<PAGE>

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

                           --------------------------
                                   FORM 10-K

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

                       For the fiscal year ended December 31, 2001

                                       OR

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

                      For the transition period from _____ to _____

                      Commission file number: 333-4520
                 -----------------------------------------------
                              RACI HOLDING, INC.
            (Exact name of registrant as specified in its charter)

                 Delaware                                     51-0350929
(State or other jurisdiction of incorporation or            (I.R.S. Employer
               organization)                              Identification No.)

                              870 Remington Drive
                                  P.O. Box 700
                       Madison, North Carolina 27025-0700
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (336) 548-8700
                 ------------------------------------------------
                (Registrant's telephone number, including area code)

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

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

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) 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 the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.

     [X]

     As of March 8, 2002, the registrant had outstanding 765,050 shares of
Class A Common Stock, par value $.01 per share and 0 shares of Class B Common
Stock, par value $.01 per share.

<PAGE>

                         TABLE OF CONTENTS TO FORM 10-K
                         ------------------------------

<TABLE>
<S>                                                                                         <C>
PART I...................................................................................    3
  ITEM 1. BUSINESS.......................................................................    3
  ITEM 2. PROPERTIES.....................................................................   13
  ITEM 3. LEGAL PROCEEDINGS..............................................................   14
  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............................   16

PART II..................................................................................   17
  ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS............................................................   17
  ITEM 6. SELECTED FINANCIAL DATA........................................................   18
  ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS............................................   20
  ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
           MARKET RISK...................................................................   32
  ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA....................................   33
  ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE............................................   65

PART III.................................................................................   66
  ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT............................   66
  ITEM 11. EXECUTIVE COMPENSATION........................................................   69
  ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGEMENT....................................................................   73
  ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................................   74

PART IV..................................................................................   76
  ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
           ON FORM 8-K...................................................................   76
</TABLE>

                                      2

<PAGE>

                                    PART I
                                    ------

Item 1. BUSINESS

     RACI Holding, Inc. ("Holding") and its wholly-owned subsidiary
Remington Arms Company, Inc. ("Remington"), are Delaware corporations organized
in 1993 at the direction of Clayton, Dubilier & Rice, Inc. ("CD&R"), a private
investment firm, to acquire (the "Acquisition") substantially all the assets
and business of Sporting Goods Properties, Inc. ("Sporting Goods") as well as
certain other assets of E. I. du Pont de Nemours and Company ("DuPont" and
together with Sporting Goods, the "Sellers") used in connection with the
marketing of fishline and fishline accessories (such assets and business
collectively, the "Business"). Unless the context otherwise requires, the term
"Company" means Holding and its subsidiaries, including Remington.

     Founded in 1816, the Company is engaged in the design, manufacture and
sale of sporting goods products for the hunting/shooting sports and related
markets. The Company's product lines consist of firearms, ammunition, fishline
and hunting/gun care accessories sold under the Remington(R) name and other
labels, fishing products sold under the Stren(R) and Remington(R) names and
other labels and clay targets.

     Certain market share and competitive position data contained in this
report is based on the most recent data published by the National Sporting
Goods Association ("NSGA"), American Sports Data, Inc. ("ASDI") and the
National Sports Markets Research Group ("SMRG"). The Company believes that such
data is inherently imprecise and may not accurately reflect the Company's
market shares for more recent periods, but is generally indicative of its
relative market share and competitive position.

     The following sets forth the Company's sales for its aggregated
operating segments for the periods shown (see Note 20 to the Company's
consolidated financial statements for the year ended December 31, 2001
appearing elsewhere in this report):

                                       Year Ended December 31,
                              ------------------------------------------
                                 2001          2000              1999
                                -----         -------           ------
Hunting/Shooting Sports         $ 340.3       $ 345.1           $ 354.0
Other (a)                          42.8          43.6              49.1
                                -------       -------           -------

Total Sales                     $ 383.1       $ 388.7           $ 403.1
                                =======       =======           =======

____________
(a) Consists of fishing products, accessories, clay targets and commercial
powder metal product ("PMP") parts.

Hunting/Shooting Sports

     Remington is the only domestic manufacturer of both firearms and
ammunition. The Company enjoys a domestic market leadership position for many
of its firearms product lines and is one of the three major manufacturers in
the domestic ammunition market. According to ASDI in 2000, approximately 27
million people in the United States enjoy shooting sports, including
approximately 17 million who hunt annually. Overall, the market for
hunting-related products is a large, mature market that the Company believes
generally will remain relatively flat, at least in the near future. Total
domestic consumer expenditures in this market for hunting and firearms
equipment, including ammunition in 2000 was estimated by NSGA to be
approximately $1.6 billion.

      The Company believes that a number of trends currently exist that are
potentially significant to the hunting/shooting sports market. First, the
Company believes that the development of rural property in many locations has
curtailed or eliminated access by hunters to private and public lands. However,
the Company also believes that the number of private hunting facilities is
increasing, as is the availability of alternatives to traditional hunting
activities, such as sporting clays and shooting games that simulate hunting,
and that these trends may help offset increasing restrictions on access and
land use. Second, environmental issues, such as concern about lead in the
environment, may also adversely affect the industry. See "--Environmental
Matters." The Company has developed a line of shotshells that use steel shot
and a new line of Premier(R) Hevi Shot(TM) that uses a tungsten-nickel-iron
alloy instead of the industry standard lead shot. These shotshells are intended
to reduce the amount of lead being introduced into the environment and to
appeal not only to the shooter legally required to use steel shot, but also to
the environmentally concerned

                                      3

<PAGE>

shooter. Third, the Company believes that hunting safety issues may affect
sales of firearms, ammunition and other shooting-related products; in the
northeastern United States, for example, some communities permit hunters to use
only shotguns (which have a shorter average range than rifles) for deer hunting
in order to minimize the possibility of shooting accidents in more densely
populated areas. The Company markets specialized ammunition, its Premier(R)
Copper Solid(TM) sabot slug, intended for use in a shotgun, which is designed
to give hunters the accuracy and effectiveness of a rifle. Additionally, the
Company believes that the current status, of firearms regulatory proposals and
municipal firearms litigation, or the consumer perception thereof, could
adversely affect the firearms and ammunition markets. The Company produces
firearms and ammunition that are generally used by hunters and sporting
enthusiasts. It does not produce either "assault weapons" (as defined in the
federal law enacted in 1994), or handguns, although it does produce handgun
ammunition.

     Although the Company believes that these trends have not had a
material adverse effect on its business in the past, there can be no assurance
that they will not do so in the future, or that industry sales of firearms,
ammunition and other shooting-related products will not decline. See
"--Regulation."

Products
--------

     The Company's Hunting/Shooting Sports product offerings include a
comprehensive line of recreational shotguns and rifles, sporting ammunition and
ammunition reloading components. In the 186 years since the first Remington
firearm was made, Remington has introduced its versions of the metallic
centerfire cartridge (1867), the auto-loading shotgun (1905), the repeating
centerfire rifle (1906), the pump-action shotgun (1907) and the bolt-action
centerfire rifle (1921), all of which became standards in the industry.

     The Company produces and markets a broad selection of shotguns and
rifles under the Remington brand name. The Company's goal has been to market a
combination of general-purpose firearms together with more specialized products
that embody Remington's emphasis on value, performance and design. In addition,
the Company produces custom-made shotguns and rifles in the custom shop at its
Ilion, New York facility.

     In 2000, according to NSGA, the Company had one of the largest shares
of the U.S. retail shotgun market based on sales volume, at approximately 21%,
with its leading competitor holding a market share of approximately 23%. The
Company produces numerous variations of shotguns. The Company's most popular
shotguns, the Model 1100(TM) and Model 11-87(TM) auto-loading and the Model
870(TM) pump-action, range in retail list price from approximately $229 to
$799. Remington shotguns are offered in versions that are marketed to both the
novice and the experienced gun owner. Specialty shotguns focus on the deer and
turkey hunting markets and recreational and competitive clay target shooting,
as well as various law enforcement applications.

     Remington was also a leading brand of rifles in the United States in
2000 based on sales volume, according to NSGA, with a market share of
approximately 22%, with its nearest competitor holding a market share of
approximately 21%. The Company's most popular rifles are the Model 700(TM),
Model Seven(TM), Model 7400(TM) and Model 7600(TM) centerfire rifles and the
family of Model 597(TM) rimfire rifles. To appeal to a broad range of shooters,
the Company manufactures these rifles in a wide variety of calibers,
configurations and finishes. The Company presently manufactures three types of
centerfire rifles: bolt-action, pump-action and auto-loading. In addition, the
Company produces pump-action and auto-loading .22 caliber rimfire rifles. The
Company's bolt-action Model 700 rifle is considered the standard in the
industry, and the Company has versions utilizing stainless steel barrels and
synthetic stocks for weather durability. Retail list prices for the Company's
most popular rifles range from approximately $349 to $849.

     In the ammunition market, the Company believes it is one of the largest
brands in the United States. The Company designs, manufactures and markets a
complete line of sporting ammunition products, including shotgun shells,
metallic centerfire ammunition for use in rifles and handguns and .22 caliber
rimfire ammunition. The Company also produces and markets sporting ammunition
components used by smaller ammunition manufacturers, as well as by private
consumers engaged in the practice of reloading centerfire cases or shotgun
shells.

     The Company markets its ammunition products primarily under the brand
names Remington, Peters(R) and UMC(R), through firearms dealers, sporting goods
stores and mass merchandisers. In general, Remington branded

                                      4

<PAGE>

products compete in both the middle and high performance categories, while the
UMC and Peters brands are considered popularly priced ammunition.

     In 2001, the Company continued to introduce new products that satisfy
the need for specialized, high performance firearms and ammunition. The Company
introduced the Model 710(TM) bolt-action centerfire rifle and the Model 700
titanium ultimate lightweight bolt-action rifle. Product line expansions
include new versions of the Model 11-87 Super Magnum(TM) shotgun, which the
Company believes provides Remington with the most extensive line of
turkey-specific shotguns in the industry. Ammunition introductions in 2001
include the 7mm Remington Ultra Mag(TM) and the .375 Remington Ultra Mag(TM)
centerfire rifle cartridges as well as new Premier(R) high-velocity turkey and
Express(R) high-velocity upland game shotshell lines.

Service and Warranty
--------------------

     The Company supports service and repair facilities for all of its
firearm products in order to meet the service needs of its distributors,
customers and consumers nationwide. The Company provides consumer warranties
against manufacturing defects in all firearm products it sells in North
America. Estimated future warranty costs are accrued at the time of sale.
Product modifications or corrections are voluntary steps taken by the Company
to assure proper usage or performance of a product by consumers. The cost
associated with product modifications and or corrections is recognized in
accordance with Statement of Financial Accounting Standard No. 5, Accounting
for Contingencies, and charged to operations.

Manufacturing
-------------

     The Company currently manufactures its Hunting/Shooting Sports products
at three plants, all located within the United States. The Company's facility
in Ilion, New York manufactures shotguns, rifles, powder metal parts and
accessories such as extra barrels, and also houses a portion of the Company's
gunsmith repair services and its custom gun shop. The Company's facility in
Mayfield, Kentucky manufactures rimfire and centerfire rifles. The Company's
facility in Lonoke, Arkansas manufactures ammunition and ammunition components.

     To manufacture its various firearm models, the Company utilizes a
combination of parts manufactured from raw materials at the Ilion and Mayfield
facilities or components purchased from independent manufacturers. Prior to
assembly, purchased parts may be modified through several secondary processes,
such as metal removal, joining, heat treating, forming and coloring.
Manufactured parts, including many of the basic metal component parts of the
firearms manufactured by the Company, are produced from raw materials via the
processes of material removal, finishing, heat treating and forming using metal
and plastic injection molding techniques. Quality control processes are
employed throughout the production process, utilizing specifically tailored
testing procedures and analyses. The Company believes that its firearm
manufacturing safety record is among the best in the U.S. firearms industry.

     The manufacturing of ammunition at Lonoke consists of four major
production areas: Primer, Centerfire, Shotshell and Rimfire. In the Primer
area, ingredients are manufactured on site utilizing two separate
precipitation processes and then combined with fuels and binders to form primer
mixture. The Centerfire operation consists of bullet manufacture, shell
manufacture, priming, loading and packaging. The Shotshell operation consists
of shot manufacture, head manufacture, body manufacture, assembly and priming,
loading and packaging. Lead shot is manufactured by pouring molten lead through
a screen, forming lead spheres that solidify as they fall over 100 feet into a
cushion of water. The other components of a shotshell are made by forming brass
strip, brass plated steel and polyethylene hulls and wads via several stamping
and extrusion processes. The Rimfire operation consists of shell manufacture,
priming, loading and packaging. Several continuous rotary machines form shells,
insert bullets and add smokeless powder. Throughout the various processes,
Company technicians continuously monitor and test the velocity, pressure and
accuracy levels of the ammunition. The Company believes that its ammunition
manufacturing safety record is among the best in the U.S. ammunition industry.

Supply of Raw Materials
-----------------------

     To manufacture its various products, the Company utilizes numerous raw
materials, including steel, lead, brass, powder, plastics and wood, as well as
manufactured parts purchased from independent manufacturers. For a number of

                                      5

<PAGE>

the Company's raw materials, it relies on one or a few suppliers. As an
example, the Company's requirements for brass strip and walnut gun stock blanks
are each currently being met by a single vendor. Although alternative vendors
could be found for single source suppliers, any disruption in the Company's
relationships with any of these vendors or reductions in the production of the
material supplied could, in each case, adversely affect the Company's ability
to obtain an adequate supply of the material.

     Generally, the Company has had satisfactory, long-term relationships
with its suppliers. The Company has purchase contracts with certain of its
suppliers for periods ranging from one to seven years, with no commitment to
purchase specified quantities. The Company does not have formal contracts with
the other suppliers. The Company believes that it has a good relationship with
each of its vendors and does not currently anticipate any material shortages or
disruptions in supply from these vendors.

     Three companies in the United States and Canada produce smokeless
powder, which is an indispensable component in the ammunition manufactured and
sold by the Company. The Company currently purchases powder from each of these
three suppliers. The Company believes that any two of these three companies
could supply substantially all of the Company's powder requirements. However,
given the complex formulas and production processes involved in manufacturing
the powder mixtures used by the Company, obtaining powder from sources other
than these three companies may not be feasible.

     The Company purchases a number of stamped parts from one vendor. While
alternative vendors can be found to replace this supplier, any disruption in
the Company's relationship with this supplier could result in
substantial expenditures for tooling. The Company believes that it has a good
relationship with its current supplier and does not currently anticipate any
material shortages or disruptions in supply of these stamped parts.

     Alternative sources, many of which are foreign, exist for each of these
materials from which the Company could obtain such raw materials. Nonetheless,
the Company does not currently have significant supply relationships with any
of these alternative sources and cannot estimate with any certainty the length
of time that would be required to establish such a supply relationship, or the
sufficiency of the quantity or quality of materials that could be so obtained.
In addition, the Company may incur additional costs in sourcing raw materials
from alternative producers.

     The price and availability of raw materials are affected by a wide
variety of interrelated economic and other factors, including alternative uses
of materials and their components, changes in production capacity, energy
prices and governmental regulations. Industry competition and the timing of
price increases by suppliers limits to some extent the ability of the Company
and other industry participants to pass raw material cost increases on to
customers.

     The Company uses commodity options and futures contracts to hedge
against the risk of increased prices for raw materials. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources -- Financial Instruments."

All Other Product Lines

     According to ASDI, as of 2000, approximately 54 million people
participated in fishing activities. Fishing is considered an inexpensive sport
that can be enjoyed by people of widely varying ages, skills and abilities. The
Company distributes a range of monofilament fishline, terminal tackle and
accessories under the brand name Stren, offering eight families of fishline for
the recreational fisherman. The Company also markets a limited line of fishing
accessories, including tools, knives, terminal tackle and lure accessories.
SMRG estimates that the U.S. retail market for recreational fishline was
approximately $68 million in 2000, of which the Company had a 30% market share
based on sales dollars.

     The Company purchases a significant amount of the fishline it requires
for its product lines from DuPont under a supply agreement, which is
automatically renewed annually unless either party notifies the other of its
intent to terminate no fewer than 120 days prior to the proposed termination
date. Any disruption in the Company's relationship with DuPont, or reductions
in fishline production by DuPont, could adversely affect the Company's ability
to obtain an adequate supply of fishline on terms favorable to the Company.
Alternative sources, many of which are foreign, exist from which the Company
could obtain such supply. Although the Company currently has supply
relationships with some of these alternative sources, the Company cannot
estimate with any certainty the sufficiency of the quantity or

                                      6

<PAGE>

quality of materials that could be so obtained. In addition, the Company may
incur additional costs in sourcing raw materials from alternative producers.

     Remington produces a complete line of clay targets for use in trap,
skeet and sporting clays shooting activities, marketed under the Blue Rock(R)
brand name. The Company's clay targets are manufactured at two facilities
located in Ada, Oklahoma and Findlay, Ohio. Targets are manufactured from a
mixture of limestone and petroleum pitch.

     The Company also markets hunting and shooting accessories (including
safety and security products, parts, gun care and cleaning products, belts,
clips and folding and collectible knives) and commercial powder metal parts for
the automotive, sporting goods, office equipment, hardware, medical and
communication industries. The Company has licensed the Remington mark to
certain third parties that manufacture and market sporting and outdoor products
that complement the Company's product line. See "--Licensing."

Marketing and Distribution

     The Company's products are distributed throughout the United States and
in over 55 other countries. In the United States, Remington products are
distributed primarily through a network of wholesalers and distributors who
purchase the product directly from the Company for resale predominantly to
retailers, and retailers who purchase the product from the Company for resale
predominately to end users. The end users include sportsmen, hunters, target
shooters, gun collectors, and law enforcement and other government
organizations.

     The Company's products are marketed primarily through manufacturer's
sales representatives. In 2001, approximately 63% of the Company's sales
consisted of sales made through the five manufacturer's sales representative
groups who market principally to wholesalers, dealers and regional chains. Such
sales representatives are prohibited from selling competing goods from other
manufacturers and are paid variable commissions based on the type of products
that are sold. The customers to which the sales representatives market the
Company's products are authorized to carry specified types of Remington
products for a non-exclusive one-year term, though not all carry the full range
of products. These customers generally carry broader lines of merchandise than
do the mass merchandisers and are less seasonal in sales.

     The Company's in-house sales force markets the Company's product lines
directly to national accounts (consisting primarily of mass merchandisers) and
to federal, state and local government agencies. Approximately 21% of the
Company's total net revenues and approximately 19% of the Company's
Hunting/Shooting Sports revenues in 2001 consisted of sales made to a national
account, Wal-Mart Stores, Inc. ("Wal-Mart"). National accounts generally
provide convenient access for hunting and shooting consumers to the Company's
products but carry a more limited array of products and are more seasonal in
sales. The Company's sales to Wal-Mart are not governed by a written contract
between the parties. Although the Company believes its relationship with
Wal-Mart is good, the loss of this customer or a substantial reduction in sales
to this customer could adversely affect the Company's financial condition or
results of operations. No other single customer comprises greater than or equal
to 10% of sales. No material portion of the Company's business is subject to
renegotiation of profits or termination of contracts at the election of a
governmental purchaser.

     Foreign sales were approximately 7% of the Company's total sales for
2001 and 6% of the Company's total sales in 2000 and 1999. Hunting/Shooting
Sports foreign sales were approximately 7% of the Company's Hunting/Shooting
Sports total sales for 2001, 2000 and 1999, respectively. Company sales
personnel and manufacturer's sales representatives market to foreign
distributors generally on a nonexclusive basis and for a one-year term.
Remington also has a wholly owned subsidiary, Remington International, Ltd.,
which is a foreign sales corporation.

     Most of those firearms products of the Company designed generally for
use during the fall hunting season are sold pursuant to a "dating" plan which
allows the purchasing distributor to buy the products commencing at the
beginning of the Company's dating plan year, and pay for them on extended
terms. Discounts are offered for early payment under this plan. In the first
quarter of each dating plan year, the Company receives orders from its
customers, which are designated as firm by such customers, although the Company
may permit adjustments in outstanding unfilled orders. The Company also follows
industry practice in canceling most firearms orders from its distributors that
remain unfilled at the end of each dating plan year. Beginning in 2002, the
Company began a new dating plan relating to

                                      7

<PAGE>

ammunition that offers discounts for payment prior to the standard 60-day
payment period. As a competitive measure, the Company also offers extended
payment terms on select ammunition purchases. For further discussion of
seasonality and related matters, see "Management's Discussion of Financial
Condition and Results of Operations -- Purchasing Patterns; Seasonality." The
backlog of unfilled total company orders was approximately $104.8 million as of
January 31, 2002, compared to $183.5 million in the prior year. The backlog of
unfilled Hunting/Shooting Sports orders was approximately $102.3 million as of
January 31, 2002, compared to $180.2 million in the prior year.

Research and Development

     The Company maintains a research and development program, with 47
employees assigned to these efforts as of December 31, 2001. New products and
improvements to existing products are developed based upon the perceived needs
and demands of consumers, as well as successful products introduced to the
market by the Company's competitors. The Company's research and development
program involves an in-house team of engineers, draftsmen and other technical
personnel working with marketing managers and using tools such as
computer-assisted design and a variety of consumer research techniques. Research
and plant technical staffs then collaborate to produce an experimental
prototype, ensuring that potential new products and the manufacturing processes
to create them are concurrently designed. Following a successful prototype, a
pilot run is commenced to ensure that plant personnel and equipment can
manufacture the product efficiently. The Company continues to introduce new
products employing innovations in design and manufacturing in both firearms and
ammunition. Product line expansions in 2001 include new versions of the Model
Seven centerfire rifle in various Ultra-Magnum calibers and new versions of the
Model 700 centerfire rifle. New ammunition developments in 2001 include a new
line of high performance, bonded rifle bullets marketed under the Core-Lokt
Ultra(TM) brand. Two new Ultra Mag cartridges, the 300 & 7mm Remington Short
Action Ultra Mag(TM) were launched, expanding Remington's franchise in the
heavy magnum product arena, while the .221Fireball(TM) cartridge was
reintroduced, complementing the Model 700 Classic firearm offering. The UMC
category was expanded to include Jacketed Hollow Point bullet specifications in
the pistol & revolver category. A proprietary high density, non-toxic product,
Premier Hevi Shot(TM) was launched delivering an enhanced performing shotshell
for turkey and waterfowl hunting. The Company also developed the Core-Lokt
Ultra slug, which provides superior performance for shotgun deer hunters.

     Research and development expenditures for the continuing operations of
the Company in 2001, 2000, and 1999 amounted to approximately $5.9 million,
$6.4 million and $6.7 million, respectively. The Company does not have
customer sponsored research and development expenditures or programs.

Patents and Trademarks

     The Company's operations are not dependent to any significant extent
upon any single or related group of patents. The Company does not believe that
the expiration of any of its patents will have a material adverse effect on the
Company's financial condition or its results of operations. The Company's
operations are not dependent upon any single trademark other than the Remington
word mark, the Remington logo mark, and, to a lesser extent, the Stren mark.
Some of the trademarks used by the Company, however, are identified with and
important to the sale of the Company's products. Some of the more important
trademarks used by the Company are: Remington, the Remington scroll logo,
Stren, Core-Lokt(R) (jacketed centerfire bullets), Express(R) (long range
shotshells), Power Piston(R) (shotshell wads), Premier(R) (the Company's
highest quality ammunition), Copper Solid (solid copper slugs), Golden
Saber(TM) (high performance jacketed hollow point bullets for
pistols/revolvers), Nitro-Steel (high powered steel shotshells), UMC(R)
(popularly priced ammunition, in a limited line of popular specifications),
Leadless(TM) (reduced lead-releasing bullets), Nitro-27(R) (handicap trap
loads), Model 700 (a family of bolt-action centerfire rifles), Model 1100 and
Model 11-87 (families of auto-loading shotguns), Model 7600 (a family of
pump-action centerfire rifles), Model 7400 (a family of auto-loading centerfire
rifles), Model 870, including the Wingmaster(R) and the Express(R) (a family of
pump-action shotguns) and Model 597 (a family of .22 caliber rimfire rifles).
In June 2000, the Company formed RA Brands, L.L.C., a Delaware limited
liability company and wholly-owned subsidiary of Remington to which it
transferred ownership of all of its patents, trademarks and copyrights. RA
Brands, L.L.C. owns all of the above-referenced trademarks and licenses them to
Remington. The Company believes it has adequate policies and procedures in
place to protect its intellectual property.

                                      8

<PAGE>

     RA Brands, L.L.C. owns the Remington marks (and registrations thereof) for
use in its firearms and ammunition product lines, as well as for certain
related products associated with hunting, wildlife and the outdoors. The
Company does not own, but has the right to use, the Remington mark with respect
to certain other products marketed by it (the "Ancillary Products"), including
certain knives and other merchandising items, pursuant to the Trademark
Settlement Agreement, dated December 5, 1986 (the "Trademark Settlement
Agreement"), between the Company and Remington Products, Inc. ("RPI"). RPI uses
a different version of the Remington mark to sell consumer products, including
electric razors and hairdryers. The Trademark Settlement Agreement resulted
from the settlement of certain litigation between the Company and RPI over the
use of the Remington mark on products marketed by both parties. RPI is not
affiliated with Remington, Holding, DuPont or Sporting Goods and was not
involved with the Acquisition. The Trademark Settlement Agreement provided for
the formation of Remington Licensing Corporation ("RLC"), the capital stock of
which is owned equally by the Company and Remington Products Company LLC
("RPC") as successor to RPI, which also holds as transferee RPI's interest in
respect of the Trademark Settlement Agreement. RLC owns the Remington marks in
the United States with respect to products of mutual interest to the Company
and RPC, and licenses such marks on a royalty-free basis to the Company and RPC
for products in their respective markets. The Trademark Settlement Agreement
does however, limit the Company's ability to expand the use of the Remington
mark into product areas claimed by RPC, particularly personal care products.
The Trademark Settlement Agreement is currently relevant primarily to the
Company's U.S. operations, but does provide for cross-licensing between the
Company and RPC outside the United States. The Trademark Settlement Agreement
also provides that, if certain bankruptcy or insolvency-related events occur
with respect to either of RLC's shareholders, such shareholder may be
contractually required to sell such shareholder's RLC stock to RLC or RLC's
other shareholder at its book value or, under certain circumstances, at fair
market value. While in some cases such requirement may not be enforceable under
the U.S. Bankruptcy Code, such a purchase from the Company could provide RPC
with greater leverage over RLC's licensing relationship with the Company with
respect to Ancillary Products.

     The Company does not own any patents or other intellectual property with
respect to the manufacture of the nylon monofilament fishline products that it
markets and distributes. The Company purchases a significant amount of its
fishline requirements under a supply agreement with DuPont. See "--All Other
Product Lines."

Licensing

     RA Brands, L.L.C., which owns the Remington and Stren trademarks, licenses
the marks to certain companies that manufacture and market products that
complement the Company's product line. Currently, the Remington mark is
licensed for use on, among other things, sporting and outdoor apparel, caps,
gun cases, fishing rods and reels, non-prescription sun, shooting and safety
glasses, tree stands, wildlife feeders and certain other nostalgia/novelty
goods. The Stren mark is licensed for use on sunglasses, fish feeders and caps.
The Company strives to ensure that the quality, image and appeal of these
licensed products are consistent with the high-quality image of its core
products. These licenses generally grant an exclusive right to sell a specific
product category, with the standard term being three years with terms for
renewals. The Company believes that these licenses increase the market
recognition of the Remington trademark and enhance the Company's ability to
market core products and that licensing facilitates new cross-marketing
promotional opportunities and generates income. Certain of the Company's
licensing efforts are carried out under terms established in the Trademark
Settlement Agreement described above.

Competition

     The markets in which the Company operates are highly competitive.
Competition is based primarily on quality of products, product innovation,
price, and customer service and support. Product image, quality and innovation
are the dominant competitive factors in the firearms industry, with price the
dominant factor in the ammunition industry.

     The Company's competitors vary according to product line. Certain of
these competitors are subsidiaries of large corporations with substantially
greater financial resources than the Company. The Company's shotgun products
compete primarily with products offered by O. F. Mossberg & Sons, Inc., USRAC
(which produces Winchester firearms) and Browning (which, with USRAC, is owned
by the Walloon regional government of Belgium). The Company's rifles compete
primarily with products offered by Marlin Firearms Co., Sturm Ruger & Co.,
Inc., USRAC, Savage Arms, Inc. and Browning. In the ammunition market, the
Company competes primarily with the Winchester unit of Olin Corporation, and
the Federal Cartridge Co. and CCI units of Alliant Techsystems, Inc.,
purchased in

                                      9

<PAGE>

December 2001 from Blount International, Inc. The Company's fishing line
products compete primarily with products offered by Pure Fishing, formerly
Berkley, Inc., and JWA Fishing, and private label products.

     The Company believes that it competes effectively with all of its present
competitors. However, there can be no assurance that the Company will continue
to do so, and the Company's ability to compete could be adversely affected by
its leveraged condition.

Seasonality

     Historically, the Company's sales have been moderately seasonal, with
higher sales during the third quarter, and lower sales during the other
quarters, principally due to the need to meet customer requirements for
ammunition and, to a lesser extent, firearms, during the primary hunting
season. The Company did experience an increased demand for its
hunting/shooting sports products in fourth quarter 2001 as compared to fourth
quarter 2000. Management believes that this increase in demand is attributable,
at least in part, to the impact on consumers of the terrorist attacks on New
York and Washington on September 11, 2001. Because the longer-term effects of
such events are inherently unpredictable, management cannot determine with
certainty the impact of these events on future demand. The Company follows the
industry practice of selling firearms pursuant to a "dating" plan allowing the
customer to buy the products commencing at the beginning of the Company's
dating plan year. The Company believes that this dating plan has partially
offset the seasonality of the Company's business by shifting firearms sales to
the first quarter. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Purchasing Patterns; Seasonality."

Regulation

     The manufacture, sale and purchase of firearms are subject to extensive
federal, state and local governmental regulation, as well as certain foreign
regulation. The basic federal laws are set forth in the National Firearms Act
and the Federal Firearms Act, which were originally enacted in the 1930s and
which have been amended from time to time. Federal law generally prohibits the
private ownership of fully automatic weapons and places certain restrictions on
the interstate sale of firearms unless certain licenses are obtained. The
Company does not manufacture fully automatic weapons. The Company possesses
valid federal licenses for all of its owned and leased sites to manufacture
and/or sell firearms and ammunition.

     In 1994, a federal law was enacted that generally prohibits the
manufacture of certain firearms defined as "assault weapons" as well as the
sale or possession of "assault weapons" except for those that, prior to the
law's enactment into law, were legally in the owner's possession. This law
expressly exempts approximately 650 models of firearms that are generally used
by hunters and sporting enthusiasts, including all of the Company's current
firearms products. Various bills have been introduced in Congress in recent
years to repeal the ban on semi-automatic assault weapons and large-capacity
ammunition feeding devices; the likelihood of their passage is uncertain.
Another federal law, enacted in 1993 and extended in 1998, the so-called "Brady
Bill," mandates a national system of instant background checks for all firearms
(including long guns) purchased from federally-licensed firearms dealers.
Legislation has been proposed to further extend this system to sales made by
non-licensed sellers at gun shows.

     In addition, bills have been introduced in Congress in the past several
years that would affect the manufacture and sale of handgun ammunition,
including bills to regulate the manufacture, importation and sale of any
projectile that is capable of penetrating body armor, to impose a tax and
import controls on bullets designed to penetrate bullet-proof vests, to
prohibit the manufacture, transfer or importation of .25 caliber, .32 caliber
and 9mm handgun ammunition, to increase the tax on handgun ammunition, to
impose a special occupational tax and registration requirements on
manufacturers of handgun ammunition, and to drastically increase the tax on
certain handgun ammunition, such as 9mm, .25 caliber, and .32 caliber bullets.
Certain of these bills would apply to handgun ammunition of the kind produced
by the Company, and accordingly, if enacted, could have a material adverse
effect on the business of the Company. The Company believes that existing
regulations applicable to handgun ammunition have not had such an effect.

     State and local laws and regulations vary significantly in the level of
restrictions they place on gun ownership and transfer. Some states have
recently enacted, and others are considering, legislation restricting or
prohibiting the ownership, use or sale of certain categories of firearms and/or
ammunition. Although many states have in effect mandatory waiting period laws
for handguns, there are currently few restrictive state regulations applicable
to handgun

                                     10

<PAGE>

ammunition. The Company's current firearm and ammunition products generally are
not subject to existing state restrictions on ownership, use or sale of certain
categories of firearms and ammunition, and generally would not be subject to
any known proposed state legislation relating to regulation of "assault
weapons." However, Remington firearms are covered under several recently
enacted state regulations requiring guns to be sold with internal or external
locking mechanisms.

     The Company believes that existing federal and state regulation regarding
firearms and ammunition has not had a material adverse effect on its sales of
these products to date. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations." However, there can be no assurance that
federal, state, local or foreign regulation of firearms and/or ammunition will
not become more restrictive in the future and that any such development would
not have a material adverse effect on the business of the Company.

Employees

     As of January 31, 2002, the Company employed approximately 2,243 full-time
employees of whom nearly 2,015 were engaged in manufacturing, approximately 181
in sales and general administration and approximately 47 in research and
development. An additional work force of temporary employees is engaged during
peak production schedules.

     The United Mine Workers of America ("UMWA") represent hourly employees at
the Company's plant in Ilion, New York. The five-year collective bargaining
agreement with UMWA expires in September 2002. Delay in renewing or inability
to renew this agreement could have a material adverse effect on the Company.
The Company also has a labor agreement with Local 2021 of the United
Automobile, Aircraft and Agricultural Implement Workers of America, U.A.W.,
which represents hourly employees at the Company's plant in Findlay, Ohio,
which agreement is terminable by either party on notice. Employees at the
Company's Lonoke, Arkansas, Mayfield, Kentucky and Ada, Oklahoma facilities are
not represented by unions. There have been no significant interruptions or
curtailments of operations due to labor disputes since prior to 1968 and the
Company believes that relations with its employees are satisfactory.

Environmental Matters

     The Company has in place programs that monitor compliance with various
federal, state and local environmental regulations. In the normal course of its
manufacturing operations, the Company is subject to occasional governmental
proceedings and orders pertaining to waste disposal, air emissions and water
discharges into the environment. The Company believes that it is in compliance
with applicable environmental regulations in all material respects, and that
the outcome of any such proceedings and orders will not have a material adverse
effect on its business.

     On June 7, 1999, the Company was informed that it was a potentially
responsible party in a case involving the RSR Corporation (RSR) Superfund site
in Dallas, Texas. The Company shipped lead waste to this facility in the
1980's. DuPont has accepted responsibility for this liability under the terms
of the 1993 Environmental Liability Services Agreement with the Company. See
"--Certain Indemnities."

     On January 6, 2000 the Company received a request for information related
to shipments of used drums to Container Recycling Inc., a Superfund site in
Kansas City, Kansas. Shipments were made in 1994 and it is possible that the
Company may be identified as a potentially responsible party as the
investigation continues. Based upon the limited number of containers shipped to
this site, the Company believes that if it were found to be a potentially
responsible party, the Company's costs to resolve the matter would not be
significant.

     On March 5, 2001, the Company received a request for information relating
to any use of the Agriculture Street Landfill, a Superfund site in New Orleans,
LA. DuPont has accepted responsibility for this site under terms of the 1993
Environmental Liability Services Agreement with the Company, and responded to
EPA. The Company identified no contribution to or use of this site.

     On February 21, 2002, the Company received a request for information
regarding the Peters Cartridge Company's Kings Mills Technical Center, in
Warren County, Ohio. While Peters Cartridge Company was owned by Dupont, the
only assets relating to Peters Cartridge Company transferred to Remington as
part of the Acquistion was the Peters trademark. Although the Company is still
reviewing its records and materials regarding this site, it believes that any
responsibility for this site would rest with DuPont under the terms of

                                      11

<PAGE>

the 1993 Environmental Liability Services Agreement with the Company.

     Based on information known to the Company, the Company does not expect
current environmental regulations or environmental proceedings and claims to
have a material adverse effect on the results of operations or financial
condition of the Company. However, it is not possible to predict with certainty
the impact on the Company of future environmental compliance requirements or of
the cost of resolution of any future environmental proceedings and claims, in
part because the scope of the remedies that may be required is not certain,
liability under federal environmental laws is joint and several in nature, and
environmental laws and regulations are subject to modification and changes in
interpretation. There can be no assurance that environmental regulation will
not become more burdensome in the future and that any such development would
not have a material adverse effect on the Company.

Certain Indemnities

     In connection with the Acquisition on December 1, 1993 under the asset
purchase agreement (the "Purchase Agreement") among Remington, Sporting Goods,
and DuPont, Remington assumed (i) certain specified liabilities, including
certain trade payables and contractual obligations of Sporting Goods, (ii)
limited financial responsibility for certain product liability claims relating
to disclosed occurrences prior to the Acquisition and for environmental claims
relating to the operation of the Business prior to the Acquisition and (iii)
liabilities for product liability claims relating to occurrences after the
Acquisition, except for claims involving discontinued products. All other
liabilities relating to or arising out of the operation of the Business prior
to the Acquisition are excluded liabilities (the "Excluded Liabilities"), which
the Sellers retained. The Sellers are required to indemnify Remington and its
affiliates for inaccuracies in their Purchase Agreement representations,
subject to certain limitations (environmental matters being addressed
separately), for the Sellers' failure to comply with Purchase Agreement
covenants, and in respect of the Excluded Liabilities, which include, among
other liabilities, certain tax liabilities and certain employee and retiree
compensation and benefit liabilities. The Sellers' overall liability in respect
of their representations, covenants and the Excluded Liabilities, excluding
environmental liabilities and product liability matters relating to events
occurring prior to the purchase but not disclosed in connection with the
Purchase Agreement, or relating to discontinued products, is limited to $324.8
million. With certain exceptions, the Sellers' representations have expired.
The Company made claims for such indemnification involving product liability
issues prior to such expiration. See "Legal Proceedings."

     Remington has fully paid the amount of its limited financial
responsibility for all environmental liabilities relating to the ownership or
operation of the Business prior to the Acquisition, and for liabilities
relating to any product liability claims arising from occurrences prior to the
Acquisition. The Sellers retained all liabilities in respect of such
environmental and product liability matters in excess of such amount, as well
as for all claims relating to discontinued products, and are required to
indemnify Remington with respect thereto. The Sellers are also required to
indemnify Remington for certain claims for economic loss relating to certain
products manufactured prior to mid-1997. In addition, the Sellers agreed in
1996 to indemnify Remington against a portion of certain product liability
costs involving certain shotguns manufactured prior to 1995 and arising from
occurrences on or prior to November 30, 1999. These indemnification obligations
of the Sellers relating to product liability and environmental matters (subject
to a limited exception) are not subject to any survival period limitation,
deductible or other dollar threshold or cap. The Sellers and Remington are also
party to separate agreements setting forth agreed procedures for the management
and disposition of environmental and product liability claims and proceedings
relating to the operation or ownership of the Business prior to the
Acquisition, and are currently engaged in the joint defense of certain product
liability claims and proceedings. See "Legal Proceedings."

                                      12

<PAGE>

Item 2. PROPERTIES

     The Company's manufacturing operations are currently conducted at five
owned facilities. The following table sets forth certain information regarding
each of these facilities:

                                                                   Square Feet
       Plant                           Product                    (in thousands)
------------------  --------------------------------------------  -------------
Ilion, New York     Shotguns; centerfire and rimfire rifles           1,000
Lonoke, Arkansas    Shotshell; rimfire and centerfire ammunition        750
Mayfield, Kentucky  Rimfire rifles and centerfire rifles                 44
Findlay, Ohio       Clay targets                                         40
Ada, Oklahoma       Clay targets                                         21

     The Company believes that these facilities are suitable for the
manufacturing conducted therein and have capacities appropriate to meet
existing production requirements. The Lonoke, Ilion and Mayfield facilities
each contain enclosed ranges for testing firearms and ammunition.

     The Company's headquarters and related operations are conducted in an
office building owned by the Company in Madison, North Carolina. Research and
development is conducted at a facility owned by the Company in Elizabethtown,
Kentucky. All of the real property owned by the Company has been mortgaged to
secure the Company's obligations under the Company's senior bank credit
agreement. The Company also leases and contracts for services from a warehouse
in Memphis, Tennessee.

                                      13

<PAGE>

Item 3.  LEGAL PROCEEDINGS

     Pursuant to the Purchase Agreement, the Sellers retained liability for,
and are required to indemnify the Company against, (1) all product liability
cases and claims (whenever they may arise) involving discontinued products, (2)
all product liability cases and claims involving products that had not been
discontinued as of the Acquisition ("extant products") and relating to
occurrences that took place prior to the Acquisition and (3) certain
environmental liabilities based on conditions existing at the time of the
Acquisition. These indemnification obligations of the Sellers are not subject
to any survival period limitation. The Company has no current information on
the extent, if any, to which the Sellers have insured these indemnification
obligations. Except for certain cases and claims relating to shotguns as
described below and except for all cases and claims relating to products
discontinued prior to the Acquisition, the Company generally bears financial
responsibility for product liability cases and claims relating to occurrences
after the Acquisition.

     Since December 1, 1993, the Company has maintained insurance coverage
for product liability claims subject to certain self-insured retentions both on
a per-occurrence basis and in the aggregate for personal injury or property
damage relating to occurrences arising after the Acquisition. The Company
believes that its current product liability insurance coverage for personal
injury and property damage is adequate for its needs. The Company's current
product liability insurance policy provides for a self-insured retention of
$0.5 million per occurrence (plus pro-rata legal expenses) and a $10.0 million
indemnity loss aggregate. The current policy period runs from December 1, 2001
through November 30, 2002. The current policy has a batch clause endorsement,
which in general provides that if a batch of the Company's products were to be
defective, the Company's liability for expenses and damages related to the
entire batch would be capped at the amount of self-insured retention for a
single occurrence. The policy excludes from coverage any pollution-related
liability. Based in part on the nature of the Company's products, and the
impact on the insurance market of the events of September 11, 2001, there can
be no assurance that the Company will be able to obtain adequate product
liability insurance coverage upon the expiration of the current policy. Certain
of the Company's post-December 2001 excess insurance coverage expressly does
not apply to actions brought by municipalities as described below.

     As a result of contractual arrangements, the Company manages the joint
defense of product liability litigation involving Remington brand firearms and
Company ammunition products for both Remington and the Sellers. As of December
31, 2001, approximately 20 individual bodily injury cases and claims were
pending, primarily alleging defective product design or manufacture, or failure
to provide adequate warnings, some of these cases seek punitive as well as
compensatory damages. The Company has previously disposed of a number of other
cases involving post-Acquisition occurrences by settlement. Of the pending
individual cases and claims, approximately two involve matters for which the
Sellers retained liability and are required to indemnify the Company. The
remaining approximately 18 pending cases involve post-Acquisition occurrences
for which the Company bears responsibility under the Purchase Agreement; the
Sellers have some responsibility for the costs of approximately two of these
cases involving certain shotguns, as described below. One of the pending cases
for which Remington bears financial responsibility involves the accidental fatal
shooting in October 2000 with a Remington Model 700 bolt-action rifle of a
nine-year-old boy, Gus Barber, by his mother after a hunting trip in Montana.
This case has been the subject of repeated local and national media attention,
and in December 2001, the family filed a lawsuit in federal district court in
Montana. The Company has not been formally served but understands that the
action names Remington and the Sellers as defendants. Like many Remington
bolt-action centerfire firearms made before 1982, the Barber rifle was
manufactured with a feature known as a 'bolt-lock,' which requires the manual
safety to be moved to the 'fire' position to begin the process of unloading the
rifle. Partly in response to this accident, in early March 2002, the Company has
initiated a nationwide product safety program to run through the end of 2002
under which the Company will modify such centerfire firearms to remove the
bolt-lock feature for $20. Participating customers will receive a transferable
$20 rebate coupon on the purchase of Remington safety products. Approximately
2.5 million guns manufactured before 1982 may be eligible for this offer. The
Company is unable to estimate the ultimate cost of this modification program,
due to various uncertainties, including the number of customers who choose to
participate in the program and the condition of their firearms. However, based
inpart on the length of time since these products were manufactured, the Company
does not believe that the ultimate cost of the safety program will have a
material adverse impact on financial condition or liquidity, there can be no
assurance of such an outcome.

                                     14

<PAGE>

     As a manufacturer of shotguns and rifles, Remington has been named in
only three of the approximately 18 actions brought by certain municipalities,
primarily against manufacturers and sellers of handguns: (i) City of Boston, et
                                                          -
al. v. Smith & Wesson, et al., No. 99-2590 (Suffolk Super Ct.); (ii) City of
St. Louis, Missouri v. Henry Cernicek, et al., No. 992-01209 (Cir. Ct. St.
Louis) & 00 Civil 1895 (U.S. Dist. Ct.. E.D. Missouri); and (iii) City of New
York, et al. v. B.L. Jennings, Inc., et al., 00 Civil 3641 (JBW) (U.S. Dist.
Ct. E.D.N.Y.).

     In the City of Boston case, first filed on June 2, 1999, the City of
Boston and the Boston Public Health Commission claim (among other allegations)
that the distribution practices of defendant firearms manufacturers allegedly
permit their products to enter a secondary market, from which guns may be
obtained by unauthorized users; that defendants have failed to include adequate
safety devices in their firearms to prevent unauthorized use and accidental
misuse; and that defendants' conduct has created a public nuisance. Plaintiffs
seek injunctive relief and money damages (consisting of the cost of providing
certain city services and lost tax and other revenues). By order of July 13,
2000, the trial court denied manufacturer-defendants' motion to dismiss, and
defendants' request for interlocutory appeal of this decision was denied on
September 19, 2000. Discovery is proceeding pursuant to the Joint Case
Management Order, under which trial is presently scheduled for September 2002.
On February 1, 2002, the trial court issued an order granting defendants'
motion for partial summary judgment, prohibiting the plaintiffs from attempting
to prove liability on a "market share" theory.

     The City of St. Louis makes claims similar to those in the City of
Boston litigation and seeks punitive as well as compensatory damages. The First
Amended Complaint naming Remington was filed on August 15, 2000, in Circuit
Court of the City of St. Louis. The case was removed on November 29, 2000, to
the United States District Court for the Eastern District of Missouri by
third-party defendant, Denel (Pty) Ltd., a firearms manufacturer majority-owned
by the Republic of South Africa. Removal was made pursuant to Title 28, section
1330, of the United States Code, as an action involving a foreign state. On
September 25, 2001, the federal court remanded the case to state court, (where
motions to dismiss are pending). On February 20, 2002, the trial court heard
argument on defendants' motion to transfer venue to the Circuit Court for St.
Louis County, the motion was granted on March 1, 2002.

     The City of New York, the New York City Health and Hospitals Corp., and
certain city officials filed an Amended Complaint, dated September 1, 2000, in
the United States District Court for the Eastern District of New York naming
Remington and asserting claims similar to those in the City of Boston
litigation. The Company answered on December 1, 2000. Plaintiffs' and
defendants' initial discovery requests were served in June 2001. In August
2001, the City indicated its intention to file a second amended complaint.
However, in part as a result of the events of September 11, the City has asked
that the case be put on hold pending the appeal by the State of New York of the
dismissal of its separate lawsuit against handgun manufacturers (in which the
Company is not a defendant).

     Motions to intervene had been filed in another such municipal lawsuit,
Chicago v. Beretta U.S.A. Corp. (Cook Co. Ct.), seeking to name as additional
defendants unidentified "ammunition manufacturers." Such intervention was not
permitted by the Court, which, on September 15, 2000, granted the existing
defendants' motion to dismiss the case. The City's appeal of this decision has
been briefed and argued to the intermediate level court of appeals.

     The numbers of cases listed above do not include Joe Luna, et al. v.
Remington Arms Company, Inc. and E. I. Du Pont de Nemours and Company et al.
("Luna"), which was first filed in 1989 in Texas district court in Jim Wells
County. The plaintiffs sought certification of a class consisting of all Texas
owners of Model 700 bolt-action rifles seeking the cost of repair. In June
1996, the district court certified for class treatment certain limited issues;
this ruling was reversed on appeal. Remington was not named as a defendant
until July 1996, and was not a party to the appeal, although the appellate
courts' decisions should govern class action claims against Remington as well.
The Sellers' obligations with respect to Luna include a requirement that they
indemnify the Company against claims for economic loss involving Model 700
rifles shipped prior to the end of May 1997. Claims involving Model 700 rifles
shipped thereafter would be the Company's responsibility and, to the extent
that they do not involve personal injury or property damage, would not be
covered by the Company's product liability insurance.

     The Federal Trade Commission and the attorneys general of several states
have instituted investigations into allegations of anticompetitive retaliation
against Smith & Wesson by other participants in the firearms industry. To

                                     15

<PAGE>

date, Remington has received and replied to civil investigative demands and
subpoenae duces tecum and other discovery requests from the State of
Connecticut and the Federal Trade Commission. Remington, which makes only long
guns, does not compete with Smith & Wesson, which makes handguns.

     In recognition of and support of certain legal and legislative
initiatives, the firearms industry has established the Hunting and Shooting
Sports Heritage Fund of which the Company is a member. During 2002, the Company
will contribute a percentage of its domestic net revenue from sales of its
firearms and select accessory products to this organization. Contributions in
2001 and 2000 were $1.7 million and $2.9 million, respectively.

     The Company has made claims for indemnification involving product
liability issues under the Purchase Agreement. In 1996, the Company and the
Sellers agreed that the Sellers would assume financial responsibility for a
portion of the costs relating to product liability claims and cases involving
certain shotguns manufactured prior to mid-1995 and based on occurrences
arising prior to November 30, 1999, and that any claims the Company and the
Sellers may have against each other under the Purchase Agreement relating to
shotguns (excluding various indemnification rights and the allocation of
certain costs) would be released. Any claims between the Company and the
Sellers relating to other product liability issues remain open.

     Because the Company's assumption of financial responsibility for certain
product liability cases and claims involving pre-Acquisition occurrences was
limited to an amount that has now been fully paid, with the Sellers retaining
liability in excess of that amount and indemnifying the Company in respect
thereof, and because of the Company's accruals with respect to such cases and
claims, the Company believes that product liability cases and claims involving
occurrences arising prior to the Acquisition are not likely to have a material
adverse effect upon the financial condition or results of operations of the
Company. Moreover, although it is difficult to forecast the outcome of
litigation, the Company does not believe, in light of relevant circumstances
(including the current availability of insurance for personal injury and
property damage with respect to cases and claims involving occurrences arising
after the Acquisition, the Company's accruals for the uninsured costs of such
cases and claims and the Sellers' agreement to be responsible for a portion of
certain post-Acquisition shotgun-related product liability costs, as described
above, as well as the type of firearms products made by the Company), that the
outcome of all pending post-Acquisition product liability cases and claims will
be likely to have a material adverse effect upon the financial condition or
results of operations of the Company. Nonetheless, in part because the nature
and extent of liability based on the manufacture and/or sale of allegedly
defective products (particularly in connection with the use of firearms) is
uncertain, there can be no assurance that the Company's resources will be
adequate to cover both pending and future product liability occurrences, cases
or claims, in the aggregate, or that a material adverse effect upon our
financial condition or results of operations will not result therefrom. Because
of the nature of its products, the Company anticipates that it will continue to
be involved in product liability litigation in the future.

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

     No matter was submitted to a vote of the Company's shareholders during
the fourth quarter of 2001.

                                     16

<PAGE>

                                     PART II
                                     -------

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

There is no established public trading market for either Holding's or
Remington's common stock. Prior to 1997, the only holder of Holding's Common
Stock was The Clayton & Dubilier Private Equity Fund IV Limited Partnership
("C&D Fund IV"). On August 25, 1997 Holding filed a registration statement on
Form S-8 with the Securities and Exchange Commission to register 12,500 shares
of Class A Common Stock ("Common Stock"), par value $.01 per share, of Holding
for issuance in accordance with the RACI Holding, Inc. Director Stock Purchase
Plan (the "1997 Directors' Plan"). As of December 31, 2001, a total of 11,250
shares of Class A Common Stock had been issued to five directors under the 1997
Directors' Plan and 1,800 shares of Class A Common Stock were issued to five
directors under the 1994 Directors' Plan. See "Security Ownership of Certain
Beneficial Owners and Management." The only holder of Remington's common stock
is Holding. During 2000, the Company paid dividends of $71.929 per share in an
aggregate amount of $55.3 million to all shareholders of record. The Company
also declared a special payment to holders of all stock options and deferred
shares of $71.929 per share, in an aggregate amount of $6.9 million. The
Company did not pay any dividends during 2001. As Holding has no separate
operations, its ability to pay dividends is dependent upon the extent to which
it receives dividends or other funds from Remington. The declaration and
payment of future dividends, if any, will be at the sole discretion of the
Board of Directors of the respective company, subject to the restrictions set
forth in the Amended and Restated Credit Agreement, dated as of April 28, 2000,
among the Company, The Chase Manhattan Bank, Bank of America, Goldman Sachs
Credit Partners L.P. and certain other lenders (the "Credit Agreement"), and
the indenture for its subordinated notes (the "Indenture"), which currently
restrict the payment of cash dividends to shareholders, and restrictions, if
any, imposed by other indebtedness outstanding from time to time. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources," "--Credit Agreement" and
"--Notes" and Note 14 to the Company's consolidated financial statements for
the year ended December 31, 2001 appearing elsewhere in this report.

                                     17

<PAGE>

Item 6.  SELECTED FINANCIAL DATA

     The following table sets forth certain selected financial information
derived from the Company's consolidated financial statements as audited by its
independent accountants, PricewaterhouseCoopers LLP, for each of the years in
the five-year period ended December 31, 2001. The table should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations," and the Company's consolidated financial statements
and related notes and other financial information included elsewhere in this
report.

<TABLE>
<CAPTION>
                                                               Year Ended December 31,
                                               ----------------------------------------------------
                                                  2001      2000      1999      1998     1997
                                                  ----      ----      ----      ----     ----
<S>                                               <C>       <C>       <C>       <C>      <C>
Statement of Operations Data:                     (Dollars in Millions, Except Per Share Data)

Sales (a)..................................      $ 383.1   $ 388.7    $403.1    $385.8   $384.0
Gross Profit...............................        109.8     132.8     129.9     123.0    113.0
Operating Expenses.........................         72.3      84.8      78.1      75.5     77.6
Operating Income...........................         37.5      48.0      51.8      47.5     32.6
Interest Expense...........................         15.3      15.6      14.1      19.2     23.6
Income before Taxes........................         22.2      32.4      37.7      28.3      9.0
Net Income.................................         13.7      19.9      23.0      17.2      5.5
Basic Income Per Common Share..............        17.25     25.10     29.68     22.63     7.33
Diluted Income Per Common Share............        16.90     24.49     28.89     22.26     7.33
Dividends Paid per Common & Redeemable
Share (b)..................................            -     71.93         -         -        -
Ratio of Earnings to Fixed Charges (c)               2.4x      3.0x      3.7x      2.5x     1.4x

Operating and Other Data:
EBITDA as Defined (d)......................      $  56.8   $  73.0    $ 74.0    $ 64.2    $52.2
EBITDA Margin (d) (e)......................         14.8%     18.8%     18.4%     16.6%    13.7%
Depreciation and Amortization (f)..........      $  16.9   $  16.4    $ 16.0    $ 15.9    $15.1
Other Non-cash Charges (g).................          1.1       1.2       6.2       1.1      3.7
Nonrecurring and Restructuring Items (h)...          1.3        .5         -     (0.3)      0.8
Special Payment (b)........................            -       6.9         -         -        -
Ratio of EBITDA to Interest Expense (d)(f)           4.2x      5.4x      6.1x      3.7x     2.4x
Consolidated Fixed Charge Coverage
  Ratio (i)................................          3.6x      4.2x      5.2x      3.4x     2.2x
Capital Expenditures.......................      $   4.2   $  17.4    $ 13.0    $  8.5     $5.8
Cash flows provided by (used in):
  Operating Activities.....................         50.7      21.8      64.5      56.7     54.0
  Investing Activities.....................         (4.2)    (17.4)    (13.0)     (8.5)    (5.8)
  Financing Activities.....................        (35.7)    (28.0)    (30.1)    (43.9)   (57.2)

Balance Sheet Data (end of period):
Working Capital............................      $ 102.6   $ 115.9    $ 91.1    $ 92.7   $108.2
Total Assets...............................        332.1     361.9     357.1     352.9    378.6
Total Debt (j).............................        114.3     154.6     118.5     146.9    195.0
Shareholders' Equity.......................        105.2      91.7     126.2     103.5     86.3
</TABLE>

(a)  Sales are presented net of federal excise taxes. Excise taxes were $32.8
     million, $33.2 million, $33.8 million, $31.5 million and $31.0 million
     for the years ended December 31, 2001, 2000, 1999, 1998 and 1997,
     respectively. For the years ended December 31, 1999 and 1998, Arms
     Service sales (revenue from the parts and repairs operation) of $3.7
     million and $5.1 million, respectively, have been reclassified from
     operating expenses.

(b)  On April 25, 2000, the Company declared a special dividend of $63.933 per
     share, in an aggregate amount of $49.1 million, to all shareholders of
     record on that date. The Company also declared a special payment to
     holders of all stock options and deferred shares of $63.933 per share, in
     an aggregate amount of $6.1 million on

                                     18

<PAGE>

     that date. On October 24, 2000, the Company declared a special dividend
     of $7.996 per share, in an aggregate amount of $6.1 million, to all
     shareholders of record on October 20, 2000. The Company also declared a
     special payment to holders of all stock options and deferred shares of
     $7.996 per share, in an aggregate amount of $0.8 million on that date.

(c)  For purposes of computing this ratio, earnings consists of earnings before
     income taxes and fixed charges, excluding capitalized interest. Fixed
     charges consist of interest expense, capitalized interest, amortization
     of discount on indebtedness and one-third of rental expense (the portion
     deemed representative of the interest factor).

(d)  EBITDA as presented is calculated in accordance with the definition of that
     term contained in the Credit Agreement, and may not be comparable to
     similarly titled measures reported by other companies. Generally, the
     Credit Agreement defines EBITDA to consist of net income (loss) adjusted
     to exclude cash interest expense, income tax expense, depreciation,
     amortization, non-cash expenses and charges, gain or loss on sale or
     write-off of assets, and extraordinary, unusual or nonrecurring gains,
     losses, charges or credits, amounts paid as permitted dividends that are
     treated as compensation expense ("special payment") and defines interest
     expense as cash interest. EBITDA, and the Ratio of EBITDA to Interest
     Expense, are presented to facilitate a more complete analysis of the
     Company's financial performance, by adding back non-cash and nonrecurring
     items to operating income, as an indicator of the Company's ability to
     generate cash to service debt and other fixed obligations. Investors
     should not rely on EBITDA as an alternative to operating income or cash
     flows, as determined in accordance with generally accepted accounting
     principles, as an indicator of the Company's operating performance,
     liquidity or ability to meet cash needs. See "Management's Discussion and
     Analysis of Financial Condition and Results of Operations" for further
     discussion of the Company's operating income and cash flows.

(e)  Represents EBITDA as a percentage of sales.

(f)  Excludes amortization of deferred financing costs of $1.7 million, $2.0
     million, $1.8 million, $2.0 million and $1.7 million in 2001, 2000, 1999,
     1998 and 1997, respectively, which is included in interest expense.

(g)  Non-cash charges consist of the following: (1) for 2001, a $0.4 for loss
     on disposal of assets, a $0.5 accrual for executive pension and $0.2
     retiree benefit accrual, (2) for 2000, a $0.5 million loss on disposal of
     assets and $0.6 million accrual for executive pension and $0.1 million
     for other postretirement benefits, (3) for 1999, a $3.8 million stock
     based compensation expense, $1.8 million pension accrual and $0.6 million
     loss on disposal of assets; (4) for 1998, a pension accrual of $0.4
     million and a $0.7 million loss on disposal of assets and (5) for 1997, a
     pension accrual of $3.2 million and a $0.5 million loss on disposal of
     assets.

(h)  Nonrecurring and restructuring expenses excluded in calculating EBITDA
     consist of the following: (1) for 2001, $0.6 nonrecurring legal and
     professional fees and $0.7 severance and relocation costs; (2) for 2000,
     nonrecurring professional fees of $0.5 million related to establishment
     of subsidiaries; (3) for 1998, nonrecurring legal charge of $0.4 million
     and restructuring accrual adjustments of $(0.7); (4) for 1997, $0.8
     million of unusual and nonrecurring charges.

(i)  The Consolidated Fixed Charge Coverage Ratio is a financial measure used
     in the Indenture for the Notes to determine when the Company can incur
     certain kinds of new debt and engage in certain other transactions. It
     measures the ratio of (a) the sum of Consolidated Net Income,
     Consolidated Interest Expense, Consolidated Income Tax Expense and
     Consolidated Non-Cash Charges (including depreciation, amortization and
     other non-cash charges) deducted in computing Consolidated Net Income
     (Loss), all determined in accordance with GAAP, to (b) the sum of
     Consolidated Interest Expense and cash dividends paid, if any, on any
     Preferred Stock, as each of these terms is defined in the Indenture.
     Generally, the principal difference between the Ratio of EBITDA to
     Interest Expense and the Consolidated Fixed Charge Coverage Ratio arises
     from the exclusion of nonrecurring and restructuring expenses, and
     amounts paid as permitted dividends that are treated as compensation
     expense ("special payment") in calculating EBITDA.

(j)  Total debt consists of long-term debt, current portion of long-term debt
     and capital lease commitments.

                                     19

<PAGE>

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

         The following discussion and analysis should be read in conjunction
with The "Selected Financial Data" and the Company's consolidated financial
statements and related notes and the other financial information appearing
elsewhere in this report.

Critical Accounting Policies and Estimates

         The Company's discussion and analysis of its financial condition and
results of operations are based upon the Company's consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these financial
statements requires the Company to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities. On an ongoing basis, the
Company evaluates its estimates, including those related to inventories,
supplies, accounts receivable, warranties, long-lived assets, product liability,
revenue recognition, advertising and promotional costs, self-insurance, and
pension and postretirement benefits. The Company bases its estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. As noted below, in some cases, the
Company's estimates are also based in part on the findings of independent
advisors. Actual results may differ from these estimates under different
assumptions or conditions.

         The SEC recently issued two releases FR 60 and 61, relating to critical
accounting policies and financial statement disclosures. Management has
addressed and reviewed its critical accounting policies and considers them
appropriate. The Company believes the following critical policies utilize
significant judgments and estimates used in the preparation of its consolidated
financial statements:

         Inventories. Our inventories are valued at the lower of cost or market.
         -----------
We evaluate the quantities of inventory held against past and future demand and
market conditions to determine excess or slow moving inventory. For those units
of inventory identified, we estimate their market value based on current and
projected selling prices. If the projected market value is less than cost, we
provide an allowance to reflect the lower value of that inventory. This
methodology recognizes projected inventory losses at the time such losses are
evident rather than at the time goods are actually sold.

         Allowance for doubtful accounts. The Company maintains an allowance for
         -------------------------------
doubtful receivables for estimated losses resulting from the inability of our
trade customers to make required payments. We provide an allowance for specific
customer accounts where collection is doubtful and also provide a general
allowance for other accounts based on historical collection and write-off
experience. Additional allowances would be required if the financial conditions
of our customers deteriorated.

         Long-lived assets. We periodically review our property, plant and
         -----------------
equipment and intangible assets for possible impairment whenever facts and
circumstances indicate that the carrying amount may not be fully recoverable.
Assumptions and estimates used in the evaluation of impairment may affect the
carrying value of long-lived assets which could result in impairment charges in
future periods. The Company adopted the provisions of SFAS 142 "Goodwill and
Other Intangible Assets", effective January 1, 2002. Adoption of this new
standard also requires a review of the carrying amount of our goodwill. Adoption
of the standard, while requiring a non-cash charge, did not have a significant
impact on the financial condition of the Company. In addition, our depreciation
and amortization policies reflect judgments on the estimated useful lives of
assets.

         Reserves for product liability. The Company provides for estimated
         ------------------------------
defense and settlement costs related to product liabilities when it becomes
probable that a liability has been incurred and reasonable estimates of such
costs are available. Product liabilities are not recorded net of recoveries that
are probable of realization. Estimates for accruals for product liability
matters are based on historical patterns of the number of occurrences, costs
incurred and a range of potential outcomes. We also utilize independent advisors
to assist in analyzing the adequacy of such reserves. Due to the inherently
unpredictable nature of litigation, actual results will likely differ from
estimates.

         Revenue recognition. Sales, net of an estimate for discounts, returns
         -------------------
and allowances, and related cost of sales are recorded in income when goods are
shipped, at which time risk of loss and title transfers to the customer. The
Company continually evaluates its sales terms against criteria outlined in SEC
Staff Accounting Bulletin 101. The Company follows the industry practice of
selling firearms pursuant to a "dating" plan allowing the customer to purchase
these products commencing in December (the start of the Company's dating plan
year) and to pay for them on extended terms. Discounts are offered for early
payment under this plan. The Company believes that allowing extended payment
terms for early orders helps to level out the demand for these otherwise
seasonal products throughout the year. Historically, use of the dating plan has
had the effect of shifting some firearms sales from the second and third
quarters to the first quarter. The Company believes that the dating plan helps
facilitate a more efficient manufacturing schedule. As a competitive measure,
the Company also offers extended terms on select ammunition purchases. Use of
the dating plans, however, also results in significant deferral of collection of
accounts receivable until the latter part of the year. Customers do not have the
right to return unsold product. Management uses historical trend information as
well as other economic data to estimate future discounts, returns and
allowances.

Overview

General
-------

         The following discussion and analysis relates to Holding, its
subsidiary Remington, and Remington's wholly owned subsidiaries, Remington
International, Ltd., RA Brands, L.L.C., RBC Holding, Inc. and RA Factors, Inc.
on a consolidated basis. Holding has virtually no operations and its only
significant asset is its investment in Remington.

         The Company's business is classified as one aggregated operating
segment, and its revenues are derived primarily from sales of hunting/shooting
sports and related products. This reportable segment accounted for approximately
89% of the Company's sales in 2001 and 2000 and 88% in 1999. Other Company
product lines include firearm-related accessories, clay targets and fishline and
related products.

Business Trends and Initiatives
--------------------------------

         The sale of hunting/shooting sports and fishing products depends upon a
number of factors related to the level of consumer spending including the
general state of the economy and the willingness of consumers to spend on
discretionary items. Historically, the general level of economic activity has
significantly affected the demand for sporting goods products in the
hunting/shooting sports and related markets. As economic activity slows, as it
did beginning in the fourth quarter 2000 and continued through all of 2001,
confidence and discretionary spending by consumers declines. Management believes
that a continuation of the decline in the general level of economic activity
will have a negative impact on sales of the Company's products, and that
competitive pressures arising from any significant or prolonged economic
downturn could have a material adverse impact on the Company's financial
condition, results of operation or cash flows.

         Although the Company believes that regulation of firearms and
ammunition, and consumer concerns about such regulation, have not had a
significant influence on the market for its firearms and ammunition products for
the periods presented herein, there can be no assurance that the regulation of
firearms and ammunition will not become more restrictive in the future and that
any such development would not adversely affect these markets. See
"Business--Regulation" and "Legal Proceedings."

         The Company believes that the market for hunting/shooting sports
products is stable and mature. In light of modest sales growth opportunities and
the Company's working capital seasonality, the Company continues to focus on
improving profitability through increased efficiency and cost containment. Since
1996, the Company has undertaken a number of working capital management and cost
containment initiatives, strengthened the management team and invested capital
to continue improvement in operating efficiencies at its manufacturing
facilities. The Company's management team will continue to review all aspects of
the Company's operations with a view towards controlling costs in response to
competitive pressures. The Company is also focused on maintaining its preeminent
market position through increased brand awareness, ongoing product innovation
and the introduction of new products.

                                     20

<PAGE>

Results of Operations

     The following table shows, for the periods indicated, the
percentage relationships to sales of certain selected financial data.
Management's discussion and analysis of the Company's results of
operations compares 2001 to 2000 results, and 2000 to 1999 results.

                                  Year Ended     Year Ended     Year Ended
                                  December 31,   December 31,   December 31,
                                     2001           2000           1999
                                     ----           ----           ----
Sales                                100%           100%           100%

Cost of Goods Sold                    71             66             68

Gross Profit                          29             34             32

Operating Expenses                    19             22             19

Operating Profit                      10             12             13

Net Income                             4              5              6

Year Ended December 31, 2001 as Compared to Year Ended December 31, 2000
--------------------------------------------------------------------------

     Sales. Consolidated Sales for the year ended December 31, 2001
     -----
decreased $5.6 million or 1.4% from the year ended December 31, 2000 for the
reasons discussed below. The following table compares sales by segment for each
of the years in the two-year period ended December 31, 2001:

                                     Year Ended December 31,
                            ------------------------------------------
                                      Percent                Percent
                                2001  of Total     2000      of Total
                            ------------------------------------------
Net Sales
   Hunting/Shooting Sports    $340.3    89%      $345.1        89%
   All Other                    42.8    11%        43.6        11%
                            ------------------------------------------
    Consolidated Net Sales    $383.1   100%      $388.7       100%
                            ==========================================

     Hunting/Shooting Sports sales, including firearms and ammunition,decreased
$4.8 million or 1.4% in 2001 as compared to 2000. Firearms sales of $185.4
million for the year ended December 31, 2001 increased $1.3 million or 0.7%
from the year ended December 31, 2000, primarily due to higher sales volumes
of the Model 700 rifle combined with the introduction of the Model 710 rifle
offset by lower overall sales volumes of shotguns.

     Ammunition sales of $154.9 million for the year ended December 31, 2001
decreased $6.1 million or 3.8% from 2000, due primarily to the combination of
lower sales volumes in all ammunition categories with the exception of rimfire
cartridges and lower overall pricing in all ammunition categories with the
exception of centerfire rifle cartridges. The overall decrease in ammunition
sales in 2001 is largely attributable to the economic conditions experienced
during the year and the competitive price reductions in many of the ammunition
products.

     Sales of all other products, including fishline, accessories, targets and
powder metal products declined year over year by $0.8 million or
1.8%, primarily as a result of lower demand for certain fishline and target
products, slightly offset by higher sales in accessories, mainly hearing
protection and gun care products.

     While economic activity has slowed, the Company did experience an increased
demand for its hunting/shooting sports products in fourth quarter
2001 as compared to fourth quarter 2000. Management believes that this increase
in demand is attributable, at least in part, to the impact on consumers of the
terrorist attacks on New York and Washington on September 11, 2001. Because the
longer-term effects of such events are inherently unpredictable, management
cannot determine with certainty the impact of these events on future demand.

                                     21

<PAGE>

Management believes that the demand for hunting/shooting sports product
depends on a number of factors, including the general state of the economy, and
the Company can give no assurance that the recent increase in sales will
continue.

     Cost of Goods Sold. Cost of goods sold for 2001 increased to $273.3
     ------------------
million, an increase of $17.4 million or 6.8% from the 2000 level of $255.9
million, and as a percentage of sales, cost of goods sold increased to 71.3% in
2001 from 65.8% in 2000. The increase in cost of goods sold is primarily due
to the combination of lower overall pricing in ammunition, higher sales volumes
of lower margin products in the hunting/shooting sports segment and higher
manufacturing costs primarily associated with lower ammunition production
levels and production inefficiencies at the firearms facility in Ilion, NY.
The Company has initiated a program to reduce such inefficiencies. As a result
of lower production levels, the Company incurred $1.2 million of additional
expense due to the shutdown of the Lonoke facility in April, July and September
2001.

     Operating Expenses. Operating expenses consist of selling, general and
     ------------------
administrative expenses, research and development expense and other expense.
Operating expenses for 2001 were $72.3 million, a decrease of $12.5 million, or
14.7%, from $84.8 million for 2000.

     Selling, general and administrative expenses for 2001 were $63.3 million,
a decrease of $5.0 million, or 7.3% from $68.3 million for 2000. The decrease
between the two periods was primarily attributable to lower variable
administrative expenses of $2.9 million combined with a reduction in bad debt
expense of $2.3 million due to the partial recovery of a prior year debt and
due to a decrease of current year provisions for bad debt, partially offset by
higher distribution costs of $1.2 million primarily attributable to start-up
costs associated with the new distribution center, leased in Memphis,
Tennessee.

     Research and development expenses were $5.9 million for 2001, a $0.5
million, or 7.8%, decrease from $6.4 million in 2000.

     Other period expense of $10.1 million in 2000 includes two special
payments totaling $6.9 million to holders of all stock options and deferred
shares. No such expense was incurred in 2001.

     Interest Expense. Interest expense in 2001 was $15.3 million, a decrease
     ----------------
of $0.3 million, or 1.9%, from the 2000 level of $15.6 million. The decrease
in interest expense was primarily a result of lower interest rates incurred
partially offset by an increase in average borrowings on the revolving credit
facility (the "Revolving Credit Facility") under the Credit Agreement.

Year Ended December 31, 2000 as Compared to Year Ended December 31, 1999
------------------------------------------------------------------------

     Sales. Consolidated Sales for the year ended December 31, 2000 decreased
     -----
$14.4 million or 4% from the year ended December 31, 1999 for the reasons
discussed below. The following table compares sales by segment for each of the
years in the two-year period ended December 31, 2000:

                                          Year Ended December 31,
                            -----------------------------------------------
                                           Percent               Percent
                                   2000    of Total      1999    of Total
                            -----------------------------------------------
Net Sales
   Hunting/Shooting Sports     $   345.1       89%      $   354.0     88%
   All Other                        43.6       11%           49.1     12%
                            -----------------------------------------------
   Consolidated Net Sales      $   388.7      100%      $   403.1    100%
                            ===============================================

     Hunting/Shooting Sports sales decreased $8.9 million or 3% in 2000 as
compared to 1999. Firearms sales of $184.1 million for the year ended December
31, 2000 increased $2.4 million from the year ended December 31, 1999, due to
overall higher pricing of firearm products together with an increase in sales
volumes of higher priced shotguns and centerfire rifles partially offset by
lower sales volumes in the other firearm product categories.

                                     22

<PAGE>

     Ammunition sales of $161.0 million for the year ended December 31, 2000
decreased $11.3 million or 7% from 1999, due primarily to lower sales volumes
in all ammunition categories, mainly shotshell, rimfire and pistol and
revolver, partially offset by higher overall pricing in ammunition products.
The decline in sales volumes resulted from an unanticipated softening in demand
during the fourth quarter of 2000.

     Sales of all other products declined year over year by $5.5 million or
11%. The sales declined primarily as a result of lower demand for certain
fishline and target products, approximately $4.5 million or 15%, slightly
offset by sales of new product introductions in fishline and accessories,
mainly gun safes and gun parts.

     Cost of Goods Sold. Cost of goods sold for 2000 decreased to $255.9
     ------------------
million, a decrease of $17.3 million or 6% from the 1999 level of $273.2
million, resulting primarily from the lower volumes in both the
Hunting/Shooting and All Other segments. As a percentage of sales, cost of
goods sold decreased to 66% in 2000 from 68% in 1999, due mainly to higher
overall pricing in the Hunting/Shooting Sports segment, partially offset by
higher other manufacturing costs associated with line enhancement projects and
retiree benefit expense.

     Gross Profit. Gross profit was $132.8 million in 2000, an increase of
     ------------
$2.9 million, or 2%, from a gross profit of $129.9 million in 1999. The
increase in gross profit was primarily due to the overall favorable pricing in
both the firearms and ammunition product lines along with increased sales of
higher priced shotguns and centerfire rifles.

     Operating Expenses. Operating expenses consist of selling, general and
     ------------------
administrative expenses, research and development expense and other expense.
Operating expenses for 2000 were $84.8 million, an increase of $6.7 million, or
9%, from $78.1 million for 1999.

     Selling, general and administrative expenses for 2000 were $68.3 million,
an increase of $3.4 million, or 5% from $64.9 million for 1999. The increase
between the two periods was primarily attributable to the Company's
contributions in 2000 to The Hunting and Shooting Sports Heritage Fund and an
increase in bad debt expense partially offset by planned decreases in marketing
communications expenses.

     Research and development expenses were $6.4 million for 2000, a $0.3
million, or 4%, decrease from $6.7 million in 1999.

     Other period expense of $10.1 million in 2000 includes two special
payments totaling $6.9 million to holders of all stock options and deferred
shares. Other expense of $6.5 million for 1999 includes $3.1 million for the
Company's portion of expenses incurred in connection with the issuance of stock
and the grant of options under the 1999 Stock Incentive Plan.

     Operating Income. Operating income of $48.0 million in 2000 decreased by
     ----------------
$3.8 million or 7% from 1999's operating income of $51.8 million. Operating
income decreased as a result of the increase in operating expenses partially
offset by the increase in gross profit, as discussed above.

     Interest Expense. Interest expense in, 2000 was $15.6 million, an
     ----------------
increase of $1.5 million, or 11%, from the 1999 level of $14.1 million. The
increase in interest expense was primarily a result of higher borrowings on the
revolving credit facilities under the Credit Agreement and the Company's
previous senior bank credit agreement in 2000 combined with higher interest
rates incurred on variable rate debt partially offset by a reduction in
borrowings on the term loan in 2000 under the Company's previous senior bank
credit agreement.

Purchasing Patterns; Seasonality

     The Company's firearms products that are generally used during the fall
hunting season may be purchased under an early order or "dating" plan. Under
the dating plan, the Company allows a distributor to purchase these products
commencing in December (the start of the Company's dating plan year) and to pay
for them on extended terms. Discounts are offered for early payment under this
plan. Discounts amounting to $5.6 million were given in 2001 and $5.0 million
were given in 2000 and 1999. The Company believes that allowing extended
payment terms for early orders helps to level out the demand for these
otherwise seasonal products throughout the year. Historically, use of the
dating plan has had the effect of shifting some firearms sales from the second
and third quarters to the first quarter. The

                                     23

<PAGE>

Company believes that the dating plan helps facilitate a more efficient
manufacturing schedule. Use of the dating plan, however, also results in
significant deferral of collection of accounts receivable until the latter part
of the year.

     Beginning in 2002, the Company began a new dating plan for the ammunition
products, which begins in January and generally allows for standard terms of 60
days and offers discounts for earlier payments. There is also an early order
program, which was instituted in 1998, allows customers an additional 30 days
to pay for ammunition purchased prior to April 1/st/ of each year. As a
competitive measure, the Company also offers extended terms on select
ammunition purchases.

     As a result of the seasonal nature of the Company's sales, combined with
the Company's dating plan billing practices, the Company's working capital
financing needs generally have significantly exceeded cash provided by
operations during the middle of a year, until its extended accounts receivable
were collected in the third and fourth quarters. As a result, the Company's
working capital financing needs tend to be greatest during the spring and
summer months, decreasing during the fall and reaching their lowest point
during the winter. See "Business -- Seasonality."

Liquidity and Capital Resources

     Overview. The Company has generally funded expenditures for operations,
     --------
administrative expenses, capital expenditures and debt service obligations with
internally generated funds from operations, with working capital needs being
satisfied from time to time with borrowings under the Revolving Credit
Facility. The Company believes that it will be able to meet its debt service
obligations and fund its operating requirements in the future with cash flow
from operations and revolving credit borrowings prior to the maturity of the
Revolving Credit Facility, although no assurance can be given in this regard.
The Company continues to focus on working capital management, including the
collection of accounts receivable, decreasing inventory levels to bring them in
line with sales projections and management of accounts payable.

     Contractual Obligations and Commercial Commitments. The Company has
     --------------------------------------------------
various purchase commitments for services incidental to the ordinary conduct of
business, including for services relating to its E-Commerce activities and
NASCAR sponsorship. Such commitments are not at prices in excess of current
market prices. The Company has purchase contracts with certain raw materials
suppliers, for periods ranging from one to seven years, with no commitment to
purchase specified quantities. The Company does not have formal contracts with
its other raw materials suppliers. The commitments and contracts had no
significant impact on the financial condition or results of operations of the
Company during the reportable periods.

     In recognition of and support of certain legal and legislative
initiatives, the firearms industry has established the Hunting and Shooting
Sports Heritage Fund of which the Company is a member. During 2002, the
Company will contribute a percentage of its domestic net revenue from sales of
its firearms and select accessory products to this organization. Contributions
in 2001 and 2000 were $1.7 million and $2.9 million, respectively.

     The Company supports service and repair facilities for all of its firearm
products in order to meet the service needs of its distributors, customers and
consumers nationwide. The Company provides consumer warranties against
manufacturing defects in all firearm products it sells in North America.
Estimated future warranty costs are accrued at the time of sale. Product
modifications or corrections are voluntary steps taken by the Company to assure
proper usage or performance of a product by consumers. The cost associated
with product modifications and or corrections are recognized in accordance with
Statement of Financial Accounting Standard No. 5, Accounting for Contingencies,
and charged to operations. The cost of these programs is not expected to have
a material adverse impact on the Company operations, liquidity or capital
resourses.

                                     24

<PAGE>

     The following represents the contractual and other commercial commitments
of the Company:

<TABLE>
<CAPTION>
                                                 Payments Due by Period
                                   --------------------------------------------------
                                     Total
                                    Amounts    Less Than    1-3      4-5     Over 5
Contractual Obligations            Committed     1 Year    Years    Years     Years
-----------------------            ---------     ------    -----    -----     -----
<S>                                 <C>          <C>       <C>      <C>        <C>
  9.5% Senior Subordinated Notes
    Due 2003                        $   86.9     $    -   $  86.9  $    -     $    -
  Capital Lease Obligations              2.4        1.1       1.3       -          -
  Operating Leases                      13.1        2.6       6.2     1.9        2.4
  Other Long-term Obligations            7.8        4.6       1.7     1.5          -
                                   --------------------------------------------------
    Total Contractual Cash
       Obligations                  $  110.2     $  8.3   $  96.1  $  3.4     $  2.4

Other Commercial Commitments
----------------------------
  Revolving Credit Facility         $   25.0     $    -   $  25.0  $    -     $    -
  Standby Letters of Credit              5.4        5.4         -       -          -
                                   --------------------------------------------------
    Total Commercial Commitments    $   30.4     $  5.4   $  25.0  $    -     $    -
</TABLE>

     Liquidity. The Company incurred substantial indebtedness in connection
     ---------
with the Acquisition. As of December 31, 2001, the Company had outstanding
approximately $114.3 million of indebtedness, consisting of approximately $86.9
million in the Notes, $25.0 million in revolving credit facility borrowings and
$2.4 million in capital lease obligations. As of December 31, 2001 the Company
also had aggregate letters of credit outstanding of $5.4 million.

     At present, the principal sources of liquidity for the Company's business
and operating needs are internally generated funds from its operations and
revolving credit borrowings under the Credit Agreement. The Company believes
that it will be able to meet its debt service obligations and fund its
operating requirements with cash flow from operations and revolving credit
borrowings prior to the maturity of the revolving credit facility, although no
assurance can be given in this regard, especially in light of the general state
of economy. In addition, the Company has implemented certain programs and
initiatives in order to improve cash flow from operations. See "--Cash Flows."

     Notes. In connection with the Acquisition, the Company issued $100 million
     -----
aggregate principal amount of its 9.5% Senior Subordinated Notes due 2003 (the
"Notes"). The interest rate on the Notes is 9.5% per annum. Interest on the
Notes is payable semi-annually and principal is payable at maturity on December
1, 2003. The Indenture contains various default provisions and affirmative and
negative covenants. The failure to comply with such affirmative and negative
covenants, or any other default under the Indenture, could result in the
acceleration of the Company's obligations under the Indenture.

     No repurchases were made during 2001 and 2000. From time to time, the
Company may repurchase additional amounts of the Notes on the open market
subject to any limitations that may be contained in the Credit Agreement and
the Indenture.

     Capital & Operating Leases and Other Long-term Obligations. The Company
     ----------------------------------------------------------
maintains capital leases mainly for computer equipment. The Company has two
operating leases that extend beyond five years, the Memphis warehouse lease,
which extends to 2010 and a steam purchase contract, which extends to 2012 and
contains an option to cancel with 3 years notice. The Company also maintains
contracts for E-Commerce related business and for sponsorship of a NASCAR
racing team, which is cancelable upon certain conditions, including death and
injury of the driver.

     Credit Agreement. The Credit Agreement provides for aggregate borrowings
     ----------------
of $170.0 million under the Revolving Credit Facility. The obligations under
the Credit Agreement are guaranteed by Holding and are secured by a pledge of
the Company's capital stock and by pledges of and security interests in
substantially all the Company's property and assets including the Company's
ownership interests in its subsidiaries RA Brands, L.L.C. and RA Factors Inc.
The Credit Agreement contains various default provisions and affirmative and
negative covenants, including a negative pledge with respect to the Company's
unencumbered assets, and certain financial covenants that require the

                                     25

<PAGE>

Company to meet certain financial ratios and tests. The failure to comply with
such affirmative and negative covenants (including financial covenants), or any
other default under the Credit Agreement, could result in the acceleration of
the Company's obligations under the Credit Agreement.

     The Company may borrow up to $170.0 million (including certain letters of
credit) under the Revolving Credit Facility through September 30, 2003.
Financing costs paid in connection with the Credit Agreement of $3.7 million
were capitalized and will be amortized over the remaining term of the Credit
Agreement.

     Loans under the Credit Agreement generally bear interest, at the Company's
option, at a variable rate equal to either (i) the rate that is the highest of
the administrative agent's prime rate, or certain alternative rates, in each
case plus a margin of up to 1.25% per annum ("ABR Loans"), or (ii) the rate at
which certain Eurodollar deposits are offered in the interbank Eurodollar
market plus a margin of up to 2.25% per annum ("Eurodollar Loans"). The
Company's interest rate margin for the first six months under the Credit
Agreement was set at 1.0% and 2.0% for ABR Loans and Eurodollar Loans,
respectively. As a result of the Company's performance, on October 31, 2000,
the interest rate margin and commitment fees were reduced 0.5% and 0.125%,
respectively. Effective March 28, 2001, the interest rate margin and
commitment fees were increased 0.25% and 0.125%, respectively, as a result of
the consolidated leverage ratio at December 31, 2000. On July 27, 2001 and on
November 14, 2001, the interest rate margin was increased 0.25%, as a result of
the consolidated leverage ratio on June 30, 2001 and September 30, 2001,
respectively. Each quarter the interest rate margin will be subject to
adjustment based upon maintenance of a certain consolidated leverage ratio,
based on EBITDA and total indebtedness, for the four quarters most recently
ended and will range from 0.5% to 1.25% per annum for ABR Loans and from 1.5%
to 2.25% per annum for Eurodollar Loans. Commitment fees of 0.5% are payable
on the average daily unused portion of the Revolving Credit Facility and can be
reduced up to 0.125% based upon the same financial performance measures. The
occurrence of certain changes in control is an event of default under the
Credit Agreement.

     Effective on December 6, 2001, the Company and the requisite lenders under
the Credit Agreement, entered into an amendment (the "Amendment") of the Credit
Agreement. Under the terms of the Amendment, the consolidated leverage ratio
that the Company is required to maintain was amended so that the required
consolidated leverage ratio was changed to 3.35 to 1.00 from 2.75 to 1.00 for
the period from December 31, 2001 through September 29, 2002, and changed to
3.25 to 1.00 from 2.75 to 1.00 for the period from September 30, 2002 through
December 30, 2002. The Company paid financing costs of 0.10% of the aggregate
borrowings or $0.2 million, which were capitalized and will be amortized over
the remaining term of the Credit Agreement. As of December 31, 2001, the
Company was in compliance in all-material respects with the financial covenants
under the Credit Agreement, as amended.

     The Company has refinanced its senior secured debt in the past, and may in
the future seek to refinance its Credit Agreement or the Notes prior to their
respective maturities. Such a refinancing could involve, among other
possibilities, new senior secured debt, new debt securities or a combination
thereof, and could increase the Company's debt levels. The terms of any new
debt, including interest rates and other economic terms, as well as the
financial, operating and other covenants, could differ significantly from the
Company's existing financing arrangements.

     Cash Flows. Net cash provided by operating activities was $50.7 million
     ----------
and $21.8 million for the years ended December 31, 2001 and 2000, respectively.
The increase in cash provided by operating activities is primarily a result of
a decrease in operating assets and liabilities partially offset by a decrease
in earnings and cash contributions of $8.0 million made to the defined benefit
pension plan in 2001. Inventories decreased $15.6 million to $84.0 million in
2001 primarily as a result of managing inventory levels to bring them in line
with sales projections and an unanticipated sales volume increase in firearms
and ammunition products during the fourth quarter. Net accounts receivable
decreased $4.7 million primarily as a result of the Company's ongoing working
capital management program to help maximize cash collections. Net cash used in
investing activities in 2001 and 2000 was $4.2 million and $17.4 million,
respectively, consisting of capital expenditures principally for replacement
equipment related to the manufacture of firearms and ammunition, as well as new
equipment and improvement projects concentrated on enhancing the efficiency of
existing facilities. Net cash used in financing activities in 2001 and 2000
was $35.7 million and $28.0 million, respectively. The increase in cash used in
financing activities

<PAGE>

                                     26

primarily resulted from an increase in net payments under the Revolving Credit
Facility provided under the Credit Agreement. Cash flow from operating
activities for the years ended December 31, 2001, and 2000 was sufficient to
fund the Company's capital expenditure program. The Company expects it will
fund capital expenditures with cash flow from operating activities and the
Revolving Credit Facility in 2002.

     Net cash provided by operating activities was $21.8 million and $64.5
million for the years ended December 31, 2000 and 1999, respectively. The
decrease in cash provided by operating activities is primarily a result of a
decrease in earnings and non-cash items mainly related to the 1999 stock based
compensation expense paired with an increase in working capital. Inventories
increased $28.8 million to $99.6 million in 2000 mainly as a result of an
unanticipated decrease in ammunition sales volumes in the third and fourth
quarters. Net accounts receivable decreased $4.7 million and accounts payable
increased $1.2 million, primarily as a result of the Company's ongoing working
capital management program to help maximize cash from operations. Net cash used
in investing activities in 2000 and 1999 was $17.4 million and $13.0 million,
respectively, consisting of capital expenditures for maintenance of operations,
which extend the useful life of existing equipment and improvement projects
concentrated on enhancing the efficiency of existing facilities. Net cash used
in financing activities in 2000 and 1999 was $28.0 million and $30.1 million,
respectively. The decrease in cash used in financing activities primarily
resulted from an increase in net borrowings under Revolving Credit Facility and
the revolving credit facility provided under the Company's previous senior bank
credit agreement in 2000 of $64.5, offset by cash dividends paid, net of
shareholder loan repayments, of $54.8 million. Cash flow from operating
activities for the years ended December 31, 2000, and 1999 was sufficient to
fund the Company's capital expenditure program. Borrowings under the Revolving
Credit Facility were required to fund cash dividends and financing costs
incurred in connection with the Credit Agreement.

     Working Capital. Working capital decreased to $102.6 million at December
     ---------------
31, 2001 from $115.9 million at December 31, 2000 primarily resulting from a
decrease in inventory, as result of managements efforts to bring inventory
levels in line with sales projections and an unanticipated sales volume
increase in firearms and ammunition products during the fourth quarter,
combined with a decrease in accounts receivable and an increase in the book
overdraft, related to the Company's ongoing working capital management program
to help maximize cash from operations.

     Capital Expenditures. Capital expenditures were $4.2 million, $17.4
     --------------------
million and $13.0 million in 2001, 2000 and 1999, respectively. The capital
expenditures in 2001 were principally for replacement equipment related to the
manufacture of firearms and ammunition, as well as, new equipment and
improvement projects concentrated on enhancing the efficiency of existing
facilities. The Company anticipates that capital expenditures in 2002 will be
approximately $9.7 million, principally for equipment that will improve
production efficiencies and operations. The Company expects to fund capital
expenditures from operational cash flow and the Revolving Credit Facility.

     Financial Instruments. The Company has only limited involvement with
     ---------------------
financial instruments and does not use them for trading purposes. Financial
instruments, which are a type of financial derivative instrument, are used to
manage well-defined interest rate and commodity price risks. The criteria to
qualify for hedge accounting are that the instrument must be related to an
asset, liability, firm commitment or anticipated transaction that is probable
and whose characteristics and terms have been identified. In addition, the
investment must reduce the risks of commodity price movements or change the
character of the interest rate.

     The Company employs various strategies, including call options, zero cost
collars and futures to hedge the price risk related to firm commitments and
anticipated purchases of lead and copper to be used in the manufacturing
process. The Company buys call options for an up front fee for the right to
purchase a specified amount of metal at a pre-determined price and date. On
occasion, zero cost collars are created by selling put options for quantities
and timing identical to the call options, which in effect pay for the call
options. These put options give a third party the right to sell to the Company
a specified amount of metal at a price which is below the call option price on
a pre-determined date. This zero cost collar results in no up front fee and
insures that the Company can purchase a specified amount of metal within a
specified price range on a pre-determined date. Futures are a commitment to
purchase a given amount of metal at an agreed upon price on a future date with
a settlement between the contract price and the market price at the expiration
of the contract. Hedging gains and losses are offset against purchase price
variances on physical purchases of the commodities.

                                     27

<PAGE>

     The amount of premiums paid for commodity contracts outstanding at
December 31, 2001 and 2000 was $0.4 million and $0.7 million, respectively.
There were no call options or premiums paid for commodity contracts outstanding
at December 31, 1999. At December 31, 2001, 2000 and 1999, the market value of
the Company's outstanding contracts relating to firm commitments and
anticipated purchases up to one year from the respective balance sheet date was
$0.2 million, $0.3 million and $1.3 million, respectively. Such market values
have been determined by an independent broker. Net losses of $0.3 and $0.3 on
derivative instruments were reclassified to earnings and recorded in
accumulated other comprehensive income (loss), respectively, during the
year-to-date period ended December 31, 2001. See Note 19 to the Company's
consolidated financial statements for the year ended December 31, 2001
appearing elsewhere in this report.

     The Company was not a party to any interest rate cap, hedging or other
protection arrangements with respect to its variable rate indebtedness as of
December 31, 2001 or December 31, 2000. See Note 19 to the Company's
consolidated financial statements for the year ended December 31, 2001
appearing elsewhere in this report.

     The estimated value of the Company's debt at December 31, 2001 was $111.9
million compared to a carrying value of $114.3 million. The estimated value of
the Company's debt at December 31, 2000 was $137.3 million compared to a
carrying value of $154.6 million. All fixed rate indebtedness was valued based
on current market quotes. All variable rate indebtedness is assumed at market.

     Related Party Transactions. C&D Fund IV, which currently is Holding's
     --------------------------
largest shareholder, is a private investment fund managed by CD&R. Amounts
contributed to C&D Fund IV by its limited partners are invested at the
discretion of the general partner in equity or equity-related securities of
entities formed to effect leveraged buy-out transactions and in the equity of
corporations where the infusion of capital coupled with the provision of
managerial assistance by CD&R can be expected to generate returns on
investments comparable to returns historically achieved in leveraged buy-out
transactions. The general partner of C&D Fund IV is Associates IV. Leon J.
Hendrix, Jr., formerly a principal of CD&R, is a director and has served as
Chairman since December 1997. In November 2000, Mr. Hendrix became an employee
of the Company, retaining the title of Chairman. Joseph L. Rice, III and B.
Charles Ames are principals of CD&R, general partners of Associates IV, and
directors of Remington and Holding. Michael G. Babiarz and Thomas E. Ireland
are principals and stockholders of CD&R and directors of Remington and Holding.
Joseph L. Rice, III is a stockholder of CD&R. Hubbard C. Howe is a director of
Remington and a former principal of CD&R.

     Pursuant to a consulting agreement among Holding, Remington and CD&R, CD&R
receives an annual fee for management and financial consulting services
provided to the Company and reimbursement of out-of-pocket expenses. Such
consulting services include helping the Company to establish effective banking,
legal and other business relationships, and assisting management in developing
and implementing strategies for improving the operational, marketing and
financial performance of the Company. The consulting agreement currently
provides for an annual fee of $0.5 million, which may be adjusted at the
discretion of a majority of the directors of the Company not affiliated with
CD&R, but may not be adjusted downward without CD&R's consent. In addition,
the consulting agreement also provides that if an employee of CD&R is appointed
to an executive management position (or position of comparable responsibility)
in the Company, the annual fee will be increased by an amount to be determined
by CD&R, the amount of such increase not to exceed 100% of the existing annual
fee in effect at that time. However, any increase in the annual fee is subject
to limitations in the Credit Agreement and the Indenture that do not permit the
annual fee to exceed $0.5 million. The Company paid an annual fee of $0.5
million in 2001 and an annual fee of $0.4 million in each of 2000 and 1999.
The consulting agreement also provides that CD&R will perform financial
advisory, investment banking and similar services with respect to proposals for
an acquisition, merger, recapitalization, or any other similar transaction
directly or indirectly involving Holding, Remington and their subsidiaries.
The fee for such services in connection with future transactions would be an
amount equal to 1% of the transaction value for the transaction to which such
fee relates. The amount of the transaction fee may be increased if approved by
a majority of the directors of the Company not affiliated with CD&R.

     The Company paid fees to the law firm of Debevoise & Plimpton during 2001
for legal services rendered. Franci J. Blassberg, Esq., a member of Debevoise &
Plimpton, is married to Joseph L. Rice, III, a director of the

                                     28

<PAGE>

Company and a general partner of Associates IV. Fees and expenses paid to
Debevoise & Plimpton for 2001, 2000 and 1999 were $1.7 million, $2.0 million,
and $1.6 million, respectively.

     CD&R, C&D Fund IV, Holding and the Company have entered into an
indemnification agreement, pursuant to which Holding and the Company have
agreed to indemnify CD&R, C&D Fund IV, Associates IV and their respective
directors, officers, partners, employees, agents and controlling persons
against certain liabilities arising under the federal securities laws, other
laws regulating the business of the Company and certain other claims and
liabilities.

     C&D Fund IV currently owns 98.0% of the outstanding Common Stock. C&D
Fund IV and Holding have entered into a registration rights agreement that,
among other things, provides C&D Fund IV and will provide certain other Holding
equity holders with certain registration rights with respect to their Common
Stock.

Product Liability

     For information concerning product liability cases and claims involving
the Company, see "Legal Proceedings." Because the Company's assumption of
financial responsibility for certain product liability cases and claims
involving pre-Acquisition occurrences was limited to an amount that has now
been fully paid, with the Sellers retaining liability in excess of that amount
and indemnifying the Company in respect thereof, the Company believes that
product liability cases and claims involving occurrences arising prior to the
Acquisition are not likely to have a material adverse effect upon the financial
condition or results of operations of the Company. While it is difficult to
forecast the outcome of litigation, the Company does not believe, in light of
relevant circumstances (including the current availability of insurance for
personal injury and property damage with respect to cases and claims involving
occurrences arising after the Acquisition, the Company's accruals for the
uninsured costs of such cases and claims and the Seller's agreement to be
responsible for certain post-Acquisition shotgun-related product liability
costs, as well as the type of firearms products made by the Company), that the
outcome of all pending product liability cases and claims will be likely to
have a material adverse effect upon the financial condition or results of
operations of the Company. However, in part because of the uncertainty as to
the nature and extent of manufacturer liability for personal injury due to
alleged product defects, especially as to firearms, there can be no assurance
that the Company's resources will be adequate to cover future product liability
occurrences, cases or claims, in the aggregate, or that such a material adverse
effect will not result there from. Because of the nature of its products, the
Company anticipates that it will continue to be involved in product liability
cases and claims in the future.

     Since December 1, 1993 the Company has maintained insurance coverage for
product liability claims for personal injury or property damage relating to
occurrences after the Acquisition, subject to certain self-insured retentions
both on a per-occurrence basis and in the aggregate. The current insurance
policy extends through November 30, 2002. Certain of the Company's post
December 2001 insurance coverage expressly does not apply to actions brought by
municipalities as described in "Legal Proceedings." Based on actual defense
and disposition costs incurred by the Company and Sporting Goods with respect
to product liability cases and claims in recent years, management estimates
that the Company's liability for product liability cases and claims outstanding
at December 31, 2001 is $10.5 million. This amount is based upon ranges
developed by independent advisors. Management estimates that the amount of the
self-insured retention accrued each year will be paid out over the following
three to five years. The Company charged $2.1 million, $2.6 million and $1.8
million of payments for product liabilities (including pre-Acquisition
occurrences for which the Company assumed responsibility) in the years ended
December 31, 2001, 2000 and 1999, respectively, against the amounts previously
accrued.

Statement of Financial Accounting Standards Not Yet Adopted

     On June 29, 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets, which are
required to be adopted by the Company as of January 1, 2002. Statement No. 142
requires that goodwill and other intangible assets with indefinite lives
acquired in a business combination before July 1, 2001 not be amortized.
Intangibles amortization expense is currently recorded in other expense, net.
The Statement further requires that the fair value of goodwill and other
intangible assets with indefinite lives be tested for impairment upon adoption
of the standard and annually thereafter or upon an occurrence of certain
events.

                                     29

<PAGE>

     The Company adopted the new rules of SFAS 142 as of January 1, 2002.
Application of the non-amortization provisions of SFAS No. 142 is expected to
result in an increase of operating income of approximately $2.4 million and net
income of $1.5 million in fiscal 2002. Under the transitional provisions of
SFAS No. 142, the Company identified its reporting units and performed
impairment tests on the goodwill associated with each of the reporting units.
The Company recorded an impairment loss associated with its Accessories and
Powder Metal Products reporting units of $1.0 million and $1.3 million,
respectively. The impairment loss of $1.4 million, net of tax, or $1.73 per
diluted share, will be recorded as a cumulative effect of change in accounting
principle in the 2002 financial statements.

     On October 4, 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which addresses the financial
accounting and reporting for impairment of long-lived assets to be disposed of.
The Company adopted the new rules of SFAS No. 144 as of January 1, 2002 and
upon implementation there was no effect on the financial condition of the
Company.

     The Emerging Issues Task Force ("EITF") revised Issue 01-9 during 2001
with the purpose to codify the issues concerning the accounting for
consideration given by a vendor to a customer. The issue reconciles certain
provisions of EITF 00-14 "Accounting for Certain Sales Incentives," EITF 00-22,
"Accounting for "Points" and Certain Other Time-Based or Volume-Based Sales
Incentive Offers, and Offers for Free Products or Services to be Delivered in
the Future" and Issue No. 00-25, "Vendor Income Statement Characterizations of
Consideration Paid to a Reseller of the Vendor's Product". Upon adoption in
2002, there was no significant impact on the financial condition of the
Company.

Information Concerning Forward-Looking Statements

     The statements contained in this report (other than the Company's
consolidated financial statements and other statements of historical fact) are
forward-looking statements, including, without limitation, (i) the statement in
"Business--Hunting/Shooting Sports" that the Company believes the markets for
hunting-related products such as shotguns, rifles and ammunition will generally
remain relatively flat at least in the near future; (ii) the statement in
"Business--Hunting/Shooting Sports" that the Company believes that the number
of private hunting facilities is increasing, as is the availability of
alternatives to traditional hunting activities, and that these trends may
offset increasing restriction on access and land use; (iii) the statement in
"Business--Hunting/Shooting Sports" that the Company believes that hunting
safety issues may affect sales of firearms, ammunition and other
shooting-related products; (iv) the statement in "Business--Hunting/Shooting
sports" that the Company believes that the current trend, or the consumer
perception thereof, toward firearms regulatory proposals and municipal handgun
litigation could adversely affect the firearms and ammunition market; (v) the
statement in "Business--Hunting/Shooting Sports" that the Company believes it
has a good relationship with its vendors and does not currently anticipate
material shortages or disruptions in supply from these vendors; (vi) the
statement in "Business--Hunting /Shooting Sports" that the Company believes it
has a good relationship with its stamped parts supplier and does not currently
anticipate any material shortages or disruption in supply of these stamped
parts; (vii) the statement in "Business--Environmental Matters" concerning the
Company's belief that current environmental regulations or the outcome of any
governmental proceedings and orders pertaining to environmental compliance will
not have a material adverse effect on its business; (viii) the statement in
"Business--Environmental Matters" that the Company believes its costs to
resolve the matter would not be significant if it were found to be a
potentially responsible party in connection with the Superfund site in Kansas;
(ix) other statements as to management's or the Company's expectations and
beliefs presented in "Business;" (x) the statement in "--Liquidity and Capital
Resources--Capital Expenditures" that the Company anticipates year 2002 capital
expenditures of $9.7 million for equipment that will improve production
efficiencies and operations which it expects to fund primarily from operational
cash flow and borrowings under the Revolving Credit Facility; (xi) the
statements in "--Liquidity and Capital Resources--Liquidity" concerning the
Company's belief that it will be able to meet its debt service obligations and
fund its operating requirements with cash flow from operations and revolving
credit borrowings prior to the maturity of the Revolving Credit Facility and;
(xii) the statement in "--Liquidity and Capital Resources--Notes" that, from
time to time, the Company may continue to repurchase additional amounts of the
Notes on the open market, subject to the limitations in the Credit Agreement
and the Indenture; (xiii) the statement in "--Liquidity and Capital Resources--
Capital Expenditures" that the Company expects to fund capital expenditures
from operational cash flow and the Revolving Credit Facility; (xiv) the
statements in "--Product Liability" concerning (a) the Company's belief that
product liability cases and claims involving occurrences arising prior to the
Acquisition are not likely to have a material adverse effect upon the

                                     30

<PAGE>

financial condition or results or operations of the Company, (b) the Company's
belief that the outcome of all pending product liability cases and claims will
not have a material adverse effect upon the financial condition or result of
operations of the Company and (c) management's estimates concerning the
Company's liability for product liability cases and claims relating to
occurrences arising during 2001, 2000 and 1999 and the time period during which
the amount of the Company's self insured retention will be paid out; (xv) the
statement in "Quantitative and Qualitative Disclosures About Market Risk" that
the Company believes that a near-term change in commodity prices will not
materially impact the consolidated financial position, results of operations,
future earnings, fair value or cash flows of the Company; (xvi) other
statements as to management's or the Company's expectations and beliefs
presented in this "Management's Discussion and Analysis of Financial Condition
and Results of Operations;" (xvii) the statements in "Legal Proceedings"
concerning (a) the Company's belief that its current product liability
insurance coverage for personal injury and property damage is adequate for its
needs, (b) the Company's belief that although it anticipates that it will
continue to be involved in product liability cases and claims in the future,
the outcome of all pending product liability cases and claims will not be
likely to have a material adverse effect upon the financial conditions or
results of operations of the Company and (c) the Company's anticipation that
it, as well as other manufacturers of firearm or ammunition products, will
continue to be involved in product liability cases and claims in the future and
(xviii) other statements as to management's or the Company's expectations and
beliefs presented in "Legal Proceedings."

     Forward-looking statements are made based upon management's current
expectations and beliefs concerning future developments and their potential
effects upon the Company.  There can be no assurance that future developments
will be in accordance with management's expectations or that the effect of
future developments on the Company will be those anticipated by management.
The following important factors, and those important factors described
elsewhere in this report (including, without limitation, those discussed in
"Business--Hunting/Shooting Sports," "--Marketing and Distribution," "--Patents
and Trademarks" and "--Environmental Matters" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Overview,"
"--Taxes," "--Liquidity and Capital Resources," "--Product Liability," and
"Legal Proceedings"), or in other Securities and Exchange Commission filings of
the Company, could affect (and in some cases have affected) the Company's
actual results and could cause such results to differ materially from estimates
or expectations reflected in such forward-looking statements.

..    The Company's ability to make scheduled payments of principal or interest
     on, or to refinance its obligations with respect to its indebtedness and to
     comply with the covenants and restrictions contained in the instruments
     governing such indebtedness will depend on its future operating performance
     and cash flow, which are subject to prevailing economic conditions,
     prevailing interest rate levels, and financial, competitive, business and
     other factors beyond its control including the responses of competitors,
     changes in customer inventory management practices, changes in customer
     buying patterns, regulatory developments and increased operating costs.

..    The degree to which the Company is leveraged could have important
     consequences to the holders of the Notes, including the following: (i) the
     Company's ability to obtain additional financing for working capital or
     other purposes in the future may be limited; (ii) a substantial portion of
     the Company's cash flow from operations will be dedicated to the payment of
     principal and interest on its indebtedness, thereby reducing funds
     available for operations; (iii) certain of the Company's borrowings will be
     at variable rates of interest, which could cause the Company to be
     vulnerable to increases in interest rates and (iv) the Company may be more
     vulnerable to economic downturns and be limited in its ability to withstand
     competitive pressures.

..    The Company's ability to meet its debt service and other obligations will
     depend in significant part on customers purchasing the Company's products
     during the fall hunting season. Notwithstanding the Company's cost
     containment initiatives and continuing management of costs, a decrease in
     demand during the fall hunting season for the Company's higher priced,
     higher margin products would require the Company to further reduce costs or
     increase its reliance on borrowings under the Revolving Credit Facility to
     fund operations. No assurance can be given that the Company would be able
     to reduce costs or increase its borrowings sufficiently to adjust to such a
     reduction in demand.

..    Because of the nature of its products, the Company anticipates that it will
     continue to be involved in product liability litigation in the future. The
     Company's ability to meet its product liability obligations will depend

                                     31

<PAGE>

     (among other things) upon the availability of insurance, the adequacy of
     Company accruals, the Seller's ability to satisfy their obligations to
     indemnify the Company against certain product liability cases and claims
     and Seller's agreement to be responsible for certain post-Acquisition
     shotgun related costs.

..    The Company faces significant competition. The Company's competitors vary
     according to product line. Certain of these competitors are subsidiaries of
     large corporations with substantially greater financial resources than the
     Company. There can be no assurance that the Company will continue to
     compete effectively with all of its present competition, and the Company's
     ability to so compete could be adversely affected by its leveraged
     condition.

..    Sales made to Wal-Mart Stores, Inc. ("Wal-Mart") accounted for
     approximately 19% of the Company's total net revenues in 2001 and 19% of
     the accounts receivable balance. The Company's sales to Wal-Mart are not
     governed by a written contract between the parties. In the event that
     Wal-Mart were to significantly reduce or terminate its purchases of
     firearms and/or ammunition from the Company, the Company's financial
     condition or results of operations could be adversely affected.

..    The Company utilizes numerous raw materials, including steel, lead, brass,
     plastics and wood, as well as manufactured parts, which are purchased from
     one or a few suppliers. In addition, the Company purchases a significant
     amount of the fishline it requires for its product lines from DuPont under
     a supply agreement that was renewed in January 1997 with subsequent
     addendums, and is annually automatically renewed until notice by either
     party. Any disruption in the Company's relationship with these suppliers
     could increase the cost of operations.

..    The purchase of firearms is subject to federal, state and local
     governmental regulation. Regulatory proposals, even if never enacted, may
     affect firearms or ammunition sales as a result of consumer perceptions.
     While the Company does not believe that existing federal and state
     legislation relating to the regulation of firearms and ammunition has had a
     material adverse effect on its sales from 1999 through 2001, no assurance
     can be given that more restrictive regulations, if proposed or enacted,
     will not have a material adverse effect on the Company in the future.

..    As a manufacturer of firearms, the Company has been named as a defendant in
     certain lawsuits brought by municipalities or organizations challenging
     manufacturers' distribution practices and alleging that the defendants have
     also failed to include a variety of safety devices in their firearms. The
     Company's insurance coverage regarding such claims may be limited. In the
     event that additional such lawsuits were filed, or if certain legal
     theories advanced by plaintiffs were to be generally accepted by the
     courts, the Company, its financial condition and results of operations
     could be adversely affected.

       While the Company periodically reassesses material trends and
uncertainties affecting the operations and financial condition in connection
with its preparation of Management's Discussion and Analysis of Financial
Condition and Results of Operations contained in its quarterly and annual
reports, the Company does not intend to review or revise any particular
forward-looking statement referenced in this report in light of future events.

Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

       Certain of the Company's financial instruments are subject to market
risks,including interest rate risk. The Company uses commodity futures contracts
to hedge against the risk of increased prices for lead and copper to be used in
the manufacture of the Company's products. At December 31, 2001, the market
value of the Company's outstanding contracts relating to firm commitments and
anticipated purchases up to one year from the respective balance sheet date was
$0.2 million. The Company believes that a near-term change in commodity prices
will not materially impact the consolidated financial position, results of
operations, future earnings, fair value or cash flows of the Company. The
Company was not a party to any interest rate cap or other protection
arrangements with respect to its variable rate indebtedness as of December 31,
2001. Additionally, the Company believes it does not have a material exposure to
fluctuations in foreign currencies. The Company does not hold or issue financial
instruments for trading purposes. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources--Financial Instruments," Note 19 to the Company's consolidated
financial statements for the year ended December 31, 2001 appearing elsewhere in
this report.

                                     32

<PAGE>

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT ACCOUNTANTS

To The Board of Directors and Shareholders of RACI Holding, Inc.

In our opinion, the accompanying consolidated financial statements listed in
the index appearing under Item 14. (a) (1) on page 77 present fairly, in all
material respects, the financial position of RACI Holding, Inc. and
subsidiaries (the "Company") at 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 of America. In addition, in our
opinion, the financial statement schedule listed in the index appearing under
Item 14. (a)(2) on page 77 presents fairly, in all material respects the
information set forth therein when read in conjunction with the consolidated
financial statements. These financial statements and financial statement
schedule are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits. We conducted our audits of
these statements in accordance with auditing standards generally accepted in
the United States of America, which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

/s/ PricewaterhouseCoopers.

Greensboro, North Carolina
February 20, 2002, except as to the second paragraph of Note 15 to the
accompanying financial statements for which the date is March 4, 2002

                                     33

<PAGE>

                     RACI Holding, Inc. and Subsidiaries
                         Consolidated Balance Sheets
                (Dollars in Millions, Except Per Share Data)

<TABLE>
<CAPTION>
                                                               December 31,     December 31,
                                                                 2001              2000
                                                               -------------    -------------
<S>                                                            <C>               <C>
ASSETS
------
Current Assets
--------------
Cash and Cash Equivalents                                      $       13.5      $       2.7
Accounts Receivable Trade - net of allowances
   of $5.1 and $5.6, respectively                                      45.5             50.2
Inventories                                                            84.0             99.6
Supplies                                                               12.0             12.1
Prepaid Expenses and Other Current Assets                               2.0              7.7
Deferred Income Taxes                                                  11.8             10.1
                                                               ------------      -----------
 Total Current Assets                                                 168.8            182.4

Property, Plant and Equipment - net                                    81.0             91.5
Intangibles and Debt Issuance Costs - net                              79.9             83.8
Deferred Income Taxes                                                   1.0              3.2
Other Noncurrent Assets                                                 1.4              1.0
                                                               ------------      -----------
    Total Assets                                               $      332.1      $     361.9
                                                               ============      ===========

LIABILITIES, REDEEMABLE SHARES AND SHAREHOLDERS' EQUITY
-------------------------------------------------------
Current Liabilities
-------------------
Accounts Payable                                               $       21.2      $      24.9
Book Overdraft                                                          7.8              1.2
Short-Term Debt                                                          -               1.4
Current Portion of Long-Term Debt                                       1.1              1.3
Product and Environmental Liabilities                                   2.2              2.1
Income Taxes                                                            1.9              0.3
Other Accrued Liabilities                                              32.0             35.3
                                                               ------------      -----------
    Total Current Liabilities                                          66.2             66.5

Long-Term Debt                                                        113.2            153.3
Retiree Benefits                                                       32.8             34.7
Product and Environmental Liabilities                                   8.3              9.4
Other Long-Term Liabilities                                             0.2               -
                                                               ------------      -----------
    Total Liabilities                                                 220.7            263.9

Redeemable Deferred Shares of Class A Common Stock, par
   value $.01; 24,191 and 25,718 issued at December 31, 2001
   and December 31, 2000, respectively                                  5.0              5.3
Redeemable Shares of Class A Common Stock, par
   value $.01; 6,198 and 5,082 issued at December 31, 2001
   and December 31, 2000, respectively                                  1.2              1.0

Commitments and Contingencies

Shareholders' Equity
--------------------
Class A Common Stock, par value $.01; 1,250,000 shares
   authorized, 763,050 issued and outstanding at
   December 31, 2001 and December 31, 2000                              -                 -
Class B Common Stock, par value $.01; 1,250,000 shares
   authorized, none issued and outstanding                              -                 -
Paid in Capital                                                        76.6             76.6
Accumulated Other Comprehensive Loss                                   (0.2)              -
Retained Earnings                                                      28.8             15.1
                                                               ------------      -----------
    Total Shareholders' Equity                                        105.2             91.7
                                                               ------------      -----------
Total Liabilities, Redeemable Shares and Shareholders' Equity  $      332.1      $     361.9
                                                               ============      ===========
</TABLE>

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

                                     34

<PAGE>

                     RACI Holding, Inc. and Subsidiaries
                    Consolidated Statements of Operations
                 (Dollars in Millions, Except Per Share Data)

                                                     Year Ended December 31,
                                              ---------------------------------
                                                 2001       2000         1999
                                              ---------   ---------   ---------
Sales                                         $   383.1   $   388.7   $   403.1

Cost of Goods Sold                                273.3       255.9       273.2
                                              ---------   ---------   ---------

   Gross Profit                                   109.8       132.8       129.9

Selling, General and Administrative
   Expenses                                        63.3        68.3        64.9

Research & Development Expenses                     5.9         6.4         6.7

Other Expenses, net                                 3.1        10.1         6.5
                                              ---------   ---------   ---------

   Operating Profit                                37.5        48.0        51.8

Interest Expense                                   15.3        15.6        14.1
                                              ---------   ---------   ---------

   Profit before Income Taxes                      22.2        32.4        37.7

Provision for Income Taxes                          8.5        12.5        14.7
                                              ---------   ---------   ---------

   Net Income                                 $    13.7   $    19.9   $    23.0
                                              =========   =========   =========

Per Share Data:

Basic Income Per Share                        $   17.25   $   25.10   $   29.68
                                              =========   =========   =========
Diluted Income Per Share                      $   16.90   $   24.49   $   28.89
                                              =========   =========   =========

Dividend per Common and Redeemable Share      $       -   $   71.93   $       -
                                              =========   =========   =========

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

                                     35

<PAGE>

                     RACI Holding, Inc. and Subsidiaries
                    Consolidated Statements of Cash Flows
                           (Dollars in Millions)

<TABLE>
<CAPTION>
                                                               Year Ended December 31,
                                                        -------------------------------------
                                                           2001        2000           1999
                                                        ---------    ----------    ----------
<S>                                                     <C>          <C>           <C>
Operating Activities
--------------------
Net Income                                              $    13.7    $     19.9    $     23.0
Adjustments to reconcile Net Income to Net Cash
provided by Operating Activities:
   Depreciation                                              14.5          14.0          13.6
   Amortization                                               4.1           4.4           4.2
   Loss on disposal of Property, Plant and Equipment          0.4           0.5           0.6
   Provision for Retiree Benefits                            (3.0)          4.5           0.9
   Provision for Deferred Income Taxes                        0.5           0.1           3.9
   Stock Based Compensation Expense                             -             -           4.2
   Changes in Operating Assets and Liabilities:
    Accounts Receivable Trade - Net                           4.7           4.7           6.5
    Inventories                                              15.6         (28.8)          0.9
    Supplies                                                  0.1          (1.5)            -
    Prepaid Expenses and Other Current Assets                 5.5           0.1           1.8
    Other Noncurrent Assets                                  (0.4)            -           1.4
    Accounts Payable                                         (3.3)          1.2           1.7
    Product and Environmental Liabilities                    (1.0)         (1.0)            -
    Income Taxes Payable                                      1.6          (0.1)          0.4
    Deferred Stock Payable                                   (0.3)         (0.1)            -
    Other Accrued and Long-Term Liabilities                  (2.0)          3.9           1.4
                                                        ---------    ----------    ----------
Net Cash provided by Operating Activities                    50.7          21.8          64.5
                                                        ---------    ----------    ----------

Investing Activities
--------------------
Purchase of Property, Plant and Equipment                    (4.2)        (17.4)        (13.0)
                                                        ---------    ----------    ----------
   Net Cash used in Investing Activities                     (4.2)        (17.4)        (13.0)
                                                        ---------    ----------    ----------

Financing Activities
--------------------
Proceeds from Revolving Credit Facility                     168.2         380.4         158.6
Principal Payments on Revolving Credit Facility            (207.7)       (315.9)       (158.6)
Cash Dividends Paid                                            -          (54.8)            -
Book Overdraft                                                6.6          (5.2)          0.2
Principal Payments on Long-Term Debt                         (1.4)        (29.2)        (24.8)
Repurchase of Senior Subordinated Notes                         -             -          (6.3)
Proceeds from Short-Term Debt                                   -           1.9           1.8
Principal Payments on Short-Term Debt                        (1.4)         (1.5)         (1.7)
Debt Issuance Costs                                          (0.2)         (3.7)           -
Proceeds from Issuance of Common Stock and
   Redeemable Common Stock                                    0.2             -           0.7
                                                        ---------    ----------    ----------
   Net Cash used in Financing Activities                    (35.7)        (28.0)        (30.1)
                                                        ---------    ----------    ----------

Increase (Decrease) in Cash and Cash Equivalents             10.8         (23.6)         21.4
Cash and Cash Equivalents at beginning of period              2.7          26.3           4.9
                                                        ---------    ----------    ----------
Cash and Cash Equivalents at end of period              $    13.5    $      2.7    $     26.3
                                                        =========    ==========    ==========
Supplemental Cash Flow Information:
   Cash Paid During the Year for:
    Interest                                            $    14.1    $     13.2    $     13.0
    Income Taxes                                        $     7.4    $     13.7    $      9.7
   Noncash Activities:
    Capital Lease Obligations Incurred                  $     1.9    $      0.8    $      2.7
</TABLE>

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

                                     36

<PAGE>

                       RACI Holding, Inc. and Subsidiaries
     Consolidated Statement of Shareholders' Equity and Comprehensive Income
                              (Dollars in Millions)

<TABLE>
<CAPTION>
                                                                               Accumulated
                                                                                  Other                                Total
                                                 Paid-in        Due from      Comprehensive        Retained         Shareholders'
                                                 Capital      Shareholders        Loss              Earnings           Equity
                                                ----------    ------------    -------------        ----------       -------------
<S>                                             <C>            <C>             <C>                 <C>               <C>
Balance, December 31, 1998                      $     76.0             -                -          $     27.5        $     103.5
                                                ----------     ----------      -----------         ----------        -----------

     Comprehensive Income:
      Net Income                                         -              -                -               23.0               23.0
      Other comprehensive loss:
       Minimum Pension Liability Adjustment              -              -             (0.4)                 -               (0.4)
                                                ----------     ----------      -----------         ----------        -----------
     Total Comprehensive Income                          -              -             (0.4)              23.0               22.6
                                                ----------     ----------      -----------         ----------        -----------

     Issuance of 1,800 shares of Common
      Stock under the 1994 Directors'
      Stock Plan                                       0.4              -                -                  -                0.4

     Issuance of 1,250 shares of Common
      Stock under the 1999 Stock
      Incentive Plan                                   0.2           (0.5)               -                  -               (0.3)
                                                ----------     ----------      -----------         ----------        -----------

Balance, December 31, 1999                            76.6           (0.5)            (0.4)              50.5              126.2

                                                ----------     ----------      -----------         ----------        -----------
     Comprehensive Income:
      Net Income                                         -              -                -               19.9               19.9
      Other comprehensive income:
       Minimum Pension Liability Adjustment              -              -              0.4                  -                0.4
                                                ----------     ----------      -----------         ----------        -----------
     Total Comprehensive Income                          -              -              0.4               19.9               20.3
                                                ----------     ----------      -----------         ----------        -----------

     Repayment of Loans issued
      under the 1999 Stock Incentive Plan                -            0.5                -                  -                0.5

     Cash Dividends Paid                                 -              -                -              (55.3)             (55.3)
                                                ----------     ----------      -----------         ----------        -----------

Balance, December 31, 2000                            76.6              -                -               15.1               91.7
                                                ----------     ----------      -----------         ----------        -----------

     Comprehensive Income:
      Net Income                                         -              -                -               13.7               13.7
      Other comprehensive income:
       Cumulative effect adjustment of
         SFAS 133 adoption, net of tax
         effect of $0.1                                  -              -             (0.2)                 -               (0.2)
       Net derivative losses, net of tax
         effect of $0.2                                  -              -             (0.3)                 -               (0.3)
       Net derivative losses, relassified
         as earnings                                     -              -              0.3                  -                0.3
                                                ----------     ----------      -----------         ----------        -----------
     Total Comprehensive Income                          -              -             (0.2)              13.7               13.5
                                                ----------     ----------      -----------         ----------        -----------

Balance, December 31, 2001                      $     76.6     $        -      $      (0.2)        $     28.8        $     105.2
                                                ==========     ==========      ===========         ==========        ===========
</TABLE>

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

                                     37

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

Note 1 - Basis of Presentation
------------------------------

     The accompanying consolidated financial statements of RACI Holding, Inc.
("Holding") include the accounts of its subsidiary, Remington Arms Company, Inc.
("Remington") and Remington's wholly owned subsidiaries, Remington
International, Ltd., RA Brands, L.L.C. and RA Factors, Inc. (together with
Remington and Holding, the "Company"). Holding has no material assets other than
its investment in Remington. All intercompany accounts and transactions have
been eliminated in consolidation. Effective January 1, 2002, Remington
established an additional wholly owned subsidiary, RBC Holdings, Inc., a direct
subsidiary of Remington which owns the 1% of RA Brands, L.L.C. not directly held
by Remington. RA Brands, L.L.C., RA Factors, Inc., and RBC Holdings, Inc. were
established for Federal and State tax planning purposes.

     Certain reclassifications were made to the prior year's financial
information to conform with the current presentation format. The
reclassifications did not have a significant impact on the previously reported
financial condition, or results of operations

Note 2 - Description of the Business
------------------------------------

     The Company is engaged in the design, manufacture and sale of sporting
goods products for the hunting/shooting sports and related markets. The
Company's product lines consist of firearms, ammunition, and hunting/gun care
accessories, sold under the Remington name and other labels, fishing products
sold under the Stren and Remington names and other labels and clay targets.

Note 3 - Summary of Significant Accounting Policies
---------------------------------------------------

Cash and Cash Equivalents:
--------------------------

     Cash and cash equivalents include demand deposits with banks and highly
liquid investments with remaining maturities, when purchased, of three months
or less.

Inventories:
------------

     Inventories are stated at the lower of cost or market. The cost of
inventories is determined by the first-in, first-out ("FIFO") method

Supplies:
---------

     The cost of supplies is determined by the average cost method.

Service and Warranty
--------------------

     The Company supports service and repair facilities for all of its firearm
products in order to meet the service needs of its distributors, customers and
consumers nationwide. The Company provides consumer warranties against
manufacturing defects in all firearm products it sells in North America.
Estimated future warranty costs are accrued at the time of sale. Product
modifications or corrections are voluntary steps taken by the Company to assure
proper usage or performance of a product by consumers. The cost associated with
product modifications and or corrections is recognized in accordance with
Statement of Financial Accounting Standard No. 5, Accounting for Contingencies,
and charged to operations

Property, Plant and Equipment:
------------------------------

     Property, plant and equipment are stated at cost. Depreciation is
determined on a straight-line basis over the estimated lives of the assets. The
estimated useful lives are principally 20 to 40 years for buildings and
improvements, and 5 to 15 years for machinery and equipment. Management assesses
property, plant and equipment for impairment whenever facts and circumstances
indicate that the carrying amount may not be fully recoverable. To analyze

                                     38

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

recoverability, management projects undiscounted future cash flows over the
remaining life of the asset. If these projected cash flows are less than the
carrying amount of the asset, an impairment loss would be recognized, resulting
in a write down of property, plant and equipment with a corresponding charge to
income. The impairment loss would be measured based upon the difference between
the carrying amount of the asset and the present value of future cash flows.
The Company uses a discount rate equal to its average cost of funds to discount
the expected future cash flows.

     Maintenance and repairs are charged to operations; replacements and
betterments are capitalized. Computer hardware and software costs under capital
leases are amortized over the term of the lease. The cost and related
accumulated depreciation applicable to assets sold or retired are removed from
the accounts and the gain or loss on disposition is recognized in income.

     Interest is capitalized in connection with the construction of major
facilities. The capitalized interest is recorded as part of the asset to which
it relates and is amortized over the asset's useful life. Approximately $0.1
million and $0.5 million of interest was capitalized in 2001 and 2000,
respectively. No interest cost was capitalized in 1999.

Intangibles and Debt Issuance Costs:
------------------------------------

     Prior to January 1, 2002, intangibles, consisting primarily of goodwill,
trade names and trademarks were amortized on a straight-line basis over their
estimated useful lives of 40 years. Management assesses goodwill for impairment
whenever facts and circumstances indicate that the carrying amount may not be
fully recoverable. To analyze recoverability, management projects undiscounted
future cash flows over the remaining life of the goodwill. If these projected
cash flows are less than the carrying amount of the goodwill, an impairment
loss would be recognized, resulting in a write-down of goodwill with a
corresponding charge to income. The impairment loss would be measured based
upon the difference between the carrying amount of the goodwill and the present
value of future cash flows. The Company uses a discount rate equal to its
average cost of funds to discount the expected future cash flows. See
"Statement of Financial Accounting Standards Not Yet Adopted," for change in
accounting principles for intangibles. Debt issuance costs are being amortized
over the life of the related debt.

Financial Instruments:
----------------------

     The Company does not use financial instruments for trading purposes.
Financial instruments, which are a type of financial derivative instrument, are
used to manage well-defined commodity price and interest rate risks and are
considered hedges when certain criteria are met.

     Gains and losses on commodity futures contracts qualifying as hedges are
recorded in comprehensive income and recognized in the income statement as a
component of the cost of the related inventory when the inventory is sold.
Market values of financial instruments were estimated based on quoted market
prices, where available, or on current rates offered to the Company for debt
with similar terms and maturities. Unless otherwise disclosed, the fair value
of financial instruments approximates their recorded values.

Income Taxes:
-------------

     Deferred tax assets and liabilities are based on the difference between
the financial reporting and tax bases of assets and liabilities, applying tax
rates applicable to the year in which the differences are expected to reverse.
A valuation allowance is recorded when it is more likely than not that the
deferred tax asset will not be realized.

Product Liability:
------------------

     The Company provides for estimated defense and settlement costs related to
product liabilities when it becomes probable that a liability has been incurred
and reasonable estimates of such costs are available. The Company maintains
insurance coverage for product liability claims, subject to certain policy
limits and to certain self-insured retentions for personal injury or property
damage relating to occurrences arising after December 1, 1993. The current
insurance policy extends through November 30, 2002. Product liabilities are not
recorded net of recoveries that are probable of realization. For the years
ended, December 31, 2001, 2000 and 1999, no recoveries have been recorded.

                                     39

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

The Company's estimate of its liability for product liability cases and claims
outstanding at December 31, 2001 and 2000 (as determined by independent
advisors) is $10.5 million and $11.5 million, respectively and the Company
charged in 2001 and 2000 $2.1 million and $2.6 million, respectively, of
payments for product liabilities (including pre-Acquisition occurrences for
which the Company assumed responsibility) for the year ended December 31, 2001
against the amounts previously accrued.

Revenue Recognition:
--------------------

     Sales, net of an estimate for discounts, returns and allowances, and
related cost of sales are recorded in income when goods are shipped at which
time risk of loss and title transfers to the customer. Sales are presented net
of Federal Excise Taxes of $32.8 million, $33.2 million and $33.8 million for
the years ended December 31, 2001, 2000 and 1999, respectively.

     The Company follows the industry practice of selling firearms pursuant to a
"dating" plan allowing the customer to purchase these products commencing in
December (the start of the Company's dating plan year) and to pay for them on
extended terms. Discounts are offered for early payment under this plan. The
Company believes that allowing extended payment terms for early orders helps to
level out the demand for these otherwise seasonal products throughout the year.
Historically, use of the dating plan has had the effect of shifting some
firearms sales from the second and third quarters to the first quarter. The
Company believes that the dating plan helps facilitate a more efficient
manufacturing schedule. As a competitive measure, the Company also offers
extended terms on select ammunition purchases. Use of the dating plans, however,
also results in significant deferral of collection of accounts receivable until
the latter part of the year. Customers do not have the right to return unsold
product.

Shipping and Handling Costs:
----------------------------

     Shipping and handling costs included in Selling, General and Administrative
expense are expensed as incurred. In 2001, 2000 and 1999 shipping and handling
costs totaled $11.7 million, $10.5 million and $10.6 million, respectively.

Advertising and Promotional Costs:
----------------------------------

     Advertising and promotional costs including print ads, commercials,
catalogs, brochures and co-op are expensed as incurred. In 2001, 2000 and 1999
advertising and promotional costs totaled $13.5 million, $12.5 million and $14.8
million, respectively.

Self-Insurance:
---------------

     The Company is self-insured for elements of its employee benefit plans
including, among others, medical, workers' compensation and elements of its
property and liability insurance programs, but limits its liability through
stop-loss insurance and annual plan maximum coverage limits. Self-insurance
liabilities are based on claims filed and estimates for claims incurred but not
yet reported.

Pension and Postretirement:
---------------------------

     Unrecognized prior service costs are amortized over the estimated
remaining service lives of employees. The unrecognized net gain or loss
resulting from changes in the amount of either the projected benefit obligation
or plan assets from experience different from that assumed are amortized over
five years.

Use of Estimates:
-----------------

     The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the 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. Actual results could differ from those estimates.

                                     40

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

Statement of Financial Accounting Standard Not Yet Adopted
----------------------------------------------------------

     On June 29, 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets, which are
required to be adopted by the Company as of January 1, 2002. Statement No. 142
requires that goodwill and other intangible assets with indefinite lives
acquired in a business combination before July 1, 2001 not be amortized.
Intangibles amortization expense is currently recorded in other expense, net.
The Statement further requires that the fair value of goodwill and other
intangible assets with indefinite lives be tested for impairment upon adoption
of the standard and annually thereafter or upon an occurrence of certain events.

     The Company adopted the new rules of SFAS 142 as of January 1, 2002.
Application of the non-amortization provisions of SFAS No. 142 is expected to
result in an increase in operating income of approximately $2.4 million and net
income of $1.5 million in fiscal 2002. Under the transitional provisions of
SFAS No. 142, the Company identified its reporting units and performed
impairment tests on the goodwill associated with each of the reporting units.
The Company recorded an impairment loss associated with its Accessories and
Powder Metal Products reporting units of $1.0 million and $1.3 million,
respectively. The impairment loss of $1.4 million, net of tax, or $1.73 per
diluted share, will be recorded as a cumulative effect of change in accounting
principle in the 2002 financial statements.

     On October 4, 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which addresses the financial
accounting and reporting for impairment of long-lived assets to be disposed of.
The Company adopted the new rules of SFAS No. 144 as of January 1, 2002 and
upon implementation there was no effect on the financial condition of the
Company.

     The Emerging Issues Task Force ("EITF") revised Issue 01-9 during 2001 with
the purpose to codify the issues concerning the accounting for consideration
given by a vendor to a customer. The issue reconciles certain provisions of EITF
00-14 "Accounting for Certain Sales Incentives," EITF 00-22, "Accounting for
"Points" and Certain Other Time-Based or Volume-Based Sales Incentive Offers,
and Offers for Free Products or Services to be Delivered in the Future" and
Issue No. 00-25, "Vendor Income Statement Characterizations of Consideration
Paid to a Reseller of the Vendor's Product". Upon adoption in 2002, there was no
significant impact on the financial condition of the Company.

Note 4 - Concentrations of Credit Risk
--------------------------------------

     Concentrations of credit risk with respect to trade accounts receivable are
generally insignificant, except as noted below, due to the large number of
customers comprising the Company's customer base. The Company reviews a
customer's credit history before extending credit and establishes an allowance
for doubtful accounts based upon factors surrounding the credit risk of specific
customers, historical trends and other information. During 2001, there were
recoveries, net of expense, of $0.5 million, and in 2000 bad debt expense, net
of recoveries, was $2.8 million, respectively. There was no bad debt expense,
net of recoveries for 1999.

     Sales to the Company's largest customer approximated 21%, 20% and 21% of
sales in 2001, 2000 and 1999, respectively. The accounts receivable balance of
the Company's largest customer approximated 19% and 13% at December 31, 2001 and
2000, respectively.

     The Company's cash and cash equivalents are invested in high-quality
securities placed with institutions with high credit ratings. This investment
policy limits the Company's exposure to concentrations of credit risk

                                     41

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

Note 5-Inventories
-----------------

     At December 31, Inventories consist of the following

                                                             2001      2000
                                                           -------    -------
Raw Materials                                              $  14.6    $  17.6
Semi-Finished Products                                        21.8       23.3
Finished Products                                             47.6       58.7
                                                           -------    -------
     Total                                                 $  84.0    $  99.6
                                                           =======    =======

Note 6-Property,Plant and Equipment
-----------------------------------

     At December 31, Property, Plant and Equipment consist of the following:

                                                             2001     2000
                                                           --------  -------
Land                                                       $    1.5  $    1.5
Building and Improvements                                      24.6      24.3
Leased Assets                                                   6.7       7.3
Machinery and Equipment                                       134.7     122.0
Construction in Progress                                        2.4      13.6
                                                           --------- --------
     Subtotal                                                 169.9     168.7
Less: Accumulated Depreciation                                (88.9)    (77.2)
                                                           --------  --------
     Total                                                 $   81.0  $   91.5
                                                           ========  ========

Depreciation expences for the year ended December 31, 2001 and 2000 was $14.5
million and $14.0 million respectively

Note 7-Intangibles and Debt Issurance Costs
-------------------------------------------

     At December 31, Intangibles and Debt Issuance Costs consist of the
following:

                                                             2001       2000
                                                           --------   --------
Intangibles                                                $   95.9   $   95.9
Debt Issuance Costs                                            13.4       13.2
                                                           --------   --------
     Subtotal                                                 109.3      109.1
Less: Accumulated Amortization                                (29.4)     (25.3)
                                                           --------   --------
     Total                                                 $   79.9   $   83.8
                                                           ========   ========

Note 8 - Other Accrued Liabilities
----------------------------------

     At December 31, Other Accrued Liabilities consist of the following:

                                                            2001        2000
                                                          -------     -------
Marketing                                                 $   5.9     $   7.2
Health Costs                                                  7.7         7.3
Compensation                                                  1.9         4.1
Retiree Benefits                                              5.9         6.9
Deferred Revenue                                              2.8           -
Other                                                         7.8         9.8
                                                          -------     -------
     Total                                                $  32.0     $  35.3
                                                          =======     =======

                                     42

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

Note 9- Retiree Benefits
------------------------

Pension Plans:
--------------
     The Company sponsors a defined benefit pension plan (the "Plan").
Additionally a supplemental defined benefit pension plan (the "SERP") was
adopted January 1, 1998. Under the provisions of SFAS No. 132, the disclosure
requirements for the Plan and the SERP have been combined.

        Change in Benefit Obligation:

                                                2001       2000
                                              --------   --------
Benefit Obligation at Beginning of Year       $   96.3   $   78.7
Service Cost                                       4.1        3.9
Interest Cost                                      7.4        6.7
Actuarial Assumption Changes                       0.7       (2.1)
Actuarial  Loss                                    4.8       10.4
Benefits Paid                                     (1.8)      (1.3)
                                              --------   --------
Benefit Obligation at End of Year             $  111.5   $   96.3
                                              ========   ========

Change in Plan Assets:
                                                2001       2000
                                              --------   -------
Fair Value of Plan Assets at Beginning
   of Year                                    $   69.1   $   66.9
Actual Return on Plan Assets                       1.2        3.5
Employer Contributions                             8.0          -
Benefits Paid                                     (1.8)      (1.3)
                                              --------   --------
Fair Value of Plan Assets at End of Year      $   76.5   $   69.1
                                              ========   ========

Net Amount Recognized:
                                                2001       2000
                                              --------   --------
Funded Status                                 $  (35.0)  $  (27.2)
Unamortized Prior Service Cost                    (2.1)      (2.3)
Unrecognized Net Actuarial Gain                   20.1        9.7
                                              --------   --------
Net amount recognized                         $  (17.0)  $  (19.8)
                                              ========   ========

Amounts recognized in the statement of
   financial position consist of:
                                                2001       2000
                                              --------   --------
Accrued Benefit Liability                        (17.6)     (20.2)
Intangible Asset                                   0.6        0.4
                                              --------   --------
Net Amount Recognized                         $  (17.0)  $  (19.8)
                                              ========   ========

Components of Net Periodic Pension Cost:
                                                2001       2000        1999
                                              --------   --------    -------
Service Cost                                  $    4.1   $    3.9    $   4.5
Interest Cost                                      7.4        6.7        5.2
Expected Return on Assets                         (6.6)      (6.2)       1.8
Net Amortization and Deferral                      0.4       (0.1)      (9.5)
                                              --------   ---------   -------
Net Periodic Pension Cost                     $    5.3   $    4.3    $   2.0
                                              ========   ========    =======

Actuarial Assumptions:
   Discount Rate                                   7.3%       7.8%       7.8%
   Long-Term Rate on Assets                        8.5%       8.5%       8.5%
   Rate of Compensation Increase                   4.5%       5.5%  Age-Related

                                     43

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

Savings Plans:

     The Company sponsors a qualified defined contribution plan and matches 50%
of a participant's contributions up to a maximum of 6% of a participant's
compensation. All employees hired after May 31, 1996 are also eligible for a
discretionary contribution. The Company's expense and contribution to this plan
was $1.4 in 2001, 2000 and 1999.

     Effective January 1, 1998, the Company adopted a non-qualified defined
contribution plan. The Company's matching contribution was not material
during 2001, 2000 and 1999.

Postretirement Benefit Plan:
----------------------------

     The Company sponsors an unfunded postretirement defined benefit plan which
provides certain employees and their covered dependents and beneficiaries
with retiree health and welfare benefits.

        Change in Benefit Obligation:

                                                  2001       2000
                                                --------   --------
Benefit Obligation at Beginning of Year         $   12.9   $    8.0
Service Cost                                         0.5        0.5
Interest Cost                                        0.9        0.9
Plan Participants' Contributions                       -        0.1
Amendments                                             -        2.9
Actuarial Loss/(Gain)                               (1.1)       0.6
Benefits Paid                                       (0.3)      (0.1)
                                                --------   --------
Benefit Obligation at End of Year               $   12.9   $   12.9
                                                ========   ========

Accrued Benefit Cost:
                                                  2001       2000
                                                ---------  --------
Funded Status                                   $  (12.9)  $  (12.9)
Unrecognized Net Actuarial Gain                     (0.4)      (2.5)
Unrecognized Prior Service Cost                     (6.5)      (5.0)
                                                --------   --------
Accrued Postretirement Benefit Obligation       $  (19.8)  $  (20.4)
                                                ========   ========

Components of Net Periodic Benefit Cost:
                                                  2001       2000       1999
                                                --------   --------   --------
Service Cost                                    $    0.5   $    0.5   $    0.4
Interest Cost                                        0.9        0.9        0.6
Net Amortization and Deferral                       (1.7)      (1.2)      (2.1)
                                                --------   --------   --------
Net Periodic Benefit Income/(Expense)           $   (0.3)  $    0.2   $   (1.1)
                                                ========   ========   ========

     To determine the accumulated postretirement benefit obligation, (1) the
assumed discount rate used was 7.3% and 7.8% at December 31, 2001 and
2000, respectively (2) the assumed health care trend rate was 10.0% for 2001,
declining gradually to 4.5% in 2010 and remaining at that level thereafter and
10.0% for 2000, declining gradually to 5.0% in 2010 and remaining at that level
thereafter and (3) the assumed dental benefit rate was 10.0% for 2001,
declining gradually to 4.5% in 2010 and remaining at that level thereafter and
8.0% for 2000, declining gradually to 5.0% in 2007 and remaining at that level
thereafter.

     A one-percentage-point increase or decrease in the assumed health care
cost trend rates would increase or decrease, respectively, the accumulated
postretirement benefit obligation by approximately $0.6 as of December 31, 2001
and increase or decrease the total service and interest cost components by
approximately $0.3 and $0.4, respectively.

                                     44

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

     The Company also provides certain severance benefits. At December 31, 2001
and 2000, the accumulated postemployment benefit obligation and the annual
periodic cost of these obligations were not significant.

Note 10 - Debt
--------------

     Short-term debt consists of unsecured, fixed interest rate agreements for
financing insurance premiums.

         Long-term Debt at December 31, consisted of the following:

                                                  2001               2000
                                                ---------         ---------
Revolving Credit Facility                       $    25.0         $    64.5
9.5% Senior Subordinated Notes due 2003              86.9              86.8
Capital Lease Obligations (Note 11)                   2.4               3.3
                                                ---------         ---------
     Subtotal                                   $   114.3         $   154.6
Less: Current Portion                                 1.1               1.3
                                                ---------         ---------
     Total                                      $   113.2         $   153.3
                                                =========         =========

     The Credit Agreement provides for aggregate borrowings of $170.0 million
under the Revolving Credit Facility. All borrowings under the Credit
Agreement are guaranteed by Holding, and are collateralized by substantially
all of the assets of the Company. The Company may borrow up to $170.0 million
(including certain letters of credit) under the Revolving Credit Facility
through September 30, 2003. Financing costs paid in connection with the Credit
Agreement of $3.7 million were capitalized and will be amortized over the
remaining term of the Credit Agreement.

     The weighted average interest rate for borrowings under the Revolving
Credit Facility was 8.0% in 2001 and 10.1% in 2000. The Company is not
currently a party to any interest rate cap, hedging or other protection
arrangements with respect to its variable rate indebtedness. At December 31,
2001, the Company had $5.4 million in letters of credit and borrowings of $25.0
million outstanding with the remaining $139.6 million of the Revolving Credit
Facility available for borrowing.

     Loans under the Credit Agreement generally bear interest, at the Company's
option, at a variable rate equal to either (i) the rate that is the highest of
the administrative agent's prime rate, or certain alternative rates, in each
case plus a margin of up to 1.25% per annum ("ABR Loans"), or (ii) the rate at
which certain Eurodollar deposits are offered in the interbank Eurodollar
market plus a margin of up to 2.25% per annum ("Eurodollar Loans"). The
Company's interest rate margin for the first six months under the Credit
Agreement was set at 1.0% and 2.0% for ABR Loans and Eurodollar Loans,
respectively. As a result of the Company's performance, on October 31, 2000,
the interest rate margin and commitment fees were reduced 0.5% and 0.125%,
respectively. Effective March 28, 2001, the interest rate margin and commitment
fees were increased 0.25% and 0.125%, respectively, as a result of the
consolidated leverage ratio at December 31, 2000. On July 27, 2001 and on
November 14, 2001, the interest rate margin was increased 0.25%, as a result of
the consolidated leverage ratio on June 30, 2001 and September 30, 2001,
respectively. Each quarter the interest rate margin will be subject to
adjustment based upon maintenance of a certain consolidated leverage ratio,
based on EBITDA and total indebtedness, for the four quarters most recently
ended and will range from 0.5% to 1.25% per annum for ABR Loans and from 1.5%
to 2.25% per annum for Eurodollar Loans. Commitment fees of 0.5% are payable on
the average daily unused portion of the Revolving Credit Facility and can be
reduced up to 0.125% based upon the same financial performance measures. The
occurrence of certain changes in control is an event of default under the
Credit Agreement.

     Effective on December 6, 2001, the Company and the requisite lenders under
the Credit Agreement entered into an amendment (the "Amendment") of the Credit
Agreement. Under the terms of the Amendment, the consolidated leverage ratio
that the Company is required to maintain was amended so that the required
consolidated leverage ratio was changed to 3.35 to 1.00 from 2.75 to 1.00 for
the period from December 31, 2001 through September 29, 2002, and changed to
3.25 to 1.00 from 2.75 to 1.00 for the period from September 30, 2002 through
December 30, 2002. The Company paid financing costs of 0.10% of the aggregate
borrowings or $0.2 million, which were capitalized and will be amortized over
the remaining term of the Credit Agreement.

                                     45

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

     The Notes, in an original aggregate $100.0 principal amount, mature on
December 1, 2003. The Notes were redeemable at the option of the Company, in
whole or in part, any time on or after December 1, 1998. The redemption price
ranges from 104.5% of the principal amount in 1998 to 100% in the year 2001. In
the event of a change in control, the Notes may be redeemed at the option of
the Company for the principal amount plus applicable interest and premium at
that date. The Notes, issued by Remington, are subordinate to borrowings under
the New Credit Agreement and are fully and unconditionally guaranteed on a
subordinated basis by Holding. See Note 23 for Holding's Condensed
Consolidating Financial Data. The Notes are not collateralized by any of the
Company's assets. The original issue discounts on the Notes of $0.6 are being
amortized at 9.6% per annum. As of December 31, 2001, the total accumulated
amortization was $0.5.

     The Indenture for the Notes and the Credit Agreement contain various
restrictions on the Company's ability to incur debt, pay dividends and enter
into certain other transactions. The Credit Agreement permits repurchases of
the Notes on the open market, subject to limitations that may be contained in
the Credit Agreement and the Indenture. Prior to 2000, the Company repurchased
approximately $13.1 of the Notes on the open market with cash from operations.
The Company repurchased the Notes at an average price of 99.4% of the face
value on the open market, and the transactions had no material impact on its
results of operations. No Notes were repurchased in 2000 or 2001.

     The payments of capital lease obligations outstanding at December 31,
2001, for the next three years are $1.2, $.8 and $0.6, respectively. The Notes,
with a maturity value of $86.9 as of December 31, 2001, are due December 1,
2003 and borrowings outstanding under the New Revolving Credit Facility are
payable September 30, 2003.

Note 11 - Leases
----------------
     Future minimum lease payments under capital leases and operating leases,
together with the present value of the net minimum capital lease payments at
December 31, 2001, are as follows:

                                                           Capital     Operating
                                                            Leases      Leases
                                                            ------      ------
Minimum Lease Payments for Years
Ending December 31:
   2002                                                  $     1.2    $     2.6
   2003                                                        0.8          2.6
   2004                                                        0.6          2.5
   2005                                                          -          1.1
   2006                                                          -          1.0
   And Thereafter                                                -          3.3
                                                         ---------    ---------
     Total Minimum Lease Payments                              2.6    $    13.1
                                                                      =========
Less:  Amount representing interest                            0.2
                                                         ---------
     Present Value of Net Minimum Lease Payments         $     2.4
                                                         =========

                                     46

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

Note 12 - Redeemable Class A Common Stock
-----------------------------------------

     Certain employees and key management of the Company who hold or have the
right to receive (i.e. deferred shares) Class A common stock may require
Holding to repurchase, under certain conditions, (death, disability or
retirement, in each case as defined by the relevant plan document), all of such
shares. This repurchase right terminates upon the consummation of an initial
equity public offering of Holding's Class A common stock. In connection with
the redemption feature described above, Holding has classified, outside of
permanent equity, an amount representing the initial fair value of the
redeemable shares. As of December 31, 2001, the redeemable value would be
approximately $5.6 million, using a fair market value of $185 per share, as
determined by an independent third party. These shares have not been marked to
market since the events of redemption are considered remote.

Note 13 - Shareholders' Equity
------------------------------

     Holding has authorized 2,500,000 shares of Common Stock, consisting of
1,250,000 shares of Class A Common Stock, par value $.01 per share, and
1,250,000 shares of Class B Common Stock, par value $.01 per share. The Class A
Common Stock is voting stock and the Class B Common Stock is non-voting stock.
None of the Class B Common Stock has been issued. There were no dividends paid
in 2001. Dividends, net of shareholder loan repayments, of $54.8 million were
paid by the Company on its shares of common stock during 2000. The declaration
and payment of future dividends, if any, will be at the sole discretion of the
Board of Directors of the Company, subject to the restrictions set forth in the
Credit Agreement and the Indenture, which currently restrict the payment of
cash dividends to shareholders, and restrictions, if any, imposed by other
indebtedness outstanding from time to time.

Note 14 - Stock Purchase and Option Plans
-----------------------------------------

     As of December 31, 2001, the Company has reserved 184,580 shares of the
Class A Common Stock, par value $.01 per share, of Holding ("Common Stock") for
issuance in accordance with the terms of the Amended and Restated RACI Holding,
Inc. Stock Option Plan (the "Option Plan"), the RACI Holding, Inc. 1994
Director Stock Plan (the "1994 Director Stock Plan"), the RACI Holding, Inc.
Stock Purchase Plan (the "1994 Director Stock Purchase Plan), the RACI Holding,
Inc. Director Stock Purchase Plan (the "1997 Director Stock Purchase Plan"),
the RACI Holding, Inc. Director Stock Option Plan (the "Director Stock Option
Plan") and the RACI Holding, Inc. Stock Incentive Plan (the "1999 Stock
Incentive Plan").

     As of December 31, 2001, 11,250 shares of Class A Common Stock and 1,250
matching shares of redeemable deferred stock have been issued under the 1997
Director Stock Purchase Plan, 1,800 shares have been issued under the 1994
Director Plan in lieu of directors' fees and no shares of Common Stock have
been issued under the Option Plan.

     On May 14, 1999, the board of directors of Holding adopted the 1999 Stock
Incentive Plan. As of December 31, 2001, 24,191 shares of redeemable deferred
stock have been issued of which 715 were issued during 2001 and 6,198 shares of
redeemable Common Stock have been issued of which 1,144 were issued during 2001.

     At December 31, 2001 options to purchase 33,565 shares of Common Stock
were outstanding, at a per share exercise price of $100, of which all options
were exercisable; options to purchase 29,438 shares of Common Stock were
outstanding, at a per share exercise price of $200, of which 9,352 options were
exercisable, 17,748 of the remaining unvested options vest ratably on the
third, fourth and fifth anniversaries of the options' grant date and expire in
2009, the remaining 2,338 shares vest based on the financial performance of the
Company in 1999 and 2000, but no later than 2008; options to purchase 1,383
shares of Common Stock were outstanding at a per share exercise price of $230,
of which 763 options were exercisable, 111 of the remaining unvested options
vest ratably on the third, fourth and fifth anniversaries of the options' grant
date and expire in 2010, the remaining 509 shares vest based on the financial
performance of the Company in 2000, but no later than 2009; and options to
purchase 5,000 shares of Common Stock, which were granted during 2001, were
outstanding at a per share exercise price of $180, of which no options were
exercisable, the options vest ratably on the third, fourth and fifth
anniversaries of the options' grant date and expire in 2011.

                                     47

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

As of December 31, 2001, 71,754 shares of Class A Common Stock remain available
for grant under the above mentioned plans.

     The Option Plan provides for the grant of options (the "Options"), which
are generally exercisable in three equal annual installments, beginning on the
second anniversary of the date of grant, subject to the continued employment of
any employee option-holder. The vesting of Options may be accelerated upon the
occurrence of certain events specified in the Option Plan, as amended,
including a change in control as defined therein. Options not exercised will
expire on the tenth anniversary of the date of grant. The following is a
summary of stock option activity under the Option Plan and the 1999 Stock
Incentive Plan:

<TABLE>
<CAPTION>
                                           2001                           2000                            1999
                                 --------------------------    ----------------------------    --------------------------
                                                Wtd. Avg.                      Wtd. Avg.                       Wtd. Avg.
                                  Shares        Ex. Price        Shares        Ex. Price         Shares        Ex. Price
                                  ------        ---------        ------        ---------         ------        ---------
<S>                               <C>            <C>             <C>            <C>               <C>           <C>
Outstanding at January 1,         69,053          $ 148            68,838        $ 146             37,965        $ 100
Granted                            5,000          $ 180             1,617        $ 230             31,773        $ 200
Forfeited                         (4,666)         $ 145            (1,402)       $ 124               (900)       $ 100
                                 -------          -----          --------        -----            -------        -----
Outstanding at December 31,       69,387          $ 151            69,053        $ 148             68,838        $ 146
                                 =======          =====          ========        =====            =======        =====

Exercisable at December 31,       43,680          $ 124            45,297        $ 125             38,747        $ 116
                                 =======          =====          ========        =====            =======        =====
Weighted Average
Fair Value Options Granted       $ 24.72                         $  44.68                         $ 31.42
                                 =======                         ========                         =======
</TABLE>

     The Company has adopted the disclosure-only provision of SFAS No. 123
"Accounting for Stock-Based Compensation." Accordingly, since options have been
granted at an option exercise price equal to the estimated fair value of the
underlying Common Stock, no compensation expense has been recognized with
respect to grants of stock options granted to date. Had compensation expense
for such option grants been recognized under SFAS No. 123 based on the fair
value of such options at the grant dates thereof in 2001, 2000 and 1999, the
Company's net income and income per share on a pro forma basis would have been
as follows:

                                    2001             2000              1999
                                 ------------    -------------     ------------
Net Income    As Reported          $  13.7          $  19.9            $  23.0
              Pro Forma               13.7             19.6               22.8

Basic EPS     As Reported          $ 17.25          $ 25.10            $ 29.68
              Pro Forma              17.25            24.72              29.41

Diluted EPS   As Reported          $ 16.90          $ 24.49            $ 28.89
              Pro Forma              16.90            24.12              28.64

     For purposes of the foregoing the fair value of each option grant is
estimated as of the date of grant using a modified-Black Scholes Option Model
with the following weighted average assumptions for:

                                        2001          2000
                                        ----          ----
Risk Free Interest Rate                 5.8%          5.5%
Dividend Yields                         0.0%          0.0%
Volatility Factor                       0.0%          0.0%
Weighted Average
   Expected Option Life               3.0 years     4.4 years

                                     48

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

Note 15 - Subsequent Events
---------------------------

     In February 2002, options to purchase 2,000 shares of Common Stock were
exercised at a price of $100 per share and options to purchase 1,000 shares of
Common Stock were cancelled.

     In March 2002, certain members of management acquired an aggregate of 891
redeemable shares at a purchase price of $185 per share and were granted
options to purchase 891 shares of Common Stock, under the 1999 Stock Incentive
Plan at an exercise price of $185 per share. In connection with the purchase of
the shares, certain members of management financed a portion of the cash
purchase price of the shares of Common Stock they acquired through loans from
Bank of American, N.A. on market terms. To assist members of management obtain
such terms for such financing, Remington fully and unconditionally guaranteed
such loans. Remington guaranteed loans totaling $0.1 were extended to certain
members of management, which remain outstanding.

Note 16 - Commitments and Contingencies
---------------------------------------

     The Company has various purchase commitments, approximating $4.6 for 2002,
$1.7 for 2003, $1.5 for 2004 and no commitments for 2005 and 2006, for services
incidental to the ordinary conduct of business, including E-Commerce and NASCAR
sponsorship. Such commitments are not at prices in excess of current market
prices. The Company has purchase contracts with certain raw materials
suppliers, for periods ranging from one to seven years with no commitment to
purchase specified quantities. The Company does not have formal contracts with
its other raw materials suppliers. The commitments and contracts had no
significant impact on the financial condition or results of operations during
the reportable periods. In recognition of and support of certain legal and
legislative initiatives, the firearms industry has established the Hunting and
Shooting Sports Heritage Fund of which the Company is a member.

     The Company provides consumer warranties against manufacturing defects in
all firearm products it sells in North America. Estimated future warranty costs
are accrued at the time of sale. Product modifications or corrections are
voluntary steps taken by the Company to assure proper usage or performance of a
product by consumers. The cost associated with product modifications and or
corrections are recognized in accordance with of Statement of Financial
Accounting Standard No. 5, Accounting for Contingencies, and charged to
operations

     Pursuant to the Purchase Agreement, the Sellers retained liability for,
and are required to indemnify the Company against, (1) all product liability
cases and claims (whenever they may arise) involving discontinued products, (2)
all product liability cases and claims involving products that had not been
discontinued as of the Acquisition ("extant products") and relating to
occurrences that took place prior to the Acquisition and (3) certain
environmental liabilities based on conditions existing at the time of the
Acquisition. These indemnification obligations of the Sellers are not subject
to any survival period limitation. The Company has no current information on
the extent, if any, to which the Sellers have insured these indemnification
obligations. Except for certain cases and claims relating to shotguns as
described below and except for all cases and claims relating to products
discontinued prior to the Acquisition, the Company generally bears financial
responsibility for product liability cases and claims relating to occurrences
after the Acquisition.

     Since December 1, 1993, the Company has maintained insurance coverage for
product liability claims subject to certain self-insured retentions both on a
per-occurrence basis and in the aggregate for personal injury or property
damage relating to occurrences arising after the Acquisition. The Company
believes that its current product liability insurance coverage for personal
injury and property damage is adequate for its needs. The Company's current
product liability insurance policy provides for a self-insured retention of
$0.5 million per occurrence (plus pro-rata legal expenses) and a $10.0 million
indemnity loss aggregate. The current policy period runs from December 1, 2001
through November 30, 2002. The current policy has a batch clause endorsement,
which in general provides that if a batch of the Company's products were to be
defective, the Company's liability for expenses and damages related to the
entire batch would be capped at the amount of self-insured retention for a
single occurrence. The policy excludes from coverage any pollution-related
liability. Based in part on the nature of the Company's products, and the
impact on the insurance market of the events of September 11, 2001, there can
be no assurance that the Company will be able to obtain adequate product
liability insurance coverage upon the expiration of the current policy. Certain
of the Company's

                                     49

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

post-December 2001 excess insurance coverage expressly does not apply to
actions brought by municipalities as described below.

     As a result of contractual arrangements, the Company manages the joint
defense of product liability litigation involving Remington brand firearms and
Company ammunition products for both Remington and the Sellers. As of December
31, 2001, approximately 20 individual bodily injury cases and claims were
pending, primarily alleging defective product design or manufacture, or failure
to provide adequate warnings, some of these cases seek punitive as well as
compensatory damages. The Company has previously disposed of a number of other
cases involving post-Acquisition occurrences by settlement. Of the pending
individual cases, approximately two involve matters for which the Sellers
retained liability and are required to indemnify the Company. The remaining
approximately 18 pending cases involve post-Acquisition occurrences for which
the Company bears responsibility under the Purchase Agreement; the Sellers have
some responsibility for the costs of approximately two of these cases involving
certain shotguns, as described below. One of the pending cases for which
Remington bears financial responsibility involves the accidental fatal shooting
in October 2000 with a Remington Model 700 bolt action rifle of a nine-year-old
boy, Gus Barber, by his mother after a hunting trip in Montana, has been the
subject of repeated local and national media attention, and in December 2001,
the family filed a lawsuit in federal district court in Montana. The Company has
not been finally served but understands that the action names Remington and the
Sellers as defendants. Like many Remington bolt-action centerfire firearms made
before 1982, the Barber rifle was manufactured with a feature known as a
'bolt-lock,' which requires the manual safety to be moved to the 'fire' position
to begin the process of unloading the rifle. Partly in response to this
accident, in early March 2002, the Company has initiated a nationwide product
safety program to run through the end of 2002 under which the Company will
modify such centerfire firearms to remove the bolt-lock feature for $20.
Participating customers will receive a transferable $20 rebate coupon on the
purchase of Remington safety products. Approximately 2.5 million guns
manufactured before 1982 may be eligible for this offer. The Company is unable
to estimate the ultimate cost of this modification program, due to various
uncertainties, including the number of customers who choose to participate in
the program and the condition of their firearms. However, based in part on the
length of time since these products were manufactured. The Company does not
believe that the ultimate cost of the safety program will have a material
adverse impact on financial condition or liquidity, but there can be no
assurance of such an outcome.

     As a manufacturer of shotguns and rifles, Remington has been named in only
three of the approximately 18 actions brought by certain municipalities,
primarily against manufacturers and sellers of handguns: (i) City of Boston,
et al. v. Smith & Wesson, et al., No. 99-2590 (Suffolk Super Ct.); (ii) City of
St. Louis, Missouri v. Henry Cernicek, et al., No. 992-01209 (Cir. Ct. St.
Louis) & 00 Civil 1895 (U.S. Dist. Ct.. E.D. Missouri); and (iii) City of New
York, et al. v. B.L. Jennings, Inc., et al., 00 Civil 3641 (JBW) (U.S. Dist.
Ct. E.D.N.Y.).

     In the City of Boston case, first filed on June 2, 1999, the City of
Boston and the Boston Public Health Commission claim (among other allegations)
that the distribution practices of defendant firearms manufacturers allegedly
permit their products to enter a secondary market, from which guns may be
obtained by unauthorized users; that defendants have failed to include adequate
safety devices in their firearms to prevent unauthorized use and accidental
misuse; and that defendants' conduct has created a public nuisance. Plaintiffs
seek injunctive relief and money damages (consisting of the cost of providing
certain city services and lost tax and other revenues). By order of July 13,
2000, the trial court denied manufacturer-defendants' motion to dismiss, and
defendants' request for interlocutory appeal of this decision was denied on
September 19, 2000. Discovery is proceeding pursuant to the Joint Case
Management Order, under which trial is presently scheduled for September 2002.
On February 1, 2002, the trial court issued an order granting defendants'
motion for partial summary judgment, prohibiting the plaintiffs from attempting
to prove liability on a "market share" theory.

     The City of St. Louis makes claims similar to those in the City of Boston
litigation and seeks punitive as well as compensatory damages. The First
Amended Complaint naming Remington was filed on August 15, 2000, in Circuit
Court of the City of St. Louis. The case was removed on November 29, 2000, to
the United States District Court for the Eastern District of Missouri by
third-party defendant, Denel (Pty) Ltd., a firearms manufacturer majority-owned
by the Republic of South Africa. Removal was made pursuant to Title 28, section
1330, of the United States Code, as an action involving a foreign state. On
September 25, 2001, the federal court remanded the case to state court, (where
motions to dismiss are pending). On February 20, 2002, the trial court heard
argument on

                                     50

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

defendants' motion to transfer venue to the Circuit Court for St. Louis
County; the motion was granted in March 1, 2002.

     The City of New York, the New York City Health and Hospitals Corp., and
certain city officials filed an Amended Complaint, dated September 1, 2000, in
the United States District Court for the Eastern District of New York naming
Remington and asserting claims similar to those in the City of Boston
litigation. The Company answered on December 1, 2000. Plaintiffs' and
defendants' initial discovery requests were served in June 2001. In August
2001, the City indicated its intention to file a second amended complaint.
However, in part as a result of the events of September 11, the City has asked
that the case be put on hold pending the appeal by the State of New York of the
dismissal of its separate lawsuit against handgun manufacturers (in which the
Company is not a defendant).

     Motions to intervene had been filed in another such municipal lawsuit,
Chicago v. Beretta U.S.A. Corp. (Cook Co. Ct.), seeking to name as
additional defendants unidentified "ammunition manufacturers." Such
intervention was not permitted by the Court, which, on September 15, 2000,
granted the existing defendants' motion to dismiss the case. The City's appeal
of the decision has been briefed and argued to the intermediate level court of
appeals.

     The numbers of cases listed above do not include Joe Luna, et al. v.
Remington Arms Company, Inc. and E. I. Du Pont de Nemours and Company et al.
("Luna"), which was first filed in 1989 in Texas district court in Jim Wells
County. The plaintiffs sought certification of a class consisting of all Texas
owners of Model 700 bolt-action rifles seeking the cost of repair. In June
1996, the district court certified for class treatment certain limited issues;
this ruling was reversed on appeal. Remington was not named as a defendant
until July 1996, and was not a party to the appeal, although the appellate
courts' decisions should govern class action claims against Remington as well.
The Sellers' obligations with respect to Luna include a requirement that they
indemnify the Company against claims for economic loss involving Model 700
rifles shipped prior to the end of May 1997. Claims involving Model 700 rifles
shipped thereafter would be the Company's responsibility and, to the extent
that they do not involve personal injury or property damage, would not be
covered by the Company's product liability insurance.

     The Federal Trade Commission and the attorneys general of several states
have instituted investigations into allegations of anticompetitive retaliation
against Smith & Wesson by other participants in the firearms industry. To date,
Remington has received and replied to civil investigative demands and subpoenae
duces tecum and other discovery requests from the State of Connecticut and the
Federal Trade Commission. Remington, which makes only long guns, does not
compete with Smith & Wesson, which makes handguns.

     Because the Company's assumption of financial responsibility for certain
product liability cases and claims involving pre-Acquisition occurrences was
limited to an amount that has now been fully paid, with the Sellers retaining
liability in excess of that amount and indemnifying the Company in respect
thereof, and because of the Company's accruals with respect to such cases and
claims, the Company believes that product liability cases and claims involving
occurrences arising prior to the Acquisition are not likely to have a material
adverse effect upon the financial condition or results of operations of the
Company. Moreover, although it is difficult to forecast the outcome of
litigation, the Company does not believe, in light of relevant circumstances
(including the current availability of insurance for personal injury and
property damage with respect to cases and claims involving occurrences arising
after the Acquisition, the Company's accruals for the uninsured costs of such
cases and claims and the Sellers' agreement to be responsible for a portion of
certain post-Acquisition shotgun-related product liability costs, as described
above, as well as the type of firearms products made by the Company), that the
outcome of all pending post-Acquisition product liability cases and claims will
be likely to have a material adverse effect upon the financial condition or
results of operations of the Company. Nonetheless, in part because the nature
and extent of liability based on the manufacture and/or sale of allegedly
defective products (particularly in connection with the use of firearms) is
uncertain, there can be no assurance that the Company's resources will be
adequate to cover both pending and future product liability occurrences, cases
or claims, in the aggregate, or that a material adverse effect upon our
financial condition or results of operations will not result therefrom. Because
of the nature of its products, the Company anticipates that it will continue to
be involved in product liability litigation in the future.

                                     51

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

     The Company does not expect current environmental regulations to have a
material adverse effect on the financial condition or results of operations.
However, the Company's liability for future environmental remediation costs is
subject to considerable uncertainty due to the complex, ongoing and evolving
process of identifying the necessity for, and generating cost estimates for,
remedial work. Furthermore, there can be no assurance that environmental
regulations will not become more restrictive in the future.

Note 17 - Income Taxes
----------------------

     The provision (benefit) for income taxes consists of the following
components

                                      2001     2000       1999
                                    -------   ------     -------
Federal:
   Current                          $  7.1   $  11.8    $   8.4
   Deferred                            0.4         -        4.5
State:
   Current                             0.8       0.7        2.4
   Deferred                            0.2         -       (0.6)
                                    ------   -------    -------
                                    $  8.5   $  12.5    $  14.7
                                    ======   =======    =======

     The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities are presented
below:

                                                        2001             2000
                                                        ----             ----
Deferred tax assets:
   Accrued employee and retiree benefits             $  18.2          $  19.8
   Product, environmental and other liabilities          5.9              6.2
   Receivables and inventory                             5.6              4.3
   Tax credits                                           0.5              0.6
                                                     -------          -------
                                                        30.2             30.9
                                                     -------          -------
Deferred tax liabilities:
   Property, plant and equipment                       (11.4)           (12.4)
   Intangibles                                          (6.0)            (5.2)
                                                     -------          -------
                                                       (17.4)           (17.6)
                                                     -------          -------
Net deferred tax assets                              $  12.8          $  13.3
                                                     =======          =======

     At December 31, 2001 the Company has state tax credit carry-forwards of
$0.5 for tax purposes which expire between 2002 and 2013.

      The following is a reconciliation of the statutory federal income tax rate
to the Company's effective income tax rates:

                                            2001         2000         1999
                                            ----         ----         ----
Federal statutory rate                      35.0%        35.0%        35.0%
State income taxes, net of
   Federal benefits                          2.1          2.1          4.6
Nondeductible expenses                       0.9          1.4          1.3
Other                                        0.3          0.1         (1.9)
                                            ----         ----         ----
Effective income tax rate                   38.3%        38.6%        39.0%
                                            ====         ====         ====

Note 18 - Related Party Transactions
------------------------------------

     The Clayton & Dubilier Private Equity Fund IV Limited Partnership ("C&D
Fund IV"), which owns 750,000 shares of the 763,050 shares of Class A Common
Stock outstanding, or 98.3% at December 31, 2001, is a private investment fund
managed by Clayton, Dubilier & Rice, Inc. ("CD&R"). CD&R receives an annual fee
for management and financial consulting services provided to the Company and
reimbursement of related out-of-pocket expenses. Fees and out-of-pocket
expenses paid to CD&R were $0.6 in 2001 and $0.5 in 2000 and 1999.

                                     52

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

Note 19 - Financial Instruments
-------------------------------

     The estimated value of the Company's debt at December 31, 2001 was $111.9
compared to a carrying value of $114.3. The estimated value of the Company's
debt at December 31, 2000 was $137.3 compared to a carrying value of $154.6.

     The Company employs various strategies, including call options, zero cost
collars and futures to hedge the price risk related to firm commitments and
anticipated purchases of lead and copper to be used in the manufacturing
process. The Company buys call options for an up front fee for the right to
purchase a specified amount of metal at a pre-determined price and date. On
occasion, zero cost collars are created by selling put options for quantities
and timing identical to the call options, which in effect pay for the call
options. These put options give a third party the right to sell to the Company
a specified amount of metal at a price which is below the call option price on
a pre-determined date. This zero cost collar results in no up front fee and
insures that the Company can purchase a specified amount of metal within a
specified price range on a pre-determined date. Futures are a commitment to
purchase a given amount of metal at an agreed upon price on a future date with
a settlement between the contract price and the market price at the expiration
of the contract. Hedging gains and losses are offset against purchase price
variances on physical purchases of the commodities. There were no premiums paid
for commodity contracts outstanding at December 31, 1999. The amount of
premiums paid for commodity contracts outstanding at December 31, 2001 and 2000
were $0.4 and $0.7, respectively. At December 31, 2001, 2000 and 1999, the
market value of the Company's outstanding contracts relating to firm
commitments and anticipated purchases up to one year from the respective
balance sheet date was $0.2, $0.3 and $1.3, respectively. There were no hedging
losses related to closed commodity future contracts included in inventory at
December 31, 2001 and 2000.

     The Company adopted Statement of Financial Accounting Standards No. 133
("SFAS 133"), Accounting for Derivative Instruments and Hedging Activities, on
January 1, 2001. On January 1, 2001, the Company held call options and zero
cost collars for the purchase of copper and lead, which are designated as cash
flow hedging instruments. In accordance with the transition provisions of SFAS
133, the Company recorded a net-of-tax cumulative-effect-type adjustment of
$0.2 in accumulated other comprehensive loss to recognize at fair value all
derivatives that are designated as cash-flow hedging instruments. Gains of $0.2
and losses of $0.2 on derivatives that had been previously deferred netted to
result in no derecognition from the balance sheet through a net-of-tax
cumulative-effect-type adjustment. The Company expects to reclassify as
earnings during the next twelve months $0.2 from the transition adjustment that
was recorded in accumulated other comprehensive income. Net losses of $0.3 and
$0.3 on derivative instruments were reclassified to earnings and recorded in
accumulated other comprehensive income (loss), respectively, during the
year-to-date period ended December 31, 2001.

     Effective with the adoption of SFAS 133, all derivatives were recognized
on the balance sheet at their fair value. On the date the derivative contract
is entered into, the Company designates the derivative as (1) a hedge of the
fair value of a recognized asset or liability or of an unrecognized firm
commitment ("fair value" hedge) or (2) a hedge of a forecasted transaction or
of the variability of cash flows to be received or paid related to a recognized
asset or liability ("cash flow" hedge). Changes in the fair value of a
derivative that is highly effective and that is designated and qualifies as a
fair-value hedge, along with the loss or gain on the hedged asset or liability
that is attributable to the hedged risk, including losses or gains on firm
commitments, are recorded in current-period earnings. Changes in fair value of
a derivative that is highly effective and that is designated and qualifies as a
cash-flow hedge are recorded in other comprehensive income, until earnings are
affected by the variability of cash flows. Earnings are affected by the
variability of cash flows when periodic settlements on variable-rate assets or
liabilities are recorded in earnings.

     The Company formally documents all relationships between hedging
instruments and hedged items, as well as its risk-management objective and
strategy for undertaking various hedge transactions. This process includes
linking all derivatives that are designated as fair-value or cash-flow hedges
to specific assets and liabilities on the balance sheet or to specific firm
commitments or forecasted transactions. The Company also formally assesses,
both at the hedge's inception and on an ongoing basis, whether the derivatives
that are used in hedging transactions are highly effective in offsetting
changes in fair values or cash flows of hedged items. When it is determined
that a derivative is not highly effective as a hedge or that it has ceased to
be a highly effective hedge, the Company

                                     53

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

discontinues hedge accounting prospectively. The Company discontinues hedge
accounting prospectively when (1) it is determined that the derivative is no
longer effective in offsetting changes in the fair value or cash flows of a
hedged item (2) the derivative expires or is sold, terminated, or exercised;
(3) the derivative is de-designated as a hedge instrument, because it is
unlikely that a forecasted transaction will occur; (4) a hedged firm commitment
no longer meets the definition of a firm commitment; or (5) management
determines that designation of the derivative, as a hedge instrument is no
longer appropriate.

     When hedge accounting is discontinued because it is determined that the
derivative no longer qualifies as an effective fair-value hedge, the derivative
will continue to be carried on the balance sheet at its fair value, and the
hedged asset or liability will no longer be adjusted for changes in fair value.
When hedge accounting is discontinued because the hedged item no longer meets
the definition of a firm commitment, the derivative will continue to be carried
on the balance sheet at its fair value, and any asset or liability that was
recorded pursuant to recognition of the firm commitment will be removed from
the balance sheet and recognized as a gain or loss in current-period earnings.
When hedge accounting is discontinued because it is probable that a forecasted
transaction will not occur, the derivative will continue to be carried on the
balance sheet at its fair value, and gains and losses that were accumulated in
other comprehensive income will be recognized immediately in earnings. In all
other situations in which hedge accounting is discontinued, the derivative will
be carried at its fair value on the balance sheet, with changes in its fair
value recognized in current-period earnings.

     The Company is engaged in the design, manufacture and sale of sporting
goods products for the hunting, shooting sports and fishing markets. The
Company's activities expose it to a variety of market risks, including the
effects of changes in interest rates and commodity prices. These financial
exposures are monitored and managed by the Company as an integral part of its
overall risk-management program. The Company's risk-management program focuses
on the unpredictability of financial markets and seeks to reduce the
potentially adverse effects that the volatility of these markets may have on
its operating results. The Company believes it does not have a material
exposure to fluctuations in foreign currencies. The Company is currently not a
party to any interest rate cap or other protection arrangements with respect to
its variable rate indebtedness as of December 31, 2001.

     The Company maintains a commodity-price risk-management strategy that uses
derivative instruments to minimize significant, unanticipated earnings
fluctuations caused by commodity-price volatility. The manufacturing of certain
of the Company's products requires a significant volume of copper and lead.
Price fluctuations in copper and lead commodities cause market values of copper
and lead inventory to differ in relation to cost and actual cash outlays for
the purchase of metal to differ from anticipated cash outlays. The Company uses
futures and options contracts to hedge these risks.

     By using derivative financial instruments to hedge exposures to changes in
commodity prices, the Company exposes itself to credit risk and market risk.
Credit risk is the failure of the counter-party to perform under the terms of
the derivative contract. When the fair value of a derivative contract is
positive, the counter-party owes the Company, which creates repayment risk for
the Company. When the fair value of a derivative contract is negative, the
Company owes the counter-party and, therefore, it does not possess repayment
risk. The Company minimizes the credit (or repayment) risk in derivative
instruments by entering into transactions with high-quality counter-parties
with strong financial condition.

     The Company purchases copper and lead futures and options contracts to
hedge against price fluctuations of anticipated commodity purchases. The
futures and options contracts limit the unfavorable effect that price increases
will have on metal purchases, and the futures contracts likewise limit the
favorable effect of price declines. At December 31, 2001, the Company's
outstanding contracts relating to firm commitments and anticipated purchases
(notional amount aggregated 20.4 million pounds) up to twelve months from the
respective balance sheet date have a fair market value of approximately $0.2
million as determined by an independent third party.

     The Company was not a party to any interest rate cap or other protection
arrangements with respect to its variable rate indebtedness as of December 31,
2001, 2000 or 1999.

                                     54

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

Note 20 - Segment Information
-----------------------------

     The Company's business is classified into one aggregated reportable
segment, Hunting/Shooting Sports, which designs, manufactures and markets
recreational shotguns and rifles, sporting ammunition and ammunition reloading
components. These products are sold primarily to wholesalers and retailers,
mainly through manufacturer's sales representatives. The classification All
Other includes corporate and the manufacture and marketing of clay targets, and
the marketing of hunting/gun care accessories, fishing products and powdered
metal products. The types of customer and distribution method are similar for
substantially all of the Company's products.

     The Company primarily evaluates the performance of its segments and
allocates resources to them based on EBITDA. The chief operating decision maker
is the president and chief executive officer. Reportable segments were
separately identified based on segment revenue, EBITDA and assets. The firearms
and ammunition operations are aggregated because of similarity in nature of
product, manufacturing process and the regulatory environment, in addition to
the type of customer and distribution method. During 2001 and 2000, revenue for
the Hunting/Shooting Sports segment accounted for 89% and for 1999 88% of
consolidated revenue. The Company has no material intersegment revenue.

Information on Segments:

                                                  2001      2000      1999
                                                --------  --------  --------
Net Sales:
   Hunting/Shooting Sports                      $  340.3  $  345.1  $  354.0
   All Other                                        42.8      43.6      49.1
                                                --------  --------  --------
     Consolidated Net Sales                     $  383.1  $  388.7  $  403.1
                                                ========  ========  ========
EBITDA:
   Hunting/Shooting Sports                      $   50.7  $   67.2  $   65.2
   All Other                                         6.1       5.8       8.8
                                                --------  --------  --------
     Consolidated EBITDA                        $   56.8  $   73.0  $   74.0
                                                ========  ========  ========

Assets:
   Hunting/Shooting Sports                      $  194.5  $  222.4  $  188.3
   All Other                                       137.6     139.5     168.8
                                                --------  --------  --------
     Consolidated Assets                        $  332.1  $  361.9  $  357.1
                                                ========  ========  ========

Capital Expenditures:
   Hunting/Shooting Sports                      $    3.4  $   14.1  $   10.9
   All Other                                         0.8       3.3       2.1
                                                --------  --------  --------
     Consolidated Capital Expenditures          $    4.2  $   17.4  $   13.0
                                                ========  ========  ========

Net Sales by Product Line:
                                                  2001      2000      1999
                                                --------  --------  --------
Firearms                                        $  185.4  $  184.1  $  181.7
Ammunition                                         154.9     161.0     172.3
                                                --------  --------  --------
   Hunting/Shooting Sports                         340.3     345.1     354.0
   All Other                                        42.8      43.6      49.1
                                                --------  --------  --------
   Net Sales                                    $  383.1  $  388.7  $  403.1
                                                ========  ========  ========

                                     55

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

Reconciliation of EBITDA to Profit Before Income Taxes:

                                                  2001      2000      1999
                                                 ------    ------    -------
Consolidated EBITDA                              $ 56.8    $ 73.0    $  74.0
                                                 ------    ------    -------

Less: Interest Expense                             15.3      15.6       14.1
   Depreciation and Amortization (1)               16.9      16.4       16.0
   Other Noncash Charges                            1.1       1.2        6.2
   Nonrecurring and Restructuring Items             1.3       0.5          -
   Special Payment                                    -       6.9          -
                                                 ------    ------    -------
                                                   34.6      40.6       36.3
                                                 ------    ------    -------
   Consolidated Profit Before Income Taxes       $ 22.2    $ 32.4    $  37.7
                                                 ======    ======    =======

(1)  Excludes amortization of deferred financing costs of $1.7, $2.0 and
$1.8 in 2001, 2000 and 1999, respectively, which is included in interest
expense.

Geographic Information:

                                                   2001      2000      1999
                                                  -------  -------  -------
Net Sales:
   Domestic                                       $ 356.7  $ 363.5  $ 378.0
   Foreign                                           26.4     25.2     25.1
                                                  -------  -------  -------
     Consolidated Net Sales                       $ 383.1  $ 388.7  $ 403.1
                                                  =======  =======  =======

     Of the Company's Hunting/Shooting Sports revenues in 2001, 2000 and 1999
approximately 19%, 18% and 20%, respectively, consisted of sales made to a
single customer. The Company's sales to this customer are not governed by a
written contract between the parties. Although the Company believes its
relationship with this customer is good, the loss of this customer or a
substantial reduction in sales to this customer could adversely affect the
Company's financial condition or results of operations. No other single
customer comprises greater than or equal to 10% of sales.

Note 21- Quarterly Financial Data (unaudited)
---------------------------------------------

2001                                               Quarter
----                            ------------------------------------
                                   First   Second   Third   Fourth    Total
                                   -----   ------   -----   ------    -----
Sales                             $ 90.6  $ 86.7   $ 114.1  $ 91.7   $ 383.1
Gross Profit                        29.7    23.8      30.6    25.7     109.8
Net Income                           3.6     1.5       4.4     4.2      13.7
Basic Income Per Share              4.53    1.89      5.54    5.29     17.25
Diluted Income Per Share            4.44    1.85      5.44    5.19     16.90

2000                                               Quarter
----                            ------------------------------------
                                   First   Second   Third   Fourth    Total
                                   -----   ------   -----   ------    -----
Sales                             $ 96.6  $ 101.5  $ 113.6  $ 77.0   $388.7
Gross Profit                        32.3     33.4     40.1    27.0    132.8
Net Income                           5.8      1.0      9.3     3.8     19.9
Basic Income Per Share              7.34     1.26    11.71    4.79    25.10
Diluted Income Per Share            7.12     1.22    11.36    4.69    24.49

                                     56

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

Note 22 - Income Per Share
--------------------------

      The basic and diluted income per share was determined as follows:

                                                      2001       2000      1999
                                                      ----       ----      ----
Basic Income Per Share
  Net Income Available to Common Shareholders     $   13.7   $   19.9  $   23.0
  Weighted Average Common Shares                   794,294    792,929   775,042
    Basic Income Per Share                          $17.25     $25.10    $29.68

Diluted Income Per Share
  Net Income Available to Common Shareholders     $   13.7   $   19.9  $   23.0
  Weighted Average Common Shares                   794,294    792,929   775,042
  Effect of Outstanding Options                     16,243     19,632    21,186
  Weighted Average Common Shares and Dilutive
  Potential Common Stock                           810,537    812,561   796,228
    Diluted Income Per Share                      $  16.90   $  24.49  $  28.89

     In the first, second, third and fourth quarter of 2001 and for the year
ended December 31, 2001, 37,481, 37,481, 35,822 and 30,822 outstanding options,
were excluded from the calculation of diluted income per share as they were
anti-dilutive, respectively. Based on an independent evaluation, the estimated
fair value of the Company's Common Stock at December 31, 2001, 2000 and 1999 was
$185, $180 and $230 per share, respectively. The estimated average price during
2001, 2000 and 1999 was $183, $205 and $215 per share, respectively.

                                     57

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

Note 23 - Financial Position and Results of Operations of Holding and Remington
-------------------------------------------------------------------------------

     The following condensed consolidating financial data provides
information regarding the financial position and results of operations of
Holding and its wholly owned subsidiary, Remington, including Remington's wholly
owned subsidiaries Remington International, Ltd., RA Brands, L.L.C. and RA
Factors, Inc. Separate financial statements of Holding are not presented because
management has determined that they would not be material to holders of the
Company's public securities, Remington's 9.5% Senior Subordinated Notes due
2003, Series B (the "Notes"). Further, the Notes are fully and unconditionally
guaranteed by Holding and the subsidiaries of Remington, other than Remington
International, Ltd., which has no significant operations.

                     RACI HOLDING, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATING BALANCE SHEETS
                               December 31, 2001

<TABLE>
<CAPTION>
                                                 Combined
                                                 Guarantor                                                     RACI Holding, Inc
ASSETS                                         Subsidiaries      Remington     Holding       Eliminations      and Subsidiaries
------                                         ------------     ----------    ----------     ------------      -----------------
<S>                                            <C>               <C>          <C>             <C>              <C>
Current Assets                                 $    48.5        $  120.2      $    0.1        $      -         $  168.8
Receivable from Remington, Net                     107.4               -           7.8           115.2                -
Noncurrent Assets                                   46.4           296.5         103.5           283.1            163.3
                                               ---------        --------      --------        --------         --------
     Total Assets                              $   202.3        $  416.7      $  111.4        $  398.3         $  332.1
                                               =========        ========      ========        ========         ========
LIABILITIES, REDEEMABLE SHARES
AND SHAREHOLDERS' EQUITY
------------------------
Current Liabilities                            $    22.7        $   43.5      $      -        $      -         $   66.2
Payable to RACI Holding, Inc., Net                     -             7.8             -             7.8                -
Payable to RA Brands, L.L.C., Net                      -            40.2             -            40.2                -
Payable to RA Factors, Inc., Net                       -            67.2             -            67.2                -
Noncurrent Liabilities                                             154.5             -               -            154.5
Redeemable Shares                                      -               -           6.2               -              6.2
Shareholders' Equity                               179.6           103.5         105.2           283.1            105.2
                                               ---------        --------      --------        --------         --------
     Total Liabilities, Redeemable Shares
        and Shareholders' Equity               $   202.3        $  416.7      $  111.4        $  398.3         $  332.1
                                               =========        ========      ========        ========         ========
</TABLE>

                                     58

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

                     RACI HOLDING, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATING BALANCE SHEETS
                              December 31, 2000

<TABLE>
<CAPTION>
                                                 Combined
                                                 Guarantor                                             RACI Holding, Inc
ASSETS                                         Subsidiaries   Remington     Holding    Eliminations    and Subsidiaries
------                                         ------------   ---------   ----------   ------------   -----------------
<S>                                            <C>            <C>         <C>          <C>                 <C>
Current Assets                                 $   53.3       $  129.0    $   0.1        $      -          $  182.4
Receivable from Remington, Net                     63.5              -        7.7            71.2                 -
Noncurrent Assets                                   3.6          287.4       90.2           201.7             179.5
                                               --------       --------    -------        --------          ---------
Total Assets                                   $  120.4       $  416.4    $  98.0        $  272.9          $   361.9
                                               ========       ========    =======        ========          =========

LIABILITIES, REDEEMABLE SHARES
AND SHAREHOLDERS' EQUITY
------------------------
Current Liabilities                            $    8.9       $   57.6     $     -       $      -          $    66.5
Payable to RACI Holding, Inc., Net                    -            7.7           -            7.7                  -
Payable to RA Brands, L.L.C., Net                     -           15.6           -           15.6                  -
Payable to RA Factors, L.L.C., Net                    -           47.9           -           47.9                  -
Noncurrent Liabilities                                -          197.4           -              -              197.4
Redeemable Shares                                     -              -         6.3              -                6.3
Shareholders' Equity                              111.5           90.2        91.7          201.7               91.7
                                               --------       --------     -------       --------          ---------
     Total Liabilities, Redeemable Shares
        and Shareholders' Equity               $  120.4       $  416.4     $  98.0       $  272.9          $   361.9
                                               ========       ========     =======       ========          =========
</TABLE>

                                     59

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

                     RACI HOLDING, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                       Combined
YEAR ENDED                             Guarantor                                                  RACI Holding, Inc
December 31, 2001                    Subsidiaries    Remington     Hold ing      Eliminations      and Subsidiaries
----------------------------         ------------   -----------   ---------      ------------     -----------------
<S>                                  <C>            <C>           <C>            <C>              <C>
Sales                                $        -     $   383.1     $     -        $      -         $       383.1
Gross Profit                                  -         109.8           -               -                 109.8
Royalty Income (Expense)                   23.0         (23.0)          -               -                     -
Factoring Income (Expense)                 13.2         (13.2)          -               -                     -
Income from Equity Investees                  -          23.1        13.7            36.8                     -
Net Income                                 23.1          13.7        13.7            36.8                  13.7
</TABLE>

<TABLE>
<CAPTION>
                                       Combined
YEAR ENDED                             Guarantor                                                  RACI Holding, Inc
December 31, 2000                    Subsidiaries    Remington     Holding       Eliminations      and Subsidiaries
----------------------------         ------------   -----------   ---------      ------------     -----------------
<S>                                  <C>            <C>           <C>            <C>              <C>
Sales                                $        -     $   388.7     $     -         $       -        $       388.7
Gross Profit                                  -         132.8           -                 -                132.8
Royalty Income (Expense)                   14.5         (14.5)          -                 -                    -
Factoring Income (Expense)                  6.6          (6.6)          -                 -                    -
Income from Equity Investees                  -          14.3        19.9              34.2                    -
Net Income                                 14.3          19.9        19.9              34.2                 19.9
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED                                                                                        RACI Holding, Inc
December 31, 1999                                    Remington    Holding        Eliminations      and Subsidiaries
----------------------------                        -----------   ---------      ------------     -----------------
<S>                                                 <C>           <C>            <C>              <C>
Sales                                               $   403.1     $     -         $      -         $       403.1
Gross Profit                                            129.9           -                -                 129.9
Income from Equity Investees                                -        23.0             23.0                     -
Net Income                                               23.0        23.0             23.0                  23.0
</TABLE>

                                     60

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

                     RACI HOLDING, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
                               December 31, 2001

<TABLE>
<CAPTION>
                                                       Combined
                                                      Guarantor                                        RACI Holding, Inc
                                                     Subsidiaries  Remington  Holding   Eliminations    and Subsidiaries
                                                     ------------  ---------  -------   ------------   -----------------
<S>                                                      <C>       <C>        <C>         <C>               <C>
Operating Activities
   Net Cash Provided (Used) in Operating Activities      $  0.1    $  50.8    $ (0.2)     $    -            $   50.7

Investing Activities
   Capital Expenditures                                       -       (4.2)        -           -                (4.2)
                                                         ------    -------    ------      ------            --------
   Net Cash Used in Investing Activities                      -       (4.2)        -           -                (4.2)
Financing Activities
   Net Payments under Revolving Credit Facility               -      (39.5)        -           -               (39.5)
   Book Overdraft                                             -        6.6         -           -                 6.6
   Principal Payments on Long-Term Debt                       -       (1.4)        -           -                (1.4)
   Net Payments on Short-Term Debt                            -       (1.4)        -           -                (1.4)
   Debt Issuance Costs                                        -       (0.2)        -           -                (0.2)
   Proceeds from Issuance Common Stock                        -          -       0.2           -                 0.2
                                                         ------    -------    ------      ------            --------
   Net Cash (Used) Provided in Financing Activities           -      (35.9)      0.2           -               (35.7)

Increase (Decrease) in Cash and Cash Equivalents            0.1       10.7        -            -                10.8
Cash and Cash Equivalents at Beginning of Period              -        2.6       0.1           -                 2.7
                                                         ------    -------    ------      ------            --------
Cash and Cash Equivalents at End of Period               $  0.1    $  13.3    $  0.1      $    -            $   13.5
                                                         ======    =======    ======      ======            ========
</TABLE>

                                     61

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

                     RACI HOLDING, INC. AND SUBSIDIARIES
         UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
                               December 31, 2000

<TABLE>
<CAPTION>
                                                              Combined
                                                              Guarantor                                       RACI Holding, Inc
                                                            Subsidiaries  Remington  Holding   Eliminations    and Subsidiaries
                                                            ------------  ---------  -------   ------------  -----------------
<S>                                                          <C>          <C>        <C>       <C>           <C>
Operating Activities
   Net Cash (Used) Provided in Operating Activities          $  (93.6)    $  115.4   $     -     $      -     $        21.8

Investing Activities
   Investment in Subsidiaries                                       -        (93.6)        -        (93.6)                -
   Dividends Received, Net of Shareholder Loan Repayments           -            -      54.8         54.8                 -
   Capital Expenditures                                             -        (17.4)        -            -             (17.4)
                                                             --------     --------   -------     --------    --------------
   Net Cash (Used) Provided in Investing Activities                 -       (111.0)     54.8        (38.8)            (17.4)

Financing Activities
   Net Borrowings under   Revolving Credit Facility                 -         64.5         -            -              64.5
   Cash Dividends Paid , Net of Shareholder Loan Repayments         -        (54.8)    (54.8)       (54.8)            (54.8)
   Book Overdraft                                                   -         (5.2)        -            -              (5.2)
   Principal Payments on Long-Term Debt                             -        (29.2)        -            -             (29.2)
   Net Borrowings on Short-Term Debt                                -          0.4         -            -               0.4
   Debt Issuance Costs                                              -         (3.7)        -            -              (3.7)
   Issuance of Common Stock                                      93.6            -         -         93.6                 -
                                                             --------     --------   -------     --------    --------------
   Net Cash Provided (Used) in Financing Activities              93.6        (28.0)    (54.8)        38.8             (28.0)

Increase (Decrease) in Cash and Cash Equivalents                    -        (23.6)        -            -             (23.6)
Cash and Cash Equivalents at Beginning of Period                    -         26.2       0.1            -              26.3
                                                             --------     --------   -------     --------    --------------
Cash and Cash Equivalents at End of Period                   $      -     $    2.6   $   0.1     $      -    $          2.7
                                                             ========     ========   =======     ========    ==============
</TABLE>

                                     62

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Data)

                     RACI HOLDING, INC. AND SUBSIDIARIES
         UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
                               December 31, 1999

<TABLE>
<CAPTION>
                                                                                                 RACI Holding, Inc
                                                       Remington    Holding    Eliminations       and Subsidiaries
                                                       ---------    -------    ------------      -----------------
<S>                                                     <C>         <C>        <C>               <C>
Operating Activities
   Net Cash Provided (Used) in Operating Activities     $   65.1    $ (0.6)     $      -           $       64.5

Investing Activities
   Capital Expenditures                                     (13.0)       -             -                  (13.0)
                                                       ---------    ------      --------           ------------
   Net Cash Used in Investing Activit ies                   (13.0)       -             -                  (13.0)

Financing Activities
   Book Overdraft                                            0.2         -             -                    0.2
   Principal Payments on Long-Term Debt                    (24.8)        -             -                  (24.8)
   Repurchase of Senior Subordinated Notes                  (6.3)        -             -                   (6.3)
   Net Borrowings on Short-Term Debt                         0.1         -             -                    0.1
   Proceeds from Issuance Common Stock                        -        0.7             -                    0.7
                                                       ---------    ------      --------           ------------
   Net Cash (Used) Provided in Financing Activities        (30.8)      0.7             -                  (30.1)

Increase (Decrease) in Cash and Cash Equivalents            21.3       0.1             -                   21.4
Cash and Cash Equivalents at Beginning of Period             4.9         -             -                    4.9
                                                       ---------    ------      --------           ------------
Cash and Cash Equivalents at End of Period             $    26.2    $  0.1      $      -             $     26.3
                                                       =========    ======      ========           ============
</TABLE>

                                     63

<PAGE>

                                                                    Schedule II

                        RACI Holding, Inc. and Subsidiaries
                         Valuation and Qualifying Accounts
                    Years Ended December 31, 2001, 2000 and 1999
                              (Dollars in Millions)

<TABLE>
<CAPTION>
                                                       Charged to
                                         Balance at     Costs and     Additions/    Balance at
                                        Beginning of     Expenses    Deductions       End of
                                           Period        --------    to Reserve       Period
                                           ------                    ----------       ------
<S>                                     <C>             <C>           <C>           <C>
Description:
   Deducted from Asset Account:
    Allowance for Doubtful Accounts

YEAR ENDED
   December 31, 2001                    $  (5.6)       $    (0.5)    $   1.0        $  (5.1)

YEAR ENDED
   December 31, 2000                       (2.5)            (2.8)       (0.3)          (5.6)

YEAR ENDED
   December 31, 1999                       (3.3)            (0.7)        1.5           (2.5)
</TABLE>

                                     64

<PAGE>

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

         None.

                                     65

<PAGE>
                                    PART III
                                    --------

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The names, ages and positions of the directors and executive officers of
Remington as of March 8, 2002 are set forth below. Each of the directors of
Remington is also a director of Holding. Messrs. Millner and Little serve as
executive officers in the same capacities with Holding as they do with
Remington, and Mr. Grecco serves as Corporate Secretary and Vice President of
Holding. All directors are elected annually and hold office until their
successors are elected and qualified, or until their earlier removal or
resignation.

<TABLE>
<CAPTION>
Name                                         Age    Position
-----------------------                      ---    ----------------------------------------------------------
<S>                         <C>               <C>   <C>
Leon J. Hendrix, Jr.        (a)(b)(d)(e)(f)   60    Director, Chairman
B. Charles Ames             (c)               76    Director
Michael G. Babiarz          (c)(e)(f)         36    Director
Bobby R. Brown              (a)(b)(c)         69    Director
Richard A. Gilleland        (b)(c)(d)         57    Director
Richard E. Heckert          (b)(d)            78    Director
Hubbard C. Howe             (e)(f)            73    Director
Thomas E. Ireland           (b)(e)(f)         53    Director
Joseph L. Rice, III         (a)               70    Director
H. Norman Schwarzkopf       (b)(d)            67    Director
Thomas L. Millner           (a)(b)            48    Director, President and Chief Executive Officer
Ronald H. Bristol, II                         39    Executive Vice President and Chief Operating Officer
Mark A. Little              (e)(f)            54    Executive Vice President, Chief Financial Officer and Chief
                                                    Administrative Officer
Paul L. Cahan                                 60    Senior Vice President - Manufacturing
Jay M. Bunting                                44    Vice President - Sales, Marketing and Product Development-
                                                    Firearms and Accessories
John M. Dwyer                                 43    Vice President - Sales, Marketing and Product Development-
                                                    Ammunition, Clay Targets and Law Enforcement
Robert L. Euritt                              67    Vice President - Human Resources
Samuel G. Grecco            (e)(f)            48    Vice President - E-Business and E-Commerce, and Corporate
                                                    Secretary
</TABLE>

     (a) Member, Executive Committee
     (b) Member, Public Policy Committee
     (c) Member, Audit Committee
     (d) Member, Compensation Committee
     (e) Member, Benefits Committee
     (f) Member, Investment Committee

     Each officer of the Company is elected by the Board of Directors to hold
office until the next succeeding annual meeting of the Board of Directors.

     None of the Company's officers has any family relationship with any
director or other officer. "Family relationship" for this purpose means any
relationship by blood, marriage or adoption, not more remote than first cousin.

     The business experience during the past five years of each of the
directors and executive officers listed above is as follows:

     Leon J. (Bill)  Hendrix, Jr. has been a director of Remington and
     ---------------------------
Holding since prior to 1997, and became Chairman in December 1997. In November
2000, Mr. Hendrix retired as a principal of CD&R and became an outside
director and paid Chairman of Remington and Holding. From December 1997 until
April 1999, Mr. Hendrix was Chief Executive Officer. From prior to 1997 until
November 2000, Mr. Hendrix was a principal of CD&R. In November 2000, Mr
Hendrix became an employee of the Company, retaining his title of Chairman.
Mr. Hendrix currently serves as a director of Keithley Instruments, NACCO
Industries, Inc. and Cambrex Corp. He is also a

                                      66

<PAGE>

director of Riverwood International Corporation, and its parents RIC Holding,
Inc. and Riverwood Holding, Inc., corporations in which an investment
partnership managed by CD&R has an investment. Mr. Hendrix serves on the
compensation committees of the Boards of Directors of Keithley Instruments and
Riverwood International Corporation.

     B. Charles Ames was elected to the Boards of Directors of
     ---------------
Remington and Holding in December 1997. Mr. Ames is a professional employee,
and since prior to 1997, has been a principal of CD&R and a general partner of
Clayton & Dubilier Associates IV Limited Partnership ("Associates IV"), the
general partner of C&D Fund IV. Mr. Ames is also a director of Schulte
Bautechnik GmbH, a director and Chairman of the Board of Riverwood
International Corporation and its parents RIC Holding, Inc. and Riverwood
Holding, Inc., and is the Chairman of the Board and a director of Kinko's,
Inc., corporations in which an investment partnership managed by CD&R has
an investment. Mr. Ames also serves on the Boards of Directors of The
Progressive Corporation and Lexmark International, Inc. where he is
Chairman of the Board. Mr. Ames serves on the compensation committees of the
Boards of Directors of Riverwood International Corporation and Lexmark
International, Inc.

     Michael G. Babiarz was elected to the Boards of Directors of Remington
     ------------------
and Holding in October 1998. He has been a principal of CD&R since prior to
1997. Mr. Babiarz currently serves as a director of Allied Worldwide, Inc. and
Fairchild Dornier Corporation, corporations in which an investment partnership
managed by CD&R has an investment.

     Bobby R. Brown has been a director of Remington and Holding since prior
     --------------
to 1997.  From July 1997 to January  1998, Mr. Brown was President, and from
July 1997 to January 1998, was Chairman and Chief Executive Officer, of
CONSOL Inc. and its parent CONSOL Energy Inc., the parents of Consolidation
Coal Company, a coal mining company.  Mr. Brown was the Chairman of CONSOL
Inc. and CONSOL Energy Inc.  from prior to 1997 to February  1999.  Mr. Brown
was a director of CONSOL Inc. and CONSOL Energy Inc.  from prior to 1997 to
February  2000.  Mr.  Brown is a director of Delta Bank and Trust, and
serves on the compensation committee of the Board of Directors of Delta Bank
and Trust.

     Richard A.  Gilleland has been a director of Remington and Holding since
     ---------------------
prior to 1997. From October 1998 to March 1999, Mr. Gilleland was President
of Tyco Healthcare Group, a medical supplies company. He was Chairman
and Chief Executive Officer of Physicians Resource Group, Inc., which
provides management services to physicians and clinics, from December 1997
to October 1998. Mr. Gilleland was a director of Tyco International, Ltd.
from prior to 1997 to July 1999. Mr. Gilleland currently serves as a
director of DePuy Orthopedics.

     Richard E. Heckert has been a director of Remington and Holding since
     ------------------
prior to 1997. Mr. Heckert has been retired since prior to 1997.

     Hubbard C. Howe has been a director of Remington and Holding since
     ---------------
prior to 1997, and was Chairman and Chief Executive Officer of Remington
and Holding from prior to 1997 until December  1997. Mr. Howe has served as
Chairman and as a director since prior to 1997 of A.P.S., Inc., a
distributor of automotive replacement parts, and its parent, APS Holding
Corporation, corporations in which an investment partnership managed by CD&R
had an investment. From March 1997 until January  1998, Mr. Howe served as
the interim Chief Executive Officer of APS Holding Corporation and A.P.S.,
Inc. On February 2, 1998, A.P.S., Inc. and several of its direct and indirect
subsidiaries filed voluntary petitions for relief under Chapter 11 of the
U.S. Bankruptcy Code with the United States Bankruptcy Court for the
District of Delaware. A.P.S., Inc. was liquidated in 1999. Mr. Howe currently
serves as a director of Phoenix Packaging, Inc. and Western Industries
Natural Pharmaceuticals. He is also a director of Riverwood International
Corporation, and its parents RIC Holding, Inc. and Riverwood Holding, Inc.,
corporations in which an investment partnership managed by CD&R has an
investment.

     Thomas E. Ireland has been a director of Remington and Holding
     -----------------
since May 2001. He has been a principal of CD&R since September  1997. From
prior to 1997 to July 1997, Mr. Ireland was a senior managing director of
Alvarez & Marsal, Inc. Mr. Ireland is also a director of Jafra Cosmetics
International, Inc. its parent CDJR

                                     67

<PAGE>

Investments (LUX) S.A., and Jafra Cosmetics International, S.A. de C.V.
corporations in which an investment partnership managed by CD&R has an
investment.

     Joseph L. Rice, III has been a director of Remington and Holding since
     -------------------
prior to 1997. Since prior to 1997, Mr. Rice has been Chairman of CD&R, which
he joined in 1978, and is a general partner of Associates IV. From prior to
1997 to 1998, he also served as Chief Executive Officer of CD&R. Mr. Rice is a
director of Uniroyal Holding, Inc., Acterna Corporation, Schulte Bautechnik
GmbH, and Fairchild Dornier Corporation, corporations in which an investment
partnership managed by CD&R has an investment.

     H. Norman Schwarzkopf has been a director of Remington and Holding since
     ---------------------
prior to 1997. From prior to 1997 he has been a commentator for NBC, as well as
a lecturer and author. He currently serves as a director of USA Networks, Inc.,
and served as a director of Burns International Services, Inc. from prior to
1997 until April 2000. General Schwarzkopf is also a member of the University
of Richmond Board of Trustees and the Nature Conservancy's President's Council.

     Thomas L. Millner was President and Chief Operating Officer of Remington
     -----------------
since prior to 1997 until April 1999, and in April 1999 became President and
Chief Executive Officer. Mr.  Millner has been a director of Remington and
Holding since prior to 1997. Mr. Millner currently serves on the Board of
Directors of Stanley Furniture Co., Inc.

     Ronald H. Bristol, II joined Remington prior to 1997 as Vice President
     ---------------------
- Operations, became Vice President and General Manager - Firearms in December
1997, and became Executive Vice President and Chief Operating Officer in April
2000.

     Mark A. Little was Vice President and Controller of Remington since prior
     --------------
to 1997 and in June 1997, he became Vice President, Chief Financial Officer and
Controller. In September 1999, he became Vice President, Chief Financial
Officer and Treasurer, and in April 2000, he became Executive Vice President,
Chief Financial Officer and Chief Administrative Officer.

     Paul L. Cahan joined Remington prior to 1997 as Vice President -
     -------------
Ammunition and in January 1998 became Vice President and General Manager -
Ammunition. In August 2001, he became Senior Vice President - Manufacturing.

     Jay M. Bunting joined Remington prior to 1997 as Director of Firearms,
     --------------
Marketing and in January 2000 became Director of Sales. In August 2001, he
became Vice President - Sales, Marketing and Product Development for Firearms
and Accessories.

     John M. Dwyer joined Remington prior to 1997 as Director of Product
     -------------
Development - Ammunition and in July 2001 became Vice President - Sales,
Marketing, and Product Development for Ammunition, Clay Targets and Law
Enforcement.

     Robert L. Euritt joined Remington prior to 1997 as Vice President - Human
     ----------------
Resources and Customer Service and in April 2000, he became Vice President
- Human Resources.

     Samuel G. Grecco was Vice President - Business Development and Corporate
     ----------------
Secretary since prior to 1997 and became Vice President - eCommerce and
eBusiness and Corporate Secretary in April 2000.

                                     68

<PAGE>

Item 11.   EXECUTIVE COMPENSATION

Compensation of Directors

     Members of the Board of Directors of Remington and Holding who are not
employees of the Company or CD&R (each, an "Eligible Director") receive a per
meeting fee of $1,000 for each Remington board and committee meeting attended
and an annual retainer of $20,000. An additional per meeting fee of $1,000 is
paid to the chairman of each committee. Members of the Board of Directors of
Holding do not receive any additional compensation for their services in such
capacity. All directors are reimbursed for reasonable travel and lodging
expenses incurred to attend meetings. Each Eligible Director was also eligible
to participate in the RACI Holding, Inc. 1994 Directors' Stock Plan (the "1994
Directors' Plan") under which a director could forego part or all of the annual
retainer and meeting fee payable to him for calendar years 1995-1997 in
exchange for shares of the Holding's Common Stock. The number of shares payable
was determined by dividing (i) the amount of cash retainer fees foregone with
respect to services provided during a calendar year by (ii) the greater of (x)
the fair market value of a share of Common Stock as of the last day of such
calendar year and (y) $100. Under this Plan, 1,800 shares of Common Stock have
been issued. The 1994 Directors' Plan terminated in 1998. Effective July 1,
1997 under the RACI Holding, Inc. Director Stock Purchase Plan (the "1997
Directors' Plan"), the Company offered each Eligible Director the opportunity
to purchase up to 2,500 shares of Common Stock at a purchase price per share of
$100. The 1997 Directors' Plan extends until July 1, 2002. As of the date of
this report, 11,250 shares and 1,250 matching deferred shares of Common Stock
have been issued under the 1997 Directors' Plan.

Compensation of Executive Officers

     The following table summarizes the compensation paid by Remington to its
Chief Executive Officer and to each of the Company's four other most highly
compensated executive officers (the "Named Executive Officers") during or with
respect to the 1999, 2000 and 2001 fiscal years for services in all capacities
rendered to the Company for such fiscal years.

                           Summary Compensation Table
                           --------------------------

<TABLE>
<CAPTION>
                                                                                                Long Term
                                                                                              Compensation
                                                                                                 Awards
                                                                                                 ------
                               Annual Compensation
                       -------------------------------------
                                                                                               Securities
                                                                           Other Annual        Underlying          All Other
Name and Principal Position             Year    Salary($)    Bonus($)     Compensation($)      Options(#)       Compensation($)
---------------------------             ----    ---------    --------     ---------------      ----------       ---------------

<S>                                     <C>     <C>          <C>            <C>                 <C>             <C>
Thomas L. Millner...................    1999    385,000       10,310            --               7,776             876,519(1)
   President and Chief Executive        2000    419,167      350,200            --                 881           2,165,423(2)
   Officer                              2001    435,000           --            --                  --              28,108(3)

Ronald H. Bristol, II...............    1999    175,000      159,800            --               2,288              162,852(4)
   Executive Vice President and         2000    219,167       87,680            --                  --              501,998(5)
   Chief Operating Officer              2001    235,000           --            --                  --              30,493(6)

Mark A. Little......................    1999    178,333      103,450            --               4,255             366,596(1)
   Executive Vice President, Chief      2000    208,917      159,400            --                 122             652,837(2)
   Financial Officer and                2001    220,000           --            --                  --              20,749(3)
   Chief Administrative Officer

Robert L. Euritt....................    1999    170,333      149,500        35,383(7)            4,750             355,155(4)
   Vice President-Human Resources       2000    173,000      111,400        52,971(7)               --             697,150(8)
                                        2001    178,667           --        61,009(7)               --               5,360(9)

Samuel G. Grecco....................    1999    165,000      142,600            --               2,750             354,845(5)
   Vice President-E Business and        2000    172,333      111,400            --                  --             559,385(8)
   E Commerce and Secretary             2001    173,000           --            --                  --               5,190(9)
</TABLE>

                                     69

<PAGE>

(1)  Amount reflects premiums paid by the Company for a Disability Insurance
     Policy, Remington's matching contributions on behalf of the Named
     Executive Officer to the Remington Savings and Investment Plans, deferred
     matching share awards valued at $200 per share, interest paid due to
     delayed bonus payment and deferred stock issuance in lieu of bonus.

(2)  Amount reflects premiums paid by the Company for a Disability Insurance
     Policy, Remington's matching contributions on behalf of the Named
     Executive Officer to the Remington Savings and Investment Plans, deferred
     matching share awards valued at $230 per share and special bonus payments
     (made in connection with dividends) of $63.933 and $7.996 per unit paid
     on each option and deferred share that was held by the Named Executive
     Officer on the respective record dates.

(3)  Reflects Remington's matching contributions on behalf of the Named
     Executive Officer to the Remington Savings and Investment Plans,
     premiums paid by the Company for a Disability Insurance Policy and fees
     and expenses paid for a financial advisor.

(4)  Reflects Remington's matching contributions on behalf of the Named
     Executive Officer to the Remington Savings and Investment Plans,
     deferred matching share awards valued at $200 per share and interest paid
     due to delayed bonus payment.

(5)  Reflects Remington's matching contribution on behalf of the Named
     Executive Officer to the Remington Savings and Investment Plans, special
     bonus payments (made in connection with dividends) of $63.933 and $7.996
     per unit paid on each option and deferred share that was held by the
     Named Executive Officer on the respective record dates, and grant of
     deferred share awards valued at $180 per share.

(6)  Reflects Remington's matching contribution on behalf of the Named
     Executive Officer to the Remington Savings and Investment Plans and fees
     and expenses paid for a financial advisor.

(7)  Amount reflects reimbursements for temporary living expenses incurred by
     the Named Executive Officer.

(8)  Reflects Remington's matching contributions on behalf of the Named
     Executive Officer to the Remington Savings and Investment Plans and
     special bonus payments (made in connection with dividends) of $63.933 and
     $7.996 per unit paid on each option and deferred share that was held by
     the Named Executive Officer on the respective record dates.

(9)  Reflects Remington's matching contribution on behalf of the Named
     Executive Officer to the Remington Savings and Investment Plans.

         Aggregated Option Exercises and FY-End Option Value Table
         ---------------------------------------------------------

<TABLE>
<CAPTION>
                                                                      Number of Securities          Value of Unexercised
                                                                     Underlying Unexercised         In-the-Money Options
                          Shares Acquired                              Options at FY-End                  at FY-End
Name                       on Exercise (#)     Value Realized ($)    Exercisable/Unexercisable    Exercisable/Unexercisable(1)
----                      ---------------    ------------------    -------------------------    -----------------------------
<S>                       <C>                <C>                   <C>                          <C>
Thomas L. Millner               --                   --                  9,850/6,307                       637,500/ -
Ronald H. Bristol, II           --                   --                  2,505/1,658                       159,375/ -
Mark A. Little                  --                   --                  2,277/3,100                        85,000/ -
Robert L. Euritt                --                   --                  4,340/2,750                       198,900/ -
Samuel G. Grecco                --                   --                   3,825/1350                       206,125/ -
</TABLE>

(1)  Calculated based on a per share price of Holding Common Stock of $185, the
     estimated fair value as of December 31, 2001, less the exercise price for
     the option.

                                     70

<PAGE>

Pension and Retirement Plan

     The Remington Arms Company, Inc. Pension and Retirement Plan was
established effective December 1, 1993 to provide retirement income and
survivor benefits to Remington's employees and their beneficiaries through a
tax-qualified program. Pension benefits under the Retirement Plan are limited
in accordance with the provision of the Internal Revenue Code of 1986, as
amended (the "Code"), governing tax qualified pension plans. The Company has
adopted a Supplemental Pension Plan effective January 1, 1998 (the
"Supplemental Plan" and, together with the Pension and Retirement Plan, the
"Pension Plans") that provides for payment to participants of retirement
benefits equal to the excess, if any, of 2% of the participant's average
monthly pay multiplied by such participant's years of service over the amount
actually earned by such participant under the Pension and Retirement Plan. Each
of the Named Executive Officers is eligible to participate in the Pension
Plans. Benefits under the Supplemental Plan are not pre-funded; such benefits
are paid by the Company when due.

     Retirement benefits under the Pension Plans are generally based on an
employee's years of benefit service and highest final average compensation.
Generally, an employee's benefit service under the Pension Plans includes all
of his service with Remington and his service, if any, with DuPont prior to the
Acquisition. DuPont service is not recognized for benefit accrual or early
retirement eligibility, however, in the case of eligible employees who elected
to retire from DuPont and commence receiving retirement income from the DuPont
retirement plan in connection with the Acquisition. Retirement benefits are
generally paid in annuity form, for life, commencing at the employee's 65th
birthday, although longer service employees may elect to commence receiving
retirement income at an earlier age.

<TABLE>
<CAPTION>
    Salary and
50% of Incentive                      Estimated Annual Retirement Benefits Based on Service of
                           -------------------------------------------------------------------------------
    Compensation            15 Years         20 Years          25 Years         30 Years          35 Years
-------------------         --------         --------          --------         --------          --------

<S>                        <C>              <C>               <C>              <C>               <C>
       175,000               52,500           70,000            87,500          105,000           122,500
       200,000               60,000           80,000           100,000          120,000           140,000
       225,000               67,500           90,000           112,500          135,000           157,500
       250,000               75,000          100,000           125,000          150,000           175,000
       300,000               90,000          120,000           150,000          180,000           210,000
       400,000              120,000          160,000           200,000          240,000           280,000
       450,000              135,000          180,000           225,000          270,000           315,000
       500,000              150,000          200,000           250,000          300,000           350,000
       550,000              165,000          220,000           275,000          330,000           385,000
</TABLE>

     The above table illustrates the estimated annual amounts payable under the
Pension Plans, including the Supplemental Plan, in the form of a straight life
annuity to employees retiring at age 65 in 2001. Compensation recognized under
the Pension Plans generally includes an employee's average compensation for the
three consecutive year period in the employee's final ten years of service for
which such compensation was the highest. Compensation for this purpose includes
overtime, shift differentials and 50% of any incentive compensation award.
Compensation does not include awards and payments under any other special
compensation plans, payments for severance, relocation or other special
payments.

     The years of benefit service and average monthly pay (expressed as an
annual amount), recognized as of December 31, 2001, under the Pension Plans for
each eligible Named Executive Officer are as follows:

Name                        Years of Service          Average Pay
----                        ----------------          -----------
Thomas L. Millner                  7.6                  $598,142
Ronald H. Bristol, II              6.5                  $267,689
Mark A. Little                     5.5                  $263,683
Robert L. Euritt                   7.3                  $241,428
Samuel G. Grecco                  25.7                  $232,289

                                     71

<PAGE>

     On July 25, 2001, the Board of Remington Arms Company, Inc. amended the
Health and Welfare Benefit Plan ("Medical Plan") to allow outside directors
under the age of 65 to participate in the Medical Plan. Presently, one outside
director is enrolled in the Medical Plan and reimburses the Company at the same
cost as an active employee.

     On January 23, 2002, the Board of Remington Arms Company, Inc. extended
medical coverage to certain key employees and outside directors under the age
of 65 (collectively the "Participants"), which allows them to continue to
participate in the Medical Plan under certain circumstances. In event of a
change of control, or in the case of a key employee's, retirement, resignation
or termination (except in the case of termination for cause), the Participants
will be entitled to continue to participate in the Medical Plan or any
successor plans, at a cost equal to the cost for active Remington Arms Company,
Inc. employees and on the same basis.

Executive Employment Agreements

     In June 1999, the Company entered into Executive Employment Agreements
with each of the Named Executive Officers. The agreements provide continued
employment terms and severance terms if employment is terminated under certain
conditions. In the event of a termination of the Named Executive Officer's
employment by the Company without "cause" (as defined in the agreement) or by
such Named Executive Officer for "good reason" (as defined in the agreement),
the Named Executive Officer will receive his base salary (as defined in the
agreement) for the longer of one year or the period from such date of
termination through the end of the term, and a portion of incentive
compensation that would have been payable for the calendar year in which his
employment terminates. Messrs. Millner and Little's agreements have terms of
three years and two years, respectively, and Messrs. Euritt, Bristol and
Grecco's agreements each have terms of one year. The agreements also contain
certain non-competition and non-solicitation provisions and provide for the
termination of previously existing employment and severance agreements and
arrangements.

Compensation Committee Interlocks and Insider Participation

     The Board of Directors of the Company established a Compensation Committee
to review all compensation arrangements for executive officers of the Company.
The individuals serving on the Compensation Committee during 2001 were Richard
A.  Gilleland, Chairman, Leon J.  Hendrix, Jr., H. Norman Schwarzkopf and
Richard E.  Heckert.  Mr.  Hendrix has served as Chairman of the Company since
December 1997 and Chief Executive Officer from December 1997 to April 1999. Mr.
Hendrix was also a principal of CD&R until his retirement in 2000. In November
2000, Mr.  Hendrix became an employee of the Company, retaining the title of
Chairman.  Mr. Hendrix continues to serve as a director of the Company and as a
member of the Compensation Committee.  CD&R receives an annual fee for
management and financial consulting services to the Company and reimbursement
of out-of-pocket expenses.  The consulting fees paid to CD&R were $500,000 for
2001 and $400,000 for each of 2000 and 1999.  The consulting fees to be paid to
CD&R may not exceed $500,000 per year under the terms of the Credit Agreement
and the Indenture unless certain requirements are met. Such consulting fees
will be reviewed on an annual basis.  Holding and the Company have also agreed
to indemnify the members of the boards employed by CD&R and CD&R against
certain liabilities incurred under the federal securities laws, other laws
regulating the business of the Company and certain other claims and liabilities
with respect to their services for Holding and the Company.

                                      72

<PAGE>

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Holding owns all of the outstanding common stock (par value $.01 per
share) of Remington. Each share of common stock is entitled to one vote. The
following table sets forth the beneficial ownership, as of March 8, 2002, of
Common Stock by each director of Holding, by all directors and executive
officers of Holding as a group, by each Named Executive Officer, and by each
person who owns beneficially more than five percent of the outstanding shares
of Common Stock:

<TABLE>
<CAPTION>
                                                                               Number          Percent
Name of Beneficial Owner                                                       of Shares      of Class
------------------------                                                       ---------      --------
<S>                                                                            <C>                  <C>
The Clayton & Dubilier Private Equity Fund IV Limited Partnership(1)           750,000              98.0
B. Charles Ames(2)                                                                  --                --
Michael G. Babiarz(2)                                                               --                --
Hubbard C. Howe(2)                                                                  --                --
Joseph L. Rice, III(2)                                                              --                --
Bobby R. Brown                                                                   2,700                 *
Richard A. Gilleland                                                             2,700                 *
Richard E. Heckert                                                               2,700                 *
Thomas E. Ireland                                                                   --                --
H. Norman Schwarzkopf(3)                                                         2,900                 *
Leon J. Hendrix, Jr.(4)                                                          1,400                 *
Thomas L. Millner(5)                                                            17,928               2.3
Ronald H. Bristol, II(5)                                                         4,540                 *
Mark A. Little (5)                                                               5,777                 *
Robert L. Euritt(5)                                                              8,590               1.1
Samuel G. Grecco(5)                                                              7,325               1.0
Executive officers and directors as a group(2)(3)(4)(5)(6)                      65,070               8.5
*Less than 1%
</TABLE>

(1)  Clayton & Dubilier Associates IV Limited Partnership ("Associates IV") is
     the general partner of The Clayton & Dubilier Private Equity Fund IV
     Limited Partnership ("C&D Fund IV") and by virtue of such status may be
     deemed to be the beneficial owner of the shares owned by C&D Fund IV.
     Associates IV has the power to direct C&D Fund IV as to the voting and
     disposition of shares held by C&D Fund IV. No person controls the voting
     and dispositive power of Associates IV with respect to the shares owned by
     C&D Fund IV. Associates IV expressly disclaims beneficial ownership of the
     shares owned by C&D Fund IV. The business address for each of C&D Fund IV
     and Associates IV is 270 Greenwich Avenue, Greenwich, Connecticut 06830.

(2)  Does not include shares owned by C&D Fund IV.

(3)  Includes 1,250 deferred shares held by Mr. Schwarzkopf, director.

(4)  Includes 256 deferred shares held by Mr. Hendrix, director, Chairman.

(5)  Includes 9,850, 2,505, 2,277, 4,340, 3,825 shares that may be acquired
     upon exercise of options by Messrs.  Millner, Bristol, Little, Euritt and
     Grecco, respectively.  Includes 8,078, 2,035, 2,775, 2,530, 2,530 deferred
     shares of common stock held by Messrs. Millner, Bristol, Little, Euritt
     and Grecco, respectively.

(6)  Includes 26,971 shares that may be acquired upon exercise of vested
     options and excludes 22,891 deferred shares of common stock held by the
     executive officers as a group.

                                      73

<PAGE>

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

CD&R and C&D Fund IV

     C&D Fund IV, which currently is Holding's largest shareholder, is a
private investment fund managed by CD&R. Amounts contributed to C&D Fund IV by
its limited partners are invested at the discretion of the general partner in
equity or equity-related securities of entities formed to effect leveraged
buy-out transactions and in the equity of corporations where the infusion of
capital coupled with the provision of managerial assistance by CD&R can be
expected to generate returns on investments comparable to returns historically
achieved in leveraged buy-out transactions. The general partner of C&D Fund IV
is Associates IV. Leon J. Hendrix, Jr., formally a principal of CD&R, is a
director and has served in the capacity of Chairman since December 1997. In
November 2000, Mr. Hendrix became an employee of the Company, retaining the
title of Chairman. Joseph L. Rice, III and B. Charles Ames are principals of
CD&R, general partners of Associates IV, and directors of Remington and
Holding.  Michael G. Babiarz and Thomas E. Ireland are principals and
stockholders of CD&R and director of Remington and Holding. Joseph L. Rice, III
is a stockholder of CD&R. Hubbard C. Howe is a director of Remington and a
former principal of CD&R.

     Pursuant to a consulting agreement among Holding, Remington and CD&R, CD&R
receives an annual fee for management and financial consulting services
provided to the Company and reimbursement of out-of-pocket expenses. Such
consulting services include helping the Company to establish effective banking,
legal and other business relationships, and assisting management in developing
and implementing strategies for improving the operational, marketing and
financial performance of the Company. The consulting agreement currently
provides for an annual fee of $0.5 million, which may be adjusted at the
discretion of a majority of the directors of the Company not affiliated with
CD&R, but may not be adjusted downward without CD&R's consent. In addition, the
consulting agreement also provides that if an employee of CD&R is appointed to
an executive management position (or position of comparable responsibility) in
the Company, the annual fee will be increased by an amount to be determined by
CD&R, the amount of such increase not to exceed 100% of the existing annual fee
in effect at that time. However, any increase in the annual fee is subject to
limitations in the Credit Agreement and the Indenture that do not permit the
annual fee to exceed $0.5 million. The Company paid an annual fee of $0.5
million in 2001 and an annual fee of $0.4 million in each of 2000 and 1999. The
consulting agreement also provides that CD&R will perform financial advisory,
investment banking and similar services with respect to proposals for an
acquisition, merger, recapitalization, or any other similar transaction
directly or indirectly involving Holding, Remington and their subsidiaries. The
fee for such services in connection with future transactions would be an amount
equal to 1% of the transaction value for the transaction to which such fee
relates. The amount of the transaction fee may be increased if approved by a
majority of the directors of the Company not affiliated with CD&R.

     The Company paid fees to the law firm of Debevoise & Plimpton during 2000
for legal services rendered. Franci J. Blassberg, Esq., a member of Debevoise &
Plimpton, is married to Joseph L. Rice, III, a director of the Company and a
general partner of Associates IV. Fees and expenses paid to Debevoise
Plimpton for 2001, 2000 and 1999 were $1.7 million, $2.0 million, and $1.6
million, respectively.

     CD&R, C&D Fund IV, Holding and the Company have entered into an
indemnification agreement, pursuant to which Holding and the Company have
agreed to indemnify CD&R, C&D Fund IV, Associates IV and their respective
directors, officers, partners, employees, agents and controlling persons
against certain liabilities arising under the federal securities laws, other
laws regulating the business of the Company and certain other claims and
liabilities.

     C&D Fund IV currently owns 98.0% of the outstanding Common Stock. C&D Fund
IV and Holding have entered into a registration rights agreement that, among
other things, provides C&D Fund IV and will provide certain other Holding
equity holders with certain registration rights with respect to their Common
Stock.

                                      74

<PAGE>

Stock Option and Purchase Plans

     As of December 31, 2001, the Company has reserved 184,580 shares of the
Common Stock for issuance in accordance with the terms of the Amended and
Restated RACI Holding, Inc. Stock Option Plan (the "Option Plan"), the RACI
Holding, Inc. Stock Purchase Plan (the "Purchase Plan"), the RACI Holding, Inc.
1994 Director Stock Plan (the "1994 Director Plan"), the RACI Holding, Inc.
Director Plan (the Director Plan"), the RACI Holding, Inc. Director Stock
Option Plan (the "Director Stock Option Plan") and the RACI Holding, Inc. Stock
Incentive Plan (the "1999 Stock Incentive Plan"). As of December 31, 2001,
33,566 options were granted under the Option Plan; 1,800 shares have been
issued under the 1994 Director Plan; 11,250 shares and 1,250 deferred matching
shares of Common Stock have been issued under the 1997 Director Plan; 6,198
shares have been issued, 24,191 deferred shares were awarded and 35,821 options
were granted under the 1999 Stock Incentive Plan and no shares of Common Stock
have been issued the Purchase Plan. As of December 31, 2001, 71,754 shares of
common stock remain available for grant under the above mentioned plans.

     At December 31, 2001 options to purchase 33,565 shares of Common Stock
were outstanding, at a per share exercise price of $100, of which all options
were exercisable, options to purchase 29,438 shares of Common Stock were
outstanding, at a per share exercise price of $200, of which 9,352 options were
exercisable, options to purchase 1,383 shares of Common Stock were outstanding
at a per share exercise price of $230, of which 763 options were exercisable
and options to purchase 5,000 shares of Common Stock were outstanding at a per
share exercise price of $180, of which no options were exercisable.

     In March 2001, certain members of management acquired an aggregate of
1,144 redeemable shares of Common Stock and 715 redeemable deferred shares at a
purchase price of $180 per share and were granted options to purchase 5,000
shares of Common Stock at an exercise price of $180 per share.

     In March 2002, certain members of management acquired an aggregate of 891
redeemable shares at a purchase price of $185 per share and were granted
options to purchase 891 shares of Common Stock, under the 1999 Stock Incentive
Plan at an exercise price of $185 per share.

                                      75

<PAGE>

                                    PART IV
                                    -------

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

(a) Documents filed as part of this report:

(1) Financial Statements                                                   Page

     Report of Independent Accountants....................................  34
     Consolidated Balance Sheets as of December 31, 2001 and 2000.........  35
     Consolidated Statements of Operation for the years ended
     December 31, 2001, 2000 and 1999.....................................  36
     Consolidated Statements of Cash Flows for the years ended
     December 31, 2001, 2000, and 1999....................................  37
     Consolidated Statements of Shareholders' Equity and Comprehensive
     Income for the years ended December 31, 2001, 2000 and 1999..........  38
     Notes to Consolidated Financial Statements...........................  39

(2) Financial Statement Schedule

     Valuation and Qualifying Accounts....................................  65

(3) List of Exhibits

     See Exhibit Index on Page 80.

(b) Reports on Form 8-K.

     The Company filed Current Report on Form 8-K, dated December 6, 2001, with
     the Commission on December 20, 2001 reporting the First Amendment to the
     Amended and Restated Credit Agreement, dated as of April 28, 2000.

                                       76

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized as of March 8, 2002.
                                RACI HOLDING, INC.

                                By: /s/ Thomas L. Millner
                                  ---------------------------------------------
                                      Thomas L. Millner
                                Chief Executive Officer, President and Director

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 8, 2002.

     /s/ Thomas L. Millner       Chief Executive Officer, President and Director
------------------------------
       Thomas L. Millner         (Principal Executive Officer)

                                 Executive Vice President, Chief Financial
     /s/ Mark A. Little          Officer and Chief Administrative Officer
------------------------------
       Mark A. Little            (Principal Financial and Accounting Officer)

     /s/ Leon J. Hendrix, Jr.    Chairman and Director
------------------------------
       Leon J. Hendrix, Jr.

     /s/ B. Charles Ames         Director
------------------------------
       B. Charles Ames

     /s/ Michael G. Babiarz      Director
------------------------------
       Michael G. Babiarz

     /s/ Bobby R. Brown          Director
------------------------------
       Bobby R. Brown

     /s/ Richard A. Gilleland    Director
------------------------------
       Richard A. Gilleland

     /s/ Thomas E. Ireland       Director
------------------------------
       Thomas E. Ireland

     /s/ Richard E. Heckert      Director
------------------------------
       Richard E. Heckert

     /s/ Hubbard C. Howe         Director
------------------------------
       Hubbard C. Howe

     /s/ Joseph L. Rice, III     Director
------------------------------
       Joseph L. Rice, III

     /s/ H. Norman Schwarzkopf   Director
------------------------------
       H. Norman Schwarzkopf

                                       77

<PAGE>

Supplemental Information to be Furnished with Reports Filed Pursuant to Section
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant
to Section 12 of the Act.

     The form of proxy, notice of annual meeting and instructions sent to
security holders are attached here to as exhibits 99.2 and 99.3.

                                      78

<PAGE>

                                 EXHIBIT INDEX
                                 -------------
              Form 10-K for Fiscal Year Ended December 31, 2001
              -------------------------------------------------

Exhibit No.                            Description
-----------                            ------------

2.1     Asset Purchase Agreement, dated as of November 24, 1993, among Remington
        Arms Company, Inc., formerly named RACI Acquisition Corporation
        ("Remington"), E.I. du Pont de Nemours and Company ("DuPont") and
        Sporting Goods Properties, Inc., formerly named Remington Arms Company,
        Inc. ("Sporting Goods"); previously filed as Exhibit 2.1 to Registration
        Statement No. 333-4520, 333-4520-01 under the Securities Act of 1933, as
        amended, filed May 3, 1996, and herein incorporated by reference.

2.2     Understanding and Agreement Regarding Product Liability Litigation,
        dated as of June 1, 1996 between DuPont and Remington; previously filed
        as Exhibit 2.2 to Amendment No. 2 to Registration Statement No.
        333-4520, 333-4520-01 under the Securities Act of 1933, as amended,
        filed April 23, 1997, and herein incorporated by reference.

2.3     Non-Competition Agreement, dated as of December 1, 1993, among DuPont,
        Sporting Goods and Remington; previously filed as Exhibit 2.3 to
        Registration Statement No. 333-4520, 333-4520-01 under the Securities
        Act of 1933, as amended, filed May 3, 1996, and herein incorporated by
        reference.

2.4     Product Liability Services and Defense Coordination Agreement, dated as
        of December 1, 1993, among DuPont, Sporting Goods and Remington;
        previously filed as Exhibit 2.4 to Registration Statement No. 333-4520,
        333-4520-01 under the Securities Act of 1933, as amended, filed May 3,
        1996, and herein incorporated by reference.

2.5     Environmental Liability Services Agreement, dated as of December 1,
        1993, between DuPont and Remington; previously filed as Exhibit 2.5 to
        Registration Statement No. 333-4520, 333-4520-01 under the Securities
        Act of 1933, as amended, filed May 3, 1996, and herein incorporated by
        reference.

3.1     Certificate of Incorporation of RACI Holding, Inc. ("Holding"), dated
        October 21, 1993, as amended on June 21, 1995; previously filed as
        Exhibit 3.1 to Registration Statement No. 333-4520, 333-4520-01 under
        the Securities Act of 1933, as amended, filed May 3, 1996, and herein
        incorporated by reference.

3.2     By-Laws of Holding, as amended and restated on July 27, 1999; previously
        filed as Exhibit 3.1 to Quarterly Report on Form 10-Q, filed November
        12, 1999, and herein incorporated by reference.

4.1     Specimen of Holding Class A Common Stock Certificate; previously filed
        as Exhibit 4.1 to Annual Report on Form 10-K, filed March 30, 1998, and
        herein incorporated by reference.

4.2     Specimen of Holding Class B Common Stock Certificate; previously filed
        as Exhibit 4.2 to Annual Report on Form 10-K, filed March 30, 1998, and
        herein incorporated by reference.

4.3     Indenture, dated as of November 30, 1993 (the "Indenture"), among
        Remington, First Trust National Association, as Trustee, and Holding, as
        Guarantor, with respect to Remington's 9.5% Senior Subordinated Notes
        due 2003 (the "Notes"); previously filed as Exhibit 4.1 to Registration
        Statement No. 333-4520, 333-4520-01 under the Securities Act of 1933, as
        amended, filed May 3, 1996, and herein incorporated by reference.

                                      79

<PAGE>

4.4     First Supplemental Indenture, dated as of June 30, 2000, among RA
        Brands, L.L.C., as a Subsidiary Guarantor, Remington, Holding, as a
        Guarantor, and U.S. Bank National Association, as Trustee, to the
        Indenture referred to in Exhibit 4.3 above; previously filed as Exhibit
        4.4 to Annual Report on Form 10-K filed March 23, 2001 and herein
        incorporated by reference.

4.5     Second Supplemental Indenture, dated as of August 25, 2000, among RA
        Factors, L.L.C., as a Subsidiary Guarantor, Remington, Holding, as a
        Guarantor, and U.S. Bank National Association, as Trustee, to the
        Indenture referred to in Exhibit 4.3 above; previously filed as Exhibit
        4.5 to Annual Report on Form 10-K filed March 23, 2001 and herein
        incorporated by reference.

4.6     Purchase Agreement, dated November 19, 1993, among Remington, Holding,
        Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
        ("Merrill Lynch"), and CS First Boston Corporation ("First Boston" and,
        together with Merrill Lynch, the "Initial Purchaser"); previously filed
        as Exhibit 4.2 to Registration Statement No. 333-4520, 333-4520-01 under
        the Securities Act of 1933, as amended, filed May 3, 1996, and herein
        incorporated by reference.

4.7     Registration Rights Agreement, dated as of November 30, 1993, among
        Remington, Holding and the Initial Purchasers; previously filed as
        Exhibit 4.3 to Registration Statement No. 333-4520, 333-4520-01 under
        the Securities Act of 1933, as amended, filed May 3, 1996, and herein
        incorporated by reference.

4.8     Amended and Restated Credit Agreement, dated as of April 28, 2000, among
        Remington, The Chase Manhattan Bank, as Administrative Agent and the
        other lenders named therein; previously filed as Exhibit 4.1 to the
        Company's quarterly report on Form 10-Q for the quarter ended March 31,
        2000 and herein incorporated by reference.

4.9     First Amendment, dated effective December 6, 2001, to the Amended and
        Restated Credit Agreement, dated as of April 28, 2000, among Remington,
        the registrant, the several banks and financial institutions party
        thereto, and The Chase Manhattan Bank, as administrative agent;
        previously filed as Exhibit 10.1 on the Company's current report on Form
        8-K dated December 20, 2001 and herein incorporated by reference.

4.10    Borrower Stock Pledge Agreement, dated as of April 28, 2000 between
        Remington and The Chase Manhattan Bank, as Administrative Agent;
        previously filed as Exhibit 4.2 to the Company's quarterly report on
        Form 10-Q for the quarter ended March 31, 2000 and herein incorporated
        by reference.

4.11    Borrower Security Agreement, dated as of April 28, 2000 between
        Remington and The Chase Manhattan Bank, as Administrative Agent;
        previously filed as Exhibit 4.3 to the Company's quarterly report on
        Form 10-Q for the quarter ended March 31, 2000 and herein incorporated
        by reference.

4.12    Borrower Patent and Trademark Security Agreement, dated as of April 28,
        2000 between Remington and The Chase Manhattan Bank, as Administrative
        Agent; previously filed as Exhibit 4.4 to the Company's quarterly report
        on Form 10-Q for the quarter ended March 31, 2000 and herein
        incorporated by reference.

4.13    Holding Stock Pledge Agreement, dated as of April 28, 2000 between
        Remington and The Chase Manhattan Bank, as Administrative Agent;
        previously filed as Exhibit 4.5 to the Company's quarterly report on
        Form 10-Q for the quarter ended March 31, 2000 and herein incorporated
        by reference.

4.14    Holding Guarantee, dated as of April 28, 2000 between Remington and The
        Chase Manhattan Bank, as Administrative Agent; previously filed as
        Exhibit 4.6 to the Company's quarterly report on Form 10-Q for the
        quarter ended March 31, 2000 and herein incorporated by reference.

                                      80

<PAGE>

4.15    Supplement No. 1 to Borrower Stock Pledge Agreement, dated as of June
        30, 2000, between Remington and The Chase Manhattan Bank, as
        Administrative Agent; previously filed as Exhibit 4.14 to Annual Report
        on Form 10-K filed March 23, 2001 and herein incorporated by reference.

4.16    Subsidiary Guarantee, dated as of June 30, 2000, between RA Brands,
        L.L.C. and The Chase Manhattan Bank, as Administrative Agent; previously
        filed as Exhibit 4.15 to Annual Report on Form 10-K filed March 23, 2001
        and herein incorporated by reference.

4.17    Subsidiary Security Agreement, dated as of June 30, 2000, between RA
        Brands, L.L.C. and The Chase Manhattan Bank, as Administrative Agent;
        previously filed as Exhibit 4.16 to Annual Report on Form 10-K filed
        March 23, 2001 and herein incorporated by reference.

4.18    Subsidiary Patent and Trademark Security Agreement, dated as of June 30,
        2000, between RA Brands, L.L.C. and The Chase Manhattan Bank, as
        Administrative Agent; previously filed as Exhibit 4.17 to Annual Report
        on Form 10-K filed March 23, 2001 and herein incorporated by reference.

4.19    Supplement No. 2 to Borrower Stock Pledge Agreement, dated as of August
        25, 2000, between Remington and The Chase Manhattan Bank, as
        Administrative Agent; previously filed as Exhibit 4.18 to Annual Report
        on Form 10-K filed March 23, 2001 and herein incorporated by reference.

4.20    Subsidiary Guarantee, dated as of August 25, 2000, between RA Factors,
        L.L.C. and The Chase Manhattan Bank, as Administrative Agent; previously
        filed as Exhibit 4.19 to Annual Report on Form 10-K filed March 23, 2001
        and herein incorporated by reference.

4.21    Subsidiary Security Agreement, dated as of August 25, 2000, between RA
        Factors, L.L.C. and The Chase Manhattan Bank, as Administrative Agent;
        previously filed as Exhibit 4.20 to Annual Report on Form 10-K filed
        March 23, 2001 and herein incorporated by reference.

4.22    Sublease, dated as of March 1, 1987, between S&K Industries, Inc., as
        lessor, and Remington as assignee of DuPont, as lessee (agreement to
        furnish such sublease to the Securities and Exchange Commission upon its
        request); previously filed as Exhibit 4.17 to Annual Report on Form
        10-K, filed March 30, 1998, and herein incorporated by reference.

4.23    Third Supplemental Indenture, dated as of January 2, 2002, among RBC
        Holdings, Inc., as a Subsidiary Guarantor, Remington, Holdings, as a
        Guarantor, and U.S. Bank National Association, as Trustee, to the
        Indenture referred to in Exhibit 4.3; filed herewith.

4.24    Supplement No.3 to Borrower Stock Pledge Agreement, dated as of January
        2, 2002, between Remington and The Chase Manhattan Bank, as
        Administrative Agent; filed herewith.

4.25    Subsidiary Stock Pledge Agreement, dated as of January 2, 2002, between
        RBC Holdings, Inc. and The Chase Manhattan Bank, as Administrative
        Agent; filed herewith.

4.26    Subsidiary Guarantee, dated as of January 2, 2002, between RBC Holdings,
        Inc. and The Chase Manhattan Bank, as Administrative Agent; filed
        herewith.

4.27    Subsidiary Security Agreement, dated as of January 2, 2002, between RBC
        Holdings, Inc. and The Chase Manhattan Bank, as Administrative Agent;
        filed herewith.

                                      81

<PAGE>

Items in this Section 10 constitute management contracts or compensatory plans
or arrangements with the exception of Exhibits 10.1 through 10.26 and 10.49
through 10.54.

10.1    Filed as Exhibit 2.1.

10.2    Filed as Exhibit 2.2.

10.3    Filed as Exhibit 2.3.

10.4    Filed as Exhibit 2.4.

10.5    Filed as Exhibit 2.5.

10.6    Filed as Exhibit 4.3.

10.7    Filed as Exhibit 4.4.

10.8    Filed as Exhibit 4.5.

10.9    Filed as Exhibit 4.6.

10.10   Filed as Exhibit 4.7.

10.11   Filed as Exhibit 4.8.

10.12   Filed as Exhibit 4.9.

10.13   Filed as Exhibit 4.10.

10.14   Filed as Exhibit 4.11.

10.15   Filed as Exhibit 4.12.

10.16   Filed as Exhibit 4.13.

10.17   Filed as Exhibit 4.14.

10.18   Filed as Exhibit 4.15.

10.19   Filed as Exhibit 4.16.

10.20   Filed as Exhibit 4.17.

10.21   Filed as Exhibit 4.18.

10.22   Filed as Exhibit 4.19.

10.23   Filed as Exhibit 4.20.

                                      82

<PAGE>

10.24   Registration and Participation Agreement, dated as of November 30, 1993,
        between Holding and The Clayton & Dubilier Private Equity Fund IV
        Limited Partnership (the "C&D Fund"); previously filed as Exhibit 10.14
        to Registration Statement No. 333-4520, 333-4520-01 under the Securities
        Act of 1933, as amended, filed May 3, 1996, and herein incorporated by
        reference.

10.25   Stock Subscription Agreement, dated as of November 30, 1993, between
        Holding and the C&D Fund; previously filed as Exhibit 10.15 to
        Registration Statement No. 333-4520, 333-4520-01 under the Securities
        Act of 1933, as amended, filed May 3, 1996, and herein incorporated by
        reference.

10.26   Indemnification Agreement, dated as of November 30, 1993, among
        Remington, Holding, Clayton, Dubilier & Rice, Inc. and the C&D Fund;
        previously filed as Exhibit 10.16 to Registration Statement No.
        333-4520, 333-4520-01 under the Securities Act of 1933, as amended,
        filed May 3, 1996, and herein incorporated by reference.

10.27   RACI Holding, Inc. 1994 Directors' Stock Plan, adopted on June 2, 1994;
        previously filed as Exhibit 10.18 to Registration Statement No.
        333-4520, 333-4520-01 under the Securities Act of 1933, as amended,
        filed May 3, 1996, and herein incorporated by reference.

10.28   RACI Holding, Inc. Stock Purchase Plan, adopted on June 2, 1994;
        previously filed as Exhibit 10.19 to Registration Statement No.
        333-4520, 333-4520-01 under the Securities Act of 1933, as amended,
        filed May 3, 1996, and herein incorporated by reference.

10.29   Amended and Restated RACI Holding, Inc. Stock Option Plan, adopted as of
        July 17, 1995; previously filed as Exhibit 10.20 to Registration
        Statement No. 333-4520, 333-4520-01 under the Securities Act of 1933, as
        amended, filed May 3, 1996, and herein incorporated by reference.

10.30   Amendment No. 1, effective as of July 22, 1996, to the Amended and
        Restated RACI Holding, Inc. Stock Option Plan referred to as Exhibit
        10.25 above; previously filed as Exhibit 10.25 to Amendment No. 1 to
        Registration Statement No. 333-4520, 333-4520-01 under the Securities
        Act of 1933, as amended, filed January 10, 1997, and herein incorporated
        by reference.

10.31   Form of Management Stock Option Agreement; previously filed as Exhibit
        10.21 to Registration Statement No. 333-4520, 333-4520-01 under the
        Securities Act of 1933, as amended, filed May 3, 1996, and herein
        incorporated by reference.

10.32   RACI Holding, Inc. Director Stock Purchase Plan, adopted on July 22,
        1997; previously filed as Exhibit 10.1 by the Company in its Form 10-Q
        for the quarter ended September 30, 1997, and herein incorporated by
        reference.

10.33   Form of Director Stock Subscription Agreement; previously filed as
        Exhibit 10.2 by the Company in its Form 10-Q for the quarter ended
        September 30, 1997, and herein incorporated by reference.

10.34   RACI Holding, Inc. Director Stock Option Plan, adopted on July 22, 1996;
        previously filed as Exhibit 10.27 to Amendment No. 1 to Registration
        Statement No. 333-4520, 333-4520-01 under the Securities Act of 1933, as
        amended, filed January 10, 1997, and herein incorporated by reference.

10.35   Consulting Agreement, dated as of December 1, 1993, among Holding,
        Remington and Clayton, Dubilier & Rice, Inc.; previously filed as
        Exhibit 10.28 to Amendment No. 2 to Registration Statement No. 333-4520,
        333-4520-01 under the Securities Act of 1933, as amended, filed April
        23, 1997, and herein incorporated by

                                      83

<PAGE>

        reference.

10.36   Form of Executive Employment Agreement; previously filed as Exhibit
        10.34 to the Company's Annual Report on Form 10-K, filed March 30, 1999,
        and herein incorporated by reference.

10.37   Director Stock Subscription Agreement; previously filed as Exhibit 10.1
        to the Company's Quarterly Report on Form 10-Q, for the quarter ended
        June 30, 1999, and herein incorporated by reference.

10.38   Director Matching Deferred Share Award Agreement; previously filed as
        Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q, for the
        quarter ended June 30, 1999, and herein incorporated by reference.

10.39   1999 RACI, Holding, Inc. Stock Incentive Plan; previously filed as
        Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q, for the
        quarter ended June 30, 1999, and herein incorporated by reference.

10.40   Form of Management Stock Subscription Agreement; previously filed as
        Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q, for the
        quarter ended June 30, 1999, and herein incorporated by reference.

10.41   Form of Management Stock Subscription Agreement - Performance Option;
        previously filed as Exhibit 10.5 to the Company's Quarterly Report on
        Form 10-Q, for the quarter ended June 30, 1999, and herein incorporated
        by reference.

10.42   Form of Management Stock Subscription Agreement - Service Option;
        previously filed as Exhibit 10.6 to the Company's Quarterly Report on
        Form 10-Q, for the quarter ended June 30, 1999, and herein incorporated
        by reference.

10.43   Form of Stock Purchase Right Deferred Share Award Agreement; previously
        filed as Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q,
        for the quarter ended June 30, 1999, and herein incorporated by
        reference.

10.44   Form of Matching Deferred Share Award Agreement; previously filed as
        Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q, for the
        quarter ended June 30, 1999, and herein incorporated by reference.

10.45   Profit Based Bonus Plan; previously filed as Exhibit 10.11 to the
        Company's Quarterly Report on Form 10-Q, for the quarter ended June 30,
        1999, and herein incorporated by reference.

10.46   Form of Management Stock Subscription Agreement; filed herewith.

10.47   Form of Management Stock Option Agreement; filed herewith.

10.48   Form of Deferred Share Award Agreement; filed herewith.

10.49   Filed as Exhibit 4.23.

10.50   Filed as Exhibit 4.24.

10.51   Filed as Exhibit 4.25.

                                      84

<PAGE>

10.52   Filed as Exhibit 4.26.

10.53   Filed as Exhibit 4.27.

10.54   Amended and Restated Consulting Agreement, dated effective January 1,
        2001, among Holding, Remington, and Clayton Dubilier & Rice, Inc., filed
        herwith.

12.1    Computation of Ratio of Earnings to Fixed Charges.

21.1    List of Subsidiaries.

23.1    Consent of PricewaterhouseCoopers LLP as Independent Accountants of the
        Registrant.

99.1    Reconciliation of Income (Loss) from Operations to EBITDA.

99.2    Form of proxy set to security holders for 2001 annual meeting.

99.3    Notice of Annual Meeting and Instructions sent to security holders for
        2001 annual meeting.

                                      85