<PAGE>

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------

                                   FORM 10-K

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

<Table>
<S>                                            <C>
          FOR THE FISCAL YEAR ENDED:                      COMMISSION FILE NUMBER:
              DECEMBER 31, 2001                                   0-21139
</Table>

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

                         DURA AUTOMOTIVE SYSTEMS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<Table>
<Caption>

<S>                                            <C>
                   DELAWARE                                      38-3185711
           (STATE OF INCORPORATION)                 (I.R.S. EMPLOYER IDENTIFICATION NO.)
               4508 IDS CENTER
            MINNEAPOLIS, MINNESOTA                                 55402
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                      (ZIP CODE)
</Table>

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (612) 342-2311

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

          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      NONE

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                 CLASS A COMMON STOCK, PAR VALUE $.01 PER SHARE

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

     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. [ ]

     As of March 1, 2002, 14,731,947 shares of Class A Common Stock of the
Registrant were outstanding and the aggregate market value of the Class A Common
Stock of the Registrant (based upon the last reported sale price of the Common
Stock at that date by the Nasdaq National Market System), excluding shares owned
beneficially by affiliates, was approximately $185,449,000. In addition,
3,108,540 shares of Class B Common Stock of the Registrant were outstanding at
March 1, 2002.

     Information required by Items 10, 11, 12 and 13 of Part III of this Annual
Report on Form 10-K incorporates by reference information (to the extent
specific sections are referred to herein) from the Registrant's Proxy Statement
for its annual meeting to be held May 21, 2002 (the "2002 Proxy Statement").
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                         DURA AUTOMOTIVE SYSTEMS, INC.
                           ANNUAL REPORT ON FORM 10-K
                               TABLE OF CONTENTS

<Table>
<Caption>
                                                                          PAGE
                                                                          ----
<S>         <C>                                                           <C>
PART I
  Item 1.   Business....................................................    3
  Item 2.   Properties..................................................   16
  Item 3.   Legal Proceedings...........................................   16
  Item 4.   Submission of Matters to a Vote of Security Holders.........   19

PART II
  Item 5.   Market for Registrant's Common Equity and Related
            Stockholder Matters.........................................   19
  Item 6.   Selected Financial Data.....................................   19
  Item 7.   Management's Discussion and Analysis of Results of
            Operations and Financial Condition..........................   20
  Item 7A.  Quantitative and Qualitative Disclosure about Market Risk...   27
  Item 8.   Financial Statements and Supplementary Data.................   27
  Item 9.   Changes in and Disagreements with Accountants on Accounting
            and Financial Disclosure....................................   62

PART III
  Item 10.  Directors and Executive Officers of the Registrant..........   62
  Item 11.  Executive Compensation......................................   63
  Item 12.  Security Ownership of Certain Beneficial Owners and
            Management..................................................   63
  Item 13.  Certain Relationships and Related Transactions..............   64

PART IV
  Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form
            8-K.........................................................   64
</Table>

                                        2
<PAGE>

                                     PART I

ITEM 1.  BUSINESS

(a) GENERAL DEVELOPMENT OF BUSINESS

  General

     Dura Automotive Systems, Inc. and its subsidiaries (collectively referred
to as "Dura") is the world's largest independent designer and manufacturer of
driver control systems for the global automotive industry. Dura is also a
leading global supplier of structural door modules, glass systems, seating
control systems and structures, and engineered assemblies.

     Dura sells its products to every major North American, Japanese and
European automotive Original Equipment Manufacturer ("OEM"). Dura has 73
manufacturing and product development facilities located in the United States,
Brazil, Canada, Czech Republic, France, Germany, Japan, Mexico, Portugal,
Slovakia, Spain and the United Kingdom. Dura also has a presence in India and
China through alliances, joint ventures or technical licenses.

     The automotive components supply industry is undergoing significant
consolidation and globalization as OEMs continue to reduce their supplier base.
In order to lower costs and improve quality, OEMs are awarding sole-source
contracts to full-service suppliers who are able to supply larger portions of a
vehicle on a global basis. OEMs' criteria for supplier selection include not
only cost, quality and responsiveness, but also full-service design, engineering
and program management capabilities. OEMs are seeking suppliers capable of
providing complete systems and modules rather than suppliers who only provide
separate component parts. In addition, they require suppliers to have the
capability to design and manufacture their products in multiple geographic
markets.

     In response to these trends, over the past several years Dura has pursued a
disciplined acquisition strategy that has provided a wider variety of product,
manufacturing and technical capabilities. Dura has broadened its geographic
coverage and strengthened its ability to supply products on a global basis. As a
full-service supplier with strong OEM relationships, Dura expects to continue to
benefit from the supply base consolidation trends.

     Approximately 66% of Dura's 2001 revenues were generated from sales to
North American OEMs with its major customers being Ford, GM, DaimlerChrysler,
Toyota, Honda and Nissan. Dura manufactures products for many of the most
popular car, light truck and sport utility models sold in North America
including: Ford Focus, Taurus, Explorer, Ranger and F-Series pickup, the
Silverado/Sierra GM pickup, the Dodge Ram pickup, the Honda Accord and Civic,
and the Toyota Camry. Approximately 33% of Dura's 2001 revenues were generated
from sales to European OEMs including Volkswagen, Mercedes, PSA (Peugeot and
Citroen), BMW and Renault. Dura is generally the sole supplier of the parts it
sells to OEMs and will continue to supply parts for the life of the model, which
usually ranges from three to seven years.

  Industry Trends

     Dura's performance and growth is directly related to certain trends within
the automotive market. The consolidation of the component supply industry
includes the growth of system sourcing and the increase in global sourcing.

     Supplier Consolidation.  During the 1990s and continuing into 2001, OEMs
have continued to reduce their supplier base, awarding sole-source contracts to
full-service suppliers. As a result, OEMs currently work with a smaller number
of suppliers each of which supplies a greater proportion of the total vehicle.
These requirements can best be met by suppliers with sufficient size, geographic
scope and financial resources. This environment provides an opportunity to grow
by obtaining business previously provided by other non full-service suppliers
and by acquiring suppliers that further enhance product, manufacturing and
service capabilities. OEMs rigorously evaluate suppliers on the basis of product
quality, cost control, reliability of delivery, product design capability,
financial strength, new technology implementation, facilities and overall
management. Suppliers that obtain superior ratings are considered for new
business. Although these supplier policies have already resulted in significant
consolidation of component suppliers in certain segments, Dura
                                        3
<PAGE>

believes that opportunities exist for further consolidation within its segment.
This is particularly true in Europe, which has many suppliers with relatively
small market shares.

     System Sourcing.  OEMs increasingly seek suppliers capable of manufacturing
complete systems of a vehicle rather than suppliers who only produce individual
parts that comprise a system. By outsourcing complete systems, OEMs are able to
reduce their costs associated with the design and integration of different
components and improve quality by enabling their suppliers to assemble and test
major portions of the vehicle prior to beginning production. Dura has
capitalized on this trend by designing its mechanisms and cable systems to
function together and by providing mechanism and cable designs that are
integrated into the design of the entire vehicle.

     Module Sourcing of Interior Products.  As OEMs continually seek to reduce
their costs and asset base, they are increasingly relying on suppliers to
produce integrated modules. Modules, which differ from systems, are
sub-assemblies at a specific location in the vehicle that incorporates
components from various functional systems and are supplied to the OEM already
assembled. A system refers to a specific function within the vehicle that
incorporates components, which may be dispersed throughout the vehicle. Interior
modules or complete interiors can include the cockpit, seats, doors, door trim,
overhead, electronics and other components.

     While current OEM purchasing strategies do not allow for single outsourcing
of interior mechanical assemblies, Dura believes that the trend toward module
outsourcing will change this environment. As a result, the buying power of
emerging interior suppliers will increase rapidly as sourcing responsibility is
delegated through modular outsourcing. This anticipated change in outsourcing
strategies will present Dura with significant opportunities to provide "one stop
shopping" of complete interior mechanisms.

     Global Sourcing.  Regions such as Asia, Latin America and Eastern Europe
are expected to experience significant growth in vehicle demand over the next
ten years. OEMs are positioning themselves to reach these emerging markets in a
cost-effective manner by seeking to design and produce "world cars" which can be
designed in one vehicle center but produced and sold in many different
geographic markets, thereby allowing OEMs to reduce design costs and take full
advantage of low-cost manufacturing locations. OEMs increasingly are requiring
their suppliers to have the capability to design and manufacture their products
in multiple geographic markets.

     Full Service Supplier Responsibilities.  Suppliers are becoming more
integrally involved in the vehicle design process and have begun to assume more
system integration functions. As a result, OEMs are increasingly looking to
their suppliers for contribution when faced with product recalls, product
liability or warranty claims. In addition, with the competitive nature of the
automotive industry there is substantial and continuing pressure from the OEMs
to reduce costs, including the costs of products purchased from outside
suppliers. This forces suppliers to generate sufficient cost savings to offset
these price reductions.

     Utilization of Light-Weight Materials.  Concern over the impact of the
automotive industry on the environment has been growing resulting in European
and U.S. regulations of vehicle emissions to become more stringent. The
automotive manufacturer's need to improve overall fuel economy in vehicles has
led to the trend toward minimizing vehicle weight. The use of light-weight
materials such as aluminum is on the rise and heavier traditional materials such
as steel and iron are being replaced whenever possible.

     Dura has over 40 manufacturing facilities outside the United States,
including locations in Brazil, Canada, Czech Republic, France, Germany, Japan,
Mexico, Portugal, Slovakia, Spain and the United Kingdom. In addition, Dura has
formed strategic alliances, which range from investments in other manufacturers
to informal understandings, which are designed to provide Dura access to new
customers and geographic markets including India and China, and also the
capability of offering complementary products. Dura also has a co-located design
and development philosophy, which allows individual plant locations to optimize
product designs to coincide with Dura manufacturing processes. In support of
this philosophy, Dura has technical design and development capabilities on-site
at 30 locations globally. Dura has also relocated technical personnel resources
to locations in which OEMs will develop "world cars." By participating in the
design of these vehicles and through implementation of manufacturing processes
near the point of use, Dura believes it can continue to expand on its
international presence.
                                        4
<PAGE>

  Business Strategy

     Dura's primary business objective is to capitalize on the consolidation,
globalization and system sourcing trends in the automotive supply industry in
order to be the leading provider of the systems it supplies to OEMs worldwide.
The key elements of Dura's operating and growth strategies are as follows:

OPERATING STRATEGY

     Continuous Operational Improvements.  Dura continuously implements
strategic initiatives designed to improve product quality and reduce
manufacturing costs through the introduction of cellular manufacturing methods,
consolidation of manufacturing facilities, improvement in inventory management
and the reduction of waste. Manufacturing flexibility enables Dura's facilities
to produce systems in a cost-effective manner and strengthens Dura's ability to
meet the just-in-time and in-line sequence delivery schedules of many of its
customers. Dura utilizes a common set of key metrics used to measure actual
performance in comparison to standards and goals.

     Capitalize on Opportunities for Operating Synergies.  Dura's acquisitions
typically provide it with a number of opportunities to reduce costs and improve
operational efficiency. For example, the similarity of the manufacturing
processes and technical capabilities of Dura, and companies that has Dura
acquired, has resulted in significant cost savings and operating synergies.
Immediately following the execution of acquisition agreements, Dura establishes
cross-functional teams which identify synergies expected to be realized from
consolidation of the design, engineering and administrative functions, plant
restructuring and realignment and coordination of raw material purchases. The
cross-functional teams formulate an overall integration plan.

     Foster a Decentralized, Participatory Culture.  Dura's decentralized
approach to managing its manufacturing facilities encourages decision making and
employee participation in areas such as manufacturing processes and customer
service. This "team" approach fosters a unified culture and enhances
communication of strategic direction and goals, while facilitating a greater
success rate in reaching and exceeding its objectives. Dura provides
ownership-related incentives to not only its managers, but also to its salaried
and hourly employees, through grants under Dura's stock option plan and
participation in the employee stock discount purchase plan.

GROWTH STRATEGY

     Focus on Systems.  OEMs are increasingly seeking suppliers capable of
providing complete systems rather than suppliers who only provide separate
component parts. A key element of Dura's growth strategy has been to add to its
ability to provide complete systems to its OEM customers. Dura's past
acquisitions have significantly enhanced its ability to provide transmission
shifter systems and parking brake systems on a global basis and expanded its
product offerings by adding new product systems including window, door, and seat
systems.

     Increase Platform and Customer Penetration.  A key element of Dura's
strategy is to increase volume by adding new customers and to strengthen its
existing customer relationships by broadening its range of products through
internal development efforts and fill-in acquisitions. Dura's past acquisitions
have expanded its relationships with the North American and European OEMs. Dura
has also obtained significant firm orders on a number of new platforms for the
years 2002 through 2004 for incremental new business in North America and
Europe. Dura believes that its geographic diversity and product depth strengthen
its ability to pursue new vehicle platform contracts in the future.

     Extend Global Manufacturing Reach.  In 2001, over 70% of total worldwide
passenger vehicle production occurred outside North America. To meet OEMs'
increasing preference for suppliers with global capabilities, Dura has expanded
its manufacturing operations into new geographic markets through strategic
acquisitions and alliances. Consistent with this strategy, the following
acquisitions have enhanced Dura's ability to serve its customers globally: VOFA
Group (Germany, Spain), Trident Automotive plc (Brazil, Canada, France, Germany,
U.K.), Pollone, S.A. (Brazil), Excel Industries, Inc. (Czech Republic, Germany,
Mexico, Portugal, Spain, U.K.), Adwest Automotive plc (France, Germany, India,
Spain, U.K.),

                                        5
<PAGE>

Metallifacture Limited (U.K.) and Reiche GmbH & Co. KG Automotive Components
(Germany). In addition, this strategy has provided Dura the capability to
design, develop and produce components and systems for the growing market of
global platforms or world cars. Dura has either been awarded or is currently
developing products for several global platforms such as the next Ford Focus, GM
Epsilon, Opel/Fiat Gamma, etc. Increased international sales will also allow
Dura to mitigate the effects of cyclical downturns in a given geographic region
and further diversify its OEM customer base.

     Pursue Strategic Acquisitions and Alliances.  Dura competes in seven
product categories worldwide: driver control systems, seating control systems,
engineered assemblies, glass systems, structural door modules, exterior trim
systems and mobile products. The North American and European market for these
products is highly fragmented, which provides numerous potential growth
opportunities for Dura. Dura's management has substantial experience in
completing and integrating acquisitions within the automobile parts industry. In
the near term, Dura intends to focus its efforts in making strategic
acquisitions and establishing alliances that do not significantly increase its
leveraged position.

COMPANY HISTORY

     Dura Automotive Systems, Inc. is a holding company whose predecessor was
formed by Hidden Creek Industries ("Hidden Creek"), Onex DHC LLC (together with
its affiliates, "Onex"), J2R Corporation ("J2R") and certain others for the
purpose of acquiring the Dura Automotive Hardware and Mechanical Components
divisions of Wickes Manufacturing Company ("Wickes") in November 1990. In August
1994, Dura entered into a transaction that combined the operations of Dura's
operating subsidiary, Dura Operating Corp. ("Dura"), with the automotive parking
brake and cable business and light duty cable business (the "Brake and Cable
Business") of Alkin Co. ("Alkin").

     Since the completion of the acquisition of the Brake and Cable Business,
Dura has successfully completed the following strategic acquisitions, joint
ventures and divestitures:

     - In August 1996, Dura formed a joint venture with Excel Industries, Inc.
       ("Excel") to participate equally in the acquisition of a 25.5% interest
       in Pollone S.A. ("Pollone"), a manufacturer of automotive components and
       mechanical assemblies headquartered in Sao Paulo, Brazil, for $5 million
       in total. The joint venture also loaned Pollone an additional $10.5
       million pursuant to notes which were convertible into equity of Pollone
       at the joint venture's option. In January 1998, the joint venture
       increased its interest in Pollone to 51.0% through the conversion of
       certain of these notes. As a result of Dura's March 1999 acquisition of
       Excel, Dura began consolidating Pollone's financial results. In January
       2000, Dura acquired the remaining ownership interest in Pollone. This
       investment provided Dura with a manufacturing presence in South America.

     - In October 1996, Dura acquired the parking brake business of Rockwell
       Light Vehicle Systems France S.A. for approximately $3.8 million. The
       parking brake business, which was operated from a facility in Cluses,
       France, added a manufacturing presence in Europe and PSA (Peugeot and
       Citroen) and Renault as customers.

     - In December 1996, Dura acquired KPI Automotive Group ("KPI") from Sparton
       Corporation for approximately $78.8 million. KPI manufactures shifter
       systems, parking brake mechanisms, brake pedals and underbody tire
       carriers for the North American automotive industry from facilities in
       Indiana and Michigan. The acquisition added significant market
       penetration in console-based shifter systems, increased platform content
       and added a significant new product line in underbody tire carriers.

     - In January 1997, Dura acquired the VOFA Group ("VOFA") for approximately
       $38.0 million in cash and assumed indebtedness, plus contingent payments.
       VOFA designs and manufactures shifter cables, brake cables and other
       light duty cables for the European automotive and industrial markets from
       facilities in Dusseldorf, Gehren and Daun, Germany and Barcelona, Spain.
       The acquisition added new customers such as Mercedes, Volkswagen and BMW,
       providing a strong European position. This established Dura's cable
       manufacturing capabilities globally.

                                        6
<PAGE>

     - In May 1997, Dura acquired the automotive parking brake business from
       Excel for approximately $2.9 million. The acquisition increased Dura's
       penetration of the parking brake market and expanded Dura's relationship
       with DaimlerChrysler.

     - In August 1997, Dura acquired GT Automotive Systems, Inc. ("GT
       Automotive") for approximately $45.0 million in cash and assumed
       indebtedness, plus contingent payments. GT Automotive designs and
       manufactures column-mounted shifter systems and turn signal and tilt
       lever assemblies for North American OEMs. At the time of the acquisition,
       GT Automotive had a substantial share of the North American column-based
       shifter market. The acquisition of GT Automotive, combined with Dura's
       existing position in console-based shifter systems, increased Dura's
       share of the North American shifter market to the leading position. In
       addition, the acquisition added Nissan as a customer.

     - In December 1997, Dura purchased approximately 19% of the outstanding
       common stock of Thixotech Inc. ("Thixotech") for approximately $0.5
       million. Thixotech generated approximately $10.0 million of revenue on an
       annualized basis, and is a manufacturer of magnesium injection molded
       products for the electronics, communications, power tools and automotive
       industries. Dura also loaned Thixotech an additional $2.8 million
       pursuant to notes which were convertible into additional common stock of
       Thixotech at Dura's option. During 1998 and 1999, Dura purchased
       approximately $4.2 million of 5% convertible preferred stock of
       Thixotech. In addition, Dura guaranteed approximately $1.5 million of
       Thixotech capital lease financing. In January 2000, Dura exercised its
       conversion rights under the notes discussed above, becoming the majority
       owner of Thixotech. In October 2001, after management identified the
       business as non-core to Dura's strategy for the future, Dura successfully
       completed the sale of Thixotech for total proceeds of approximately $4.1
       million. Dura recorded a non-cash charge related to this transaction of
       approximately $5.2 million in the fourth quarter of 2001.

     - In December 1997, Dura acquired REOM Industries ("REOM") for
       approximately $3.7 million. REOM, located in Australia, generated
       approximately $10.0 million of revenue on an annualized basis and
       produced parking brakes, jacks, pedal assemblies, hinges and latches for
       the automotive industry. Their largest customers included Ford Motor
       Company, Holden Limited, and Delphi Automotive Systems. In August 2001,
       after management identified the business as non-core to Dura's strategy
       for the future, Dura divested this operation resulting in a charge of
       approximately $7.5 million in the third quarter of 2001. Approximately
       $2.0 million of this charge was cash related.

     - In March 1998, Dura acquired Universal Tool and Stamping Co., Inc., a
       manufacturer of jacks for the North American automotive industry, for
       approximately $19.5 million. Universal had 1997 revenues of approximately
       $37.0 million. Universal's customers include General Motors, Ford and
       Honda. The acquisition provided Dura with a market presence for jacks in
       North America and added Honda as a significant new customer.

     - In April 1998, Dura acquired all of the outstanding equity interests of
       Trident Automotive plc ("Trident"). Trident had revenues of approximately
       $300 million in 1997, of which 69% was derived from sales of cable
       assemblies, principally to the automotive OEM market, and the balance
       from door handle assemblies, lighting and other products. Approximately
       68% of Trident's revenues were generated in North America, 27% in Europe
       and the remainder in Latin America. Trident had manufacturing and
       technical facilities in Michigan, Tennessee, Arkansas, Canada, the United
       Kingdom, Germany, France and Brazil. Pursuant to the terms of the
       agreement, Dura acquired all of the outstanding equity interests of
       Trident for total consideration of $93.2 million in cash. In addition,
       Dura assumed $75.0 million of Trident's outstanding 10% Senior
       Subordinated Notes due 2005. Dura also repaid Trident's outstanding
       senior indebtedness of approximately $53.0 million.

     - In August 1998, Dura acquired the hinge business from Tower Automotive,
       Inc. ("Hinge Business") for approximately $37.3 million. The Hinge
       Business had annual revenues of approximately $50.0 million and
       manufactures automotive hood and deck lid hinges.

     - In March 1999, Dura acquired Excel for approximately $155.5 million in
       cash, 4.9 million shares of Dura Class A Common Stock and the assumption
       of $164.3 million in indebtedness. Excel designs and

                                        7
<PAGE>

manufactures window, door and seating systems for the automotive, recreational
vehicle, heavy truck and mass transit markets and appliances and hardware for
the recreational vehicle market. Excel also manufactures decorative trim for the
      automotive market and complex injection molded parts for the consumer and
      industrial markets. Revenues for 1998 were approximately $1.1 billion. The
      acquisition of Excel provided Dura with new, value-added product lines and
      strengthened Dura's relationship with important customers such as Ford,
      DaimlerChrysler, Volkswagen and BMW.

     - In March 1999, Dura acquired Adwest Automotive plc ("Adwest"), for $213.9
       million in cash and the assumption of $106.1 million in indebtedness.
       Adwest designs and manufactures driver control mechanisms, engine control
       products and automotive cable primarily for the European automotive
       market and had annual revenues of $400 million. The acquisition of Adwest
       provided Dura with substantial driver control mechanism design and
       production capability in Europe and broadened Dura's dealings with
       customers such as Volkswagen, BMW, Ford, GM, Peugeot and Renault.

     - In June 1999, Dura acquired Metallifacture Limited ("Metallifacture")
       from Bullough plc. Metallifacture, located in Nottingham, England, is a
       manufacturer of jacks and tire carriers for the European automotive
       industry. It had revenues of approximately $25 million and its major
       customers include Ford, General Motors, Rover, Nissan and Volkswagen.

     - In November 1999, Dura acquired the seat adjusting business of Meritor
       Automotive, Inc. ("Meritor") for total cash consideration of $130
       million. Meritor's seat track business manufactures seat track adjusting
       mechanisms for the North American automotive industry. Meritor, with
       operations in Bracebridge, Ontario and Gordonsville, Tennessee, had
       revenues of approximately $130 million and is a Tier II supplier to Lear
       Corporation and other automotive interior suppliers.

     - In January 2000, Dura purchased the Jack Division of Ausco Products, Inc.
       ("Ausco") for total cash consideration of $9 million. Ausco, with
       operations in Benton Harbor, Michigan, produces automotive jacks
       primarily for North American OEMs and has revenues of approximately $13
       million.

     - In June 2000, Dura increased its ownership interest in a previously
       majority owned subsidiary by acquiring the remaining outstanding
       interests in Bowden TSK ("Bowden"). Bowden, located in the U.K., produces
       automotive cables for European OEMs.

     - In November 2000, Dura acquired Reiche GmbH & Co. KG Automotive
       Components ("Reiche"), a manufacturer of steering columns for total
       consideration of $20 million. Reiche, located in Germany, manufactures
       steering columns and steering column components for European and North
       American OEMs.

     - In November 2001, Dura entered into a definitive agreement to divest its
       Plastic Products Business for total proceeds of approximately $41.0
       million. The transaction closed on January 28, 2002. The Plastic Products
       Business designs, engineers, and manufactures plastic components for a
       wide variety of automotive vehicle applications, focusing on the metal to
       plastic conversion and dual plastic applications markets. This business
       employs approximately 750 people in three facilities located in
       Mishawaka, Indiana, Bowling Green, Kentucky and Jonesville, Michigan and
       generates approximately $80.0 million in annual revenue. Dura has
       recorded a non-cash charge of approximately $7.4 million in the fourth
       quarter of 2001 for the estimated loss upon divestment.

  Products

     Dura is the world's largest independent designer and manufacturer of driver
control systems for the global automotive industry. Dura is also a leading
global supplier of seating control systems, glass systems, engineered
assemblies, structural door modules and exterior trim systems.

     Although a portion of Dura's products are sold directly to OEMs as finished
components, Dura uses most of its products to produce "systems" or "subsystems,"
which are groups of component parts located throughout the vehicle which operate
together to provide a specific vehicle function. Systems currently

                                        8
<PAGE>

produced by Dura include glass, door, pedal, park brake, transmission shift,
seat adjusting, latch, and engine control.

     A brief summary of each of Dura's principal product categories is set forth
below:

<Table>
<Caption>
PRODUCT CATEGORY                                            DESCRIPTION
----------------                                            -----------
<S>                                    <C>
Driver Control Systems...............  Adjustable and traditional pedal systems, electronic
                                       throttle controls, electronic and traditional park
                                       brake systems, cable systems, hybrid electronic and
                                       traditional gear shift systems, steering columns
                                       components and assemblies, instrument panel beams,
                                       integrated driver control modules
Seating Control Systems..............  2, 4, 6 & 8-way power and manual seat adjusters,
                                       first, second and third row applications, complete
                                       seat structures, seat recliner assemblies, electronic
                                       seating control modules
Glass Systems........................  RIM and PVC glass encapsulations, integrated liftgate
                                       modules, manual and power backlite assemblies, 1, 2
                                       or 3-sided glass modules, drop-door glass, hidden
                                       hardware glass, integrated greenhouse systems
Engineered Assemblies................  Spare tire carriers, jacks and tool kit assemblies,
                                       hood and tailgate latch systems, hinge assemblies
Structural Door Modules..............  Aluminum and steel body-in-white door modules, side
                                       impact beams, power and manual window lift systems,
                                       anti-pinch window lift systems
Exterior Trim Systems................  Roof trim moldings, side frame trim, A, B, & C-pillar
                                       cappings, body color trim, bright trim
Mobile Products......................  Recreational vehicle appliances (water heaters,
                                       furnaces, stoves and ranges), seat frames and
                                       mechanisms, door assemblies, window systems and other
                                       hardware
</Table>

     The following table sets forth the approximate composition by product
category of Dura's revenues for the last three fiscal years:

<Table>
<Caption>
                                                                       YEAR ENDED
                                                                      DECEMBER 31,
                                                               --------------------------
                     PRODUCT CATEGORY                          2001       2000       1999
                     ----------------                          ----       ----       ----
<S>                                                            <C>     <C>           <C>
Driver Control Systems.....................................     35%        35%        42%
Seating Control Systems....................................     15%        14%         6%
Glass Systems..............................................     14%        14%        14%
Engineered Assemblies......................................     12%        12%        14%
Structural Door Modules....................................      8%         8%         9%
Exterior Trim Systems......................................      7%         6%         5%
Mobile Products............................................      5%         6%         5%
Other......................................................      4%         5%         5%
                                                               ----       ----       ----
     Total.................................................    100%       100%       100%
                                                               ====       ====       ====
</Table>

CUSTOMERS AND MARKETING

     The North American automotive market is dominated by GM, Ford and
DaimlerChrysler, with Japanese and foreign manufacturers accounting for
approximately 23% of the market in 2001. In North America, Dura supplies its
products primarily to Ford, GM, Lear Corporation and DaimlerChrysler. Dura has
also expanded its global presence through acquisitions and internal growth. Dura
has added new customers and increased penetration into certain existing
customers such as Volkswagen and BMW.

                                        9
<PAGE>

     In 2001, over 70% of total worldwide light vehicle production occurred
outside of North America. Dura derives a significant amount of its revenues from
sales to OEMs located outside of North America. In Europe, Dura supplies its
products primarily to Volkswagen, GM/Opel, Ford, BMW, PSA (Peugeot and Citroen),
Renault/Nissan, and DaimlerChrysler. Set forth below is a summary of Dura's
sales by geographic region for 2001, 2000 and 1999:

<Table>
<Caption>
                                                               YEAR ENDED DECEMBER 31,
                                                              -------------------------
REGION                                                        2001      2000      1999
------                                                        -----     -----     -----
<S>                                                           <C>       <C>       <C>
North America...............................................    66%       68%       68%
Europe......................................................    33%       30%       31%
Other.......................................................     1%        2%        1%
                                                               ---       ---       ---
     Total..................................................   100%      100%      100%
                                                               ===       ===       ===
</Table>

     The following is a summary of the significant customers of Dura for 2001,
2000 and 1999:

<Table>
<Caption>
                                                               YEAR ENDED DECEMBER 31,
                                                              -------------------------
CUSTOMER                                                      2001      2000      1999
--------                                                      -----     -----     -----
<S>                                                           <C>       <C>       <C>
Ford........................................................    25%       26%       26%
GM..........................................................    15%       13%       15%
Lear........................................................    12%       10%        3%
DaimlerChrysler.............................................     9%       10%       11%
Volkswagen..................................................     7%        7%        7%
BMW.........................................................     3%        3%        4%
PSA (Peugeot and Citroen)...................................     3%        3%        3%
Renault.....................................................     2%        2%        2%
JCI.........................................................     1%        2%        1%
Toyota......................................................     1%        1%        2%
Nissan......................................................     1%        1%        2%
Honda.......................................................     1%        1%        1%
Other.......................................................    20%       21%       23%
                                                               ---       ---       ---
     Total..................................................   100%      100%      100%
                                                               ===       ===       ===
</Table>

     Dura's customers award contracts for a particular car platform, which may
include more than one car model. Such contracts range from one year to the life
of the models, which is generally three to seven years, and do not require the
purchase by the customer of any minimum number of parts. Dura also competes for
new business to supply parts for successor models. Because Dura supplies parts
for a broad cross-section of both new and mature models, its reliance on any
particular model is minimized. Dura manufactures products for many of the most
popular car, light truck, sport utility and mini-van models in North America and
Europe.

     Major customers for Dura's mobile products include Fleetwood Enterprises,
Winnebago, Damon, Jayco, Thor, Coachmen, Motor Coach Industries and Navistar
International Corporation. Separate sales and engineering groups are located in
Rockford, Illinois and Elkhart, Indiana to service these customers. Similar to
the automotive industry, customers in the mobile products market generally issue
purchase orders for products on an annual basis and periodically issue releases
against those purchase orders. Accordingly, this market does not have a
significant backlog of orders at any particular time.

     Dura's sales and marketing efforts are designed to create overall awareness
of its engineering, design and manufacturing capabilities and to have Dura
considered and selected to supply its products for new and redesigned models of
its OEM customers. Dura's sales and marketing staff works closely with Dura's
design and engineering personnel to prepare the materials used for bidding on
new business as well as to provide a consistent interface between Dura and its
key customers. Most of Dura's sales and marketing personnel have engineering
backgrounds which enable them to understand and participate in the design and
engineering aspects of acquiring new business as well as ongoing customer
service. Dura currently has sales and marketing

                                        10
<PAGE>

personnel located in every major region in which it operates. From time to time,
Dura also participates in industry trade shows and advertises in industry
publications.

  Design and Engineering Support

     Dura believes that engineering service and support are key factors in
successfully obtaining new business. Dura utilizes program management with
customer-dedicated program teams, which have full design, development, test and
commercial issues under the operational control of a single manager. In
addition, Dura has established cross-functional teams for each new program to
ensure efficient product development from program conception through product
launch.

     Dura has a co-located design and development philosophy, which allows
individual plant locations to optimize product designs to coincide with Dura
manufacturing processes. In support of this philosophy, Dura has technical
design & development capabilities on-site at 30 locations globally. A separate
advanced technology group has been established to maintain Dura's position as a
technology leader. The advanced technology group has developed many innovative
features in Dura's products, including many features that were developed in
conjunction with Dura's customers. Dura utilizes computer aided designs ("CAD")
in the design process, which enables Dura to share data files with its customers
via compatible systems during the design stage, thereby improving function, fit
and performance within the total vehicle. Dura also utilizes CAD links with its
manufacturing engineers to enhance manufacturability and quality of the designs
early in the development process.

     Dura has approximately 450 patents granted or in the application process.
The patents granted expire over several years beginning in 2002. Although Dura
believes that, taken together, the patents are significant, the loss or
expiration of any particular patent would not be material to Dura.

  Manufacturing

     Dura employs a number of different manufacturing processes. Dura primarily
utilizes flexible manufacturing cells in both the mechanism and cable assembly
processes. Manufacturing cells are clusters of individual manufacturing
operations and work stations grouped in a circular configuration, with the
operators placed centrally within the configuration. This provides flexibility
by allowing efficient changes to the number of operations each operator
performs. When compared to the more traditional, less flexible assembly line
process, cell manufacturing allows Dura to maintain its product output
consistent with its customers' requirements and reduce the level of inventory.

     Assemblies such as seat systems, jacks, parking brake levers, gear shifters
and latches consist of between five and 50 individual components, which are
attached to form an integrated mechanism. Although these assembly operations are
generally performed in manufacturing cells, high-volume, automated assembly
machines are employed where appropriate. The assembly operations construct the
final product through hot or cold forging machines, staking and riveting the
component parts. A large portion of the component parts are purchased from
Dura's outside suppliers. However, Dura manufactures its own stampings, a
process that consists of passing sheet metal through dies in a stamping press to
form the metal into three-dimensional parts. Dura produces stamped parts using
single-stage and progressive dies in presses, which range in size from 150 to
600 tons. Through continuous improvement teams, which stress employee
involvement, manufacturing processes are regularly upgraded to increase
flexibility, improve operating safety and minimize changeover times of the dies
and fixtures.

     Dura's door systems and body components use similar processes coupled with
roll forming and stretch bending. Roll forming is a continuous process in which
coiled steel is passed through a series of rollers which progressively form the
metal into a consistently shaped section. When viewed from one end, the profile
may be u-shaped for glass channels and roof rails. More complex shapes are
processed for upper door profiles. Stretch bending involves clamping a length of
the rolled profile at numerous points and then twisting or bending the metal to
form contoured surfaces, such as door frames. Door and body components also
require welding, grinding and polishing operations to provide a smooth finish.

                                        11
<PAGE>

     Cables are manufactured using a variety of processes, including plastic
injection molding, extrusion, wire flattening, spring making and zinc
diecasting. Wire is purchased from outside suppliers and then woven into
contra-twisted layers on tubular stranders and bunching machines to produce up
to 19-wire stranded cable. Corrosion resistance is provided by a proprietary,
ceramic coating applied during the stranding process. The cable then is
plastic-coated by an extrusion process to provide a smooth, low coefficient
surface that results in high efficiency and durability. Conduit is then produced
by flattening and coiling wire, which is then extruded with a protective
coating. Proprietary strand and conduit cutting machines enable efficient
processing. Assembly operations are arranged in cells to minimize inventory,
improve quality, reduce scrap, improve productivity and enhance employee
involvement. The cables are assembled with various attachments and end fittings
that allow the customer to install the cables to the appropriate mating
mechanisms.

     Dura's window systems broadly include two categories of products:
mechanically framed glass and molded framed glass. Mechanically framed glass
products are produced by putting glass panes through a series of processes,
which include adding handles, hinges, aluminum and steel based edge frame
assemblies, electrical connectors and fasteners. The production of molded framed
glass products involves two primary molding media: RIM (Reaction Injection
Molding: Polyurethane) and PVC (Poly Vinyl Chloride). Both media provide a
"surround" to the glass panes that incorporates the styling, sealing and
mechanical attachment features of the product. Dura's ability to utilize either
media provides OEMs with the maximum advantage in terms of cost, styling
imperatives and robustness. The glass panes used in the production of Dura's
window systems are purchased from outside suppliers.

     Dura utilizes frequent communication meetings at all levels of
manufacturing to provide training and instruction as well as to assure a
cohesive, focused effort toward common goals. Dura encourages employee
involvement in all aspects of its' business and views such involvement as a key
element in its success. Dura also aggressively pursues involvement from its
suppliers, which is necessary to assure a consistent high quality and on time
delivery of raw materials and components. Where practical, Dura utilizes
component suppliers in the design and prototype stages of the new product
development to facilitate the most comprehensive, state-of-the-art designs
available. Dura has made substantial investments in manufacturing technology and
product design capability to support its products. This includes modern
manufacturing equipment, fineblanking, sophisticated CAD systems and
highly-trained engineering personnel. These advanced capabilities enable Dura to
deliver superior product quality at globally competitive prices.

     The automotive industry has adopted a rigorous quality rating system known
as QS-9000. Suppliers must be certified QS-9000 compliant by independent
auditors as a condition of doing business with automotive customers. Dura has
received QS-9000 certification at all of its facilities and maintains this
status by demonstrating continuous improvement in manufacturing capability and
support processes.

     Dura's plants have been recognized by its customers with various awards,
such as the DaimlerChrysler Gold Pentastar Award, GM Target for Excellence,
Nummi Delivery Performance Award, Lear Hall of Fame Award, Nissan Quality Master
Award and Isuzu Quality Achievement Award. Dura has also received an "A" rating
at Peugeot and Renault. Dura has received Ford Q-1 certification at all
facilities shipping current model Ford product.

  Competition

     Dura operates in a highly competitive environment. Dura principally
competes for new business at the beginning of the development of new models and
upon the redesign of existing models. New model development generally begins two
to five years before marketing of such models to the public. Once a producer has
been designated to supply parts for a new program, an OEM usually will continue
to purchase those parts from the designated producer for the life of the
program, although not necessarily for a redesign. Competitive factors in the
market for Dura's products include product quality and reliability, cost, timely
delivery, technical expertise and development capability, new product innovation
and customer service. The number of Dura's competitors has decreased due to the
supplier consolidation resulting from changing OEM policies. Some of our
competitors have substantial size, scale and financial resources.

                                        12
<PAGE>

     In addition, there is substantial and continuing pressure at the OEMs to
reduce costs, including the cost of products purchased from outside suppliers
such as Dura. Historically, Dura has been able to generate sufficient production
cost savings to offset these price reductions.

     Dura is the world's largest independent designer and manufacturer of driver
control systems for the global automotive industry. Dura is also a leading
global supplier of seating control systems, glass systems, engineered
assemblies, structural door modules and exterior trim systems. Set forth below
is a brief summary of Dura's most significant competitors in several major
product categories:

          1) Driver Control Systems:

          Automotive Cables.  Dura is the leading producer of automotive cables
     in both North American and Europe. Major competitors include Teleflex
     Incorporated ("Teleflex") and Hi-Lex Corporation ("Hi-Lex") in North
     America and Kuester & Co. GmbH, Ficosa International, S.A. ("Ficosa") and
     Sila Holding Industriale ("Sila") in Europe.

          Parking Brakes.  Dura is the leading producer of park brakes in North
     America with four competitors dividing the remaining market share, Ventra
     Group, Inc. ("Ventra"), Magna International Inc. ("Magna"), Ficosa and
     Aisin Seiki. Dura's competitors in Europe include Scharwaechter GmbH & Co.
     ("Edscha"), Ficosa and Aries Industries.

          Transmission Shifters.  Dura is the leading producer of transmission
     shifters in North America, with its only significant competitor being Grand
     Haven Stamped Products. Dura has three competitors in Europe, Teleflex,
     Ficosa, and Sila.

          Pedal Systems.  Dura's primary competitors in pedal systems are
     Teleflex, KSR and Williams in North America. The European market is much
     more fragmented with several competitors including Lunke/Ventra, Edscha,
     Sofedit, Batz, Teleflex and more, all competing against captive or in-house
     OEM operations.

          2) Seating Control Systems:  Dura's primary competitors in seat
     adjusters are the in-house operations of Lear Corporation, Magna, Johnson
     Controls, Inc., and Faurecia. Independent competition exists in Europe,
     which includes Brose, C. Rob Hammerstein GmbH & Co. KG and Keiper Recaro
     GmbH & Co.

          3) Glass Systems:  Dura's primary competitors in window systems are
     Donnelly Corporation, Libbey-Owens Ford Co., PPG Inc. and Guardian
     Industries, Inc. in North America and Sekurit and Pilkington in Europe.

          4) Engineered Assemblies:

          Hood Latches.  Dura is the number one producer of hood latches in
     North America with only one other major competitor, Magna.

          Jacks.  There are only two major jack suppliers in North America, Dura
     and Ventra. Dura and Ventra are the two largest competitors in Europe with
     Batz, Bilstein and Storz sharing the remaining market.

          Tire Carriers.  Leading the North American market for tire carriers,
     Dura's primary competitors include Edscha, Deuer, and Fabco (Krupp). Dura
     enjoys the largest share of the market in Europe which has three other
     players Jackson, Deuer and Fabco (Krupp).

          5) Structural Door Modules:  In this product group, Dura competes in
     door modules and window lift systems as well as other product areas. The
     primary competitors for door modules in North America and Europe include
     Brose Fahrzeagteile Glaswerke GmbH & Co. ("Brose"), Delphi, ArvinMeritor,
     Magna, Matra and Wagon and for window lift systems in North America, Dura
     competes with ArvinMeritor, Brose, Hi-Lex and Magna.

          6) Exterior Trim Systems:  Dura's primary competitors in roof trim
     moldings, side frame trim, A, B, & C-pillar cappings, body color trim
     include WKW and Aries.
                                        13
<PAGE>

          7) Mobile Products:  Dura's primary competitors in the recreational
     vehicle mobile products group include Suburban Manufacturing Company,
     Maytag Appliances/Magic Chef RV Products, The Hammerblow Corporation and
     Hehr International, Inc.

  Suppliers and Raw Materials

     Dura's principal raw materials include (1) coil steel and resin in
mechanism production, (2) metal wire and resin in cable production and (3) glass
in window systems. Dura does not manufacture or sell primary glass. The types of
steel Dura purchases include hot and cold rolled, galvanized, organically coated
and aluminized steel. In general, the wire used by Dura is produced from steel
with many of the same characteristics with the exception that it has a higher
carbon content. Dura utilizes plastic resin to produce the protective coating
for cables and transmission shifter components. Dura employs just-in-time
manufacturing and sourcing systems enabling it to meet customer requirements for
faster deliveries while minimizing its need to carry significant inventory
levels. Dura has not experienced any significant shortages of raw materials and
normally does not carry inventories of raw materials or finished products in
excess of those reasonably required to meet production and shipping schedules.

     Dura typically negotiates blanket purchase orders or 12-month supply
agreements with integrated steel suppliers, mini-mills and service centers that
have demonstrated timely delivery, quality steel and competitive prices. These
relationships allow Dura to order precise quantities and types of steel for
delivery on short notice, thereby permitting Dura to maintain low inventories.
In addition, Dura occasionally "spot buys" steel from service centers to meet
customer demand, engineering changes or new part tool trials.

     Other raw materials purchased by Dura include dies, motors, fasteners,
springs, rivets and rubber products, all of which are available from numerous
sources.

  Seasonality

     A significant portion of Dura's business is directly related to automotive
sales and production by its customers, which is highly cyclical and depends on
general economic conditions, consumer spending and preferences. Any significant
reduction in automotive production and sales by Dura's customers would have a
material adverse effect on its business. The North American automotive market,
Dura's largest market, has experienced a downturn that began in 2000 and
continued into 2001. As such, Dura's sales have declined in line with reduced
volumes. To offset the reduction in production volumes, Dura has accelerated its
structural cost reduction efforts.

     Dura has operations in several major regions of the world and economic
conditions in these regions often differ, which may have varying effects on its
business. The recent downward trend of the Euro relative to the U.S. dollar has
resulted in a negative impact to Dura's results of operations.

     Dura's business is moderately seasonal as its primary North American
customers historically halt operations for approximately two weeks in July for
vacations and model changeovers and its European customers generally reduce
production during the month of August. In addition, third quarter automotive
production is traditionally lower as new models enter production. Accordingly,
third quarter results may reflect this cyclicality.

  Employees

     As of December 31, 2001, Dura employed approximately 10,500 people in North
America, 9,000 in Europe and 500 in other regions of the world. A substantial
number of Dura's employees are members of unions. Dura has collective bargaining
agreements with several unions including: the UAW; the CAW; the International
Brotherhood of Teamsters; and the International Association of Machinists and
Aerospace Workers. Virtually all of Dura's unionized facilities in the United
States and Canada have a separate contract with the union which represents the
workers employed there, with each such contract having an expiration date
independent of its other labor contracts. The majority of Dura's European and
Mexican employees are members of industrial trade union organizations and
confederations within their respective countries. Many of

                                        14
<PAGE>

these organizations and confederations operate under national contracts, which
are not specific to any one employer. Although Dura believes that its
relationship with its union employees is generally good, there can be no
assurance that Dura will be able to negotiate new agreements on favorable terms.
In the event Dura is unsuccessful in negotiating new agreements, these
facilities could be subject to work stoppages, which could have a material
adverse effect on the operations of Dura.

(b) SAFE HARBOR PROVISIONS

     Forward-looking statements included in this Form 10-K are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. There are certain important factors that could cause future results to
differ materially from those that might be anticipated based on some of the
statements made in this report. Investors are cautioned that all forward-looking
statements involve risks and uncertainty. Actual results may differ materially
from those in forward-looking statements as a result of various factors
including, but not limited to:

     - RELIANCE ON MAJOR CUSTOMERS.  Dura's largest customers, Ford, GM, Lear
       and DaimlerChrysler, represented approximately 25%, 15%, 12% and 9%,
       respectively, of Dura's 2001 revenues. The loss of Ford, GM, Lear,
       DaimlerChrysler or any of Dura's other significant customers could have a
       material adverse effect on Dura.

     - INDUSTRY CYCLICALITY AND SEASONALITY.  The automotive and recreational
       vehicle markets are highly cyclical and both markets are dependent on
       consumer spending. Economic factors adversely affecting automotive and
       recreational vehicle production and consumer spending could adversely
       impact Dura. The weakness in the North American automotive and
       recreational vehicle markets adversely impacted our operating results
       during 2001. We typically experience decreased volumes during the third
       quarter of each year due to the impact of scheduled OEM plant shutdowns
       in July and August for vacations and new model changeovers.

     - FAILURE TO OBTAIN BUSINESS RELATED TO NEW AND REDESIGNED MODEL
       INTRODUCTIONS.  The failure of Dura to obtain new business on new models
       or to retain or increase business on redesigned existing models could
       adversely affect Dura.

     - HIGHLY COMPETITIVE AUTOMOTIVE SUPPLY INDUSTRY.  The automotive component
       supply industry is highly competitive. There is substantial and
       continuing pressure from the OEMs to reduce costs, including the cost of
       products purchased from outside suppliers such as Dura. If we are unable
       to generate sufficient production cost savings in the future to offset
       price reductions, our gross margin could be adversely affected.

     - PRODUCT LIABILITY EXPOSURE.  Dura faces an inherent business risk of
       exposure to product liability claims from its customers and consumers in
       the event that its products fail to perform to specifications or result
       in personal injury or death, and there can be no assurance that Dura will
       not experience material product liability losses in the future or that we
       will not incur significant costs to defend these claims. In addition, if
       any Dura-designed products are or are alleged to be defective, we may be
       required to participate in a product recall involving those products.
       Each OEM has its own policy regarding product recalls and other product
       liability actions relating to its suppliers. However, as suppliers become
       more integrally involved in the vehicle design process and assume more
       system integration functions, OEMs are increasingly looking to their
       suppliers for contribution when faced with product recalls, product
       liability or warranty claims. Dura cannot assure you that the future
       costs associated with providing product warranties will not be material.

     - WORK STOPPAGES AND OTHER LABOR MATTERS.  A significant number of our
       employees are unionized. Dura cannot assure you that we will not
       encounter strikes, further unionization efforts or other types of
       conflicts with labor unions or our employees. Any of these factors may
       have an adverse effect on us or may limit our flexibility in dealing with
       our workforce. In addition, many OEMs and their suppliers have unionized
       workforces. Work stoppages or slow-downs experienced by OEMs or their
       suppliers could result in slow-downs or closures of assembly plants where
       our products are included in assembled

                                        15
<PAGE>

       vehicles. In the event that one or more of our customers experience a
       material work stoppage, such work stoppage could have a material adverse
       effect on our business.

     - SUBSTANTIAL LEVERAGE.  We have a significant amount of indebtedness. Our
       ability to service our indebtedness will depend on our future
       performance, which will be affected by prevailing economic conditions and
       financial, business, regulatory and other factors. Certain of these
       factors are beyond our control. In addition, since a portion of our
       indebtedness is at variable rates of interest, we will be vulnerable to
       increases in interest rates, which could have a material adverse effect
       on our results of operations, liquidity and financial condition.

ITEM 2.  PROPERTIES

     Dura's corporate office is located in Minneapolis, Minnesota and occupies
approximately 5,700 square feet. Dura's operating headquarters is located in
Rochester Hills, Michigan and occupies two facilities totaling approximately
100,000 square feet, a portion of which is used for product development
activities. All three of these facilities are leased.

     Dura believes that the productive capacity and utilization of its
facilities is sufficient to allow Dura to conduct its operations in accordance
with its business strategy. All of Dura's owned facilities are subject to liens
under its Credit Agreement. The following table shows the principal facilities
of Dura as of December 31, 2001:

<Table>
<Caption>
                                              NUMBER OF
COUNTRY                                         SITES
-------                                       ---------
<S>                                           <C>
Brazil......................................      2
Canada......................................      3
Czech Republic..............................      3
France......................................      7
Germany.....................................      9
Japan.......................................      1
Mexico......................................      2
Portugal....................................      2
Slovakia....................................      1
Spain.......................................      3
United Kingdom..............................      8
United States...............................     32
                                                 --
     Total..................................     73
                                                 ==
</Table>

     Dura's manufacturing facilities have a combined square footage in excess of
7,850,000, approximately 72% of which is owned and approximately 28% is leased.
To increase efficiency, Dura expects to consolidate the operations of certain of
its manufacturing facilities and technical centers over the next twelve months.

     In some cases, several of Dura's manufacturing sites, technical centers
and/or product development centers and sales activity offices are located at a
single multi-purpose site. As of December 31, 2001, Dura had an aggregate of 30
sites globally that contain technical design & development capabilities.

     Management believes that substantially all of its property and equipment is
in good condition and that it has sufficient capacity to meet its current
manufacturing needs. Utilization of Dura's facilities varies with North American
and European light vehicle production and general economic conditions in such
regions.

ITEM 3.  LEGAL PROCEEDINGS

     Dura is involved in routine litigation incidental to the conduct of its
business. Dura does not believe that any litigation to which it is currently a
party will have a material adverse effect on its business or financial
condition.

                                        16
<PAGE>

     In late 1994, Ford issued a recall of a series of manual transmission Ford
F-Series pickups to repair the self-adjust parking brakes originally
manufactured by the Brake and Cable Business. The type of alleged failures that
prompted the F-Series recalls have led to a number of claims and lawsuits filed
against Ford, one of which culminated in a July 1998 award of punitive damages
against Ford of more than $151 million (which has subsequently been reduced on
appeal to $69 million) and Ford is appealing the decision. Dura may be subject
to claims brought directly against Dura by injured occupants of Ford vehicles
and to claims for contribution or indemnification asserted by Ford. The
agreement relating to the acquisition of the Brake and Cable Business provided
that Dura is liable for claims arising out of accidents that take place on or
after August 31, 1994 and that Dura will be liable for other claims only to the
extent any losses by Alkin relating to such claims are not paid by Alkin's
insurance policies (either because they are not over the deductible amount,
because Alkin's policy limits have been exceeded or because they are not covered
by Alkin's insurance policies for other reasons). Dura is not presently aware of
any other open self-adjusting parking brake claims against Ford with respect to
which Ford may elect to seek contribution from Dura. Dura has attempted to work
with Ford to address the claims arising from the self-adjusting parking brakes
and does not believe that these claims have adversely affected its business
relationship with Ford.

     In early November 1996, Dura was served with a lawsuit brought by
affiliates of AIG, its excess insurance carrier, in Toronto, Canada seeking a
declaratory judgment that the umbrella and excess liability policies that it had
issued to Onex do not provide coverage in connection with allegedly defective
self-adjust parking brakes manufactured by Alkin prior to August 31, 1994. The
AIG policies at issue provided (a) the first layer of excess coverage (beyond
Dura's $3 million primary policy per year) for claims arising from August 31,
1994 to April 1, 1996 in the amount of $20 million coverage per year, and (b) an
additional layer of excess coverage at $33 to $53 million per year. In principal
part, the AIG affiliates claim that the policies do not provide coverage with
respect to products manufactured prior to August 31, 1994 or liabilities assumed
by Dura pursuant to purchase agreements. The AIG affiliates also claim that the
policies should be voided with respect to self-adjust parking brake claims for
inadequate disclosure at the time the policies were applied for. Dura and Onex
dispute the allegations of the Ontario lawsuit and have filed a counterclaim
against the AIG affiliates for breach of contract.

     In March 1999, Dura was notified by Ford of its decision to institute a
recall of certain of its vehicles, including Explorers, Mountaineers, Rangers,
Mustangs and F-Series pickups, relating to the speed control cable. Ford has
reported that certain of such vehicles could be equipped with a speed control
cable that could interfere with the speed control pulley and thus result in a
"stuck" throttle. In June 1999, Ford notified Dura that as many as 987,839
vehicles could be affected at an alleged cost of up to $60 per vehicle. In
October 1999, Ford announced that it was voluntarily recalling all 1998-1999
Ford Explorers and Mountaineers (approximately 932,000 vehicles) to replace the
auxiliary hood latches. Ford contends that Dura failed to provide adequate
corrosion protection, thereby allowing the secondary latch to remain open, which
may potentially lead to hoods flying open. Ford projects that the recall will
cost Ford approximately $23 million. Although Dura denies full liability related
to the speed control and secondary hood latch recalls, in June 2000, it settled
the two product recall matters through a cost sharing agreement with Ford. Dura
agreed to pay $40 million ($20 million in July 2000, followed by three equal
payments totaling $20 million in July 2001, July 2002 and July 2003) to resolve
Ford's claims relating to these recalls.

     In September 2001, Dura was notified by Landrover of its decision to
institute a recall of its Freelander vehicles due to alleged malfunctions of the
parking brake mechanism. This recall potentially affects approximately 220,000
vehicles manufactured world-wide between September 1997 and March 2001. Dura is
currently working with the customer to resolve this matter.

     Although Dura does not believe any current litigation will have a material
adverse effect on its business or financial condition, it faces an inherent
business risk of exposure to product liability claims in the event that the
failure of its products results, or is alleged to result, in property damage,
bodily injury and/or death. Dura cannot assure you that it will not experience
any material product liability losses in the future or that it will not incur
significant costs to defend these claims. In addition, if any Dura-designed
products are or are alleged to be, defective, Dura may be required to
participate in a recall involving those products. Each OEM has its own policy
regarding product recalls and other product liability actions relating to its
suppliers. However, as
                                        17
<PAGE>

suppliers become more integrally involved in the vehicle design process and
assume more system integration functions, OEMs are increasingly looking to their
suppliers for contribution when faced with product recalls, product liability or
warranty claims. Dura cannot assure you that the future costs associated with
providing product warranties will not be material.

     Dura believes that it is adequately insured, including with respect to
product liability coverage, at levels sufficient to cover any of the other
claims described above, subject to commercially reasonable deductible amounts.
Dura has also established reserves in amounts it believes are reasonably
adequate to cover any adverse judgments. However, any adverse judgment in excess
of our insurance coverage and such reserves could have a material adverse effect
on Dura's business.

  Environmental Matters

     Dura is subject to the requirements of federal, state, local and foreign
environmental and occupational health and safety laws and regulations. While
Dura devotes resources designed to maintaining compliance with these
requirements, there can be no assurance that Dura operates at all times in
complete compliance with all such requirements. Dura could be subject to
potentially significant fines and penalties for any noncompliance that may
occur. Although Dura has made and will continue to make capital and other
expenditures to comply with environmental requirements, Dura does not expect to
incur material capital expenditures for environmental controls in 2002.

     Some of Dura's operations generate hazardous substances. Like all
manufacturers, if a release of hazardous substances occurs or has occurred at or
from any of Dura's current or former properties or at a landfill or another
location where Dura has disposed of wastes, Dura may be held liable for the
contamination, and the amount of such liability could be material.

     In 1995, the Michigan Department of Environmental Quality ("MDEQ"),
requested that Dura and Wickes conduct an environmental investigation at and
around Dura's Mancelona, Michigan facility, which Dura acquired from Wickes in
1990. The investigation detected trichloroethylene ("TCE") in groundwater at the
facility and offsite locations. Dura has not used TCE since it acquired the
Mancelona facility, although TCE may have been used by prior operators. Dura has
arranged and paid for the sampling of several residential drinking water wells
in the area and for the replacement of drinking water wells found to contain TCE
above drinking water standards. Sampling of residential wells, and replacement
of such wells, when necessary, will continue. Dura will likely incur additional
costs to further investigate, monitor or remediate the contamination, and
possibly to provide additional alternative drinking water supplies. In April
1999, Dura settled certain potential claims asserted by a ski resort with
respect to possible future impact on the resort's water supply wells.

     The Mancelona groundwater contamination matter is subject to an indemnity
from Wickes. In connection with Dura's acquisition of certain assets from Wickes
in 1990, Wickes agreed to indemnify Dura with respect to certain environmental
liabilities associated with Wickes' operation of the subject facilities subject
to a $750,000 basket (which has been reached), up to a $2.5 million cap. Dura
will be obligated to indemnify Wickes with respect to any liabilities above such
cap. Wickes has acknowledged that Dura made a timely and adequate claim for
indemnification with respect to the Mancelona matter, and has been paying
indemnification claims relating to the Mancelona matter, subject to a
reservation of rights.

     In 1998, Dura acquired Universal. The seller in the Universal transaction
agreed to indemnify Dura for environmental liabilities arising from the
operation of the acquired facilities prior to the acquisition. Following the
acquisition, pursuant to the indemnity, the seller continued to address certain
environmental matters, including the cleanup of TCE-contaminated soil at Dura's
Butler, Indiana facility. In 1998, the seller filed for reorganization under the
federal bankruptcy laws and ceased performing its obligations under the
indemnity. In March 1999, the seller requested bankruptcy court approval to
reject their contractual indemnity obligations to Dura. Subject to Dura's right
to seek repayment in the bankruptcy proceeding, it is likely that Dura will be
responsible for completing the cleanup at its Butler facility. Although Dura
cannot provide complete assurance, based on estimates provided by the
environmental consultant that has been performing the cleanup, Dura does not
expect the cost to complete the cleanup to be material.
                                        18
<PAGE>

     In 1998, Dura entered into a partial consent decree to settle its liability
for past costs at the former Excel Main Street Well Field Site in Elkhart,
Indiana, where TCE was found in a municipal well field near the Elkhart
facility. Dura is one of several potentially responsible parties involved at the
site. Under the settlement, Dura has a continuing payment obligation for
operation and maintenance of a groundwater treatment system and for a soil vapor
extraction system. These obligations will likely continue for several years. The
annual cost to operate these systems is not material. In addition, Dura expects
to receive certain payments from other parties involved at the site.

     Dura is involved as a potentially responsible party at several waste
disposal sites. Although the environmental laws provide for joint and several
liability at such sites, liability is typically allocated among the viable
parties involved. Dura believes that it has no liability at some of these sites,
and that adequate reserves are in place for current estimates of Dura's share of
liability at the other sites. Dura cannot provide complete assurance, however,
that its liability at these sites will not materially exceed the current amount
of Dura's reserves.

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

     There were no matters submitted to a vote of stockholders during the fourth
quarter of 2001.

                                    PART II

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

     The Class A Common Stock is traded on the Nasdaq National Market under the
symbol "DRRA." The following table sets forth, for the periods indicated, the
low and high closing sale prices for the Class A common stock as regularly
quoted on Nasdaq.

<Table>
<Caption>
                                                                 LOW       HIGH
                                                                ------    ------
<S>                                                             <C>       <C>
2001
First Quarter...............................................    $ 5.44    $ 9.69
Second Quarter..............................................      7.25     16.00
Third Quarter...............................................      6.83     19.05
Fourth Quarter..............................................      7.25     11.00
2000
First Quarter...............................................    $12.38    $19.13
Second Quarter..............................................     10.66     16.88
Third Quarter...............................................      8.50     12.00
Fourth Quarter..............................................      4.75      9.56
</Table>

     As of March 1, 2002, there were approximately 805 holders of record of the
outstanding Class A common stock and 10 holders of record of the outstanding
Class B common stock.

     Dura has not declared or paid any dividends on its Common Stock in the past
and does not anticipate paying dividends in the foreseeable future. Any future
payment of dividends is within the discretion of the Board of Directors and will
depend upon, among other factors, the capital requirements, operating results
and financial condition of Dura. In addition, Dura's ability to pay dividends is
limited under the terms of the 9% Senior Subordinated Notes and by the terms of
its Credit Agreement. See "Management's Discussion and Analysis of Results of
Operations and Financial Condition -- Liquidity and Capital Resources."

ITEM 6.  SELECTED FINANCIAL DATA

     The selected consolidated financial data for Dura presented below for, and
as of the end of each of the years in the five-year period ended December 31,
2001, is derived from Dura Automotive Systems, Inc.'s Consolidated Financial
Statements which have been audited by Arthur Andersen LLP, independent public
accountants. The consolidated financial statements at December 31, 2001 and 2000
and for each of the three

                                        19
<PAGE>

years in the period ended December 31, 2001 and the auditor's report thereon are
included elsewhere in this report. The consolidated financial statements at and
for the years ended December 31, 1999, 1998 and 1997 are not included herein.
This selected consolidated financial data should be read in conjunction with
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" and Dura's Consolidated Financial Statements and Notes to
Consolidated Financial Statements, included elsewhere in this report.

<Table>
<Caption>
                                                             YEARS ENDED DECEMBER 31,
                                          --------------------------------------------------------------
                                             2001          2000          1999         1998        1997
                                          ----------    ----------    ----------    --------    --------
                                                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                       <C>           <C>           <C>           <C>         <C>
INCOME STATEMENT DATA:
Revenues..............................    $2,477,373    $2,633,084    $2,200,385    $739,467    $449,111
Cost of sales.........................     2,163,324     2,236,544     1,854,705     608,518     375,086
S, G & A expense......................       139,559       165,524       130,079      49,825      32,815
Facility consolidation, product recall
  and other charges...................        24,386        15,361        16,246          --          --
Amortization expense..................        27,049        27,515        23,546       9,868       3,600
Operating income......................       123,055       188,140       175,809      71,256      37,610
Interest expense, net.................       100,817       112,433        81,633      20,267       9,298
Provision for income taxes............         8,450        30,571        37,984      20,933      11,670
Net income............................        11,219        41,777        41,220      26,024      16,642
                                          ----------    ----------    ----------    --------    --------
Basic earnings per share..............    $     0.63    $     2.39    $     2.53    $   2.43    $   1.89
Diluted earnings per share............    $     0.62    $     2.35    $     2.46    $   2.37    $   1.88
</Table>

<Table>
<Caption>
                                             2001          2000          1998         1998        1997
                                          ----------    ----------    ----------    --------    --------
                                                              (DOLLARS IN THOUSANDS)
<S>                                       <C>           <C>           <C>           <C>         <C>
BALANCE SHEET DATA:
Working capital.......................    $   80,642    $  169,005    $  162,949    $ 63,766    $ 50,304
Total assets..........................     2,121,604     2,357,047     2,444,867     929,383     419,264
Long-term debt........................     1,015,579     1,161,201     1,178,310     316,417     178,081
Stockholders' investment..............       442,397       453,394       430,996     238,037     101,708
</Table>

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

     This discussion should be read in conjunction with Dura's Consolidated
Financial Statements and the Notes to Consolidated Financial Statements included
elsewhere in this report.

OVERVIEW

     The economic climate has been extremely challenging in 2001. This was
especially true in the automotive and recreational vehicle markets. We saw
significantly lower production levels in North America during 2001 as compared
to 2000. The automotive market experienced a boost in the second half of 2001 as
a result of the various incentive plans that the OEMs established including zero
percent financing, but production levels were still reduced compared to 2000
because most of the demand was met from the sale of existing inventory. As such,
our sales have declined in line with the reduced North American OEM production
volumes. We anticipate that 2002 will continue to be a challenging environment
and we believe that our ability to reduce costs and deliver quality products has
prepared us for the conditions this uncertain market may present to us.

COMPARISON OF YEAR ENDED DECEMBER 31, 2001 TO YEAR ENDED DECEMBER 31, 2000

     Revenues.  Revenues for the year ended December 31, 2001 decreased by
$155.7 million, or 5.9%, to $2,477.4 million from $2,633.1 million for 2000.
Factors that unfavorably impacted revenue in 2001 included the weakness in both
the North American automotive and recreational vehicle markets as well as the
weakening of the European currencies in relation to the US dollar. Approximately
33% of Dura's total

                                        20
<PAGE>

revenues are generated from European operations and 8% of total revenues are
generated from the recreational vehicle market.

     Cost of Sales.  Cost of sales for the year ended December 31, 2001
decreased by $73.2 million, or 3.3%, to $2,163.3 million from $2,236.5 million
for 2000. Cost of sales as a percentage of revenues for the year ended December
31, 2001 was 87.3% compared to 84.9% for 2000. The corresponding reduction in
gross margin is primarily the result of the decreased volumes in the North
American automotive and recreational vehicle markets as well as inefficiencies
resulting from a few difficult product launches in Europe. These items were
partially offset by the benefit from the implementation of Dura's restructuring
plan and continued focus on cost reduction.

     Selling, General, and Administrative.  Selling, general, and administrative
expenses for the year ended December 31, 2001 decreased by $26.0 million, or
15.7%, to $139.6 million from $165.5 million in 2000. As a percentage of
revenue, selling, general and administrative expenses decreased to 5.6% for 2001
compared to 6.3% for 2000. The decrease in cost is primarily the result of the
salaried headcount reduction actions taken in late 2000 and early 2001.

     Facility Consolidation, Product Recall and Other Charges.  In August 2001,
Dura divested its Australian operations resulting in a charge of approximately
$7.5 million in the third quarter of 2001. Approximately $2.0 million of this
charge was cash related. The Australian operations generated approximately $10.0
million of revenue on an annualized basis and produced parking brakes, jacks,
pedal assemblies, hinges and latches for the automotive industry. Their largest
customers included Ford Motor Company, Holden Limited, and Delphi Automotive
Systems.

     In October 2001, Dura successfully completed the sale of its Thixotech
business located in Canada for total proceeds of approximately $4.1 million.
Thixotech generated approximately $10.0 million of revenue on an annualized
basis, and is a manufacturer of magnesium injection molded products for the
electronics, communications, power tools and automotive industries. Dura
recorded a non-cash charge related to this transaction of approximately $5.2
million in the fourth quarter of 2001.

     In November 2001, Dura entered into a definitive agreement to divest its
Plastic Products Business for total proceeds of approximately $41.0 million. The
transaction closed on January 28, 2002. The Plastic Products Business designs,
engineers, and manufactures plastic components for a wide variety of automotive
vehicle applications, focusing on the metal to plastic conversion and dual
plastic applications markets. This business employs approximately 750 people in
three facilities located in Mishawaka, Indiana, Bowling Green, Kentucky and
Jonesville, Michigan and generates approximately $80.0 million in annual
revenue. Two members of Dura's board of directors are members of management of
an investor group which is general partner of the controlling shareholder of the
acquiring company. Dura has recorded a non-cash charge of approximately $7.4
million in the fourth quarter of 2001 for the estimated loss upon divestment.

     Throughout 2000 and 2001 Dura has evaluated manufacturing capacity issues
and opportunities for cost reduction given the reduced demand in the North
America automotive and recreational vehicle markets and the available capacity
within Dura's operations. As a result, beginning in the fourth quarter of 2000,
Dura began to implement several actions including discontinuing operations in
two North American facilities, combining the Driver Control and Engineered
Products divisions into one, Control Systems, and reducing and consolidating
certain support activities to achieve an appropriate level of support personnel
relative to remaining operations and future business requirements. These actions
resulted in a fourth quarter 2000 restructuring charge of $6.8 million,
including severance related payments of $6.2 million and facility closure costs
of approximately $0.6 million. Additionally in 2000 Dura expensed as incurred
equipment relocation costs of $0.8 million. In continuation of the actions taken
in 2000, Dura recorded $2.4 million of additional restructuring charges in the
first quarter and $2.0 million in the fourth quarter of 2001 relating to
employee severance. Dura also expensed as incurred approximately $0.2 million of
equipment relocation costs incurred during the first quarter of 2001. Dura
expects to fund these expenditures through cash flow from operations.

                                        21
<PAGE>

     Amortization Expense.  Amortization expense for the year ended December 31,
2001 decreased by $0.5 million, or 1.7%, to $27.0 million from $27.5 million in
2000. The slight decrease is due to the impact of foreign exchange on European
goodwill during 2001.

     Interest Expense.  Interest expense for the year ended December 31, 2001
decreased by $11.6 million, or 10.3%, to $100.8 million from $112.4 million in
2000. The decrease in interest expense is due to lower interest rates on LIBOR
contracts and debt pay-down of approximately $131.8 million during 2001, offset
by the higher interest cost related to the additional issuance of $158.5 million
of Senior Subordinated Notes (see below) and the unfavorable impact of existing
interest rate swap agreements.

     Income Taxes.  The effective tax rate for the year ended December 31, 2001
was 38.0% compared to the 2000 effective tax rate of 40.4%. The effective income
tax rate decreased as a result of the implementation of tax planning strategies
during 2001, a reduction in the statutory tax rates in Germany that became
effective in 2001 and a tax holiday in the Czech Republic for 2001. The
effective rate differs from statutory rates due primarily to the mix of
income/loss among the countries in which Dura operates, the effect of
non-deductible goodwill amortization and the effects of various tax planning
strategies.

     Minority Interest and Equity in Losses of Affiliates.  For the year ended
December 31, 2000, Minority Interest in Income represented a partial year of a
minority interest in Dura's fully consolidated subsidiary in Wales. The minority
interest was acquired during 2000 and at December 31, 2000 was wholly owned.

     Minority Interest.  Minority interest for the years ended December 31, 2001
and December 31, 2000 represents dividends, net of income tax benefits, on the
7 1/2 percent Convertible Trust Preferred Securities ("Preferred Securities")
which were issued on March 20, 1998.

     New Accounting Pronouncements.  In July 2001, the Financial Accounting
Standards Board issued SFAS No. 141, "Business Combinations," and SFAS No. 142,
"Goodwill and Other Intangible Assets". SFAS No. 141 requires all business
combinations initiated after June 30, 2001 to be accounted for using the
purchase method of accounting. Under SFAS No. 142 goodwill and intangible assets
with indefinite lives are no longer amortized, but reviewed annually, or more
frequently if impairment indicators arise. Separable intangible assets that are
not deemed to have indefinite lives will continue to be amortized over their
useful lives, but with no maximum life. The amortization provisions of SFAS No.
142 apply to goodwill and intangible assets acquired after June 30, 2001.
Effective January 1, 2002, Dura adopted SFAS No. 142 with respect to goodwill
and intangible assets acquired prior to July 1, 2001. Dura is in the process of
determining the impact of adopting SFAS No. 142 on its earnings and financial
position, including whether it will be required to recognize any transitional
impairment losses as a cumulative effect of a change in accounting principle.
Application of the provisions of SFAS No. 142 are anticipated to result in an
increase in pre-tax net income of approximately $25.9 million for the year ended
December 31, 2002, related to the goodwill amortization that will no longer be
recorded under SFAS No. 142.

     Effective January 1, 2001, Dura adopted SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended, which requires that
all derivative instruments be reported on the balance sheet at fair value and
establishes criteria for designation and effectiveness of transactions entered
into for hedging purposes. The cumulative effect of adopting SFAS No. 133 was to
increase other comprehensive income ("OCI") by $0.2 million, after-tax. The
effect on net income was not significant, primarily because the hedges in place
as of January 1, 2001 qualified for hedge accounting treatment and were highly
effective.

COMPARISON OF YEAR ENDED DECEMBER 31, 2000 TO YEAR ENDED DECEMBER 31, 1999

     Revenues.  Revenues for the year ended December 31, 2000 increased by
$432.7 million, or 19.7%, to $2,633.1 million from $2,200.4 million for 1999.
The increase is primarily the result of the full year effect of the acquisitions
of Excel and Adwest in March of 1999, Metallifacture in June of 1999 and the
seat track business of Meritor in November 1999. Factors that unfavorably
impacted revenue in 2000 included the weakening of the European currencies in
relation to the US dollar and the weakness in the recreational vehicle market.
Approximately 30% of Dura's total revenues are generated from European
operations and 10% of total revenues are generated from the recreational vehicle
market.

                                        22
<PAGE>

     Cost of Sales.  Cost of sales for the year ended December 31, 2000
increased by $381.8 million, or 20.6%, to $2,236.5 million from $1,854.7 million
for 1999. Cost of sales as a percentage of revenues for the year ended December
31, 2000 was 84.9% compared to 84.3% for 1999. The corresponding reduction in
gross margin is primarily the result of the full year effect of the 1999
acquired operations resulting in a larger proportion of business at lower
margins. Additionally, inefficiencies resulting from plant consolidations and
product launches caused the margin deterioration in the latter part of 2000.
These items were partially offset by the benefit from the implementation of
Dura's restructuring plan and continued focus on cost reduction.

     Selling, General, and Administrative.  Selling, general, and administrative
expenses for the year ended December 31, 2000 increased by $35.4 million, or
27.2%, to $165.5 million from $130.1 million in 1999. As a percentage of
revenue, selling, general and administrative expenses increased to 6.3% for 2000
compared to 5.9% for 1999. The increase in cost is primarily the result of the
full year effect of the acquisitions made during 1999 discussed above and
expenses resulting from the development of web-based sourcing and cost reduction
program.

     Facility Consolidation, Product Recall and Other Charges.  As a result of
reduced demand in the recreational vehicle market, a downturn in the North
American automotive industry and the utilization of available capacity resulting
from Dura's focus on lean manufacturing, Dura announced plans to close two
manufacturing facilities and consolidate two of its divisions during October of
2000. Also, a previously planned European facility closure will no longer occur
due to customer and capacity issues. The net impact of the restructuring actions
was a $0.6 million benefit in 2000. Dura anticipates incurring the majority of
the remaining costs in 2001. Dura expects to fund these expenditures through
cash flow from operations. In the second quarter of 2000, Dura settled two
product recall issues through a cost sharing agreement with Ford. As a result of
this agreement, Dura recorded a one-time charge to operations of $16.0 million
in the second quarter of 2000 to cover amounts not previously reserved. The
payments related to this charge will be made over a three-year period and began
in July of 2000. These recalls were announced in the first half of 1999 and
involved concerns associated with Trident speed control cables and a secondary
hood latch. Dura acquired Trident in April of 1998.

     Amortization Expense.  Amortization expense for the year ended December 31,
2000 of $27.5 million increased $4.0 million compared to 1999. The increase
reflects the full year effect for the goodwill related to the acquisitions made
during 1999 discussed above.

     Interest Expense.  Interest expense of $112.4 million for the year ended
December 31, 2000 has increased $30.8 million or 37.7% from 1999. The increase
in interest expense reflects the full year impact of the borrowings resulting
from the 1999 acquisitions and an increase in the effective interest rate for
2000 compared to 1999.

     Income Taxes.  The effective tax rate for the year ended December 31, 2000
was 40.4% compared to the 1999 effective tax rate of 40.3%. The effective rates
differ from statutory rates due primarily to the mix in income among the
countries in which Dura operates and the effect of the non-deductible goodwill
amortization, offset by favorable foreign sales corporation and research and
development credits.

     Minority Interest and Equity in Losses of Affiliates.  For the year ended
December 31, 2000, Minority Interest in Income represents a partial year of a
minority interest in Dura's fully consolidated subsidiary in Wales. The minority
interest was acquired during 2000 and at December 31, 2000 was wholly owned. The
Equity in Losses of Affiliates for year ended December 31, 2000 is less
significant in 2000 compared to 1999 as a result of Dura increasing its
ownership interest in these investments during 2000, resulting in consolidation
of the entities, as well as operating improvements implemented which resulted in
a positive impact on earnings. As of December 31, 2000, Dura had acquired all
minority interest positions in these entities and will fully consolidate these
entities results in 2001.

     Minority Interest.  Minority interest for the years ended December 31, 2000
and December 31, 1999 represents dividends, net of income tax benefits, on the
7 1/2 percent Convertible Trust Preferred Securities ("Preferred Securities")
which were issued on March 20, 1998.

                                        23
<PAGE>

     Extraordinary Items.  The extraordinary loss for the year ended December
31, 1999 represents the write-off, net of income taxes, of deferred financing
costs related to Dura's former credit facilities.

     Cumulative Effects of Change in Accounting.  The cumulative effect of
change in accounting for the year ended December 31, 1999 represents the
write-off, net of income taxes, of the unamortized balance of capitalized
start-up costs pursuant to the provisions of SOP 98-5.

LIQUIDITY AND CAPITAL RESOURCES

     During 2001, Dura provided cash from operations of $212.1 million, compared
to $117.6 million in 2000. Cash generated from operations before changes in
working capital items was $136.0 million for 2001 compared to $134.0 million for
2000. Working capital generated cash of $76.1 million in 2001 compared to
requiring $16.4 million in 2000. The improvement in working capital is primarily
the result of Dura's continued focus on reducing accounts receivable and
inventory levels during 2001.

     Net cash used in investing activities was $71.8 million for 2001 as
compared to $129.2 million in 2000. Net capital expenditures totaled $71.8
million for 2001 primarily for equipment and dedicated tooling purchases related
to new or replacement programs. This compares with net capital expenditures of
$110.1 million in 2000.

     Net cash used in financing activities totaled $135.3 million for 2001
compared with cash provided of $18.9 million in 2000. During 2001, Dura issued
an additional $147.1 million, net of issuance costs and discounts, of 9% Senior
Subordinated Notes (see below), and used the proceeds to repay borrowings
outstanding under its revolving credit facility.

     In connection with the acquisitions of Adwest and Excel, Dura entered into
an amended and restated $1.15 billion credit agreement ("Credit Agreement"). The
Credit Agreement provides for revolving credit facilities of $400.0 million, a
$275.0 million tranche A term loan, a $275.0 million tranche B term loan and a
$200.0 million interim term loan facility. As of December 31, 2001, rates on
borrowings under the Credit Agreement ranged from 4.4% to 6.4%. Borrowings under
the tranche A term loan are due and payable in March 2005 and borrowings under
the tranche B term loan are due and payable in March 2006. The revolving credit
facility is available until March 2005. Borrowings under the interim loan were
repaid in April 1999.

     The Credit Agreement contains various restrictive covenants that limit
indebtedness, investments, rental obligations and cash dividends. The Credit
Agreement also requires Dura to maintain certain financial ratios including
minimum liquidity and interest coverage. Dura was in compliance with the
covenants as of December 31, 2001. Borrowings under the Credit Agreement are
collateralized by substantially all assets of Dura.

     The Credit Agreement provides Dura with the ability to denominate a portion
of its revolving credit borrowings in foreign currencies up to an amount equal
to $150.0 million. As of December 31, 2001, $50.0 million of borrowings were
denominated in US dollars, $9.5 million in British pound sterling and $3.1
million in Euros.

     At December 31, 2001, Dura had unused borrowing capacity of approximately
$321.0 million of which $40.1 million was available under its most restrictive
debt covenant. Dura also utilizes uncommitted overdraft facilities to satisfy
the short-term working capital requirements of its foreign subsidiaries. At
December 31, 2001, Dura had unsecured overdraft facilities outstanding of $0.7
million, which is included in current maturities of long-term debt on the
balance sheet. At December 31, 2001, Dura had unsecured overdraft facilities
available from banks of approximately $32.8 million. The average interest rates
on the outstanding overdraft facilities at December 31, 2001 was approximately
5.5%. Dura believes the borrowing availability under its credit agreement,
uncommitted overdraft facilities and funds generated by operations, should
provide liquidity and capital resources to pursue its business strategy for the
foreseeable future, with respect to working capital, capital expenditures, and
other operating needs. Dura estimates its 2002 capital expenditures will not
exceed $80.0 million.

                                        24
<PAGE>

     In April 1999, Dura completed the offering of $300 million and Euro 100
million of senior subordinated notes ("Subordinated Notes"). The Subordinated
Notes mature in May 2009 and bear interest at 9% per year, which is payable
semi-annually. Net proceeds from this offering of approximately $394.7 million
were used to repay the $200.0 million interim term loan, approximately $78.1
million to retire other indebtedness and approximately $118.9 million will be
used for general corporate purposes. In June 2001, Dura completed a similar
offering of 9% senior subordinated notes due May 2009 with a face amount of
$158.5 million. The interest on these notes is also payable semi-annually.
Unamortized discount and debt issuance costs were $8.5 million, yielding an
imputed interest rate of 10%. Net proceeds of approximately $147.1 million were
used to reduce the borrowings outstanding under the revolving credit facility.
These notes are collateralized by guarantees of certain of Dura's subsidiaries.

     Dura is limited as to its ability to declare or make certain dividend
payments or other distributions of assets under its Credit Agreement and
Subordinated Notes. Certain distributions relating to items such as; a company
stock purchase program, tax sharing arrangements and as required under Dura's
Trust Preferred Securities are permitted.

     In connection with the termination of a former credit facility, Dura
wrote-off deferred financing costs of approximately $2.7 million, net of income
taxes during the first quarter of 1999. In addition, Dura wrote-off costs of
approximately $2.7 million, net of income taxes, related to the tender of the
$75.0 million of Trident's outstanding 10% Senior Subordinated Notes due 2005
during the second quarter of 1999. These charges are reflected as extraordinary
items in the accompanying 1999 statement of operations.

SIGNIFICANT ACCOUNTING POLICIES

     Our significant accounting policies are more fully described in Note 2 of
our consolidated financial statements. Certain of our accounting policies
require the application of significant judgement by management in selecting
appropriate assumptions for calculating financial estimates. By their nature,
these judgments are subject to an inherent degree of uncertainty.

     Revenue Recognition and Sales Commitments.  Dura recognizes revenue as its
products are shipped to its customers. Dura enters into agreements with its
customers at the beginning of a given vehicle's life to produce products. Once
such agreements are entered into by Dura, fulfillment of the customers'
purchasing requirements is the obligation of Dura for the entire production life
of the vehicle, with terms of up to seven years, and Dura has no provisions to
terminate such contracts. In certain instances, Dura may be committed under
existing agreements to supply product to its customers at selling prices that
are not sufficient to cover the direct cost to produce such product. In such
situations, Dura records a liability for the estimated future amount of such
losses. Such losses are recognized at the time that the loss is probable and
reasonably estimable and is recorded at the minimum amount necessary to fulfill
Dura's obligations to its customers. Dura utilizes certain estimates when
calculating its required loss reserves. These estimates include production
volumes for particular models, future pricing agreed to with customers and
Dura's ability to achieve planned cost savings. We adjust our reserves as events
occur that impact our estimates. These adjustments could materially impact our
financial position and results of operations.

     Valuation of Goodwill.  Goodwill represents the excess of the purchase
price over the fair value of the net assets acquired and has been amortized on a
straight-line basis over 40 years. In assessing the recoverability of Dura's
goodwill and other intangibles Dura must make assumptions regarding estimated
future cash flows and other factors to determine the fair value of the
respective assets. If these estimates or their related assumptions change in the
future, Dura may be required to record impairment charges for these assets not
previously recorded. On January 1, 2002 Dura adopted Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets," and will
be required to analyze its goodwill for impairment issues during the first six
months of fiscal 2002, and then on a periodic basis thereafter. During the year
ended December 31, 2001, Dura did not record any impairment losses related to
goodwill and other intangible assets.

     Accounting for Income Taxes.  As part of the process of preparing our
consolidated financial statements we are required to estimate our income taxes
in each of the jurisdictions in which we operate. This process
                                        25
<PAGE>

involves us estimating our actual current tax exposure together with assessing
temporary differences resulting from differing treatment of items for tax and
accounting purposes. These differences result in deferred tax assets and
liabilities, which are included within our consolidated balance sheet. We must
then assess the likelihood that our deferred tax assets will be recovered from
future taxable income and to the extent we believe that recovery is not likely,
we must establish a valuation allowance. To the extent we establish a valuation
allowance or increase this allowance in a period, we must include an expense
within the tax provision in the statement of operations. Significant management
judgment is required in determining our provision for income taxes, our deferred
tax assets and liabilities and any valuation allowance recorded against our net
deferred tax assets. We have recorded a valuation allowance of $18.8 million as
of December 31, 2001, due to uncertainties related to our ability to utilize
some of our deferred tax assets, primarily consisting of certain net operating
losses carried forward before they expire. The valuation allowance is based on
our estimates of taxable income by jurisdiction in which we operate and the
period over which our deferred tax assets will be recoverable. In the event that
actual results differ from these estimates or we adjust these estimates in
future periods, the effects of these adjustments could materially impact our
financial position and results of operations. The net deferred tax asset as of
December 31, 2001 was $40.3 million, net of a valuation allowance of $18.8
million.

QUARTERLY RESULTS OF OPERATIONS AND SEASONALITY

     Dura typically experiences decreased revenues and operating income during
the third calendar quarter of each year due to production shutdowns at OEMs for
model changeovers and vacations. The recreational vehicle market is seasonal in
that sales in the fourth quarter are normally at reduced levels.

EFFECTS OF INFLATION

     Inflation potentially affects Dura in two principal ways. First, a
significant portion of Dura's debt is tied to prevailing short-term interest
rates which may change as a result of inflation rates, translating into changes
in interest expense. Second, general inflation can impact material purchases,
labor and other costs. In many cases, Dura has limited ability to pass through
inflation-related cost increases due to the competitive nature of the markets
that Dura serves. In the past few years, however, inflation has not been a
significant factor.

MARKET RISK

     Dura is exposed to various market risks, including changes in foreign
currency exchange rates and interest rates. Market risk is the potential loss
arising from adverse changes in market rates and prices, such as foreign
currency exchange and interest rates. Dura does not enter into derivatives or
other financial instruments for trading or speculative purposes. Dura enters
into financial instruments to manage and reduce the impact of changes in foreign
currency exchange rates and interest rates. The counterparties are major
financial institutions.

     Dura manages its interest rate risk by balancing the amount of fixed and
variable debt. For fixed rate debt, interest rate changes affect the fair market
value of such debt, but do not impact earnings or cash flows. Conversely for
variable rate debt, interest rate changes generally do not affect the fair
market value of such debt but do impact future earnings and cash flows, assuming
other factors are held constant. At December 31, 2001 giving effect to the
interest rate swaps discussed below, Dura had fixed rate debt of $608.9 million
and variable rate debt of $467.6 million. Holding other variables constant (such
as foreign exchange rates and debt levels), a one percentage point increase in
interest rates would have changed the fair market value of Dura's debt at
December 31, 2001 by approximately $25.9 million and would be expected to have
an estimated impact on pre-tax earnings and cash flows for the next year of
approximately $4.7 million.

     At December 31, 2001, Dura had outstanding interest rate swap agreements
that effectively converted $50.0 million of its Credit Agreement borrowings into
a fixed rate obligation. Under these swap agreements, which expire at various
dates through April, 2002, Dura receives payments at variable rates, while it
makes payments at fixed rates (5.1% to 5.3% at December 31, 2001). The net
interest paid or received is included in interest expense. At December 31, 2001,
the fair value of the interest rate swap agreements was a net loss

                                        26
<PAGE>

position for Dura of approximately $0.3 million, net of tax, representing the
estimated cost that would be incurred to terminate the agreements, and is
included in other comprehensive income in the accompanying consolidated December
31, 2001 statement of stockholders' investment. The swap agreements were
designated at their inception as an interest rate hedge.

     Dura also uses forward exchange contracts to hedge its foreign currency
exposure related to the interest payments under its outstanding 100 million Euro
denominated Senior Subordinated Notes. Dura designated these contracts at their
inception as a cash flow hedge. At December 31, 2001, Dura had outstanding
contracts to purchase 9.0 million Euro (approximately $7.8 million),
representing the interest payments due during 2002. The estimated fair value of
these foreign exchange contracts based upon market quotes was approximately $8.0
million. The net realized gain of approximately $0.2 million is included in
other comprehensive income in the accompanying consolidated December 31, 2001
statement of stockholders' investment.

     The counter parties to the above agreements are major financial
institutions. Dura does not enter into or hold derivatives for trading or
speculative purposes.

FOREIGN CURRENCY TRANSACTIONS

     A significant portion of Dura's revenues during the year ended December 31,
2001 were derived from manufacturing operations in Europe, Canada and Latin
America. The results of operations and the financial position of Dura's
operations in these countries are principally measured in their respective
currency and translated into U.S. dollars. The effects of foreign currency
fluctuations in such countries are somewhat mitigated by the fact that expenses
are generally incurred in the same currencies in which revenues are generated.
The reported income of these subsidiaries will be higher or lower depending on a
weakening or strengthening of the U.S. dollar against the respective foreign
currency.

     A significant portion of Dura's assets at December 31, 2001 are based in
its foreign operations and are translated into U.S. dollars at foreign currency
exchange rates in effect as of the end of each period, with the effect of such
translation reflected as a separate component of stockholders' investment.
Accordingly, Dura's consolidated stockholders' investment will fluctuate
depending upon the weakening or strengthening of the U.S. dollar against the
respective foreign currency.

     Dura's strategy for management of currency risk relies primarily upon
conducting its operations in such countries' respective currency and Dura may,
from time to time, engage in hedging programs intended to reduce Dura's exposure
to currency fluctuations (see discussion above on "Market Risk").

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     See "Market Risk" and "Foreign Currency Transactions" sections of Item 7.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<Table>
<Caption>
                                                                PAGE
                                                                ----
<S>                                                             <C>
Report of Independent Public Accountants....................     28
Consolidated Balance Sheets as of December 31, 2001 and
  2000......................................................     29
Consolidated Statements of Income for the years ended
  December 31, 2001, 2000 and 1999..........................     30
Consolidated Statements of Stockholders' Investment for the
  years ended December 31, 2001, 2000 and 1999..............     31
Consolidated Statements of Cash Flows for the years ended
  December 31, 2001, 2000 and 1999..........................     32
Notes to Consolidated Financial Statements..................     33
</Table>

                                        27
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Dura Automotive Systems, Inc.:

     We have audited the accompanying consolidated balance sheets of Dura
Automotive Systems, Inc. (a Delaware corporation) and Subsidiaries as of
December 31, 2001 and 2000 and the related consolidated statements of income,
stockholders' investment and cash flows for each of the three years in the
period ended December 31, 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Dura Automotive Systems,
Inc. and Subsidiaries as of December 31, 2001 and 2000, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2001 in conformity with accounting principles generally accepted in
the United States.

Arthur Andersen LLP
Minneapolis, Minnesota,
January 23, 2002

                                        28
<PAGE>

                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                                   AS OF DECEMBER 31
                                                                ------------------------
                                                                   2001          2000
                                                                ----------    ----------
                                                                     (IN THOUSANDS,
                                                                 EXCEPT SHARE AMOUNTS)
<S>                                                             <C>           <C>
                                         ASSETS
Current Assets:
  Cash and cash equivalents.................................    $   32,289    $   30,438
  Accounts receivable, net of reserve for doubtful accounts
     of $5,517 and $9,135...................................       293,476       367,505
  Inventories...............................................       116,508       148,919
  Other current assets......................................       126,367       170,083
                                                                ----------    ----------
     Total current assets...................................       568,640       716,945
                                                                ----------    ----------
Property, Plant and Equipment:
  Land and buildings........................................       207,017       199,563
  Machinery and equipment...................................       479,143       434,123
  Construction in progress..................................        30,294        38,898
  Less-Accumulated depreciation.............................      (199,937)     (138,672)
                                                                ----------    ----------
     Net property, plant and equipment......................       516,517       533,912
                                                                ----------    ----------
Goodwill, net of accumulated amortization of $87,647 and
  $62,894...................................................       962,467     1,028,113
Other assets, net of accumulated amortization of $22,029 and
  $14,392...................................................        73,980        78,077
                                                                ----------    ----------
                                                                $2,121,604    $2,357,047
                                                                ==========    ==========
                        LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable............................................    $  249,824    $  258,895
  Accrued liabilities.......................................       177,327       225,032
  Current maturities of long-term debt......................        60,847        64,013
                                                                ----------    ----------
     Total current liabilities..............................       487,998       547,940
                                                                ----------    ----------
Long-term debt, net of current maturities...................       475,879       766,961
Subordinated notes..........................................       539,700       394,240
Other noncurrent liabilities................................       120,380       139,262
                                                                ----------    ----------
     Total liabilities......................................     1,623,957     1,848,403
                                                                ----------    ----------
Commitments and Contingencies (Notes 5, 11 and 12)
  Mandatorily Redeemable Convertible Trust Preferred
     Securities.............................................        55,250        55,250
Stockholders' Investment:
  Preferred stock, par value $1; 5,000,000 shares
     authorized; none issued or outstanding.................            --            --
  Common stock, Class A; par value $.01; 60,000,000 shares
     authorized; 14,664,102 and 14,324,923 shares issued and
     outstanding............................................           147           143
  Common stock, Class B; par value $.01; 10,000,000 shares
     authorized; 3,133,540 and 3,312,354 shares issued and
     outstanding............................................            31            33
  Additional paid-in capital................................       342,694       341,472
  Treasury stock at cost....................................        (1,891)       (1,505)
  Retained earnings.........................................       161,268       150,049
  Accumulated other comprehensive loss......................       (59,852)      (36,798)
                                                                ----------    ----------
     Total stockholders' investment.........................       442,397       453,394
                                                                ----------    ----------
                                                                $2,121,604    $2,357,047
                                                                ==========    ==========
</Table>

   The accompanying notes are an integral part of these consolidated balance
                                    sheets.
                                        29
<PAGE>

                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME

<Table>
<Caption>
                                                                  FOR THE YEARS ENDED DECEMBER 31
                                                             -----------------------------------------
                                                                2001           2000           1999
                                                             -----------    -----------    -----------
                                                             (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                          <C>            <C>            <C>
Revenues.................................................    $2,477,373     $2,633,084     $2,200,385
Cost of sales............................................     2,163,324      2,236,544      1,854,705
                                                             ----------     ----------     ----------
  Gross profit...........................................       314,049        396,540        345,680
Selling, general and administrative expenses.............       139,559        165,524        130,079
Facility consolidation, product recall and other
  charges................................................        24,386         15,361         16,246
Amortization expense.....................................        27,049         27,515         23,546
                                                             ----------     ----------     ----------
  Operating income.......................................       123,055        188,140        175,809
Interest expense, net....................................       100,817        112,433         81,633
                                                             ----------     ----------     ----------
  Income before provision for income taxes, equity in
     losses of affiliates and minority interests.........        22,238         75,707         94,176
Provision for income taxes...............................         8,450         30,571         37,984
Minority interest and equity in losses of affiliates,
  net....................................................            --            914          3,978
Minority interest -- dividends on trust preferred
  securities, net........................................         2,569          2,445          2,445
                                                             ----------     ----------     ----------
  Income before extraordinary item and accounting
     change..............................................        11,219         41,777         49,769
Extraordinary item -- loss on early extinguishment of
  debt, net..............................................            --             --          5,402
Cumulative effect of change in accounting, net...........            --             --          3,147
                                                             ----------     ----------     ----------
  Net income.............................................    $   11,219     $   41,777     $   41,220
                                                             ==========     ==========     ==========
Basic earnings per share:
  Income before extraordinary item and accounting
     change..............................................    $     0.63     $     2.39     $     3.06
  Extraordinary item.....................................            --             --          (0.33)
  Cumulative effect of change in accounting..............            --             --          (0.20)
                                                             ----------     ----------     ----------
     Net income..........................................    $     0.63     $     2.39     $     2.53
                                                             ==========     ==========     ==========
Diluted earnings per share:
  Income before extraordinary item and accounting
     change..............................................    $     0.62     $     2.35     $     2.94
  Extraordinary item.....................................            --             --          (0.30)
  Cumulative effect of change in accounting..............            --             --          (0.18)
                                                             ----------     ----------     ----------
     Net income..........................................    $     0.62     $     2.35     $     2.46
                                                             ==========     ==========     ==========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        30
<PAGE>

                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES

              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT
<Table>
<Caption>
                                                      COMMON STOCK
                                       -------------------------------------------
                                             CLASS A                 CLASS B          ADDITIONAL      TREASURY STOCK
                                       --------------------    -------------------     PAID-IN      ------------------
                                         SHARES      AMOUNT     SHARES      AMOUNT     CAPITAL      SHARES     AMOUNT
                                       ----------    ------    ---------    ------    ----------    -------    -------
                                                            (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S>                                    <C>           <C>       <C>          <C>       <C>           <C>        <C>
BALANCE, December 31, 1998.........     9,029,085     $ 90     3,325,303     $33       $171,377          --         --
  Issuance of shares in acquisition
    of Excel.......................     4,934,414       49            --      --        165,121          --         --
  Sale of stock under Employee
    Stock Discount Purchase Plan...        51,283        1            --      --          1,156          --         --
  Exercise of options..............        80,015        1            --      --          1,337          --         --
  Other issuance of shares.........         1,714       --            --      --             50          --         --
  Conversion from Class B to Class
    A..............................         5,000       --        (5,000)     --             --          --         --
  Net income.......................            --       --            --      --             --          --         --
  Other comprehensive income-
    Foreign currency translation
      adjustment...................            --       --            --      --             --          --         --
  Total comprehensive income.......
                                       ----------     ----     ---------     ---       --------     -------    -------
BALANCE, December 31, 1999.........    14,101,511      141     3,320,303      33        339,041          --         --
  Sale of stock under Employee
    Stock Discount Purchase Plan...        63,063        1            --      --            735          --         --
  Conversion from Class B to Class
    A..............................         7,949       --        (7,949)     --             --          --         --
  Exercise of warrants.............       152,400        1            --      --            191          --         --
  Contributions to deferred
    compensation plan..............            --       --            --                  1,723          --         --
  Treasury shares purchased at
    $13.06 per share...............            --       --            --      --             --     131,921     (1,723)
  Treasury share distribution......            --       --            --                   (218)    (16,694)       218
  Net income.......................            --       --            --      --             --          --         --
  Other comprehensive income-
    Foreign currency translation
      adjustment...................            --       --            --      --             --          --         --
  Minimum pension liability........            --       --            --      --             --          --         --
  Total comprehensive income.......
                                       ----------     ----     ---------     ---       --------     -------    -------
BALANCE, December 31, 2000.........    14,324,923      143     3,312,354      33        341,472     115,227     (1,505)
  Sale of stock under Employee
    Stock Discount Purchase Plan...       159,165        2            --      --            802          --         --
  Conversion from Class B to Class
    A..............................       178,814        2      (178,814)     (2)            --          --         --
  Exercise of options..............         1,200       --            --      --             19          --         --
Collection of common stock
  subscription receivables.........            --       --            --      --             15          --         --
  Treasury shares purchased at
    $8.65 per share................            --       --            --      --            368      42,500       (368)
  Treasury shares purchased at
    $8.34 per share................            --       --            --      --            246      29,460       (246)
  Treasury share distribution......            --       --            --      --           (228)    (17,422)       228
  Net income.......................            --       --            --      --             --          --         --
  Other comprehensive income-......                                                          --
    Foreign currency translation
      adjustment...................            --       --            --      --             --          --         --
    Minimum pension liability......            --       --            --      --             --          --         --
    Derivative instruments.........            --       --            --      --             --          --         --
  Total comprehensive loss.........
                                       ----------     ----     ---------     ---       --------     -------    -------
BALANCE, December 31, 2001.........    14,664,102     $147     3,133,540     $31       $342,694     169,765    $(1,891)
                                       ==========     ====     =========     ===       ========     =======    =======

<Caption>

                                                  ACCUMULATED
                                                     OTHER            TOTAL
                                     RETAINED    COMPREHENSIVE    STOCKHOLDERS'
                                     EARNINGS        LOSS          INVESTMENT
                                     --------    -------------    -------------
                                        (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S>                                  <C>         <C>              <C>
BALANCE, December 31, 1998.........  $ 67,052      $   (515)        $238,037
  Issuance of shares in acquisition
    of Excel.......................        --            --          165,170
  Sale of stock under Employee
    Stock Discount Purchase Plan...        --            --            1,157
  Exercise of options..............        --            --            1,338
  Other issuance of shares.........        --            --               50
  Conversion from Class B to Class
    A..............................        --            --               --
  Net income.......................    41,220
  Other comprehensive income-
    Foreign currency translation
      adjustment...................        --       (15,976)
  Total comprehensive income.......                                   25,244
                                     --------      --------         --------
BALANCE, December 31, 1999.........   108,272       (16,491)         430,996
  Sale of stock under Employee
    Stock Discount Purchase Plan...        --            --              736
  Conversion from Class B to Class
    A..............................        --            --               --
  Exercise of warrants.............        --            --              192
  Contributions to deferred
    compensation plan..............        --            --            1,723
  Treasury shares purchased at
    $13.06 per share...............        --            --           (1,723)
  Treasury share distribution......        --            --               --
  Net income.......................    41,777
  Other comprehensive income-
    Foreign currency translation
      adjustment...................        --       (18,355)
  Minimum pension liability........        --        (1,952)
  Total comprehensive income.......                                   21,470
                                     --------      --------         --------
BALANCE, December 31, 2000.........   150,049       (36,798)         453,394
  Sale of stock under Employee
    Stock Discount Purchase Plan...        --            --              804
  Conversion from Class B to Class
    A..............................        --            --               --
  Exercise of options..............        --            --               19
Collection of common stock
  subscription receivables.........        --            --               15
  Treasury shares purchased at
    $8.65 per share................        --            --               --
  Treasury shares purchased at
    $8.34 per share................        --            --               --
  Treasury share distribution......                      --               --
  Net income.......................    11,219
  Other comprehensive income-......
    Foreign currency translation
      adjustment...................        --       (18,550)
    Minimum pension liability......        --        (4,168)
    Derivative instruments.........        --          (336)
  Total comprehensive loss.........                                  (11,835)
                                     --------      --------         --------
BALANCE, December 31, 2001.........  $161,268      $(59,852)        $442,397
                                     ========      ========         ========
</Table>

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

                                        31
<PAGE>

                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                 FOR THE YEARS ENDED DECEMBER 31
                                                               -----------------------------------
                                                                 2001         2000         1999
                                                               ---------    ---------    ---------
                                                                         (IN THOUSANDS)
<S>                                                            <C>          <C>          <C>
OPERATING ACTIVITIES:
  Net income...............................................    $  11,219    $  41,777    $  41,220
  Adjustments required to reconcile net income to net cash
     provided by operating activities --
     Depreciation and amortization.........................       94,579       85,503       76,654
     Deferred income tax provision (benefit)...............       30,202        5,769       (1,899)
     Extraordinary loss on extinguishment of debt, net.....           --           --        5,402
     Change in method of accounting, net...................           --           --        3,147
     Equity in losses of affiliates and minority
       interest............................................           --          914        3,978
     Change in other operating items:
       Accounts receivable.................................       62,456      107,089          148
       Inventories.........................................       28,717      (12,566)      11,194
       Other current assets................................       25,655      (34,219)     (28,498)
       Accounts payable and accrued liabilities............      (43,742)     (89,706)       5,425
       Other assets and liabilities........................        3,034       12,998      (35,829)
                                                               ---------    ---------    ---------
          Net cash provided by operating activities........      212,120      117,559       80,942
                                                               ---------    ---------    ---------
INVESTING ACTIVITIES:
  Capital expenditures, net................................      (71,779)    (110,132)     (80,469)
  Acquisitions, net........................................           --      (19,110)    (524,033)
  Other, net...............................................           --           --       (3,443)
                                                               ---------    ---------    ---------
          Net cash used in investing activities............      (71,779)    (129,242)    (607,945)
                                                               ---------    ---------    ---------
FINANCING ACTIVITIES:
  Borrowings under revolving credit facilities.............       14,567      682,749      202,871
  Repayments of revolving credit facilities................      (25,266)    (597,897)    (147,553)
  Long-term borrowings.....................................      193,328       17,267      754,124
  Repayments of long-term borrowings.......................     (461,512)     (82,407)    (660,830)
  Purchase of treasury shares and other, net...............         (386)      (1,723)          --
  Proceeds from issuance of subordinated notes, net........      147,100           --      394,653
  Proceeds from stock offering and exercise of stock
     options, net..........................................          838          928        2,545
  Debt issue costs.........................................       (4,006)          --      (19,537)
                                                               ---------    ---------    ---------
          Net cash provided by (used in) financing
            activities.....................................     (135,337)      18,917      526,273
                                                               ---------    ---------    ---------
EFFECT OF EXCHANGE RATES ON CASH...........................       (3,153)        (493)       3,883
                                                               ---------    ---------    ---------
NET CHANGE IN CASH AND CASH EQUIVALENTS....................        1,851        6,741        3,153
CASH AND CASH EQUIVALENTS, beginning of period.............       30,438       23,697       20,544
                                                               ---------    ---------    ---------
CASH AND CASH EQUIVALENTS, end of period...................    $  32,289    $  30,438    $  23,697
                                                               =========    =========    =========
SUPPLEMENTAL CASH FLOW INFORMATION:
  Cash paid (refunded) for --
     Interest..............................................    $  96,010    $ 119,972    $  70,209
                                                               =========    =========    =========
     Income taxes..........................................    $  (2,677)   $   4,942    $  30,071
                                                               =========    =========    =========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        32
<PAGE>

                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

1. ORGANIZATION AND BASIS OF PRESENTATION:

     Dura Automotive Systems, Inc. (a Delaware Corporation) and subsidiaries
(Dura) designs and manufactures components and systems primarily for the global
automotive industry. Dura has over 70 manufacturing and product development
facilities located in the United States, Brazil, Canada, the Czech Republic,
France, Germany, Mexico, Portugal, Spain and the United Kingdom.

2. SIGNIFICANT ACCOUNTING POLICIES:

  Principles of Consolidation:

     The accompanying consolidated financial statements include the accounts of
Dura and its wholly owned subsidiaries. All significant intercompany accounts
and transactions have been eliminated in consolidation.

  Cash Equivalents:

     Cash equivalents consist of money market instruments with original
maturities of three months or less and are stated at cost, which approximates
fair value.

  Inventories:

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

     Inventories consisted of the following (in thousands):

<Table>
<Caption>
                                                                DECEMBER 31,
                                                            --------------------
                                                              2001        2000
                                                            --------    --------
<S>                                                         <C>         <C>
Raw materials...........................................    $ 65,228    $ 77,357
Work-in-process.........................................      25,369      31,071
Finished goods..........................................      25,911      40,491
                                                            --------    --------
                                                            $116,508    $148,919
                                                            ========    ========
</Table>

  Other Current Assets:

     Other current assets consisted of the following (in thousands):

<Table>
<Caption>
                                                                DECEMBER 31,
                                                            --------------------
                                                              2001        2000
                                                            --------    --------
<S>                                                         <C>         <C>
Excess of cost over billings on uncompleted tooling
  projects..............................................    $ 47,910    $ 57,621
Deferred income taxes...................................      30,542      49,354
Prepaid expenses........................................      47,915      63,108
                                                            --------    --------
                                                            $126,367    $170,083
                                                            ========    ========
</Table>

     Excess of cost over billings on uncompleted tooling projects represents
costs incurred by Dura in the production of customer-owned tooling to be used by
Dura in the manufacture of its products. Dura receives a specific purchase order
for this tooling and is reimbursed by the customer within one operating cycle.
Costs are deferred until reimbursed by the customer. Forecasted losses on
incomplete projects are recognized currently.

                                        33
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Property, Plant and Equipment:

     Property, plant and equipment are stated at cost. For financial reporting
purposes, depreciation is provided on the straight-line method over the
following estimated useful lives:

<Table>
<S>                                             <C>
Buildings...................................    20 to 30 years
Machinery and equipment.....................    3 to 20 years
</Table>

     Accelerated depreciation methods are used for tax reporting purposes.

     Maintenance and repairs are charged to expense as incurred. Major
betterments and improvements which extend the useful life of the item are
capitalized and depreciated. The cost and accumulated depreciation of property,
plant and equipment retired or otherwise disposed of are removed from the
related accounts, and any residual values are charged or credited to income.

  Goodwill and Other Assets:

     Goodwill represents the excess of the purchase price over the fair value of
the net assets acquired and has been amortized on a straight-line basis over 40
years. Other assets principally consist of pension plan assets in excess of
accumulated benefits; debt financing costs, which are being amortized over the
term of the applicable agreements; and deferred income taxes.

     Dura periodically evaluates whether events and circumstances have occurred
which may affect the estimated useful life or the recoverability of the
remaining balance of its goodwill and other long-lived assets. If such events or
circumstances were to indicate that the carrying amount of these assets would
not be recoverable, Dura would estimate the future cash flows expected to result
from the use of the assets and their eventual disposition. If the sum of the
expected future cash flows (undiscounted and without interest charges) were less
than the carrying amount of goodwill and other long-lived assets, Dura would
recognize an impairment loss. Effective January 1, 2002, Dura adopted Statement
of Financial Accounting Standards (SFAS) No. 142, (See New Accounting
Pronouncements) "Goodwill and Other Intangible Assets," which requires that
goodwill and intangible assets with indefinite lives are not to be amortized,
but tested for impairment annually, except in certain circumstances, and
whenever there is an impairment indicator. The assessment is a two-step process.
The first step is to compare the estimated fair value of a reporting unit to its
carrying value. If the carrying value exceeds the fair value, then the second
step is to perform a valuation of all tangible and intangible assets to
determine the amount, if any, by which goodwill and/or an intangible asset is
impaired. Dura will assess the impact of SFAS No. 142 by performing the initial
impairment study during the first half of 2002 and will complete any required
goodwill impairment calculations by the end of 2002 as required by SFAS No. 142.

  Accrued Liabilities:

     Accrued liabilities consisted of the following (in thousands):

<Table>
<Caption>
                                                                DECEMBER 31,
                                                            --------------------
                                                              2001        2000
                                                            --------    --------
<S>                                                         <C>         <C>
Compensation and benefits...............................    $ 72,503    $ 65,306
Legal and environmental.................................      15,200      15,005
Interest................................................      11,293       8,747
Loss contracts..........................................      10,178       8,763
Accrued income taxes....................................       9,880      36,902
Facility closure and consolidation costs................       9,387      29,608
Other...................................................      48,886      60,701
                                                            --------    --------
                                                            $177,327    $225,032
                                                            ========    ========
</Table>

                                        34
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Other Noncurrent Liabilities:

     Other noncurrent liabilities consisted of the following (in thousands):

<Table>
<Caption>
                                                                DECEMBER 31,
                                                            --------------------
                                                              2001        2000
                                                            --------    --------
<S>                                                         <C>         <C>
Pension and post-retirement benefits....................    $ 38,411    $ 37,365
Legal and environmental.................................      22,411      31,952
Facility closure and consolidation costs................      21,806      22,985
Loss contracts..........................................       2,794       8,185
Other...................................................      34,958      38,775
                                                            --------    --------
                                                            $120,380    $139,262
                                                            ========    ========
</Table>

  Revenue Recognition and Sales Commitments:

     Dura recognizes revenue as its products are shipped to its customers. Dura
enters into agreements with its customers at the beginning of a given vehicle's
life to produce products. Once such agreements are entered into by Dura,
fulfillment of the customers' purchasing requirements is the obligation of Dura
for the entire production life of the vehicle, with terms of up to seven years,
and Dura has no provisions to terminate such contracts. In certain instances,
Dura may be committed under existing agreements to supply product to its
customers at selling prices which are not sufficient to cover the direct cost to
produce such product. In such situations, Dura records a liability for the
estimated future amount of such losses. Such losses are recognized at the time
that the loss is probable and reasonably estimable and is recorded at the
minimum amount necessary to fulfill Dura's obligations to its customers.

  Income Taxes:

     Dura accounts for income taxes following the provisions of SFAS No. 109,
"Accounting for Income Taxes," which requires recognition of deferred tax assets
and liabilities for the expected future tax consequences of events that have
been included in the financial statements or tax returns. Under this method,
deferred tax assets and liabilities are determined based on the difference
between the financial statement and tax bases of assets and liabilities using
currently enacted tax rates.

  Comprehensive Income:

     Dura follows the provisions of SFAS No. 130, "Reporting Comprehensive
Income," which established standards for reporting and display of comprehensive
income and its components. Comprehensive income reflects the change in equity of
a business enterprise during a period from transactions and other events and
circumstances from non-owner sources. For Dura, comprehensive income represents
net income adjusted for foreign currency translation adjustments, the deferred
gain/loss on derivative instruments utilized to hedge Dura's interest and
foreign exchange exposures, and additional minimum pension liability. In
accordance with SFAS No. 130, Dura has chosen to disclose comprehensive income
in the consolidated statements of stockholders' investment.

  Fair Value of Financial Instruments:

     The carrying amount of cash and cash equivalents, accounts receivable,
inventory, accounts payable, accrued liabilities and revolving credit facilities
approximates fair value because of the short maturity of these instruments. The
carrying amount of Dura's non-subordinated long-term debt approximates fair
value because of the variability of the interest cost associated with these
instruments. The fair value of Dura's Subordinated Notes, based on quoted market
activity approximated $512.7 million as of December 31, 2001. The fair value

                                        35
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

of Dura's Preferred Securities, based on NASDAQ market quote activity,
approximated $14.2 million as of December 31, 2001.

     At December 31, 2001, Dura had outstanding interest rate swap agreements
that effectively converted $50.0 million of its Credit Agreement borrowings (See
Note 7) into a fixed rate obligation. Under these swap agreements, which expire
at various dates through April, 2002, Dura receives payments at variable rates,
while it makes payments at fixed rates (5.1 percent to 5.3 percent at December
31, 2001). The net interest paid or received is included in interest expense. At
December 31, 2001, the estimated fair value of the interest rate swap agreements
was a net loss position for Dura of approximately $0.3 million, net of tax,
representing the estimated cost that would be incurred to terminate the
agreements, and is included in other comprehensive income in the accompanying
consolidated December 31, 2001 statement of stockholders' investment. The swap
agreements were designated at their inception as an interest rate hedge.

     Dura also uses forward exchange contracts to hedge its foreign currency
exposure related to the interest payments under its outstanding 100 million Euro
denominated Senior Subordinated Notes. Dura designated these contracts at their
inception as a cash flow hedge. At December 31, 2001, Dura had outstanding
contracts to purchase 9.0 million Euro (approximately $7.8 million),
representing the interest payments due during 2002. The estimated fair value of
these foreign exchange contracts based upon market quotes was approximately $8.0
million. The net realized gain of approximately $0.2 million is included in
other comprehensive income in the accompanying consolidated December 31, 2001
statement of stockholders' investment.

     The counter parties to the above agreements are major financial
institutions. Dura does not enter into or hold derivatives for trading or
speculative purposes.

  New Accounting Pronouncements:

     In July 2001, the Financial Accounting Standards Board issued SFAS No. 141,
"Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible
Assets". SFAS No. 141 requires all business combinations initiated after June
30, 2001 to be accounted for using the purchase method of accounting. Under SFAS
No. 142 goodwill and intangible assets with indefinite lives are no longer
amortized, but reviewed annually, or more frequently if impairment indicators
arise. Separable intangible assets that are not deemed to have indefinite lives
will continue to be amortized over their useful lives, but with no maximum life.
The amortization provisions of SFAS No. 142 apply to goodwill and intangible
assets acquired after June 30, 2001. With respect to goodwill and intangible
assets acquired prior to July 1, 2001, Dura is required to adopt SFAS No. 142
effective January 1, 2002. Dura has not determined the impact of adopting SFAS
No. 142 on its earnings and financial position, including whether it will be
required to recognize any transitional impairment losses as a cumulative effect
of a change in accounting principle. Application of the provisions of SFAS No.
142 are anticipated to result in an increase in pre-tax net income of
approximately $25.9 million for the year ended December 31, 2002, related to the
goodwill amortization that will no longer be recorded under SFAS No. 142.

     Effective January 1, 2001, Dura adopted SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended, which requires that
all derivative instruments be reported on the balance sheet at fair value and
establishes criteria for designation and effectiveness of transactions entered
into for hedging purposes. The cumulative effect of adopting SFAS No. 133 was to
increase other comprehensive income (OCI) by $0.2 million, after-tax. The effect
on net income was not significant, primarily because the hedges in place as of
January 1, 2001 qualified for hedge accounting treatment and were deemed highly
effective.

                                        36
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Common Stock:

     The holder of each share of Class A common stock outstanding is entitled to
one vote per share and the holder of each share of Class B common stock
outstanding is entitled to ten votes per share.

  Stock Options:

     Dura accounts for stock options under the provisions of Accounting
Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to
Employees," under which no compensation expense is recognized when the stock
options are granted. The pro forma effects had Dura followed the provisions of
SFAS No. 123, "Accounting for Stock-Based Compensation," are included in Note 5.

  Use of Estimates:

     The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. The ultimate results could differ from
those estimates.

  Foreign Currency Translation:

     Assets and liabilities of Dura's foreign operations are translated using
the year-end rates of exchange. Results of operations are translated using the
average rates prevailing throughout the period. Translation gains or losses are
accumulated as a separate component of stockholders' investment.

  Change in Accounting Method:

     Effective January 1, 1999, Dura adopted the provisions of the Financial
Accounting Standards Board Statement of Position (SOP) 98-5, "Reporting on the
Costs of Start-Up Activities." SOP 98-5 requires costs associated with certain
start-up activities be expensed as incurred versus capitalizing and expensing
them over a period of time. Previously, Dura capitalized certain design and
engineering costs which related to future programs and amortized these costs
over the life of the program once production began. Pursuant to the provisions
of SOP 98-5, Dura wrote off the unamortized balance of such capitalized costs,
net of income tax benefits, of approximately $3.1 million. The write-off is
reflected as a cumulative effect of change in accounting in the accompanying
consolidated statement of operations for the year ended December 31, 1999.

3. ACQUISITIONS:

  2000 Acquisitions

     In January 2000, Dura purchased the Jack Division of Ausco Products, Inc.
(Ausco). Ausco produces automotive jacks primarily for North American original
equipment manufacturers (OEMs). Additionally, in January 2000, Dura increased
its ownership interest in Thixotech Inc. (Thixotech). With this additional
investment, Dura owned and controlled a majority interest in Thixotech and in
2000 began consolidating Thixotech into Dura's financial statements. Thixotech
is a producer of magnesium die castings for the North American automotive and
consumer product markets. In October 2001, Dura divested the Thixotech business
(see Note 4). In January and June 2000, Dura increased its ownership interest in
two previous majority owned subsidiaries by acquiring the remaining outstanding
interests in Pollone S.A. Industria E Comercio (Pollone) and Bowden TSK
(Bowden). Pollone produces cables, latches, shifters, rear window frames and
pedal boxes primarily for the South American automotive market and Bowden
produces automotive cables for European OEMs. In November 2000, Dura acquired
Reiche, a manufacturer of steering columns for European and North American OEMs.
                                        37
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The Ausco, Thixotech, Pollone, Bowden and Reiche acquisitions have been
accounted for using the purchase method of accounting and, accordingly, the
assets acquired and liabilities assumed have been recorded at their fair values
as of the dates of their respective acquisition. The excess of the purchase
price over the fair value of the assets acquired and liabilities assumed has
been recorded as goodwill. The final allocations of purchase price made by Dura
in 2001 were not materially different than the preliminary estimates. The
operating results of Ausco and Reiche have been included in the consolidated
financial statements of Dura since their respective dates of acquisition. The
aggregate purchase price for the 2000 acquisitions was $36.3 million, with funds
provided by borrowings under Dura's Credit Agreement (see Note 7). The pro forma
effects of these acquisitions would not have materially affected Dura's results
of operations.

  1999 Acquisitions

     Adwest

     In March 1999, Dura acquired through a cash tender offer approximately 95
percent of the outstanding ordinary shares of Adwest Automotive plc (Adwest).
Dura subsequently purchased the remaining 5 percent. Adwest had annual revenues
of approximately $400 million and is a supplier of driver control products
primarily for European OEMs. Dura paid approximately $320 million to acquire all
of the outstanding shares of Adwest, including the assumption of approximately
$106.1 million in indebtedness.

     Excel

     In March 1999, Dura completed its merger with Excel Industries, Inc.
(Excel). Excel had annual revenues of approximately $1.1 billion of which
approximately 78 percent were generated in North America with the remainder in
Europe. Dura issued an aggregate of approximately 4.9 million shares of its
Class A common stock and paid approximately $155.5 million in cash to Excel's
former shareholders. In addition, outstanding options and warrants of Excel were
converted to options and warrants of Dura, amounting to 257,520 options and
152,400 warrants. The number of options and warrants and their respective
exercise prices were adjusted based upon the share exchange ratio. Dura also
assumed approximately $100.0 million of indebtedness. In August 1999, Dura
acquired the remaining 30 percent minority interest in Schade from Excel's
former European partner for approximately $16.4 million in cash.

     The Adwest and Excel acquisitions have been accounted for using the
purchase method of accounting and, accordingly, the assets acquired and
liabilities assumed have been recorded at their fair values as of the dates of
their respective acquisition. The excess of the purchase price over the fair
value of the assets acquired and liabilities assumed has been recorded as
goodwill. The final allocations of purchase price made by Dura in 2000 related
to the finalization of plans for facility consolidations and were approximately
$7.7 million for costs associated with the shutdown and consolidation of certain
acquired facilities and $1.0 million for severance and other related costs.
These adjustments were recorded as an adjustment to goodwill. The operating
results of Adwest and Excel have been included in the consolidated financial
statements of Dura since their respective dates of acquisition. The cash
consideration related to the acquisitions of Adwest and Excel was financed with
borrowings under Dura's Credit Agreement (see Note 7). Pro forma results of
operations for 1999 reflecting the acquisitions of Adwest and Excel are included
in the Pro Forma Financial Information below.

  Other 1999 Acquisitions

     In June and November of 1999, Dura purchased Metallifacture Limited
(Metallifacture) and the seat track business of Meritor Automotive, Inc.
(Meritor). Metallifacture produces automotive jacks primarily for European OEMs
and Meritor produces seat mechanisms and structures for "Tier I" suppliers in
North America.
                                        38
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The Metallifacture and Meritor acquisitions were accounted for using the
purchase method of accounting and, accordingly, the assets acquired and
liabilities assumed have been recorded at their fair values as of the dates of
the acquisitions. The excess of the purchase price over the fair value of the
assets acquired and liabilities assumed has been recorded as goodwill. The final
allocations of purchase price made by Dura in 2000 were not materially different
than the preliminary estimates. The operating results of Metallifacture and
Meritor have been included in the consolidated financial statements of Dura
since the dates of acquisition. The aggregate cash paid for these acquisitions
was $158.9 million, with funds provided by borrowings under Dura's Credit
Agreement (see Note 7). The pro forma effects of these acquisitions would not
have materially affected Dura's results of operations.

     Acquisition Integrations

     Dura has developed and implemented the majority of the facility
consolidation plans designed to integrate the operations of past acquisitions.
As of December 31, 2001, purchase liabilities recorded in conjunction with the
acquisitions included approximately $23.7 million for costs associated with the
shutdown and consolidation of certain acquired facilities and $5.5 million for
severance and other related costs. Costs incurred and charged to these reserves
amounted to $5.7 million related to acquired facilities and $6.8 million in
severance and other related costs during the year ended December 31, 2001.
Adjustments to these reserves during 2001 related to certain of the acquisitions
as discussed above amounted to a net decrease of $4.8 million related to
acquired facilities and a net reduction of $1.6 million in severance. These
adjustments were recorded as an adjustment to goodwill. The remaining employee
terminations and facility closures are expected to be completed by the end of
2002 except for contractual obligations that will continue through 2005.

     Pro Forma Financial Information

     The accompanying unaudited consolidated pro forma results of operations for
the year ended December 31, 1999 give effect to (i) the acquisitions of Adwest
and Excel, (ii) the April 1999 offering of the Senior Subordinated Notes (see
Note 7), (iii) and the tender of the Trident notes (see Note 7) as if such
transactions had occurred at the beginning of the period and excludes the
effects of the extraordinary loss and change in accounting method (in thousands,
except per share amounts):

<Table>
<Caption>
                                                                PRO FORMA FOR THE
                                                                   YEAR ENDED
                                                                DECEMBER 31, 1999
                                                                -----------------
<S>                                                             <C>
Revenues....................................................       $2,589,436
Operating income............................................          167,881
Net income before extraordinary item........................           38,138
Basic earnings per share....................................       $     2.20
Diluted earnings per share..................................       $     2.14
</Table>

     The unaudited pro forma consolidated financial information does not purport
to represent what Dura's financial position or results of operations would
actually have been if these transactions had occurred at such dates or to
project Dura's future results of operations.

4. FACILITY CONSOLIDATION, PRODUCT RECALL AND OTHER CHARGES:

  Divestitures

     In August 2001, Dura divested its Australian operations resulting in a
charge of approximately $7.5 million in the third quarter of 2001. Approximately
$2.0 million of this charge was cash related. The Australian operations
generated approximately $10.0 million of revenue on an annualized basis and
produced parking brakes, jacks, pedal assemblies, hinges and latches for the
automotive industry. Their largest

                                        39
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

customers included Ford Motor Company, Holden Limited, and Delphi Automotive
Systems. The effect of this divestiture on future operating results will not be
significant.

     In October 2001, Dura successfully completed the sale of its Thixotech
business located in Canada for total proceeds of approximately $4.1 million.
Thixotech generated approximately $10.0 million of revenue on an annualized
basis, and is a manufacturer of magnesium injection molded products for the
electronics, communications, power tools and automotive industries. Dura
recorded a noncash charge related to this transaction of approximately $5.2
million in the fourth quarter of 2001. The effect of this divestiture on future
operating results will not be significant.

     In November 2001, Dura entered into a definitive agreement to divest its
Plastic Products Business for total proceeds of approximately $41.0 million. The
transaction closed on January 28, 2002. The Plastic Products Business designs,
engineers, and manufactures plastic components for a wide variety of automotive
vehicle applications, focusing on the metal to plastic conversion and dual
plastic applications markets. This business employs approximately 750 people in
three facilities located in Mishawaka, Indiana, Bowling Green, Kentucky and
Jonesville, Michigan and generates approximately $80.0 million in annual
revenue. Two members of Dura's board of directors are members of management of
an investor group which is general partner of the controlling shareholder of the
acquiring company. Dura has recorded a noncash charge of approximately $7.4
million in the fourth quarter of 2001 for the estimated loss upon divestment.
The effect of this divestiture on future operating results will not be
significant.

  Restructuring

     Throughout 2000 and 2001 Dura has evaluated manufacturing capacity issues
and opportunities for cost reduction given the reduced demand in the North
America automotive and recreational vehicle markets and the available capacity
within Dura's operations. As a result, beginning in the fourth quarter of 2000,
Dura began to implement several actions including discontinuing operations in
two North American facilities, combining the Driver Control and Engineered
Products divisions into one, Control Systems, and reducing and consolidating
certain support activities to achieve an appropriate level of support personnel
relative to remaining operations and future business requirements. These actions
resulted in a fourth quarter 2000 restructuring charge of $6.8 million,
including severance related payments of $6.2 million and facility closure costs
of approximately $0.6 million. Additionally in 2000, Dura expensed as incurred
equipment relocation costs of $0.8 million. In continuation of the actions taken
in 2000, Dura recorded $2.4 million of additional restructuring charges in the
first quarter and $2.0 million in the fourth quarter of 2001 relating to
employee severance. Dura also expensed as incurred approximately $0.2 million of
equipment relocation costs incurred during the first quarter of 2001. The effect
of the costs expensed as incurred are reflected as facility consolidation and
other charges in the consolidated statements of operations.

     Costs incurred and charged to the reserves as of December 31, 2001 amounted
to $8.8 million in severance related costs and $0.3 million facility closure
costs. During 2001 additional adjustments were made of $0.1 million to decrease
the reserve for employee severance as the actual costs incurred were less than
originally estimated.

     The decision to exit the two facilities will result in a reduction in the
work force of approximately 52 salaried and 408 hourly employees of which 49
salaried and 391 hourly employees have been severed as of December 31, 2001.
Additionally, the decision to consolidate two divisions into one and to reduce
support personnel to a level consistent with future business requirements
resulted in a reduction of approximately 217 salaried employees of which 176
have been severed as of December 31, 2001. These restructuring actions are
anticipated to be complete in early 2002.

     In the fourth quarter of 1999, Dura began to implement a comprehensive
facility consolidation plan to consolidate certain European facilities designed
to lower its cost structure and improve the long-term

                                        40
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

competitive position of Dura. As a result, Dura recognized charges to operations
of $16.2 million. Included in this charge are the costs associated with
consolidating and eliminating certain facilities and associated lease
obligations of $1.4 million; severance related to employee terminations of $13.2
million; and asset impairments of $1.6 million. The asset impairments consist of
long-lived assets, including fixed assets, manufacturing equipment and leasehold
improvements, from facilities Dura intends to dispose of or discontinue their
use. Impairment was measured based on estimated proceeds on the sale of the
facilities and equipment. The majority of the countries in which Dura operates
have statutory requirements with regards to the minimum severance payments that
must be made to employees upon termination. The facility consolidation plan
originally called for the termination of approximately 5 salaried plant
management and 313 hourly plant manufacturing employees primarily under SFAS No.
112, "Employers' Accounting for Post-employment Benefits". However, capacity and
customer issues identified in the fourth quarter of 2000 have prompted Dura to
remain at one of the European facilities that was previously planned for
closure. As a result, the related reserves of $7.8 million of severance and $0.4
million of facility obligations were reversed in the fourth quarter of 2000 and
the plan now calls for the termination of 5 salaried plant management and 41
hourly plant manufacturing employees of which all were terminated as of December
31, 2001. Costs incurred and charged to the reserves as of December 31, 2001
amounted to $1.0 million related to lease and other closure costs, $5.4 million
in severance and $1.6 million related to asset impairment. These restructuring
actions are principally complete as of December 31, 2001.

  Product Recall

     In the second quarter of 2000, Dura settled two product recall matters
through a cost sharing agreement with a significant customer. As a result of
this agreement, Dura recorded a one-time pretax charge to operations of $16.0
million to cover amounts not previously reserved. These recalls were announced
in the first half of 1999 and involved concerns associated with Trident
Automotive plc speed control cables and a secondary hood latch.

5. STOCKHOLDERS' INVESTMENT:

  Earnings Per Share:

     Basic earnings per share were computed by dividing net income by the
weighted average number of Class A and Class B common shares outstanding during
the year. Diluted earnings per share for 2001 includes the effects of
outstanding stock options and warrants using the treasury stock method.
Potential common shares of 1,289,000 related to the Company's Preferred
Securities were excluded from the computation of diluted earnings per share for
2001, as inclusion of these shares would have been antidilutive. Diluted
earnings per share for 2000 and 1999 include (i) the effects of outstanding
stock options and warrants using the

                                        41
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

treasury stock method, and (ii) the conversion of the Preferred Securities as
follows (in thousands, except per share amounts):

<Table>
<Caption>
                                                               YEARS ENDED DECEMBER 31,
                                                             -----------------------------
                                                              2001       2000       1999
                                                             -------    -------    -------
<S>                                                          <C>        <C>        <C>
Net income...............................................    $11,219    $41,777    $41,220
Dividends on mandatorily redeemable convertible preferred
  securities, net of tax -- diluted......................         --      2,445      2,445
                                                             -------    -------    -------
Net income applicable to common stockholders --diluted...    $11,219    $44,222    $43,665
                                                             =======    =======    =======
Weighted average number of Class A common shares
  outstanding............................................     14,536     14,150     12,940
Weighted average number of Class B common shares
  outstanding............................................      3,221      3,318      3,323
                                                             -------    -------    -------
                                                              17,757     17,468     16,263
Dilutive effect of outstanding stock options after
  application of the treasury stock method...............        246         14        101
Dilutive effect of warrants..............................         --         76        114
Dilutive effect of mandatorily redeemable convertible
  preferred securities, assuming conversion..............         --      1,289      1,289
                                                             -------    -------    -------
Diluted shares outstanding...............................     18,003     18,847     17,767
                                                             =======    =======    =======
Basic earnings per share.................................    $  0.63    $  2.39    $  2.53
                                                             =======    =======    =======
Diluted earnings per share...............................    $  0.62    $  2.35    $  2.46
                                                             =======    =======    =======
</Table>

  The 1998 Stock Incentive Plan:

     Certain individuals who are full-time, salaried employees of Dura (Employee
Participants) are eligible to participate in the 1998 Stock Incentive Plan (the
1998 Plan). A committee of the board of directors selects the Employee
Participants and determines the terms and conditions of granted options. The
1998 Plan provides for the issuance of options at exercise prices equal to the
stock market price on the date of grant to Employee Participants covering up to
1,000,000 shares of Class A common stock of Dura plus any shares carried over
from the 1996 Key Employee Stock Option Plan plus an annual increase, as defined
in the 1998 Plan, subject to certain adjustments reflecting changes in Dura's
capitalization. Options available for future grants to purchase shares of Dura's
Class A common stock was 209,688 at December 31, 2001. Information

                                        42
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

regarding options outstanding from the 1996 Key Employee Stock Option Plan and
the 1998 Plan is as follows:

<Table>
<Caption>
                                                                      WEIGHTED       WEIGHTED
                                        SHARES                        AVERAGE      AVERAGE FAIR      EXERCISABLE
                                         UNDER                        EXERCISE       VALUE OF         AT END OF
                                        OPTION      EXERCISE PRICE     PRICE      OPTIONS GRANTED       YEAR
                                       ---------    --------------    --------    ---------------    -----------
<S>                                    <C>          <C>               <C>         <C>                <C>
Outstanding, December 31, 1998.....    1,004,798     $14.50-38.63      $27.57         $16.61           179,623
  Granted..........................      826,000      17.00-29.25       18.13
  Granted(1).......................      257,520      15.31-26.72       20.35
  Exercised........................      (80,015)     15.47-25.75       17.48
  Forfeited........................      (52,045)     15.47-38.63       28.89
                                       ---------     ------------
Outstanding, December 31, 1999.....    1,956,258      14.50-38.63       23.01          10.75           527,134
  Granted..........................       55,000      12.81-14.44       13.66
  Exercised........................           --               --          --
  Forfeited........................     (371,570)     15.31-38.63       26.48
                                       ---------     ------------
Outstanding, December 31, 2000.....    1,639,688      12.81-38.63       21.81           6.09           489,196
  Granted..........................    2,013,250        7.50-9.15        7.97
  Exercised........................       (1,200)           15.47       15.47
  Forfeited........................     (299,800)      7.50-38.63       18.62
                                       ---------     ------------
Outstanding, December 31, 2001.....    3,351,938     $ 7.50-38.63      $13.87         $ 5.94           999,863
</Table>

---------------
(1) These shares were granted in accordance with the acquisition of Excel
    Industries, Inc. in March 1999 (See Note 3).

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

<Table>
<Caption>
                                          OPTIONS OUTSTANDING                OPTIONS EXERCISABLE
                                   ---------------------------------   -------------------------------
                                      WEIGHTED-
   RANGE OF           NUMBER           AVERAGE          WEIGHTED-          NUMBER         WEIGHTED-
  EXERCISABLE     OUTSTANDING AT      REMAINING          AVERAGE       EXERCISABLE AT      AVERAGE
    OPTIONS          12/31/01      CONTRACTUAL LIFE   EXERCISE PRICE      12/31/01      EXERCISE PRICE
---------------   --------------   ----------------   --------------   --------------   --------------
<S>               <C>              <C>                <C>              <C>              <C>
$          7.50     1,402,750             9.1             $ 7.50                --              --
           9.15       577,000            10.0               9.15                --              --
 14.50 to 20.75       708,934             7.2              16.88           435,134          $16.82
 23.25 to 38.63       663,254             6.8              28.67           564,729           28.98
</Table>

     The weighted average exercise price of options exercisable at the end of
year was $23.13 per share at December 31, 2001, $22.87 at December 31, 2000,
$23.09 at December 31, 1999 and $18.39 at December 31, 1998. The weighted
average remaining contractual life of outstanding options was 7.2 years at
December 31, 2001, 8.3 years at December 31, 2000, 9.3 years at December 31,
1999 and 9.7 years at December 31, 1998.

Independent Director Stock Option Plan:

     The Dura Automotive Systems, Inc. Independent Director Stock Option Plan
(the Director Option Plan) provides for the issuance of options to Independent
Directors, as defined, to acquire up to 100,000 shares of Dura's Class A common
stock, subject to certain adjustments reflecting changes in Dura's
capitalization. The option exercise price must be at least 100 percent of the
market value of the Class A common stock at the time the option is issued. Such
option grants vest six months from the date of grant. As of December 31, 2001,
Dura had granted options under the Director Option Plan to acquire 21,000 shares
of Dura's Class A common stock at an exercise price of $24.50 to $25.50 per
share. As of December 31, 2001, 21,000 of these options were exercisable. No
granted options have been exercised.

                                        43
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Employee Stock Discount Purchase Plan:

     The Dura Automotive Systems, Inc. Employee Stock Discount Purchase Plan
(the Employee Stock Purchase Plan) provides for the sale of up to 500,000 shares
of Dura's Class A common stock at discounted purchase prices, subject to certain
limitations. The cost per share under this plan is 85 percent of the market
value of Dura's Class A common stock at the date of purchase, as defined.
Pursuant to this plan, 159,165; 63,063; and 51,283 shares of Class A common
stock were issued to employees during the years ended December 31, 2001, 2000
and 1999, respectively. The weighted average fair value of shares purchased in
2001, 2000 and 1999 was $5.94, $13.73 and $26.42, respectively.

  Deferred Income Stock Plan:

     During 1999, Dura established the Deferred Income Leadership Stock Purchase
Plan (the Deferred Income Stock Plan), which allows certain employees to defer
receipt of all or a portion of their annual cash bonus. Dura makes a matching
contribution of one-third of the employee's deferral. Dura's matching
contribution vests on the first day of the third plan year following the date of
the employee's deferral. In accordance with the terms of the plan, the
employee's deferral and Dura's matching contribution have been placed in a
"Rabbi" trust, which invests solely in Dura's Class A common stock. During 2001,
17,422 shares were distributed to employees leaving 169,765 units remaining to
be distributed. During 2000, 16,694 shares were distributed to employees. This
trust arrangement offers the employee a degree of assurance for ultimate payment
of benefits without causing constructive receipt for income tax purposes.
Distributions to the employee from the trust can only be made in the form of
Dura's Class A common stock. The assets of the trust remain subject to the
creditors of Dura and are not the property of the employees; therefore, they are
included as a separate component of stockholders' investment under the caption
Treasury Stock.

  Stock-Based Compensation Plans:

     Dura has elected to continue accounting for the above plans under APB
Opinion No. 25, under which no compensation cost has been recognized during the
three years ended December 31, 2001. Had compensation cost for these plans been
determined as required under SFAS No. 123, Dura's pro forma net income and pro
forma earnings per share would have been as follows (in thousands, except per
share amounts):

<Table>
<Caption>
                                                          YEARS ENDED DECEMBER 31,
                                                        -----------------------------
                                                         2001       2000       1999
                                                        -------    -------    -------
<S>                                                     <C>        <C>        <C>
Net income
  As Reported -- Basic................................  $11,219    $41,777    $41,220
  Pro Forma...........................................  $ 7,639    $39,741    $38,728
  As Reported -- Diluted..............................  $11,219    $44,222    $43,665
  Pro Forma...........................................  $ 7,639    $42,186    $41,173
Basic earnings per share
  As Reported.........................................  $  0.63    $  2.39    $  2.53
  Pro Forma...........................................  $  0.43    $  2.28    $  2.38
Diluted earnings per share
  As Reported.........................................  $  0.62    $  2.35    $  2.46
  Pro Forma...........................................  $  0.42    $  2.24    $  2.32
</Table>

     The effect of the stock issued under the Employee Stock Purchase Plan was
not material for 2001, 2000 and 1999. The fair value of each option grant is
estimated on the date of the grant using the Black-Scholes option pricing model
with the following weighted average assumptions: risk free interest rates of 5.4
percent to 5.6 percent in 2001, 5.7 percent in 2000, 5.3 percent to 6.4 percent
in 1999; expected life of four years for 2001,

                                        44
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2000 and 1999; an average expected volatility of 64 percent in 2001, 49 percent
in 2000 and 47 percent in 1999.

  Dividends:

     Dura has not declared or paid any cash dividends in the past. As discussed
in Note 7, Dura's Credit Agreement restricts the amount of dividends Dura can
declare or pay. As of December 31, 2001, under the most restrictive debt
covenants, Dura could not have paid any cash dividends.

6. MANDATORILY REDEEMABLE CONVERTIBLE TRUST PREFERRED SECURITIES:

     In March 1998, Dura Automotive Systems Capital Trust (the Issuer), a wholly
owned statutory business trust of Dura, completed the offering of $55.3 million
of its 7 1/2 percent Convertible Trust Preferred Securities (Preferred
Securities), resulting in net proceeds to Dura of approximately $52.6 million.
The Preferred Securities are redeemable, in whole or part, on or after March 31,
2001 and all Preferred Securities must be redeemed no later than March 31, 2028.
The Preferred Securities are convertible, at the option of the holder into Class
A common stock of Dura at a rate of 0.5831 shares of Class A common stock for
each Preferred Security, which is equivalent to a conversion price of $42 7/8
per share. The net proceeds of the offering were used to repay outstanding
indebtedness. Dividends on the Preferred Securities, net of the related income
tax benefit, are reflected as minority interest in the accompanying consolidated
statements of operations.

     No separate financial statements of the Issuer have been included herein.
Dura does not consider that such financial statements would be material to
holders of Preferred Securities because (i) all of the voting securities of the
Issuer are owned, directly or indirectly, by Dura, a reporting company under the
Exchange Act, (ii) the Issuer has no independent operations and exists for the
sole purpose of issuing securities representing undivided beneficial interests
in the assets of the Issuer and investing the proceeds thereof in 7 1/2 percent
convertible subordinated debentures due March 2028 issued by Dura and (iii) the
obligations of the Issuer under the Preferred Securities are fully and
unconditionally guaranteed by Dura.

7. DEBT:

     Debt consisted of the following (in thousands):

<Table>
<Caption>
                                                            DECEMBER 31,
                                                      ------------------------
                                                         2001          2000
                                                      ----------    ----------
<S>                                                   <C>           <C>
Credit Agreement:
  Tranche A and B term loans........................  $  454,306    $  506,115
  Revolving credit facility.........................      62,584       292,764
9% Senior subordinated notes........................     539,700       394,240
Other...............................................      19,836        32,095
                                                      ----------    ----------
                                                       1,076,426     1,225,214
Less -- Current maturities..........................     (60,847)      (64,013)
                                                      ----------    ----------
                                                      $1,015,579    $1,161,201
                                                      ==========    ==========
</Table>

                                        45
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Future maturities of long-term debt as of December 31, 2001 are as follows
(in thousands):

<Table>
<S>                                                <C>
2002.............................................  $   60,847
2003.............................................      65,452
2004.............................................      64,888
2005.............................................     273,197
2006.............................................      67,004
Thereafter.......................................     545,038
                                                   ----------
                                                   $1,076,426
                                                   ==========
</Table>

     In connection with the acquisitions of Adwest and Excel, Dura entered into
an amended and restated $1.15 billion credit agreement (Credit Agreement). The
Credit Agreement provides for revolving credit facilities of $400.0 million, a
$275.0 million tranche A term loan, a $275.0 million tranche B term loan and a
$200.0 million interim term loan facility. As of December 31, 2001, rates on
borrowings under the Credit Agreement are generally based on LIBOR and ranged
from 4.4 percent to 6.4 percent. Borrowings under the tranche A term loan are
due and payable in March 2005 and borrowings under the tranche B term loan are
due and payable in March 2006. The revolving credit facility is available until
March 2005. Borrowings under the interim loan were due and payable in September
2000, and, as further discussed below, were repaid in April 1999. The Credit
Agreement contains various restrictive covenants which limit indebtedness,
investments, rental obligations and cash dividends. The Credit Agreement also
requires Dura to maintain certain financial ratios including minimum liquidity
and interest coverage. Dura was in compliance with the covenants as of December
31, 2001. Borrowings under the Credit Agreement are collateralized by
substantially all assets of Dura.

     The Credit Agreement provides Dura with the ability to denominate a portion
of its revolving credit borrowings in foreign currencies up to an amount equal
to $150.0 million. As of December 31, 2001, $50.0 million of borrowings were
denominated in U.S. dollars, $9.5 million of borrowings were denominated in
British pound sterling and $3.1 million of borrowings were denominated in Euro.

     Dura also utilizes uncommitted overdraft facilities to satisfy the
short-term working capital requirements of its foreign subsidiaries. At December
31, 2001, Dura had unsecured overdraft facilities outstanding of $0.7 million
which is included in current maturities of long-term debt on the balance sheet.
At December 31, 2001, Dura had unsecured overdraft facilities available from
banks of approximately $32.8 million.

     In connection with the termination of Dura's 1998 credit facility, Dura
wrote-off deferred financing costs of approximately $2.7 million, net of income
taxes, during the first quarter of 1999. In addition, Dura wrote-off costs of
approximately $2.7 million, net of income taxes, related to the tender of the
$75.0 million of Trident outstanding 10 percent Subordinated Notes due 2005
during the second quarter of 1999. These charges are reflected as extraordinary
items in the accompanying 1999 statement of operations.

8. SENIOR SUBORDINATED NOTES:

     In April 1999, Dura completed the offering of $300.0 million and Euro 100.0
million of 9 percent senior subordinated notes (Subordinated Notes), due May
2009. The interest on the Subordinated Notes is payable semi-annually. Net
proceeds from this offering of approximately $394.7 million were used to repay
the $200.0 million interim term loan, approximately $78.1 million to retire
other indebtedness and approximately $118.9 million was used for general
corporate purposes. In June 2001, Dura completed a similar offering of 9 percent
senior subordinated notes due May 2009 with a face amount of $158.5 million. The
interest on these notes is also payable semi-annually. Unamortized discount and
debt issuance costs were approximately $8.5 million, yielding an imputed
interest rate of 10 percent. Net proceeds of approximately $147.1 million

                                        46
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

were used to reduce the borrowings outstanding under the revolving credit
facility. These notes are collateralized by guarantees of certain of Dura's
subsidiaries.

9. INCOME TAXES:

     The summary of income before provision for income taxes, equity in losses
of affiliates, minority interests, cumulative effect of change in accounting and
extraordinary items consisted of the following (in thousands):

<Table>
<Caption>
                                                               YEARS ENDED DECEMBER 31,
                                                             -----------------------------
                                                              2001       2000       1999
                                                             -------    -------    -------
<S>                                                          <C>        <C>        <C>
Domestic.................................................    $27,662    $53,304    $81,714
Foreign..................................................     (5,424)    22,403     12,462
                                                             -------    -------    -------
     Total...............................................    $22,238    $75,707    $94,176
                                                             =======    =======    =======
</Table>

     The provision for income taxes consisted of the following (in thousands):

<Table>
<Caption>
                                                               YEARS ENDED DECEMBER 31,
                                                            ------------------------------
                                                              2001       2000       1999
                                                            --------    -------    -------
<S>                                                         <C>         <C>        <C>
Currently payable --
  Domestic..............................................    $    232    $ 2,429    $32,478
  Foreign...............................................     (21,984)    22,373      7,405
                                                            --------    -------    -------
       Total............................................     (21,752)    24,802     39,883
                                                            --------    -------    -------
Deferred --
  Domestic..............................................      (1,145)     7,765     (3,525)
  Foreign...............................................      31,347     (1,996)     1,626
                                                            --------    -------    -------
       Total............................................      30,202      5,769     (1,899)
                                                            --------    -------    -------
       Total............................................    $  8,450    $30,571    $37,984
                                                            ========    =======    =======
</Table>

     A reconciliation of the provision for income taxes at the statutory rates
to the reported income tax provision is as follows (in thousands):

<Table>
<Caption>
                                                                YEARS ENDED DECEMBER 31,
                                                              ----------------------------
                                                               2001      2000       1999
                                                              ------    -------    -------
<S>                                                           <C>       <C>        <C>
Federal provision at statutory rates......................    $7,783    $26,178    $32,962
Foreign net operating losses not benefited................     9,543      5,544      2,259
Amortization of nondeductible goodwill....................     4,123      3,646      2,921
State taxes, net of federal benefit.......................     1,600        628      1,495
Capital losses not benefited (utilized)...................     1,557     (2,045)        --
Write-off of foreign investments..........................    (9,871)        --         --
Foreign provision in excess of (less than) U.S. tax
  rate....................................................    (2,783)       970      2,089
Extraterritorial income exclusion benefit.................    (2,106)    (2,752)      (953)
Research and development credits..........................    (1,640)    (1,250)    (2,250)
Other, net................................................       244       (348)      (539)
                                                              ------    -------    -------
       Total..............................................    $8,450    $30,571    $37,984
                                                              ======    =======    =======
</Table>

                                        47
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     A summary of deferred tax assets (liabilities) is as follows (in
thousands):

<Table>
<Caption>
                                                                DECEMBER 31,
                                                            --------------------
                                                              2001        2000
                                                            --------    --------
<S>                                                         <C>         <C>
Depreciation and property basis differences.............    $(54,629)   $(26,936)
Net operating loss carryforwards........................      41,135      24,757
Accrued compensation costs..............................      15,335      17,582
Postretirement benefit obligations......................      14,191       7,093
Loss contracts..........................................       8,431       4,124
Facility closure and consolidation costs................       8,309      19,957
Research and development and other credit
  carryforwards.........................................       6,301         597
Capital loss carryforward...............................       5,678       3,696
Legal and environmental costs...........................       3,984      13,148
Inventory valuation adjustments.........................       2,981       3,461
Bad debt allowance......................................         673       1,370
Other...................................................       6,739       7,860
Valuation allowance.....................................     (18,840)    (10,819)
                                                            --------    --------
                                                            $ 40,288    $ 65,890
                                                            ========    ========
</Table>

     Net current deferred tax assets of $30.5 million in 2001 and $49.4 million
in 2000 are included in other current assets. Net long term deferred tax assets
of $9.8 million in 2001 and $16.5 million in 2000 are included in other assets.
The valuation allowance has been provided primarily related to the uncertainty
regarding the use of certain of Dura's net operating loss and capital loss
carryforwards. In 2001 and 2000, the valuation allowance increased by $13.7
million and $6.6 million respectively, to primarily reflect changes in the
uncertainties related to specific net operating loss and capital loss
carryforwards and was reduced by $5.7 million in 2001 as a result of the
utilization of previously valued net operating loss carryforwards. No provision
has been made for U.S. income taxes related to undistributed earnings of foreign
subsidiaries that are intended to be permanently reinvested. As of December 31,
2001, Dura had approximately $124.5 million of net operating loss carryforwards,
of which $91.7 million are related to Dura's various foreign operations who's
use are subject to the tax laws of such foreign jurisdiction and will be limited
by the ability of such foreign entity to generate taxable income. Of the total
net operating loss carryforwards, $77.7 million have no expiration and $46.8
million expire in 2006 through 2021. The utilization of Dura's research and
development credit carryforwards expire in 2010 through 2021. Dura has been
granted tax holidays in certain countries in which it operates. In 2001, Dura
recognized a tax benefit of approximately $0.5 million in countries with tax
holidays.

10. SEGMENT REPORTING:

     Dura follows the provisions of SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information." Dura is organized in three divisions
based on the products that each division offers to vehicle OEM customers. Each
division reports their results of operations, submits budgets and makes capital
expenditure requests to the chief operating decision-making group. This group
consists of the president and chief executive officer, the presidents of the
three divisions, the chief financial officer, the vice-presidents of sales and
human resources and the director of developing markets. Dura's operating
segments have been aggregated into one reportable segment, as Dura believes it
meets the aggregation criteria of SFAS No. 131. Dura's divisions, each with a
separate management team, are dedicated to providing vehicle components and
systems to OEM customers. Each of the divisions demonstrate similar economic
performance, mainly driven by vehicle production volumes of the customers for
which they service. All of Dura's operations use similar manufacturing
techniques and utilize common cost saving tools. These techniques include
continuous improvement programs designed to reduce Dura's overall cost base and
to enable Dura to better handle OEM volume fluctuations.

                                        48
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following table presents revenues and long-lived assets for each of the
geographic areas in which Dura operates (in thousands):

<Table>
<Caption>
                                                   YEARS ENDED DECEMBER 31,
                          ---------------------------------------------------------------------------
                                   2001                      2000                      1999
                          -----------------------   -----------------------   -----------------------
                                       LONG-LIVED                LONG-LIVED                LONG-LIVED
                           REVENUES      ASSETS      REVENUES      ASSETS      REVENUES      ASSETS
                          ----------   ----------   ----------   ----------   ----------   ----------
<S>                       <C>          <C>          <C>          <C>          <C>          <C>
North America...........  $1,632,905    $272,300    $1,784,664    $304,594    $1,493,749    $300,391
Europe..................     815,478     232,572       798,471     200,178       679,662     192,862
Other foreign
  countries.............      28,990      11,645        49,949      29,140        26,974       7,641
                          ----------    --------    ----------    --------    ----------    --------
                          $2,477,373    $516,517    $2,633,084    $533,912    $2,200,385    $500,894
                          ==========    ========    ==========    ========    ==========    ========
</Table>

     Revenues are attributed to geographic locations based on the location of
product production.

     The following is a summary composition by product category of Dura's
revenues (in thousands):

<Table>
<Caption>
                                                            YEARS ENDED DECEMBER 31,
                                                     --------------------------------------
                                                        2001          2000          1999
                                                     ----------    ----------    ----------
<S>                                                  <C>           <C>           <C>
Driver control systems...........................    $  877,925    $  920,247    $  922,115
Seating control systems..........................       363,471       361,614       134,680
Glass systems....................................       332,976       362,069       296,303
Engineered assemblies............................       290,614       328,677       310,541
Structural door modules..........................       197,770       204,853       197,052
Exterior trim systems............................       172,656       164,094       120,785
Mobile products..................................       131,005       152,514       119,735
Other............................................       110,956       139,016        99,174
                                                     ----------    ----------    ----------
Revenues from external customers.................    $2,477,373    $2,633,084    $2,200,385
                                                     ==========    ==========    ==========
</Table>

     Dura sells its products directly to OEMs. Customers that accounted for a
significant portion of consolidated revenues for each of the three years in the
period ended December 31, 2001 were as follows:

<Table>
<Caption>
                                                                    YEARS ENDED
                                                                    DECEMBER 31,
                                                                --------------------
                                                                2001    2000    1999
                                                                ----    ----    ----
<S>                                                             <C>     <C>     <C>
Ford Motor Company..........................................    25%     26%     26%
General Motors..............................................    15%     13%     15%
Lear Corporation............................................    12%     10%      3%
DaimlerChrysler.............................................     9%     10%     11%
</Table>

     As of December 31, 2001 and 2000, receivables from these customers
represented 61 percent and 50 percent of total accounts receivable.

11. EMPLOYEE BENEFIT PLANS:

  Defined Benefit Plans and Post-retirement Benefits:

     Dura sponsors 17 defined benefit plans that cover certain hourly and salary
employees in the United States and certain European countries. Dura's policy is
to make annual contributions to the plans to fund the normal cost as required by
local regulations. In addition, Dura has nine postretirement medical benefit
plans for certain employee groups and has recorded a liability for its estimated
obligation under these plans. The tables below are based on a September 30
measurement date.

                                        49
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The change in benefit obligation, plan assets and funded status consisted
of the following (in thousands):

<Table>
<Caption>
                                PENSION PLANS IN     PENSION PLANS IN WHICH
                              WHICH ASSETS EXCEED     ACCUMULATED BENEFITS     POSTRETIREMENT BENEFITS
                              ACCUMULATED BENEFITS        EXCEED ASSETS          OTHER THAN PENSIONS
                              --------------------   -----------------------   -----------------------
                                2001       2000         2001         2000         2001         2000
                              --------   ---------   ----------   ----------   ----------   ----------
<S>                           <C>        <C>         <C>          <C>          <C>          <C>
Change in Benefit
  Obligation:
  Benefit obligation at
     beginning of year......  $10,679    $ 89,313     $152,216     $ 81,268     $ 23,321     $ 23,183
  Service cost..............      637       3,028        3,493        1,564          470          448
  Interest cost.............      743       4,960        9,461        5,401        1,722        1,633
  Plan participants'
     contributions..........       --         463          437          194           --           --
  Amendments................       52         737        1,749           --         (276)          --
  Actuarial (gain) loss.....     (149)     (3,292)      17,939       (6,828)       1,243         (223)
  Acquisitions..............       --          --           --           --           --          791
  Benefits paid.............     (775)     (6,125)     (11,188)      (4,384)      (2,987)      (2,470)
  Exchange rate changes.....     (428)     (5,555)      (2,790)       2,151         (184)         (41)
                              -------    --------     --------     --------     --------     --------
  Benefit obligation at end
     of year................  $10,759    $ 83,529     $171,317     $ 79,366     $ 23,309     $ 23,321
                              =======    ========     ========     ========     ========     ========
Change in Plan Assets:
  Fair value of plan assets
     at beginning of year...  $11,936    $117,709     $155,197     $ 61,250     $     --     $     --
  Actual return on plan
     assets.................      423         619       (4,687)      (3,434)          --           --
  Acquisitions..............       --          --           --        2,870           --           --
  Employer contributions....      763       2,480        4,540        3,652        2,871        2,448
  Plan participants'
     contributions..........       --         463          437           --           --           --
  Benefits paid.............     (775)     (6,125)     (10,801)      (3,874)      (2,871)      (2,448)
  Exchange rate changes.....     (476)     (7,669)      (2,800)        (808)          --           --
                              -------    --------     --------     --------     --------     --------
  Fair value of plan assets
     at end of year.........  $11,871    $107,477     $141,886     $ 59,656     $     --     $     --
                              =======    ========     ========     ========     ========     ========
Change in Funded Status:
  Funded status.............  $ 1,112    $ 23,948     $(29,431)    $(19,710)    $(23,309)    $(23,321)
  Unrecognized actuarial
     (gain) loss............      328      (2,098)      41,240        4,896          (15)      (1,255)
  Unrecognized prior service
     cost...................      817         867        1,507            5          (57)         (64)
  Adjustment to recognize
     minimum liability......       --       3,897      (10,682)      (4,065)          --           --
                              -------    --------     --------     --------     --------     --------
  Prepaid/(Accrued) benefit
     cost...................  $ 2,257    $ 26,614     $  2,634     $(18,874)    $(23,381)    $(24,640)
                              =======    ========     ========     ========     ========     ========
</Table>

                                        50
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following weighted-average assumptions were used to account for the
plans:

<Table>
<Caption>
                                                                     POST-RETIREMENT BENEFITS
                                             PENSION BENEFITS          OTHER THAN PENSIONS
                                         ------------------------    ------------------------
                                            2001          2000          2001          2000
                                         ----------    ----------    ----------    ----------
<S>                                      <C>           <C>           <C>           <C>
Discount rate........................    5.00-7.50%    5.50-7.50%    7.00-7.50%    6.75-7.50%
Expected return on plan assets.......    5.00-8.00%    7.50-8.00%           N/A           N/A
Rate of compensation increase........    2.50-4.00%    2.50-4.00%           N/A           N/A
</Table>

     For measurement purposes, a 4.00 percent-5.75 percent annual rate of
increase in the per capita cost of covered health care benefits was assumed for
2001. The rate was assumed to remain constant thereafter.

     The components of net periodic benefit costs are as follows (in thousands):

<Table>
<Caption>
                                                                      POST-RETIREMENT BENEFITS
                                   PENSION BENEFITS YEARS ENDED      OTHER THAN PENSIONS YEARS
                                           DECEMBER 31,                  ENDED DECEMBER 31,
                                 --------------------------------    --------------------------
                                   2001        2000        1999       2001      2000      1999
                                 --------    --------    --------    ------    ------    ------
<S>                              <C>         <C>         <C>         <C>       <C>       <C>
Service cost...................  $  4,130    $  4,592    $  5,724    $  470    $  451    $  780
Interest cost..................    10,204      10,362       7,926     1,722     1,654     1,872
Expected return on plan
  assets.......................   (12,109)    (13,299)    (10,763)       --        --        --
Amendments/curtailments........       267           2        (470)     (276)       --        --
Amortization of prior service
  cost.........................      (645)       (675)       (319)       (7)      (46)       (8)
Recognized actuarial (gain)
  loss.........................        (9)          5         644        --        --        25
                                 --------    --------    --------    ------    ------    ------
Net periodic benefit cost......  $  1,838    $    987    $  2,742    $1,909    $2,059    $2,669
                                 ========    ========    ========    ======    ======    ======
</Table>

     Assumed health care cost trend rates have a significant effect on the
amounts reported for the post-retirement medical benefit plans. A one
percentage-point change in assumed health care cost trend rates would have the
following effects (in thousands):

<Table>
<Caption>
                                                     ONE PERCENTAGE-POINT    ONE PERCENTAGE-POINT
                                                           INCREASE                DECREASE
                                                     --------------------    --------------------
<S>                                                  <C>                     <C>
Effect on total of service and interest cost
  components.....................................           $  196                 $  (172)
Effect on the post-retirement benefit
  obligation.....................................           $1,848                 $(1,744)
</Table>

  Retirement Savings Plans:

     Dura sponsors various employee retirement savings plans that allow
qualified employees to provide for their retirement on a tax-deferred basis. In
accordance with the terms of the retirement savings plans, Dura is required to
match certain of the participants' contributions and/or provide employer
contributions based on Dura's performance and other factors. Dura amended
certain of these plans during 2001 to suspend the required matching of certain
participant contributions. Dura's contributions totaled $5.8 million, $9.5
million and $4.7 million during fiscal 2001, 2000 and 1999.

                                        51
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12. COMMITMENTS AND CONTINGENCIES:

  Leases:

     Dura leases office and manufacturing space and certain equipment under
operating lease agreements which require it to pay maintenance, insurance, taxes
and other expenses in addition to annual rentals. Future annual rental
commitments at December 31, 2001 under these operating leases are as follows (in
thousands):

<Table>
<Caption>
YEAR                                                   AMOUNT
----                                                   -------
<S>                                                    <C>
2002...............................................    $17,248
2003...............................................     14,804
2004...............................................     12,494
2005...............................................      8,221
2006...............................................      4,813
Thereafter.........................................     29,079
</Table>

Litigation:

     Dura is subject to various legal actions and claims incidental to its
business, including those arising out of alleged defects, product warranties,
employment-related matters and environmental matters. In the event of a product
recall by an original equipment manufacturer, it is possible that the
manufacturer will seek reimbursement of the costs to repair from Dura. Dura
maintains insurance to cover certain of these claims. Dura has established
reserves for issues that are probable and estimatable in amounts management
believes are adequate to cover reasonable adverse judgments not covered by
insurance. Based upon the information available to management and discussions
with legal counsel, it is the opinion of management that the ultimate outcome of
the various legal actions and claims that are incidental to Dura's business will
not have a material adverse impact on the consolidated financial position,
results of operations or cash flows of Dura; however, such matters are subject
to many uncertainties, and the outcomes of individual matters are not
predictable with assurance.

13. RELATED PARTY TRANSACTIONS:

     Dura incurred fees to Hidden Creek Industries (HCI), an affiliate of Dura,
of approximately $1.6 million in 2001 in connection with the amendment to the
Credit Agreement, the offering of the Subordinated Notes, the divestitures of
Australia, Thixotech and Plastic Products businesses and other business
development services. In 2000 Dura paid fees to HCI of $2.1 million in
connection with the Meritor acquisition and other business development services.
In 1999 Dura paid fees to HCI of $9.5 million in connection with the
acquisitions of Excel and Adwest, the offering of the Subordinated Notes, the
tender of the Trident notes and the amended Credit Agreement. (See Note 3 for
discussion of acquisitions and Note 4 for discussion of divestitures).

     In addition to the transaction discussed in Note 4, during 2001, Dura
loaned approximately $1.2 million pursuant to a promissory note to Automotive
Aviation Partners, LLC, (AAP LLC) of which Dura's chairman of the board of
directors is a partner and majority shareholder. Dura is the sole other
shareholder in AAP LLC. The promissory note bears interest at the commercial
prime lending rate with principal and interest due at maturity in October 2002.
Dura's chairman of the board of directors has guaranteed 75% of the promissory
note. This loan is included in accounts receivable in the accompanying 2001
consolidated balance sheet of Dura.

                                        52
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. QUARTERLY FINANCIAL DATA (UNAUDITED):

     The following is a condensed summary of actual quarterly results of
operations for 2001 and 2000 (in thousands, except per share amounts):

<Table>
<Caption>
                                                                     NET           BASIC             DILUTED
                                           GROSS      OPERATING    INCOME     EARNINGS (LOSS)    EARNINGS (LOSS)
                              REVENUES     PROFIT      INCOME      (LOSS)        PER SHARE          PER SHARE
                              --------    --------    ---------    -------    ---------------    ---------------
<S>                           <C>         <C>         <C>          <C>        <C>                <C>
2001:
  First...................    $661,853    $ 91,907     $44,646     $ 9,218        $ 0.52             $ 0.52
  Second..................     666,321      89,011      46,217      12,866          0.72               0.70
  Third...................     568,890      68,167      20,155      (3,386)        (0.19)             (0.19)
  Fourth..................     580,309      64,964      12,037      (7,479)        (0.42)             (0.42)
2000:
  First...................    $682,769    $109,115     $58,156     $16,460        $ 0.94             $ 0.90
  Second..................     707,690     114,427      47,750      11,520          0.66               0.64
  Third...................     587,081      93,631      45,411      10,255          0.59               0.58
  Fourth..................     655,544      79,367      36,823       3,542          0.20               0.20
</Table>

     The sum of the per share amounts for the quarters does not equal the total
for the year due to the application of the treasury stock method.

15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION:

     The following consolidating financial information presents balance sheets,
statements of operations and cash flow information related to Dura's business.
Each Guarantor, as defined, is a direct or indirect wholly owned subsidiary of
Dura and has fully and unconditionally guaranteed the 9% senior subordinated
notes issued by Dura Operating Corp., on a joint and several basis. Separate
financial statements and other disclosures concerning the Guarantors have not
been presented because management believes that such information is not material
to investors.

                                        53
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                         DURA AUTOMOTIVE SYSTEMS, INC.
              CONSOLIDATING BALANCE SHEETS AS OF DECEMBER 31, 2001

<Table>
<Caption>
                                         DURA                     NON-
                                      OPERATING    GUARANTOR   GUARANTOR
                                        CORP.      COMPANIES   COMPANIES    ELIMINATIONS   CONSOLIDATED
                                      ----------   ---------   ----------   ------------   ------------
                                                           (AMOUNTS IN THOUSANDS)
<S>                                   <C>          <C>         <C>          <C>            <C>
                                                ASSETS
Current assets:
  Cash and cash equivalents.........  $   10,693   $  1,857    $   19,739            --     $   32,289
  Accounts receivable, net..........     113,655     25,205       154,616            --        293,476
  Inventories.......................      34,425     17,591        64,492            --        116,508
  Other current assets..............      47,909      1,249        77,209            --        126,367
  Due from affiliates...............     149,969     63,358         2,241   $  (215,568)            --
                                      ----------   --------    ----------   -----------     ----------
     Total current assets...........     356,651    109,260       318,297      (215,568)       568,640
                                      ----------   --------    ----------   -----------     ----------
Property, plant and equipment,
  net...............................     184,461     48,554       283,502            --        516,517
Investment in subsidiaries..........     648,053      3,489        66,926      (718,468)            --
Notes receivable from affiliates....     278,213    146,409        70,711      (495,333)            --
Goodwill, net.......................     429,663     82,769       450,035            --        962,467
Other assets, net...................      47,989        510        25,481            --         73,980
                                      ----------   --------    ----------   -----------     ----------
                                      $1,945,030   $390,991    $1,214,952   $(1,429,369)    $2,121,604
                                      ==========   ========    ==========   ===========     ==========
                               LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
  Accounts payable..................  $  105,430   $ 17,655    $  126,739   $        --     $  249,824
  Accrued liabilities...............      71,248     12,522        93,557            --        177,327
  Current maturities of long-term
     debt...........................      42,122         50        18,675            --         60,847
  Due to affiliates.................      65,760     33,999       115,809      (215,568)            --
                                      ----------   --------    ----------   -----------     ----------
     Total current liabilities......     284,560     64,226       354,780      (215,568)       487,998
                                      ----------   --------    ----------   -----------     ----------
Long-term debt, net of current
  maturities........................     422,650         56        53,173            --        475,879
Subordinated notes..................     539,700         --            --            --        539,700
Other noncurrent liabilities........      61,117     12,606        46,657            --        120,380
Notes payable to affiliates.........      84,625     23,851       386,857      (495,333)            --
                                      ----------   --------    ----------   -----------     ----------
     Total liabilities..............   1,392,652    100,739       841,467      (710,901)     1,623,957
                                      ----------   --------    ----------   -----------     ----------
Mandatorily redeemable convertible
  trust preferred securities........      55,250         --            --            --         55,250
Stockholders' investment............     497,128    290,252       373,485      (718,468)       442,397
                                      ----------   --------    ----------   -----------     ----------
                                      $1,945,030   $390,991    $1,214,952   $(1,429,369)    $2,121,604
                                      ==========   ========    ==========   ===========     ==========
</Table>

                                        54
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                         DURA AUTOMOTIVE SYSTEMS, INC.

    CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DEC. 31, 2001

<Table>
<Caption>
                                           DURA                       NON-
                                        OPERATING     GUARANTOR    GUARANTOR
                                          CORP.       COMPANIES    COMPANIES     ELIMINATIONS    CONSOLIDATED
                                        ----------    ---------    ----------    ------------    ------------
                                                               (AMOUNTS IN THOUSANDS)
<S>                                     <C>           <C>          <C>           <C>             <C>
Revenues............................    $1,152,909    $297,460     $1,080,550      $(53,546)      $2,477,373
Cost of sales.......................       987,510     246,660        982,700       (53,546)       2,163,324
                                        ----------    --------     ----------      --------       ----------
     Gross profit...................       165,399      50,800         97,850            --          314,049
Selling, general and administrative
  expenses..........................        73,487      14,003         52,069            --          139,559
Facility consolidation, product
  recall and other charges..........        22,658       1,680             48            --           24,386
Amortization expense................        12,902       2,461         11,686            --           27,049
                                        ----------    --------     ----------      --------       ----------
     Operating income...............        56,352      32,656         34,047            --          123,055
Interest expense, net...............        60,696         597         39,524            --          100,817
                                        ----------    --------     ----------      --------       ----------
  Income before provision for income
     taxes, equity in (earnings) of
     affiliates and minority
     interest.......................        (4,344)     32,059         (5,477)           --           22,238
                                        ----------    --------     ----------      --------       ----------
Provision for income taxes..........         2,879       4,494          1,077            --            8,450
Equity in losses of affiliates,
  net...............................        (5,713)         --         (5,249)       10,962               --
Minority interest-dividends on trust
  preferred securities, net.........         2,569          --             --            --            2,569
Dividends (to)/from affiliates......       (15,298)         --             --        15,298               --
                                        ----------    --------     ----------      --------       ----------
     Net income (loss)..............    $   11,219    $ 27,565     $   (1,305)     $(26,260)      $   11,219
                                        ==========    ========     ==========      ========       ==========
</Table>

                                        55
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                         DURA AUTOMOTIVE SYSTEMS, INC.

    CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DEC. 31, 2001

<Table>
<Caption>
                                            DURA                      NON-
                                          OPERATING    GUARANTOR    GUARANTOR
                                            CORP.      COMPANIES    COMPANIES    ELIMINATIONS    CONSOLIDATED
                                          ---------    ---------    ---------    ------------    ------------
                                                                (AMOUNTS IN THOUSANDS)
<S>                                       <C>          <C>          <C>          <C>             <C>
OPERATING ACTIVITIES:
  Net income (loss).....................  $  11,219    $ 27,565     $ (1,305)      $(26,260)      $  11,219
  Adjustments to reconcile net income
     (loss) to net cash provided by
     (used in) operating activities:
     Depreciation and amortization......     39,504       9,868       45,207             --          94,579
     Deferred income tax provision......     (3,901)     14,573       19,530             --          30,202
     Equity in losses of affiliates and
       minority interest................     (5,713)         --       (5,249)        10,962              --
     Changes in other operating items...     60,895      25,240      (10,015)            --          76,120
                                          ---------    --------     --------       --------       ---------
       Net cash provided by (used in)
          operating activities..........    102,004      77,246       48,168        (15,298)        212,120
                                          ---------    --------     --------       --------       ---------
INVESTING ACTIVITIES:
  Capital expenditures, net.............    (13,590)     (4,657)     (53,532)            --         (71,779)
  Acquisitions, net.....................         --          --           --             --              --
                                          ---------    --------     --------       --------       ---------
       Net cash used in investing
          activities....................    (13,590)     (4,657)     (53,532)            --         (71,779)
                                          ---------    --------     --------       --------       ---------
FINANCING ACTIVITIES:
  Short-term borrowings, net............      6,691          50      (17,440)            --         (10,699)
  Long-term borrowings, net.............   (245,464)         56      (22,776)            --        (268,184)
  Debt financing (to)/from affiliates...        977     (56,600)      55,623             --              --
  Purchase of treasury shares and other,
     net................................       (386)         --           --             --            (386)
  Proceeds from issuance of subordinated
     notes, net.........................    147,100          --           --             --         147,100
  Proceeds from stock offering and
     exercise of stock options, net.....        838          --           --             --             838
  Debt issue costs......................     (4,006)         --           --             --          (4,006)
  Dividends paid........................         --     (15,298)          --         15,298              --
                                          ---------    --------     --------       --------       ---------
       Net cash provided by (used for)
          financing activities..........    (94,250)    (71,792)      15,407         15,298        (135,337)
                                          ---------    --------     --------       --------       ---------
EFFECT OF EXCHANGE RATES ON CASH........     (1,625)         --       (1,528)            --          (3,153)
                                          ---------    --------     --------       --------       ---------
NET INCREASE IN CASH AND CASH
  EQUIVALENTS...........................     (7,461)        797        8,515             --           1,851
CASH AND CASH EQUIVALENTS:
  Beginning of period...................     18,154       1,060       11,224             --          30,438
                                          ---------    --------     --------       --------       ---------
  End of period.........................  $  10,693    $  1,857     $ 19,739       $     --       $  32,289
                                          =========    ========     ========       ========       =========
</Table>

                                        56
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                         DURA AUTOMOTIVE SYSTEMS, INC.
              CONSOLIDATING BALANCE SHEETS AS OF DECEMBER 31, 2000

<Table>
<Caption>
                                           DURA                     NON-
                                        OPERATING    GUARANTOR   GUARANTOR
                                          CORP.      COMPANIES   COMPANIES    ELIMINATIONS   CONSOLIDATED
                                        ----------   ---------   ----------   ------------   ------------
                                                             (AMOUNTS IN THOUSANDS)
<S>                                     <C>          <C>         <C>          <C>            <C>
                                                 ASSETS
Current assets:
  Cash and cash equivalents..........   $   18,154   $  1,060    $   11,224   $        --     $   30,438
  Accounts receivable, net...........      138,628     33,600       195,277            --        367,505
  Inventories........................       50,140     20,218        78,561            --        148,919
  Other current assets...............       74,444     15,112        80,527            --        170,083
  Due from affiliates................      127,166     61,800        32,979      (221,945)            --
                                        ----------   --------    ----------   -----------     ----------
     Total current assets............      408,532    131,790       398,568      (221,945)       716,945
                                        ----------   --------    ----------   -----------     ----------
Property, plant and equipment, net...      200,289     52,448       281,175            --        533,912
Investment in subsidiaries...........      583,799     27,000        50,396      (661,195)            --
Notes receivable from affiliates.....      354,502    115,189        72,187      (541,878)            --
Goodwill, net........................      419,260    116,958       491,895            --      1,028,113
Other assets, net....................       31,772     11,554        34,751            --         78,077
                                        ----------   --------    ----------   -----------     ----------
                                        $1,998,154   $454,939    $1,328,972   $(1,425,018)    $2,357,047
                                        ==========   ========    ==========   ===========     ==========

                                LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
  Accounts payable...................   $   97,211   $ 14,892    $  146,792   $        --     $  258,895
  Accrued liabilities................       83,618     16,074       125,340            --        225,032
  Current maturities of long-term
     debt............................       36,091         --        27,922            --         64,013
  Due to affiliates..................       80,036     28,816       113,093      (221,945)            --
                                        ----------   --------    ----------   -----------     ----------
     Total current liabilities.......      296,956     59,782       413,147      (221,945)       547,940
                                        ----------   --------    ----------   -----------     ----------
Long-term debt, net of current
  maturities.........................      676,840         --        90,121            --        766,961
Subordinated notes...................      394,240         --            --            --        394,240
Other noncurrent liabilities.........       51,314     31,485        56,463            --        139,262
Notes payable to affiliates..........       35,328     64,978       441,572      (541,878)            --
                                        ----------   --------    ----------   -----------     ----------
     Total liabilities...............    1,454,678    156,245     1,001,303      (763,823)     1,848,403
                                        ----------   --------    ----------   -----------     ----------
Mandatorily redeemable convertible
  trust preferred securities.........       55,250         --            --            --         55,250
Stockholders' investment:............      490,192    298,694       362,501      (661,195)       490,192
  Accumulated other comprehensive
     loss............................       (1,966)        --       (34,832)           --        (36,798)
                                        ----------   --------    ----------   -----------     ----------
                                        $1,998,154   $454,939    $1,328,972   $(1,425,018)    $2,357,047
                                        ==========   ========    ==========   ===========     ==========
</Table>

                                        57
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                         DURA AUTOMOTIVE SYSTEMS, INC.
    CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DEC. 31, 2000

<Table>
<Caption>
                                           DURA                       NON-
                                        OPERATING     GUARANTOR    GUARANTOR
                                          CORP.       COMPANIES    COMPANIES     ELIMINATIONS    CONSOLIDATED
                                        ----------    ---------    ----------    ------------    ------------
                                                               (AMOUNTS IN THOUSANDS)
<S>                                     <C>           <C>          <C>           <C>             <C>
Revenues............................    $1,227,089    $390,912     $1,069,868      $(54,785)      $2,633,084
Cost of sales.......................     1,068,520     312,334        910,475       (54,785)       2,236,544
                                        ----------    --------     ----------      --------       ----------
     Gross profit...................       158,569      78,578        159,393            --          396,540
Selling, general and administrative
  expenses..........................        76,589      18,329         70,606            --          165,524
Facility consolidation, product
  recall and other charges..........        19,483       1,379         (5,501)           --           15,361
Amortization expense................        11,401       3,631         12,483            --           27,515
                                        ----------    --------     ----------      --------       ----------
     Operating income...............        51,096      55,239         81,805            --          188,140
Interest expense, net...............        60,904       2,730         48,799            --          112,433
                                        ----------    --------     ----------      --------       ----------
     Income before provision for
       income taxes, equity in
       (earnings) of affiliates and
       minority interest............        (9,808)     52,509         33,006            --           75,707
                                        ----------    --------     ----------      --------       ----------
Provision for income taxes..........            (5)     10,199         20,377            --           30,571
Minority interests and equity in
  (earnings) of affiliates, net.....       (54,025)         --         (6,687)       61,626              914
Minority interest -- dividends on
  trust preferred securities, net...         2,445          --             --            --            2,445
Dividends (to)/from affiliates......            --      (2,783)        (2,784)        5,567               --
                                        ----------    --------     ----------      --------       ----------
     Net income (loss)..............    $   41,777    $ 45,093     $   22,100      $(67,193)      $   41,777
                                        ==========    ========     ==========      ========       ==========
</Table>

                                        58
<PAGE>
                 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                         DURA AUTOMOTIVE SYSTEMS, INC.
    CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DEC. 31, 2000

<Table>
<Caption>
                                              DURA                      NON-
                                            OPERATING    GUARANTOR    GUARANTOR
                                              CORP.      COMPANIES    COMPANIES    ELIMINATIONS    CONSOLIDATED
                                            ---------    ---------    ---------    ------------    ------------
                                                                  (AMOUNTS IN THOUSANDS)
<S>                                         <C>          <C>          <C>          <C>             <C>
OPERATING ACTIVITIES:
  Net income (loss).....................    $ 41,777     $ 45,093     $ 22,100       $(67,193)      $  41,777
  Adjustments to reconcile net income
     (loss) to net cash provided by
     (used in) operating activities:
     Depreciation and amortization......      35,060       10,193       40,250             --          85,503
     Deferred income tax provision......      13,874       (5,974)      (2,131)            --           5,769
     Equity in losses of affiliates and
       minority interest................     (54,025)          --       (6,687)        61,626             914
     Changes in other operating items...     (19,467)      26,306      (23,243)            --         (16,404)
                                            --------     --------     --------       --------       ---------
       Net cash provided by (used in)
          operating activities..........      17,219       75,618       30,289         (5,567)        117,559
                                            --------     --------     --------       --------       ---------
INVESTING ACTIVITIES:
  Capital expenditures, net.............     (38,461)     (10,170)     (61,501)            --        (110,132)
  Acquisitions, net.....................          --       (9,147)      (9,963)            --         (19,110)
                                            --------     --------     --------       --------       ---------
       Net cash used in investing
          activities....................     (38,461)     (19,317)     (71,464)            --        (129,242)
                                            --------     --------     --------       --------       ---------
FINANCING ACTIVITIES:
  Short-term borrowings, net............      19,476         (335)      (4,623)            --          14,518
  Long-term borrowings, net.............      26,147          (79)     (20,874)            --           5,194
  Debt financing (to)/from affiliates...       2,589      (51,758)      49,169             --              --
  Purchase of treasury shares and other,
     net................................      (1,723)          --           --             --          (1,723)
  Proceeds from stock offering and
     exercise of stock options, net.....         928           --           --             --             928
  Dividends paid........................          --       (2,783)      (2,784)         5,567              --
                                            --------     --------     --------       --------       ---------
       Net cash provided by (used for)
          financing activities..........      47,417      (54,955)      20,888          5,567          18,917
                                            --------     --------     --------       --------       ---------
EFFECT OF EXCHANGE RATES ON CASH........      (9,288)          --        8,795             --            (493)
                                            --------     --------     --------       --------       ---------
NET INCREASE IN CASH AND CASH
  EQUIVALENTS...........................      16,887        1,346      (11,492)            --           6,741
CASH AND CASH EQUIVALENTS:
  Beginning of period...................       1,267         (286)      22,716             --          23,697
                                            --------     --------     --------       --------       ---------
  End of period.........................    $ 18,154     $  1,060     $ 11,224       $     --       $  30,438
                                            ========     ========     ========       ========       =========
</Table>

                                        59
<PAGE>

                         INDEPENDENT PUBLIC ACCOUNTANTS

TO DURA AUTOMOTIVE SYSTEMS, INC.:

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

Arthur Andersen LLP

Minneapolis, Minnesota,
January 23, 2002

                                        60
<PAGE>

                         DURA AUTOMOTIVE SYSTEMS, INC.
                 SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS

ADDITIONAL PURCHASE LIABILITIES RECORDED IN CONJUNCTION WITH ACQUISITIONS:

     The transactions in the purchase liabilities recorded in conjunction with
acquisitions for the years ending December 31, 2001, 2000 and 1999 were as
follows (in thousands):

<Table>
<Caption>
                                                            2001        2000        1999
                                                          --------    --------    --------
<S>                                                       <C>         <C>         <C>
Balance, beginning of the year........................    $ 48,168    $ 82,120    $ 81,209
  Provisions..........................................         110       3,107      39,827
  Reversals...........................................      (6,542)     (8,898)         --
  Utilizations........................................     (12,511)    (28,161)    (38,916)
                                                          --------    --------    --------
  Balance, end of the year............................    $ 29,225    $ 48,168    $ 82,120
                                                          ========    ========    ========
</Table>

FACILITY CONSOLIDATION CHARGE:

     The transactions in the facility consolidation reserve accounts for the
year ending December 31, 2001, 2000 and 1999 were as follows (in thousands):

<Table>
<Caption>
                                                              2001       2000       1999
                                                             -------    -------    -------
<S>                                                          <C>        <C>        <C>
Balance, beginning of the year...........................    $ 4,425    $12,501         --
  Provisions.............................................      4,393      6,840    $14,639
  Reversals..............................................       (512)    (8,201)        --
  Utilizations...........................................     (6,338)    (6,715)    (2,138)
                                                             -------    -------    -------
  Balance, end of the year...............................    $ 1,968    $ 4,425    $12,501
                                                             =======    =======    =======
</Table>

                                        61
<PAGE>

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

     None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

A. DIRECTORS OF THE REGISTRANT

     The information required by Item 10 with respect to the directors is
incorporated herein by reference to the section labeled "Election of Directors"
which appears in Dura's 2002 Proxy Statement.

B. EXECUTIVE OFFICERS

     The following table sets forth certain information with respect to Dura's
executive officers as of March 1, 2002:

<Table>
<Caption>
NAME                                     AGE                 POSITION(S)
----                                     ---                 -----------
<S>                                      <C>   <C>
S.A. Johnson...........................  61    Chairman and Director
Karl F. Storrie........................  64    President, Chief Executive Officer and
                                                 Director
David R. Bovee.........................  52    Vice President, Chief Financial Officer
                                                 and Assistant Secretary
John J. Knappenberger..................  55    Vice President
Milton D. Kniss........................  54    Vice President and President -- Cockpit
                                                 Systems Division
Robert A. Pickering....................  59    Vice President and President -- Atwood
                                                 Mobile Products Division
Scott D. Rued..........................  45    Vice President
Jurgen von Heyden......................  54    Vice President and President -- Body &
                                                 Glass Division
</Table>

     S.A. Johnson has served as Chairman and a Director of Dura since November
1990. Mr. Johnson is the founder and Chairman of Hidden Creek Industries
("Hidden Creek"), a private industrial management company based in Minneapolis,
Minnesota, which has provided certain management and other services to Dura. Mr.
Johnson is also the President of J2R Corporation ("J2R"). Prior to forming
Hidden Creek, Mr. Johnson served from 1985 to 1989 as Chief Operating Officer of
Pentair, Inc., a diversified industrial company. From 1981 to 1985, Mr. Johnson
was President and Chief Executive Officer of Onan Corp., a diversified
manufacturer of electrical generating equipment and engines for commercial,
defense and industrial markets. Mr. Johnson served as Chairman and a director of
Automotive Industries Holding, Inc., a supplier of interior trim components to
the automotive industry, from May 1990 to August 1995. Mr. Johnson is also
Chairman and a director of Tower Automotive, Inc., a manufacturer of engineered
metal stampings and assemblies for the automotive industry.

     Karl F. Storrie has served as President, Chief Executive Officer and a
Director of Dura since March 1991. Prior to joining Dura and from 1986, Mr.
Storrie was Group President of a number of aerospace manufacturing companies
owned by Coltec Industries, a multi-divisional public corporation. Prior to
becoming a Group President, Mr. Storrie was a Division President of two
aerospace design and manufacturing companies for Coltec Industries from 1981 to
1986. During his thirty-five year career, Mr. Storrie has held a variety of
positions in technical and operations management. Mr. Storrie is also a director
of Argo-Tech Corporation, a manufacturer of aircraft fuel, boost and transfer
pumps.

     David R. Bovee has served as Vice President and Chief Financial Officer of
Dura since January 2001 and from November 1990 to May 1997. From May 1997 until
January 2001, Mr. Bovee served as Vice President of Business Development. Mr.
Bovee also serves as Assistant Secretary for Dura. Prior to joining Dura, Mr.
Bovee served as Vice President at Wickes in its Automotive Group from 1987 to
1990.

                                        62
<PAGE>

     John J. Knappenberger has served as Vice President of Quality and Materials
of Dura since December 1995. Mr. Knappenberger assumed responsibility for sales
and engineering in June 1997. Prior to joining Dura, Mr. Knappenberger was
Director of Quality for Carrier Corporation's North American Operations,
manufacturers of heating and air conditioning systems, from February 1992. From
1985 to 1991, Mr. Knappenberger was employed by TRW Inc., a supplier of
components to the automotive industry, beginning as Director of Quality in 1985
for the Steering and Suspension Division and becoming Vice President, Quality
for the Automotive Sector in 1990.

     Milton D. Kniss has served as Vice President of Operations of Dura since
January 1994 and President of the Control Systems Division since October 2000.
From April 1991 until January 1994, Mr. Kniss served as Director of Michigan
Operations for Dura. Mr. Kniss joined the predecessor in 1981 as a Divisional
Purchasing Manager, served as Plant Manager of East Jordan, Michigan from 1982
until 1986, and Plant Manager of Gordonsville, Tennessee until 1991.

     Robert A. Pickering has served as Vice President of Dura since March 1999
and President of the Atwood Mobile Products Division since January 2000. From
December 1996 to March 1999, Mr. Pickering was Vice President of Excel. From
1989 to 1996, Mr. Pickering was employed by Atwood Industries, serving as Vice
President of manufacturing of Atwood Automotive Division from 1989 to 1991 and
President of Atwood Mobile Products from 1991 to 1996. Prior to joining Atwood
Industries, Mr. Pickering's employment included seven years with Tech Form
Industries, an automotive OEM supplier, six years with Volkswagen of America,
and ten years with the Chevrolet Division of General Motors.

     Scott D. Rued has served as Vice President of Dura since November 1990. Mr.
Rued, a stockholder of J2R, has also served as Chief Executive Officer of Hidden
Creek since January 2001. From January 1994 through December of 2000 Mr. Rued
served as Executive Vice President and Chief Financial Officer of Hidden Creek
and from June 1989 through 1993 he served as Vice President -- Finance and
Corporate Development. Mr. Rued has served as Vice President, Corporate
Development and a director of Tower Automotive, Inc. since April 1993. Mr. Rued
served as Vice President, Chief Financial Officer and a director of Automotive
Industries Holding, Inc. from April 1990 to 1995. Mr. Rued is also a director of
The Rottlund Company, Inc., a corporation engaged in the development and sale of
residential real estate.

     Jurgen von Heyden has served as Vice President of Dura and President of the
Body & Glass Division since February 2000. Mr. von Heyden served as Managing
Director of Dura Body & Glass Systems GmbH in Plettenberg, Germany from March
1999 to February 2000. Prior to the acquisition of Schade, Mr. von Heyden served
as the Managing Director/CEO of Schade since 1997. Before joining Schade he was
the Managing Director of Happich, later becoming Becker-Group. Mr. von Heyden
has been in the automotive supplier industry since 1984 with professional
training of Diplom-Ingenieur and Diplom-Wirtschaftsingenieur.

C. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     The information required by Item 10 with respect to compliance with
reporting requirements is incorporated herein by reference to the section
labeled "Section 16(a) Beneficial Ownership Reporting Compliance" which appears
in Dura's 2002 Proxy Statement.

ITEM 11.  EXECUTIVE COMPENSATION

     The information required by Item 11 is incorporated herein by reference to
the sections labeled "Compensation of Directors" and "Executive Compensation"
which appear in Dura's 2002 Proxy Statement, excluding information under the
headings "Compensation Committee Report on Executive Compensation" and
"Performance Graph."

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by Item 12 is incorporated herein by reference to
the section labeled "Ownership of Dura Common Stock" which appears in Dura's
2002 Proxy Statement.

                                        63
<PAGE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by Item 13 is incorporated herein by reference to
the section labeled "Certain Relationships and Related Transactions" which
appears in Dura's 2002 Proxy Statement.

                                    PART IV

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

     (A) DOCUMENTS FILED AS PART OF THIS REPORT ON FORM 10-K

          (1) Financial Statements:

           - Report of Independent Public Accountants

           - Consolidated Balance Sheets as of December 31, 2001 and 2000

           - Consolidated Statements of Income for the Years Ended December 31,
             2001, 2000 and 1999

           - Consolidated Statements of Stockholders' Investment for the Years
             Ended December 31, 2001, 2000 and 1999

           - Consolidated Statements of Cash Flows for the Years Ended December
             31, 2001, 2000 and 1999

           - Notes to Consolidated Financial Statements

          (2) Financial Statement Schedules:

             - Financial Statement Schedule II--Valuation and Qualifying
               Accounts

          (3) Exhibits: See "Exhibit Index" beginning on page 66.

     (B) REPORTS ON FORM 8-K

     During the quarter for which this report is filed, Dura filed the following
Form 8-K Current Report with the Securities and Exchange Commission:

          1. Dura's current report on Form 8-K dated October 4, 2001, under Item
     9 (Commission File No. 0-21139).

                                        64
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 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.

                                          DURA AUTOMOTIVE SYSTEMS, INC.

                                          By /s/ S.A. JOHNSON
                                            ------------------------------------
                                                 S.A. Johnson, Chairman

Date: March 12, 2002

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

<Table>
<Caption>
                     SIGNATURE                                     TITLE                     DATE
                     ---------                                     -----                     ----
<C>                                                  <S>                                <C>

                 /s/ S.A. JOHNSON                    Chairman and Director              March 12, 2002
---------------------------------------------------
                   S.A. Johnson

                /s/ KARL F. STORRIE                  President, Chief Executive         March 12, 2002
---------------------------------------------------    Officer (Principal Executive
                  Karl F. Storrie                      Officer) and Director

            /s/ ROBERT E. BROOKER, JR.               Director                           March 12, 2002
---------------------------------------------------
              Robert E. Brooker, Jr.

                /s/ JACK K. EDWARDS                  Director                           March 12, 2002
---------------------------------------------------
                  Jack K. Edwards

          /s/ JAMES O. FUTTERKNECHT, JR.             Director                           March 12, 2002
---------------------------------------------------
               James O. Futterknecht

               /s/ J. RICHARD JONES                  Director                           March 12, 2002
---------------------------------------------------
                 J. Richard Jones

                 /s/ ERIC J. ROSEN                   Director                           March 12, 2002
---------------------------------------------------
                   Eric J. Rosen

             /s/ RALPH R. WHITNEY, JR.               Director                           March 12, 2002
---------------------------------------------------
                 Ralph R. Whitney

                /s/ DAVID R. BOVEE                   Vice President and Chief           March 12, 2002
---------------------------------------------------    Financial Officer (Principal
                  David R. Bovee                       Accounting Officer)
</Table>

                                        65
<PAGE>

                         DURA AUTOMOTIVE SYSTEMS, INC.

                         EXHIBIT INDEX TO ANNUAL REPORT
                                  ON FORM 10-K
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

<Table>
<Caption>
                                                                              PAGE NUMBER IN
                                                                                SEQUENTIAL
                                                                                 NUMBERING
                                                                             OF ALL FORM 10-K
 EXHIBIT                                                                     AND EXHIBIT PAGES
---------                                                                    -----------------
<S>          <C>                                                             <C>
3.1          Restated Certificate of Incorporation of Dura Automotive            *
             Systems, Inc., incorporated by reference to Exhibit 3.1 of
             the Registration Statement on Form S-4 (Registration No.
             333-81213) (the "S-4").
3.2          Amended and Restated By-laws of Dura Automotive Systems,            *
             Inc., incorporated by reference to exhibit 3.2 of the
             Registration Statement on Form S-1 (Registration No.
             333-06601) (the "S-1").
4.1          Amended and Restated Stockholders Agreement, dated as of            *
             August 13, 1996, by and among Dura, Onex U.S. Investments,
             Inc., J2R, Alkin, the HCI Stockholders (as defined therein)
             and the Management Stockholders (as defined therein),
             incorporated by reference to Exhibit 10.30 of the S-1.
4.2          Amendment No. 1 to Amended and Restated Stockholders                *
             Agreement, dated as of August 13, 1996, by and between Dura,
             Onex DHC LLC, J2R, Alkin and the HCI Stockholders and the
             Management Stockholders, incorporated by reference to
             Exhibit 4.1 of the Quarterly Report on Form 10-Q for the
             quarter ended September 30, 1997.
4.3          Registration Agreement, dated as of August 31, 1994, among          *
             Dura, Alkin and the MC Stockholders (as defined therein),
             incorporated by reference to Exhibit 4.3 of the S-1.
4.4          Amendment to Registration Agreement, dated May 17, 1995, by         *
             and between Dura, the MC Stockholders (as defined therein)
             and Alkin, incorporated by reference to Exhibit 4.4 of the
             S-1.
4.5          Amended and Restated Investor Stockholder Agreement, dated          *
             as of August 13, 1996, by and among Dura, Onex, U.S.
             Investments, Inc., J2R and certain other stockholders party
             thereto, incorporated by reference to Exhibit 10.31 of the
             S-1.
4.6          Form of certificate representing Class A common stock of            *
             Dura, incorporated by reference to Exhibit 4.6 of the S-1.
4.7          Indenture, dated April 22, 1999, between Dura Operating             *
             Corp., Dura Automotive Systems, Inc., the Subsidiary
             Guarantors and U.S. Bank Trust National Association, as
             trustee, relating to the 9% senior subordinated notes
             denominated in U.S. dollars, incorporated by reference to
             Exhibit 4.7 of the S-4.
4.8          Indenture, dated April 22, 1999, between Dura Operating             *
             Corp., Dura Automotive Systems, Inc., the Subsidiary
             Guarantors and U.S. Bank Trust National Association, as
             trustee, relating to the 9% senior subordinated notes
             denominated in Euros, incorporated by reference to Exhibit
             4.8 of the S-4.
4.9          Certificate of Trust of Dura Automotive Systems Capital             *
             Trust, incorporated by reference to Exhibit 4.8 of the
             Registrant's Form S-3, Registration No. 333-47273 filed
             under the Securities Act of 1933 (the "Form S-3").
</Table>

                                        66
<PAGE>

<Table>
<Caption>
                                                                              PAGE NUMBER IN
                                                                                SEQUENTIAL
                                                                                 NUMBERING
                                                                             OF ALL FORM 10-K
 EXHIBIT                                                                     AND EXHIBIT PAGES
---------                                                                    -----------------
<S>          <C>                                                             <C>
4.10         Form of Amended and Restated Trust Agreement of Dura                *
             Automotive Systems Capital Trust among Dura Automotive
             Systems, Inc., as Sponsor, The First National Bank of
             Chicago, as Property Trustee, First Chicago Delaware, Inc.,
             as Delaware Trustee and the Administrative Trustees named
             therein, incorporated by reference to Exhibit 4.9 of the
             Form S-3.
4.11         Form of Junior Convertible Subordinated Indenture between           *
             Dura Automotive Systems, Inc. and The First National Bank of
             Chicago, as Indenture Trustee, incorporated by reference to
             Exhibit 4.10 of the Form S-3.
4.12         Form of Preferred Security, incorporated by reference to            *
             Exhibit 4.11 of the Form S-3.
4.13         Form of Debenture, incorporated by reference to Exhibit 4.12        *
             of the Form S-3.
4.14         Form of Guarantee Agreement between Dura Automotive Systems,        *
             Inc., as Guarantor, and The First National Bank of Chicago,
             as Guarantee Trustee with respect to the Preferred
             Securities of Dura Automotive Systems Capital Trust,
             incorporated by reference to Exhibit 4.13 of the Form S-3.
4.15         Indenture, dated June 22, 2001, between Dura Operating              *
             Corp., Dura Automotive Systems, Inc., the Subsidiary
             Guarantors and U.S. Bank Trust National Association, as
             trustee, relating to the Series C and Series D, 9% senior
             subordinated notes denominated in U.S. Dollars, incorporated
             by reference to Exhibit 4.7 of the S-4.
10.1         Amended and Restated Credit Agreement, dated as of March 19,        *
             1999, among Dura Automotive Systems, Inc., as Parent
             Guarantor, Dura Operating Corp., Dura Automotive Systems
             (Europe) GmbH, Dura Asia-Pacific Pty Limited ACN 004884539
             and Dura Automotive Systems (Canada), Ltd., as Dura
             Borrowers, Trident Automotive plc, Dura Automotive Systems
             Limited, Spicebright Limited, Dura Automotive Systems Cable
             Operating Inc., Dura Automotive Systems Cable Operations
             Canada, Inc. and Moblan Investments B.V., as Trident
             Borrowers, Dura Automotive Acquisition Limited, as the
             initial Adwest Borrower, Bank of America National Trust and
             Savings Association, as Agent, BA Australia Limited, as
             Australian Lender, Bank of America Canada, as Canadian
             Lender, Bank of America National Trust and Savings
             Association, as Swing Line Lender and Issuing Lender, and
             the other financial institutions party thereto, NationsBanc
             Montgomery Securities LLC, as Lead Arranger and Book
             Manager, incorporated by reference to Exhibit 10.1 of the
             Company's Quarterly Report on Form 10-Q for the quarterly
             period ended March 31, 1999.
10.2**       1996 Key Employee Stock Option Plan, incorporated by                *
             reference to Exhibit 10.27 of the S-1.
10.3**       Independent Director Stock Option Plan, incorporated by             *
             reference to Exhibit 10.28 of the S-1.
10.4**       Employee Stock Discount Purchase Plan, incorporated by              *
             reference to Exhibit 10.29 of the S-1.
</Table>

                                        67
<PAGE>

<Table>
<Caption>
                                                                              PAGE NUMBER IN
                                                                                SEQUENTIAL
                                                                                 NUMBERING
                                                                             OF ALL FORM 10-K
 EXHIBIT                                                                     AND EXHIBIT PAGES
---------                                                                    -----------------
<S>          <C>                                                             <C>
10.5         Stock Purchase Agreement, dated August 1, 1997, by and among        *
             Dura Shifter Holding Corp. and the various selling
             shareholders, incorporated by reference to Exhibit 2.1 of
             the Registrant's Form 8-K dated September 12, 1997.
10.6         Joint Venture Agreement by and among Orscheln Co., MC               *
             Holding Corp., Onex U.S. Investments, Inc., J2R Corporation
             and Dura Automotive Holding, Inc., dated as of August 31,
             1994, incorporated by reference to Exhibit 10.1 of the S-1.
10.7         Stock Purchase Agreement, dated April 8, 1998, by and among         *
             Dura Automotive Systems (UK) Limited and the various selling
             shareholders listed on the various signature pages thereto,
             incorporated by reference to Exhibit 2.1 of Dura's Amendment
             No. 1 to Form 8-K/A dated April 30, 1998.
10.8         Stock Purchase Agreement, dated April 8, 1998, by and among         *
             Dura Automotive Systems (UK) Limited and Mervyn Edgar
             (including a schedule identifying Stock Purchase Agreements
             executed by D. Michael Dodge, Geoff Hill, Thomas Humann, Dan
             Robosto, Frances Sarrazin and Lothar Singe), incorporated by
             reference to Exhibit 2.2 of Dura's Amendment No. 1 to Form
             8-K/A dated April 30, 1998.
10.9**       Stock Option Agreement, dated as of August 31, 1994, between        *
             Dura Automotive Systems, Inc., and Alkin incorporated by
             reference to Exhibit 10.4 of the S-1.
10.10**      Promissory Note, dated December 31, 1991, of Karl F. Storrie        *
             in favor of Dura Automotive Systems, Inc., incorporated by
             reference to Exhibit 10.17 of the S-1.
10.11**      1998 Stock Incentive Plan, as amended.                              *
10.12        Agreement and Plan of Merger, dated as of January 19, 1999,         *
             among Dura Automotive Systems, Inc., Excel Industries, Inc.
             and Windows Acquisition Corporation, incorporated by
             reference to Exhibit 2.1 to Dura's Current Report on Form
             8-K, dated January 22, 1999.
10.13        Amendment to Agreement and Plan of Merger, dated as of March        *
             9, 1999, by and among Dura Automotive Systems, Inc., Dura
             Operating Corp., Excel Industries, Inc. and Windows
             Acquisition Corporation incorporated by reference to the
             additional definitive proxy materials filed with the SEC on
             March 11, 1999.
10.14**      Deferred Income Leadership Stock Purchase Plan, incorporated        *
             by reference to Appendix A of the 2000 Proxy Statement filed
             with the SEC on May 25, 2000.
10.15**      Director Deferred Stock Purchase Plan, incorporated by              *
             reference to Appendix B of the 2000 Proxy Statement filed
             with the SEC on May 25, 2000.
</Table>

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<PAGE>

<Table>
<Caption>
                                                                              PAGE NUMBER IN
                                                                                SEQUENTIAL
                                                                                 NUMBERING
                                                                             OF ALL FORM 10-K
 EXHIBIT                                                                     AND EXHIBIT PAGES
---------                                                                    -----------------
<S>          <C>                                                             <C>
10.16        Amended and Restated Credit Agreement, dated as of May 10,          *
             2001, among Dura Automotive Systems, Inc., as Parent
             Guarantor, Dura Operating Corp., Dura Automotive Systems
             (Europe) GmbH, Dura Asia-Pacific Pty Limited ACN 004884539
             and Dura Automotive Systems (Canada), Ltd., as Dura
             Borrowers, Trident Automotive plc, Dura Automotive Systems
             Limited, Spicebright Limited, Dura Automotive Systems Cable
             Operating Inc., Dura Automotive Systems Cable Operations
             Canada, Inc. and Moblan Investments B.V., as Trident
             Borrowers, Dura Automotive Acquisition Limited, as the
             initial Adwest Borrower, Bank of America National Trust and
             Savings Association, as Agent, BA Australia Limited, as
             Australian Lender, Bank of America Canada, as Canadian
             Lender, Bank of America National Trust and Savings
             Association, as Swing Line Lender and Issuing Lender, and
             the other financial institutions party thereto, NationsBanc
             Montgomery Securities LLC, as Lead Arranger and Book
             Manager, incorporated by reference to Exhibit 10.1 of the
             Company's Quarterly Report on Form 10-Q for the quarterly
             period ended March 31, 2001.
12.1         Statement of Computation of Ratio of Earnings to Fixed             --
             Charges
21.1         Subsidiaries of Dura Automotive Systems, Inc.                      --
23.1         Consent of Arthur Andersen LLP filed herewith.                     --
</Table>

---------------
*  Incorporated by reference.

** Indicates compensatory arrangement.

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