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 [FEE REQUIRED] 

            For the fiscal year ended          December 28, 1995  
                                        ---------------------------

                                      OR

            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
            THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

   For the transition period from               to       
                                  --------------    -------------- 
        
                       Commission file number   0-5485  
                                              ----------
            
                          ENVIRODYNE INDUSTRIES, INC.             

             -----------------------------------------------------
             (Exact name of registrant as specified in its charter)

       Delaware                              95-2677354        
---------------------------              --------------------
(State or other jurisdiction of              (I.R.S.   Employer   

incorporation or organization)            Identification No.)   

701 Harger Road, Suite 190, Oak Brook, Illinois           60521  
-----------------------------------------------        -----------
   (Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code:  (708) 571-8800

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

                                   None

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

                      Common Stock, $.01 par value
                   Warrants to Purchase Common Stock

     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
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.     X
             -----

     As of March 26, 1996, the aggregate market value of the voting
stock held by non-affiliates of the registrant was $44,654,582.

     APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:  Indicate by check
mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.   Yes   X       No        
                                         -----        -----

     As of March 26, 1996, there were 14,479,721 shares outstanding
of the registrant's Common Stock, $.01 par value.

               DOCUMENTS INCORPORATED BY REFERENCE:

     The information required by Part III is incorporated by
reference from the registrant's definitive proxy statement to be
filed with the Commission pursuant to Regulation 14A not later than
120 days after the end of the fiscal year covered by this report.

<PAGE>
                            PART I
                            ------
ITEM 1. BUSINESS
        --------

(a)          General development of business:
              --------------------------------
General

Envirodyne Industries, Inc. is a Delaware corporation organized in
1970. As used herein, the "Company" means Envirodyne Industries,
Inc. and its subsidiaries. The Company, through Viskase Corporation
(Viskase), is the leading producer of cellulosic casings used in
preparing and packaging processed meat products and is a major
producer of heat shrinkable plastic bags and specialty films for
packaging and preserving fresh and processed meat products, poultry
and cheeses. The Company is also a leading domestic and
international manufacturer of plasticized polyvinyl chloride (PVC)
films, primarily for use in packaging food items. Through Sandusky
Plastics, Inc. (Sandusky), the Company is a producer of
thermoformed and injection molded plastic containers, used in the
packaging of cultured dairy and delicatessen products, and of
horticultural trays and inserts. Finally, through Clear Shield
National, Inc. (Clear Shield), the Company is a major domestic
producer of disposable plastic cutlery, drinking straws, custom
dining kits and related products. The market positions of the
Company's subsidiaries set forth in this Form 10-K represent
management's belief based upon internally generated information. No
independent marketing information has been used to confirm the
stated market position.

On January 7, 1993, Envirodyne and certain of its subsidiaries
(collectively, the Debtors) filed petitions under Chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy Court
for the Northern District of Illinois, Eastern Division (Bankruptcy
Court). On December 31, 1993, the Debtors consummated a plan of
reorganization (Plan of Reorganization) and emerged from
bankruptcy. For additional information regarding the Plan of
Reorganization, see Part IV, Item 14, Note 1 of Notes to
Consolidated Financial Statements.

(b)  Financial information about industry segments:
      --------------------------------------------
Reference is made to Part IV, Item 14, Note 21 of Notes to
Consolidated Financial Statements.

(c)  Narrative description of business:
     ---------------------------------
The Company's operations include food packaging products (Viskase
and Sandusky) and disposable foodservice supplies (Clear Shield).


VISKASE

-------
General

Viskase developed the basic process for producing cellulosic
casings and began commercial production in 1925. Since that time,
management believes that Viskase has been the leading worldwide
producer of cellulosic casings. In 1964 Viskase entered the
specialty films business. Since then, it has continued to introduce
new specialty film products to customers in the fresh and processed
meat, poultry and cheese industries. Viskase also manufactures and
sells PVC plastic film for wrapping fresh meats, poultry and other
products.

Cellulosic Casings

Cellulosic casing products are used in the production of processed
meat and poultry products, such as hot dogs, salami and bologna. To
manufacture these products, meat is stuffed into the casings prior
to smoking and cooking. The casings, which are non-edible, serve to
hold the shape of the product during these processes. For certain
products, such as hot dogs, the casings are removed and discarded
prior to retail sale. Casings made of regenerated cellulose were
developed by Viskase to replace casings made of animal intestines.
Cellulosic casings generally afford greater uniformity, lower cost
and greater reliability of supply.

The production of regenerated cellulose casings generally involves
three principal steps: production of a viscose slurry from wood
pulp, extrusion of a continuous tube during the regeneration
process, and "shirring" of the final product. Shirring is a process
of folding or compressing the casing in tubular form for subsequent
use in high-speed stuffing machines. The production of regenerated
cellulose involves a complex and continuous series of chemical and
manufacturing processes, and Viskase believes that its facilities
and expertise in the manufacturing of extruded cellulose are
important factors in maintaining its product quality and operating
efficiencies. 

Viskase's product line includes both NOJAX(R) cellulosic casings
for small sausage products such as hot dogs and paper-reinforced
cellulosic casings for large sausages, salami, hams and other
processed meat products. Reinforced cellulosic casings are known in
the meat industry as fibrous casings.

Specialty Film Products

Since developing a technology for the extrusion of bioriented
plastic films in 1964, Viskase has continued to expand its product
line of heat shrinkable bags made from its specialty  films. These
shrinkable bags are sold under the brand name PERFLEX(R). Viskase's
shrinkable plastic bags are used by major poultry, fresh and
processed meat and cheese producers to package and preserve their
products during wholesale and retail distribution.

Viskase produces single layer and multilayer heat shrinkable
plastic bags. Single layer film bags are used primarily to protect
fresh and frozen whole turkeys and chickens from moisture loss and
handling damage. Multilayer film bags, referred to in the food
industry as "barrier bags," are made of layers of coextruded films,
each of which contributes a special property. For example,
individual layers can provide mechanical strength or can reduce the
transmission of moisture, oxygen or ultraviolet light and can
protect bagged products, such as fresh meats, from weight loss and
spoilage. 

As part of its service orientation, Viskase also provides graphic
art and design services to its customers. Viskase's ability to
print on the bags and films directly with designs, illustrations
and text in up to eight colors further enhances the appeal of its
customers' products.

PVC and Other Film Products

Viskase manufactures PVC stretch and single layer shrink films
under the Filmco (R) brand name, used for wrapping grocery products
and for packaging foods. In Europe, Viskase also converts oriented
polypropylene films for use in packaging bakery goods and
manufactures rigid food packaging materials made from oriented
polystyrene.

International Operations

Viskase has seven manufacturing facilities located outside the
continental United States, in Beauvais, France; Thaon, France;
Lindsay, Ontario, Canada; Sedgefield, England (Great Britain);
Swansea, Wales (Great Britain); Guarulhos, Brazil and Nuevo Laredo,
Mexico.

The aggregate of domestic exports and net sales of foreign
operations represents approximately 46% of Viskase's total net
sales.

International sales and operations may be subject to various risks
including, but not limited to, possible unfavorable exchange rate
fluctuations, political instability, governmental regulations
(including import and export controls), restrictions on currency
repatriation, embargoes, labor relations laws and the possibility
of governmental expropriation. Viskase's foreign operations
generally are subject to taxes on the repatriation of funds.

International operations in certain parts of the world may be
subject to international balance of payments difficulties which may
raise the possibility of delay or loss in the collection of
accounts receivable from sales to customers in those countries.
Viskase believes that its allowance for doubtful accounts makes
adequate provision for the collectibility of its receivables.
Management believes that growth potential exists for many of
Viskase's products outside the United States and that Viskase is
well positioned to participate in these markets. 
 
Sales and Distribution

Viskase has a broad base of customers, with no single customer
accounting for more than 5% of sales. Viskase sells its products in
virtually every country in the world. In the United States, Viskase
has a staff of technical sales representatives responsible for
sales to fresh meat, processed meat and poultry producers.
Approximately 50 distributors market Viskase products to customers
in Europe, Africa, Asia, and Latin America. Its products are
marketed through its own subsidiaries in the United Kingdom,
Germany, France, Italy, Russia, Brazil, Mexico and Australia.

In the United States, Viskase sells its PVC film products primarily
to the retail grocery industry through packaging material
distributors, food wholesalers and a direct sales force.
Additionally the sales organization is supported by a technical
service group. The United Kingdom operation sells directly and
through distributors, primarily to the retail grocery and
foodservice industries in Europe.

In the United States, Viskase operates casings service centers in
Atlanta, Georgia, and Bensalem, Pennsylvania, as well as service
centers within the Chicago, Illinois, and Pauls Valley, Oklahoma,
plants. In Europe, Viskase operates casings service centers in
Milan, Italy, Pulheim, Germany, and Moscow, Russia. Viskase also
operates a service center in Brisbane, Australia. These service
centers provide finishing, inventory and delivery services to
Viskase customers.

Competition

Viskase is the world's leading producer of cellulosic casings and
is a major producer of films. Viskase seeks to maintain a
competitive advantage by introducing new products having superior
performance characteristics over competitive products, by
responding quickly to customer product requirements, by providing
customers with assistance in production or formulation problems, by
producing niche products to fill particular individual customer
requirements, by providing technical support services to its
customers and by manufacturing products having outstanding quality
and performance. From time to time, Viskase experiences reduced
market share or reduced profits due to price competition. 

Viskase's principal competitors in cellulosic casings are Teepak,
Inc., located in the U.S. and Belgium, and Viscofan, S.A., located
in Spain and Brazil. Some of the other important competitors in the
cellulosic casings industry are Kalle Niederlassung der Hoechst AG
located in Germany; Wolff Walsrode AG, a wholly-owned subsidiary of
Bayer AG, located in Germany; Oy Visko AB located in Finland; and
Celanese Mexicana located in Mexico.

In the specialty films area, the largest producer of heat
shrinkable bags is the Cryovac Division of W.R. Grace & Company.
Cryovac developed heat shrinkable films and a vacuumizing process
for applying them in the early 1960's. Cryovac sells bags on a
worldwide basis to all segments of the food industry, including
meat and poultry producers. American Can Company, a subsidiary of
Pechiney Corp., is another competitor in the specialty films area.
Management believes that Viskase is in the number two position in
the world behind Cryovac in the sale of heat shrinkable bags. 

In the PVC films area, major competitors in the U.S. and Europe
include Borden, Inc.; Huntsman Film Products Corporation; and
Anchor Plastics. These competitors have substantially greater
financial and other resources than those of the Company.

Research and Development; Customer Support

Viskase's continuing emphasis on research and development is
central to its ability to maintain industry leadership. In
particular, Viskase focuses on the development of new products that
increase customers' operating efficiency, reduce their operating
costs and expand their markets. Viskase's projects include
development of new processes and products to improve its
manufacturing efficiencies. Viskase's research scientists,
engineers and technicians are engaged in continuing product and
equipment development and also provide direct technical and
educational support to its customers.

Viskase founded its Food Science and Quality Institute (Institute)
in 1941 to assist the meat and poultry industry in the development
of new food items and more efficient production and packaging
methods using Viskase products. The Institute's staff works closely
with Viskase's sales and marketing professionals providing
responsible, high-quality technical service to, and support of,
Viskase customers. The Institute is able to reproduce customers'
products and processes in order to help customers to solve their
problems and to experiment with new foods and production
techniques. The Institute conducts Meat Science Seminars that are
attended by Viskase customers and production, research and quality
assurance personnel, as well as food scientists from leading
academic institutions.

Seasonality

Historically, domestic sales and profits of Viskase have been
seasonal in nature, increasing in the spring and summer months and
again near the year-end holiday season. Sales of specialty films to
the fresh meat industry and sales outside of the United States
follow a relatively stable pattern throughout the year. Sales of
PVC films experience only minor seasonality with sales generally
increasing during the second and third quarters. 

Raw Materials

Raw materials used by Viskase include cellulose (from wood pulp),
fibrous paper, petroleum based resins, plasticizers and various
other chemicals. Viskase generally purchases its raw materials from
a single or small number of suppliers with whom it maintains good
relations. Certain primary and alternative sources of supply are
located outside the United States. Viskase believes, but there can
be no assurance, that adequate alternative sources of supply
currently exist for all of Viskase's raw materials or raw material
substitutes that Viskase could modify its processes to utilize.


SANDUSKY 
---------

Sandusky is a leading producer of thermoformed and injection molded
plastic containers, used in the packaging of cultured dairy and
delicatessen products, and of horticultural trays and inserts.
Sandusky sells a majority of its products to dairy product
manufacturers for packaging items such as yogurt and cottage cheese
and to supermarkets for in-store packaging of take-home foods. The
containers are normally custom printed in various colors with
product identification, company names, logos, nutritional informa-
tion and universal product codes in accordance with the customers'
requirements.

Sandusky sells directly to its dairy and non-food customers through
its sales and marketing group. Delicatessen containers and
horticultural products are sold both directly and through
commissioned brokers. Sandusky markets its products primarily in
the northeastern, southern and midwestern regions of the United
States. Plastic container sales are somewhat seasonal in nature,
with slightly higher delicatessen container sales in late spring
and summer and higher dairy sales in the fourth quarter. 

All of Sandusky's thermoformed and injection molded products are
produced at its two Sandusky, Ohio plants. Thermoforming is a
process by which plastic resin pellets are melted and extruded into
sheet stock, which is then heated and formed into finished
containers, lids and trays. Injection molding is a process by which
polypropylene and polyethylene pellets are melted and injected at
high pressure into precision molds to produce a finished container.
The principal raw materials used by Sandusky are prime high impact
polystyrene, polypropylene and polyethylene resins, which currently
are available from several domestic sources.

The dairy and delicatessen containers industry is highly
fragmented. Sandusky competes in the manufacture and sale of dairy
and delicatessen containers with several domestic manufacturers of
thermoformed and injection molded plastic containers. Major
competitive factors in the dairy and delicatessen container
business are price, quality and customer service. Major competitive
factors in the specialized thermoformed container business are
price and technical and customer service capabilities.


CLEAR SHIELD
------------

Clear Shield, headquartered in Wheeling, Illinois, is a major
domestic producer of disposable plastic cutlery, drinking straws,
custom dining kits and related foodservice products. Clear Shield
is one of the largest producers of plastic cutlery and drinking
straws in the United States. These products are sold primarily to
institutional users, principally consisting of major quick serve
restaurant chains, schools, and hospitals, and also to consumers
through retail outlets. Sales are made under registered trade names
including CLEAR SHIELD (R) and CARNIVAL (R). Institutional
customers include such leading quick serve restaurant chains as
McDonald's Corporation, Burger King Corporation, Taco Bell,
Hardee's, KFC Restaurants and Pizza Hut. In addition, retail
customers include Wal-Mart Stores, Inc.; The Kroger Co. and other
major retail companies.
Clear Shield's products are produced at plants in Wheeling,
Illinois; Leominster, Massachusetts; and Shreveport, Louisiana.
Plastic cutlery is made by melting polystyrene or polypropylene
beads, which are then injected into specially designed custom molds
within high-speed injection molding machines. Drinking straws are
made by extruding molten polypropylene through specially designed
dies within high-speed extrusion machines. Certain completed
products are then specially wrapped using high-speed wrapping
machines. Raw materials used in the manufacturing process currently
are available from alternative sources. Raw material costs, in
particular of polystyrene and polypropylene, are a major portion of
Clear Shield's production costs. Although Clear Shield is generally
able to pass on most raw material cost increases to customers,
there can be a delay that varies by customer and market.

Sales are made predominantly in the United States, primarily east
of the Rocky Mountains, using Clear Shield's own sales force
augmented by a network of non-exclusive, independent sales rep-
resentatives. The majority of Clear Shield's sales, consisting of
bulk and individually packaged products for institutional users,
generally is not seasonal. Sales of retail packaged products are
seasonal, however, with the highest sales and operating profits
historically being achieved in the second and third quarters.

While competitive pricing generally is of key importance, Clear
Shield also competes by emphasizing responsive service to
customers, by maintaining consistent quality in its products and by
capitalizing on its efficient and flexible operations. These
efficiencies stem largely from proprietary improvements to the
manufacturing process, high-volume manufacturing facilities and a
flexible work force that enable Clear Shield to produce and ship
more than 50 million items per working day.

Clear Shield's primary competitors include several major
corporations, some of which are larger and better capitalized than
Clear Shield and, in some cases, offer a wider product line than
Clear Shield. Clear Shield's competitors periodically engage in
aggressive price discounting to gain business. Clear Shield
believes, however, that such market conditions will not result in
any long-term material loss of business for Clear Shield, although
its profit margins may be affected from time to time. 


General Business Matters
------------------------

Employees
---------

The Company generally maintains productive and amicable
relationships with its 4,900 employees worldwide. One of Viskase's
domestic plants, located in Loudon, Tennessee, is unionized, and
its Canadian and European plants have unions. From time to time
union organization efforts have occurred at other individual plant
locations. Unions represent a total of approximately 1,500 of
Viskase's 4,000 employees. None of Clear Shield's approximate 514
employees is represented by a union. Certain of the hourly
production personnel of Sandusky's Ohio thermoforming facility are
members of a union.

Trademarks and Patents
----------------------

Viskase holds patents on many of its major technologies, including
those used in its manufacturing processes and the technology
embodied in products sold to its customers. Because it believes its
ongoing market leadership depends heavily upon its technology,
Viskase vigorously protects and defends its patents against
infringement by competitors on an international basis. Viskase, as
part of its research and development program, has developed and
expects to continue to develop new proprietary technology and has
licensed proprietary technology from third parties. Management
believes these activities will enable Viskase to maintain its com-
petitive position. Viskase also owns numerous trademarks and
registered tradenames that are used actively in marketing its
products. Viskase periodically licenses its process and product
patents to competitors to generate royalty income.

The other Company operations also own trademarks and tradenames
that are used actively in marketing products. Sandusky has patents
on new product developments, but, with the exception of Viskase,
patent protection is not currently material to any of the opera-
tions as now conducted.

Research and Development
------------------------

Research and development costs are expensed as incurred and, on a
consolidated basis, totaled $11,034,000, $16,852,000, and
$15,216,000 for 1995, 1994 and 1993, respectively. The majority of
such costs are attributable to Viskase's extensive research and
development program.

Viskase believes it has achieved and maintained its position as a
leading producer of cellulosic casings and as a major domestic
producer of specialty films for packaging meats through significant
expenditures on research and development. The Company expects to
continue its research and development efforts. The
commercialization of certain of these product and process
applications and related capital expenditures to achieve
commercialization may require substantial financial commitments in
future periods. Should these activities be curtailed or if capital
resources are not available to develop its projects, Viskase's
ability to maintain its present market share could be materially
impaired.


Environmental Regulations
-------------------------

In manufacturing its products, the Company employs certain
hazardous chemicals and generates toxic and hazardous wastes. The
use of these chemicals and the disposal of such waste are subject
to stringent regulation by several governmental entities, including
the United States Environmental Protection Agency (USEPA) and
similar state, local and foreign environmental control entities.
The Company is subject to various environmental, health and safety
laws, rules and regulations including those of the United States
Occupational Safety and Health Administration and USEPA. These
laws, rules and regulations are subject to amendment and to future
changes in public policy or interpretation, which may affect the
operations of the Company. The Company uses its best reasonable
efforts to comply with promulgated laws, rules and regulations and
participates in the rulemaking process.

Certain of the Company's facilities are or may become potentially
responsible parties with respect to other off-site waste disposal
facilities.

As noted above, new environmental and health and safety laws can
impose significant compliance costs, including two forthcoming
rules. Under the Clean Air Act Amendments of 1990, various
industries, including casings manufacturers, will be required to
meet air emissions standards for certain chemicals based on use of
the "maximum achievable control technology" (MACT). MACT standards
for casings manufacturers have not yet been proposed or
promulgated; therefore, at this time no estimate of the cost of
complying with MACT standards can be made. Such rules, however,
will likely impose similar costs on all casings manufacturers in
the United States.

Under the Resource Conservation and Recovery Act (RCRA),
regulations have been recently proposed that would, in come cases,
impose additional effluent limitations on wastewater discharged
from wastewater treatment systems employing surface impoundments.
In addition, RCRA regulations to be proposed in the future may
impose design and/or operating requirements on such impoundments.
Two of Viskase's plants use surface impoundments. The Company is
currently assessing the potential impact of the proposed
regulations.

Various state, local and foreign governments have enacted or are
considering enacting laws, rules or regulations concerning the
disposal of plastic products. While such legislative action has had
a minor effect on certain product sales and may have further effect
in the future, the Company is not aware of any existing legislative
action that it currently expects to have a material adverse effect
on the Company. 

(d)            Financial information about foreign and domestic
               ------------------------------------------------
               operations and export sales
               ---------------------------

Reference is made to Part IV, Item 14, Note 21 of Notes to
Consolidated Financial Statements.

<PAGE>

EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------

The following table sets forth the names and ages of the Company's
executive officers, together with the positions with the Company
held by such executive officers, and a summary of their recent
business experience. Under the Company's Amended and Restated By-
Laws, the Company's officers are elected for such terms as may be
determined from time to time by the Board of Directors.

On January 7, 1993, Envirodyne and its major domestic subsidiaries
filed petitions under Chapter 11 of the United States Bankruptcy
Code (the "Bankruptcy Code"). On December 31, 1993, Envirodyne and
the debtor subsidiaries consummated a plan of reorganization and
emerged from bankruptcy. In addition, Emerald Acquisition
Corporation (Emerald), the sole stockholder of Envirodyne prior to
Envirodyne's emergence from bankruptcy, filed a petition under
Chapter 11 of the Bankruptcy Code on August 20, 1993. The Emerald
case is still pending before the Bankruptcy Court.

In addition to the positions with Envirodyne held by the persons
specified below for the periods indicated, Mr. Kelly has served as
a director and executive officer of Emerald, and Messrs. Gustafson,
Corcoran and Schuster have served as executive officers of Emerald,
since May 1989.

<TABLE>
<CAPTION>
Name, Age and Office                       Business Experience    
--------------------------            -----------------------------------------------------------------
<S>                                  <C>
Donald P. Kelly, 74,                  Mr. Kelly  has been a director and Chairman of the Board, President,
Chairman of the Board,                and  Chief  Executive   Officer  of  the  Company  since  May  1989.
  President and Chief                 Mr. Kelly has also served as President and Chief Executive Officer
    Executive Officer                 of D.P. Kelly &  Associates, L.P. ("DPK"), a management services and private
                                      investment firm, since November 1988.

F. Edward Gustafson, 54,              Mr. Gustafson has been Executive Vice President and Chief Operating
Executive Vice President              Officer  of  the  Company  since  May  1989  and  a  director of the 
  and Chief Operating                 Company since December 1993.  Mr. Gustafson was President of
  Officer                             Viskase from February 1990 to August  1994.  Mr. Gustafson  has
                                      also served as Executive Vice President and Chief Operating Officer of
                                      DPK since November 1988.

J.S. Corcoran, 53,                    Mr. Corcoran has been Executive Vice President and Chief Financial
Executive Vice President              Officer  of  the  Company  since  May  1989.  Mr. Corcoran  has  also
  and Chief Financial                 served as  Executive  Vice  President and Chief Financial Officer of
  Officer                             DPK  since November 1988.

Stephen M. Schuster, 39,              Mr. Schuster has been Vice President, Secretary and General Counsel
Vice President, Secretary             of the Company since May 1989.  Mr. Schuster has also  served  as
  and General Counsel                 Vice President and General Counsel of DPK since January 1989.

Gordon S. Donovan, 42,                Mr. Donovan  has  been  Treasurer of the Company since November 
  Vice President, Treasurer           1989 and was elected Vice President in May 1995.
  and Assistant Secretary
</TABLE>

<PAGE>
ITEM 2. PROPERTIES
        ----------

VISKASE FACILITIES 

   LOCATION                    SQUARE FEET     PRIMARY USE   
--------------                 -----------   -----------------
Manufacturing Facilities

  Aurora, Ohio                     73,000    PVC film production
  Barceloneta, Puerto Rico        156,000    Idle plant facilities
                                               held for sale
  Beauvais, France (a)            235,000    Casings production and
                                               finishing
  Centerville, Iowa               223,000    Specialty films
                                               production
                                               and finishing 
  Chicago, Illinois               991,000    Casings production,
                                               administration
                                               and research 
  Guarulhos, Brazil                81,000    Specialty films
                                               production and
                                               casings finishing
  Huntsville, Alabama              27,000    Idle plant facilities
                                               held for sale
  Kentland, Indiana               125,000    Casings finishing 
  Lindsay, Ontario, Canada        269,000    Casings finishing and
                                               specialty
                                               films finishing
  Loudon, Tennessee               250,000    Casings production 
  Nuevo Laredo, Mexico (a)         22,000    Casings finishing
  Osceola, Arkansas               223,000    Casings production and
                                               finishing
  Pauls Valley, Oklahoma          110,000    Casings finishing,
                                               specialty films
                                               production and
                                               finishing
  Sedgefield, England             132,000    PVC and rigid OPS
                                               production
                                               and OPP conversion
  Swansea, Wales (Great Britain)   77,000    Specialty films
                                               production and
                                               finishing
  Swansea, Wales (a)               28,000    Administrative
                                               facilities
  Thaon, France                   239,000    Casings production
                                               and finishing

Service Centers 
  
  Atlanta, Georgia (a) 
  Bensalem, Pennsylvania 
  Brisbane, Australia (a)
  Chicago, Illinois
  Milan, Italy 
  Pauls Valley, Oklahoma
  Pulheim, Germany (a) 
  Santa Fe Springs, California             Idle plant facilities
                                             held for sale

Headquarters 
  
  Worldwide: Chicago, Illinois 
  Europe: Paris, France (a)
                       
------------------------

(a)  Leased. All other properties are owned by the respective
     company or its subsidiaries.

<PAGE>

CLEAR SHIELD FACILITIES 

   LOCATION                     SQUARE FEET       PRIMARY USE   
--------------------------    --------------   --------------------
  Leominster, Massachusetts        135,000     Cutlery, straws and
                                                 combination kits
  Shreveport, Louisiana            148,000     Cutlery, straws and
                                                 combination kits
  Wheeling, Illinois (two plants)  260,000     Cutlery, straws and
                                                 combination kits;
                                                 Headquarters

SANDUSKY FACILITIES 
  
   LOCATION                      SQUARE FEET       PRIMARY USE   
--------------------------     ---------------  ------------------
  Sandusky, Ohio                   195,000      Manufacturing;
                                                  Headquarters
  Sandusky, Ohio                    31,000      Warehouse 
  Sandusky, Ohio (a)                97,000      Warehouse 
  Sandusky, Ohio (a)                90,000      Manufacturing

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

(a)     Leased. All other properties are owned by the respective
        company or its subsidiaries. 


The Company's headquarters are located in leased facilities in Oak
Brook, Illinois. The Company believes that its properties generally
are suitable and adequate to satisfy the Company's present and
anticipated needs. The Company's United States real property
collateralizes the Company's obligations under various financing
arrangements. For a discussion of these financing arrangements,
refer to Part IV, Item 14, Note 9 of Notes to Consolidated
Financial Statements.


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

Lumpkin Litigation
-------

In March 1996 the Company completed a settlement resolving all
claims of the former union employees of its former steel and mining
subsidiary, WSC Corp. Under the settlement of Frank Lumpkin, et al.
                                              --------------------
v. Envirodyne Industries, Inc., the Company was released and
-----------------------------
discharged from all claims in exchange for 900,000 shares of
Envirodyne common stock without any admission or finding of
liability or wrongdoing.

In February 1989, a complaint was filed against Envirodyne in the
United States District Court for the Northern District of Illinois
(District Court) by a plaintiff class consisting of former union
employees of WSC Corp. (WSC). WSC was a wholly-owned subsidiary of
EDC Holding Company (EDC) whose operations consisted of the former
steel and mining segment (SMD) of Navistar International Corp.
(Navistar). EDC, then a wholly-owned subsidiary of Envirodyne,
acquired SMD from Navistar in 1977 and transferred the SMD assets
to WSC and to other wholly-owned subsidiaries of EDC. In 1980, EDC
and WSC filed voluntary bankruptcy petitions and halted operations.
The plaintiffs were seeking to recover from Envirodyne certain
pension and other benefits allegedly owed by WSC under a collective
bargaining agreement to which WSC (but not Envirodyne) was a party.
The complaint sought to hold Envirodyne directly liable for these
benefits on an alter ego theory of liability. The plaintiffs sought
(1) damages under the WSC 1977-1980 collective bargaining agreement
of $80 million to $100 million (less the amount of the plaintiffs'
$14.8 million received in settlement of litigation with Navistar),
(2) unspecified equitable relief under ERISA Section 502, and (3)
other compensatory damages and punitive damages, unspecified in
amount, under ERISA Section 502 and Section 301 of the Labor
Management Relations Act.

The Lumpkin litigation was stayed by the commencement of the
    -------
Envirodyne bankruptcy case in January 1993. During 1995 Envirodyne
and the plaintiffs participated in a mediation process to attempt
to resolve the case. Because the claims relating to the Lumpkin
                                                        -------
litigation arose prior to the commencement of the Envirodyne
bankruptcy case, such claims were subject to the Plan of
Reorganization.

Indemnification Claims

Litigation is pending with respect to events arising out of the
Envirodyne bankruptcy case and the 1989 acquisition of Envirodyne
by Emerald Acquisition Corporation (Emerald) with respect to which,
although Envirodyne is not presently a party to such litigation,
certain defendants have asserted indemnity rights against
Envirodyne.

In ARTRA Group Incorporated v. Salomon Brothers Holding Company
   ------------------------------------------------------------
Inc, Salomon Brothers Inc, D.P. Kelly & Associates, L.P., Donald P.
------------------------------------------------------------------
Kelly, Charles K. Bobrinskoy, James L. Massey, William Rifkind and
------------------------------------------------------------------
Michael Zimmerman, Case No. 93 A 1616, United States Bankruptcy
-----------------
Court for the Northern District of Illinois, Eastern Division,
ARTRA Group Incorporated (ARTRA) alleges breach of fiduciary duty
and tortious inference in connection with the negotiation and
consummation of the Plan of Reorganization. In ARTRA Group
                                               -----------
Incorporated v. Salomon Brothers Holding Company Inc, Salomon
-------------------------------------------------------------
Brothers Inc, D.P. Kelly & Associates, L.P., Donald P. Kelly,
------------------------------------------------------------
Charles K. Bobrinskoy and Michael Zimmerman, Case No. 93 L 2198,
-------------------------------------------
Circuit Court of the Eighteenth Judicial Circuit, DuPage County,
Illinois, ARTRA alleges breach of fiduciary duty, fraudulent and
negligent misrepresentation and breach of contract in connection
with the 1989 acquisition of Envirodyne by Emerald. The plaintiff
seeks damages in the total amount of $136.2 million plus interest
and punitive damages of $408.6 million. D.P. Kelly & Associates,
L.P. and Messrs. Kelly, Bobrinskoy, Massey, Rifkind and Zimmerman
have asserted common law and contractual rights of indemnity
against Envirodyne for attorneys' fees, costs and any ultimate
liability relating to the claims set forth in the complaints.
Envirodyne is continuing its evaluation of the merits of the
indemnification claims against Envirodyne and the underlying claims
in the litigation. Upon the undertaking of D.P. Kelly & Associates,
L.P. to repay such funds in the event it is ultimately determined
that there is no right to indemnity, Envirodyne is advancing funds
to D.P. Kelly & Associates, L.P. and Mr. Kelly for the payment of
legal fees in the case pending before the Bankruptcy Court.
Although the Company is not a party to either case, the Company
believes that the plaintiff's claims raise similar factual issues
to those raised in the Envirodyne bankruptcy case which, if
adjudicated in a manner similar to that in the Envirodyne bankruptcy
case, would render it difficult for the plaintiff to establish
liability. Accordingly, the Company believes that the indemnification
claims would not have a material adverse effect upon the business or
financial position of the Company, even if the claimants were
successful in establishing their right to indemnification.

Treatment of Untendered Shares Under Plan of Reorganization

Certain of Envirodyne's stockholders prior to the acquisition of
Envirodyne by Emerald failed to exchange their certificates
representing old Envirodyne common stock for the $40 per share cash
merger consideration specified by the applicable acquisition
agreement. In the Envirodyne bankruptcy case, Envirodyne sought to
equitably subordinate the claims of the holders of untendered
shares, so that such holders would not receive a distribution under
the Plan of Reorganization. The Bankruptcy Court granted
Envirodyne's motion for summary judgment and equitably subordinated
the claims of the holders of untendered shares to the claims of
other general unsecured creditors. Certain of the affected holders
appealed and both the U.S. District Court and the U.S. Seventh
Circuit Court of Appeals affirmed the Bankruptcy Court decision.
The time period for further appeal has not passed. Envirodyne
believes that, even in the event of further appeal, if any, and
reversal of the prior decisions, the maximum number of shares of
common stock that it would be required to issue to such claimants
is approximately 106,000.

Other

Clear Shield National, Inc. and some of its employees have received
subpoenas from the Antitrust Division of the United States Department
of Justice relating to a grand jury investigation of the disposable
plastic cutlery industry. The U.S. Department of Justice has advised
a former officer and an existing employee that they are targets of
the investigation. Both individuals were invited to appear and
testify before the grand jury but both declined. Clear Shield
National is cooperating fully with the investigation.

In February 1996 Clear Shield National and three other plastic
cutlery manufacturers were named as defendants in the following
three civil complaints: Eisenberg Brothers, Inc., on behalf of
                        --------------------------------------
itself and all others similarly situated, v. Amcel Corp., Clear
---------------------------------------------------------------
Shield National, Inc., Dispoz-O Plastics Corp. and Benchmark
------------------------------------------------------------
Holdings, Inc. t/a Winkler Products, Civil Action No. 96-728,
-----------------------------------
United States District Court for the Eastern District of
Pennsylvania; St. Cloud Restaurant Supply Company v. Amcel Corp.,
              -------------------------------------------------
Clear Shield National, Inc., Dispoz-O Plastics Corp. and Benchmark
------------------------------------------------------------------
Holdings, Inc. t/a Winkler Products, Case No. 96C 0777, United
-----------------------------------
States District Court for the Northern District of Illinois,
Eastern Division; and Servall Products, Inc., on behalf of itself
                      -------------------------------------------
and all others similarly situated, v. Amcel Corporation, Clear
--------------------------------------------------------------
Shield National, Inc., Dispoz-O Plastics Corporation and Benchmark
------------------------------------------------------------------
Holdings, Inc. t/a Winkler Products, Civil Action No. 96-1116,
-----------------------------------
United States District Court for the Eastern District of
Pennsylvania. Each of the complaints alleges, among other things,
that from October 1990 through April 1992 the defendants unlawfully
conspired to fix the prices at which plastic cutlery would be sold.
The Company has informed the plaintiffs that such claims as they
relate to Clear Shield were discharged by the order of the
Bankruptcy Court and Plan of Reorganization and that the plaintiffs
are permanently enjoined from pursuing legal action to collect
discharged claims.

On February 27, 1996, the plaintiff in the St. Cloud case
                                           ---------
voluntarily dismissed the action without prejudice and refiled its
action in the U.S. District Court for the Eastern District of
Pennsylvania but did not name Clear Shield National as a defendant.
On March 14, 1996, Eisenberg Brothers Inc. filed a motion in Clear
Shield National's Bankruptcy proceeding in the U.S. Bankruptcy
Court for the Northern District of Illinois, Eastern Division.
Eisenberg Brothers Inc.'s motion contends that the Bankruptcy
Court's order did not discharge the plaintiff's claim.

For a description of certain environmental matters affecting the
Company, refer to Part I, Item 1, "Environmental Regulations."

The Company and its subsidiaries are involved in various other
legal proceedings arising out of its business, none of which is
expected to have a material adverse effect upon its business or
financial position.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
        ---------------------------------------------------
Not applicable.

<PAGE>

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

(a)  Market Information. Envirodyne's Common Stock is traded in the
     ------------------
over-the-counter market on the Nasdaq SmallCap Market. The high and
low closing bid prices of the Common Stock during 1995 and 1994 are
set forth in the following table. Such prices reflect interdealer
prices without markup, markdown or commissions and may not
represent actual transactions.


1995     First Quarter Second Quarter Third Quarter Fourth Quarter
------   ------------- -------------- ------------- --------------
High         $4.88         $4.75         $4.88          $4.63
Low           3.50          3.75          4.13           2.88

1994     First Quarter Second Quarter Third Quarter Fourth Quarter
------   ------------- -------------- ------------- --------------
High        $10.88         $8.63         $5.50          $5.63
Low           7.00          3.50          4.13           3.38


(b)  Holders. As of March 22, 1996, there were approximately 
     -------
123 holders of record of Envirodyne's Common Stock.

(c)  Dividends. Envirodyne has never paid a cash dividend on shares
     ---------
of its Common Stock. The payment of dividends is restricted by the
terms of various financing agreements to which the Company is a
party. The Company has no present intention of paying dividends in
the foreseeable future.

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA
        -----------------------
<TABLE>
<CAPTION>
                                            Post-consummation                     Pre-consummation                   
                                  ----------------------------------    -----------------------------------------------
                                    December            January  1       January 1      December            December
                                  30, 1994 to               to              to            27, 1991 to     28, 1990 to
                                    December             December         December       December           December
                                  28, 1995 (1)         29, 1994 (1)     31, 1993 (1)      31, 1992          26, 1991 
                                  ------------         ------------     ------------    -----------        ----------
                                                  (in thousands, except for per  share amounts)

<S>                                <C>                   <C>             <C>            <C>               <C>            
Net sales                           $650,212              $599,029        $587,385       $  575,705        $  543,969
(Loss) before extra- 
  ordinary gain (loss) (2)(3)        (17,323)               (3,612)        (98,195)         (36,996)          (29,253)

Income (loss) including extra-
  ordinary gain (loss) (4)(5)        (21,519)               (3,612)         85,589          (36,996)          (31,755)

Per share (loss)
  before extraordinary
  gains (loss) (2)(3)                  (1.28)                 (.27)       (306,859)        (115,613)          (91,416)
Per share income (loss)
  including extraordinary
  gain (loss) (4)(5)                   (1.59)                 (.27)        267,466         (115,613)          (99,234)
Cash and equivalents
  and time deposits                   30,325                 7,289           7,743           14,062            16,075
Working capital (6)                  121,725                91,727          82,440         (736,643)         (708,064)
Total assets                         899,567               896,636         867,680        1,026,962         1,086,457

Debt obligations:
  Short-term debt (7)                 12,504                25,798          15,610           40,365            34,937
  Long-term debt reclassified
    as current                                                                              758,300           792,557
  Long-term debt                     530,181               489,358         482,379           12,524            18,833
Stockholders' equity (deficit)       117,096               135,349         135,000          (83,545)          (40,303)
Cash dividends                          none                  none            none             none              none



<FN>
(1)     Due to the implementation of the Plan of Reorganization and
        Fresh Start Reporting, financial statements including outstanding
        shares for the new restructured company (effective December 31, 1993)
        are not comparable to those of the prior years. (Refer to Part IV,
        Item 14, Note 1 of Notes to Consolidated Financial Statements.)

(2)     Includes $5.8 million of income (net of book tax provision) in 1994
        from the settlement of a patent infringement suit.

(3)     Includes charges of $104,745 of Reorganization items, net, in 1993.
        (Refer to Part IV, Item 14, Note 1 of Notes to Consolidated Financial
        Statements.)

(4)     Includes an extraordinary gain of $183,784 in 1993 from the
        implementation of the Plan of Reorganization. (Refer to Part IV,
        Item 14, Note 1 of Notes to Consolidated Financial Statements.)

(5)     Includes an extraordinary loss on debt extinguishment in 1995 and
        in 1991.

(6)     Includes $758,300 and $792,557 of long-term debt reclassified
        as current at December 31, 1992 and December 26, 1991, respectively.

(7)    Includes current portion of long-term debt.
</TABLE>

<PAGE>

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

The accompanying management's discussion and analysis of financial
condition and results of operations should be read in conjunction
with the following table:

                             December 30,   January 1  January 1
                               1994 to        to          to
                             December 28, December 29, December 31,
                                 1995         1994        1993    
                             -----------  -----------  -----------
                                        (in thousands)
Net sales:
  Food packaging products       $574,266    $530,179     $522,363
  Disposable foodservice
    supplies                      76,138      68,996       66,383
  Other and eliminations            (192)       (146)      (1,361)
                                --------    --------     --------
                                $650,212    $599,029     $587,385
                                ========    ========     ========
Operating income:
  Food packaging products        $39,183    $ 48,145     $ 53,432
  Disposable foodservice
    supplies                       4,959       6,514        5,223
  Other and eliminations          (6,007)     (5,982)      (5,023)
                                --------    --------     --------
                                 $38,135    $ 48,677     $ 53,632
                                ========    ========     ========

Depreciation and amortization
  under capital lease and
  amortization of
  intangibles expense:
  Food packaging products        $51,404     $47,207     $ 46,715
  Disposable foodservice
    supplies                       4,581       4,125        5,624
  Corporate and other                 76          55           59
                                --------    --------     --------
                                 $56,061    $ 51,387     $ 52,398
                                ========    ========     ========
Capital expenditures:
  Food packaging products        $30,744    $ 28,534     $ 37,673
  Disposable foodservice
    supplies                       3,687       4,012        3,100
  Corporate and other                 34          20          114
                                --------    --------     --------
                                 $34,465     $32,566     $ 40,887
                                ========    ========     ========
<PAGE>

Results of Operations
---------------------

The Company's 1995 net sales were $650.2 million, which represented
an 8.5% increase over the prior year's sales of $599.0 million.

Net sales in 1995 for Viskase increased 10.4% over the prior year
due to the expansion of European, Latin American and Asian Pacific
sales, selected price increases, increased worldwide film sales,
combined with the favorable effects of foreign currency
translation.

External factors affected casing sales in both the domestic and
foreign markets. These included a general softness in hot dog sales
in the U.S. and a weakening of processed meat sales in Europe. In
addition, Viscofan, S.A., a Spanish small diameter casing producer
entered the U.S. market in November 1994. Although the Company has
yet to experience significant volume loss to Viscofan, management
believes that Viskase will experience further pricing pressures as
a result of Viscofan's entrance into the domestic market.

Sandusky's sales declined 15% due to an 11% reduction in dairy and
deli container sales combined with the loss of Scott Paper
Company's premoistened baby wipe container business. The loss in
container sales is primarily attributed to a shift in demand from
thermoformed to injection molded containers. The Company has added
and will add additional injection molding equipment in 1996 to
increase capacity. This effort is expected to substantially
contribute to improving the Company's competitiveness in this
market.

Clear Shield's net sales increased 10.4% primarily due to selling
price increases along with an increase in the retail product group
sales volume.
The Company's 1994 net sales were $599 million, which represented
a 2.0% increase over the prior year's sales of $587.4 million.

Net sales for 1994 for Viskase increased 2.5% over the prior year
due to the impact of increased film sales and foreign currency
translation. Sandusky's sales declined 8.1% due to the reduction in
the baby wipe container sales partially offset by an increase in
dairy and deli container volumes. Clear Shield's net sales
increased 3.9% primarily due to the impact of third and fourth
quarter price increases combined with some volume increases in the
wrapped cutlery and retail product lines.

Operating income for 1995 was $38.1 million, which represented a
decline of $10.5 million from the prior year. Operating income in
1994 benefitted from a net $8.7 million settlement of a patent
infringement suit. The decline in gross margins in 1995 was due to
price competition in domestic and foreign markets, lower casing
volumes, continued effect of resin price increases through the
third quarter of 1995, primarily at Clear Shield and Sandusky, and
loss of dairy and deli container and baby wipe container volume.
Operating income in 1995 reflected increased selling, general and
administrative expenses resulting from strategic expansion in
foreign markets including Europe, Latin America and Australia,
partially offset by lower research and development costs and the
consolidation of Sandusky's manufacturing operations. Operating
income for 1994 was $48.7 million, which represented a decline of
$5.0 million from the prior year. Pro forma operating income for
1993, giving effect to fresh start reporting and the implementation
of the Plan of Reorgniazation with the related financing as if such
events had taken place on January 1, 1993, was $54.6 million. The
decline in gross margins in 1994 was due to the impact of price
competition in dairy and deli containers and in foreign markets,
reduced by baby wipe container sales and increased resin prices.
Selling, general and administrative expenses in 1994 included $1.6
million of additional patent legal expenses (approximately $.8
million of which were legal expenses related to the $9.5 million
patent infringement litigation settlement), expansion in Central
and South America, additional corporate costs relating to increased
insurance and other costs associated with Envirodyne's status as a
public company following its emergence from bankruptcy, as well as
increased expenditures on research and development.

During 1993, Scott notified Sandusky of its intention to purchase
containers from other suppliers, and the change was completed in
September 1994. Sandusky closed its Clayton, Delaware facility,
which was primarily dedicated to the production of baby wipe
containers, in December 1994, and has consolidated its
manufacturing operations at its Sandusky, Ohio thermoforming
facility.

Net interest expense for 1995 totaled $56.7 million, which
represented an increase of $7.5 million from 1994. The increase is
attributable equally to an increase in borrowing levels and an
increased weighted interest rate during 1995.

Other income (expense) of $(1.7) million and $1.7 million in 1995
and 1994, respectively, includes net foreign currency translation
gains (losses) of $(.1) million and $2.7 million, respectively.

The extraordinary loss represents the write-off of unamortized
financing fees related to the Company's senior secured bank
facility that was refinanced by a private placement. The
extraordinary loss of $4.2 million is net of a tax benefit of $2.6
million. (Refer to Part IV, Item 14, Note 9 of Notes to
Consolidated Financial Statements.)

The Company has entered into forward foreign exchange contracts to
hedge certain foreign currency transactions on a continuing basis
for periods consistent with its committed foreign exchange
exposures. The effect of this practice is to minimize the effect of
foreign exchange rate movements on the Company's operating results.
The Company's hedging activities do not subject the Company to
additional exchange risk because gains and losses on these
contracts offset losses and gains on the transactions being hedged.
The cash flows from forward contracts are classified consistent
with the cash flows from the transactions or events being hedged.

Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of," was issued in March 1995 and established
financial accounting and reporting standards for the impairment of
long-lived assets and certain identifiable intangibles to be
disposed of. The Company's adoption of this statement in 1995 did
not have a significant impact on the Company's income from
continuing operations nor cash flows.

The 1995 tax benefit consisted of the benefit of U.S. losses
partially offset by the provision related to income from foreign
subsidiaries. The 1994 and 1993 tax provisions consisted of the
provisions on income from the U.S. and foreign subsidiaries. Due to
the permanent differences in the U.S. resulting from non-deductible
amortization and foreign losses for which no tax benefit is
provided, a benefit of $2.9 million and a provision of $4.8
million, respectively, was provided on income (loss) before income
taxes and extraordinary items of $(20.2) million and $1.2 million,
respectively, for 1995 and 1994. Domestic cash income taxes paid in
1995, 1994 and 1993 were $640 thousand, $1.5 million and $91
thousand, respectively. Foreign cash income taxes paid in 1995,
1994 and 1993 were $4.3 million, $3.5 million, and $1.1 million,
respectively. The U.S. tax benefit is recorded as a reduction of
the deferred tax liability and does not result in a refund of
income taxes.

The 1993 reorganization items of $104.7 million consisted of $4.1
million for the write-off of deferred financing fees on the bank
credit agreement, $14.9 million for legal, financial advisory and
other fees incurred in connection with the Envirodyne bankruptcy
case and $85.7 million of adjustment to the fair value of assets
and liabilities due to the reorganization and adoption of Fresh
Start Reporting (refer to Part IV, Item 14, Note 1 of Notes to
Consolidated Financial Statements).

The 1993 extraordinary gain of $183.8 million results from the
reorganization cancellation of indebtedness offset by the fair
value of debt and equity issued and is net of a tax provision of
$8.3 million. For a further discussion, refer to Part IV, Item 14,
Note 1 of Notes to Consolidated Financial Statements.

The Company's 1993 net sales were $587.4 million, which represented
a 2.0% increase over the prior year's sales of $575.7 million.

Net sales in 1993 for Viskase were comparable to the prior year.
Sandusky's sales increased by 26.3% due to container volume
increases resulting from the liquidation of a major competitor
offset partially by the effects of intense price competition. Clear
Shield's net sales increased 5.5% due to strong volumes across all
major product lines offset partially by competitive price
conditions.

Operating income for 1993 was $53.6 million, which represented a
decline of $13.6 million from the prior year. The decline in
operating income resulted from intense price competition in
containers and large diameter casings as well as price pressure in
European, Latin American, Japanese and Canadian markets. The
Company also recorded an additional $2 million of before tax
expense for postretirement benefits due to the adoption on January
1, 1993 of Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions." For further discussion, refer to Part IV, Item 14, Note
11 of Notes to Consolidated Financial Statements.


Liquidity and Capital Resources
-------------------------------

Cash and equivalents increased by $23.0 million during the fiscal
year ended December 28, 1995. Cash flows provided by operating
activities of $39.0 million and cash flows provided by financing
activities of $18.7 million exceeded cash flows used in investing
activities of $34.4 million. Cash flows provided by operating
activities were principally attributable to the effect of
depreciation and amortization and a decrease in operating assets
and liabilities offset by the Company's loss from operations. Cash
flows provided by financing activities were principally
attributable to issuance of the Company's senior secured notes net
of the repayment of the Company's senior secured bank credit
facility, Viskase's capital lease obligation and Viskase Limited's
term loan. Cash flows used in investing activities consist
principally of capital expenditures for property, plant and
equipment.

On June 20, 1995, Envirodyne completed the sale of $160 million
aggregate principal amount of senior secured notes to certain
institutional investors in a private placement. The senior secured
notes were issued pursuant to an indenture dated June 20, 1995
(Indenture) and consist of (i) $151.5 million of 12% Senior Secured
Notes due 2000 and (ii) $8.5 million of Floating Rate Senior
Secured Notes due 2000 (collectively, the Senior Secured Notes).
Envirodyne used the net proceeds of the offering primarily to (i)
repay the Company's $86.1 million domestic term loan, (ii) repay
the $68.3 million of obligations under the Company's domestic and
foreign revolving loans and (iii) pay transaction fees and
expenses. Concurrently with the June 20, 1995 private placement,
Envirodyne entered into a new $20 million domestic revolving credit
facility (Revolving Credit Facility) and a new $28 million letter
of credit facility (Letter of Credit Facility). The Senior Secured
Notes and the obligations under the Revolving Credit Facility and
the Letter of Credit Facility are guaranteed by Envirodyne's
significant domestic subsidiaries and secured by a collateral pool
(Collateral Pool) comprised of: (i) all domestic accounts
receivable (including intercompany receivables) and inventory; (ii)
all patents, trademarks and other intellectual property (subject to
non-exclusive licensing agreements); (iii) substantially all
domestic fixed assets (other than assets subject to a lease
agreement with General Electric Capital Corporation); and (iv) a
senior pledge of 100% of the capital stock of Envirodyne's
significant domestic subsidiaries and 65% of the capital stock of
Viskase S.A. Such guarantees and security are shared by the holders
of the Senior Secured Notes and the holders of the obligations
under the Revolving Credit Facility on a pari passu basis pursuant
to an intercreditor agreement. Pursuant to such intercreditor
agreement, the security interest of the holders of the obligations
under the Letter of Credit Facility has priority over all other
liens on the Collateral Pool.

The Company finances its working capital needs through a
combination of cash generated through operations and borrowings
under the Revolving Credit Facility. The availability of funds
under the Revolving Credit Facility is subject to the Company's
compliance with certain covenants (which are substantially similar
to those included in the Indenture), to borrowing base limitations
measured by accounts receivable and inventory of the Company and to
reserves which may be established in the discretion of the lenders.
Currently, there are no drawings under the Revolving Credit
Facility. The available borrowing capacity under the Revolving
Credit Facility was $20 million at December 28, 1995.

The Company anticipates that its operating cash flow will be
sufficient to meet its operating expenses and to service its
interest payments on the Senior Secured Notes and its other
outstanding indebtedness. The Company will be required to satisfy
its $80 million mandatory redemption obligation with respect to the
Senior Secured Notes in 1999 and to pay the remaining principal
amount of the Senior Secured Notes in 2000. Additionally, the
Company's 10.25% Notes, of which $219.3 million principal amount is
outstanding, will mature in December 2001. The Company expects that
in order to make these payments it will be required to pursue one
or more alternative strategies, such as refinancing its
indebtedness, selling additional equity capital, reducing or
delaying capital expenditures, or selling assets. There can be no
assurance that any of these strategies could be effected on
satisfactory terms, if at all.

Capital expenditures for fiscal 1995 and 1994 totaled $34.4 million
and $32.6 million, respectively. Capital expenditures for 1996 are
expected to be approximately $34 million and in future years $31
million.

The Company has entered into interest rate agreements that cap $50
million of interest rate exposures at an average LIBOR rate of
6.50% until January 1997. These interest rate cap agreements were
entered into under terms of the senior bank financing that was
repaid on June 20, 1995. Interest expense includes $613 thousand of
amortization of interest rate cap premium during the fiscal year
ended December 28, 1995. The Company has not received any payments
under the interest rate protection agreements.

The Company acquired the minority shareholder's interest in
Viskase's Brazilian subsidiary for $4.2 million during the first
quarter of 1994.

The Company has spent approximately $11 million to $17 million
annually on research and development programs, including product
and process development, and on new technology development during
each of the past three years, and the 1996 research and development
and product introduction expenses are expected to be approximately
$10 million. Among the projects included in the current research
and development efforts is the application of certain patents and
technology licensed by Viskase to the manufacture of cellulosic
casings. The commercialization of these applications and the
related fixed asset expense associated with such commercialization
may require substantial financial commitments in future periods.


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

Financial statements and supplementary financial information
meeting the requirements of Regulation S-X are listed in the index
to financial statements and schedules, as included under Part IV,
Item 14 of this report.


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

There were no disagreements on accounting and financial disclosure
required to be disclosed under this Item.

<PAGE>

                            PART III
                            --------

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

The information required by this Item is set forth in the Company's
definitive Proxy Statement to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A within 120 days
after the end of the fiscal year covered by this report (Proxy
Statement) in the section entitled "Election of Directors," in the
last paragraph of the section entitled "Security Ownership" and in
the third paragraph of the section entitled "Certain Relationships
and Related Transactions," and is incorporated herein by reference
to the Proxy Statement. For information regarding executive
officers of the Company, see the information set forth under
"Executive Officers of the Registrant" in Part I of this report.


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

The information required by this Item is set forth in the Proxy
Statement in the section entitled "Compensation of Directors and
Executive Officers" and is incorporated herein by reference to the
Proxy Statement. The information set forth in the Proxy Statement
in the sections entitled "Compensation Committee Report on
Executive Compensation" and "Performance Graph" is not required by
this Item and is not incorporated by reference.


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

The information required by this Item is set forth in the Proxy
Statement in the section entitled "Security Ownership" (except for
the last paragraph thereof) and is incorporated herein by reference
to the Proxy Statement.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
          ----------------------------------------------
The information required by this Item is set forth in the Proxy
Statement in the section entitled "Certain Relationships and
Related Transactions" and is incorporated by reference to the Proxy
Statement. See also Part IV, Item 14, Note 20 of Notes to
Consolidated Financial Statements.


                             PART IV
                             -------

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
         ---------------------------------------------------
         ON FORM 8-K
         -----------
(a) 1.  Financial statements:                                PAGE
        --------------------
        Report of independent accountants 

        Consolidated balance sheets, December 28, 1995 and
           December 29, 1994 

        Consolidated statements of operations, for December 30,
           1994 to December 28, 1995 (Post-consummation);
           January 1 to December 29, 1994 (Post-consummation);
           and January 1 to December 31, 1993 (Pre-consummation);

        Consolidated statements of stockholders' equity (deficit),
           for December 30, 1994 to December 28, 1995
           (Post-consummation); January 1 to December 29, 1994
           (Post-consummation); and January 1 to December 31, 1993
           (Pre-consummation);

        Consolidated statements of cash flows, for December
           30, 1994 to December 28, 1995 (Post-consummation);
           January 1 to December 29, 1994 (Post-consummation);
           and January 1 to December 31, 1993 (Pre-consummation);

        Notes to consolidated financial statements


(a) 2.  Financial statement schedules for the periods December 30,
        ---------------------------------------------------------
        1994 to December 28, 1995; January 1 to December 29, 1994;
        ---------------------------------------------------------
        and January 1 to December 31, 1993:
        ----------------------------------
    II   Valuation and qualifying accounts


Schedules other than those listed are omitted because they are not
required, are not applicable, or because equivalent information has
been included in the financial statements and notes thereto or
elsewhere herein.

(b)     Reports on Form 8-K. On December 13, 1995, Envirodyne filed
        -------------------
        a Current Report on Form 8-K to disclose the settlement
        agreement relating to Frank Lumpkin, et al. v. Envirodyne
                              -----------------------------------
        Industries, Inc.
        ---------------

(c) Exhibits:
    --------
Exhibit No    Description of Exhibits                     Page  
----------    ------------------------------------------
  2.1   Debtors First Amended Joint Plan of 
        Reorganization as Twice Modified dated December
        15, 1993 of Envirodyne Industries, Inc. and
        certain of its subsidiaries (incorporated herein
        by reference to Exhibit 2 to Form 8-K filed 
        January 19, 1994 of Envirodyne Industries, Inc.)    *

   3.1   Amended and Restated Certificate of
         Incorporation of Envirodyne Industries, Inc.
         (incorporated herein by reference to Exhibit 3.1
         to Form 8-K filed January 19, 1994, of
         Envirodyne Industries, Inc.).                       *

   3.2  Amended and Restated By-Laws of
        Envirodyne Industries, Inc. (incorporated
        herein by reference to Exhibit 3.2 to Form 8-K
        filed February 21, 1995 of Envirodyne
        Industries, Inc.).                                     *

   4.1  Indenture dated as of December 31, 1993
        between Envirodyne Industries, Inc. and Bankers
        Trust Company, as Trustee, relating to the 10-
        1/4% Notes Due 2001 of Envirodyne Industries,
        Inc. including form of 10-1/4% Note Due 2001
        (incorporated herein by reference to Exhibit 4.1
        to Form 8-K filed January 19, 1994 of Envirodyne
        Industries, Inc.).                                   *

 4.2    Warrant Agreement dated as of December 31, 1993
        between Envirodyne Industries, Inc. and Bankers
        Trust Company, as Warrant Agent, relating to the
        Warrants to Purchase Common Stock of Envirodyne
        Industries, Inc., including form of Warrant to
        Purchase Common Stock (incorporated herein by
        reference to Exhibit 4.2 to Form 8-K filed
        January 19, 1994 of Envirodyne Industries,
        Inc.).                                                *

 4.3    Indenture dated as of June 20, 1995 (the
        "Indenture") between Envirodyne Industries, Inc.
        and Shawmut Bank Connecticut, National
        Association, as Trustee (incorporated by
        reference to Exhibit 4.3 to the Registration
        Statement on Form S-4 of Envirodyne Industries,
        Inc. filed July 20, 1995).                           *

 4.4    Forms of the Notes issued pursuant to the
        Indenture (included in Exhibit 4.3).                 *

 4.5    Exchange and Registration Rights Agreement dated
        as of June 20, 1995 between Envirodyne
        Industries, Inc. and the purchasers of the Notes
        (incorporated by reference to Exhibit 4.5 to the
        Registration Statement on Form S-4 of Envirodyne
        Industries, Inc. filed July 20, 1995).              *

 4.6    Guaranty Agreement, dated as of June 20, 1995,
        made by Clear Shield National, Inc., Sandusky
        Plastics, Inc., Sandusky Plastics of Delaware,
        Inc., Viskase Corporation, Viskase Holding 
        Corporation and Viskase Sales Corporation, in
        favor of BT Commercial Corporation, as
        Collateral Agent (incorporated by reference to
        Exhibit 4.6 to the Registration Statement on
        Form S-4 of Envirodyne Industries, Inc. filed
        July 20, 1995).                                       *

 4.7    Pledge Agreement, dated as of June 20, 1995, made
        by Envirodyne Industries, Inc. to BT Commercial
        Corporation, as Collateral Agent (incorporated
        by reference to Exhibit 4.7 to Amendment No. 2
        to the Registration Statement on Form S-4 of
        Envirodyne Industries, Inc. filed September 21,
        1995).                                                *

 4.8    Security Agreement, dated as of June 20, 1995,
        made by Envirodyne Industries, Inc. in favor of
        BT Commercial Corporation, as Collateral Agent
        (incorporated by reference to Exhibit 4.8 to
        Amendment No. 2 to the Registration Statement on
        Form S-4 of Envirodyne Industries, Inc. filed
        September 21, 1995).                                    *

 4.9    Form of Subsidiary Security Agreement, dated as
        of June 20, 1995, made by each applicable
        Subsidiary in favor of BT Commercial
        Corporation, as Collateral Agent (incorporated
        by reference to Exhibit 4.9 to Amendment No. 2
        to the Registration Statement on Form S-4 of
        Envirodyne Industries, Inc. filed September 21,
        1995).                                                   *

 4.10   Intellectual Property Security Agreement, dated
        as of June 20, 1995, made by Viskase Corporation
        in favor of BT Commercial Corporation, as
        Collateral Agent (incorporated by reference to
        Exhibit 4.10 to Amendment No. 2 to the
        Registration Statement on Form S-4 of Envirodyne
        Industries, Inc. filed September 21, 1995).               *

 4.11   First Supplemental Indenture, dated as of October
        13, 1995, between Envirodyne Industries, Inc.
        and Shawmut Bank Connecticut, National
        Association, as Trustee (incorporated by
        reference to Exhibit 4.11 to Amendment No. 3 to
        the Registration Statement on Form S-4 of
        Envirodyne Industries, Inc. filed October 17,
        1995).                                                    *

10.1    Participation Agreement dated as of December 18,
        1990 among Viskase Corporation, as Lessee,
        Envirodyne Industries, Inc., as Guarantor,
        General Electric Capital Corporation, as Owner
        Participant, and The Connecticut National Bank,
        as Owner Trustee (incorporated herein by
        reference to Exhibit 10.24 to Form 8-K, filed
        January 22, 1991, of Envirodyne
        Industries, Inc.).                                        *

10.2    Lease Agreement dated as of December 18, 1990
        between The Connecticut National Bank, Owner
         Trustee, as Lessor and Viskase Corporation, as
         Lessee (incorporated herein by reference to
         Exhibit 10.25 to Form 8-K, filed January 22,
         1991, of Envirodyne Industries, Inc.).                  *

10.3    Appendix A; Definitions relating to the
        Participation Agreement, the Lease and the
        Ground Lease (incorporated herein by reference
        to Exhibit 10.26 to Form 8-K, filed January 22,
        1991, of Envirodyne Industries, Inc.).                  *

10.4    Ground Lease dated as of December 18, 1990
        between Viskase Corporation, as Ground Lessor,
        and The Connecticut National Bank, as Ground
        Lessee (incorporated herein by reference to
        Exhibit 10.27 to Form 8-K, filed January 22,
        1991, of Envirodyne Industries, Inc.).                  *

10.5    Guaranty Agreement dated as of December 18, 1990,
        among Envirodyne Industries, Inc.; Clear Shield
        National, Inc.; Sandusky Plastics of Delaware,
        Inc.; Viskase Sales Corporation, all as
        Guarantors; The Connecticut National Bank, as
        Owner Trustee; and General Electric Capital
        Corporation, as Owner Participant (incorporated
        herein by reference to Exhibit 10.28 to Form
        8-K, filed January 22, 1991, of Envirodyne
        Industries, Inc.).                                         *

10.6    Trust Agreement dated as of December 18, 1990
        between General Electric Capital Corporation, as
        Owner Participant, and The Connecticut National
        Bank, as Owner Trustee (incorporated herein by
        reference to Exhibit 10.29 to Form 8-K, filed
        January 22, 1991, of Envirodyne
        Industries, Inc.).                                         *

10.7    Amended and Restated Management Services
        Agreement Dated December 31, 1993 between
        Envirodyne Industries, Inc. and D.P. Kelly and
        Associates, L.P. (incorporated herein by
        reference to Exhibit 99.2 to Form 8-K filed
        January 19, 1994 of Envirodyne Industries,
        Inc.). +                                                   *

10.8    Envirodyne Industries, Inc. 1993 Stock Option
        Plan (incorporated herein by reference to Exhibit
        10.10 to Form 10-K filed March 29, 1994 of
        Envirodyne Industries, Inc.). +                            *

10.9    Envirodyne Industries, Inc. Corporate Office
        Management Incentive Plan for Fiscal Year 1995. + 

10.10   Envirodyne Industries, Inc. Long-Term Incentive
        Plan (incorporated herein by reference to Exhibit
        10.34 to Form 10-Q for the fiscal quarter ended
        June 27, 1991, filed August 12, 1991, of
        Envirodyne Industries, Inc.). +                             *

10.11   Envirodyne Industries, Inc. Parallel Envirodyne
        Non-Qualified Thrift Plan (incorporated herein by
        reference to Exhibit 10.35 to Form 10-Q for the
        fiscal quarter ended June 27, 1991, filed August
        12, 1991, of Envirodyne Industries, Inc.). +                *

10.12   Note Agreement, dated as of June 20, 1995,
        between Envirodyne Industries, Inc. and each of
        the purchasers identified therein (incorporated by
        reference to Exhibit 10.10 to the Registration
        Statement on Form S-4 of Envirodyne Industries,
        Inc. filed July 20, 1995).                                   *

10.13   Letter Agreement, dated as of June 20, 1995,
        between Envirodyne Industries, Inc. and certain
        purchasers of the Notes (incorporated by reference
        to Exhibit 10.11 to the Registration Statement on
        Form S-4 of Envirodyne Industries, Inc. filed July
        20, 1995).                                                     *

10.14   Revolving Credit Agreement, dated as of June 20,
        1995, between Envirodyne Industries, Inc. and The
        Prudential Insurance Company of America
        (incorporated by reference to Exhibit 10.12 to the
        Registration Statement on Form S-4 of Envirodyne
        Industries, Inc. filed July 20, 1995).                      *


10.15   Credit Agreement, dated as of June 20, 1995,
        among Envirodyne Industries, Inc., the lenders
        identified therein and BT Commercial Corporation,
        as Agent (incorporated by reference to Exhibit
        10.13 to the Registration Statement on Form S-4 of
        Envirodyne Industries, Inc. filed July 20, 1995).            *

10.16   Intercreditor and Collateral Agency Agreement,
        dated as of June 20, 1995, among BT Commercial
        Corporation, The Prudential Insurance Company of
        America, Shawmut Bank Connecticut, National
        Association, and certain other parties identified
        therein (incorporated by reference to Exhibit
        10.14 to the Registration Statement on Form S-4 of
        Envirodyne Industries, Inc. filed July 20, 1995).          *

10.17   GECC Intercreditor Agreement, dated as of June
        20, 1995, among BT Commercial Corporation, General
        Electric Capital Corporation, Shawmut Bank
        Connecticut, National Association, Envirodyne
        Industries, Inc. and Viskase Corporation
        (incorporated by reference to Exhibit 10.15 to the
        Registration Statement on Form S-4 of Envirodyne
        Industries, Inc. filed July 20, 1995).                     *

10.18   First Amendment under Revolving Credit Agreement,
        dated as of June 20, 1995, between Envirodyne
        Industries, Inc. and The Prudential Insurance
        Company of America (incorporated by reference to
        Exhibit 10.16 to Amendment No. 3 to the
        Registration Statement on Form S-4 of Envirodyne
        Industries, Inc. filed October 17, 1995).            *

10.19   Amendment No. 1 to Credit Agreement, dated as of
        June 20, 1995, between Envirodyne Industries, Inc.
        and BT Commercial Corporation, individually and as
         agent (incorporated by reference to Exhibit 10.17
        to Amendment No. 3 to the Registration Statement
        on Form S-4 of Envirodyne Industries, Inc. filed
        October 17, 1995).                                     *

11.1    Statement re computation of per share earnings.       **

21.1    Subsidiaries of the registrant.                       **
23.1    Consent of Independent Accountants                    **

*  Previously filed, incorporated by reference.
** Filed herewith
+  Management contract or compensatory plan or
   arrangement.

(d)    Financial statement schedules required by Regulation S-X.
       --------------------------------------------------------
Index to financial statements of Viskase Holding Corporation and
subsidiaries.

<PAGE>
                           SIGNATURES
                           ----------

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

                                  ENVIRODYNE INDUSTRIES, INC.
                                  --------------------------
                                  (Registrant)

                                  By: /s/                        
                                      ---------------------------
                                      Donald P. Kelly
                                      Chairman, Chief Executive
                                      Officer and President

                                  By:/s/                         
                                     ----------------------------
                                     J.S. Corcoran
                                     Executive Vice President and
                                       Chief Financial Officer

Date:   March 27, 1996

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities indicated on this 27th day of
March 1996.



/s/                                /s/                          
------------------------------     -----------------------------
Robert N. Dangremond (Director)    Michael E. Heisley (Director)


/s/                                /s/                          
------------------------------     -----------------------------
Avram A. Glazer (Director)         Gregory R. Page (Director)


/s/                                /s/                          
------------------------------     -----------------------------
Malcolm I. Glazer (Director)       Mark D. Senkpiel (Director)


/s/                         
------------------------------
F. Edward Gustafson (Director)

<PAGE>
                 REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
Envirodyne Industries, Inc.

     We have audited the consolidated financial statements and the
financial statement schedules of Envirodyne Industries, Inc. and
Subsidiaries listed in Item 14(a) of this Form 10-K. These financial
statements and financial statement schedules are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial statement
schedules based on our audits.

     We conducted our audits in accordance with generally accepted
auditing standards. 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.

     As discussed in Note 1 to the consolidated financial statements,
on December 31, 1993, the Company completed a comprehensive financial
restructuring through the implementation of reorganization under
Chapter 11 of the United States Bankruptcy Code and applied fresh
start reporting.

     In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Envirodyne Industries, Inc. and Subsidiaries as of
December 28, 1995 and December 29, 1994, and the consolidated results
of their operations and their cash flows for the period December 30,
1994 to December 28, 1995 and January 1 to December 29, 1994
(Post-consummation) and January 1 to December 31, 1993
(Pre-consummation), in conformity with generally accepted accounting
principles. In addition, in our opinion the schedules referred to
above, when considered in relation to the basic financial statements
taken as a whole, present fairly, in all material respects, the
information required to be included therein.


Coopers & Lybrand L.L.P.

Chicago, Illinois
March 26, 1996


<PAGE>
             ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES

                       CONSOLIDATED BALANCE SHEETS



                                  December 28,   December 29,
                                       1995          1994    
                                  ------------   -----------
                                        (in thousands) 

ASSETS
  Current assets:
    Cash and equivalents               $ 30,325    $   7,289
    Receivables, net                     89,454       86,868
    Inventories                          99,474      110,483
    Other current assets                 21,646       19,466
                                       --------     --------
        Total current assets            240,899      224,106

  Property, plant and equipment,
    including those under
    capital leases                      545,491      506,099
    Less accumulated depreciation
      and amortization                   75,987       35,761
                                       --------     --------
    Property, plant and
      equipment, net                    469,504      470,338
 
  Deferred financing costs                8,090        9,143
  Other assets                           45,589       47,181
  Excess reorganization value           135,485      145,868
                                       --------     --------
                                       $899,567     $896,636
                                       ========     ========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
    Short-term debt including
      current portion of long-term
      debt and obligations
      under capital leases             $ 12,504   $   25,798
    Accounts payable                     39,117       34,335
    Accrued liabilities                  67,553       72,246
                                       --------     --------
        Total current liabilities       119,174      132,379
  Long-term debt including obliga-
    tions under capital leases          530,181      489,358

  Accrued employee benefits              55,626       56,217
  Deferred and noncurrent income taxes   77,490       83,333

  Commitments and contingencies

  Stockholders' equity:
    Preferred stock, $.01 par value;
      none outstanding
    Common stock, $.01 par value;
      13,579,460 shares issued and
      outstanding at
      December 28, 1995 and
      13,515,000 shares at
      December 29, 1994                     136          135
    Paid in capital                     134,864      134,865
    Accumulated (deficit)               (25,131)      (3,612)
    Cumulative foreign currency
      translation adjustments             7,227        3,961
                                       --------     --------
         Total stockholders' equity     117,096      135,349
                                       --------     --------
                                       $899,567     $896,636
                                       ========     ========

The accompanying notes are an integral part of the consolidated
financial statements.

<PAGE>
                            ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                               CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                              52 weeks             52 weeks          52 weeks
                                             December 30,          January 1,        January 1,
                                               1994 to                to                 to
                                             December 28,         December 29,      December 31,
                                                1995                  1994              1993
                                             -----------          -----------       -----------
                                              (in thousands, except for number of shares
                                                         and per share amounts)

<S>                                        <C>                   <C>              <C> 
NET SALES                                     $650,212              $599,029        $ 587,385
  Patent infringement settlement income                                9,457

COSTS AND EXPENSES
  Cost of sales                                485,048               435,760          418,692
  Selling, general and administrative          111,230               108,437           99,350
  Amortization of intangibles and
    excess reorganization value                 15,799                15,612           15,711
                                              --------              --------         --------
OPERATING INCOME                                38,135                48,677           53,632
  Interest income                                  670                   307              931
  Interest expense                              57,336                49,514           31,190
  Other expense (income), net                    1,710                (1,668)           5,540
  Minority interest in loss of subsidiary                                 50              717
                                              --------              --------         --------
INCOME (LOSS) BEFORE INCOME TAXES,
  REORGANIZATION ITEMS 
  AND EXTRAORDINARY ITEMS                      (20,241)                1,188           18,550

  Reorganization items, net                                                           104,745
                                              --------              --------         --------
INCOME (LOSS) BEFORE INCOME TAXES
  AND EXTRAORDINARY ITEMS                      (20,241)                1,188          (86,195)

  Income tax provision (benefit)                (2,918)                4,800           12,000
                                              --------              --------         --------
(LOSS) BEFORE EXTRAORDINARY ITEMS              (17,323)               (3,612)         (98,195)

  Extraordinary gain (loss), net of tax         (4,196)                               183,784
                                              --------              --------         --------
NET INCOME (LOSS)                             $(21,519)             $ (3,612)        $ 85,589
                                              ========              ========         ========

WEIGHTED AVERAGE COMMON SHARES              13,516,771            13,500,703              320
                                            ==========            ==========              ===

PER SHARE AMOUNTS:
(LOSS) BEFORE EXTRAORDINARY ITEMS             $  (1.28)           $     (.27)       $(306,859)
                                              ========            ==========        =========
NET INCOME (LOSS)                             $  (1.59)           $     (.27)       $ 267,466
                                              ========            ==========        =========

<FN>
Due to the implementation of the Plan of Reorganization and Fresh Start
Reporting, the consolidated statement of operations for the fiscal years
ended December 28, 1995 and December 29, 1994 are not comparable to the
fiscal year ended December 31, 1993. (Refer to Note 1 of Notes to
Consolidated Financial Statements.)

The accompanying notes are an integral part of the consolidated
financial statements.

</TABLE>

<PAGE>
            ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
                                                                             Cumulative
                                                                               Foreign       Total
                                                                              Currency    Stockholders'
                                   Common         Paid in    Accumulated     Translation      Equity
                                   Stock          Capital     (Deficit)      Adjustments    (Deficit)
                                   ------         -------    -----------     -----------   ----------
                                                  (in thousands)

<S>                                <C>         <C>             <C>            <C>          <C>
Balance December 31, 1992            $  1        $ 12,900       $(98,776)       $ 2,330      $(83,545)
Net income                                                        85,589                       85,589
Translation adjustments                                                          (2,044)       (2,044)
Cancellation of preconsummation 
  Common Stock                         (1)        (12,900)                                    (12,901)
Elimination of accumulated deficit 
  and cumulative foreign currency 
  translation adjustments                                         13,187           (286)       12,901
                                     ----        --------       --------        -------      --------
                                     $  0        $      0       $      0        $     0      $      0

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

Issuance of new Common Stock         $135        $134,865                                    $135,000
                                     ----        --------                                    --------
Balance December 31, 1993             135         134,865                                     135,000
Net (loss)                                                      $ (3,612)                      (3,612)
Translation adjustments                                                          $ 3,961        3,961
                                     ----        --------       --------         -------     --------
Balance December 29, 1994             135         134,865         (3,612)          3,961      135,349
Net (loss)                                                       (21,519)                     (21,519)
Issuance of Common Stock                1              (1)
Translation adjustments                                                            3,266        3,266
                                     ----        --------       --------         -------     --------
Balance December 28, 1995            $136        $134,864       $(25,131)         $7,227     $117,096
                                     ====        ========       ========          ======     ========

<FN>
Due to the implementation of the Plan of Reorganization and
Fresh Start Reporting, the stockholders' equity for the fiscal
years ended December 28, 1995 and December 29, 1994 are not
comparable to the fiscal year ended December 31, 1993. (Refer to
Note 1 of Notes to Consolidated Financial Statements.)


The accompanying notes are an integral part of the consolidated
financial statements.

</TABLE>

<PAGE>
             ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                             December 30,            January 1,          January 1,
                                               1994 to                   to                 to
                                             December 28,           December 29,        December 31,
                                                 1995                   1994                1993
                                             -----------            -----------         -----------
                                                                   (in thousands)

<S>                                          <C>                    <C>                <C>
Cash flows from operating activities:
  (Loss) before extraordinary item             $(17,323)              $ (3,612)          $ (98,195)
  Extraordinary gain (loss)                      (4,196)                                   183,784
                                               --------               --------           ---------
  Net income (loss)                             (21,519)                (3,612)             85,589
  Adjustments to reconcile net income
    (loss) to net cash
    provided by operating activities:
    Depreciation and amortization
       under capital leases                      40,262                 35,775              36,687
    Amortization of intangibles and
       excess reorganization value               15,799                 15,612              15,711
    Amortization of deferred financing
       fees and discount                          2,196                  1,569               2,418
    Increase (decrease) in deferred
       and noncurrent income taxes               (6,450)                   (52)              9,547
    Loss on debt extinguishment                   6,778
    Foreign currency transaction loss (gain)     (1,233)                (3,465)              3,380
    Loss (gain) on sales of property,
       plant and equipment                           73                     (9)                650
    Reorganization items and
       fresh start reporting                                                                (79,039)

    Changes in operating assets
      and liabilities:
      Accounts receivable                          (839)               (11,257)             (1,319)
      Inventories                                12,741                (10,548)              4,163
      Other current assets                       (1,837)                (1,607)             (2,152)
      Accounts payable and
        accrued liabilities                      (1,670)                 3,774              15,894
      Other                                      (5,334)                (2,894)                672

                                               --------               --------           ---------
    Total adjustments                            60,486                 26,898               6,612
                                               --------               --------           ---------
      Net cash provided by
        operating activities before 
        reorganization expense                   38,967                 23,286              92,201
      Net cash used for
        reorganization items                                                               (14,929)
                                               --------               --------           ---------
      Total net cash provided by
        operating activities                     38,967                 23,286              77,272

Cash flows from investing activities:
  Capital expenditures                          (34,465)               (32,566)            (40,887)
  Proceeds from sale of property,
    plant and equipment                              86                    359                 124
  Purchase of minority interest 
    in subsidiary                                                       (4,200)                   
                                               --------               --------           ---------
      Net cash (used in) investing
         activities                             (34,379)               (36,407)            (40,763)

Cash flows from financing activities:
  Proceeds from revolving loan and
    long-term borrowings                        207,922                 37,668             106,003
  Deferred financing costs                       (7,887)                (1,608)             (9,779)
  Repayment of revolving loan,
    long-term borrowings and 
    capital lease obligations                  (181,375)               (22,617)           (138,736)
                                               --------               --------           ---------
      Net cash provided by (used in)
        financing activities                     18,660                 13,443             (42,512)

Effect of currency exchange
   rate changes on cash                            (212)                  (776)               (316)
                                               --------               --------           ---------
Net increase (decrease) in cash
   and equivalents                               23,036                   (454)             (6,319)
Cash and equivalents at
   beginning of period                            7,289                  7,743              14,062
                                               --------               --------           ---------
Cash and equivalents at end of period           $30,325               $  7,289           $   7,743
                                                =======               ========           =========
                                                                                                   
---------------------------------------------------------------------------------------------------
Supplemental cash flow information and 
  noncash investing and financing activities:
  Interest paid                                 $55,030               $ 43,484           $  28,001
  Income taxes paid                             $ 4,895               $  5,058           $   1,154
  Capital lease obligations
    (machinery and equipment)                   $ 2,081

<FN>
Due to the implementation of the Plan of Reorganization and Fresh Start
Reporting, the consolidated statement of cash flows for the fiscal years
ended December 28, 1995 and December 29, 1994 are not comparable to the
fiscal year ended December 31, 1993. (Refer to Note 1 of Notes to
Consolidated Financial Statements.)

The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>

<PAGE>
              ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   CHAPTER 11 REORGANIZATION PROCEEDINGS (dollars in thousands)

On January 6, 1993, a group of bondholders filed an involuntary
petition for reorganization of Envirodyne Industries, Inc. under
Chapter 11 of the U.S. Bankruptcy Code. On January 7, 1993 Viskase
Corporation, Viskase Sales Corporation, Viskase Holding Corporation,
Clear Shield National, Inc., Sandusky Plastics of Delaware, Inc.,
Sandusky Plastics, Inc. and Envirodyne Finance Company each filed
voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in
the United States Bankruptcy Court for the Northern District of
Illinois, Eastern Division (the Bankruptcy Court). On December 17,
1993, the Bankruptcy Court confirmed the First Amended Joint Plan of
Reorganization as twice modified (Plan of Reorganization) with
respect to Envirodyne Industries, Inc. (Envirodyne) and certain of
its subsidiaries. The Plan of Reorganization was consummated and
Envirodyne and certain of its subsidiaries emerged from Chapter 11 on
December 31, 1993 (Effective Date). For accounting purposes, the Plan
of Reorganization was deemed to be effective as of December 31, 1993.

Pursuant to the Plan of Reorganization, Envirodyne's shares of common
stock that were outstanding prior to the effective date were
canceled. Emerald Acquisition Corporation, the sole stockholder of
Envirodyne prior to the consummation of the bankruptcy, received no
distribution pursuant to the Plan of Reorganization. The Plan of
Reorganization provided for the initial issuance of approximately
13,500,000 new shares of Envirodyne common stock (subject to
adjustment), warrants to purchase an additional 1,500,000 shares and
distributions to major creditors as follows:

  --  Holders of Envirodyne's former Senior Discount Notes Due 1997
      (14.5%) (Old Discount Notes) with an accreted value as of
      January 6, 1993 of $200,838 became entitled to receive a pro
      rata portion of $219,262 principal amount of 10 1/4% Senior
      Notes Due 2001 (10 1/4% Notes).

  --  Holders of Envirodyne's former $200,000 principal amount of
      14% Senior Subordinated Debentures Due 2001 (Old 14%
      Debentures), with accrued but unpaid interest through
      January 6, 1993 of $42,812 became entitled to receive a pro
      rata portion of 12,142,737 shares of the Envirodyne common
      stock, par value $.01 per share, representing in the
      aggregate approximately 89.95% of the common stock initially
      issued pursuant to the Plan of Reorganization.

  --  Holders of the Envirodyne's former $91,350 principal amount
      of 13 1/2% Subordinated Notes Due 1996 (Old 13 1/2% Notes),
      with accrued but unpaid interest through January 6, 1993 of
      $13,604 became entitled to receive a pro rata portion of
      (i) 903,625 shares of Envirodyne common stock, representing
      in the aggregate approximately 6.69% of the common stock
      initially issued pursuant to the Plan of Reorganization, and
      (ii) warrants (Warrants) to purchase 1,500,000 shares of
      common stock. The Warrants were issued pursuant to a Warrant
      Agreement dated as of December 31, 1993 between Envirodyne
      and Bankers Trust Company, as Warrant Agent. The Warrants are
      exercisable at any time until December 31, 1998 at an
      exercise price of $17.25 per share. The number of shares of
      common stock for which a Warrant is exercisable, and the
      exercise price of the Warrants, are subject to adjustment
      upon the occurrence of certain events. In addition, holders
      of Old 13 1/2% Notes, other than Salomon Brothers Inc
      (Salomon Brothers) and certain of its affiliates, who elected
      to grant a limited release to Salomon Brothers and its
      affiliates pursuant to the Plan of Reorganization, of all
      claims arising out of the 1989 leveraged buyout acquisition
      of Envirodyne, the Old 13 1/2% Notes or Envirodyne, were
      entitled to share ratably in 445,928 shares of common stock,
      representing in the aggregate approximately 3.30% of the
      common stock initially issued pursuant to the Plan of
      Reorganization.

  --  Holders of allowed general unsecured claims of Envirodyne (as
      opposed to subsidiaries of Envirodyne) became entitled to
      receive 32.28 shares of common stock for each five hundred
      dollars amount of their prepetition claims, or a total of
      8,070 shares of common stock, representing .06% of the common
      stock initially issued pursuant to the Plan of
      Reorganization. These claims totaled approximately $125. If
      the allowed amount of general unsecured claims of Envirodyne
      exceeds $125, for example upon the resolution of disputed
      claims, additional shares of common stock will have to be
      issued to the holders of allowed general unsecured claims of
      Envirodyne in order to provide equitable allocation of value
      among Envirodyne's unsecured creditors under the Plan of
      Reorganization. Such additional shares of common stock would
      be distributed with respect to allowed general unsecured
      claims of Envirodyne as follows: (i) approximately 2.58
      additional shares per five hundred dollars in claims in the
      event allowed general unsecured claims of Envirodyne are
      between $125 and $25,000; (ii) approximately 5.61 additional
      shares per five hundred dollars in claims in the event
      allowed general unsecured claims of Envirodyne are between
      $25,000 and $50,000; (iii) approximately 9.22 additional
      shares per five hundred dollars in claims in the event
      allowed general unsecured claims of Envirodyne are between
      $50,000 and $75,000; and (iv) approximately 13.58 additional
      shares per five hundred dollars in claims in the event
      allowed general unsecured claims of Envirodyne are between
      $75,000 and $100,000. Refer to Note 23 for discussion on
      certain settled claims and open claims which, if determined
      adversely to Envirodyne, would result in the issuance of
      common stock.

  --  Holders of Envirodyne subsidiary allowed trade claims were
      paid in full.

  --  Salomon Brothers Holding Company Inc 11.25% Pay-in-Kind Notes
      issued by Envirodyne with an accreted value as of January 6,
      1993 of $5,658 were canceled.
     
The contracts constituting the sale and leaseback transaction with
General Electric Capital Corporation were assumed by the relevant
Envirodyne subsidiaries under the Plan of Reorganization with minor
changes thereto.

The Chapter 11 filing was related only to the Company's domestic
operations and did not include the foreign subsidiaries and various
inactive domestic subsidiaries.

The Company accounted for the reorganization using the principles of
fresh start reporting in accordance with the American Institute of
Certified Public Accountants Statement of Position 90-7, "Financial
Reporting by Entities in Reorganization under the Bankruptcy Code."
Accordingly, all assets and liabilities have been restated to reflect
their reorganization value, which approximates fair value.

The reorganization value of the Company's equity of $135,000 was
based on the consideration of many factors and various valuation
methods, including discounted cash flows and comparable multiples of
earnings valuation techniques believed by management and its
financial advisors to be representative of the Company's business and
industry. Factors considered by the Company included the following:

  .   Forecasted operating and cash flow results which gave effect
      to the estimated impact of debt restructuring and other
      operational reorganization.

  .   Discounted residual value at the end of the forecasted period
      based on the capitalized cash flows for the last year of that
      period.

  .   Competition and general economic considerations.

  .   Projected sales growth.

  .   Potential profitability.

  .   Seasonality and working capital requirements.

The excess of the reorganization value over the fair value of net
assets and liabilities is reported as excess reorganization value and
is being amortized over a fifteen-year period. The Company continues
to evaluate the recoverability of excess reorganization value based
on the operating performance and expected future undiscounted cash
flows of the operating business units.

The reorganization and the adoption of Fresh Start Reporting resulted
in the following adjustments to the Company's Consolidated Statement
of Operations for the period January 1 to December 31, 1993:


                                                      Income
                                                     (Expense)
Reorganization Items
-----------------------                             -------------
Legal, financial advisory and other
  fees associated with the 
  Chapter 11 proceedings                               $ (14,929)
Write-off of deferred financing fees
  associated with the Bank 
  Credit Agreement                                        (4,071)
Write-off of existing excess investment
  over net assets acquired, net 
  of excess reorganization value recorded,
  and fair market value 
  adjustments to assets and liabilities                  (85,745)
                                                       ---------
                                                       $(104,745)
                                                       =========
Extraordinary Gain
------------------
Accreted value of the Old Discount Notes
  less unamortized deferred financing                  $ 197,379
Principal amount of Old 14% Debentures
  plus accrued interest less 
  unamortized deferred financing                         237,125
Principal amount of Old 13 1/2% Notes
  plus accrued interest less 
  unamortized deferred financing                         103,918
Accreted value of 11 1/4% Pay-in-Kind Notes
  due to Related Party                                     5,658
Envirodyne untendered shares                               2,176
Envirodyne general unsecured creditors
  allowed claims                                              90
Principal amount of 10 1/4% Notes exchanged
  for Old Discount Notes                                (219,262)
Fair value of equity exchanged for
  Old 14% Debentures, Old 13 1/2% Notes
  and Envirodyne unsecured claims                       (135,000)
                                                       ---------
Extraordinary gain before tax provision                  192,084
Tax provision on extraordinary gain                        8,300
                                                       ---------
Extraordinary gain net of taxes                        $ 183,784
                                                       =========

<PAGE>
Had the Fresh Start reporting and the Plan of Reorganization been
implemented with the related financing at the beginning of 1993, the
pro forma Envirodyne consolidated statement of operations would have
been as follows:

  (in thousands, except for number of shares and per share amounts)

                                                     Pro forma
                                                    January 1 to
                                                  December 31, 1993
                                                  -----------------
                                                     (unaudited)

Net sales                                             $587,385
  Cost of sales                                        417,780
  Selling, general and administrative                   99,350
  Amortization of intangibles and
    excess reorganization cost                          15,612
                                                      --------
Operating income                                        54,643
  Interest income                                          931
  Interest expense                                      51,198
  Other expense (income), net                            5,540
  Minority interest in loss of subsidiary                  717
                                                      --------
Income before income taxes                                (447)
  Income tax provision                                   6,140
                                                      --------
Net (loss)                                            $ (6,587)
                                                      ========
Weighted average common shares                      13,500,703
Net (loss) per share                                     $(.49)
                                                         =====

The pro forma information reflects the changes in interest cost and
depreciation and amortization due to the implementation of the Plan
of Reorganization and Fresh Start Reporting.


2.  NATURE OF BUSINESS

Envirodyne manufactures food packaging products and foodservice
supplies through three primary operating subsidiaries - Viskase,
Sandusky and Clear Shield. The operations of these subsidiaries are
primarily in North and South America and Europe. Viskase is a leading
producer of cellulosic casings used in preparing and packaging
processed meat products and is a major producer of heat shrinkable
plastic bags and specialty films for packaging and preserving fresh
and processed meat products, poultry and cheeses. The Company is also
a leading domestic and international manufacturer of plasticized
polyvinyl chloride (PVC) films, primarily for use in packaging food
items. Through Sandusky, the Company is a producer of thermoformed
and injection molded plastic containers, used in the packaging of
cultured dairy and delicatessen products, and of horticultural trays
and inserts. Finally, through Clear Shield, the Company is a major
domestic producer of disposable plastic cutlery, drinking straws,
custom dining kits and related products.


International Operations

Viskase has seven manufacturing facilities located outside the
continental United States, in Beauvais, France; Thaon, France;
Lindsay, Ontario, Canada; Sedgefield, England (Great Britain);
Swansea, Wales (Great Britain); Guarulhos, Brazil and Nuevo Laredo,
Mexico.

The aggregate of domestic exports and net sales of foreign operations
represents approximately 56% of Viskase's total net sales.

International sales and operations may be subject to various risks
including, but not limited to, possible unfavorable exchange rate
fluctuations, political instability, governmental regulations
(including import and export controls), restrictions on currency
repatriation, embargoes, labor relations laws and the possibility of
governmental expropriation. Viskase's foreign operations generally
are subject to taxes on the repatriation of funds.

International operations in certain parts of the world may be subject
to international balance of payments difficulties which may raise the
possibility of delay or loss in the collection of accounts receivable
from sales to customers in those countries. Viskase believes that its
allowance for doubtful accounts makes adequate provision for the
collectibility of its receivables. Management believes that growth
potential exists for many of Viskase's products outside the United
States and that Viskase is well positioned to participate in these
markets. 

All of Sandusky's and Clear Shield's operations are located in the
United States.

 
Sales and Distribution

Viskase sells its products in virtually every country in the world
with principal markets in North America, Europe, Latin America and
Asia Pacific. In the United States, Viskase has a staff of technical
sales representatives responsible for sales to fresh meat, processed
meat and poultry producers. Approximately 50 distributors market
Viskase products to customers in Europe, Africa, Asia, and Latin
America. Its products are marketed through its own subsidiaries in
the United Kingdom, Germany, France, Italy, Russia, Brazil, Mexico
and Australia.

In the United States, Viskase sells its PVC film products primarily
to the retail grocery industry through packaging material
distributors, food wholesalers and a direct sales force. Additionally
the sales organization is supported by a technical service group. The
United Kingdom operation sells directly and through distributors,
primarily to the retail grocery and foodservice industries in Europe.

In the United States, Viskase operates casings service centers in
Atlanta, Georgia, and Bensalem, Pennsylvania, as well as service
centers within the Chicago, Illinois, and Pauls Valley, Oklahoma,
plants. In Europe, Viskase operates casings service centers in Milan,
Italy, Pulheim, Germany, and Moscow, Russia. Viskase also operates a
service center in Brisbane, Australia. These service centers provide
finishing, inventory and delivery services to Viskase customers.

Sandusky's and Clear Shield's sales are predominantly in the United
States.


Competition

Viskase is one of the world's leading producers of cellulosic casings
and a major producer of films. From time to time, Viskase experiences
reduced market share or reduced profits due to price competition;
however, management believes that such market conditions will not
result in any long-term material loss of business.

The dairy and delicatessen containers industry is highly fragmented.
Sandusky competes in the manufacture and sale of dairy and
delicatessen containers with several domestic manufacturers of
thermoformed and injection molded plastic containers. Major
competitive factors in the dairy and delicatessen container business
are price, quality and customer service. Major competitive factors in
the specialized thermoformed container business are price and
technical and customer service capabilities.

Clear Shield's primary competitors include several major
corporations, some of which are larger and better capitalized than
Clear Shield and, in some cases, offer a wider product line than
Clear Shield. Clear Shield's competitors periodically engage in
aggressive price discounting to gain business. Clear Shield
management believes, however, that such market conditions will not
result in any long-term material loss of business for Clear Shield,
although its profit margins may be affected from time to time. 


3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A)  Basis of presentation

Effective in 1990 Envirodyne adopted a 52/53 week fiscal year ending
on the last Thursday of December. The 1993 financial statements
include December 31, 1993 in order to present the effect of the
consummation of the Plan of Reorganization.

(B)  Principles of consolidation

The consolidated financial statements include the accounts of
Envirodyne Industries, Inc. and its subsidiaries (the Company).

Reclassifications have been made to the prior years' financial
statements to conform to the 1995 presentation.

(C)  Use of estimates in the preparation of financial statements

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

(D)  Cash equivalents (dollars in thousands)

For purposes of the statement of cash flows, the Company considers
cash equivalents to consist of all highly liquid debt investments
purchased with an initial maturity of approximately three months or
less. Due to the short-term nature of these instruments, the carrying
values approximate the fair market value. Cash equivalents include
$24,536 and $821 of short-term investments at December 28, 1995 and
December 29, 1994, respectively.

(E)  Inventories

Domestic inventories are valued primarily at the lower of last-in,
first-out (LIFO) cost or market. Remaining amounts, primarily
foreign, are valued at the lower of first-in, first-out (FIFO) cost
or market.

(F)  Property, plant and equipment

Property, plant and equipment are carried at cost less accumulated
depreciation. Depreciation is computed on the straight-line method
over the estimated useful lives of the assets ranging from 3 to 32
years. Upon retirement or other disposition, cost and related
accumulated depreciation are removed from the accounts, and any gain
or loss is included in results of operations. Effective December 31,
1993 and in conjunction with the Fresh Start Reporting, property,
plant and equipment was reported at the estimated fair value (refer
to Note 1).



(G)  Deferred financing costs

Deferred financing costs are amortized on a straight-line basis over
the expected term of the related debt agreement. Amortization of
deferred financing costs is classified as interest expense.

(H)  Patents

Patents are amortized on the straight-line method over an estimated
average useful life of ten years.

The carrying value of patents is periodically reviewed by the Company
and impairments are recognized when the expected undiscounted future
operating cash flows derived from such patents is less than the
carrying value. If impairment is identified, valuation techniques
deemed appropriate under the particular circumstances will be used to
determine the asset's fair value. The loss will be measured based on
the excess of carrying value over the determined fair value. The
review for impairment is performed at least on a quarterly basis.

(I)  Excess reorganization value and excess investment over net
assets acquired, net

Excess reorganization value is amortized on the straight-line method
over 15 years. Accumulated amortization of excess reorganization
value totaled $20 million and $10 million at December 28, 1995, and
December 29, 1994, respectively.

Cost in excess of net assets acquired, net was amortized on a
straight-line method over 40 years in fiscal 1993.

The Company continues to evaluate the recoverability of excess
reorganization value based on operating performance and undiscounted
cash flows of the operating business units. Impairment will be
recognized when the expected undiscounted future operating cash flows
derived from such intangible is less than its carrying value. If
impairment is identified, valuation techniques deemed appropriate
under the particular circumstances will be used to determine the
intangible's fair value. The loss will be measured based on the
excess of carrying value over the determined fair value. The review
for impairment is performed at least on a quarterly basis.

(J)  Pensions

The North American operations of Viskase and the Company's operations
in Europe have defined benefit retirement plans covering
substantially all salaried and full time hourly employees. Pension
cost is computed using the projected unit credit method.

The Company's funding policy is consistent with funding requirements
of the applicable federal and foreign laws and regulations.

(K)  Postretirement benefits other than pensions

The North American operations of Viskase have postretirement health
care and life insurance benefits. Effective January 1, 1993,
postretirement benefits other than pensions are accounted for in
accordance with the provisions of Statement of Financial Accounting
Standards (SFAS) No. 106 "Employers' Accounting for Postretirement
Benefits Other Than Pensions."

(L)  Postemployment benefits

Effective December 31, 1993 and in conjunction with the Fresh Start
Reporting, the Company adopted SFAS No. 112 "Employers Accounting for
Postemployment Benefits." The impact of adopting SFAS No. 112 was not
material.

(M)  Income taxes

Income taxes are accounted for in accordance with SFAS No. 109. Tax
provisions and benefits are recorded at statutory rates for taxable
items included in the consolidated statements of operations
regardless of the period for which such items are reported for tax
purposes. Deferred income taxes are recognized for temporary
differences between financial statement and income tax bases of
assets and liabilities for which income tax benefits will be realized
in future years.

(N)  Net income (loss) per share

Net income (loss) per share of common stock is based upon the
weighted average number of shares of common stock outstanding during
the year. No effect has been given to options outstanding under the
Company's stock option plans and warrants issued pursuant to the Plan
of Reorganization as their effect is anti-dilutive.

(O)  Revenue recognition

Sales to customers are recorded at the time of shipment net of
discounts and allowances.

(P)  Foreign currency contracts

The Company maintains a hedging program to partially hedge its
forecasted foreign currency revenue cash flows. The hedging program
principally addresses revenue cash flows within its European
operations. The foreign exchange contracts are denominated
predominantly in the major European currencies and have varying
maturities up to eighteen months. The effect of this practice is to
minimize the effect of foreign exchange rate movements on the
Company's operating results. The Company's hedging activities do not
subject the Company to additional exchange rate risk because gains
and losses on these contracts offset losses and gains on the
transactions being hedged. The cash flows from forward contracts
accounted for as hedges of identifiable transactions or events are
classified consistent with the cash flows from the transactions or
events being hedged.

(Q)  Stock-based compensation

Statement of Financial Accounting Standards No. 123 "Accounting for
Stock-Based Compensation" encourages, but does not require, companies
to recognize compensation expense for grants of stock, stock options
and other equity instruments to employees based on new fair value
acounting rules. Although expense recognition for employee stock-
based compensation is not mandatory, SFAS 123 requires companies that
choose not to adopt the new fair value accounting to disclose pro
forma net income and earnings per share under the new method. This
new accounting principle is effective for the Company's fiscal year
ending December 26, 1996. The Company believes that adoption is not
expected to have a material impact on its financial condition as the
Company will not adopt the fair value accounting, but will instead
comply with the disclosure requirements.

4.  RECEIVABLES (dollars in thousands)

Receivables consisted primarily of trade accounts receivable and were
net of allowances for doubtful accounts of $3,224 and $2,136 at
December 28, 1995, and at December 29, 1994, respectively.
Envirodyne has a broad base of customers, with no single customer
accounting for more than 5% of sales.

<PAGE>
5.  INVENTORIES (dollars in thousands)

Inventories consisted of:
                                 December 28,      December 29,
                                     1995             1994
                                 -----------       -----------

Raw materials                      $17,150           $20,358
Work in process                     32,800            37,613
Finished products                   49,524            52,512
                                   -------          --------
                                   $99,474          $110,483
                                   =======          ========

Approximately 54% and 55% of the Company's inventories at
December 28, 1995, and December 29, 1994, respectively, were valued
at LIFO. These LIFO values exceeded current manufacturing cost by
approximately $4,000 and $7,000 at December 28, 1995, and
December 29, 1994, respectively. Inventories were net of reserves for
obsolete and slow moving inventory of $3,818 and $5,353 at
December 28, 1995, and December 29, 1994, respectively.

Raw materials used by Viskase include cellulose (from wood pulp),
fibrous paper, petroleum based resins, plasticizers and various other
chemicals. Viskase generally purchases its raw materials from a
single or small number of suppliers with whom it maintains good
relations. Certain primary and alternative sources of supply are
located outside the United States. Viskase believes, but there can be
no assurance, that adequate alternative sources of supply currently
exist for all of Viskase's raw materials or raw material substitutes
that Viskase could modify its processes to utilize.

The principal raw materials used by Sandusky and Clear Shield are
thermoplastic resins, which are readily available from several
domestic sources.


6.  PROPERTY, PLANT AND EQUIPMENT (dollars in thousands)

                                   December 28,      December 29,
                                       1995              1994
                                   -----------       -----------
Property, plant and equipment:
  Land and improvements              $ 16,369         $ 15,930
  Buildings and improvements           81,767           76,202
  Machinery and equipment             292,176          256,621
  Construction in progress             15,938           20,178
Capital leases:
  Machinery and equipment             139,241          137,168
                                     --------         --------
                                     $545,491         $506,099
                                     ========         ========

Maintenance and repairs charged to costs and expenses for 1995, 1994,
and 1993 aggregated $33,227, $33,045 and $32,636, respectively.
Depreciation is computed on the straight-line method over the
estimated useful lives of the assets ranging from 3 to 32 years.

7.  OTHER ASSETS (dollars in thousands)

Other assets were comprised of:

                                      December 28,  December 29,
                                         1995          1994
                                      -----------   -----------

Patents                                 $50,000       $50,000
  Less accumulated amortization          10,000         5,000
                                        -------       -------
    Patents, net                         40,000        45,000
Other                                     5,589         2,181
                                        -------       -------
                                        $45,589       $47,181
                                        =======       =======

Patents are amortized on the straight-line method over an estimated
average useful life of ten years.


8.  ACCRUED LIABILITIES (dollars in thousands)

Accrued liabilities were comprised of:

                                      December 28,  December 29,
                                         1995          1994
                                      -----------   -----------

Compensation and employee benefits      $31,997       $33,521
Taxes, other than on income               6,535         6,454
Accrued interest                          2,535         3,630
Accrued volume and sales discounts       13,218        11,958
Accrued reorganization fees
   and expenses                           2,027         3,167
Other                                    11,241        13,516
                                        -------       -------
                                        $67,553       $72,246
                                        =======       =======

9.  DEBT OBLIGATIONS (dollars in thousands)

On June 20, 1995, Envirodyne completed the sale of $160,000 aggregate
principal amount of senior secured notes (Senior Secured Notes) to
certain institutional investors in a private placement. The senior
secured notes were issued pursuant to an indenture dated June 20,
1995 (Indenture) and consist of (i) $151,500 of 12% Senior Secured
Notes due 2000 and (ii) $8,500 of Floating Rate Senior Secured Notes
due 2000 (collectively, the Senior Secured Notes). Envirodyne used
the net proceeds of the offering primarily to (i) repay the Company's
$86,125 domestic term loan, (ii) repay the $68,316 of obligations
under the Company's domestic and foreign revolving loans and (iii)
pay transaction fees and expenses. Concurrently with the June 20,
1995 placement, Envirodyne entered into a new $20,000 domestic
revolving credit facility (Revolving Credit Facility) and a new
$28,000 letter of credit facility (Letter of Credit Facility). The
Senior Secured Notes and the obligations under the Revolving Credit
Facility and the Letter of Credit Facility are guaranteed by
Envirodyne's significant domestic subsidiaries and secured by a
collateral pool (Collateral Pool) comprised of: (i) all domestic
accounts receivable (including intercompany receivables) and
inventory; (ii) all patents, trademarks and other intellectual
property (subject to non-exclusive licensing agreements); (iii)
substantially all domestic fixed assets (other than assets subject to
a lease agreement with General Electric Capital Corporation); and
(iv) a senior pledge of 100% of the capital stock of Envirodyne's
significant domestic subsidiaries and 65% of the capital stock of
Viskase S.A. Such guarantees and security are shared by the holders
of the Senior Secured Notes and the holders of the obligations under
the Revolving Credit Facility on a pari passu basis pursuant to an
intercreditor agreement. Pursuant to such intercreditor agreement,
the security interest of the holders of the obligations under the
Letter of Credit Facility has priority over all other liens on the
Collateral Pool.

The Company finances its working capital needs through a combination
of cash generated through operations and borrowings under the
Revolving Credit Facility. The availability of funds under the
Revolving Credit Facility is subject to the Company's compliance with
certain covenants (which are substantially similar to those included
in the Indenture), borrowing base limitations measured by accounts
receivable and inventory of the Company and reserves which may be
established at the discretion of the lenders. Currently, there are no
drawings under the Revolving Credit Facility. The available borrowing
capacity under the Revolving Credit Facility was $20 million at
December 28, 1995.

The Company recognized an extraordinary loss of $6,778 representing
the write-off of deferred financing fees related to the June 20, 1995
debt refinancing. The extraordinary loss, net of applicable income
taxes of $2,582, was included in the Company's Statement of
Operations for the quarter ended June 29, 1995.

The $151,500 tranche of Senior Secured Notes bears interest at a rate
of 12% per annum and the $8,500 tranche bears interest at a rate
equal to the six month London Interbank Offered Rate (LIBOR) plus 575
basis points. The current interest rate on the floating rate tranche
is approximately 11.4%. The interest rate on the floating rate
tranche is reset semi-annually on June 15 and December 15. Interest
on the Senior Secured Notes is payable each June 15 and December 15. 

On June 15, 1999, $80,000 of the aggregate principal amount of the
Senior Secured Notes is subject to a mandatory redemption. The
remaining principal amount outstanding will mature on June 15, 2000.
In the event the Company has Excess Cash Flow (as defined) in excess
of $5,000 in any fiscal year, beginning with fiscal 1995, Envirodyne
will be required to make an offer to purchase Senior Secured Notes
together with any borrowed money obligations outstanding under the
Revolving Credit Facility, on a pro rata basis, in an amount equal to
the Excess Cash Flow at a purchase price of 100% plus any accrued
interest to the date of purchase. There was no Excess Cash Flow for
fiscal 1995.

The Senior Secured Notes are redeemable, in whole or from time to
time in part, at Envirodyne's option, at the greater of (i) the
outstanding principal amount or (ii) the present value of the
expected future cash flows from the Senior Secured Notes discounted
at a rate equal to the Treasury Note yield corresponding closest to
the remaining average life of the Senior Secured Notes at the time of
prepayment plus 100 basis points; plus accrued interest thereon
                                  ----
to the date of purchase.

Upon the occurrence of a Change of Control (which includes the
acquisition by any person of more than 50% of Envirodyne's Common
Stock), each holder of the Senior Secured Notes has the right to
require the Company to repurchase such holder's Senior Secured Notes
at a price equal to the greater of (i) the outstanding principal
amount or (ii) the present value of the expected cash flows from the
Senior Secured Notes discounted at a rate equal to the Treasury Note
yield corresponding closest to the remaining average life of the
Senior Secured Notes at the time of prepayment plus 100 basis points;
plus accrued interest thereon to the date of purchase.
----

The Indenture contains covenants with respect to Envirodyne and its
subsidiaries limiting (subject to a number of important
qualifications), among other things, (i) the ability to pay dividends
or redeem or repurchase common stock, (ii) the incurrence of
indebtedness, (iii) the creation of liens, (iv) certain affiliate
transactions and (v) the ability to consolidate with or merge into
another entity and to dispose of assets.

Borrowings under the Revolving Credit Facility bear interest at a
rate per annum equal to the three month London Interbank Offered Rate
(LIBOR) on the first day of each calendar quarter plus 300 basis
points. The Revolving Credit Facility expires on June 20, 1998.

Envirodyne has entered into interest rate agreements that cap $50
million of interest rate exposure at an average LIBOR rate of 6.50%
until January 1997. These interest rate cap agreements were entered
into under terms of the senior bank financing that was repaid on June
20, 1995. Interest expense includes $613 of amortization of the
interest rate cap premium during fiscal 1995. Envirodyne has not
received any payments under the interest rate protection agreements.

The Letter of Credit Facility expires on June 20, 1998. Fees on the
outstanding amount of letters of credit are 2.0% per annum, with an
issuance fee of 0.5% on the face amount of the letter of credit.
There is a commitment fee of 0.5% per annum on the unused portion of
the Letter of Credit Facility.

<PAGE>
Had the refinancing taken place at the beginning of 1995, the pro
forma Envirodyne consolidated statement of operations would have
been:

 (in thousands, except for number of shares and per share amounts)

                              Pro forma December 30, 1994
                                 to December 28, 1995
                              ---------------------------

Net sales                                  $650,212
  Cost of sales                             485,048
  Selling, general and administrative       111,230
  Amortization of intangibles and
    excess reorganization cost               15,799
                                           --------
Operating income                             38,135
  Interest income                               670
  Interest expense                           60,213
  Other expense (income), net                 1,710
                                           --------
(Loss) before income taxes                  (23,118)
  Income tax (benefit)                       (4,040)
                                          ---------
Net (loss)                                $ (19,078)
                                          =========

Weighted average common shares           13,516,771
Net (loss) per share                         $(1.41)
                                             ======

The pro forma information reflects the change in interest expense and
related tax effect due to the issuance of $160 million principal
amount of Senior Secured Notes and the refinancing of the Company's
bank debt.

The $219,262 principal amount of 10-1/4% Notes were issued pursuant
to an Indenture dated as of December 31, 1993 (10-1/4% Note
Indenture) between Envirodyne and Bankers Trust Company, as Trustee.
The 10-1/4% Notes are the unsecured senior obligations of Envirodyne,
bear interest at the rate of 10-1/4% per annum, payable on each June
1 and December 1, and mature on December 1, 2001. The 10-1/4% Notes
are redeemable, in whole or from time to time in part, at the option
of Envirodyne, at the percentages of principal amount specified below
plus accrued and unpaid interest to the redemption date, if the 10-
1/4% Notes are redeemed during the twelve-month period commencing on
January 1 of the following years:

 Year                                     Percentage
------                                    ----------
 1996                                         104%
 1997                                         103%
 1998                                         102%
 1999                                         101%
 2000 and thereafter                          100%

The 10-1/4% Note Indenture contains covenants with respect to
Envirodyne and its subsidiaries limiting (subject to a number of
important qualifications), among other things, (i) the ability to pay
dividends on or redeem or repurchase capital stock, (ii) the
incurrence of indebtedness, (iii) certain affiliate transactions and
(iv) the ability of the Company to consolidate with or merge with or
into another entity or to dispose of substantially all its assets.


<PAGE>
Outstanding short-term and long-term debt consisted of:

                                              December   December
                                              28, 1995   29, 1994 
                                             ----------  ---------
Short-term debt, current maturity of
  long-term debt and capital lease
   obligations:

  Current maturity of Bank Term Loan                      $11,100
  Current maturity of Viskase Capital
    Lease Obligation                          $ 6,012       5,450
  Current maturity of Viskase Limited
    Term Loan (4.7%)                            2,033       1,882
  Other                                         4,459       7,366
                                              -------     -------
        Total short-term debt                 $12,504     $25,798
                                              =======     =======

Long-term debt:

  Bank Credit Agreement:
    Term Loan due 1999                                   $ 80,575
    Revolving Loan due 1999                                32,524
  12% Senior Secured Notes due 2000         $160,000
  10.25% Senior Notes due 2001               219,262      219,262
  Viskase Capital Lease Obligation           141,182      147,194
  Viskase Limited Term Loan (4.7%)             7,115        8,466
  Other                                        2,622        1,337
                                            --------     --------
        Total long-term debt                $530,181     $489,358
                                            ========     ========

The fair value of the Company's debt obligation (excluding capital
lease obligations) is estimated based upon the quoted market prices
for the same or similar issues or on the current rates offered to the
Company for the debt of the same remaining maturities. At
December 28, 1995, the carrying amount and estimated fair value of
debt obligations (excluding capital lease obligations) were $393,432
and $318,053, respectively.

The average interest rate on short-term borrowing during 1995 was
10.1%.

On December 28, 1990, Viskase and GECC entered into a sale and
leaseback transaction. The sale and leaseback of assets included the
production and finishing equipment at Viskase's four domestic casing
production and finishing facilities. The facilities are located in
Chicago, Illinois; Loudon, Tennessee; Osceola, Arkansas and Kentland,
Indiana. Viskase, as the Lessee under the relevant agreements, will
continue to operate all of the facilities. Sales proceeds on the
sale-leaseback transaction were $171.5 million; proceeds were used to
repay approximately $154 million of bank debt and a $15 million
convertible note outstanding at the time. The lease has been
accounted for as a capital lease.

The principal terms of the sale and leaseback transaction include:
(a) a 15 year basic lease term (plus selected renewals at Viskase's
option); (b) annual rent payments in advance beginning in
February 1991; and (c) a fixed price purchase option at the end of
the basic 15 year term and fair market purchase options at the end of
the basic term and each renewal term. Further, the Lease Documents
contain covenants requiring maintenance by the Company of certain
financial ratios and restricting the Company's ability to pay
dividends, make payments to affiliates, make investments and incur
indebtedness.

Annual rental payments under the Lease will be approximately
$19.2 million through 1997, $21.4 million in 1998 and $23.5 million
through the end of the basic 15-year term. Viskase is required to
provide credit support consisting of a standby letter of credit in an
amount up to one year's rent through at least 1997. This credit
support can be reduced up to $4 million currently if the Company
achieves and maintains certain financial ratios. As of December 28,
1995, the Company had met the required financial ratios and the
letter of credit has been reduced by $4 million. The letter can be
further reduced in 1997 or eliminated after 1998 if the Company
achieves and maintains certain financial ratios. Envirodyne and its
other principal subsidiaries guaranteed the obligations of Viskase
under the Lease.

The 1996 GECC lease payment of $19,227 was paid on February 28, 1996.
Principal payments under the capital lease obligations for the years
ended 1996 through 2000 range from approximately $6 million to
$14 million.

The following is a schedule of minimum future lease payments under
the capital lease obligations together with the present value of the
net minimum lease payments as of December 28, 1995:

Year ending December
    1996                                         $ 19,714
    1997                                           19,658
    1998                                           21,636
    1999                                           23,766
    2000                                           23,766
    Thereafter                                    118,028
                                                 --------
    Net minimum lease payments                    226,568
    Less: Amount representing interest            (77,315)
                                                 --------
                                                 $149,253
                                                 ========

Aggregate maturities of remaining long-term debt for each of the next
five fiscal years are:

                                                   Total 
                                                  -------
            1996                                  $ 9,019
            1997                                    9,418
            1998                                   12,313
            1999                                   95,477
            2000                                   95,669

10.  OPERATING LEASES (dollars in thousands)

The Company has operating lease agreements for machinery, equipment
and facilities. The majority of the facilities leases require the
Company to pay maintenance, insurance and real estate taxes.

Future minimum lease payments for operating leases that have initial
or remaining noncancelable lease terms in excess of one year as of
December 28, 1995, are:

            1996                              $3,033
            1997                               2,291
            1998                               1,708
            1999                                 588
            2000                                 375
            Total thereafter                        
                                              ------
            Total minimum lease payments      $7,995
                                              ======

Total rent expense during 1995, 1994 and 1993 amounted to $6,749,
$5,982 and $5,401, respectively.


11.  RETIREMENT PLANS

The Company and its subsidiaries have defined contribution and
defined benefit plans varying by country and subsidiary.

At December 28, 1995, the North American operations of Viskase
maintained several non-contributory defined benefit retirement plans.
The Viskase plans cover substantially all salaried and full-time
hourly employees, and benefits are based on final average
compensation and years of credited service. The Company's policy is
to fund the minimum actuarially computed annual contribution required
under the Employee Retirement Income Security Act of 1974 (ERISA).

As of the Viskase acquisition date, the former owner assumed the
liability for the accumulated benefit obligation under its plans. The
effect of expected future compensation increases on benefits accrued
is recorded as a liability on the Company's consolidated balance
sheet.


<PAGE>
PENSIONS -- NORTH AMERICA (dollars in thousands):

Net pension cost for the Viskase North American plans consisted of:

                              December 30, January 1,   January 1,
                                1994 to        to          to
                             December 28, December 29, December 31,
                                 1995         1994        1993    
                             -----------  -----------  -----------
Service cost -- benefits
   earned during the year       $3,238       $ 3,662     $ 3,186
Interest cost on projected
   benefit obligation            4,794         4,249       4,000
Actual (gain) loss on
   plan assets                  (7,012)          874      (2,306)
Net amortization and deferral    4,086        (3,696)        (74)
                                ------       -------     -------
Net pension cost                $5,106       $ 5,089     $ 4,806
                                ======       =======     =======

The amounts included in the consolidated balance sheet for the North
American plans of Viskase were:

                                       December 28,  December 29,
                                           1995         1994
                                       -----------   -----------
Actuarial present value of
  benefit obligation:
  Vested benefits                        $45,208        $39,165
  Nonvested benefits                       4,435          4,316
                                         -------        -------
Accumulated benefit obligation            49,643         43,481
Effect of projected future
  compensation increases                  16,566         16,651
                                         -------        -------
Projected benefit obligation              66,209         60,132
Plan assets at fair value,
  primarily listed stocks and investment 
  grade corporate bonds                   43,190         33,678
                                         -------        -------
Amount underfunded                        23,019         26,454
Unrecognized gain (loss)                   7,578          3,778
Unrecognized prior service costs              63             71
                                         -------        -------
Accrued liability included
  in consolidated balance sheet          $30,660        $30,303
                                         =======        =======
Assumed discount rate                      7.5%           8.0%
Assumed long-term compensation factor      4.5%           5.0%
Assumed long-term return on plan assets    8.5%           8.5%

SAVINGS PLANS (dollars in thousands):

The Company also has defined contribution savings and similar plans,
which vary by subsidiary, and, accordingly, are available to
substantially all full-time U.S. employees not covered by collective
bargaining agreements. The Company's aggregate contributions to these
plans are based on eligible employee contributions and certain other
factors. The Company expense for these plans was $2,134, $2,109 and
$2,026 in 1995, 1994, and 1993, respectively.

INTERNATIONAL PLANS (dollars in thousands):

The Company maintains various pension and statutory separation pay
plans for its European employees. The expense for these plans in
1995, 1994 and 1993 was $1,383, $1,043 and $864, respectively. As of
their most recent valuation dates, in plans where vested benefits
exceeded plan assets, the actuarially computed value of vested
benefits exceeded those plans' assets by approximately $2,856;
conversely, 
plan assets exceeded the vested benefits in certain other plans by
approximately $2,346.

OTHER POSTRETIREMENT BENEFITS (dollars in thousands):

The Company provides postretirement health care and life insurance
benefits to Viskase's North American employees. The Company does not
fund postretirement health care and life benefits in advance, and has
the right to modify these plans in the future.

Effective January 1, 1993, the company adopted the provisions of SFAS
No. 106 "Employers' Accounting for Postretirement Benefits Other Than
Pensions." SFAS No. 106 requires that the expected cost of these
benefits must be charged to expense during the years that the
employee renders service. In connection with the 1989 acquisition of
the Company, an accrual of $15,000 had been recorded for the
estimated postretirement benefits liability at the acquisition date.
On January 1, 1993, an additional liability and transition obligation
was recorded on a prospective basis for $6,500. The transaction
obligation was to be amortized over 20 years. Subsequently, Fresh
Start Reporting resulted in the write-off of the transition
obligation and statement of the liability for postretirement health
care and life insurance benefits at fair value. Net periodic
postretirement benefit cost for 1995 and 1994 includes the following
components:

<PAGE>
<TABLE>
<CAPTION>
                                                     Medical                       Life                        Total
                                               --------------------       -------------------       --------------------
                                                1995         1994          1995        1994          1995         1994
                                               -------     --------       -------    --------       ------      --------
<S>                                          <C>          <C>            <C>        <C>           <C>         <C>
Components of net periodic
  postretirement 
  benefit cost:
  Service cost -- benefits earned
    during the current year                       $413      $   511       $   162      $  176       $  575      $   687
  Interest cost -- on accumulated post-
    retirement benefit obligation                1,182        1,208           472         442        1,654        1,650
  Amortization of unrecognized transition 
    benefit                                        (73)                       (17)                     (90)             
                                               -------     --------      --------     -------      -------     --------
  Net periodic benefit cost                     $1,522      $ 1,719       $   617      $  618       $2,139      $ 2,337
                                               =======     ========      ========     =======      =======     ========
Actuarial present value of
  benefit obligations:
  Retirees                                      $6,937      $ 6,836       $ 2,745      $2,184      $ 9,682      $ 9,020
  Fully eligible active participants             2,309        2,238         2,409       2,435        4,718        4,673
  Other active participants                      7,411        7,660         1,624       1,612        9,035        9,272
                                               -------     --------      --------     -------      -------     --------
             Total                              16,657       16,734         6,778       6,231       23,435       22,965
  Unrecognized gains                             1,616          979           622         581        2,238        1,560
  Unrecognized prior service costs                (109)                                               (109)             
                                               -------     --------      --------     -------      -------     --------
Accumulated postretirement
  benefit obligation                           $18,164      $17,713       $ 7,400      $6,812      $25,564      $24,525
                                               =======     ========      ========     =======      =======     ========
<FN>
Assumed discount rate                                       7.50%
Assumed medical trend rate                                 11.00% in 1995 decreasing to 6.50% in 2004
Assumed long-term compensation factor                       4.50%
(/TABLE>

<PAGE>

The postretirement benefit obligation was determined by application
of the terms of the various plans, together with relevant actuarial
assumptions. The effect of a 1% annual increase in these assumed
cost trend rates would increase the accumulated postretirement
benefit obligation at December 28, 1995 and December 29, 1994 by
$178 and $198, respectively, and the service and interest cost
components for 1995 and 1994 by a total of $16 and $22,
respectively.

EMPLOYEE RELATIONS

The Company generally maintains productive and amicable
relationships with its 4,900 employees worldwide. One of Viskase's
domestic plants, located in Loudon, Tennessee, is unionized, and
all of its Canadian and European plants have unions. Employees at
the Company's European plants are unionized with negotiations
occurring at both local and national levels. Contracts have
recently been reached with certain of the European unions. Based on
past experience and current conditions, the Company does not expect
a protracted work stoppage to occur; however, national events
outside of the Company's control may give rise to such risk. From
time to time union organization efforts have occurred at other
individual plant locations.

Unions represent a total of approximately 1,500 of Viskase's 4,000
employees. None of Clear Shield's approximate 514 employees are
represented by unions. Certain of the hourly production personnel
at Sandusky's Ohio thermoforming facility are members of a union.
As of December 28, 1995, approximately 1,675 of the Company's
employees are covered by collective bargaining agreements that will
expire within one year.


12.  INCOME TAXES (dollars in thousands)

The provision (benefit) for income taxes consisted of:


                           December 30,  January 1,    January 1,
                             1994 to        to            to
                           December 28, December 29,  December 31,
                               1995         1994          1993
                           -----------  -----------  -------------
Current:
  Federal                                 $  200
  Foreign                    $  950        4,652        $ 2,453
  State and local                                              
                             ------       ------        -------
                             $  950        4,852          2,453
                             ------       ------        -------
Deferred:
  Federal                    (7,219)        (194)        17,188
  Foreign                     2,098          128         (1,434)
  State and local            (1,329)          14          2,093
                            -------       ------        -------
                             (6,450)         (52)        17,847
                            -------       ------        -------
                            $(5,500)      $4,800        $20,300
                            =======       ======        =======

The income tax benefit for the 1995 period was allocated between
loss before extraordinary loss for $2,918 and to the extraordinary
loss for $2,582.

The income tax expense for the 1993 period was allocated between
loss before extraordinary gain for $12,000 and to the extraordinary
gain for $8,300.

A reconciliation from the statutory federal tax rate to the
consolidated effective tax rate follows:

                           December 30,  January 1,    January 1,
                             1994 to        to            to
                           December 28, December 29,  December 31,
                               1995         1994          1993
                           -----------  -----------  -------------

Statutory federal tax rate     (35.0)%      35.0%        35.0%
Increase (decrease)
  in tax rate due to:
  State and local taxes net
    of related federal
    tax benefit                 (3.2)         .8          1.3
  Net effect of taxes 
    relating to foreign
    operations                    .8       140.3          1.5
  Intangibles amortization       9.4       214.1          2.3
  Non-taxable debt discharge
    income, fresh start
    accounting 
    and other bankruptcy
    related expenses                                    (22.9)
  Other                          7.6        13.8          2.0
                                ----       -----        -----
Consolidated effective
  tax rate                     (20.4)%     404.0%        19.2%
                               =====       =====        =====

<PAGE>

Temporary differences and carryforwards which give rise to a significant
portion of deferred tax assets and liabilities for 1995 are as follows:

</TABLE>
<TABLE>
<CAPTION>
                                    Temporary Difference              Tax Effected
                                 --------------------------   ---------------------------
                                 Deferred Tax  Deferred Tax   Deferred Tax   Deferred Tax
                                     Assets    Liabilities       Assets      Liabilities
                                 ------------  ------------   ------------   ------------
<S>                               <C>           <C>            <C>           <C>
Depreciation basis differences                   $296,263                     $113,094
Inventory basis differences                        28,097                       10,976
Intangible basis differences                       37,603                       14,665
Lease transaction                   $147,194                    $57,406
Pension and healthcare                56,545                     22,067
Employee benefits accruals            13,544                      5,282
Valuation allowances                   3,209                      1,252
Other accruals and reserves            6,673                      2,602
Foreign exchange and other               648       70,720           216         27,580
                                    --------     --------       -------       --------
                                    $227,813     $432,683       $88,825       $166,315
                                    --------     --------       -------       --------
</TABLE>

At December 28, 1995, the Company had $11,136 of undistributed
earnings of foreign subsidiaries considered permanently invested
for which deferred taxes have not been provided.

At December 28, 1995, the Company had federal income tax net
operating loss carryforwards of approximately $28 million. Such
losses will expire in the year 2009, if not previously utilized. In
addition the Company has alternative minimum tax credit
carryforwards of $3.5 million. Alternative minimum tax credits have
an indefinite carryforward period. Significant limitations on the
utilization of the net operating loss carryforwards and the
alternative minimum tax credit carryforwards exist under federal
income tax rules. 

Domestic earnings or (losses) after extraordinary gain or loss and
before income taxes were approximately $(30,138), $(7,705) and
$107,622 in 1995, 1994 and 1993, respectively. Foreign earnings or
(losses) before income taxes were approximately $3,118, $8,893 and
$(1,733) in 1995, 1994 and 1993, respectively.

The Company joins in filing a U.S. consolidated federal income tax
return including all of its domestic subsidiaries.


13.  COMMITMENTS

As of December 28, 1995, the Company had capital expediture
commitments outstanding of approximately $3.7 million.


14.  CONTINGENCIES (dollars in thousands)

A class action lawsuit by former employees of subsidiary
corporations comprising most of the Company's former steel and
mining division (SMD) was pending as of the commencement of the
bankruptcy case in which the plaintiffs were seeking substantial
damages. In March 1996, Envirodyne completed a settlement of the
lawsuit under which Envirodyne was released and discharged from all
claims in exchange for 900,000 shares of Envirodyne common stock
without any admission or finding of liability or wrongdoing.

Litigation has been initiated with respect to events arising out of
the bankruptcy cases and the 1989 acquisition of Envirodyne by
Emerald with respect to which, although Envirodyne is not presently
a party to such litigation, certain defendants have asserted
indemnity rights against Envirodyne. In ARTRA Group Incorporated v.
                                        --------------------------
Salomon Brothers Holding Company Inc, Salomon Brothers Inc, D.P.
---------------------------------------------------------------
Kelly & Associates, L.P., Donald P. Kelly, Charles K. Bobrinskoy,

----------------------------------------------------------------
James L. Massey, William Rifkind and Michael Zimmerman, Case
------------------------------------------------------
No. 93 A 1616, United States Bankruptcy Court for the Northern
District of Illinois, Eastern Division (Bankruptcy Court), ARTRA
Group Incorporated (ARTRA) alleges breach of fiduciary duty and
tortious inference in connection with the negotiation and
consummation of the Plan of Reorganization. In ARTRA Group
                                               -----------
Incorporated v. Salomon Brothers Holding Company Inc, Salomon
-------------------------------------------------------------
Brothers Inc, D.P. Kelly & Associates, L.P., Donald P. Kelly,
------------------------------------------------------------
Charles K. Bobrinskoy and Michael Zimmerman, Case No. 93 L 2198,
-------------------------------------------
Circuit Court of the Eighteenth Judicial Circuit, County of DuPage,
State of Illinois, ARTRA alleges breach of fiduciary duty,
fraudulent and negligent misrepresentation and breach of contract
in connection with the 1989 acquisition of Envirodyne by Emerald.
The plaintiff seeks damages in the total amount of $136.2 million
plus interest and punitive damages of $408.6 million. D.P. Kelly &
Associates, L.P. and Messrs. Kelly, Bobrinskoy, Massey, Rifkind and
Zimmerman have asserted common law and contractual rights of
indemnity against Envirodyne for attorneys' fees, costs and any
ultimate liability relating to the claims set forth in the
complaints. Upon the undertaking of D.P. Kelly & Associates, L.P.
to repay such funds in the event it is ultimately determined that
there is no right to indemnity, Envirodyne is advancing funds to
D.P. Kelly & Associates, L.P. and Mr. Kelly for the payment of
legal fees in the case pending before the Bankruptcy Court.
Although the Company is not a party to either case, the Company
believes that the plaintiff's claims raise similar factual issues
to those raised in the bankruptcy cases which, if adjudicated in a
manner similar to that in the bankruptcy cases, would render it
difficult for the plaintiff to establish liability. Accordingly,
the Company believes that the indemnification claims would not have
a material adverse effect upon the business or financial position
of the Company, even if the claimants were ultimately successful in
establishing their right to indemnification.

Certain of Envirodyne's stockholders prior to the acquisition of
Envirodyne by Emerald failed to exchange their certificates
representing old Envirodyne common stock for the $40 per share cash
merger consideration specified by the applicable acquisition
agreement. In the Envirodyne bankruptcy case, Envirodyne sought to
equitably subordinate the claims of the holders of untendered
shares, so that such holders would not receive a distribution under
the Plan of Reorganization. The Bankruptcy Court granted
Envirodyne's motion for summary judgment and equitably subordinated
the claims of the holders of untendered shares to the claims of
other general unsecured creditors. Certain of the affected holders
appealed and both the U.S. District Court and the U.S. Seventh
Circuit Court of Appeals affirmed the Bankruptcy Court decision.
The time period for further appeal has not passed. Envirodyne
believes that, even in the event of further appeal, if any, and
reversal of the prior decisions, the maximum number of shares of
common stock that it would be required to issue to such claimants
is approximately 106,000.

Clear Shield National, Inc. and some of its employees have received
subpoenas from the Antitrust Division of the United States
Department of Justice relating to a grand jury investigation of the
disposable plastic cutlery industry. The U.S. Department of Justice
has advised a former officer and an existing employee that they are
targets of the investigation. Both individuals were invited to
appear and testify before the grand jury but both declined. Clear
Shield National is cooperating fully with the investigation.

In February 1996 Clear Shield National and three other plastic
cutlery manufacturers were named as defendants in the following
three civil complaints: Eisenberg Brothers, Inc., on behalf of
                        --------------------------------------
itself and all others similarly situated, v. Amcel Corp., Clear
---------------------------------------------------------------
Shield National, Inc., Dispoz-O Plastics Corp. and Benchmark
------------------------------------------------------------
Holdings, Inc. t/a Winkler Products, Civil Action No. 96-728,
-----------------------------------
United States District Court for the Eastern District of
Pennsylvania; St. Cloud Restaurant Supply Company v. Amcel Corp.,
              -------------------------------------------------
Clear Shield National, Inc., Dispoz-O Plastics Corp. and Benchmark
------------------------------------------------------------------
Holdings, Inc. t/a Winkler Products, Case No. 96C 0777, United
-----------------------------------
States District Court for the Northern District of Illinois,
Eastern Division; and Servall Products, Inc., on behalf of itself
                      -------------------------------------------
and all others similarly situated, v. Amcel Corporation, Clear
--------------------------------------------------------------
Shield National, Inc., Dispoz-O Plastics Corporation and Benchmark
------------------------------------------------------------------
Holdings, Inc. t/a Winkler Products, Civil Action No. 96-1116,
-----------------------------------
United States District Court for the Eastern District of
Pennsylvania. Each of the complaints alleges, among other things,
that from October 1990 through April 1992 the defendants unlawfully
conspired to fix the prices at which plastic cutlery would be sold.
The Company has informed the plaintiffs that such claims as they
relate to Clear Shield were discharged by the order of the
Bankruptcy Court and Plan of Reorganization and that the plaintiffs
are permanently enjoined from pursuing legal action to collect
discharged claims.

On February 27, 1996, the plaintiff in the St. Cloud case
                                           ---------
voluntarily dismissed the action without prejudice and refiled its
action in the U.S. District Court for the Eastern District of
Pennsylvania but did not name Clear Shield National as a defendant.
On March 14, 1996, Eisenberg Brothers Inc. filed a motion in Clear
Shield National's Bankruptcy proceeding in the U.S. Bankruptcy
Court for the Northern District of Illinois, Eastern Division.
Eisenberg Brothers Inc.'s motion contends that the Bankruptcy
Court's order did not discharge the plaintiff's claim.

The Company and its subsidiaries are involved in various legal
proceedings arising out of its business and other environmental
matters, none of which is expected to have a material adverse
effect upon its results of operations, cash flows or financial
position.


15.  CAPITAL STOCK, PAID IN CAPITAL, AND WARRANTS

Authorized shares of preferred stock ($.01 par value per share) and
common stock ($.01 par value per share) for the reorganized
Envirodyne are 25,000,000 shares and 50,000,000 shares,
respectively. 13,579,460 shares of common stock were issued and
outstanding as of December 28, 1995. In accordance with the Plan of
Reorganization, an additional 64,460 shares of common stock and
15,000 shares of common stock were issued to the general unsecured
creditors of Envirodyne during 1995 and 1994, respectively. (Refer
to Note 1.)

Prior to the December 31, 1993 reorganization, the authorized
shares of preferred stock and common stock were 1,000 shares and
320 shares, respectively.

Envirodyne issued 1,500,000 warrants pursuant to the Plan of
Reorganization, exercisable at any time until December 31, 1998.
Each warrant was initially exercisable for one share of common
stock at an initial exercise price of $17.25 per share. The
exercise price and the number of shares of common stock for which
a warrant is exercisable were adjusted as a result of the issuance
of certain shares of Envirodyne after the consummation of the Plan
of Reorganization, including the issuance of shares in settlement
of the SMD lawsuit discussed in Note 14. Under terms of the warrant
agreement, the exercise price has been adjusted from $17.25 to
$16.08 per share and the number of common shares for which each
warrant is exercisable has been adjusted from 1.000 share to 1.073
shares.


16.  STOCK OPTIONS

At December 28, 1995, the Company had outstanding options under the
1993 Stock Option Plan. Options were issued to certain employees to
purchase shares at not less than the fair market value of the
shares on the grant date. The plan options generally vest in three
equal annual amounts beginning one year from the grant date and
expire ten years from the grant date, subject to the acceleration
of exercisability upon the occurrence of certain events. Such an
acceleration event occurred in both November 1994 and August 1995.

During 1995, each non-employee director of the Company received
options to purchase 2,000 shares of stock at not less than the fair
market value of the shares on the date of grant. The non-employee
director options are fully exercisable upon issuance. Pursuant to
the 1993 Stock Option Plan, on the date of each subsequent annual
meeting of stockholders, non-employee directors will automatically
be granted non-qualified options to purchase 1,000 shares of Common
Stock at an option exercise price equal to the fair market value of
a share of Common Stock on the date of grant.

Stock option activity for the years ended December 28, 1995 and
December 29, 1994 were:

                                         Number of
                                          Option    Option Price
                                          Shares     Per Share
                                         ---------  ------------
Outstanding, December 31, 1993
  Granted                                 402,020      $5.06
  Exercised
  Terminated                              (13,100)      5.06
                                          -------
Outstanding, December 29, 1994            388,920       5.06
  Granted                                  97,200       5.06
  Exercised
  Terminated                              (61,890)      5.06
                                          -------
Outstanding, December 28, 1995            424,230       5.06
                                          =======


17.  FAIR VALUE OF FINANCIAL INSTRUMENTS (dollars in thousands)

The following table presents the carrying value and estimated fair
value as of December 28, 1995 of the Company's financial
instruments. (Refer to Notes 3 and 9.)

                                             Carrying   Estimated
                                              Value    Fair  Value
                                             --------  -----------
Assets:
  Cash and equivalents                       $ 30,325   $ 30,325
  Foreign currency contracts                    3,397      3,377
  Interest rate agreements                        561          3

Liabilities:
  Long-term debt (excluding capital leases)   393,432    318,053


18.  PATENT LITIGATION SETTLEMENT (dollars in thousands)

In 1989 certain competitors of Viskase filed a declaratory action
challenging the validity and enforceability of a Viskase patent
relating to casings used in the manufacture of food products. In
May 1994, the trial court upheld the validity and enforceability of
the Viskase patent and found infringement of the patent. Before the
trial on damages was conducted, Viskase entered into agreements to
settle the claims and grant licenses to the competitors. Under the
terms of these agreements Viskase received $9,457 for past
infringement and advance royalties and established royalty rates
for future patent use.


19.  RESEARCH AND DEVELOPMENT COSTS (dollars in thousands)

Research and development costs are expensed as incurred and totaled
$11,034, $16,852 and $15,216, for 1995, 1994, and 1993,
respectively.


20.  RELATED PARTY TRANSACTIONS (dollars in thousands)

During fiscal 1995, 1994 and 1993, the Company paid DPK $770 for
management services. In fiscal 1995, 1994 and 1993, the Company
made payments of approximately $156, $560 and $354, respectively,
to an affiliate of DPK for the use of a jet aircraft on an
as-needed basis.

During fiscal 1995, 1994, and 1993, the Company purchased product
and services from affiliates of DPK in the amounts of approximately
$1,537, $1,367 and $941, respectively. During fiscal 1995, 1994,
and 1993, the Company sublet office space from DPK for which it
paid approximately $151, $151 and $150, respectively, in rent.
During fiscal 1995, the Company reimbursed a non-affiliated medical
plan in the aggregate amount of $79,344 for medical claims of
Messrs. Kelly, Gustafson and Corcoran.

During fiscal 1995 and 1994, the Company advanced funds to and made
payments on behalf of DPK and Donald P. Kelly in the amounts of
approximately $52 and $118, respectively, for legal fees related to
the litigation involving ARTRA Group Incorporated (refer to
Note 14).


21.   BUSINESS SEGMENT INFORMATION AND GEOGRAPHIC
      AREA INFORMATION (dollars in thousands)

Envirodyne primarily manufactures and sells polymeric food casings
and plastic packaging films and containers (food packaging
products) and disposable foodservice supplies. The Company's
operations are primarily in North/South America and Europe.
Intercompany sales and charges (including royalties) have been
reflected as appropriate in the following information. Other income
for 1995, 1994, and 1993 includes net foreign exchange transaction
gains (losses) of approximately $(61), $2,707, and $(4,631),
respectively.

<PAGE>
Business Segment Information

<TABLE>
<CAPTION>
                                      December 30,    January 1,    January 1,
                                         1994 to         to            to
                                       December 28,  December 29,  December 31,
                                          1995           1994         1993
                                       -----------   -----------   -----------
<S>                                    <C>           <C>          <C>
Net sales:
  Food packaging products                $574,266      $530,179     $522,363
  Disposable foodservice supplies          76,138        68,996       66,383
  Other and eliminations                     (192)         (146)      (1,361)
                                         --------      --------     --------
                                         $650,212      $599,029     $587,385
                                         ========      ========     ========
Earnings before income taxes:
Operating income:
  Food packaging products                 $39,183      $ 48,145     $ 53,432
  Disposable foodservice supplies           4,959         6,514        5,223
  Unallocated expenses, net
    -- primarily corporate                 (6,007)       (5,982)      (5,023)
                                         --------      --------     --------
                                           38,135        48,677       53,632

Interest expense, net                      56,666        49,207       30,259
Other expense (income), net                 1,710        (1,668)       5,540
Minority interest in
  loss of subsidiary                                         50          717
                                         --------      --------     --------
                                         $(20,241)     $  1,188     $ 18,550
                                         ========      ========     ========
Identifiable assets:
  Food packaging products                $796,655      $814,731     $790,125
  Disposable foodservice supplies          69,812        71,530       64,879
  Corporate and other,
    primarily cash equivalents             33,100        10,375       12,676
                                         --------      --------     --------
                                         $899,567      $896,636     $867,680
                                         ========      ========     ========
Depreciation and amortization
   under capital lease and 
  amortization of intangibles expense:
  Food packaging products                 $51,404      $ 47,207     $ 46,715
  Disposable foodservice supplies           4,581         4,125        5,624
  Corporate and other                          76            55           59
                                         --------      --------     --------
                                          $56,061      $ 51,387     $ 52,398
                                         ========      ========     ========
Capital expenditures:
  Food packaging products                 $30,744      $ 28,534     $ 37,673
  Disposable foodservice supplies           3,687         4,012        3,100
  Corporate and other                          34            20          114
                                         --------      --------     --------
                                          $34,465      $ 32,566     $ 40,887
                                         ========      ========     ========
</TABLE>

<PAGE>

Geographic Area Information
<TABLE>
<CAPTION>
                                       December 30,   January 1,    January 1,
                                         1994 to         to            to
                                       December 28,  December 29,  December 31,
                                          1995           1994         1993
                                       -----------   -----------   -----------
<S>                                    <C>           <C>          <C>
Net sales:
  North/South American operations        $440,539      $423,049     $426,644
  European operations                     213,618       184,395      164,717
  Other and eliminations                   (3,945)       (8,415)      (3,976)
                                         --------      --------     --------
                                         $650,212      $599,029     $587,385
                                         ========      ========     ========
Operating profit:
  North/South American operations         $23,028      $ 28,124     $ 37,495
  European operations                      15,373        20,553       16,137
  Other and eliminations                     (266)                          
                                         --------      --------     --------
                                          $38,135      $ 48,677     $ 53,632
                                         ========      ========     ========

Identifiable assets:
  North/South American operations        $677,377      $667,358     $669,240
  European operations                     219,802       229,278      198,440
  Other and eliminations                    2,388                           
                                         ========      ========     ========
                                         $899,567      $896,636     $867,680
                                         ========      ========     ========
<FN>
The total assets and net assets of foreign businesses were approximately
$282,383 and $107,023 at December 28, 1995.

</TABLE>

<PAGE>

22.   QUARTERLY DATA (unaudited)

Quarterly financial information for 1995 and 1994 is as follows (in
thousands, except for per share amounts):

                    First    Second     Third     Fourth
Fiscal 1995        Quarter   Quarter   Quarter   Quarter   Annual
----------------  --------  --------  --------  --------  -------- 
Net Sales         $155,824  $165,184  $166,688  $162,516  $650,212
Operating Income     8,689    10,089     8,653    10,704    38,135
Net income (loss)   (3,895)   (7,513)   (4,475)   (5,636)  (21,519)
Net income (loss)
  per share          (0.29)    (0.56)    (0.33)    (0.42)    (1.59)

The second quarter net (loss) includes an extraordinary loss of
$(4.2) million on debt extinguishment.

Net income (loss) per share amounts are computed independently for
each of the quarters presented using weighted average shares
outstanding during each quarter. The sum of the quarterly per share
amounts in 1995 do not equal the total for the year because of
rounding and 1995 stock issuances, as shown on the Consolidated
Statement of Stockholders' Equity.

                     First    Second     Third     Fourth
Fiscal 1994         Quarter   Quarter   Quarter   Quarter  Annual
--------------     --------  --------  --------  -------- -------- 
Net Sales          $142,593  $150,788  $151,883  $153,765 $599,029
Operating Income      9,710    18,739     9,755    10,473   48,677
Net income (loss)    (2,507)    3,448    (3,261)   (1,292)  (3,612)
Net income (loss)
  per share           (0.19)     0.26     (0.24)    (0.10)   (0.27)

The 1994 second quarter operating income benefitted from a
$9.5 million settlement of a patent infringement suit.

Net income (loss) per share amounts are computed independently for
each of the quarters presented using weighted average shares
outstanding during each quarter.


23.  SUBSEQUENT EVENTS (dollars in thousands)

On February 23, 1996, the United States Bankruptcy Court for the
Northern District of Illinois, Eastern District entered an order
approving a settlement agreement resolving all claims of the former
union employees of Wisconsin Steel Company which shut down in March
1980. Under terms of the approved settlement of Frank Lumpkin, et
                                                -----------------
al. v. Envirodyne Industries, Inc. (Lumpkin) and without any
---------------------------------   -------
admission or finding of liability or wrongdoing, Envirodyne was
released and discharged from all claims in exchange for 900,000
shares of common stock.  The distribution is in accordance with the
terms of Envirodyne's Plan of Reorganization under which common
stock was distributed to Envirodyne's general unsecured creditors
in satisfaction of their allowed claims (Refer to Note 1).

The Company issued additional shares of common stock for the
Lumpkin settlement and to the holders of general unsecured claims
-------
of Envirodyne (as opposed to the subsidiaries of Envirodyne) under
terms of the Plan of Reorganization. The total number of shares
outstanding after issuance of common stock for the Lumpkin
                                                   -------
settlement and for additional distribution to holders of general
unsecured claims of Envirodyne is 14,479,721.

Under terms of the Plan of Reorganization, Envirodyne issued
warrants to purchase 10% of the fully diluted common stock. The
issuance of common stock pursuant to the Lumpkin settlement,
                                         -------
together with other issuances of common stock since the
consummation of the Plan of Reorganization, caused an adjustment to
the exercise price of the warrants and the number of shares of
common stock for which a warrant is exercisable. The exercise price
was adjusted from $17.25 to $16.08 per share and the number of
common shares for which each warrant is exercisable was adjusted
from 1.000 share to 1.073 shares.

On March 15, 1996 the United States Court of Appeals for the
Seventh Circuit affirmed the decisions of the U.S. District Court
and the Bankruptcy Court to equitably subordinate the claims of
holders of untendered shares to claims of the other general
unsecured creditors (refer to Note 14). The time period for further
appeal has not passed. Envirodyne believes that even in the event
of further appeal, if any, and reversal of the prior decisions, the
maximum number of shares of common stock that it would be required
to issue to such claimants is approximately 106,000.


24.  SUBSIDIARY GUARANTORS

Envirodyne's payment obligations under the Senior Secured Notes are
fully and unconditionally guaranteed on a joint and several basis
(collectively, Subsidiary Guarantees) by Viskase Corporation,
Viskase Holding Corporation, Viskase Sales Corporation, Clear
Shield National, Inc., Sandusky Plastics, Inc. and Sandusky
Plastics of Delaware, Inc., each a direct or indirect wholly-owned
subsidiary of Envirodyne and each a "Guarantor." These subsidiaries
represent substantially all of the operations of Envirodyne
conducted in the United States. The remaining subsidiaries of
Envirodyne generally are foreign subsidiaries or otherwise relate
to foreign operations.

The obligations of each Guarantor under its Subsidiary Guarantee
are the senior obligation of such Guarantor, and are
collateralized, subject to certain permitted liens, by
substantially all of the domestic assets of the Guarantor and, in
the case of Viskase Holding Corporation, by a pledge of 65% of the
capital stock of Viskase S.A. The Subsidiary Guarantees and
security are shared with the lenders under the Revolving Credit
Agreement on a pari passu basis and are subject to the priority
interest of the holders of obligations under the Letter of Credit
Facility, each pursuant to an intercreditor agreement.

The following consolidating condensed financial data illustrate the
composition of the combined Guarantors. No single Guarantor has any
significant legal restrictions on the ability of investors or
creditors to obtain access to its assets in the event of default on
the Subsidiary Guarantee other than its subordination to senior
indebtedness described above. Separate financial statements of the
Guarantors are not presented because management has determined that
these would not be material to investors. Based on the book value
and the market value of the pledged securities of Viskase
Corporation, Viskase Sales Corporation, Clear Shield National,
Inc., Sandusky Plastics, Inc. and Sandusky Plastics of Delaware,
Inc., these Subsidiary Guarantors do not constitute a substantial
portion of the collateral and, therefore, the separate financial
statements of these subsidiaries have not been provided. Separate
audited financial statements of Viskase Holding Corporation are
being filed within.

Investments in subsidiaries are accounted for by the parent and
Subsidiary Guarantors on the equity method for purposes of the
supplemental consolidating presentation. Earnings of subsidiaries
are therefore reflected in the parent's and Subsidiary Guarantors'
investment accounts and earnings. The principal elimination entries
eliminate investments in subsidiaries and intercompany balances and
transactions.

<PAGE>

    ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
           CONSOLIDATING BALANCE SHEETS
                DECEMBER 28, 1995
<TABLE>
<CAPTION>

                                                        Guarantor      Nonguarantor                     Consolidated
                                             Parent    Subsidiaries    Subsidiaries  Eliminations (1)      Total    
                                        -------------  -------------  -------------  ----------------  -------------
                                                                 (in thousands)

<S>                                       <C>           <C>            <C>            <C>              <C>
ASSETS
  Current assets:
    Cash and equivalents                    $ 18,013      $    486       $ 11,826                        $ 30,325
    Receivables and advances, net             52,462        70,458         57,082       $ (90,548)         89,454
    Inventories                                             63,355         38,233          (2,114)         99,474
    Other current assets                         176        12,364          9,106                          21,646
                                            --------      --------       --------       ---------        --------
      Total current assets                    70,651       146,663        116,247         (92,662)        240,899

Property, plant and equipment including
  those under capital lease                      261       394,813        150,417                         545,491
  Less accumulated depreciation
    and amortization                             150        55,620         20,217                          75,987
                                            --------      --------       --------       ---------        --------
Property, plant and equipment, net               111       339,193        130,200                         469,504

Deferred financing costs                       7,048                        1,042                           8,090
Other assets                                                43,720          1,869                          45,589
Investment in subsidiaries                    77,766       133,634                       (211,400) 
Excess reorganization value                                 94,968         40,517                         135,485
                                            --------      --------       --------       ---------        --------
                                            $155,576      $758,178       $289,875       $(304,062)       $899,567
                                            ========      ========       ========       =========        ========
LIABILITIES & STOCKHOLDERS' EQUITY
  Current liabilities:
    Short-term debt including current 
      portion of long-term debt and 
      obligation under capital lease                        $6,407         $6,097                       $  12,504
    Accounts payable and advances            $    80        78,848         50,737       $ (90,548)         39,117
    Accrued liabilities                        8,126        37,488         21,939                          67,553
                                            --------      --------       --------       ---------        --------
      Total current liabilities                8,206       122,743         78,773         (90,548)        119,174

Long-term debt including obligation
  under capital lease                        379,262       143,198          7,721                         530,181

Accrued employee benefits                                   51,345          4,281                          55,626
Deferred and noncurrent income taxes          34,088        17,507         25,895                          77,490
Intercompany loans                          (383,076)      340,000         43,083              (7)

Commitments and contingencies

Stockholders' equity:
  Preferred stock, $.01 par value;
    none outstanding
  Common stock, $.01 par value;
    13,579,460 shares issued and
    outstanding                                  136             3         32,738         (32,741)            136
  Paid in capital                            134,864       103,955         87,871        (191,826)        134,864
  Accumulated earnings (deficit)             (25,131)      (27,752)         2,334          25,418         (25,131)
  Cumulative foreign currency
    translation adjustments                    7,227         7,179          7,179         (14,358)          7,227
                                            --------      --------       --------       ---------        --------
    Total stockholders' equity               117,096        83,385        130,122        (213,507)        117,096
                                            --------      --------       --------       ---------        --------
                                            $155,576      $758,178       $289,875       $(304,062)       $899,567
                                            ========      ========       ========       =========        ========
<FN>
(1)  Elimination of intercompany receivables, payables and investment accounts.
</TABLE>

<PAGE>
      ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
              CONSOLIDATING BALANCE SHEETS
                   DECEMBER 29, 1994
<TABLE>
<CAPTION>
                                                        Guarantor      Nonguarantor                    Consolidated
                                             Parent    Subsidiaries    Subsidiaries  Eliminations (1)      Total    
                                                                 (in thousands)
                                          -----------  ------------   ------------   -------------    --------------
<S>                                       <C>           <C>            <C>            <C>              <C>
ASSETS
  Current assets:
    Cash and equivalents                    $    555      $  1,853       $  4,881                         $ 7,289
    Receivables and advances, net             33,508        63,949         49,378       $ (59,967)         86,868
    Inventories                                             68,719         43,725          (1,961)        110,483
    Other current assets                         181        12,999          6,286                          19,466
                                            --------      --------       --------       ---------        --------
      Total current assets                    34,244       147,520        104,270         (61,928)        224,106

Property, plant and equipment including
  those under capital lease                      189       367,880        138,030                         506,099
  Less accumulated depreciation
    and amortization                              55        26,739          8,967                          35,761
                                            --------      --------       --------       ---------        --------
Property, plant and equipment, net               134       341,141        129,063                         470,338

Deferred financing costs                       8,062                        1,081                           9,143
Other assets                                                45,757          1,424                          47,181
Investment in subsidiaries                    91,576       116,360                       (207,936)
Excess reorganization value                                102,230         43,638                         145,868
                                            --------      --------       --------       ---------        --------
                                            $134,016      $753,008       $279,476       $(269,864)       $896,636
                                            ========      ========       ========       =========        ========
LIABILITIES & STOCKHOLDERS' EQUITY
  Current liabilities:
    Short-term debt including current 
      portion of long-term debt and 
      obligation under capital lease        $ 11,100      $  7,720         $6,978                       $  25,798
    Accounts payable and advances                726        53,193         40,383       $ (59,967)         34,335
    Accrued liabilities                       10,254        36,634         25,358                          72,246
                                            --------      --------       --------       ---------        --------
      Total current liabilities               22,080        97,547         72,719         (59,967)        132,379

Long-term debt including obligation
  under capital lease                        327,437       147,898         14,023                         489,358

Accrued employee benefits                                   52,248          3,969                          56,217
Deferred and noncurrent income taxes          29,006        31,927         22,400                          83,333
Intercompany loans                          (379,856)      340,000         39,856

Commitments and contingencies

Stockholders' equity:
  Preferred stock, $.01 par value;
    none outstanding
  Common stock, $.01 par value;
    13,515,000 shares issued and
    outstanding                                  135             4         32,608         (32,612)            135
  Paid in capital                            134,865        87,805         87,440        (175,245)        134,865
  Accumulated earnings (deficit)              (3,612)       (8,333)         2,549           5,784          (3,612)
  Cumulative foreign currency
    translation adjustments                    3,961         3,912          3,912          (7,824)          3,961
                                            --------      --------       --------       ---------        --------
    Total stockholders' equity               135,349        83,388        126,509        (209,897)        135,349
                                            --------      --------       --------       ---------        --------
                                            $134,016      $753,008       $279,476       $(269,864)       $896,636
                                            ========      ========       ========       =========        ========
<FN>
(1)  Elimination of intercompany receivables, payables and investment accounts.
</TABLE>

<PAGE>

         ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
            CONSOLIDATING STATEMENTS OF OPERATIONS
             FOR THE YEAR ENDED DECEMBER 28, 1995
<TABLE>
<CAPTION>
                                                        Guarantor       Nonguarantor                   Consolidated
                                             Parent    Subsidiaries    Subsidiaries    Eliminations        Total    
                                          ----------   ------------   -----------     ------------     -------------
                                                                 (in thousands)
<S>                                       <C>           <C>            <C>            <C>              <C>
NET SALES                                                 $417,756       $267,212        $(34,756)       $650,212

COSTS AND EXPENSES
  Cost of sales                                            312,419        207,232         (34,603)        485,048
  Selling, general and administrative         $6,004        65,318         39,908                         111,230
  Amortization of intangibles and
    excess reorganization value                             12,466          3,333                          15,799
                                            --------      --------       --------       ---------        --------
OPERATING INCOME (LOSS)                       (6,004)       27,553         16,739            (153)         38,135

  Interest income                                203            12            455                             670
  Interest expense                            40,081        13,902          3,353                          57,336
  Intercompany interest expense (income)     (38,218)       34,007          4,211    
  Management fees (income)                    (8,086)        6,377          1,709
  Other expense (income), net                 (2,400)           52          4,058                           1,710
  Equity Loss (income) in subsidiary          19,571           216                        (19,787)               
                                            --------      --------       --------       ---------        --------
INCOME (LOSS) BEFORE INCOME TAXES
   AND EXTRAORDINARY ITEM                    (16,749)      (26,989)         3,863          19,634         (20,241)
  Income tax provision (benefit)               1,264        (7,570)         3,388                          (2,918)
                                            --------      --------       --------       ---------        --------
INCOME (LOSS) BEFORE EXTRAORDINARY
   ITEM                                      (18,013)      (19,419)           475          19,634         (17,323)
  Extraordinary loss, net of tax               3,506                          690                           4,196
                                            --------      --------       --------       ---------        --------
NET (LOSS)                                  $(21,519)    $ (19,419)        $ (215)      $  19,634        $(21,519)
                                            ========      ========       ========       =========        ========
</TABLE>


            ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                    CONSOLIDATING CASH FLOWS
              FOR THE YEAR ENDED DECEMBER 28, 1995

<TABLE>
<CAPTION>
                                                        Guarantor       Nonguarantor                   Consolidated
                                             Parent    Subsidiaries    Subsidiaries    Eliminations        Total    
                                          -----------  -------------  --------------- --------------  ---------------
                                                                 (in thousands)
<S>                                       <C>           <C>            <C>            <C>              <C>
Net cash provided by (used in)
  operating activities                     $ (13,276)     $ 32,242        $20,001                        $ 38,967
Cash flows from investing activities:
  Capital expenditures                           (34)      (27,842)        (6,589)                        (34,465)
  Proceeds from sale of property, plant
    and equipment                                               39             47                              86
                                            --------      --------       --------       ---------        --------
      Net cash (used in)
        investing activities                     (34)      (27,803)        (6,542)                        (34,379)

Cash flows from financing activities:
  Proceeds from revolving loan and
    long term borrowings                     164,000         1,706         42,216                         207,922
  Deferred financing costs                    (6,721)                      (1,166)                         (7,887)
  Repayment of revolving loan, long-term
    borrowings and capital lease
    obligations                             (123,275)       (7,512)       (50,588)                       (181,375)
  Increase (decrease) in Envirodyne loan      (3,236)                       3,236                                
                                            --------      --------       --------       ---------        --------
      Net cash provided by (used in)
        financing activities                  30,768        (5,806)        (6,302)                         18,660
Effect of currency exchange rate changes
  on cash                                                                    (212)                           (212)
                                            --------      --------       --------       ---------        --------
Net increase (decrease) in cash
  and equivalents                             17,458        (1,367)         6,945                          23,036
Cash and equivalents at beginning
  of period                                      555         1,853          4,881                           7,289
                                            --------      --------       --------       ---------        --------
Cash and equivalents at end
  of period                                  $18,013      $    486        $11,826                         $30,325
                                            ========      ========       ========       =========        ========
</TABLE>

<PAGE>

       ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
          CONSOLIDATING STATEMENTS OF OPERATIONS
          FOR THE YEAR ENDED DECEMBER 29, 1994

<TABLE>
<CAPTION>
                                                        Guarantor      Nonguarantor                    Consolidated
                                             Parent    Subsidiaries    Subsidiaries    Eliminations        Total    
                                          -----------  ------------    -------------  --------------  ---------------
                                                                 (in thousands)
<S>                                       <C>           <C>            <C>            <C>              <C>
NET SALES                                                 $406,988       $220,787        $(28,746)       $599,029
  Patent infringement settlement income                      9,457                                          9,457

COSTS AND EXPENSES
  Cost of sales                                            295,356        168,891         (28,487)        435,760
  Selling, general and administrative         $6,015        71,092         31,330                         108,437
  Amortization of intangibles and
    excess reorganization value                             12,266          3,346                          15,612
                                            --------      --------       --------       ---------        --------
OPERATING INCOME (LOSS)                       (6,015)       37,731         17,220            (259)         48,677

  Interest income                                 13            46            248                             307
  Interest expense                            31,937        14,124          3,453                          49,514
  Intercompany interest expense (income)     (35,077)       31,170          3,907
  Management fees (income)                    (7,400)        6,544            856
  Other expense (income), net                 (3,448)            7          1,923            (150)         (1,668)
  Equity loss (income) in subsidiary           8,392        (2,549)                        (5,843)
  Minority interest in loss of subsidiary                                                      50              50
                                            --------      --------       --------       ---------        --------
INCOME (LOSS) BEFORE INCOME TAXES               (406)      (11,519)         7,329           5,784           1,188
  Income tax provision                         3,206        (3,186)         4,780                           4,800
                                            --------      --------       --------       ---------        --------
NET INCOME (LOSS)                            $(3,612)     $ (8,333)        $2,549        $  5,784        $ (3,612)
                                            ========      ========       ========       =========        ========
</TABLE>


               ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                          CONSOLIDATING CASH FLOWS
                  FOR THE YEAR ENDED DECEMBER 29, 1994

<TABLE>
<CAPTION>
                                                        Guarantor      Nonguarantor                    Consolidated
                                             Parent    Subsidiaries    Subsidiaries    Eliminations        Total    
                                          -----------  ------------    -------------  --------------  ---------------
                                                                 (in thousands)
<S>                                       <C>           <C>            <C>            <C>              <C>
Net cash provided by (used in)
  operating activities                       $(1,414)      $13,575        $11,125                         $23,286

Cash flows from investing activities:
  Capital expenditures                           (20)      (21,666)       (10,880)                        (32,566)
  Proceeds from sales of property,
    plant and equipment                                        239            120                             359
  Purchase of minority interest
    in subsidiary                                           (4,200)                                        (4,200)
                                            --------      --------       --------       ---------        --------
      Net cash (used in)
        investing activities                     (20)      (25,627)       (10,760)                        (36,407)

Cash flows from financing activities:
  Proceeds from revolving loan and
    long term borrowings                      27,600                       10,068                          37,668
  Deferred financing costs                    (1,608)                                                      (1,608)
  Repayment of revolving loan,
    long-term borrowings and
    capital lease obligations                 (8,325)       (5,180)        (9,112)                        (22,617)
  Increase (decrease) in Envirodyne loan     (16,608)       17,163           (555)                               
                                            --------      --------       --------       ---------        --------
      Net cash provided by (used in)
        financing activities                   1,059        11,983            401                          13,443
Effect of currency exchange rate
   changes on cash                                                           (776)                           (776)
                                            --------      --------       --------       ---------        --------
Net (decrease) in cash and equivalents          (375)          (69)           (10)                           (454)
Cash and equivalents
  at beginning of period                         930         1,922          4,891                           7,743
                                            --------      --------       --------       ---------        --------
Cash and equivalents at end of period          $ 555       $ 1,853         $4,881                          $7,289
                                            ========      ========       ========       =========        ========
</TABLE>

<PAGE>

              ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                 CONSOLIDATING STATEMENTS OF OPERATIONS
                  FOR THE YEAR ENDED DECEMBER 31, 1993

<TABLE>
<CAPTION>
                                                        Guarantor      Nonguarantor                    Consolidated
                                             Parent    Subsidiaries    Subsidiaries    Eliminations        Total    
                                          -----------  ------------    -------------  --------------  ---------------
                                                                 (in thousands)

<S>                                       <C>           <C>            <C>            <C>              <C>
NET SALES                                                 $408,872       $195,291        $(16,778)       $587,385

COSTS AND EXPENSES
  Cost of sales                                            283,743        151,694         (16,745)        418,692
  Selling, general and administrative         $5,021        65,992         28,337                          99,350
  Amortization of intangibles and
    excess reorganization value                             13,170          2,541                          15,711
                                            --------      --------       --------       ---------        --------
OPERATING INCOME (LOSS)                       (5,021)       45,967         12,719             (33)         53,632

  Interest income                                  1            20            910                             931
  Interest expense                            10,388        14,589          6,213                          31,190
  Intercompany interest expense (income)     (21,970)       61,416        (39,446)          
  Management fees (income)                    (7,600)        6,748            852
  Other expense (income), net                  3,432           (86)         2,194                           5,540
  Minority interest in subsidiary                              717                                            717
                                            --------      --------       --------       ---------        --------
INCOME (LOSS) BEFORE INCOME TAXES, REORGANI-
   ZATION ITEMS AND EXTRAORDINARY ITEM        10,730       (35,963)        43,816             (33)         18,550
  Reorganization items, net                   92,745        12,000                                        104,745
                                            --------      --------       --------       ---------        --------
INCOME (LOSS) BEFORE INCOME TAXES
   AND EXTRAORDINARY ITEM                    (82,015)      (47,963)        43,816             (33)        (86,195)
  Income tax provision (benefit)              (1,430)       (4,442)        17,872                          12,000
                                            --------      --------       --------       ---------        --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM      (80,585)      (43,521)        25,944             (33)        (98,195)
  Extraordinary gain, net of tax             183,784                                                      183,784
                                            --------      --------       --------       ---------        --------
NET INCOME (LOSS)                           $103,199     $ (43,521)      $ 25,944          $  (33)       $ 85,589
                                            ========      ========       ========       =========        ========
</TABLE>


              ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                        CONSOLIDATING CASH FLOWS
                  FOR THE YEAR ENDED DECEMBER 31, 1993

<TABLE>
<CAPTION>
                                                        Guarantor      Nonguarantor                    Consolidated
                                             Parent    Subsidiaries    Subsidiaries    Eliminations        Total    
                                          -----------  ------------    -------------  --------------  ---------------
                                                                 (in thousands)

<S>                                       <C>           <C>            <C>            <C>              <C>
Net cash provided by
  operating activities
  before reorganization expense              $24,623      $ 33,840        $33,738                        $ 92,201
Net cash used for reorganization items        (2,929)      (12,000)                                       (14,929)
                                            --------      --------       --------       ---------        --------
Net cash provided by
  operating activities                        21,694        21,840         33,738                          77,272

Cash flows from investing activities:
  Capital expenditures                          (114)      (27,289)       (13,484)                        (40,887)
  Proceeds from sale of property,
    plant and equipment                                          4            120                             124
                                            --------      --------       --------       ---------        --------
      Net cash (used in)
        investing activities                    (114)      (27,285)       (13,364)                        (40,763)

Cash flows from financing activities:
  Proceeds from revolving loan and
    long term borrowings                     100,000                        6,003                         106,003
  Deferred financing costs                    (8,659)                      (1,120)                         (9,779)
  Repayment of revolving loan,
    long-term borrowings and
    capital lease obligations               (103,100)       (4,698)       (30,938)                       (138,736)
  Increase (decrease) in Envirodyne loan      (8,891)       10,519         (1,628)                               
                                            --------      --------       --------       ---------        --------
      Net cash provided by (used in)
        financing activities                 (20,650)        5,821        (27,683)                        (42,512)
Effect of currency exchange rate
  changes on cash                                                            (316)                           (316)
                                            --------      --------       --------       ---------        --------
Net increase (decrease) in
  cash and equivalents                           930           376         (7,625)                         (6,319)
Cash and equivalents at
  beginning of period                                        1,546         12,516                          14,062
                                            --------      --------       --------       ---------        --------
Cash and equivalents at end of period       $    930      $  1,922        $ 4,891                         $ 7,743
                                            ========      ========       ========       =========        ========
</TABLE>



<PAGE>
Financial Statement Schedules Required by Regulation S-X
--------------------------------------------------------
              VISKASE HOLDING CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements:
---------------------------------
Report of independent accountants 

Consolidated balance sheets, December 28, 1995 and
   December 29, 1994

Consolidated statements of operations, for December 30, 1994 to
   December 28, 1995 (Post-consummation);
   January 1 to December 29, 1994 (Post-consummation);
   and January 1 to December 31, 1993 (Pre-consummation);

Consolidated statements of stockholders' equity (deficit),
   for December 30, 1994 to December 28, 1995 (Post-consummation);
   January 1 to December 29, 1994 (Post-consummation);
   and January 1 to December 31, 1993 (Pre-consummation);

Consolidated statements of cash flows, for December 30, 1994 to
   December 28, 1995 (Post-consummation);
   January 1 to December 29, 1994 (Post-consummation);
   and January 1 to December 31, 1993 (Pre-consummation);

Notes to consolidated financial statements



                   REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors
Viskase Holding Corporation

         We have audited the consolidated financial statements and
the financial statement schedules of Viskase Holding Corporation
and Subsidiaries. These financial statements and financial
statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements and financial statement schedules based on our
audits.

         We conducted our audits in accordance with generally
accepted auditing standards. 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.

        As discussed in Note 1 to the consolidated financial
statements, on December 31, 1993, Envirodyne Industries, Inc. and
its domestic subsidiaries completed a comprehensive financial
restructuring through the implementation of reorganization under
Chapter 11 of the United States Bankruptcy Code and applied fresh
start reporting.

        In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Viskase Holding Corporation and Subsidiaries
as of December 28, 1995 and December 29, 1994, and the consolidated
results of their operations and their cash flows for the period
December 30, 1994 to December 28, 1995 and January 1 to
December 29, 1994 (Post-consummation) and January 1 to December 31,
1993 (Pre-consummation), in conformity with generally accepted
accounting principles. In addition, in our opinion the schedules
referred to above, when considered in relation to the basic
financial statements taken as a whole, present fairly, in all
material respects, the information required to be included therein.



Coopers & Lybrand L.L.P.

Chicago, Illinois
March 26, 1996

<PAGE>

                VISKASE HOLDING CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS

                                      December 28,     December 29,
                                          1995             1994   
                                     ---------------  -------------
                                              (in thousands) 
ASSETS
  Current assets:
     Cash and equivalents               $  11,826       $   6,201
     Receivables, net                      53,022          46,834
     Receivables, affiliates               51,829          48,138 
     Inventories                           38,233          43,725
     Other current assets                   9,106           6,515
                                         --------        --------
         Total current assets             164,016         151,413

   Property, plant and equipment          150,417         138,030
      Less accumulated depreciation        20,217           8,967
                                         --------        --------
      Property, plant and equipment, net  130,200         129,063
 
   Deferred financing costs                 1,042           1,081
   Other assets                             1,869           1,424
   Excess reorganization value             40,517          43,638
                                         --------        --------
                                         $337,644        $326,619
                                         ========        ========

LIABILITIES AND STOCKHOLDERS' EQUITY
   Current liabilities:
      Short-term debt including current
        portion of long-term debt         $ 6,097       $   6,978
      Accounts payable                     13,720          15,479
      Accounts payable and
        advances, affiliates               54,152          43,233
      Accrued liabilities                  21,942          25,358
                                         --------        --------
          Total current liabilities        95,911          91,048

   Long-term debt                           7,721          14,023

   Accrued employee benefits                4,281           3,969
   Deferred and noncurrent income taxes    25,895          22,400
   Intercompany loans                      81,094          77,866

   Commitments and contingencies

   Stockholders' equity:
      Common stock, $1.00 par value,
        1,000 shares authorized;
        100 shares issued and outstanding
      Paid in capital                     103,463         103,463
      Retained earnings                    12,100           9,938
      Cumulative foreign currency
        translation adjustments             7,179           3,912
                                         --------        -------- 
      
           Total stockholders' equity     122,742         117,313
                                         --------        --------
                                         $337,644        $326,619
                                         ========        ========

The accompanying notes are an integral part of the consolidated
financial statements.

<PAGE>
               VISKASE HOLDING CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                           52 weeks              52 weeks           52 weeks
                                         December 30,            January 1,        January 1,
                                           1994 to                  to                 to
                                         December 28,           December 29,       December 31,
                                             1995                   1994              1993
                                         ------------           -----------        -----------
                                                 (in thousands, except for number of shares
                                                          and per share amounts)
<S>                                       <C>                   <C>                <C>
NET SALES                                  $267,212               $220,787           $195,291
  Patent infringement settlement income                              9,457

COSTS AND EXPENSES
  Cost of sales                             207,232                168,891            151,694
  Selling, general and administrative        36,288                 27,654             25,171
  Amortization of intangibles and
    excess reorganization value               3,333                  3,346              2,541
                                           --------               --------           --------
OPERATING INCOME                             20,359                 30,353             15,885
  Interest income                               455                    248                910
  Interest expense                            3,353                  3,453              6,213
  Intercompany interest expense               4,199                  3,861              6,084
  Management fees                             1,709                    856                852
  Other expense (income), net                 3,754                  2,518              1,723
  Minority interest in loss of subsidiary                               50                717
                                           --------               --------           --------
INCOME BEFORE INCOME TAXES AND
  EXTRAORDINARY ITEM                          7,799                 19,963              2,640
  Income tax provision                        4,947                 10,025              2,645
                                           --------               --------           --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM       2,852                  9,938                 (5)
  Extraordinary loss, net of tax                690                                          
                                           --------               --------           --------
NET INCOME (LOSS)                            $2,162               $  9,938           $     (5)
                                           ========               ========           ========
WEIGHTED AVERAGE COMMON SHARES                  100                    100                100
                                                ===                    ===                ===
PER SHARE AMOUNTS:

NET INCOME (LOSS)                          $ 21,620               $ 99,380           $    (50)
                                           ========               ========           ========
<FN>
Due to the implementation of the Plan of Reorganization and
Fresh Start Reporting, the consolidated statement of operations
for the fiscal years ended December 28, 1995 and December 29, 1994
are not comparable to the fiscal year ended December 31, 1993.
(Refer to Note 1 of Notes to Consolidated Financial Statements.)

The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>

<PAGE>
            VISKASE HOLDING CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
                                                                                 Cumulative
                                                                                   Foreign
                                                                                   Currency     Total
                                           Common        Paid in    Retained     Translation  Stockholder's
                                            Stock        Capital    Earnings     Adjustments     Equity  
                                           ------       ---------  -----------   -----------  -------------
                                                                 (in thousands)
<S>                                        <C>         <C>          <C>          <C>           <C> 
Balance December 31, 1992                                $20,119      $79,458      $(2,356)      $97,221
Net (loss)                                                                 (5)                        (5)
Capital contributions                                      4,295                                   4,295
Fresh start revaluation adjustments                       58,272                                  58,272
Translation adjustments                                                             (2,044)       (2,044)
Elimination of Viskase Holding
  Corporation accumulated earnings                                    (79,453)       4,400       (75,053)


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


Balance December 31, 1993                                $82,686       $    0       $    0       $82,686
Net income                                                              9,938                      9,938
Capital contributions                                     16,056                                  16,056
Fresh start revaluation adjustments                        4,721                                   4,721
Translation adjustments                                                              3,912         3,912
                                                        --------      -------      -------      --------
Balance December 29, 1994                               $103,463      $ 9,938       $3,912      $117,313
Net income                                                              2,162                      2,162
Translation adjustments                                                              3,267         3,267
                                                        --------      -------      -------      --------
Balance December 28, 1995                               $103,463      $12,100      $ 7,179      $122,742
                                                        ========      =======      =======      ========
<FN>
Due to the implementation of the Plan of Reorganization and Fresh Start
Reporting, the stockholders' equity for the fiscal years ended December 28,
1995 and December 29, 1994 are not comparable to the fiscal year ended
December 31, 1993. (Refer to Note 1 of Notes to Consolidated Financial
Statements.)


The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>

<PAGE>
           VISKASE HOLDING CORPORATION AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                   December 30,    January 1,     January 1,
                                                                     1994 to           to            to
                                                                   December 28,   December 29,   December 31,
                                                                       1995           1994            1993
                                                                   -----------    ------------   -----------
                                                                                 (in thousands)
<S>                                                                <C>             <C>            <C>
Cash flows from operating activities:
  Income (loss) before extraordinary item                             $ 2,852        $ 9,938         $   (5)
  Extraordinary loss                                                      690                              
                                                                      -------        -------       --------
  Net income (loss)                                                     2,162          9,938             (5)
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities:
    Depreciation                                                       11,202          9,018         11,024
    Amortization of intangibles and excess reorganization value         3,333          3,346          2,541
    Amortization of deferred financing fees and discount                  208            210            935
    Increase (decrease) in deferred and noncurrent income taxes         2,098            128         (1,436)
    Loss on debt extinguishment                                         1,030
    Foreign currency transaction loss (gain)                              159                           (68)
    Loss (gain) on sales of property, plant and equipment                  30             32            424
    Changes in operating assets and liabilities:
      Accounts receivable                                              (4,441)        (9,076)        (3,055)
      Accounts receivable, affiliates                                  (5,183)       (18,214)         9,373
      Inventories                                                       7,224         (8,895)        (1,467)
      Other current assets                                             (2,144)        (1,462)          (461)
      Accounts payable and accrued liabilities                         (6,926)         8,314          3,219
      Accounts payable, affiliates                                     10,719         21,739         13,359
      Other                                                              (790)           288           (908)
                                                                      -------        -------       --------
    Total adjustments                                                  16,519          5,428         33,480
                                                                      -------        -------       --------
      Net cash provided by operating activities                        18,681         15,366         33,475
Cash flows from investing activities:
  Capital expenditures                                                 (6,589)       (10,880)       (13,484)
  Proceeds from sale of property, plant and equipment                      47            120            120
  Investments and advances to affiliated companies                                  
  Purchase of minority interest in subsidiary                                         (4,200)              
                                                                      -------        -------       --------
      Net cash (used in) investing activities                          (6,542)       (14,960)       (13,364)
Cash flows from financing activities:
  Proceeds from revolving loan and long-term borrowings                42,216         10,068          6,003
  Deferred financing costs                                             (1,166)                       (1,120)
  Repayment of revolving loan and long-term borrowings                (50,588)        (9,112)       (30,938)
  Increase (decrease) in Envirodyne loan and advances                   3,236           (555)        (1,628)
                                                                      -------        -------       --------
      Net cash provided by (used in) financing activities              (6,302)           401        (27,683)
Effect of currency exchange rate changes on cash                         (212)          (776)          (316)
                                                                      -------        -------       --------
Net increase (decrease) in cash and equivalents                         5,625             31         (7,888)
Cash and equivalents at beginning of period                             6,201          6,170         14,058
                                                                      -------        -------       --------
Cash and equivalents at end of period                                $ 11,826       $  6,201       $  6,170
                                                                     ========       ========       ========
                                                                                                                    
------------------------------------------------------------------------------------------------------------------

Supplemental cash flow information:
  Interest paid                                                        $1,919        $ 1,808       $  4,403
  Income taxes paid                                                    $4,255        $ 3,548       $  1,063


<FN>
Due to the implementation of the Plan of Reorganization and Fresh Start
Reporting, the consolidated statement of cash flows for the fiscal years
ended December 28, 1995 and December 29, 1994 are not comparable to the
fiscal year ended December 31, 1993. (Refer to Note 1 of Notes to
Consolidated Financial Statements.)

Supplemental schedule of noncash investing and financing activities:

Fiscal 1993
------------
Viskase Holding Corporation's capital increased by $4.3 million due to the
forgiveness of an Envirodyne loan.
Viskase Holding Corporation contributed capital consisting of $160 thousand
of equipment to Viskase Brasil Embalagens Ltda.

Fiscal 1994
------------
Viskase S.A. and its subsidiary Viskase Canada Inc.'s capital increased by
$16 million due to the forgiveness of an Envirodyne loan.
Viskase Corporation transferred equipment totaling $1.5 million, $174
thousand and $2.1 million to Viskase S.A., Viskase de Mexico S.A. de C.V.,
and Viskase Brasil Embalagens Ltda, respectively.

Fiscal 1995
-----------
Viskase Corporation transferred equipment totaling $497 thousand to Viskase
S.A.
Viskase Holding Corporation contributed capital consisting of $250 thousand
of equipment to Viskase de Mexico S.A. de C.V.

The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>

<PAGE>
          VISKASE HOLDING CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  GENERAL

Viskase Holding Corporation is a wholly owned subsidiary of Viskase Corporation.
Viskase Corporation, in turn, is a wholly owned subsidiary of Envirodyne
Industries, Inc. Viskase Holding Corporation serves as the direct or indirect
parent company for the majority of Viskase Corporation's non-domestic
operations. These subsidiaries are as follows:

<TABLE>
<CAPTION>
Name of Subsidiary                  Parent of Subsidiary              Country of Business
------------------------------      ---------------------------       --------------------- 
<S>                                 <C>                               <C>
Viskase Brasil Embalagens Ltda.     Viskase Holding Corporation       Brazil
Viskase Australia Limited           Viskase Holding Corporation       Australia
Viskase de Mexico S.A. de C.V.      Viskase Holding Corporation       Mexico
Viskase S.A.                        Viskase Holding Corporation       France
Viskase Gmbh                        Viskase S.A.                      Germany
Viskase SPA                         Viskase S.A.                      Italy
Viskase Canada Inc.                 Viskase S.A.                      Canada
Viskase ZAO                         Viskase S.A.                      Russia
Viskase Holdings Limited            Viskase S.A.                      United Kingdom
Filmco International Limited        Viskase Holdings Limited          United Kingdom
Viskase Limited                     Viskase Holdings Limited          United Kingdom
Viskase (UK) Limited                Viskase Limited                   United Kingdom
Envirodyne S.A.R.L.                 Viskase (UK) Limited              France

</TABLE>


Viskase Holding Corporation conducts its operations through its
subsidiaries and, for the most part, has no assets or liabilities
other than its investments, accounts receivable and payable with
affiliates, and intercompany loan and advances.

On January 6, 1993, a group of bondholders filed an involuntary
petition for reorganization of Envirodyne Industries, Inc. under
Chapter 11 of the U.S. Bankruptcy Code. On January 7, 1993, several
of the subsidiaries of Envirodyne Industries, Inc., including
Viskase Holding Corporation, each filed voluntary petitions under
Chapter 11 of the U.S. Bankruptcy Code in the United States
Bankruptcy Court for the Northern District of Illinois, Eastern
Division (the Bankruptcy Court). None of the subsidiaries of
Viskase Holding Corporation entered into Chapter 11. On December
17, 1993, the Bankruptcy Court confirmed the First Amended Joint
Plan of Reorganization as twice modified (Plan of Reorganization)
with respect to Envirodyne Industries, Inc. (Envirodyne) and
certain of its subsidiaries, including Viskase Holding Corporation.
The Plan of Reorganization was consummated and Envirodyne and
certain of its subsidiaries emerged from Chapter 11 on December 31,
1993 (Effective Date). For accounting purposes, the Plan of
Reorganization was deemed to be effective as of December 31, 1993.

The Chapter 11 filing was related only to the Company's domestic
operations and did not include the foreign subsidiaries and various
inactive domestic subsidiaries.

The Company accounted for the reorganization using the principles
of fresh start reporting in accordance with the American Institute
of Certified Public Accountants Statement of Position 90-7,
"Financial Reporting by Entities in Reorganization under the
Bankruptcy Code." Accordingly, all assets and liabilities have been
restated to reflect their reorganization value, which approximates
fair value.

The reorganization value of the Company's equity of $135,000 was
based on the consideration of many factors and various valuation
methods, including discounted cash flows and comparable multiples
of earnings valuation techniques believed by management and its
financial advisors to be representative of the Company's business
and industry. Factors considered by the Company included the
following:

  .  Forecasted operating and cash flow results which gave effect
     to the estimated impact of debt restructuring and other
     operational reorganization.

  .  Discounted residual value at the end of the forecasted period
     based on the capitalized cash flows for the last year of that
     period.

  .  Competition and general economic considerations.

  .  Projected sales growth.

  .  Potential profitability.

  .  Seasonality and working capital requirements.

The excess of the reorganization value over the fair value of net
assets and liabilities is reported as excess reorganization value
and is being amortized over a fifteen-year period. The Company
continues to evaluate the recoverability of excess reorganization
value based on the operating performance and expected future
undiscounted cash flows of the operating business units.

The reorganization and the adoption of Fresh Start Reporting
resulted in no material adjustments to the Company's Consolidated
Statement of Operations for the period January 1 to December 31,
1993.


2.  NATURE OF BUSINESS

Viskase Holding Corporation's subsidiaries manufacture food
packaging products. The operations of these subsidiaries are
primarily in Europe and South and North America. Through its
subsidiaries, the Company is a leading producer of cellulosic
casings used in preparing and packaging processed meat products and
is a major producer of heat shrinkable plastic bags and specialty
films for packaging and preserving fresh and processed meat
products, poultry and cheeses. The Company is also a leading
international manufacturer of plasticized polyvinyl chloride (PVC)
films, primarily for use in packaging food items.

International Operations

Viskase Holding Corporation's subsidiaries have seven manufacturing
facilities located outside the continental United States, in
Beauvais, France; Thaon, France; Lindsay, Ontario, Canada;
Sedgefield, England (Great Britain); Swansea, Wales (Great
Britain); Guarulhos, Brazil and Nuevo Laredo, Mexico.

International sales and operations may be subject to various risks
including, but not limited to, possible unfavorable exchange rate
fluctuations, political instability, governmental regulations
(including import and export controls), restrictions on currency
repatriation, embargoes, labor relations laws and the possibility
of governmental expropriation. Viskase Holding Corporation's
foreign operations generally are subject to taxes on the
repatriation of funds.

International operations in certain parts of the world may be
subject to international balance of payments difficulties which may
raise the possibility of delay or loss in the collection of
accounts receivable from sales to customers in those countries.
Viskase Holding Corporation believes that its subsidiaries' allow-
ance for doubtful accounts makes adequate provision for the
collectibility of its receivables. Management believes that growth
potential exists for many of Viskase's products outside the United
States and that Viskase is well positioned to participate in these
markets. 

Sales and Distribution

Viskase Holding Corporation's subsidiaries' principal markets are
in Europe, Latin America, North America and Asia Pacific.

The United Kingdom operation sells its PVC films directly and
through distributors, primarily to the retail grocery and
foodservice industries in Europe.

In Europe, Viskase Holding Corporation's subsidiaries operate
casings service centers in Milan, Italy, Pulheim, Germany, and
Moscow, Russia. The Company also operates a service center in
Brisbane, Australia. These service centers provide finishing,
inventory and delivery services to customers. The subsidiaries also
use outside distributors to market their products to customers in
Europe, Africa, Asia and Latin America.
Competition

From time to time, Viskase Holding Corporation's subsidiaries
experience reduced market share or reduced profits due to price
competition; however, management believes that such market
conditions will not result in any long-term material loss of
business.


3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A)  Basis of presentation

Effective in 1990 Envirodyne Industries, Inc. adopted a 52/53 week
fiscal year ending on the last Thursday of December. Viskase
Holding Corporation's 1993 financial statements include
December 31, 1993 in order to present the effect of the
consummation of the Plan of Reorganization.

(B)  Principles of consolidation

The consolidated financial statements reflect the accounts of
Viskase Holding Corporation and its subsidiaries. All significant
intercompany transactions and balances between and among Viskase
Holding Corporation and its subsidiaries have been eliminated in
the consolidation.

Reclassifications have been made to the prior years' financial
statements to conform to the 1995 presentation.

(C)  Use of estimates in the preparation of financial statements

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

(D)  Cash equivalents (dollars in thousands)

For purposes of the statement of cash flows, the Company considers
cash equivalents to consist of all highly liquid debt investments
purchased with an initial maturity of approximately three months or
less. Due to the short-term nature of these instruments, the
carrying values approximate the fair market value. Cash equivalents
include $8,074 and $821 of short-term investments at December 28,
1995 and December 29, 1994, respectively.

(E)  Inventories

Inventories, primarily foreign, are valued at the lower of
first-in, first-out (FIFO) cost or market.

(F)  Property, plant and equipment

Property, plant and equipment are carried at cost less accumulated
depreciation. Depreciation is computed on the straight-line method
over the estimated useful lives of the assets ranging from 3 to 32
years. Upon retirement or other disposition, cost and related
accumulated depreciation are removed from the accounts, and any
gain or loss is included in results of operations. Effective
December 31, 1993 and in conjunction with the Fresh Start
Reporting, property, plant and equipment was reported at the
estimated fair value.

(G)  Deferred financing costs

Deferred financing costs are amortized on a straight-line basis
over the expected term of the related debt agreement. Amortization
of deferred financing costs is classified as interest expense.

(H)  Excess reorganization value and excess investment over net
assets acquired, net

Excess reorganization value is amortized on the straight-line
method over 15 years.

Cost in excess of net assets acquired, net was amortized on a
straight-line method over 40 years in fiscal 1993.

The Company continues to evaluate the recoverability of excess
reorganization value based on operating performance and
undiscounted cash flows of the operating business units. Impairment
will be recognized when the expected undiscounted future operating
cash flows derived from such intangible is less than its carrying
value. If impairment is identified, valuation techniques deemed
appropriate under the particular circumstances will be used to
determine the intangible's fair value. The loss will be measured
based on the excess of carrying value over the determined fair
value. The review for impairment is performed at least on a
quarterly basis.

(I)  Pensions

The Company's operations in Europe have defined benefit retirement
plans covering substantially all salaried and full time hourly
employees. Pension cost is computed using the projected unit credit
method.

The Company's funding policy is consistent with funding
requirements of the applicable foreign laws and regulations.

(J)  Postemployment benefits

Effective December 31, 1993 and in conjunction with the Fresh Start
Reporting, the Company adopted SFAS No. 112 "Employers Accounting
for Postemployment Benefits." The impact of adopting SFAS No. 112
was not material.

(K)  Income taxes

Income taxes are accounted for in accordance with SFAS No. 109. Tax
provisions and benefits are recorded at statutory rates for taxable
items included in the consolidated statements of operations
regardless of the period for which such items are reported for tax
purposes. Deferred income taxes are recognized for temporary
differences between financial statement and income tax bases of
assets and liabilities for which income tax benefits will be
realized in future years.

(L)  Net income (loss) per share

Net income (loss) per share of common stock is based upon the
weighted average number of shares of common stock outstanding
during the year.

(M)  Revenue recognition

Sales to customers are recorded at the time of shipment net of
discounts and allowances.

(N)  Foreign currency contracts

The Company maintains a hedging program to partially hedge its
forecasted foreign currency revenue cash flows. The hedging program
principally addresses revenue cash flows within its European
operations. The foreign exchange contracts are denominated
predominantly in the major European currencies and have varying
maturities up to eighteen months. The effect of this practice is to
minimize the effect of foreign exchange rate movements on the
Company's operating results. The Company's hedging activities do
not subject the Company to additional exchange rate risk because
gains and losses on these contracts offset losses and gains on the
transactions being hedged. The cash flows from forward contracts
accounted for as hedges of identifiable transactions or events are
classified consistent with the cash flows from the transactions or
events being hedged.

(O)  Stock-based compensation

Statement of Financial Accounting Standards No. 123 "Accounting for
Stock-Based Compensation" encourages, but does not require,
companies to recognize compensation expense for grants of stock,
stock options and other equity instruments to employees based on
new fair value acounting rules. Although expense recognition for
employee stock-based compensation is not mandatory, SFAS 123
requires companies that choose not to adopt the new fair value
accounting to disclose pro forma net income and earnings per share
under the new method. This new accounting principle is effective
for the Company's fiscal year ending December 26, 1996. The Company
believes that adoption is not expected to have a material impact on
its financial condition as the Company will not adopt the fair
value accounting, but will instead comply with the disclosure
requirements.


4.  RECEIVABLES (dollars in thousands)

Receivables consisted primarily of trade accounts receivable and
were net of allowances for doubtful accounts of $2,256 and $1,364
at December 28, 1995, and at December 29, 1994, respectively.


5.  INVENTORIES (dollars in thousands)

Inventories consisted of:
                                    December 28,    December 29,
                                       1995              1994
                                    -----------     -----------
Raw materials                         $ 5,299         $ 5,778
Work in process                        13,342          13,975
Finished products                      19,592          23,972
                                      -------         -------
                                      $38,233         $43,725
                                      =======         =======

Inventories were net of reserves for obsolete and slow moving
inventory of $1,331 and $1,686 at December 28, 1995 and
December 29, 1994, respectively.


6.  PROPERTY, PLANT AND EQUIPMENT (dollars in thousands)

                                    December 28,    December 29,
                                       1995              1994
                                    -----------     -----------
Property, plant and equipment:
  Land and improvements               $  5,319       $  4,982
  Buildings and improvements            30,236         28,588
  Machinery and equipment              114,212        103,293
  Construction in progress                 283          1,167
Capital Leases:
  Machinery and equipment                  367               
                                      --------       --------
                                      $150,417       $138,030
                                      ========       ========

Maintenance and repairs charged to costs and expenses for 1995,
1994, and 1993 aggregated $10,288, $10,748 and $9,782,
respectively. Depreciation is computed on the straight-line method
over the estimated useful lives of the assets ranging from 3 to
32 years.

7.  ACCRUED LIABILITIES (dollars in thousands)

Accrued liabilities were comprised of:

                                    December 28,    December 29,
                                       1995              1994
                                    -----------     -----------
Compensation and employee benefits     $ 9,446        $10,408
Taxes, other than on income              1,585          2,006
Accrued volume and sales discounts       5,320          5,445
Other                                    5,591          7,499
                                       -------        -------
                                       $21,942        $25,358
                                       =======        =======

8.  DEBT OBLIGATIONS (dollars in thousands)

As described in Note 1, Chapter ll Reorganization Proceedings,
Envirodyne and certain of its domestic Subsidiaries (including
Viskase Holding Corporation) emerged from Chapter 11 on December
31, 1993.

On June 20, 1995, Envirodyne completed the sale of $160,000
aggregate principal amount of senior secured notes to certain
institutional investors in a private placement. The senior secured
notes were issued pursuant to an indenture dated June 20, 1995
(Indenture) and consist of (i) $151,500 of 12% Senior Secured Notes
due 2000 and (ii) $8,500 of Floating Rate Senior Secured Notes due
2000 (collectively, the Senior Secured Notes). Envirodyne used the
net proceeds of the offering primarily to (i) repay the Company's
$86,125 domestic term loan, (ii) repay the $68,316 of obligations
under the Company's domestic and foreign revolving loans and (iii)
pay transaction fees and expenses. Concurrently with the June 20,
1995 placement, Envirodyne entered into a new $20,000 domestic
revolving credit facility (Revolving Credit Facility) and a new
$28,000 letter of credit facility (Letter of Credit Facility). The
Senior Secured Notes and the obligations under the Revolving Credit
Facility and the Letter of Credit Facility are guaranteed by
Envirodyne's significant domestic subsidiaries and secured by a
collateral pool (Collateral Pool) comprised of: (i) all domestic
accounts receivable (including intercompany receivables) and
inventory; (ii) all patents, trademarks and other intellectual
property (subject to non-exclusive licensing agreements); (iii)
substantially all domestic fixed assets (other than assets subject
to a lease agreement with General Electric Capital Corporation);
and (iv) a senior pledge of 100% of the capital stock of
Envirodyne's significant domestic subsidiaries and 65% of the
capital stock of Viskase S.A. Such guarantees and security are
shared by the holders of the Senior Secured Notes and the holders
of the obligations under the Revolving Credit Facility on a pari
passu basis pursuant to an intercreditor agreement. Pursuant to such
intercreditor agreement, the security interest of the holders of the
obligations under the Letter of Credit Facility has priority over all
other liens on the Collateral Pool.

The Company finances its working capital needs through a
combination of cash generated through operations and borrowings
local unsecured credit facilities and intercompany loans.

The Company recognized an extraordinary loss of $1,030 representing
the write-off of deferred financing fees related to the June 20,
1995 debt refinancing. The extraordinary loss, net of applicable
income taxes of $340, was included in the Company's Statement of
Operations for the quarter ended June 29, 1995.

The Viskase Limited term facility is with a foreign financial
institution. The term facility, which is collateralized by
substantially all of the assets of Viskase Limited, bears a
variable interest rate and is payable in 16 equal semiannual
installments that began in December 1992.

Outstanding short-term and long-term debt consisted of:

                                    December 28,    December 29,
                                       1995              1994
                                    -----------     -----------
Short-term debt and current
  maturity of long-term debt:
  Current maturity of Viskase
    Limited Term Loan (4.7%)          $2,033           $ 1,882
  Other                                4,064             5,096
                                      ------           -------
  Total short-term debt               $6,097           $ 6,978
                                      ======           =======
Long-term debt:
  Bank Credit Agreement:
    Multicurrency Loan
      due 1999 (8.9%)                                    4,924
  Viskase Limited Term
      Loan (4.7%)                      7,115             8,466
  Other                                  606               633
                                      ======           =======
  Total long-term debt                $7,721           $14,023
                                      ======           =======

The fair value of the Company's debt obligation is estimated based
upon the quoted market prices for the same or similar issues or on
the current rates offered to the Company for the debt of the same
remaining maturities. At December 29, 1994, the fair value of debt
obligations approximated their carrying value.

Aggregate maturities of remaining long-term debt for each of the
next five fiscal years are:

                                                Total
                                               ------
           1996                                $2,612
           1997                                 2,383
           1998                                 2,233
           1999                                 2,033
           2000                                 1,016


9.  OPERATING LEASES (dollars in thousands)

The Company has operating lease agreements for machinery, equipment
and facilities. The majority of the facilities leases require the
Company to pay maintenance, insurance and real estate taxes.
Future minimum lease payments for operating leases that have
initial or remaining noncancelable lease terms in excess of one
year as of December 28, 1995, are:

      1996                              $1,357
      1997                               1,092
      1998                                 886
      1999                                 450
      2000                                 372
      Total thereafter                        
                                        ------
      Total minimum lease payments      $4,157
                                        ======

Total rent expense during 1995, 1994 and 1993 amounted to $3,750,
$2,350 and $2,140, respectively.


10.  RETIREMENT PLANS (dollars in thousands)

The Company maintains various pension and statutory separation pay
plans for its European employees. The expense for these plans in
1995, 1994 and 1993 was $1,383, $1,043 and $864, respectively. As
of their most recent valuation dates, in plans where vested
benefits exceeded plan assets, the actuarially computed value of
vested benefits exceeded those plans' assets by approximately
$2,856; conversely, plan assets exceeded the vested benefits in
certain other plans by approximately $2,346.

The Company's postretirement benefits are not material.


11.  CONTINGENCIES (dollars in thousands)

The Company and its subsidiaries are involved in various legal
proceedings arising out of its business and other environmental
matters, none of which is expected to have a material adverse
effect upon its results of operations, cash flows or financial
position.


12.  INCOME TAXES (dollars in thousands)

The provision (benefit) for income taxes consisted of:

                         December 30,   January 1,   January 1,
                            1994 to       to           to
                          December 29, December 29, December 31,
                              1995       1994           1993
                         ------------  -----------  -----------
Current:
  Federal                    $1,316     $4,479        $ 1,368
  Foreign                       950      4,652          2,453
  State and local               243        766            258
                             ------     ------        -------
                              2,509      9,897          4,079
                             ------     ------        -------
Deferred:
  Federal
  Foreign                     2,098        128         (1,434)
  State and local                                            
                             ------      -----        -------
                              2,908        128         (1,434)
                            -------    -------         ------
                            $ 4,607    $10,025         $2,645
                            =======    =======         ======


A reconciliation from the statutory federal tax rate to the
consolidated effective tax rate follows:

                         December 30,   January 1,   January 1,
                            1994 to       to           to
                          December 29, December 29, December 31,
                              1995       1994           1993
                         ------------  -----------  -----------

Statutory federal tax rate    35.0%        35.0%       35.0%
Increase (decrease)
  in tax rate due to:
  State and local taxes net
    of related federal
    tax benefit                2.3          2.5         6.4
  Net effect of taxes
    relating to foreign
    operations                30.4         11.1        61.6
  Other                         .4          1.6        (2.8)
                             -----         ----       -----
Consolidated effective 
  tax rate                    68.1%        50.2%      100.2%
                              ====         ====       =====

Temporary differences and carryforwards which give rise to a
significant portion of deferred tax assets and liabilities for 1995
are as follows:

                       Temporary Difference        Tax Effected
                       ---------------------    ---------------------
                        Deferred   Deferred     Deferred   Deferred 
                           Tax        Tax         Tax        Tax
                          Assets  Liabilities    Assets   Liabilities
                         -------  -----------    ------   -----------
Depreciation basis
   differences                      $72,219                $25,717
Pension and healthcare                  600                    220
Other accruals, reserves,
   and other              $ 648         399      $ 216         174
                          -----     -------      -----     -------
                          $ 648     $73,218      $ 216     $26,111
                          =====     =======      =====     =======

At December 28, 1995, the Company had $11,136 of undistributed
earnings of foreign subsidiaries considered permanently invested
for which deferred taxes have not been provided.

Domestic earnings or (losses) after extraordinary gain or loss and
before income taxes were approximately $3,937, $12,634 and $4,373
in 1995, 1994 and 1993, respectively. Foreign earnings or (losses)
before income taxes were approximately $2,832, $7,329 and $(1,733)
in 1995, 1994 and 1993, respectively.


13.  RESEARCH AND DEVELOPMENT COSTS (dollars in thousands)

Research and development costs are expensed as incurred and totaled
$1,106, $1,562 and $1,180, for 1995, 1994, and 1993, respectively.


14.  RELATED PARTY TRANSACTIONS (dollars in thousands)

Intercompany loans and advances:
-------------------------------

                                         December 28,  December 29,
                                            1995           1994   
                                         -----------   -----------
Viskase S.A. 12% promissory note
   due to Envirodyne                       $25,142
Viskase S.A. promissory note
   due to Envirodyne                        17,440        $35,249
Accrued interest on Viskase S.A.
   promissory note                              83          1,688
Viskase United Kingdom Limited
   promissory note
   due to Envirodyne,
   including accrued interest                  419          2,919

Advances:
  Envirodyne to Viskase S.A.               
  Viskase Corporation to
    Viskase Holding Corporation             38,010         38,010
                                           -------        -------
                                           $81,094        $77,866
                                           =======        =======

The Viskase S.A. 12% promissory note due to Envirodyne is payable
on demand. Interest is payable semiannually on June 30 and December
31.

The Viskase S.A. promissory note due to Envirodyne is payable on
demand and bears interest at a rate of 10.00%. Interest is payable
semiannually on June 30 and December 31.

The $2.5 million Viskase United Kingdom Limited promissory note due
to Envirodyne is payable on demand and bears interest at a rate of
8.00%. The promissory note was repaid in 1995.

The Viskase Corporation advance to Viskase Holding Corporation is
payable on demand.

License Agreements
------------------

Viskase Holding Corporation has been granted the right to license
Viskase Corporation's patents and technology pursuant to a license
agreement between Viskase Corporation and Viskase Holding
Corporation.

Intercompany transactions:
-------------------------

In 1995, 1994 and 1993, the Company paid $1,022, $756 and $752,
respectively, to Viskase Corporation for management services.
During 1995, 1994 and 1993, the Company accrued $687, $100 and
$100, respectively, payable to Envirodyne for management services.

During 1995, 1994 and 1993, the Company purchased semi-finished and
finished inventory from Viskase Sales Corporation in the amount of
$26,953, $23,114 and $15,439, respectively. In addition, during
1995, 1994 and 1993, the Company had sales of inventory to Viskase
Sales Corporation in the amount of $7,329, $5,632 and $1,338,
respectively.


15.  FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents the carrying value and estimated fair
value as of December 28, 1995 of the Company's financial
instruments. (Refer to Notes 3 and 8.)

                                    Carrying         Estimated 
                                     Value          Fair  Value
                                    --------        -----------
Assets:
   Cash and equivalents              $11,826          $11,826
   Foreign currency contracts          3,397            3,377

Liabilities:
   Long-term debt                      7,721            7,721


<PAGE>

            ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES        SCHEDULE II
                VALUATION AND QUALIFYING ACCOUNTS

                          (in thousands)

<TABLE>
<CAPTION>
                                   Balance at    Provision                                          Balance 
                                   Beginning    Charged to                                          at End
      Description                  of  Period     Expense     Write-offs  Recoveries    Other(1)   of Period

<S>                                <C>           <C>          <C>          <C>          <C>        <C>
1995  for the year ended
      December 28 
      Allowance for
      doubtful accounts              $2,136       $1,403       $  (472)       $  6        $151       $3,224

1994  for the year ended
      December 29 
      Allowance for
      doubtful accounts               2,872          939        (1,824)         21         128        2,136

1993  for the year ended
      December 31 
      Allowance for
      doubtful accounts               2,175        1,166           (334)        70        (205)       2,872



1995  for the year ended
      December 28
      Reserve for obsolete and
      slow moving inventory           5,353        1,264         (2,868)                    69        3,818

1994  for the year ended
      December 29 
      Reserve for obsolete and
      slow moving inventory           5,425        2,936         (3,123)                   115        5,353

1993  for the year ended
      December 31 
      Reserve for obsolete and
      slow moving inventory           3,178        4,973         (2,660)                   (66)       5,425

<FN>
(1)  Foreign currency translation.

</TABLE>