  in  the form of 16% cumulative junior preferred stock.  See Note 8 for
additional  information  on  investments.

The  Company renders management, consulting and financial services to WKI for an
annual  fee of $2.5. Amounts outstanding at December 31, 2000 and 1999 were $1.7
and  $0.1,  respectively.  WKI  also reimburses the Company for certain expenses
incurred  on  its behalf. Amounts outstanding for these expenses at December 31,
2000  were  $0.5.

Affiliates  of  the  Company and Combined Companies invest cash with the Company
and  Combined  Companies  at  rates  that generally approximate market. BWHLLC's
invested  cash  with  the  Company and Combined Companies was $73.4 and $11.3 at
December 31, 2000 and 1999, respectively. At  December  31,  1999, cash invested
with the Company and  Combined  Companies  by  the Company's parent was $0.7. At
December 31, 2000, Borden Foods  Holdings  LLC,  Foods'  parent,  had  $2.3 cash
invested with the Company and Combined Companies and an additional $3.0 invested
with the Combined Companies, and  CCPC  Acquisition  Corp.,  WKI's parent and an
affiliate of   the   Company's   parent,  had $0.5 invested with the Company and
Combined Companies. The Company recorded $2.3, $5.2 and $5.4 of interest expense
on amounts invested by these  unconsolidated  affiliates  during  2000, 1999 and
1998, respectively.  Included  in  other  current  liabilities   at December 31,
2000  and  1999, respectively,  was $2.6 and $0.1 of affiliated interest payable
related   to these unconsolidated  affiliates.   Affiliated   interest   expense
recorded by the Combined Companies   is   not  significantly different for these
affiliates than that recorded by  the  Company.

KKR renders management, consulting and financial services to the Company and its
businesses  for  an  annual  fee  of  $10.0,  payable  quarterly  in  arrears.

As  described in Note 4 and in Management's Discussion and Analysis, the Company
acquired  certain  assets  from  BCP.  A  wholly owned subsidiary of the Company
serves  as  the  general  partner of BCP. The purchase price of these assets  is
considered  to  be  at  fair  value  as  determined by an independent appraisal.

During  2000,  1999  and 1998,  the Company purchased $102.5, $64.7 and $66.4 of
raw  materials  from  BCP. In addition, the Company paid $25.3 in 2000 to BCP to
exit  certain  raw  material purchase contracts.

                                       65












<PAGE>

19.     COMMITMENTS  AND  CONTINGENCIES

ENVIRONMENTAL  MATTERS  -  The  Company  and  Combined Companies, like others in
similar   businesses,  are   subject  to  extensive  Federal,  state  and  local
environmental  laws  and  regulations.   Although  the  Company's  and  Combined
Companies'  environmental  policies  and   practices   are  designed  to  ensure
compliance with these laws and regulations, future developments and increasingly
stringent  regulation  could  require the Company and Combined Companies to make
additional  unforeseen  environmental  expenditures.

Accruals  for  environmental  matters  are  recorded  when it is probable that a
liability  has  been  incurred and the amount of the liability can be reasonably
estimated.  Environmental accruals are routinely reviewed on an interim basis as
events  and  developments  warrant  and  are subjected to a comprehensive review
annually  during  the  fiscal  fourth  quarter.  The  Company  and  the Combined
Companies  have each accrued approximately $26 (including those costs related to
legal proceedings) at December 31, 2000 and  1999,  for  probable  environmental
remediation  and  restoration liabilities. This is management's best estimate of
these  liabilities.  Based  on currently available information and analysis, the
Company  believes that it is reasonably possible that costs associated with such
liabilities may exceed current reserves by amounts that may prove insignificant,
or  by  amounts,  in  the  aggregate,  of  up  to  approximately  $16.

LEGAL  MATTERS  -  The  Company  and  Combined  Companies  have recorded $4.1 in
liabilities  at  December  31,  2000, for legal costs in amounts that management
believes  are  probable  and reasonably estimable. These liabilities at December
31,  1999,  totaled  $5.1  and  $8.5  for  the  Company  and Combined Companies,
respectively. Actual costs are not expected to exceed these amounts. The Company
may  be  held  responsible for certain environmental liabilities incurred at BCP
facilities,  which  were  previously owned by the Company. The Company believes,
based  upon  the information it currently possesses, and taking into account its
established  reserves  for  estimated liability and its insurance coverage, that
the  ultimate  outcome  of  the foregoing proceedings and actions is unlikely to
have  a  material  adverse  effect  on  the  Company's  financial  statements.

OTHER  -  A  wholly  owned  subsidiary of the Company that serves as the general
partner  of  BCP, has certain  fiduciary  responsibilities   to   BCP.   BCP was
created in November 1987, is a separate and distinct entity from the Company and
Combined Companies and is 99% owned by the public.   In  2000,  BCP's  financial
Results included a loss from continuing operations of approximately $75. Adverse
business  conditions and disappointing operating results have caused an increase
in  borrowings  under  its  credit  facility.   Based  on  currently   available
information,  the  Company  has  recorded  a  liability  of  $20.0 for potential
liabilities  related to the continued decline in BCP's financial condition.  The
Company  believes  that  it is reasonably possible, based on current information
and analysis, that costs associated with BCP may exceed the current liability by
amounts  that  may prove insignificant or by amounts, in the aggregate, of up to
approximately  $17.


                                       66

































<PAGE>

20.  QUARTERLY  FINANCIAL  DATA  (UNAUDITED)

The  following  represents  Quarterly  Financial  Data  for  the  Company:
<TABLE>
<CAPTION>

2000 QUARTERS                                                             FIRST    SECOND   THIRD  FOURTH(1)
------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>     <C>     <C>    <C>
Net sales (2)                                                             $356.5   $388.4  $403.2   $375.9
------------------------------------------------------------------------------------------------------------
Gross profit (3)                                                            90.5    100.9    87.1     49.1
------------------------------------------------------------------------------------------------------------
Business realignment                                                         2.8      9.0     1.8     24.8
Loss on divestiture of businesses                                              -        -       -     (0.9)
------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations                                    12.3     12.4    (8.0)   (75.7)
------------------------------------------------------------------------------------------------------------
Discontinued operations:
   Gain on disposal, net of tax                                                -     93.0       -        -
------------------------------------------------------------------------------------------------------------
Net income (loss)                                                           12.3    105.4    (8.0)   (75.7)
------------------------------------------------------------------------------------------------------------
Preferred stock dividends                                                   18.4     18.5    18.4     18.4
------------------------------------------------------------------------------------------------------------
Net (loss) income applicable to common stock                                (6.1)    86.9   (26.4)   (94.1)
------------------------------------------------------------------------------------------------------------
Basic and diluted, per share of common stock:
   Income (loss) from continuing operations                                 0.06     0.06   (0.04)   (0.38)
Discontinued operations:
   Gain on disposal, net of tax                                                -     0.47       -        -
Net (loss) income applicable to common stock                               (0.03)    0.44   (0.14)   (0.47)
Dividends per common share                                                  0.13     0.06    0.06     0.06
Dividends per preferred share                                               0.75     0.75    0.75     0.75
Average number of common shares outstanding                                199.0    199.0   199.0    199.0
------------------------------------------------------------------------------------------------------------

1999 QUARTERS                                                             FIRST    SECOND  THIRD  FOURTH (4)
------------------------------------------------------------------------------------------------------------
Net sales (2)                                                             $310.1   $347.6  $354.5   $362.5
------------------------------------------------------------------------------------------------------------
Gross profit  (3)                                                           83.1     99.9    95.0     90.2
------------------------------------------------------------------------------------------------------------
Business realignment and asset write-offs                                      -     10.0    21.6     10.0
Gain on divestiture of business                                                -        -       -      7.4
------------------------------------------------------------------------------------------------------------
Income from continuing operations                                           13.3     22.6     3.8     15.6
------------------------------------------------------------------------------------------------------------
Discontinued operations:
   Loss from operations, net of tax                                            -        -       -     (0.4)
   Gain (loss) on disposal, net of tax                                         -      0.6       -     (2.6)
------------------------------------------------------------------------------------------------------------
Net income                                                                  13.3     23.2     3.8     12.6
------------------------------------------------------------------------------------------------------------
Preferred stock dividends                                                   18.4     18.5    18.4     18.4
------------------------------------------------------------------------------------------------------------
Net (loss) income applicable to common stock                                (5.1)     4.7   (14.6)    (5.8)
------------------------------------------------------------------------------------------------------------
Basic and diluted, per share of common stock:
   Income from continuing operations                                        0.07     0.12    0.02     0.07
Discontinued operations:
   Gain (loss) on disposal, net of tax                                         -        -       -    (0.01)
Net (loss) income applicable to common stock                               (0.02)    0.03   (0.08)   (0.03)
Dividends per common share                                                  0.06     0.06    0.14     0.06
Dividends per preferred share                                               0.75     0.75    0.75     0.75
Average number of common shares outstanding                                199.0    199.0   199.0    199.0
-----------------------------------------------------------------------------------------------------------
<FN>
(1) - As described in Note 4, the Company's fourth quarter 2000 results included costs of $24.5 related  to
      plant closures. The Company's fourth quarter 2000 results also include a $25.3 charge to exit certain
      raw material purchase contracts  which  is  recorded  in  cost  of  sales  (see  page  17).   In  the
      fourth quarter of 2000, the Company recorded  investment  write-downs  of  $48.0   (see Note 8)   and
      recorded a liability of $20.0  related  to  a limited partnership for which a wholly owned subsidiary
      serves as general partner (see Note 19).
(2) - Amounts  are  adjusted  reflecting  the  fourth  quarter 2000 adoption of EITF Issue No. 00-10, which
      addresses the classification of amounts billed to customers for  distribution  costs.  In  accordance
      with EITF Issue No. 00-10, certain amounts have been reclassified from distribution  expense  to  net
      sales.
(3) - Gross  profit  is  defined  as  gross  margin  less  distribution  expense.
(4) - As described in Note 4, the Company's fourth quarter 1999 results include a $10.0 charge related to a
      plant  expansion  project  that  was  discontinued.
</TABLE>


                                       67
<PAGE>
The  following  represents  Quarterly Financial Data for the Combined Companies:
<TABLE>
<CAPTION>

2000 QUARTERS                                                             FIRST   SECOND  THIRD  FOURTH (1)
------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>      <C>     <C>     <C>
Net sales (2)                                                            $498.8   $511.0  $542.1   $542.8
------------------------------------------------------------------------------------------------------------
Gross profit (3)                                                          149.4    147.3   144.0    125.4
------------------------------------------------------------------------------------------------------------
Business realignment                                                        2.8      9.0     6.6     25.7
Gain on divestiture of businesses                                             -        -     3.1      0.8
------------------------------------------------------------------------------------------------------------
(Loss) income from continuing operations                                   (0.4)    68.6   (17.6)   (79.2)
------------------------------------------------------------------------------------------------------------
Discontinued operations:
   Income (loss) from operations, net of tax                                0.4      1.5     1.8     (0.6)
   Gain on disposal, net of tax                                               -     37.0       -        -
------------------------------------------------------------------------------------------------------------
Net income (loss)                                                           0.1    107.2   (15.8)   (80.0)
------------------------------------------------------------------------------------------------------------
Preferred stock dividends                                                  18.4     18.5    18.4     18.4
------------------------------------------------------------------------------------------------------------
Net (loss) income applicable to common stock                              (18.2)    88.7   (34.2)   (98.6)
------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
1999 QUARTERS                                                             FIRST   SECOND  THIRD  FOURTH (4)
------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>       <C>      <C>    <C>
Net sales (2)                                                            $449.7   $463.7   $477.4  $531.8
------------------------------------------------------------------------------------------------------------
Gross profit (3)                                                          143.3    147.4    150.6   165.8
------------------------------------------------------------------------------------------------------------
Business realignment and asset write-offs                                     -     10.0     21.6    10.0
Gain on divestiture of businesses                                           4.4     10.4     32.7     9.0
------------------------------------------------------------------------------------------------------------
Income from continuing operations                                          12.6     15.0     18.9    43.1
------------------------------------------------------------------------------------------------------------
Discontinued operations:
   (Loss) income from operations, net of tax                               (0.5)     0.6      0.9     1.2
   Gain (loss) on disposal, net of tax                                        -      0.6        -    (3.7)
------------------------------------------------------------------------------------------------------------
Cumulative effect of change in accounting principle                        (2.8)       -        -       -
------------------------------------------------------------------------------------------------------------
Net income                                                                 12.2     16.2     19.8    37.7
------------------------------------------------------------------------------------------------------------
Preferred stock dividends                                                  18.4     18.5     18.4    18.4
------------------------------------------------------------------------------------------------------------
Net (loss) income applicable to common stock                               (7.1)    (1.7)     0.9    15.0
------------------------------------------------------------------------------------------------------------
<FN>
(1) - As described in Note 4, the Company's and Combined Companies' fourth  quarter  2000  results  included
      costs of $24.5 related to plant closures. The Company's and Combined Companies'  fourth  quarter  2000
      results  also include a $25.3 charge to exit certain raw material purchase contracts which is recorded
      in cost  of  sales  (see  page  17). In the fourth quarter of 2000, the Company and Combined Companies
      recorded investment write-downs of $48.0 (see Note 8) and recorded a liability of $20.0 related to   a
      limited   partnership for which a wholly owned subsidiary serves as general partner (see Note 19).
(2) - Amounts  are  adjusted  reflecting the fourth quarter 2000 adoption of EITF  Issue  No.  00-10,  which
      addresses the classification of amounts billed to customers for distribution costs. In accordance with
      EITF Issue No. 00-10, certain  amounts  have been reclassified from distribution expense to net sales.
(3) - Gross  profit  is  defined  as  gross  margin  less  distribution  expense.
(4) - As described in Note 4, the Company's and Combined Companies fourth quarter  1999  results  include  a
      $10.0  charge  related  to  a  plant  expansion  project  that  was  discontinued.
</TABLE>
                                       68

















<PAGE>
                          INDEPENDENT AUDITORS' REPORT




To  the  Board  of  Directors
and  Shareholders  of  Borden,  Inc.


We  have audited the accompanying consolidated balance sheets of Borden, Inc. (a
wholly  owned  subsidiary  of  Borden  Holdings,  Inc.)  and  subsidiaries as of
December  31,  2000  and  1999,  and  the  related  consolidated  statements  of
operations,  shareholders' equity, and cash flows for each of the three years in
the  period  ended  December  31,  2000.  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  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our  opinion,  such consolidated financial statements present fairly, in all
material  respects,  the  financial position of Borden, Inc. and subsidiaries at
December  31,  2000 and 1999, and the results of their operations and their cash
flows  for  each  of  the  three  years in the period ended December 31, 2000 in
conformity with accounting principles generally accepted in the United States of
America.


DELOITTE  &  TOUCHE  LLP


Columbus,  Ohio
February  9,  2001

                                       69












































<PAGE>

                          INDEPENDENT AUDITORS' REPORT




To  the  Board  of  Directors
and  Shareholders  of  Borden,  Inc.


We  have  audited  the accompanying  combined balance sheets of Borden, Inc. and
Affiliates (which includes Borden, Inc. and subsidiaries,  Borden Foods Holdings
Corporation  and  subsidiaries  and Wise Holdings,  Inc. and subsidiaries (prior
to distribution on October 30, 2000))  as  of  December  31,  2000 and 1999, and
the  related  combined statements of operations, shareholders' equity  and  cash
flows for  each of the three years in the period ended December 31, 2000.  These
financial  statements are  the responsibility of the companies' 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  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our  opinion,  such  financial  statements  present  fairly, in all material
respects,  the  combined  financial  position of Borden, Inc. and Affiliates  at
December  31,  2000  and  1999, and the combined results of their operations and
their  combined  cash  flows for  each  of the three years  in  the period ended
December 31, 2000 in conformity with accounting principles generally accepted in
the  United  States  of  America.



DELOITTE  &  TOUCHE  LLP


Columbus,  Ohio
February  9,  2001

                                       70








































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

                       None


                                    PART III

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

Set  forth  below are the names and ages of the Directors and Executive Officers
of  the  Company  as  of  March 13, 2001, and the positions and offices with the
Company  held  by  each of them. Their terms of office extend to the next Annual
Meeting  of  the  Board  of  Directors  or  until  their  earlier resignation or
replacement.

<TABLE>
<CAPTION>
                                                                                                    Served in
                                                                                   Age on            Present
                                                                                   Dec. 31,          Position
         Name                                 Position & Office                     2000              Since
----------------------------------------------------------------------------------------------------------------
<S>                                           <C>                                    <C>                 <C>
C.R. Kidder                                   Chairman of the Board, Director
                                               Chief Executive Officer and President  56                 1995
H.R. Kravis                                   Director                                56                 1995
A. Navab                                      Director                                35                 1995
G.R. Roberts                                  Director                                57                 1995
S.M. Stuart                                   Director                                41                 1995
W.H. Carter                                   Executive Vice President and
                                               Chief Financial Officer                47                 1995
K.M. Kelley                                   Executive Vice President                43                 1999
N.A. Reardon                                  Executive Vice President                48                 1997
W.F. Stoll, Jr.                               Executive Vice President and
                                               General Counsel                        52                 1996
R.P. Starkman                                 Senior Vice President and Treasurer     46                 1995
</TABLE>

                                       71










































<PAGE>
C.  Robert  Kidder  was  elected  a  Director,  Chairman  of the Board and Chief
Executive  Officer of the Company on January 10, 1995.  He is also a director of
Electronic  Data Systems Corporation and Morgan Stanley Dean Witter & Co.  He is
a  member  of  the  Executive  and  Compensation Committees of the Borden Board.

Henry  R. Kravis acted as Chairman of the Board of the Company from December 21,
1994,  to  January 10, 1995.  He has been a member of KKR & Co., LLC since 1996,
was  a  General  Partner of Kohlberg Kravis Roberts & Co. from its establishment
through  1995  and  has been a General Partner of KKR Associates, L.P. since its
establishment.  He  is  also  a   Director  of  Accuride  Corporation,  Amphenol
Corporation,  The  Boyds  Collection,  Ltd.,  Evenflo Company Inc., The Gillette
Company,  IDEX  Corporation,  KinderCare  Learning Centers, Inc., KSL Recreation
Corporation, Owens-Illinois, Inc., PRIMEDIA Inc., Regal Cinemas, Inc., Sotheby's
Holdings,  Inc.,  and  Spalding  Holdings  Corporation.  He  is  a member of the
Executive  Committee  of the Borden Board.  Messrs. Kravis and Roberts are first
cousins.

Alexander  Navab  became  a  member  of  KKR  & Co., LLC  in 2001, having been a
Director of Kohlberg Kravis Roberts & Co. since 1999. He began as  an  Executive
of Kohlberg Kravis Roberts & Co.  in  1993.  He  is  also  a  Director  of  CAIS
Internet, Inc., Intermedia Communications, Inc., KSL Recreation Corporation  and
Regal Cinemas, Inc. He is Chairman of the  Audit  Committee  and a member of the
Compensation  Committee  of  the  Borden  Board.

George  R. Roberts has been a member of KKR & Co., LLC since 1996, was a General
Partner  of  Kohlberg  Kravis Roberts & Co. from its establishment through 1995,
and  has been a General Partner of KKR Associates, L.P. since its establishment.
He  is also a Director of  Accuride Corporation, Amphenol Corporation, The Boyds
Collection,  Ltd., DPL, Inc., Evenflo Company Inc., IDEX Corporation, KinderCare
Learning  Centers,  Inc.,  KSL  Recreation  Corporation,  Owens-Illinois,  Inc.,
PRIMEDIA Inc., Safeway, Inc., and Spalding Holdings Corporation.  Messrs. Kravis
and  Roberts  are  first  cousins.

Scott  M.  Stuart  has been a member of KKR & Co., LLC since 1996, was a General
Partner  of  Kohlberg Kravis Roberts & Co. and has been a General Partner of KKR
Associates,  L.P.  since  January  1995.  He began as an Executive with Kohlberg
Kravis  Roberts  &  Co. in 1986.  He is also a Director of AEP Industries, Inc.,
The  Boyds  Collection,  Ltd., DPL, Inc., and KSL Recreation Corporation.  He is
Chairman  of  the Compensation Committee and a member of the Audit and Executive
Committees  of  the  Borden  Board.

William  H.  Carter  was  elected  Executive  Vice President and Chief Financial
Officer  effective  April  3,  1995.

Kevin  M.  Kelley  was  elected Executive Vice President, Corporate Strategy and
Development  effective  April  5, 1999.  Prior to that, since April 1996, he was
Managing  Director  of Ripplewood Holdings LLC.  From January 1995 to April 1996
he  was  a  Managing  Director  with  Onex  Investment  Corporation.

Nancy  A.  Reardon  was  elected  Senior  Vice  President,  Human  Resources and
Corporate  Affairs  effective  March  3,  1997  and  promoted  to Executive Vice
President  in  December  2000. Prior to joining the Company, she was Senior Vice
President - Human Resources  and Communications for Duracell International, Inc.
from 1991 through February  1997.

William  F.  Stoll,  Jr.  was  elected Senior Vice President and General Counsel
effective  July  1,  1996  and  promoted to Executive Vice President in December
2000.  Prior  to  joining  the  Company, he was a Vice President of Westinghouse
Electric  Corporation since 1993, and served as its Deputy General Counsel  from
1988  to  1996.

Ronald  P.  Starkman  was  elected  Senior  Vice  President and Treasurer of the
Company  effective  November  20,  1995.

                                       72





















<PAGE>
ITEM  11.     EXECUTIVE  COMPENSATION
---------     -----------------------

The following table provides certain summary information concerning compensation
of  the  Company's  Chief  Executive  Officer  and  the  four  other most highly
compensated  Executive  Officers  as  of December 31, 2000 (the "Named Executive
Officers")  for  the  periods  indicated.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                              SUMMARY COMPENSATION TABLE
                                                                                    LONG-TERM
                                            ANNUAL COMPENSATION                    COMPENSATION
                                      -----------------------------------             AWARDS              (4)
                                                                               -------------------
NAME AND                                                        OTHER               SECURITIES         ALL OTHER
PRINCIPAL                                                       ANNUAL              UNDERLYING        COMPENSATION
POSITION                  YEAR        SALARY ($)  BONUS ($)  COMPENSATION ($)     OPTIONS/LSAR (#)         ($)
===================================================================================================================
<S>                        <C>          <C>         <C>          <C>                  <C>                 <C>
C.R. Kidder               2000       1,194,063           0       (1)87,757               (5)               99,503
Chairman, President &     1999       1,171,500   1,054,350       (2)75,608               (5)               90,255
Chief Executive Officer   1998       1,100,000     547,470       (3)92,467               (5)               96,731

W.H. Carter               2000         462,538     200,000               0               (5)               31,878
Executive Vice President  1999         437,538     247,541               0               (5)               32,815
& Chief Financial Officer 1998         415,000     150,000               0               (5)               31,238

K.M. Kelley               2000         462,500     125,000     (6) 291,216               (5)               46,339
Executive Vice President  1999         334,327     185,625       (7)13,835               (5)               48,957
Strategy and Development

N.A. Reardon              2000         387,795      50,000               0               (5)               22,289
Executive Vice President  1999         365,295     206,575               0               (5)               18,754
Human Resources and       1998         345,250     107,973               0               (5)               17,747
Corporate Affairs

W.F. Stoll, Jr.           2000         387,425      90,000               0               (5)               22,260
Executive Vice President  1999         362,425     206,168               0               (5)               18,754
and General Counsel       1998         335,500     106,453               0               (5)               17,906
-------------------------------------------------------------------------------------------------------------------
<FN>
(1)     Includes $60,000 pursuant to the Executive Perquisite Benefit Plan and $27,757 not paid to Mr. Kidder but allocable
        to  his  personal  use  of  company  aircraft.
(2)     Includes $60,000 pursuant to the Executive Perquisite Benefit Plan and $15,608 not paid to Mr. Kidder but allocable
        to  his  personal  use  of  company  aircraft.
(3)     Includes $60,000 pursuant to the Executive Perquisite Benefit Plan and $31,842 not paid to Mr. Kidder but allocable
        to  his  personal  use  of  company  aircraft.
(4)     All  other  compensation  is  identified  and  quantified  in  the  table  below for the current year.
(5)     No  Executive  Officer  of  the Company owns any stock of Borden, Inc., or options to acquire stock in Borden, Inc.
        For  information  on  equity securities of Borden's parent or subsidiary entities owned by management, see Item 12.
(6)     Includes  $252,500  in  forgiven  principal  and  interest  from  a  loan  to  Mr.  Kelley.
(7)     Tax  gross-up  payments  on  moving  expenses.
</TABLE>

                                       73






























<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
                                         MATCHING
                                      CONTRIBUTIONS     RELOCATION
                               YEAR   (RSP AND ESP)(a)    EXPENSE     TOTAL
                               ----  ----------------     -------    ------
<S>                             <C>         <C>             <C>       <C>
C.R. Kidder                    2000         $99,503          $0      $99,503

W.H. Carter                    2000          31,878           0       31,878

K.M. Kelley                    2000          24,305      22,034       46,339

N.A. Reardon                   2000          22,289           0       22,289

W.F. Stoll, Jr.                2000          22,260           0       22,260
-------------------------------------------------------------------------------
<FN>
   (a)       RSP and ESP refer to the Company's Retirement Savings Plan and the
             executive supplemental benefit plans.
</TABLE>



The  following table provides information on option/SAR exercises during 2000 by
the  Named Executive Officers and the value of their unexercised options/SARS at
December  31,  2000.
<TABLE>
<CAPTION>

        AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
=============================================================================================================
                                                # OF SECURITIES UNDERLYING      VALUE OF UNEXERCISED IN-THE-
                                               UNEXERCISED OPTIONS/SARS AT     MONEY OPTIONS/SARS AT FISCAL
                    SHARES                         FISCAL  YEAR END (1)                YEAR  END  ($)
                 ACQUIRED ON      VALUE        ---------------------------     -----------------------------
NAME             EXERCISE (#)  REALIZED ($)    EXERCISABLE   UNEXERCISABLE     EXERCISABLE     UNEXERCISABLE
=============================================================================================================
<S>                  <C>            <C>           <C>              <C>            <C>              <C>
C.R. Kidder          N/A            N/A            0          12,225,730           0                0

W.H. Carter          N/A            N/A            0           5,791,370           0                0

K.M. Kelley          N/A            N/A            0           5,791,370           0                0

N.A. Reardon         N/A            N/A            0           4,222,220           0                0

W.F. Stoll, Jr.      N/A            N/A            0           4,222,220           0                0
<FN>
============================================================================================================

(1)     Represents  unit  appreciation  rights  in  BW  Holdings,  LLC.
</TABLE>


                                       74





























<PAGE>
The following table provides information on option/SAR grants during 2000 to the
Named  Executive  Officers.
<TABLE>
<CAPTION>

                                                  INDIVIDUAL GRANTS
                                                  =================

                    # OF SECURITIES       % OF TOTAL                                                 GRANT DATE
                       UNDERLYING         OPTIONS/SAR'S                                           PRESENT VALUE ($)
                      OPTIONS/SAR'S        GRANTED TO    EXERCISE OR BASE     EXPIRATION                 (2)
NAME                   GRANTED (#)        EMPLOYEES IN    PRICE ($/SHARE)        DATE
                           (1)             FISCAL YEAR
=====================================================================================================================
<S>                      <C>                <C>            <C>                     <C>                  <C>
C.R. Kidder          4,834,350              20.08%         4.15                  7/1/10              2,078,771

W.H. Carter          3,381,750              14.05%         4.15                  7/1/10              1,454,153

K.M. Kelley          3,381,750              14.05%         4.15                  7/1/10              1,454,153

N.A. Reardon         1,812,600               7.53%         4.15                  7/1/10                779,418

W.F. Stoll, Jr.      1,812,600               7.53%         4.15                  7/1/10                779,418
=====================================================================================================================
<FN>

(1)  Represents  Unit  Appreciation  Rights  in  BW  Holdings,  LLC.
(2)  The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model
     with risk free interest rates of 6.11%, dividend rates of 2.9%, expected volatility of 0.1% and expected  life  of
     four  years.
</TABLE>

                                       75




















































<PAGE>
The  Long-Term  Incentive  Plans-Awards  In  Last  Fiscal  Year  table  has been
eliminated  since  the  Registrant  has  no  long-term  incentive  plan.

Retirement  Benefits
--------------------
The  Borden Employees Retirement Income Plan ("ERIP") for salaried employees was
amended  as  of  January  1,  1987, to provide benefit credits of 3% of earnings
which  are  less  than  the  Social  Security  wage base for the year plus 6% of
earnings  in  excess  of the wage base. Earnings include annual incentive awards
paid currently but exclude any long-term incentive awards.  Benefits for service
through December 31, 1986, are based on the plan formula then in effect and have
been  converted  to  opening balances under the plan.  Both opening balances and
benefit  credits  receive interest credits at one-year Treasury bill rates until
the  participant  commences  receiving  benefit payments. For the year 2000, the
interest  rate  as  determined  in  accordance with the plan language was 5.54%.
Benefits  vest  after completion of five years of employment for employees hired
on  or  after  July  1,  1990.

The  Company  has supplemental plans which will provide those benefits which are
otherwise  produced by application of the ERIP formula, but which, under Section
415 or Section 401 (a)(17) of the Internal Revenue Code, are not permitted to be
paid through a qualified plan and its related trust.  The supplemental plan also
provides  a  pension  benefit using the ERIP formula based on deferred incentive
compensation  awards  and  certain  other  deferred  compensation, which are not
considered  as  part  of  compensation  under  the  ERIP.

The  total  projected  annual benefits payable under the formulas of the ERIP at
age  65  without  regard to the Section 415 or 401(a)(17) limits and recognizing
supplemental pensions as described above, are as follows for the Named Executive
Officers   of   the  Company  in  2000:  C.R. Kidder - $183,747,  W.H.  Carter -
$125,843, N.A. Reardon - $45,133,  K.M. Kelley - $120,399, and W.F. Stoll, Jr. -
$62,570.

In  addition,  certain Executive Officers receive Company matching contributions
on  the  first  7%  of  contributions  to  the Retirement Savings Plan.  Company
matching  contributions  on  employee contributions in excess of 5% are provided
under the supplemental plans.  This benefit is not provided if the executive has
any  other  pension  benefit  guarantee.

Compensation  of  Directors
---------------------------
Each director who is not currently an employee of the Company receives an annual
retainer of $45,000.  Directors who are also employees of the Company receive no
remuneration  for  serving  as  directors.

Directors  who  served prior to March 15, 1995 and who were not employees of the
Company  are  provided,  upon attaining age 70, annual benefits through a funded
grantor  trust  equal  to their final annual retainer if they served in at least
three  plan  years.  Such  benefits  can  continue  for  up  to  15  years.

Employment,  Termination  and  Change  in  Control  Arrangements
----------------------------------------------------------------
The Company has a special arrangement with William F. Stoll, Jr., Executive V.P.
and  General  Counsel  concerning   retirement  and  termination.   Under   this
arrangement,  with respect to retirement, the Company will calculate the benefit
Mr.  Stoll  would  have  received  from his former employer, using predetermined
assumptions,  and  deduct from this amount the retirement benefits accrued under
the  Borden  Retirement  Programs. Any shortfall in benefits will be paid by the
Company  as  a non-qualified benefit. Special provisions also apply in the event
of death or disability. Under this arrangement, with respect to termination, Mr.
Stoll  is  guaranteed  enhanced severance equal to two times base salary and two
times  incentive target if he is constructively terminated or terminated without
cause  prior  to  July  1,  2001.

The  Company  has an employment arrangement with certain key managers, including
the Named  Executive  Officers,  which  provides  payments  upon the liquidation
of  BW Holdings, LLC or  upon a termination of employment without cause prior to
such a liquidation.  Payments to the Named Executive Officers are: C.R. Kidder -
$1,718,880,  W.H. Carter  - $1,202,400, K.M. Kelley - $1,202,400, N.A. Reardon -
$644,480,  and  W.F. Stoll, Jr. - $644,480.

                                       76














<PAGE>

Compensation  Committee  Interlocks  and  Insider  Participation
----------------------------------------------------------------
Messrs.  Navab  and  Stuart are members of the Company's Compensation Committee.
Both  are  general  partners of KKR Associates, L.P.  See "Certain Relationships
and  Related Transactions."  Mr. Kidder, Chairman and Chief Executive Officer of
the  Company,  is  also  a  member  of  the  Compensation  Committee.

                                       77













































































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

The  following  table  sets  forth  certain information regarding the beneficial
ownership of the Registrant's Common Stock and other equity securities issued by
affiliated  entities,  as  of  March  13,  2001,  by  (a)  persons  known to the
Registrant  to  be  the  beneficial  owners  of  more  than  five percent of the
outstanding  voting  stock  of  the  Registrant,  (b)  each  director  of  the
Registrant,  (c)  each  of the Named Executive Officers of the Registrant during
the  2000  fiscal  year  of  the  Registrant and (d) all directors and executive
officers  of  the  Registrant as a group. Except as otherwise noted, the persons
named  in  the table below have sole voting and investment power with respect to
all  securities  shown  as  beneficially  owned  by  them.

     Name  of                             Beneficial  Ownership
  Beneficial  Owner                       of  Equity  Securities
-------------------                    ------------------------------
                                         Shares/Units     Percent
                                         ------------     -------

KKR  Associates  (1)                     198,974,994       100.0
     9  West  57th  Street
     New  York,  New  York  10019
C.  Robert  Kidder                           369,569 (2)       *
Henry  R.  Kravis  (1)                            --           *
George  R.  Roberts  (1)                          --           *
Scott  M.  Stuart  (1)                            --           *
Alexander  Navab (1)                              --           *
William  H.  Carter                          120,481 (2)       *
Kevin  M.  Kelley                            120,481 (2)       *
Nancy  A.  Reardon                           120,481 (2)       *
William  F.  Stoll,  Jr.                     120,481 (2)       *
All  Directors  and  Executive  Officers
   as  a  group  (2)                         887,637 (2)       *

 *     Beneficial  ownership  does  not  exceed  1.0% of the respective class of
securities.

(1)     The Borden Common Stock shown as beneficially owned by KKR Associates is
        directly held  by Borden Holdings, Inc., a Delaware corporation which is
        wholly owned by BW  Holdings, LLC, a Delaware limited liability company,
        the  managing  member  of  which  is a limited partnership, of which KKR
        Associates is the sole general  partner  and as to  which  it  possesses
        sole voting and investment power. KKR Associates  is also the beneficial
        owner of 632,000,000 units of BW Holdings,  LLC.  KKR  Associates  is  a
        limited  partnership of which Messrs. Todd Fisher,  Edward  A.  Gilhuly,
        Perry Golkin, James H. Greene, Jr.,  Johannes  Huth,  Henry  R.  Kravis,
        Robert  I.  MacDonnell,  Michael W. Michelson, Alexander Navab, Paul  E.
        Raether,  Neil  Richardson,  George  R.  Roberts, Scott  M.  Stuart  and
        Michael T. Tokarz  are the general partners. Such persons may be  deemed
        to share beneficial ownership  of the  shares  shown  as  owned  by  KKR
        Associates. The foregoing persons disclaim  beneficial ownership of  any
        such  shares.
(2)     Represents  units in BW Holdings, LLC.  No director or executive officer
        owns  directly  any  stock of the Registrant or options to  acquire such
        stock.

                                       78

























<PAGE>
ITEM  13.      CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS
---------      --------------------------------------------------

All  of  the Company's common stock is owned by a holding company which is owned
by  an  affiliate  of  KKR  Associates,  a New York limited partnership of which
Messrs. Todd Fisher, Edward  A.  Gilhuly,  Perry  Golkin,  James H. Greene, Jr.,
Johannes  Huth,  Henry  R.  Kravis, Robert  I. MacDonnell, Michael W. Michelson,
Alexander Navab, Paul E. Raether,  Neil Richardson, George R. Roberts,  Scott M.
Stuart  and Michael  T. Tokarz are the general partners. KKR Associates has sole
voting and investment  power  with  respect  to  such  shares.  Messrs.  Kravis,
Roberts, Stuart and Navab  are  directors  of  the  Company.

KKR renders management, consulting and financial services to the Company and its
businesses  for  an  annual  fee  of  $10 million, payable quarterly in arrears.
Messrs.  Kravis,  Roberts,  Navab  and  Stuart  are  general  partners  of  KKR.

The  Company  has  made a loan to Mr. Carter, Executive Vice President and Chief
Financial  Officer, in the amount of $375,000, of which $225,000 is secured with
a  mortgage  on his residence. The interest rate applicable to the loan is prime
less  .25%.  As  of March 31, 2001, the full amount of the loan was outstanding,
plus  accrued  interest  of  $18,125.

Pursuant to his terms of employment, Mr. Kelley received a loan from the Company
in  the  amount of $675,000. The principal and accrued interest are payable upon
termination  of  employment,  only  if such termination occurs prior to April 4,
2002,  and  only  to  the  extent  of  amounts  not  forgiven.

                                       79


























































<PAGE>

                                      PART IV

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

(a)     List  of  documents  filed  as  part  of  this  report
        ------------------------------------------------------

     1.     Financial  Statements
            ---------------------

            All  financial  statements  of the registrant are set forth under
            Item 8 of this Report  on  Form  10-K.

     2.     Financial  Statement  Schedules
            -------------------------------

            Report  of  Independent  Auditors  (page  81)

            For  the  three  years  ended  December  31,  2000:
               Schedule  II - Valuation  and  Qualifying  Accounts  (page  82)

     3.    Exhibits  (page  83)

                                       80




























































<PAGE>

                          INDEPENDENT AUDITORS' REPORT



To  the  Board  of  Directors
and  Shareholders  of  Borden,  Inc.



We  have audited the financial statements of Borden, Inc. and subsidiaries as of
December  31, 2000 and 1999, and for each of the three years in the period ended
December  31,  2000,  and have issued our report thereon dated February 9, 2001;
such  financial  statements and report are included elsewhere in this Form 10-K.
Our  audits  also included the financial statement schedule  of Borden, Inc. and
subsidiaries, listed in Item 14.  This consolidated financial statement schedule
is  the  responsibility  of  the Company's management.  Our responsibility is to
express  an  opinion  based  on  our  audits.  In our opinion, such consolidated
financial statement schedule, when considered in relation to the basic financial
statements  taken  as  a  whole,  presents  fairly  in all material respects the
information  set  forth  therein.


DELOITTE  &  TOUCHE  LLP
Columbus,  Ohio


February  9,  2001

                                       81
























































<PAGE>
     SCHEDULE  II  -  VALUATION  AND  QUALIFYING  ACCOUNTS
<TABLE>
<CAPTION>

<S>                              <C>                 <C>          <C>                  <C>
                                 Balance             Charged to                        Balance
                                 December 31, 1997   Expense      Write-offs           December 31, 1998
                                 ------------------  -----------  -------------------  ------------------
Allowance for
doubtful accounts                    $  9.4             $ 2.9         $  (1.9)              $  10.4
---------------------------------------------------------------------------------------------------------
                                 Balance             Charged to                        Balance
                                 December 31, 1998   Expense      Write-offs           December 31, 1999
                                 ------------------  -----------  -------------------  ------------------
Allowance for
doubtful accounts                    $ 10.4             $ 3.3         $  (1.9)              $  11.8
---------------------------------------------------------------------------------------------------------
                                 Balance             Charged to                        Balance
                                 December 31, 1999   Expense      Write-offs           December 31, 2000
                                 ------------------  -----------  -------------------  ------------------
Allowance for
doubtful accounts                    $ 11.8             $ 3.8         $  (2.5)              $  13.1
---------------------------------------------------------------------------------------------------------
</TABLE>


                                       82



























































<PAGE>
          3.     Exhibits
                 --------

     Management contracts, compensatory plans and arrangements are listed herein
     at  Exhibits  (10)(v)  through  (10)(xv).

        (3)(i)            Restated  Certificate of Incorporation dated March 14,
                          1995,  and   Certificate  of  Amendment  of   Restated
                          Certificate  of Incorporation dated  June   23,  1995,
                          both incorporated herein by reference from Exhibit (3)
                          to the  June  30,  1995  Form  10-Q.

          (ii)            By-Laws incorporated  herein by reference from Exhibit
                          (3)(ii)  to  the  September  30,  1996,  Form  10-Q.

        (4)(i)            Form  of  Indenture  dated  as of January 15, 1983, as
                          supplemented by the First Supplemental Indenture dated
                          as  of  March  31, 1986, and the  Second  Supplemental
                          Indenture, dated as of June 26, 1996, relating to  the
                          $200,000,000  8-3/8% Sinking Fund Debentures due 2016,
                          incorporated herein by reference  from Exhibits (4)(a)
                          and (b) to Amendment No. 1 to  Registration  Statement
                          on  Form  S-3, File No. 33-4381 and Exhibit (4)(iv) to
                          the  June 30, 1996, Form  10-Q.

          (ii)            Form of  Indenture dated  as of December 15, 1987,  as
                          supplemented by the First Supplemental Indenture dated
                          as of December 15, 1987, and  the  Second Supplemental
                          Indenture  dated as of February 1, 1993, and the Third
                          Supplemental  Indenture dated as  of  June  26,  1996,
                          incorporated herein by reference  from Exhibits (4)(a)
                          through (d) to  Registration Statement  on  Form  S-3,
                          File  No.  33-45770,  and   Exhibit  (4)(iii)  to  the
                          June  30, 1996,  Form  10-Q, relating to the following
                          Debentures and  Notes:

                          (a)  The $150,000,000 9-1/4% Sinking Fund Debentures
                               due 2019.

                          (b)  The  $200,000,000  9-1/5%  Debentures  due  2021.

                          (c)  The  $250,000,000  7-7/8%  Debentures  due  2023.

          (iii)           Form  of  Indenture  relating  to  Senior  Securities,
                          incorporated  herein by reference from Exhibit 4.1  to
                          the Company's Registration Statement  on   Form   S-3,
                          File  No.  33-57577.

          (iv)            Form of Indenture relating to Subordinated  Securities
                          incorporated  herein by reference from Exhibit  4.2 to
                          the Company's Registration  Statement  on   Form  S-3,
                          File  No.  33-57577.

       (10)(i)            Recapitalization  Agreement, dated  as of October  14,
                          1997, among  BORDEN, INC., a New  Jersey  corporation,
                          BORDEN DECORATIVE PRODUCTS HOLDINGS, INC., a  Delaware
                          corporation and an indirect  wholly  owned  subsidiary
                          of Borden, and BDPI HOLDINGS CORPORATION,  a  Delaware
                          corporation   incorporated  herein   by  reference  to
                          Exhibit (10)(i) to the 1997 Form 10-K Annual Report.

           (ii)           Credit Agreement dated as of December 15, 1994 amended
                          and restated as of July 14, 1997, incorporated  herein
                          by reference to Exhibit (10)(ii) to the June 30, 1997,
                          Form  10-Q.

                                       83



















<PAGE>
          (iii)           Stockholders  Agreement, dated as of June 20, 1996, by
                          and  among  Borden, Inc. and J. Brendan Barba, Paul M.
                          Feeny, David MacFarland, Robert Cron, Kenneth J. Avia,
                          Melanie K. Barba,  John Powers, Lauren Powers, Carolyn
                          Vegliante  and  Lawrence  Noll, incorporated herein by
                          Reference  to  Exhibit  2   to   Schedule  13D,  dated
                          July  1,  1996.  File  No.  005-37385.

           (iv)           Governance   Agreement,  dated  as  of  June 20, 1996,
                          between    Borden,  Inc.  and   AEP  Industries  Inc.,
                          incorporated   herein by reference  to  Exhibit  5  to
                          Schedule 13D, dated July 1, 1996, File No. 005-37385.

            (v)           Amended and  Restated 1996 Unit Incentive Plan for Key
                          Employees  of Borden,  Inc.  and  Associated  Persons,
                          as  of June 29, 1999, incorporated herein by reference
                          to  Exhibit  (10)(v)  to  the  1999  Form  10-K Annual
                          Report.

           (vi)           Amended  and  Restated  1996  Unit Incentive Plan  for
                          Key Employees of Borden, Inc.  and Associated Persons,
                          as  of  December 31,  2000.

          (vii)           1994 Stock Option  Plan  incorporated by reference  to
                          Exhibit (10)(v) to the 1993 Form 10-K  Annual  Report.

          (viii)          Executive  Supplemental   Pension  Plan   Amended  and
                          Restated  as   of  January,  1996   incorporated    by
                          Reference  to  Exhibit (10)(xiii)  to  the  1998  Form
                          10-K  Annual  Report.

            (ix)          Advisory   Directors  Plan,  incorporated  herein   by
                          reference  from   Exhibit  (10)(viii)  to   the   1989
                          Form  10-K  Annual  Report.

             (x)          Advisory    Directors    Plan     Trust     Agreement,
                          incorporated  herein   by   reference   from   Exhibit
                          (10)(ix) to the 1988 Form 10-K Annual Report.

            (xi)          Management  Agreements
                          ----------------------

                          (a)  Employment  Agreement  with  W.  F.  Stoll,  Jr.,
                               dated June 6, 1996,  incorporated  by   reference
                               to Exhibit  (10)(vi)  to  the  June 30, 1996 Form
                               10-Q.

                          (b)  Summary of  Terms  of  Employment  for  Kevin  M.
                               Kelley,  incorporated  herein   by  reference  to
                               Exhibit (10) to the June 30, 1999  Form  10-Q.

           (xii)          Executive  Perquisite  Benefits  Plan dated January 1,
                          1996, incorporated by  reference to Exhibit (10)(xxiv)
                          to the 1995 Form 10-K Annual Report.

           (xiii)         Consulting   Agreement   dated   August    21,   1995,
                          incorporated  herein   by  reference  to  Exhibit (10)
                          to  the  September  30, 1995 Form 10-Q.

            (xiv)         1999  Management  Incentive  Plan for  Borden  Capital
                          Management  Partners, incorporated herein by reference
                          To  Exhibit (10)(xvi) to  the 1999  Form  10-K  Annual
                          Report.


                                       84




















<PAGE>
            (xv)          2000  Management  Incentive  Plan for  Borden  Capital
                          Management  Partners.

            (21)          Subsidiaries  of  Registrant.

         (23)(i)          Accountants'  Consent.


4.  Financial  Statement  Schedules
    -------------------------------

    The  following  is   the  separate  financial statements  of Foods  Holdings
    filed in accordance with  rule 3-10  of Regulation S-X.  Foods  Holdings  is
    a guarantor of the Company's  credit  facility  and  all  of  the  Company's
    outstanding  publicly  held  debt.

(a) Reports  on  Form  8-K
    ----------------------

No  reports  on  Form 8-K were filed by the Company during the fourth quarter of
2000.

                                       85































































<PAGE>

                                  SIGNATURES


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


                         BORDEN,  INC.

                         By     /s/  Deborah K. Roche
                                ---------------------
                         Deborah K. Roche, Vice  President/General Auditor
                         and  Controller
                        (Principal Accounting Officer)

Date:  April 2,  2001


     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 Company
and  in  the  capacities  indicated,  on  the  date  set  forth  above.


Signature                     Title
---------                     -----

/s/  C.  Robert  Kidder       Chairman  of  the  Board  and
------------------------------
(C.  Robert  Kidder)          Chief  Executive  Officer

/s/  Henry  R.  Kravis        Director
------------------------------
(Henry  R.  Kravis)

/s/  George  R.  Roberts      Director
------------------------------
(George  R.  Roberts)



                                       86











































<PAGE>

                                                                      EXHIBIT 21
     BORDEN,  INC.,  CONSOLIDATED

     SUBSIDIARIES  OF  REGISTRANT  AS  OF  DECEMBER  31,  2000
     ---------------------------------------------------------

                                             The percentage of   State or other
                                              voting securities  jurisdiction of
                                              owned, or other    incorporation
Subsidiaries  of  Registrant:                 basis of control   or organization
-----------------------------                ------------------  ---------------

BCP  Management,  Inc.                                       100     Delaware
     BCP  Finance  Corporation                               100     Delaware
BDS  Two,  Inc.                                              100     Delaware
BFI  Ltd.,  L.P.                                             100     Delaware
Borden  Chemical  Holdings,  Inc.                           95.5     Delaware
     Borden  Chemical  Canada,  Inc.                         100     Canada
     Borden  Chemical  Investments,  Inc.                    100     Delaware
     Borden  Chemical,  Inc.                                 100     Delaware
          Borden  Chemical  International,  Inc.             100     Delaware
          Melamine  Chemicals,  Inc.                         100     Delaware
              Borden Chemical Foreign Sales Corp. V.I., Inc. 100     US  V.I.
     Borden  Chemical  Philippines,  Inc.                     98     Philippines
     Borden  Chemical  Australia  (Pty.)  Ltd.               100     Australia
          Borden/AEP Australia Superannuation (Pty) Limited  100     Australia
     Borden  Chemical  Holdings  (Panama),  S.A.             100     Panama
          Alba  Quimica  Industria  e  Comercio  Ltda.        99     Brazil
              Alba  Amazonia  S.A.  Industrias  Quimicas    99.9     Brazil
                   Alba  Nordeste  Industrias  Quimica Ltda. 100     Brazil
                   Wenham  Corp.,  S.A.(The)                 100     Uruguay
          Borden  Chemical  (M.)  Sdn.  Bhd.                 100     Malaysia
          Borden  Chemical  Resinas,  Panama,  S.R.L.        100     Panama
          Quimica  Borden  Argentina  S.A.                   100     Argentina
     Borden  Chimie,  S.A.                                    98     France
     Borden  International  Holdings,  Ltd.                  100     UK
          Borden  Chemical  GB,  Ltd.                        100     UK
          Borden  Chemical  U.K.  Limited                    100     UK
              Borden  Bray,  Ltd.                            100     Ireland
     Borden  Chemical  International  Philippines,  Inc.      98     Philippines
     Compania  Quimica  Borden,  S.A.                        100     Panama
     Quimica  Borden  Espana,  S.A.                          100     Spain
          Borden  Division  de  Consumo,  S.A.               100     Spain
     Compania  Quimica  Borden  Ecuatoriana,  S.A.          83.3     Ecuador
     Gun  Ei  Borden  International  Resin  Co.  Ltd.          5     Japan
     Italcolor  S.A.                                         100     Uruguay
Elmer's  Holdings,  Inc.                                    98.5     Delaware
     Elmer's  Products,  Inc.                                100     Delaware
         Elmer's  International,  Inc.                       100     Delaware
              Elmer's  Products  Canada,  Inc.               100     Canada
     Elmer's  Investments,  Inc.                             100     Delaware
     Ross  Products,  Inc.                                   100     Delaware

NOTE:     The  above  subsidiaries  have  been included in Borden's Consolidated
Financial Statements on a consolidated or equity basis as appropriate. The names
of  certain  subsidiaries,  active  and  inactive,  included in the Consolidated
Financial  Statements and of certain other subsidiaries not included therein are
omitted  since  when  considered in the aggregate as a single subsidiary they do
not  constitute  a  significant  subsidiary.

                                       87
























<PAGE>

                                                                     EXHIBIT  21
                                     BORDEN,  INC.
     The  following  entities  are  included  in  the  combined  businesses
           as of December 31, 2000, but not included in the Registrant

                                          The  percentage  of
                                           voting  securities
                                          owned,  or  other     State or other
                                          basis  of  control   jurisdiction of
                                          by  its  immediate    incorporation/
Affiliates  of  Registrant                       parent           organization
--------------------------                  --------------      -------------

Borden  Foods  Holdings  Corporation                 100         Delaware
Borden  Foods  Corporation                           100         Delaware
     Aunt  Millie's  Sauces,  Inc.                   100         New  York
     Albadoro  S.p.A.                                100         Italy
        Monder  Aliment  S.p.A.                      100         Italy
     BF  Foods  International  Corp.                 100         Delaware
           Borden  Company  Limited,  The            100         Ireland
             Borden  Foods  Limited                  100         Ireland
           Borden  Exports  Limited                  100         Ireland
        Borden  International  (Europe)  Ltd.        100         Delaware
        BF  Andina  Ltda                             100         Colombia
          BFC  (Alisa)  SDAD  LtdA.                  100         Panama
          BFC  (Colombia)  S.A.                      100         Panama
              BF  (Colombia)  LLC                    100         Delaware
     BFC  One  Corporation                           100         Delaware
      Borden  Foods  International  Corp.            100         Delaware
          Borden  Foods  Canada  Corporation         100         Canada
      Borden  Foods  World  Trade  Corporation       100         Ohio
      Borden  International,  Inc.                   100         Delaware
      Borden International Foods (Asia-Pacific) Ltd. 100         Hong  Kong
Borden  Redevelopment  Corp.                         100         Missouri
International  Gourmet  Specialties  Company         100         New  Jersey
Prince  Company,  Inc.,  The                         100         Massachusetts

                                       88















































<PAGE>
                                                            Exhibit  10(vi)

                              AMENDED AND RESTATED
                            1996 UNIT INCENTIVE PLAN
                              FOR KEY EMPLOYEES OF
                       BORDEN, INC. AND ASSOCIATED PERSONS
                              AS OF  DECEMBER, 2000
1. Purpose  of  Plan
   -----------------
This  Amended and Restated 1996 Unit Incentive Plan for Key Employees of Borden,
Inc.  and  Associated  Persons  (the  "Plan")  is  designed:
     (a)     to  promote the long term financial interests and growth of Borden,
             Inc.  (the "Corporation") and its Associated Persons by attracting
             and retaining management personnel with the  training,  experience
             and  ability  to enable them to make  a  substantial  contribution
             to the success of the Corporation's business;
     (b)     to  motivate  management personnel  by  means  of  growth-related
             incentives to  achieve  long  range  goals;  and
     (c)     to  further  the identity of interests of Participants with those
             of the direct  and  indirect  equityholders  of  the  Corporation
             through opportunities to participate  in  increased value of,  or
             distributions by, the Corporation and/or its  Associated  Persons.

2. Definitions
   -----------
As  used  in  the  Plan,  the following words shall have the following meanings:
     (a)     "Associated Person"  shall  mean  any  Subsidiary of  BW  Holdings,
             -------------------
             including, without limitation,  the Corporation, or any Subsidiary
             of the Corporation, and any  other entity  designated by the Board
             of Directors, which may include, without limitation,  a  successor
             to  BW  Holdings.
     (b)     "BW  Holdings" shall mean BW Holdings,  LLC,  a  Delaware  limited
             --------------
             liability company.
     (c)     "BW  Holdings Unit" shall mean a unit of limited liability company
             -------------------
             interest  in  BW  Holdings.
     (d)     "Board   of  Directors"  means  the  Board  of  Directors  of  the
             -----------------------
             Corporation.
     (e)     "Committee"  means  the  Compensation  Committee  of  the Board of
             -----------
             Directors.
     (f)     "Employee"  means  a  person, including an officer, in the regular
             ----------
             full-time employment of the Corporation or one of  its  Associated
             Persons who, in the  opinion of the Committee, is, or is  expected
             to  be,  primarily  responsible for  the  management,  growth   or
             protection of some part or all of the business of the  Corporation
             or  its  Associated  Persons.
     (g)     "Equivalent Company" shall mean any Person so  designated  by  the
             --------------------
             Committee  that, at  the relevant time, owns or operates, directly
             or  indirectly, substantially  all  of  the  business  and  assets
             of  BW  Holdings  and  its Subsidiaries.
     (h)     "Exchange  Act"  means  the Securities  Exchange  Act of 1934,  as
             ---------------
             amended.
     (i)     "Fair Value" means such value of a BW  Holdings  Unit  or  similar
             ------------
             ownership   interest  in   an  Equivalent  Company  as  determined
             in  accordance  with  any applicable  resolutions  or  regulations
             of  the  Committee  in   effect   at   the  relevant time  and  in
             accordance  with  the  provisions  of  a  Grant  Agreement.
     (j)     "Grant"  means  an  award made to a Participant  pursuant  to  the
             -------
             Plan   and   described   in   Paragraph   5,   including,  without
             limitation,  an   award  of  a  BW   Holdings  Unit  Option,  Unit
             Appreciation  Right,  Purchase  BW Holdings  Unit  or  Other  Unit-
             Based  Grant,  or  any  combination  of  the  foregoing.

                                       89













<PAGE>
     (k)     "Grant  Agreement"  means  an  agreement  between  the Corporation
             ------------------
             and  a  Participant  that  sets forth the  terms,  conditions  and
             limitations applicable to a  Grant.
     (l)     "Participant"  means  an Employee selected to participate  in  the
             -------------
             Plan by the  Committee  in  its sole discretion and to whom one or
             more Grants have been made  and  such  Grants have  not  all  been
             forfeited or terminated  under  the  Plan;  provided,  however,  a
                                                         --------   -------
             non-employee   director  of  the   Corporation   or   one  of  its
             Associated  Persons  may  not  be  a  Participant.
     (m)     "Subsidiary"  means  any  corporation, partnership or other entity
             ------------
             in an unbroken chain  of  corporations,  partnerships   or   other
             entities beginning with BW Holdings  if  each of the corporations,
             partnerships or other entities, or  group of  commonly  controlled
             corporations, partnerships or other entities other  than  the last
             corporation,  partnership  or other entity in the  unbroken  chain
             then owns  50% or more of the  voting  stock  or  other  ownership
             interests in  one  of  the  other  corporations,  partnerships  or
             other  entities  in  such  chain.

3. Administration  of  Plan
   ------------------------
     (a)     The Plan shall be administered by the Committee. The Committee  may
             adopt its own rules of procedure, and the action of a majority   of
             the Committee, taken  at  a  meeting  or taken  without   a meeting
             by a writing signed by  such  majority,  shall  constitute   action
             by the Committee. The Committee shall have the power and  authority
             to administer, construe and interpret the Plan, to make rules   for
             carrying  it  out  and  to  make  changes in  such rules.  Any such
             interpretations,  rules  and  administration  shall be   consistent
             with the basic purposes  of  the  Plan.
    (b)      The  Committee  may delegate to the Chief Executive  Officer and to
             other senior  officers  of  the  Corporation its duties   under the
             Plan subject to such conditions  and  limitations as the  Committee
             shall prescribe, except  that only  the  Committee  may   designate
             and make Grants to Participants who are subject to Section   16  of
             the  Exchange  Act  at  the  time  of  such  Grant.
    (c)      The  Committee  may  employ  attorneys,  consultants,  accountants,
             appraisers,  brokers  or  other   persons.    The Committee,    the
             Corporation, and the officers  and  directors  of  the  Corporation
             shall be entitled to rely upon the advice,  opinions  or valuations
             of any such persons.  All actions taken  and  all   interpretations
             and determinations made by the Committee in good  faith   shall  be
             final  and  binding  upon  all   Participants,  the     Corporation
             and  all  other interested  persons.  No  member  of the  Committee
             or the Board of Directors, or the  board of directors  or   similar
             management  body  of  any  Associated  Person, and  none  of    the
             Corporation, BW Holdings, any Associated Person or any affiliate of
             any  thereof  shall  be   liable  (personally  or  otherwise)   for
             any  action, determination  or  interpretation made in good   faith
             with respect to the Plan or  the  Grants,  and  all   such  persons
             shall be fully protected by the Corporation with  respect   to  any
             such  action,  determination  or  interpretation.

4. Eligibility
   -----------
The Committee may from time to time make Grants under the Plan to such Employees
and  in such form having such terms, conditions and limitations as the Committee
may  determine in its sole discretion.  No Grants may be made under this Plan to
non-employee  directors of Corporation or any of its Subsidiaries. Grants may be
granted  singly,  in  combination  or  in  tandem.  The  terms,  conditions  and
limitations  of  each  Grant  under  the  Plan  shall  be  set  forth in a Grant
Agreement,  in  a  form approved by the Committee, consistent, however, with the
terms  of  the  Plan;  provided,  however,  such  Grant  Agreement shall contain
                       --------   -------
provisions dealing with the treatment of Grants in the event of the termination,
death or disability of a Participant, and may also include provisions concerning
the  treatment  of  Grants  in  the  event  of  a  change  of  control.

5. Grants
   ------
From  time to time, the Committee will determine the forms and amounts of Grants
for  Participants.  Such  Grants may take the following forms in the Committee's
sole  discretion:

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<PAGE>
           (a) BW  Holdings Unit Options - These  are  options  to  purchase  BW
               ------------------------
        Holdings Units.  At the time of the Grant the Committee shall determine,
        and shall have contained in the Grant Agreement or other Plan rules, the
        option exercise  period,  the  option  exercise  price,  and  such other
        conditions or restrictions  on  the  grant  or exercise of the option as
        the  Committee  deems appropriate,  which  may include  the  requirement
        that the grant of options is predicated on  the acquisition  of Purchase
        BW Holdings Units by the optionee.

           (b) Unit Appreciation Rights - These  are  rights  that  entitle  the
               ------------------------
        holder to receive payments from time to time  from  the  Corporation  in
        amounts and at  times  corresponding  to  the  amounts  and  times  when
        distributions  on the BW Holdings  Units  are  made  and/or  in  amounts
        determined  based  on  the  relative values of a BW Holdings Unit at the
        time  of  payment  and at the time of Grant, as specified  in  a   Grant
        Agreement.    Generally,   Unit   Appreciation   Rights   will   provide
        for    payments    by    the    Corporation    when    the     aggregate
        distributions   on   each   BW   Holdings   Unit   exceeds   a   trigger
        price  specified  in  the Grant  Agreement.  The Committee, in the Grant
        Agreement  or  by  the  other  Plan rules, may impose such conditions or
        restrictions  on  the Unit Appreciation  Rights,  may  provide  for  the
        conversion  of  the  Unit  Appreciation  Rights into  BW Holdings Units,
        or options to purchase BW Holdings  Units or  other ownership  interests
        in  BW  Holdings  or  any Associated Person,  and  may  provide for such
        other  terms and  conditions applicable to the Unit  Appreciation Rights
        as  it deems appropriate.  Unit Appreciation Rights may also  be  called
        "UARs"  in  a  Grant  Agreement.

           (c) Purchase BW Holdings Unit - Purchase BW  Holdings  Units  are  BW
               -------------------------
        Holdings  Units  offered to a Participant at such price as determined by
        the   Committee,  the   acquisition  of  which will make him eligible to
        receive Grants under the Plan;  provided,  however,  that  the  price of
                                        ---------  -------
        such  Purchase  BW  Holdings  Units may not be less than 50% of the fair
        market value (as determined by the Committee) of the BW  Holdings  Units
        on the date  such Purchase BW Holdings Units are offered.

           (d) Other  Unit-Based Grants - The Committee may make   other  Grants
               ------------------------
        under the Plan pursuant to which BW Holdings Units (or similar ownership
        interests of   an    Equivalent   Company)   are or may in the future be
        acquired,  or  payments  are or may in the future be made, in each case,
        based on the performance or value of the Corporation and its  Associated
        Persons. The Committee, in the Grant Agreement or by other  Plan  rules,
        may impose such conditions or restrictions on any such Grant as it deems
        appropriate, consistent with the purposes of the Plan.  Such Other Unit-
        Based  Grants  may  include,  without  limitation,  appreciation  rights
        providing  for  payments  to the Employee when a specified value of  the
        Units is achieved  relative  to  a  value specified  at the time of  the
        Grant in the Grant Agreement.

6. Limitations  and  Conditions
   ----------------------------
           (a) The   number of BW Holdings Units available for Grants under this
        Plan,  and the number of such Units on which Grants under this  Plan may
        be based, shall be  1,157,057, but may be increased or decreased (but in
        be event decreased  to    a  number lower than the number of BW Holdings
        Units theretofore granted or with respect  to which  Grants  theretofore
        Have been made under the Plan), by the Committee in its sole discretion.
        Unless  restricted by applicable law, the number  of  BW  Holdings Units
        related to Grants that are forfeited,  terminated, cancelled  or  expire
        shall  immediately  become  available  for  Grants.
           (b) No Grants shall be made under the Plan beyond ten years after the
        effective  date  of  the  Plan,  but  the  terms of Grants  made  on  or
        before the expiration  thereof  may  extend beyond such  expiration.  At
        the time a Grant is made or amended or the  terms  or  conditions  of  a
        Grant  are  changed,  the  Committee  may  provide  for  limitations  or
        conditions  on  such  Grant.
           (c) Nothing  contained  herein  shall   affect   the   right  of  the
        Corporation to terminate  any  Participant's  employment at any time  or
        for any reason.

           (d) Deferrals of Grant payouts may   be   provided   for, at the sole
        discretion of  the  Committee,  in  the  Grant  Agreements.


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<PAGE>
           (e) Except as otherwise prescribed by the Committee, the   amounts of
        the   Grants  for  any employee of a Subsidiary, along with    interest,
        dividend and other expenses accrued on  deferred   Grants    shall    be
        charged to the Participant's employer during the period for  which   the
        Grant   is   made.   If   the Participant is employed by more  than  one
        Subsidiary  or by   both the Corporation and a  Subsidiary   during  the
        period  for  which  the  Grant  is  made, the Participant's   Grant  and
        related    expenses    will   be  allocated    between   the   companies
        employing the Participant in a manner prescribed  by  the  Committee.
           (f) Other than as specifically provided with regard to the death of a
        Participant,  no  Grant or  right  to payment  in respect thereof  under
        the Plan shall  be  subject in  any  manner to anticipation, alienation,
        sale, transfer, assignment,  pledge,  encumbrance  or  charge,  and  any
        attempt to do so shall  be  void.  No  Grant  or  right  to  payment  in
        respect thereof shall, prior  to  receipt thereof by the Participant, be
        in  any  manner  liable  for  or  subject   to   the  debts,  contracts,
        liabilities,     engagements    or    torts    of    the    Participant.
        Notwithstanding  the  foregoing, the Committee may,  in  its discretion,
        authorize all  or  a  portion of the options or UARs  to  be  granted to
        an optionee to be  on terms  which  permit  transfer  by  such  optionee
        to  (1)  the  spouse,   children   or   grandchildren  of  the  optionee
        ("Immediate  Family  Members"),   (ii)  a  trust  or  trusts   for   the
        exclusive  benefit  of  such   Immediate  Family  Members,  or  (iii)  a
        partnership  or other  entity in which such Immediate Family members are
        the  only  partners,  members   or   beneficiaries,  provided  that, (x)
                                                             --------  ----
        the  option  agreement  pursuant   to  which  such options  are  granted
        must  be  approved  by  the  Committee,  and  must expressly provide for
        transferability   in   a   manner  consistent  with  this  Section,  (y)
        subsequent   transfers   of   transferred  options  shall  be prohibited
        except  transfers  by  will  or  by the applicable  laws  of  this Plan.
        Following transfer,  any  such  options shall  continue  to  be  subject
        to  the  same  terms  and  conditions  as  were  applicable  immediately
        prior  to  transfer.
           (g) Participants  shall  not be, and shall not have any of the rights
        or privileges of, members  of  BW  Holdings or equity  holders  in   any
        Associated Person in respect of  any  BW  Holdings  Units  or  interests
        in an   Associated Person purchasable  in  connection  with  any   Grant
        unless  and until such Participant is registered  as  the  owner thereof
        and, if  applicable,  certificates  representing any  such  BW  Holdings
        Units or  such  other interests have  been issued by BW Holdings or such
        Associated  Person  to  such  Participants.
           (h) No  election   as   to  benefits or exercise of BW Holdings  Unit
        Options, Unit Appreciation  Rights  or other rights may be made during a
        Participant's Lifetime by  anyone  other  than  the  Participant  except
        by  a  legal representative appointed for  or  by  the  Participant.
           (i) Absent express provisions to  the  contrary, any grant under this
        Plan shall not be deemed compensation for purposes of computing benefits
        or contributions  under  any retirement plan of the Corporation  or  its
        Subsidiaries  and  shall   not  affect  any  benefits  under  any  other
        benefit  plan  of any kind or subsequently  in  effect  under  which the
        availability or amount of benefits is  related to level of compensation.
        This  Plan  is  not  a "Retirement  Plan" or "Welfare  Plan"  under  the
        Employee Retirement Income Security Act of 1974, as amended.
           (j) Unless the Committee determines otherwise,  no benefit or promise
        under    the    Plan   shall  be  secured  by any specific assets of the
        Corporation or any of its  Subsidiaries,  nor  shall  any  assets of the
        Corporation  or  any of its Subsidiaries  be  designated as attributable
        or allocated to the satisfaction of the Corporation's  obligations under
        the  Plan.

7. Transfers  and  Leaves  of  Absence
   -----------------------------------
For  purposes  of  the  Plan,  unless the Committee determines otherwise:  (a) a
transfer  of  a  Participant's  employment  without  an  intervening  period  of
separation among the Corporation and any Associated Person shall not be deemed a
termination  of  employment,  and  (b) a Participant who is granted in writing a
leave  of  absence  shall  be  deemed  to  have  remained  in  the employ of the
Corporation  during  such  leave  of  absence.

8. Adjustments
   -----------
In  the  event  that  the  Corporation (or any Equivalent Company) consummates a
Public  Offering,  or  any  similar  event  occurs,  or there is a change in the
powers,  designations,  preferences  and  relative  participating,  optional  or
other     rights,   if   any,     or   the   qualifications,    limitations   or
restrictions of   the   outstanding     BW     Holdings    Units    or    equity
interests in     an    Equivalent     Company     or     a     reclassification,

                                       92






<PAGE>
recapitalization     or     merger,    change    of    control,    or    similar
event  affecting  the  Corporation,  BW  Holdings  or an Equivalent Company, the
Committee  may  adjust  appropriately  the  outstanding Grants as it deems to be
equitably  required,  including  without  limitation  converting the Grants into
common  equity  of,  or  grants of options or other rights to purchase ownership
interests  in,  the  Corporation  or  the  Equivalent Company that consummates a
Public  Offering  on  such terms as the Committee deems to be appropriate in its
sole  discretion.

9. Merger, Consolidation,  Exchange,  Acquisition,  Liquidation  or  Dissolution
   -----------------------------------------------------------------------------
In  its  absolute  discretion,  and  on  such  terms  and conditions as it deems
appropriate,  coincident with or after the grant of any BW Holdings Unit Option,
Unit Appreciation Right or any Other Unit-Based Grant, the Committee may provide
that  such  BW Holdings Unit Option, Unit Appreciation Right or Other Unit-Based
Grant  cannot  be exercised or triggered after the merger or consolidation of BW
Holdings  or  the  Corporation  into another corporation, the exchange of all or
substantially  all  of  the  assets  of  BW  Holdings or the Corporation for the
securities  of  another  corporation,  the  sale of all or substantially all the
assets of BW Holdings or the Corporation, the acquisition by another corporation
of  80%  or  more of BW Holdings' or the Corporation's then outstanding units or
shares of voting stock or the recapitalization, reclassification, liquidation or
dissolution of BW Holdings or the Corporation, and if the Committee so provides,
it  shall,  on such terms and conditions as it deems appropriate in its absolute
discretion,  also  provide, either by the terms of such BW Holdings Unit Option,
Unit  Appreciation  Right  or  Other Unit-Based Grant or by a resolution adopted
prior  to  the  occurrence of such merger, consolidation, exchange, acquisition,
recapitalization,  reclassification,  liquidation or dissolution, that, for some
period  of  time  prior  to  such  event,  such  BW  Holdings  Unit Option, Unit
Appreciation  Right or Other Unit-Based Grant shall be exercisable or able to be
triggered as to all units or shares subject thereto, notwithstanding anything to
the  contrary herein (but subject to the provisions of Paragraph 6(b)) and that,
upon  the  occurrence  of  such  event,  such  BW  Holdings  Unit  Option,  Unit
Appreciation  Right  or  Other  Unit-Based  Grant  shall  terminate and be of no
further force or effect; provided, however, that the Committee may also provide,
                         --------  -------
in  its  absolute  discretion,  that  even  if the BW Holdings Unit Option, Unit
Appreciation Right or Other Unit-Based Grant shall remain exercisable or able to
be  triggered  after  any  such  event,  from  and after such event, any such BW
Holdings Unit Option, Unit Appreciation Right or Other Unit-Based Grant shall be
exercisable  or  able to be triggered only for the kind and amount of securities
and/or other property, or the cash equivalent thereof, receivable as a result of
such  event  by the holder of Unit Appreciation Rights immediately prior to such
event  or  a  number of units or shares of stock for which such BW Holdings Unit
Option  or Other Unit-Based Grant could have been exercised immediately prior to
such  event.

10. Amendment  and  Termination
    ---------------------------
The  Committee shall have the authority to make such amendments to any terms and
conditions  applicable  to  outstanding  Grants as are consistent with this Plan
provided  that,  except  for  adjustments under Paragraph 8 or 9 hereof, no such
action  shall  modify  such Grant in a manner adverse to the Participant without
the  Participant's  consent  except  as  such  modification  is  provided for or
contemplated  in  the  terms  of  the  Grant.

The  Board  of Directors may amend, suspend or terminate the Plan except that no
such  action,  other  than an action under Paragraph 8 or 9 hereof, may be taken
which  would  decrease  the  exercise  price  or trigger price of outstanding BW
Holdings  Unit  Options  or  Unit  Appreciation  Rights, change the requirements
relating  to  the  Committee  or  extend  the  term  of  the  Plan.

11. Foreign  Options  and  Rights
    -----------------------------
The  Committee  may  make  Grants  to  Employees  who are subject to the laws of
nations other than the United States, which Grants may have terms and conditions
that  differ  from  the  terms thereof as provided elsewhere in the Plan for the
purpose  of  complying  with  foreign  laws.

12. Withholding  Taxes
    ------------------
The  Corporation shall have the right to deduct from any cash payment made under
the Plan any federal, state or local income or other taxes required by law to be
withheld  with  respect  to  such  payment.  It  shall  be  a  condition  to the
obligation of the Corporation to deliver BW Holdings Units upon exercise of a BW

                                       93









<PAGE>
Holdings  Unit  Option  or  exercise or settlement of any Other Unit-Based Grant
that  the  Participant pay to the Corporation such amount as may be requested by
the Corporation for the purpose of satisfying any liability for such withholding
taxes.  Any  Grant  Agreement  may  (but  is  not  required to) provide that the
Participant may elect, in accordance with any conditions set forth in such Grant
Agreement,  to satisfy a portion or all of such withholding taxes in the form of
a  reduced  payment  by  the Corporation (including by reducing the number of BW
Holdings  Units  to  be  received  upon  exercise of a BW Holdings Unit Option).

13. Effective  Date  and  Termination  Dates
    ----------------------------------------
The  Plan  shall  be  effective  on  and  as  of the date of its approval by the
stockholders  of  the  Corporation and no further grants shall be made under the
plan  after  ten  years  from  such  date.

                                       94






































































<PAGE>






                                 BORDEN CAPITAL
                               MANAGEMENT PARTNERS




                               2000 INCENTIVE PLAN
                                    OVERVIEW





















                                       95


















































<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>



<S>                                                     <C>
PERFORMANCE HAS ITS REWARDS. . . . . . . . . . . . . .   97

SUMMARY OF HOW THE INCENTIVE PLAN WORKS. . . . . . . .   98

PLAN PARTICIPATION . . . . . . . . . . . . . . . . . .   99
Who's Eligible . . . . . . . . . . . . . . . . . . . .   99
Target Award . . . . . . . . . . . . . . . . . . . . .   99

ESTABLISHING PERFORMANCE TARGETS . . . . . . . . . . .   99
Financial Target . . . . . . . . . . . . . . . . . . .  100
Operating EBITDA . . . . . . . . . . . . . . . . . . .  100
Performance Objectives . . . . . . . . . . . . . . . .  101
Company Objectives . . . . . . . . . . . . . . . . . .  101
Individual Performance Objectives. . . . . . . . . . .  101

DETERMINING THE INCENTIVE AWARD. . . . . . . . . . . .  102
Determine BWHLLC's Operating EBITDA. . . . . . . . . .  102
Determine BCMP's Overall Performance Rating Against
   Objectives and Total Award Pool . . . . . . . . . .  102
The Incentive Award Table. . . . . . . . . . . . . . .  102
Determine Your Individual Performance Rating and Award  104

LEAVING THE PLAN . . . . . . . . . . . . . . . . . . .  104
If You Leave the Borden Family of Companies. . . . . .  104
If you Retire, Die or Become Disabled. . . . . . . . .  104
If You Transfer. . . . . . . . . . . . . . . . . . . .  104

TAXES. . . . . . . . . . . . . . . . . . . . . . . . .  105

FOCUS ON PERFORMANCE . . . . . . . . . . . . . . . . .  105
</TABLE>


                                       96












































<PAGE>
                          PERFORMANCE HAS ITS REWARDS

The  Incentive Plan provides a form of compensation that is driven by individual
and company performance, and in the process supports BCMP's values.  Awards from
the Incentive Plan will be paid in addition to your regular salary increases and
in  no  way  affect  your  annual  salary  review  at  midyear.

Strong  teamwork is rewarded in special ways by the Incentive Plan.  The Plan is
designed  to  reward team players who add value to BCMP over the years to come.

The  2000  Incentive  Plan  bases  its  rewards in part on the financial measure
called  EBITDA - Earnings Before Interest, Taxes, Depreciation and Amortization.
EBITDA  is  a  powerful  financial  tool  for letting us know how we're doing in
managing the business for profitable growth.  The other important factors in the
incentive  plan  are BCMP performance against overall goals and your performance
against  individual  performance  objectives.

This  document  explains  the  basics  of the Borden Capital Management Partners
Incentive Plan.  Please read it carefully so you'll understand how the Plan ties
your  compensation  to  your  performance.

                                       97
































































<PAGE>
                    SUMMARY OF HOW THE INCENTIVE PLAN WORKS
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
<S>                                            <C>

YOU PARTICIPATE IN THE PLAN                   - You meet the eligibility criteria.
                                              - Your target award is established.



WE WORK HARD THROUGHOUT THE YEAR TO           -  We strive to achieve and exceed the goals we set for
INCREASE EBITDA.                                 ourselves and the company.

THE YEAR ENDS AND THE BOOKS CLOSE.            -  BWHLLC's EBITDA is compared to the EBITDA
                                                 Target.

                                              -  Using a rating system, the company and you will be
                                                 rated on performance against objectives.

                                              -  Ratings increase when we achieve our super goals or
                                                 perform at an extraordinary level.

                                              -  You will receive an award early the following year as
                                                 long as EBITDA results are above minimum target
                                                 and your performance meets certain minimum
                                                 requirements.

YOU MAY RECEIVE AN AWARD FROM THE PLAN.       -  The amount awarded depends on numerous factors,
                                                 including the year's EBITDA achievement and
                                                 performance ratings for the company and you.*
-------------------------------------------------------------------------------------------------------
</TABLE>

*All  awards  payable  from  the  Incentive Plan are subject to the approval and
discretion  of  the  CEO  and  the  Borden,  Inc.  Board  of  Directors.

                                       98
















































<PAGE>
                               PLAN PARTICIPATION

                                 WHO'S ELIGIBLE

All  associates  employed  by  Borden  Capital  Management Partners beginning on
January  1,  2000,  or  hired  during the year prior to October 1, 2000, will be
eligible  to participate in the Incentive Plan.  There is no eligibility waiting
period.


                                  TARGET AWARD

The  Incentive Plan is designed to generate a certain level of additional income
for  you when the annual EBITDA Target and performance objectives are met.  That
amount  is  called  your  TARGET  AWARD.  The  Target Award depends on your band
within  the  BCMP  organizational  chart  shown  below.
<TABLE>
<CAPTION>

BAND                                                    INCENTIVE TARGET %
---------------------------------------------------------------------------
<S>                             <C>                         <C>
Band G                       Partners                       60%+
Band F                      Principals                    40 - 60%
Band E                  Engagement Managers               20 - 40%
Band D                     Consultants                    15 - 25%
Band C                       Analysts                       10%
Band B                    Administrators                   5 - 10%
Band A               Administrative Assistants               5%
</TABLE>

When  BCMP  and  individual  associates  accomplish  and  exceed objectives, the
Incentive  Plan awards  combined  with  base salary will deliver total cash
compensation that is above  competitive markets.

                        ESTABLISHING PERFORMANCE TARGETS

The  Incentive  Plan  rewards  us  based  on  how  well we have accomplished the
established  performance  targets.  Our targets are aggressive but they are also
realistic.  Accomplishing  set  objectives  defines for us a job well done.  But
before  we  know  how well we are doing, we have to define what we are trying to
accomplish.  Each  year,  we  will  formally  establish the financial target and
performance  objectives  at two levels within the organization, against which we
will  judge  our  achievements.

<TABLE>
<CAPTION>
----------------------------------------
<S>               <C>
FINANCIAL TARGET  PERFORMANCE OBJECTIVES
----------------  ----------------------

BW Holdings, LLC    - Company
Operating EBITDA    - Individual
----------------------------------------
</TABLE>

                                       99




























<PAGE>
                                FINANCIAL TARGET

OPERATING  EBITDA

The  financial  measure  chosen  for  BCMP's  2000  Incentive Plan is EBITDA, or
Earnings  Before  Interest,  Taxes,  Depreciation  and  Amortization.

You  are  probably  all familiar with this fundamental measure of profitability.
Our  focus  is  on  the BWHLLC operating EBITDA - essentially the aggregate cash
earnings  achieved  by  each member of the Borden Family of Companies in running
its  day-to-day  operations (including businesses in the process of divestment).
BCMP  influences  these  results  through  partnering  on  strategic  and  other
projects,  governance,  and  functional  counseling  and  support.

The  EBITDA is measured at BWHLLC to include Wise, CCPC and Borden Foods as well
as the other operating companies.  BCMP's own financial performance includes the
small  ownership  portions  of  AEP and BCP.  Operating EBITDA also reflects the
expenses  incurred  by  BCMP,  and thus the degree to which we can control those
costs and partly offset them with income, e.g., from successful tail management.
The  operating  EBITDA measure, however, excludes both restructuring charges and
one-time  gains or losses on acquisitions or divestitures (but success in either
area  can  benefit  the  rating  of  BCMP performance objectives).  If we make a
significant  acquisition  or  divestiture, the financial target will be revised,
e.g.,  when  CCPC  was  acquired  in  April  1998,  the BWHLLC EBITDA target was
revised.

While  BCMP  uses  BWHLLC's operating EBITDA for incentive purposes, most of the
Borden  Family  Companies  use  Economic  Value Added, or EVA as the measure for
incentive.

For  BCMP,  EVA  doesn't  work  well  because of three factors: acquisitions and
divestitures; the complex financial and legal structure of our organization; and
tax  considerations.

The  BCMP  Partners  and  Borden  Board  of Directors have agreed that operating
EBITDA is the best measure of how well we are achieving day-to-day and long-term
objectives  that  align  with  the  underlying  goal of increasing the value and
financial  health  of BWHLLC for its investors.  That measure in turn will drive
potential  awards  under  the  Incentive  Plan.

The  2000  EBITDA  Target  has been set at $406,600 million, with a positive and
negative  swing  (explained  later) of $81,320 million.  This creates an overall
range from $325,280 million ($406,600 - $81,320) to $487,920 million ($406,600 +
$81,320).

                                       100








































<PAGE>
                             PERFORMANCE OBJECTIVES

Besides  EBITDA,  your  individual  Incentive Award is also based on setting and
meeting performance objectives at two different levels - company and individual.

Measurements  for  each of the performance objectives are established plus super
goals  as  appropriate.  SUPER  GOALS  are  aggressive milestones or outstanding
performance  levels  that  result  in  extraordinary  positive  impact  on  the
department  or organization. Setting super goals is a way to "aim high" in hopes
of  exceeding  our normal expectations. The purpose of setting super goals is to
articulate  as clearly as possible a "home run". Not every objective will have a
defined  super  goal.

COMPANY  OBJECTIVES

To  help  meet  the  overall EBITDA Target, the Partners will articulate certain
business  objectives  and  super goals with more potential organizational impact
than others. While associates are accountable for achieving all objectives, high
impact  objectives  should receive the most focus. As with financial objectives,
performance  objectives  may  be  revised  due  to  changing  business  needs.

INDIVIDUAL  PERFORMANCE  OBJECTIVES

Each  year,  you  will be asked to develop a list of your individual performance
objectives  for  the  coming  year.  The  defined  objectives should support the
objectives  of  the  company.

You will also set super goals for yourself.  These are measurements for specific
objectives  that  are  considered  extraordinary  for  your  level.
--------------------------------------------------------------------------------
Tips  on  how  to  write  "aligned  objectives"

-     Align  objectives  to  BCMP  objectives  whenever  possible.

-     Determine  how  objectives  could  support  a  part  of  a BCMP objective.

-     If an individual associate's job design is such that a direct link to BCMP
      objectives   is  difficult,  negotiate  goals that move  the  organization
      forward,   e.g.,   improve   quality   and   customer  service,  implement
      efficiencies, and/or simplify  processes.
--------------------------------------------------------------------------------
A planning template has been provided to all associates to assist you in writing
up  your individual performance objectives and super goals.  You will coordinate
your  list  with  your  manager,  who  will help ensure that your objectives are
appropriately  aggressive,  yet  attainable  -  and, of course, in line with the
goals  of  the  company.


                                       101





































<PAGE>
                         DETERMINING THE INCENTIVE AWARD

There  are  three  steps  to  arrive  at  your  individual  Incentive  Award.

Step  1.  Determine  BWHLLC's  operating  EBITDA.

Step  2.  Determine  BCMP's  overall  performance  rating against objectives and
          total  award  pool.

Step  3.  Determine  your  individual  performance  rating  and  award.

                  STEP 1.  DETERMINE BWHLLC'S OPERATING EBITDA

This  leads  us  to a total Incentive Award to be shared by all BCMP associates.
Actual  2000  EBITDA  performance  will  be  compared  to  the  2000  financial
performance  range ($325,280 million to $487,920 million). Financial performance
must  exceed $325,280 million in order for incentive payments to be made. Target
Incentive  Awards  will  be  paid  if  the  EBITDA target of $406,600 million is
achieved.

          STEP 2.  DETERMINE BCMP'S OVERALL PERFORMANCE RATING AGAINST
                         OBJECTIVES AND TOTAL AWARD POOL

At  the  end of each year, the Board of Directors will assess BCMP's performance
against  objectives  and  assign  an  overall  rating using the following scale:

                               PERFORMANCE RATINGS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
<S>                     <C>           <C>         <C>       <C>         <C>      <C>       <C>       <C>
1.0                     1.5           2.0         2.5       3.0          3.5     4.0       4.5        5.0
MEETS NO                 -       MEETS 50% OF      -        MEETS         -      MEETS       -        MEETS
OBJECTIVES                        OBJECTIVES              OBJECTIVES           OBJECTIVES           OBJECTIVES
                                                                                & 50% OF            & ALL SUPER
                                                                              SUPER GOALS              GOALS
---------------------------------------------------------------------------------------------------------------
</TABLE>

The  combination  of  BWHLLC's  operating  EBITDA and BCMP's overall performance
rating  against  objectives  is  then  compared  to  the  Incentive  Award Table
described  below  to  determine  BCMP's  total  award  pool.

                            THE INCENTIVE AWARD TABLE

Using  the  table  on the next page, we locate the combination of the EBITDA and
the  performance  rating.  The  percentage  we find represents the amount of the
Target  Award  that  will  become  the  Incentive  Award  pool  for  the  year.

The left-most column on the table reflects BWHLLC's operating EBITDA Target plus
and minus the swing, which is divided into fifths that differentiate the rows up
and  down.

Each  $16.3  million ($81.3 / 5) increase or decrease in actual 2000 EBITDA over
or  under  the EBITDA Target moves you one row higher or lower on the table, and
the  Incentive  Award  will  increase  or  decrease  as shown.  If actual EBITDA
performance falls between two rows, the incentive award will be determined using
a  proportional  increase  or  decrease.

If  EBITDA  exceeds the high end of the range, Incentive Awards continue to rise
following  the  established pattern.  Below the bottom of the range, however, no
Incentive  Awards  are  paid.


                                       102





















<PAGE>
                              PERCENTAGE OF TARGET
<TABLE>
<CAPTION>
----------------------------------------------------------------------
<S>                <C>  <C>  <C>   <C>   <C>   <C>   <C>   <C>   <C>

BWHLLC
------
EBITDA
------
487.9M              0%  50%  100%  150%  200%  250%  300%  350%  400%
                   --   ---  ----  ----  ----  ----  ----  ----  ----
                    0%  50%  100%  140%  180%  200%  250%  300%  350%
                   --   ---  ----  ----  ----  ----  ----  ----  ----
                    0%  50%  100%  130%  160%  170%  200%  250%  300%
                   --   ---  ----  ----  ----  ----  ----  ----  ----
                    0%  50%  100%  120%  140%  150%  160%  200%  250%
                   --   ---  ----  ----  ----  ----  ----  ----  ----
                    0%  50%  100%  110%  120%  130%  140%  150%  200%
                   --   ---  ----  ----  ----  ----  ----  ----  ----
                                       TARGET
                                       ------
406.6M              0%  40%   80%   90%  100%  110%  120%  130%  150%
                   --   ---  ----  ----  ----  ----  ----  ----  ----
                    0%  35%   70%   80%   90%  100%  110%  120%  138%
                   --   ---  ----  ----  ----  ----  ----  ----  ----
                    0%  30%   60%   70%   80%   90%  100%  110%  126%
                   --   ---  ----  ----  ----  ----  ----  ----  ----
                    0%  25%   50%   60%   70%   80%   90%  100%  114%
                   --   ---  ----  ----  ----  ----  ----  ----  ----
                    0%  20%   40%   50%   60%   70%   80%   90%  102%
                   --   ---  ----  ----  ----  ----  ----  ----  ----
$325.3M             0%  15%   30%   40%   50%   60%   70%   80%   90%
                   --   ---  ----  ----  ----  ----  ----  ----  ----
----------------------------------------------------------------------
</TABLE>

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

       1.0     1.5     2.0     2.5     3.0     3.5     4.0     4.5     5.0
    MEETS NO    -   MEETS 50%   -      MEETS    -     MEETS     -     MEETS
   OBJECTIVES     OF OBJECTIVES     OBJECTIVES    OBJECTIVES &     OBJECTIVES &
                                                    50% of          ALL SUPER
                                                  SUPER GOALS         GOALS
-------------------------------------------------------------------------------
                               PERFORMANCE RATINGS
-------------------------------------------------------------------------------

EXAMPLE:  DETERMINING  BCMP'S  TOTAL  INCENTIVE  AWARD

Let's  look  at  a  few  examples to see how to apply the Incentive Award Table.

EXAMPLE  A:  Assume  that  BWHLLC's  2000 EBITDA Target of $406.6 million is met
exactly.  The  company  is then evaluated based on its objectives and receives a
3.0  rating.  Using  the chart, the total award from the Incentive Plan would be
100%  of  the  Target  Award.

EXAMPLE  B:  Now  let's  say  that BWHLLC exceeds the EBITDA Target by achieving
$439.2  million in 2000.  Remember that the swing has been set at $81.3 million,
creating  plus or minus increments of $16.3 million.  Again using the table, the
$32.6  million  EBITDA  achievement  over  Target ($439.2 - $406.6) elevates the
award  exactly two rows above the Target EBITDA.  The company's 3.0 rating would
result  in  a  total  award  of  140%  of  the  Target  Award.

                                       103





















<PAGE>
         STEP 3. DETERMINE YOUR INDIVIDUAL PERFORMANCE RATING AND AWARD

After  the  end  of  the  year,  you  should  provide  a self-assessment of your
performance against objectives to your manager.  Your manager will consider this
input  in  reaching an overall performance rating for you. Achieving super goals
or  exceptional performance may substantially raise performance ratings.  Rating
performance  is  not  an  exact  science;  the  process  does  require judgment.

Your overall performance rating will be compared to the Incentive Award table to
determine  your  individual incentive award. Remember that the overall financial
performance continues to determine which row of the table is used.  The total of
individual  awards  may  not  exceed  the  total  BCMP award pool created by the
combination  of  BWHLLC  financial  performance  and  BCMP's overall performance
against  objectives.

It's  recognized  that managers may be inconsistent in their ratings and planned
objectives  may  not  always  be  aligned.  BCMP partners will review individual
associate  ratings  across  departments  prior  to  submission  to  the Board of
Directors  to  ensure  consistency  and  relative  fairness.

EXAMPLE:  DETERMINING  YOUR  INDIVIDUAL  AWARD

Assume  that as an Analyst with a base salary of $40,000 with a 10% target, your
Target  Award  is  $4,000.  Using  Example  A,  Target  EBITDA  is met, and BCMP
receives  a  3.0  rating  to  receive 100% of the Target Award.  Your individual
rating  is  4.0,  so  your Incentive Target Award is $4,800 (120% of your Target
Award  from  the  table).

Using Example B, BWHLLC financial performance exceeds EBITDA Target  with a BCMP
performance  against  objectives rating of 3.0 which generates a pool of 140% of
target.  Your individual rating is 4.0 and by using the chart your award is 160%
or  $6,400  total  payments  may  not  exceed  the  available  pool.

                                LEAVING THE PLAN

                   IF YOU LEAVE THE BORDEN FAMILY OF COMPANIES

The  Incentive  Plan is designed to award associates who are contributing to the
success  of  BW  Holdings, LLC.  You must be actively employed within the Borden
Family  of  Companies  on  December 31 to be eligible for an award earned during
that  year.  If  your  employment ends for reason other than transfer to another
Borden  Family Company or retirement, death or disability, you will no longer be
eligible  for  Incentive  Awards.

                      IF YOU RETIRE, DIE OR BECOME DISABLED

If  you  retire  at  or  after  age 55 with at least 10 years of service, die or
become  disabled, you (or your beneficiary) will receive a cash payment equal to
your Incentive Award for the year pro-rated for the number of months you worked.
This  payment  will  be  made after the end of the year in which your employment
ends.


                                 IF YOU TRANSFER

If  you  transfer  to  another company within the Borden Family and are actively
employed  at  the end of the year, you will receive a cash payment equal to your
Incentive  Award  for  the  year prorated for the number of months you worked at
BCMP.

                                       104

























<PAGE>
                                      TAXES

Payments  from  the  Incentive  Plan are treated as regular income.  The company
will  withhold  regular income tax and the payment will appear on your Form W-2.
You  may want to speak to your tax advisor regarding the tax implications of the
Incentive  Plan.

                              FOCUS ON PERFORMANCE

With  the Incentive Plan, all BCMP associates have a mechanism in place that can
truly  reward a job well done.  What you need to do every day - for yourself and
the  company  -  is  to focus on increasing EBITDA and achieving your individual
performance  objectives.

Keep in mind, the Incentive Plan does NOT replace your regular salary review and
recommended increases; it is a means to turn a solid performance on the job into
a  cash bonus in addition to those increases. The evaluation of your performance
against  your individual performance objectives is an important process not only
for  the Incentive Plan, but also as part of your July competency evaluation and
base  salary  review.

If  you  have any questions about the Incentive Plan, please speak to your Human
Resources  representative.


ALL  INCENTIVE  PLAN  PAYMENTS  ARE  SUBJECT  TO DISCRETION. Notwithstanding the
attainment  of  financial  results or part or all of performance objectives, all
awards  under  the Incentive Plan are subject to the approval of the CEO and the
Borden,  Inc.  Board  of  Directors.

The  company expects and intends to continue this Plan indefinitely but reserves
the  right  to  end  or amend  it  at  any  time.

This  document  is  intended  to  summarize  the  Incentive  Plan  for  eligible
associates  of  Borden  Capital  Management Partners, and it does not attempt to
cover  every  detail.  For  complete  details, please refer to the official Plan
Document which governs the Plan.  To obtain a copy of the Plan Document, contact
your Human Resources representative.  Every attempt has been made to ensure that
all  information  presented  here  is  accurate,  however,  if  there  are  any
discrepancies between this document and the official Plan Document, the official
Plan  Document  will  govern.

                                       105











































<PAGE>

                          INDEPENDENT AUDITORS' CONSENT



We  consent  to  the  incorporation  by  reference in Registration Statement No.
33-57577  of  Borden,  Inc. on Form S-3 of our reports for each of Borden, Inc.,
Borden,  Inc.  and  Affiliates, and Borden Foods Holdings Corporation each dated
February  9,  2001, appearing in this Annual Report on Form 10-K of Borden, Inc.
for  the  year  ended  December  31,  2000.



DELOITTE  &  TOUCHE  LLP
Columbus,  Ohio


March 30,  2001




                                       106































































<PAGE>

BORDEN  FOODS  HOLDINGS  CORPORATION

CONSOLIDATED  FINANCIAL  STATEMENTS
AS OF DECEMBER 31, 2000 AND 1999
AND FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED DECEMBER 31, 2000














































































                                            BFH1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT



To  the  Board  of  Directors
     And  Shareholder  of  Borden  Foods  Holdings  Corporation


We  have  audited  the  accompanying consolidated balance sheets of Borden Foods
Holdings Corporation and subsidiaries (a wholly owned subsidiary of Borden Foods
Holdings,  LLC)  as  of December 31, 2000 and 1999, and the related consolidated
statements  of  operations,  shareholder's equity and cash flows for each of the
three  years  in the period ended December 31, 2000.  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  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our  opinion,  such consolidated financial statements present fairly, in all
material  respects,  the financial position of Borden Foods Holdings Corporation
and  subsidiaries  at  December  31,  2000  and  1999,  and the results of their
operations  and their cash flows for each of the three years in the period ended
December 31, 2000 in conformity with accounting principles generally accepted in
the  United  States  of  America.


DELOITTE  &  TOUCHE  LLP


Columbus,  Ohio
February  9,  2001














































                                            BFH2
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
CONSOLIDATED  STATEMENTS  OF  OPERATIONS

BORDEN  FOODS  HOLDINGS  CORPORATION

      (In thousands, except per share and share amounts)          Year ended December 31,

                                                                 2000       1999        1998
-----------------------------------------------------------------------------------------------
<S>                                                           <C>         <C>        <C>
Net sales                                                     $ 570,659   $547,934   $ 706,088
Cost of goods sold                                              284,671    264,012     393,062
                                                              ----------  ---------  ----------

Gross margin                                                    285,988    283,922     313,026
                                                              ----------  ---------  ----------

Distribution expense                                             44,030     42,650      44,947
Marketing expense                                               214,935    198,693     211,430
General & administrative expense                                 67,656     51,959      69,185
Gain on divestiture of businesses                                (4,848)   (46,938)   (243,845)
Business realignment expense                                      5,737          -       9,003
                                                              ----------  ---------  ----------

Operating income (loss)                                         (41,522)    37,558     222,306
                                                              ----------  ---------  ----------

Interest expense                                                    233        486       2,475
Interest income                                                 (16,496)   (15,820)    (20,293)
Other (income) expense, net                                           -       (332)      2,013
                                                              ----------  ---------  ----------

Income (loss) before income taxes and cumulative
   effect of accounting change                                  (25,259)    53,224     238,111
Income tax expense                                                5,529     11,050      54,175
                                                              ----------  ---------  ----------

Income (loss) before cumulative effect of accounting change     (30,788)    42,174     183,936
Cumulative effect of accounting change, net of tax                    -     (2,806)          -
                                                              ----------  ---------  ----------

Net income (loss)                                               (30,788)    39,368     183,936

Affiliate's share of income                                         (66)    (5,098)   (142,033)
                                                              ----------  ---------  ----------

Net income (loss) applicable to common shares                 $ (30,854)  $ 34,270   $  41,903
                                                              ==========  =========  ==========

Per Share Data
--------------
Basic and diluted earnings (loss) per common share
   before cumulative effect of accounting change              $(308,540)  $370,760   $ 419,030
Cumulative effect of accounting change per common share               -    (28,060)          -
                                                              ----------  ---------  ----------

Net basic and diluted earnings (loss) per common share        $(308,540)  $342,700   $ 419,030
                                                              ==========  =========  ==========

Average number of common shares outstanding
  during the year                                                   100        100         100
-----------------------------------------------------------------------------------------------
</TABLE>


See  accompanying  Notes  to  the  Consolidated  Financial  Statements.

















                                            BFH3
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
CONSOLIDATED  BALANCE  SHEETS

BORDEN  FOODS  HOLDINGS  CORPORATION

(In  thousands)

                                                               December 31,
ASSETS                                                      2000         1999
--------------------------------------------------------------------------------
<S>                                                    <C>             <C>
  CURRENT ASSETS
    Cash and equivalents                                   $ 222,374  $ 266,825
    Accounts receivable (less allowance for doubtful
      accounts of $787 and $1,317, respectively)              51,126     55,201
    Inventories:
      Finished and in-process goods                           46,531     48,066
      Raw materials and supplies                              28,608     30,089
    Deferred income taxes                                      9,584     15,383
    Other current assets                                       8,243     11,793
                                                           ---------  ---------
                                                             366,466    427,357


  OTHER ASSETS                                                 7,461     10,819


  PROPERTY AND EQUIPMENT
    Land                                                       9,586      9,542
    Buildings                                                 43,362     41,790
    Machinery and equipment                                  224,937    189,652
                                                           ---------  ---------
                                                             277,885    240,984
    Less accumulated depreciation                            (88,062)   (64,462)
                                                           ---------  ---------
                                                             189,823    176,522

  INTANGIBLES, NET
    Goodwill                                                  10,692     11,006
    Trademarks and other intangibles                         105,464    108,496
                                                           ---------  ---------
                                                             116,156    119,502
                                                           ---------  ---------

  TOTAL ASSETS                                             $ 679,906  $ 734,200
                                                           =========  =========
</TABLE>


See  accompanying  Notes  to  the  Consolidated  Financial  Statements.

































                                            BFH4
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------
CONSOLIDATED  BALANCE  SHEETS

BORDEN  FOODS  HOLDINGS  CORPORATION

(In  thousands,  except  per  share  and  share  amounts)

                                                         December 31,
LIABILITIES AND SHAREHOLDER'S EQUITY                  2000         1999
----------------------------------------------------------------------------
<S>                                              <C>             <C>
  CURRENT LIABILITIES
    Accounts and drafts payable                       $ 39,823   $ 46,858
    Accrued customer allowances                         12,093     17,781
    Income taxes payable                                 8,000     11,640
    Current maturities of long-term debt                   369        346
    Current obligations under capital lease                252          -
    Loans due to affiliates                              3,029      2,513
    Other current liabilities                           27,817     46,845
                                                      --------   --------
                                                        91,383    125,983

  OTHER LIABILITIES
    Long-term debt                                       2,529      3,033
    Long-term obligations under capital lease            2,770          -
    Deferred income taxes                                6,203     34,585
    Other long-term liabilities                         56,609     36,314
                                                      --------   --------
                                                        68,111     73,932

  COMMITMENTS AND CONTINGENCIES (SEE NOTE 16)

  SHAREHOLDER'S EQUITY
    Common stock - $0.01 par value; 100 shares
      authorized, issued, and outstanding                    -          -
    Paid in capital                                    423,104    405,817
    Shareholder's investment in affiliates              66,338     66,272
    Retained earnings                                   34,470     65,324
    Accumulated translation adjustments                 (3,500)    (3,128)
                                                      --------   --------
                                                       520,412    534,285
                                                      --------   --------

  TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY          $679,906   $734,200
                                                      ========   ========
-------------------------------------------------------------------------
</TABLE>


See  accompanying  Notes  to  the  Consolidated  Financial  Statements.

































                                            BFH5
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS

BORDEN  FOODS  HOLDINGS  CORPORATION


(In thousands)                                                           Year ended December 31,
                                                                       2000        1999        1998
-----------------------------------------------------------------------------------------------------
<S>                                                                  <C>          <C>        <C>
  CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
    Net income (loss)                                               $  (30,788)  $ 39,368   $ 183,936
    Adjustments to reconcile net income (loss) to
     net cash from (used in) operating activities:
      Depreciation                                                      27,599     17,614      13,422
      Amortization                                                       3,606      3,754       3,887
      Deferred tax (benefit) expense                                    (5,295)    19,387      11,301
      Gain on divestiture of businesses                                 (4,848)   (46,938)   (243,845)
      Business realignment expense                                       5,737          -       9,003
    Net change in assets and liabilities:
      Trade receivables                                                  4,075     (7,862)     49,564
      Inventories                                                        3,016    (14,111)     21,394
      Trade payables                                                    (7,035)    (8,989)    (16,600)
      Accrued customer allowances                                       (5,688)    (1,819)    (11,006)
      Current tax payable                                               (3,640)     6,183     (24,912)
      Other current assets and liabilities                             (11,991)   (17,602)    (70,653)
      Other long-term assets and liabilities                            22,444     11,734      (6,927)
      Other, net                                                         4,859       (180)      7,248
                                                                   -----------  ---------  ----------
                                                                         2,051        539     (74,188)
                                                                   -----------  ---------  ----------

  CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES
    Capital expenditures                                               (46,781)   (58,190)    (37,952)
    Proceeds from the sale of fixed assets                                 161      4,466      15,852
    Proceeds from the divestiture of businesses                              -     23,571     733,226
                                                                   -----------  ---------  ----------
                                                                       (46,620)   (30,153)    711,126
                                                                   -----------  ---------  ----------

  CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
    Net short-term debt payments                                          (346)    (6,178)    (15,263)
    Proceeds (repayment) of loans due to affiliates                        516      2,513     (27,914)
    Repayment of long-term debt due to affiliates                           -           -     (47,616)
    Repayment of long-term debt                                            (16)         -      (2,572)
    Repayment of capital lease obligations                                 (36)         -           -
    Distribution to affiliate                                                -          -    (272,205)
                                                                   -----------  ---------  ----------
                                                                           118     (3,665)   (365,570)
                                                                   -----------  ---------  ----------

  (DECREASE) INCREASE IN CASH AND EQUIVALENTS                          (44,451)   (33,279)    271,368

  CASH AND EQUIVALENTS AT BEGINNING
    OF YEAR                                                            266,825    300,104      28,736
                                                                   -----------  ---------  ----------

  CASH AND EQUIVALENTS AT END
    OF YEAR                                                        $   222,374   $266,825   $ 300,104
                                                                   ===========  =========  ==========
</TABLE>

See  accompanying  Notes  to  the  Consolidated  Financial  Statements.




















                                            BFH6
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS  (CONTINUED)

BORDEN  FOODS  HOLDINGS  CORPORATION

(In thousands)                                                            For the year ended December 31,
                                                                             2000         1999      1998
---------------------------------------------------------------------------------------------------------
<S>                                                                           <C>       <C>        <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

  Cash paid:
    Interest                                                             $       172   $    493   $ 3,619
    Income taxes, net of refunds                                              (1,268)   (25,264)   67,614

---------------------------------------------------------------------------------------------------------
</TABLE>


See  accompanying  Notes  to  the  Consolidated  Financial  Statements.































































                                            BFH7
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
CONSOLIDATED  STATEMENTS  OF  SHAREHOLDER'S  EQUITY

BORDEN  FOODS  HOLDINGS  CORPORATION

(In  thousands)
                                           ----------------------------------------------------------------------
                                                         Shareholder's    Retained    Accumulated
                                              Paid in     Investment      Earnings    Translation
                                              Capital    in Affiliates    (Deficit)   Adjustments         Total
-----------------------------------------------------------------------------------------------------------------
Balance at December 31, 1997                $  401,057     $  203,297     $ (10,849)    $  (43,639)     $ 549,866
-----------------------------------------------------------------------------------------------------------------
<S>                                          <C>             <C>            <C>          <C>             <C>
Net income                                                                  183,936                       183,936
Foreign currency translation adjustments                                                    (4,409)        (4,409)
Reclassification adjustment                                                                 39,942         39,942
                                                                                                   --------------
COMPREHENSIVE INCOME                                                                                 $    219,469
                                                                                                   ==============
Reallocation of consideration to BFC
  from Investment LP                            12,301        (12,301)                                          -
Affiliate's share of income                                   142,033      (142,033)                            -
Distribution to affiliate                                    (272,205)                                   (272,205)
Decrease in tax basis related to adjustment
  of purchase price allocation                 (24,314)                                                   (24,314)
Contribution from affiliate                      1,944                                                      1,944
-----------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998                $  390,988     $   60,824     $  31,054     $   (8,106)  $    474,760
-----------------------------------------------------------------------------------------------------------------

Net income                                                                   39,368                        39,368
Foreign currency translation adjustments                                                     4,696          4,696
Reclassification adjustment                                                                    282            282
                                                                                                  ---------------
COMPREHENSIVE INCOME                                                                                 $     44,346
                                                                                                  ===============
Affiliate's share of income                                     5,098        (5,098)                            -
Increase in tax basis related to adjustment
  of purchase price allocation and other        14,829            350                                      15,179
-----------------------------------------------------------------------------------------------------------------
Balance at December 31, 1999                $  405,817    $    66,272     $  65,324     $   (3,128)  $    534,285
-----------------------------------------------------------------------------------------------------------------

Net loss                                                                    (30,788)                      (30,788)
Foreign currency translation adjustments                                                      (372)          (372)
                                                                                                  ---------------
COMPREHENSIVE INCOME                                                                                 $    (31,160)
                                                                                                  ===============
Affiliate's share of income                                        66           (66)                            -
Increase in tax basis related to adjustment
  of purchase price allocation                  17,287                                                     17,287
-----------------------------------------------------------------------------------------------------------------
Balance at December 31, 2000                $  423,104    $    66,338     $  34,470     $   (3,500)  $    520,412
-----------------------------------------------------------------------------------------------------------------
See accompanying Notes to the Consolidated Financial Statements.
</TABLE>


























                                            BFH8
<PAGE>
BORDEN  FOODS  HOLDINGS  CORPORATION
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
(Dollars  in  thousands)


1.  BACKGROUND  AND  BASIS  OF  PRESENTATION

In  1994,  Borden,  Inc.  ("Borden") entered into an agreement providing for the
acquisition  ("Acquisition")  of  all  of  Borden's  outstanding common stock by
affiliates  of  Kohlberg  Kravis  Roberts  &  Co.  ("KKR").  The Acquisition was
completed  on March 14, 1995.  Borden, a public registrant as a result of public
debt  that  was  outstanding prior to the Acquisition, elected not to apply push
down  accounting in its consolidated financial statements and, as such, Borden's
consolidated  and  combined  financial  statements  are  reported  on  Borden's
historical  cost  basis. The accompanying consolidated financial statements have
been  prepared on a purchase accounting basis from the date of KKR's acquisition
of Borden, and include the accounts of all majority-owned subsidiaries including
Borden  Foods Corporation ("BFC") and BFC Investments, LP (the "Investment LP").
All  significant  intercompany  transactions  have  been  eliminated.

In  1996,  Borden,  in  a  taxable transaction, sold certain food businesses and
certain trademarks to Borden Foods Holdings Corporation ("Foods Holdings" or the
"Company").  The purchase price was based on a third party valuation.  There was
no  change  in  the  book  basis  of assets and liabilities because the sale was
between  related  parties  and  Borden's principal stockholders will continue to
control the Company.  Within the terms of the sale, Foods Holdings has fully and
unconditionally  guaranteed  obligations under Borden's Credit Agreement and all
of  Borden's publicly held debt on a pari passu basis (see Note 9).  As a result
of  this  financial  guarantee  and in accordance with Regulation S-X rule 3-10,
Borden  is  required  to include in its filings with the Securities and Exchange
Commission  separate  financial  statements  for  Foods Holdings as if it were a
registrant.

Foods Holdings, a wholly owned subsidiary of Borden Foods Holdings, LLC ("LLC"),
owns  approximately  98% of BFC; the remaining interest in BFC is owned directly
by  the  LLC.  In  connection  with  the  formation  of  Foods Holdings, the LLC
transferred  notes to Foods Holdings in exchange for 100 shares of common stock.
Foods  Holdings  used  the notes to acquire a 98% interest in BFC.  LLC directly
contributed  cash  to  BFC  in  exchange  for  the remaining 2% interest in BFC.

In  a series of transactions in 1996 and 1997, BFC purchased a majority interest
in  Investment LP and LLC acquired the remaining minority interest in Investment
LP.  At  such time, Investment LP transferred certain consideration to Borden in
exchange  for  Foods' trademarks.  The portion of BFC and Investment LP directly
owned  by  LLC  is  recorded  in  Shareholder's  Investment  in  Affiliates.


2.  NATURE  OF  OPERATIONS

The  Company  is  a  leading producer and marketer of a variety of food products
worldwide,  including  pasta,  pasta sauce, bouillon, dry soups and shelf stable
meals.  At  December  31,  2000,  the Company's operations included 8 production
facilities,  4  of  which  are  located  in  the  United  States.  The remaining
facilities  are  located  in  Canada  and  Italy.































                                            BFH9
<PAGE>
3.  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

USE  OF  ESTIMATES - The preparation of the consolidated financial statements in
conformity with generally accepted accounting principles 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 financial statements and the reported amounts
of  revenues and expenses during the reporting period.  Significant estimates in
the  accompanying  financial  statements are the accruals for trade and consumer
promotions,  reserves  for  expenses on businesses sold, allocation of tax basis
between  Investment  LP  and  the  Company,  litigation,  general  insurance
liabilities, and employee benefit plan liabilities.  Actual results could differ
from  those  estimates.

REVENUE  RECOGNITION  -  Net  sales are recognized when products are shipped and
title  transfers  to  customers.  Reserves  for  estimated  returns, allowances,
consumer  discounts  and  trade  discounts  are  established  when  revenues are
recognized.

SHIPPING  AND  HANDLING  -  Shipping  costs  are incurred to physically move the
Company's  products  from  the  production  or storage facility to the customer.
Handling  costs  are  incurred  from  the  point  the  products are removed from
inventory  until they are provided to the shipper and generally include costs to
store,  move  and  prepare  the  products  for  shipment.  The  Company incurred
shipping  costs  of  $16,414,  $14,492  and  $15,713  in  2000,  1999  and 1998,
respectively.  Due  to  the  nature  of the Company's operations, handling costs
incurred  prior  to shipment are not significant.  These costs are classified as
distribution  expense  in  the  Consolidated  Statement  of  Operations.

ADVERTISING  AND  PROMOTION COSTS - Production costs of future media advertising
are  expensed  on  the  first air-date or print release date of the advertising.
All  other  advertising  costs  are  charged  to  marketing expense as incurred.
Advertising  costs  were  $21,497,  $14,156  and $10,130 in 2000, 1999 and 1998,
respectively.  Promotion  costs are generally expensed when the related products
are  shipped.  Promotion costs with written contracts are expensed over the life
of  the contract in accordance with performance measures.  Promotion expense was
$151,023,  $142,829  and  $152,037  in  2000,  1999  and  1998,  respectively.

RESEARCH AND DEVELOPMENT COSTS - Significant funds are committed to the research
and  development  of new, innovative products that are expected to contribute to
operating  profits  in  future  years.  All  costs  associated with research and
development  are charged to expense as incurred.  Research and development costs
were  $18,725,  $19,235  and  $18,643  in  2000,  1999  and  1998, respectively.

CASH AND EQUIVALENTS - Cash and equivalents consist of highly liquid investments
purchased  with an original maturity of three months or less.   Included in cash
equivalents  are  overnight  investments  with  Borden  (see  Note  7).

INVENTORIES  -  Inventories  are stated at the lower of cost or market with cost
being  determined  using  the  average  cost  and  first-in,  first-out methods.

PROPERTY  AND  EQUIPMENT  - Property and equipment are stated at cost and, where
appropriate,  include capitalized interest during construction.  Depreciation is
recorded on the straight-line basis over useful lives ranging from 3 to 10 years
for  machinery and equipment and 30 years for buildings and improvements.  Major
renewals  and  betterments  are  capitalized.  Maintenance,  repairs  and  minor
renewals  are  expensed  when  incurred.




























                                            BFH10
<PAGE>
INTANGIBLES - The excess of purchase price over the value of net tangible assets
of  businesses  acquired  is  carried as intangibles in the consolidated balance
sheets.  Goodwill  is  amortized  on a straight-line basis over not more than 40
years,  while trademarks and patents are amortized on a straight-line basis over
the  shorter  of  their  legal  or  useful  lives.  Accumulated  amortization of
intangibles was $21,230 and $17,624 at December 31, 2000 and 1999, respectively.

IMPAIRMENT  - The Company periodically evaluates the recoverability of property,
equipment  and intangibles by assessing whether the net book value of the assets
can  be  recovered  through  expected future cash flows (undiscounted and before
interest) of the underlying business.  The amount of impairment loss is measured
as  the  difference  between  the net book value of the assets and the estimated
fair  value  of  the  related  assets.

INCOME  TAXES  -  Income  taxes  are accounted for using the liability method in
accordance  with  Statement  of  Financial Accounting Standards ("SFAS") No. 109
"Accounting  for Income Taxes".  Deferred income taxes are recorded to recognize
the  future  effects  of  temporary  differences  which  arise between financial
statement  assets  and  liabilities  and  their  bases  for income tax reporting
purposes.  Taxes  related  to  foreign  operations  have  been  provided  for in
accordance  with  SFAS  No.  109.

FOREIGN  CURRENCY  TRANSLATIONS  - The local currency is the functional currency
for  international  subsidiaries  and,  as  such,  assets  and  liabilities  are
translated  at  the  exchange rates in effect at the balance sheet date.  Income
and  expenses  are  translated  at  average exchange rates prevailing during the
year.  Translation  adjustments  resulting  from  changes  in exchange rates are
reported  as a separate component of shareholder's equity.  The Company realized
net  foreign  exchange losses of $197 and $1,773 in 2000 and 1998, respectively,
and  a  net  foreign  exchange  gain  of  $1,820  in  1999.

RECLASSIFICATION  ADJUSTMENTS WITHIN COMPREHENSIVE INCOME - Adjustments shall be
made  to  reflect  comprehensive  income  items  that are included in net income
during  the  current  period.  The  reclassification  adjustments  represent the
accumulated  translation  adjustment  recognized on the sale of Denmark Foods in
1999  and  on  the  sale  of  KLIM  and  Belgium  Foods  businesses  in  1998.

DERIVATIVE  FINANCIAL  INSTRUMENTS  -  The Company uses foreign exchange forward
contracts  to  reduce  its  exposure  to  market  risks  from changes in foreign
exchange  rates.  In  accordance  with  current  accounting standards, gains and
losses  arising  from  forward  contracts  that  hedge  future  transactions are
deferred  until  the  related  transactions  occur.  Those  arising from forward
contracts  that  hedge  existing  transactions  (i.e.,  outstanding  payables
denominated  in  foreign  currency), are recorded currently in income and offset
the  gains and losses that occur as exchange rates change.  The Company does not
hold  or  issue  derivatives  for  speculative  trading  purposes.

CONCENTRATION  OF  CREDIT RISK - Financial instruments which potentially subject
the  Company  to  concentrations of credit risk consist principally of temporary
cash  investments,  marketable securities, and accounts receivable.  The Company
places  its  temporary  cash  investments  with  Borden  and  its  affiliates.
Concentrations  of  credit risk with respect to accounts receivable are limited,
due  to the large number of customers comprising the Company's customer base and
their  dispersion across many different industries and geographies.  The Company
generally  does  not  require  collateral  or other security to support customer
receivables.

UNITS  AND UNIT APPRECIATION RIGHTS ("UAR") - The Financial Accounting Standards
Board ("FASB") issued  SFAS  No. 123, "Accounting for Stock-Based Compensation,"
which  was  adopted  for  disclosure  only.  As  permitted  by SFAS No. 123, the
Company  will  continue  to apply its current accounting policy of the intrinsic
value  method  under Accounting Principles Board Opinion No. 25 and will include
the  additional  disclosures  required  by  SFAS  No.  123.






















                                            BFH11
<PAGE>
PER  SHARE  INFORMATION - Basic and diluted earnings or loss per common share is
computed by dividing net income or loss by the weighted average number of common
shares  outstanding  during  the  year.

RECENTLY  ISSUED  ACCOUNTING STATEMENTS - In 1998, the FASB issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities."  This statement
establishes  accounting  and  reporting  standards  for  derivative instruments,
including  certain  derivative  instruments embedded in other contracts, and for
hedging  activities.  It  requires  that  an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and measures
those  instruments  at  fair value.  If certain conditions are met, a derivative
may  be  specifically  designated as a hedge.  The accounting for change in fair
value  of  a  derivative  depends  on the intended use of the derivative and the
resulting  designation.  If  the derivative is designated as a fair value hedge,
the  changes  in  the  fair  value  of  the  derivative  and  of the hedged item
attributable  to  the hedged risk are recognized in earnings.  If the derivative
is  designated  as  a  cash flow hedge, the effective portions of changes in the
fair  value  of  the  derivative  are recorded as an adjustment in Shareholder's
Equity  through  comprehensive income and are recognized in the income statement
when  the  hedged  item  affects  earnings.  In  1999, FASB issued SFAS No. 137,
"Accounting  for Derivative Instruments and Hedging Activities - Deferral of the
Effective  Date  of  FASB  Statement  No.  133."  This  statement  deferred  the
effective date of SFAS No. 133 to the Company's fiscal quarters and fiscal years
beginning  January  1, 2001.  The Company adopted SFAS No. 133 effective January
1,  2001  and  recorded a pre-tax transition adjustment of $380 in other expense
for  marking foreign exchange forward contracts to fair value (see Note 14). The
Company  elected  not  to apply hedge accounting to these contracts because they
are  marked  to market through earnings at the same time that the exposed assets
and  liabilities  are  remeasured  through  earnings.

In 1998, the American Institute of Certified Public Accountants issued Statement
of  Position  98-1,  "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use."  SOP 98-1 provides guidance on the capitalization of
costs  incurred  for  computer  software developed or obtained for internal use.
The  Company adopted SOP 98-1 on a prospective basis as of January 1, 1999, with
an  estimated  impact of approximately $1,325 in costs being capitalized in 1999
that  would  have  been  expensed  prior  to  adoption.

Also  in  1998,  the  American  Institute of Certified Public Accountants issued
Statement  of  Position  98-5,  "Reporting on the Costs of Start-up Activities."
SOP 98-5 requires the costs of opening a new facility, introducing a new product
or  service, conducting business in a new market, or similar start-up activities
be  expensed as incurred.  Amounts previously capitalized are to be expensed and
reported  as a cumulative effect of a change in accounting principle in the year
of  adoption.  Accordingly,  the Company adopted SOP 98-5 in 1999 and reported a
charge  of $2,806 (net of tax benefit of $1,794) to write-off amounts previously
capitalized.

In  1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting
Bulletin  ("SAB") No. 101, "Revenue Recognition", which provides guidance on the
recognition,  presentation  and  disclosure  of  revenue in financial statements
filed with the SEC. The Company adopted SAB No. 101 as of December 31, 2000 with
no  significant  impact  on  the  consolidated  financial  statements.

In  2000,  the  Emerging Issues Task Force ("EITF") reached a consensus on Issue
No.  00-14,  "Accounting  for  Certain  Sales  Incentives",  which addresses the
recognition,  measurement  and  income  statement  classification  for  sales
incentives offered to customers.  Although this EITF is not effective until June
30,  2001,  registrants  who  do  not  elect  to  adopt early are subject to the
disclosure  requirements  as  of  December  31,  2000.  Upon  adoption,  certain
promotion  costs  of $79,976, $72,449 and $80,546 for the years ended 2000, 1999
and  1998,  respectively,  will  be  reclassified  from marketing expense to net
sales.  The  Company  will continue recognizing a liability for sales incentives
at the later of the date at which the related revenue is recorded or the date at
which the sales incentive is offered in compliance with the consensus reached on
this  Issue.



















                                            BFH12
<PAGE>
RECLASSIFICATION  - Certain prior year amounts have been reclassified to conform
to  the  2000  presentation.

4.  BUSINESS  REALIGNMENT

Restructuring  of  Aligned  Businesses
--------------------------------------
Prior  to  1998,  the Company recorded pre-tax charges, primarily for severance,
pension  settlements  and  other  employee  related benefits, for the closure of
certain  pasta  plants.  In  1998,  the  loss  was  decreased  by $2,646, as net
proceeds  from  the  sale  of facilities were greater than previously estimated.
The  sale of these facilities, as well as the machinery and equipment, generated
proceeds  of  $2,424  and  $15,892  in  1999  and  1998,  respectively.

In  1998, the Company announced the closing of the Tolleson, Arizona pasta plant
due  to the consolidation of production into other pasta facilities and recorded
pre-tax  charges  of $16,300.  These charges included (a) $8,195 non-cash charge
to  write  down the facility to its net realizable value, (b) $6,118 fair market
value  adjustment of an inventory purchase commitment (recorded in cost of goods
sold),  and  (c)  $1,987  for  severance, pension settlements and other employee
related  benefits.   No reserve amounts remained in other current liabilities as
December  31,  1999.

In  2000,  the  Company  recorded  charges  of  $5,737  to implement a workforce
reduction  plan.  The  workforce  reduction  plan  was  put  into  place to take
advantage  of  the  efficiencies  generated  from  the  implementation  of
enterprise-wide  information  technology  systems  in  1999  and  work  process
redesign.  The  plan  is  expected  to reduce ongoing general and administrative
expenses  and plant overhead costs.  As of December 31, 2000, reserves of $3,737
primarily  for  severance  remained  in  other  current  liabilities.

Divested  Unaligned  Businesses
-------------------------------
Prior  to  1998, the Company announced its intention to sell certain businesses,
which  were  not  considered  to  be  aligned with its grain-based meal solution
strategy.  Among  the  unaligned  businesses  were  the  milk  powder, sweetened
condensed  milk,  reconstituted  lemon juice, candy popcorn and processed cheese
businesses.

On  December  31,  1997,  the Company completed the sale of the domestic Cracker
Jack candy popcorn business to Recot, Inc., a subsidiary of Frito-Lay which is a
Texas  based  unit  of  PepsiCo,  Inc.,  and  the domestic FunCheese business to
Mid-America  Dairymen,  Inc., a dairy marketing co-op headquartered in Missouri.

On  January  24,  1998,  the  Company completed the sale of the Signature Flavor
business  to  Eagle  Family  Foods,  Inc.  a  newly  formed entity managed by GE
Investments  and  Warburg,  Pincus  &  Co. LLC.  Signature Flavor grocery brands
included  Eagle  Brand,  Cremora,  ReaLemon,  Kava,  and  None  Such.

On  February  12,  1998,  the  Company  completed the sale of the KLIM business,
including the KLIM milk powder business in Latin America and Asia, the non-dairy
coffee  creamer  operations in South Africa and the ice cream business in Puerto
Rico, to Nestle, S.A.  An estimated after tax loss from the sale was recorded in
1997.  In  1999,  the Company received additional proceeds of $9,476 for working
capital  settlements  on the sale of KLIM, of which $8,400 was included in other
receivables  as  of  December  31,  1998.

On  May  22,  1998,  the Company completed the sale of Borden Foods Puerto Rico,
Inc.,  a Puerto Rican foods distributor.  The Company also completed the sale of
Belgium  Foods  to  Meroso  Invest  N.V.  on  November  13,  1998.

























                                            BFH13
<PAGE>
On April 30, 1999, the Company sold the milk powder business located in China to
Royal  Numico.  The  Company  had  previously  elected  to  exit the milk powder
business  and sold significant KLIM operations, excluding China, to Nestle, S.A.
in  1998.  At  that time, the Company established divestiture reserves of $4,289
for  costs  to  close  operations  in  China, and recorded $12,794 to write-down
assets  to  estimated  net  realizable  value.  As a result of the sale, certain
remaining  liabilities  for  closure  costs  of  $3,112 were no longer required.

On  July 14, 1999, the Company completed the sale of the chocolate milk business
located  in  Denmark.

The proceeds, gains and taxes related to the divestitures in 2000, 1999 and 1998
were  as  follows:

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

DIVESTED BUSINESS                 PROCEEDS            PRE-TAX GAIN (LOSS)
-----------------                 --------            ------------------

<S>                            <C>        <C>        <C>        <C>      <C>
                               1999       1998       2000      1999      1998
                           --------------------------------------------------
Cracker Jack & FunCheese                                             $  7,385
Signature Flavor                       $376,500   $  4,278            209,447
KLIM                       $  9,767     339,882        570  $34,549    32,700
China                         7,112                          10,838
Borden Foods Puerto Rico                  8,844                          (683)
Belgium Foods                             8,000                        (5,004)
Denmark Foods                 6,692                           1,551
                           --------------------------------------------------
     TOTAL                 $ 23,571    $733,226   $  4,848  $46,938  $243,845
                           ---------  ---------
                                    TAX EXPENSE     (9,906)  (7,831)  (55,247)
                                                 ----------------------------
                          AFTER TAX GAIN (LOSS)    $(5,058) $39,107  $188,598
                                                 ============================
-----------------------------------------------------------------------------
</TABLE>

In  2000,  additional  income taxes were provided for anticipated liabilities on
divestitures  related  to  open  tax  years.

The  unaligned  businesses  generated a combined operating income of $1,896 from
net  sales  of  $11,067  in  1999 and a combined operating loss of $323 from net
sales  of  $119,802  in  1998.

During  1998,  the  Company  established  reserves  of  $134,811  for work-force
reductions,  closure  of  facilities,  selling  and  legal  fees,  contract
terminations,  transition services and other costs related to the divestiture of
unaligned  businesses.  Of  this  amount,  $19,317  related  to non-cash charges
associated  with  remaining  assets  to  be  sold.

In  1999,  the  Company  reduced  current liabilities by $37,159, which included
$3,112 related to closing operations in China, for the resolution of divestiture
related  severance and lower than expected exit costs.  The Company also reduced
current  liabilities  by  $4,848  in 2000 due to lower than expected exit costs.



























                                            BFH14
<PAGE>
Activities  related  to  divestiture  reserves  during 2000 and 1999, which were
recorded  as  other current liabilities and other long-term liabilities, were as
follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                                                     Business &      Selling,
                                    Work-Force      Contractual       Legal &
                                   Reductions(1)   Obligations(2)    Other(3)        TOTAL
                                  ----------------------------------------------------------
<S>                                     <C>            <C>               <C>         <C>

Balance at December 31, 1998          $7,110         $35,071          $19,711      $61,892

Utilized                              (3,529)         (4,608)          (5,638)     (13,775)
Other(4)                              (2,230)        (22,193)         (12,736)     (37,159)
                                  ----------------------------------------------------------

Balance at December 31, 1999          $1,351          $8,270           $1,337      $10,958

Utilized                              (1,351)         (2,199)            (663)      (4,213)
Other(4)                                   -          (4,217)            (631)      (4,848)
                                  ----------------------------------------------------------

Balance at December 31, 2000          $    -          $1,854           $   43       $1,897
                                  ==========================================================
--------------------------------------------------------------------------------------------
<FN>
(1)  Includes  severance  and  other  employee  related  benefits.
(2)  Includes  charges  related  to  the  termination  of  leases,  distributor
arrangements,  and  other  contractual  agreements.
(3)  Includes selling and legal fees, facility closings, and other miscellaneous
costs.
(4)  Changes  in  estimates.
--------------------------------------------------------------------------------------------
</TABLE>

5.  AFFILIATE'S  SHARE  OF  INCOME

In  accordance  with  Investment  LP's  limited  partnership  agreement with the
Company  and  LLC,  the first allocation of a trademark gain is to the Company's
priority  return,  which is a return of 10% per annum, cumulative and compounded
annually  on  the  Company's  net  capital contributions.  The allocation of the
remaining  gain,  computed on a tax basis, is 10% to the Company and 90% to LLC.
After  giving  effect  to  all  special allocations specified by the partnership
agreement,  net  income or loss shall be allocated to the partners in proportion
to  their  respective  percentage  interests.

LLC  was allocated an affiliate's share of income (see accompanying consolidated
statements  of  operations)  of $66, $5,098 and $142,033 in 2000, 1999 and 1998,
respectively.  In  1998,  a  $272,205  distribution  of  a  portion  of the sale
proceeds  from the divestitures of the candy popcorn, domestic processed cheese,
Signature  Flavor  Belgium  Foods  and  KLIM  businesses  was  made  to  LLC.


6.  CHANGE  IN  ACCOUNTING  ESTIMATE

The  Company  reduced  accruals corresponding to trade spending by approximately
$5,700  during  1998.  These  accruals  had  been  provided in earlier years for
anticipated  customer  settlements in the ordinary course of business.  Due to a
concerted  effort  to  improve the management of trade spending, the settlements
were  significantly  lower than management had previously estimated.  The income
recognized  for  the  change  in  estimates  is  included  in marketing expense.






















                                            BFH15
<PAGE>
7.  RELATED  PARTIES

Borden and a subsidiary of Borden provide certain administrative services to the
Company  at  negotiated  fees.  These  services  include  processing of payroll,
active  and  retiree  group  insurance  claims,  securing insurance coverage for
catastrophic  claims,  and  information systems support.  The Company reimburses
the Borden subsidiary for payments for general disbursements and post-employment
benefit  claims.  The  amount owed by the Company for reimbursement of payments,
services  and  other  costs  was  $211  and  $789 at December 31, 2000 and 1999,
respectively.

During  the  first quarter of 2000, the subsidiary of Borden was sold to a third
party.  The third party continues to provide services that include processing of
payroll,  active  and  retiree  group  insurance  claims, and securing insurance
coverage  for  catastrophic  claims.  Subsequent  to the sale of the subsidiary,
fees  for  these  services  were  no  longer  considered  affiliate  charges.

Also,  as  eligible  U.S. employees are provided employee pension benefits under
the  Borden  domestic  pension plan and can participate in the Borden retirement
savings plan, the Company provides Borden with contributions for these benefits,
certain  of  which  are  determined by Borden's actuary (see Note 12).  In 2000,
Borden charged the Company $4,039 for retiree postretirement benefits associated
with  certain  sold  or  closed  plants.

The  following summarizes the affiliate charges and reimbursements in 2000, 1999
and  1998:

--------------------------------------------------------
<TABLE>
<CAPTION>
                                  Year ended December 31,
                               -------------------------
<S>                               <C>      <C>      <C>

                                  2000     1999     1998
                                -------  -------  ------
Employee benefits               $8,086   $2,803   $3,365
Group and general insurance        626    4,732    4,688
Administrative services          3,983   12,151   12,984
                                -------  -------  ------
                               $12,695  $19,686  $21,037
                               =======  =======  =======
--------------------------------------------------------
</TABLE>


The  Company  performs certain administrative services on behalf of other Borden
affiliates.  These  services  include  customer  service, purchasing and quality
assurance.  The Company charged these affiliates $732, $765, and $1,122 for such
services  in  2000,  1999  and  1998,  respectively.  The  receivable  for these
services  was  $146  and  $972  at  December  31,  2000  and 1999, respectively.

The  Company  invests  cash  with  Borden.  The Company's investment balance was
$206,963  and  $234,550  at December 31, 2000 and 1999, respectively.  The funds
are  invested overnight earning a rate set by Borden that generally approximates
money  market rates.  The Company earned interest income of $15,001, $14,753 and
$19,423  on  these  funds  during  2000,  1999  and 1998, respectively.  Amounts
receivable  for  interest  were  $789  and $1,861 at December 31, 2000 and 1999,
respectively.

Borden continues to provide executive, financial and strategic management to the
Company  for  which  it  charges  an  annual  fee  of  $1,000.























                                            BFH16
<PAGE>
8.  DEBT

Debt  outstanding  at  December  31,  2000  and 1999 consisted of the following:

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

                                                       2000                    1999
                                               ----------------------- ---------------------
<S>                                                <C>        <C>          <C>        <C>
                                                               Due                    Due
                                                 Long-       within       Long-      within
                                                 term       one year      term     one year
                                               --------- ------------- ---------- ----------
Loans due to affiliates (see Note 9)                         $3,029                 $ 2,513
Foreign bank loans at 3%                        $   195          35     $    263        346
Industrial Revenue Bonds (non-interest bearing)   2,334         334        2,770
                                               --------- ------------- ---------- ----------
  Total debt                                    $ 2,529      $3,398     $  3,033   $  2,859
                                               ========= ============= ========== ==========
--------------------------------------------------------------------------------------------
</TABLE>

Maturities  of  debt  for  the  next  five  years and thereafter are as follows:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
<S>                                      <C>           <C>
                                        2001         $3,398
                                        2002            375
                                        2003            715
                                        2004            719
                                        2005            388
                                        Thereafter      332
                                                     -------
                                                     $5,927
                                                     =======
--------------------------------------------------------------------------------------------
</TABLE>

9.  AFFILIATED  CREDIT  FACILITIES

In 1999, the Company borrowed funds from LLC for use in operations.  At December
31,  2000  and  1999,  loans  payable  to  LLC were $3,029 and $2,513 carrying a
variable interest rate of approximately 7.25% and 5.70%, respectively.  Interest
payable  to  LLC  was  $328  and  $112  as  of  December  31,  2000  and  1999,
respectively.

The  Company  had entered into consecutive loan agreements to borrow funds up to
$10,000 in 2000 and $50,000 in 1999 from Borden with a maturity date of December
31,  2000.  Borrowings  with  three days notice and outstanding at least 30 days
incurred  interest  at Borden's cost of funds for 30 day LIBOR plus 0.25%.  Same
day  borrowings  incurred  interest at the prime rate.  There was no outstanding
balance  under  the loan facility as of December 31, 2000 and 1999.  The Company
did  not  extend  the  loan  agreement  beyond  December  31,  2000.  A  nominal
commitment fee based on a variable rate tied to Borden's leverage was charged on
the  unused  portion  of  the  loan  facility.

The  Company has fully and unconditionally guaranteed obligations under Borden's
Credit  Agreement  and all of Borden's publicly held debt on a pari passu basis.
Borden's  Credit  Agreement  provides  a  line  of credit up to $809,000 under a
five-year revolver maturing July 13, 2002.  Borden's outstanding credit facility
and  public  borrowings  amounted  to  approximately  $530,530  and  $547,745 at
December  31,  2000  and 1999, respectively.

In  connection with this guarantee, the Company charges Borden an annual fee  of
$1,050. As an affiliated guarantor, the Company's liability shall not exceed the
greater  of  its  outstanding  affiliated  borrowings or 95% of its adjusted net
assets while Borden or any other obligated parties have obligations outstanding.














                                            BFH17
<PAGE>

The Credit Agreement, as amended, contains covenants that significantly limit or
prohibit,  among  other  things,  Borden  and  its affiliated guarantors and its
subsidiaries'  ability  to  incur  indebtedness,  make  prepayments  of  certain
indebtedness,  pay  dividends,  engage  in  transactions with affiliates, create
liens,  make  changes  in  its  business or control of the Company, sell assets,
engage  in  mergers  and  consolidations,  and use proceeds from asset sales and
certain  debt  and equity issuances.  In addition, the Credit Agreement requires
that  Borden  and  its  affiliate  guarantors  limit its capital expenditures to
certain  specified  amounts  and  maintain  other  financial ratios, including a
minimum  ratio of adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation
and  Amortization)  to  interest  expense  and  a maximum ratio of total debt to
EBITDA.


10.  LEASES

The Company leases under operating lease agreements certain buildings, forklifts
and  vehicles,  and  subleases  office  space from Borden.  In 2000, the Company
entered  into  a capital lease for certain manufacturing equipment through 2005,
with  an option to renew for five more years.  The Company has agreed to provide
payments based on unit production until the equipment costs are fully recovered.
Upon  expiration  or  termination of this agreement for any cause other than for
special reasons, the Company shall pay for any unrecovered costs of equipment at
such  time.

The  future  minimum  lease  payments under capital and operating leases for the
years  ending  December  31  are  as  follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                                                                          Operating Leases

                                                     Capital Lease     Affiliated     Non-Affiliated
                                                    ---------------   ------------   ----------------
<S>                                                         <C>             <C>            <C>
     2001                                               $   475         $  1,456         $   803
     2002                                                   475            1,456             653
     2003                                                   475            1,185             582
     2004                                                   475                -             479
     2005                                                   475                -             382
     Thereafter                                           3,432                -             310
                                                    ---------------   ------------   ----------------
     Total minimum operating
       lease payments                                   $ 5,807         $  4,097        $  3,209
                                                                      ============   ================
     Less amounts representing
       interest at 6.75%                                  2,785
                                                    ---------------
     Present value of future minimum
       capital lease payments                             3,022
     Less current obligations under
       capital lease                                        252
                                                    ---------------
     Long-term obligations under
       capital lease                                   $ 2,770
                                                    ===============
-----------------------------------------------------------------------------------------------------
</TABLE>

Total  rental  expense  for  operating  leases was $2,869, $4,214 and $4,232 for
2000,  1999 and 1998, respectively, which includes $1,573, $1,987 and $1,747 for
affiliated  leases.





















                                            BFH18
<PAGE>
11.  INCOME  TAXES

In  1996,  Borden,  in  a  taxable transaction, sold certain food businesses and
certain trademarks to the Company.  There was no change in the book basis of the
assets and liabilities because the sale was between related parties and Borden's
principal  stockholders  will  continue to control the Company. Since inception,
certain  adjustments have been made to the initial capitalization and tax basis.
In  1998,  the  initial capitalization and tax basis was reallocated from BFC to
Investment  LP, both consolidated subsidiaries, resulting in additional domestic
tax  basis.  The  Company  recognized  additional  basis  in 1999 upon the legal
conveyance  of  Canadian  Foods  assets  from  a subsidiary of Borden.  In 2000,
Borden's 1996/1997 IRS audit settlement resulted in additional tax basis for the
Company.  However,  the additional domestic tax basis resulted in an increase in
deferred tax assets and Shareholder's Equity of $7,802 for the three years ended
December  31,  2000  in  accordance  with  Emerging  Issues  Task  Force  94-10,
"Accounting  by  a  Company  for the Income Tax Effects of Transactions among or
with  Its  Shareholders  under  FASB  Statement  No.  109".

Income  tax  provision  for  the  years  ended December 31, 2000, 1999 and 1998,
consisted  of  the  following:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
                                            2000                  1999                  1998
                                            ----                  ----                  ----
<S>                                         <C>                   <C>                  <C>
Current:
     Federal                            $  9,735            $   (7,567)            $  32,675
     State  and  local                    (1,250)                 (193)                6,167
     Foreign                               2,339                  (577)                4,032
                                        ---------           -----------            ----------
                                          10,824                (8,337)               42,874
                                        ---------           -----------            ----------
Deferred:
     Federal                            $ (5,077)               13,445                10,361
     State  and  local                      (315)                3,468                 1,740
     Foreign                                  97                 2,474                  (800)
                                        ---------           -----------            ----------
                                          (5,295)               19,387                11,301
                                        ---------           -----------            ----------

                                        $  5,529            $   11,050             $  54,175
                                        =========           ===========            ==========
----------------------------------------------------------------------------------------------
The domestic and foreign components of income (loss) before income taxes were as
follows:
----------------------------------------------------------------------------------------------
                                           2000                 1999                   1998
                                           ----                 ----                   ----
     Domestic                           $(30,605)           $   51,455             $  241,604
     Foreign                               5,346                 1,769                 (3,493)
                                        ---------           -----------            ----------
     Total                              $(25,259)           $   53,224             $  238,111
                                        =========           ===========            ==========
----------------------------------------------------------------------------------------------
</TABLE>




























                                            BFH19
<PAGE>
The  following  table  reconciles  the maximum statutory U.S. Federal income tax
rate  multiplied  by  income  (loss)  before  taxes  to  the recorded income tax
expense:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
                                                              2000               1999              1998
                                                              ----               ----              ----
<S>                                                           <C>                 <C>               <C>
     U.S. Federal  income  tax  expense  (benefit)        $ (8,841)          $  18,628        $  83,339
     State income tax expense (benefit), net of Federal     (1,010)              2,129            5,140
     Divestiture  tax differential                           8,015             (10,474)         (39,304)
     Foreign  rate  differentials                              351               1,278            4,454
     Other                                                   7,014                (511)             546
                                                           -------           ---------         --------
     Income  tax  expense                                 $  5,529           $  11,050        $  54,175
                                                           ========          =========         ========
--------------------------------------------------------------------------------------------------------
</TABLE>

In  2000,  additional  income  taxes  were  provided  for  changes  in estimated
liabilities  on  divestitures  related  to open tax years and resulting from the
settlement  of  the  1996/1997  IRS  audit.  These  amounts  are  included  in
divestiture  tax  differential  and  other  in  the  above  reconciliation.

The  Company  had $22,209 and $8,954 recorded as other long-term liabilities for
income  tax  liabilities  not expected to be settled within one year at December
31,  2000  and  1999,  respectively.

Temporary differences, associated with the Company's assets and liabilities, are
shown  in the table below.  Deferred income tax assets and liabilities have been
recorded  at  December  31,  2000  and  1999  as  follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
                                                                      2000          1999
                                                                      ----          ----
<S>                                                                    <C>          <C>
     ASSETS:
         Non-pension post-employment                              $  2,742      $  2,996
         Coupon  accrual                                             1,991         1,885
         Divestiture  reserves                                         740         4,347
         Trademarks  and  other  intangibles                           582             -
         Net  operating  losses  - domestic                          9,252             -
         Net  operating  losses  - foreign                             599         4,427
         Foreign  tax  credits                                       5,795         5,145
         Other                                                       2,991         7,162
                                                                  --------      --------
         Gross deferred  tax  assets                                24,692        25,962
         Valuation  allowance                                         (599)       (4,427)
                                                                  --------      --------
                                                                    24,093        21,535
     LIABILITIES:
         Property and equipment                                     17,557        22,149
         Trademarks  and  other  intangibles                             -        16,608
         Other                                                       3,155         1,980
                                                                  --------      --------
                                                                    20,712        40,737
                                                                  --------      --------

     NET   ASSET  (LIABILITY)                                     $  3,381    $  (19,202)
                                                                  ========      ========
----------------------------------------------------------------------------------------
</TABLE>

The  Company  recorded  valuation  allowances of $599 and $4,427 at December 31,
2000  and 1999,  respectively,  for  the  foreign  net  operating losses,  which
expire   through   2003,   due   to  uncertainty  as  to  whether  the  deferred

















                                            BFH20
<PAGE>
tax  asset  is  realizable. The decrease from 1999 is due to the utilization and
expiration of operating  loss  carryforwards relating to operations in Italy and
Ireland.  The foreign  tax  credits  expire  in  2003.


12.  PENSION  AND  OTHER  BENEFIT  PLANS

Most employees of the Company participate in foreign and domestic pension plans.
For  most  salaried employees, benefits under these plans generally are based on
compensation  and  credited  service.  For most hourly employees, benefits under
these  plans  are  based  on  specified  amounts  per  year of credited service.

Pension  benefits  to  eligible  U.S.  employees  are  provided under the Borden
domestic  pension  plan  to  which  the  Company  contributes.  This  amount  is
considered  to  be  an  amount  due  to affiliate since Borden retains the legal
obligation  for  these benefits.  Amounts payable by the Company for its portion
of the net pension liability were $10,862 and $8,776 as of December 31, 2000 and
1999,  respectively,  which  were  recorded  in  other  long-term  liabilities.

The  Company  provides  certain  health and life insurance benefits for eligible
domestic  and  Canadian  retirees  and  their  dependents.  The  costs  of these
benefits are accrued as a form of deferred compensation earned during the period
that  employees  render  service.  Benefits are funded on a pay-as-you-go basis.

Domestic  participants  who  are not eligible for Medicare are provided with the
same  medical  benefits  as  active  employees, while those who are eligible for
Medicare  are  provided  with  supplemental benefits.  Canadian participants are
provided  with  supplemental benefits to the national healthcare plan in Canada.
The  domestic  postretirement  medical benefits are contributory for retirements
after  1983.  The  postretirement  life  insurance  benefit  is noncontributory.

The  Company  also  provides certain post-employment benefits, primarily medical
and  life  insurance  benefits  for  long-term  disabled employees, to qualified
former  or  inactive  employees.  The  cost  of  benefits  provided to former or
inactive  employees after employment, but before retirement, are accrued when it
is  probable  that  a benefit will be provided.  The amounts of such charges are
not  considered  significant.
















































                                            BFH21
<PAGE>
A  reconciliation  of  the  changes in Borden's domestic pension plan and in the
Company's  Canadian  and  domestic postretirement plans' benefit obligations and
fair  value  of  assets  over  the  two-year period ended December 31, 2000, and
statements  of  the  funded  status  as  of  December  31, 2000 and 1999 were as
follows:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                                                              BORDEN
                                                          PENSION BENEFIT              OTHER BENEFITS
                                                         -----------------             ----------------
CHANGE IN BENEFIT OBLIGATION                             2000         1999             2000        1999
                                                      -----------  -----------       ---------  ---------
<S>                                                      <C>          <C>              <C>          <C>
Benefit obligation at beginning of year                $320,663      $338,984         $8,551      $7,303
Service cost                                              4,123         4,317             41          15
Interest cost                                            22,886        21,433            856         685
Plan participants' contributions                             -             -             334         409
Actuarial loss (gain)                                     7,241       (4,753)            362       1,238
Benefits paid                                           (43,398)     (41,291)         (1,675)     (2,174)
Acquisitions                                              7,395            -              -           -
Divestitures                                            (22,356)           -              -           -
Amendments and other                                       (710)       1,973           3,329      1,075
                                                      -----------------------       --------------------
Benefit obligation at end of year                      $295,844     $320,663         $11,798     $8,551
                                                      -----------------------       --------------------

CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year         $376,460     $342,706              -           -
Actual returns on plan assets                            66,580       75,045              -           -
Employer contributions                                       -            -           $1,341     $1,765
Plan participants' contributions                             -            -              334        409
Benefits paid                                           (43,398)     (41,291)         (1,675)    (2,174)
Acquisitions                                              8,056           -               -           -
Divestitures                                            (25,856)          -               -           -
                                                      -----------------------       --------------------
Fair value of plan assets at end of year               $381,842     $376,460              $0         $0
                                                      -----------------------       --------------------

FUNDED STATUS
Funded status at end of year                            $85,998      $55,797        $(11,798)   $(8,551)
Unrecognized net actuarial (gain) loss                  (71,773)     (41,553)          1,368      1,021
Unrecognized prior service cost                           4,135        5,314            (661)         -
                                                      -----------------------       --------------------
Prepaid (accrued) benefit cost at end of year           $18,360      $19,558        $(11,091)   $(7,530)
                                                      ==================================================

---------------------------------------------------------------------------------------------------------
</TABLE>

The  Borden  domestic  pension  plan  had an actuarial loss in 2000 due to early
settlements  of  the  discounted liability and a change in actuarial assumptions
relating  to  future  lump  sum  settlements.
































                                            BFH22
<PAGE>
The assumptions used in the measurement of the benefit obligations of Borden for
the  domestic  pension  plan  and  of  the Company for the Canadian and domestic
postretirement  plans  were  as  follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                               BORDEN
                                                          PENSION BENEFIT                OTHER BENEFITS
                                                         -----------------               ---------------
WEIGHTED AVERAGE ASSUMPTIONS AS
OF  DECEMBER 31,                                        2000           1999           2000              1999
                                                    -----------     -----------    ---------         ----------
<S>                                                     <C>            <C>           <C>                <C>
Discount rate                                          7.75%          7.75%     7.75% (6.75% Cdn)  7.75% (6.75% Cdn)
Expected rate of return on plan assets                 8.75%          8.75%           NA                 NA
Rate of compensation increase                          4.75%          4.75%     4.75% (3.75% Cdn)  4.75% (3.75% Cdn)
-------------------------------------------------------------------------------------------------------------------
</TABLE>

For  measurement  purposes,  health care costs are assumed to increase 5.75% for
pre-65  benefits and increase 9.25% in 2001 grading down gradually to a constant
level  5.75%  annual  increase  for  post-65  benefits  by  2008.

The  components  of  net  periodic benefit costs for the Borden domestic pension
plan  and  the Company's Canadian and domestic postretirement plans provided for
the  years  ended  December  31,  2000,  1999  and  1998  were  as  follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                                       BORDEN
                                                  PENSION BENEFIT                        OTHER BENEFITS
                                                  ---------------                        --------------
COMPONENTS OF NET PERIODIC BENEFIT COST    2000       1999       1998                2000      1999       1998
                                          --------  ---------  ---------           -------  ---------  -------
<S>                                          <C>       <C>        <C>                <C>       <C>        <C>
Service cost                               $4,123     $4,317     $5,623             $  50     $  15     $  15
Interest cost                              22,886     21,433     24,269               878       685       744
Expected return on plan assets            (26,267)   (27,309)   (26,693)                -         -         -
Amortization of prior service cost            455        391        281                 -         -         -
Recognized net actuarial loss (gain)            -          -          -                16         -        43
Settlement / Curtailment loss (gain)           14          -     (1,419)                -         -      (147)
Other                                           -          -          -                 -     1,160         -
                                          -----------------------------            ---------------------------
Net periodic benefit cost                  $1,211    $(1,168)    $2,061             $ 944    $1,860     $ 655
                                          =============================            ===========================
--------------------------------------------------------------------------------------------------------------
</TABLE>
Amounts  charged to the Company for participation in the Borden domestic pension
plan  are  actuarially  determined and were $2,177, $1,243 and $855 (including a
curtailment  gain  of  $905  due  to  the  divestiture  of  the Signature Flavor
business)  for  the  years ended December 31, 2000, 1999 and 1998, respectively.


































                                            BFH23
<PAGE>
Assumed  health  care  cost trend rates have a significant effect on the amounts
reported  for  health  care  plans.  A 1% change in the assumed health care cost
trend  rates  would  have  the  following  effects:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
                                                                  1% INCREASE                1% DECREASE
                                                                --------------               ------------
<S>                                                                  <C>                       <C>
Effect on total service cost and interest cost components of
  net periodic health care benefit                                  $   42                    $  (38)
Effect on the health care component of the accumulated
  benefit obligation                                                   691                      (623)
--------------------------------------------------------------------------------------------------------
</TABLE>
Certain  employees  of  the  Company  participate in a Canadian pension plan.  A
reconciliation of the changes in the Canadian pension plan's benefit obligations
and  fair  value of assets over the two-year period ended December 31, 2000, and
statements  of  the  funded  status  as  of  December  31, 2000 and 1999 were as
follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                                                                              CANADIAN
                                                                          PENSION BENEFIT
                                                                         -----------------
CHANGE IN BENEFIT OBLIGATION                                           2000           1999
                                                                     ----------     --------
<S>                                                                    <C>            <C>
Benefit obligation at beginning of year                               $20,530       $20,980
Service cost                                                              370           327
Interest cost                                                           1,263           976
Actuarial gain                                                         (1,036)       (1,608)
Benefits paid                                                          (1,753)       (1,275)
Amendments                                                                  -            58
Adjustment for change in exchange rates                                  (915)        1,072
                                                                     -----------------------
Benefit obligation at end of year                                     $18,459       $20,530
                                                                     -----------------------
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year                        $25,088       $23,526
Actual returns on plan assets                                           4,923           539
Benefits paid                                                          (1,753)       (1,275)
Employer contributions                                                    322         1,095
Adjustment for change in exchange rates                                (1,251)        1,203
                                                                     -----------------------
Fair value of plan assets at end of year                              $27,329       $25,088
                                                                     -----------------------
FUNDED STATUS
Funded status at end of year                                           $8,870        $4,558
Unrecognized net actuarial (gain) loss                                 (2,214)        1,870
Unrecognized prior service cost                                            50             5
                                                                     -----------------------
Prepaid benefit cost at end of year                                    $6,706        $6,433
                                                                     =======================
--------------------------------------------------------------------------------------------
</TABLE>




























                                            BFH24
<PAGE>
The  assumptions used in the measurement of the Company's benefit obligation for
the  Canadian  pension  plan  were  as  follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
                                                                           CANADIAN
                                                                      PENSION BENEFIT
                                                                      ----------------
WEIGHTED AVERAGE ASSUMPTIONS AS OF
DECEMBER 31,                                                            2000        1999
                                                                    -----------  ---------
<S>                                                                     <C>        <C>
Discount rate                                                          6.75%        6.75%
Expected rate of return on plan assets                                 7.75%        7.75%
Rate of compensation increase                                          3.75%        3.75%
-------------------------------------------------------------------------------------------
</TABLE>

The  components of net periodic benefit costs for the Company's Canadian pension
plan  for  the  years  ended  December  31, 2000, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                                                                          CANADIAN
                                                                       PENSION BENEFIT
                                                                      -----------------
COMPONENTS OF NET PERIODIC BENEFIT                              2000            1999          1998
                                                             ----------       ---------     --------
<S>                                                              <C>            <C>            <C>
Service cost                                                  $  370           $  437        $  369
Interest cost                                                  1,263            1,302         1,090
Expected return on plan assets                                (1,899)          (1,918)       (1,676)
Amortization of prior service cost                                 6                6             1
                                                             ----------      ----------    ---------
Net periodic benefit                                          $ (260)          $ (173)       $ (216)
                                                             =======================================
-----------------------------------------------------------------------------------------------------
</TABLE>

Certain  employees  of  the  Company  participate in other international pension
plans.  These  other  international  pension plans have not been included in the
notes  to  the  consolidated  financial  statements as they are not significant.

Most employees not covered by one of the above plans are covered by collectively
bargained  agreements,  which  are  generally  effective  for five years.  Under
federal pension law, there would be continuing liability to these pension trusts
if  Borden  or  the Company ceased all or most participation in such trusts, and
under  certain  other specified conditions.  Charges to the Company for payments
to  pension  trusts  on behalf of employees not covered by Borden plans were not
considered  significant.

The  Company has certain other benefit and severance plans that are accrued when
payment  is  probable  that  a  benefit  will  be  provided  and  amounts can be
reasonably  estimated.


13.  RETIREMENT  SAVINGS  PLAN

Eligible   salaried   and   hourly  non-bargaining U.S. employees of the Company
may   contribute   to  a   Borden   sponsored  retirement  savings   plan.   The
Company   provides    a   50%    matching    contribution    up   to  5%  of  an
























                                            BFH25
<PAGE>
employee's pay (7% for  certain  longer  service  salaried  employees).  Amounts
incurred  by  the  Company for matching contributions  were  $1,063,  $1,125 and
$1,522 for the years ended December 31, 2000,  1999  and  1998,  respectively.


14.     FINANCIAL  INSTRUMENTS

Due  to  its foreign operations, the Company is exposed to foreign exchange risk
on  transactions,  which  are denominated in a currency other than the operating
unit's  functional  currency.  To  reduce  this  exposure,  the  Company closely
monitors  its  foreign  currency  cash flow transactions and enters into foreign
exchange  forward  contracts,  whenever  economically  feasible, to buy and sell
foreign currencies to protect the U.S. dollar value of such transactions, to the
extent  of  the  amount  under  contract.

The  unsecured forward contracts mature within 12 months and are executed, by an
affiliate,  with  banks.  The  Company is exposed to credit loss in the event of
non-performance  by  the  other parties to the contracts.  The Company evaluates
the  creditworthiness  of  the  counterparties' financial condition and does not
expect  default  by  the  counterparties.

The following table presents the notional amount and fair value, based on dealer
quotes,  of  the  Company's  outstanding  foreign  exchange forward contracts at
December  31, 2000 and 1999.  The fair value of a these forward contracts is the
amount  at  which  the  financial  instrument  could  be  exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.
The  carrying  amounts  of  cash  and  cash equivalents, accounts receivable and
payable,  accrued  liabilities  and  debt are considered reasonable estimates of
their  fair  values.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                                                                2000                     1999
                                                         --------------------  ----------------------
                                                          Notional      Fair     Notional      Fair
                                                           Amount       Value      Amount     Value
                                                         ----------  ---------  ----------   --------
<S>                                                         <C>          <C>        <C>         <C>
     DERIVATIVES RELATING TO:
      Foreign currency contracts - gains                                          $14,136     $   94
      Foreign currency contracts - losses                  $ 6,892    $  (380)
                                                         ----------  ---------  ----------   --------
                                                           $ 6,892    $  (380)    $14,136     $   94
                                                         ==========  =========  ==========   ========
-----------------------------------------------------------------------------------------------------
</TABLE>

As discussed in Note 9, the Company guarantees obligations under Borden's Credit
Agreement  and  all  of  Borden's outstanding publicly held debt on a pari passu
basis.  Management  does  not  expect  these  guarantees  to  have a significant
adverse  effect  on  the  financial position of the Company.  Fair value was not
assigned  to  these guarantees due to the complexity of the arrangements and the
absence  of  the  expected  funding  and market for these financial instruments.































                                            BFH26
<PAGE>
15.  UNIT  INCENTIVE  PLAN

A  Unit Incentive Plan ("Incentive Plan") was formed to provide for the granting
of  options,  unit  appreciation  rights  ("UAR's"),  units and other unit-based
equity  interests  in LLC to key employees of the Company and associated persons
at  the  discretion  of  the  Board  of  Directors  of  the  Company.

LLC  sold 1,080,000 Class A units to certain management employees of the Company
under  the  Incentive  Plan.   The  Class A units are generally restricted as to
transfer  and  allow  for  LLC,  at its discretion, to repurchase the units upon
certain  conditions, including termination of the unitholders' employment, prior
to  full  vesting after five years.  Since the initial offering, LLC has sold an
additional  20,000  Class A units and has repurchased 812,000 Class A units from
management.  Class  A  units  outstanding  at  December  31,  2000 and 1999 were
288,000  and  323,000,  respectively.

In  1999,  LLC sold 389,125 Class C units to certain management employees of the
Company.  The  Class  C  units are generally restricted as to transfer and allow
for  LLC,  at  its  discretion, to repurchase the units upon certain conditions,
including  termination  of  the  unitholders'  employment, prior to full vesting
after  five  years.  LLC  has subsequently repurchased 16,000 Class C units from
management.  Class  C  units  outstanding  at  December  31,  2000 and 1999 were
373,125  and  386,000,  respectively.

In  2000,  LLC  sold 99,492 Class D units to certain management employees of the
Company.  The  Class  D  units are generally restricted as to transfer and allow
for  LLC,  at  its  discretion, to repurchase the units upon certain conditions,
including  termination  of  the  unitholders'  employment, prior to full vesting
after  five  years.  LLC  has  subsequently repurchased 2,942 Class D units from
management  in  2001.

Under  the Incentive Plan, the Company issued UAR's to the unitholders.  The UAR
entitles  the unitholder to receive an amount in cash equal to the excess of the
market price (as defined in the UAR agreement) of the Class A, Class C, or Class
D  unit  over  the  exercise price of the UAR.  The UAR's vest ratably over five
years  and expire upon certain events, including termination of the unitholders'
employment, but in no case to exceed ten years.  Four UAR's were issued for each
Class A unit purchased (one UAR with an exercise price of $10 per unit and three
UAR's  with  an exercise price of $20 per unit), for each Class C unit purchased
(four  UAR's  with  an  exercise price of $8 per unit) and for each Class D unit
purchased  (four  UAR's with an exercise price of $8.50 per unit).  During 1998,
the  exercise  prices  for  Class  A  units  were  revalued to $5.85 and $15.85,
respectively.

The  Company  issued  375,220 and 104,500 UAR's with an exercise price of $10.50
and  $8.50,  respectively, to non-unit holders in 2000, and issued 592,000 UAR's
with  an exercise price of $8.00 to non-unit holders in 1999.  Each UAR entitles
the  recipient  to  receive  an amount in cash equal to the excess of the market
price (as defined in the UAR agreement) over the exercise price.  The UAR's vest
ratably over five years and expire upon certain events, including termination of
the recipient's employment, but in no case to exceed ten years.  Non-unitholders
had  375,220  (at  $10.50),  89,000  (at  $8.50)  and  475,000  (at $8.00) UAR's
outstanding  at  December  31,  2000.

The  weighted-average  remaining  contractual  life  of the outstanding UAR's is
approximately  7.25  years  as  of  December 31, 2000.  UAR's awarded to Class A
unitholders  will  expire  on  January  1,  2006.  UAR's  awarded  to  Class  C
unitholders  and  non-unitholders in 1999 will expire on October 1, 2008.  UAR's
awarded  to  Class  D  unitholders  and  non-unitholders  in 2000 will expire on
December  1,  2009.  The  remaining UAR's awarded in 2000 will expire on June 1,
2010.
























                                            BFH27
<PAGE>
Compensation  expense  is  accrued  in  other long-term liabilities and shall be
adjusted  in subsequent periods up to the measurement date for changes, increase
or  decreases,  in  the market price of the UAR's.  Compensation expense was $93
and  $867  for  the  years ended December 31, 2000 and 1999.  Since the exercise
price  exceeded  the  underlying value of the UAR's, no compensation expense was
recorded  in  relation  to  the  issuance  of  UAR's  in  1998.

As  the UAR's are settled in cash, the change in value of the UAR's is accounted
for  under  the  liability  method  as prescribed by Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" (APB No. 25).  Due to
the  cash  nature  of  the  award, treatment under SFAS No. 123, "Accounting for
Stock  Based Compensation," would be synonymous with APB No. 25 and accordingly,
no  fair  market  value  disclosures  are  applicable.


16.  COMMITMENTS  AND  CONTINGENCIES

Legal  Matters
--------------
In  1995,  a  Fresno, California jury returned a verdict against the Company for
wrongful  termination  of a tomato packing agreement.  In granting the award for
lost  profits to Helm Tomatoes, Inc., the jury found that while the business had
a  legal right to terminate the agreement, it was estopped from doing this by an
oral  representation  made  by  a  former  employee.  The Company had previously
established  a  reserve in other current liabilities of $14,500 for the verdict,
interest  and legal costs.  In 1999, the Company and Helm Tomatoes, Inc. reached
agreement  to  settle  the claim with payments from the Company of $3,300 in May
1999  and  $3,400  in  May  2000.  A gain of $7,500, derived from the difference
between  the initial reserve less the settlement and legal fees, was recorded in
general  and  administrative  expense  during  1999.

The  Company  is involved in certain other legal proceedings arising through the
normal course of business.  Management is of the opinion that the final outcomes
of  such  proceedings  should  not  have  a  significant impact on the Company's
results  of  operations  or  financial  position.

Inventory  Commitments  and  Risks
----------------------------------
The  Company has entered into a long-term supply agreement through 2004, subject
to  renewal  thereafter, for diced tomatoes and tomato concentrates.  The supply
agreement  requires  the  Company to purchase, at prices determined by formulas,
100%  of  its  requirements for diced tomatoes and a specified minimum of tomato
concentrate  per  crop year.  Based on the pricing formula, the minimum purchase
commitment  for  tomato  concentrate  is  approximately  $5,400  per  crop year.

Raw  materials,  such as semolina and tomatoes, account for a high percentage of
the  Company's total production costs.  The Company purchases a major portion of
these  raw  materials under market sensitive supply contracts, and therefore the
Company's  operating results are subject to short term fluctuations in these raw
material  market  prices.  Because of the highly competitive and price sensitive
nature  of  the markets in which the Company operates, the ability to pass these
raw  material  price  increases  through  to  the  customer is limited and often
depends  upon  the  Company's  competitors  raising  their  prices  as  well.


















                                            BFH28