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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-K

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

For the fiscal year ended December 31, 2001

OR

|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from
 to

Commission file number 1-12261

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SUPERIOR TELECOM INC.(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

58-2248978(I.R.S. Employer Identification No.)One Meadowlands Plaza
East Rutherford, New Jersey(Address of principal executive offices)

07073(Zip code)


Registrant's telephone number, including area code 201-549-4400

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

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

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

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

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of 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. o

At
March 25, 2002, the registrant had 21,343,476 shares of common stock, par value $.01 per share, outstanding, and the aggregate market value of the outstanding shares of voting
stock held by non-affiliates of the registrant on such date was approximately $7.8 million based on the closing price of $0.78 per share of such common stock on such date.

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DOCUMENTS INCORPORATED BY REFERENCE

Proxy
Statement for the Company's Annual Meeting of Stockholders in Part III of this Form 10-K.

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PART I

Item 1. Business

General

Superior TeleCom Inc. (together with its subsidiaries, unless the context otherwise requires, the "Company" or "Superior") is the largest wire and cable
manufacturer in North America and the fourth largest in the world. Superior manufactures wire and cable products for the communications, original equipment manufacturer, or "OEM", and electrical
markets. Superior is a leading manufacturer and supplier of communications wire and cable products; magnet wire and insulation materials for motors, transformers and electrical controls; and building
and industrial wire for applications in commercial and residential construction and industrial facilities. Superior operates 30 manufacturing facilities in the United States, Canada, United Kingdom,
Israel and Mexico.

Organizational History

Superior was incorporated in July 1996 as a wholly-owned subsidiary of The Alpine Group, Inc. ("Alpine"). In October 1996, Alpine completed a
reorganization whereby all of the issued and outstanding common stock of two of Alpine's wholly-owned subsidiaries, Superior Telecommunications Inc. and DNE Systems, Inc., were
contributed to Superior. Immediately thereafter, Superior completed an initial public offering of its common stock, pursuant to which Alpine's common stock ownership position in Superior was reduced
to approximately 50.1%. As a result of treasury stock repurchases, stock grants and other transactions, Alpine's December 31, 2001 common stock interest in Superior was 50.2%.

Superior
effected a five-for-four stock split on February 2, 1998 and on February 3, 1999, and issued a 3% stock dividend on February 11,
2000. All references herein to shares of common stock (except shares authorized and issued) and to per share information have been adjusted to reflect the stock splits and stock dividend on a
retroactive basis.

Acquisitions

During the period 1995-1998 Superior, including its predecessors, completed two significant acquisitions resulting in a major consolidation of the
North American wire and cable industry. In May 1995, Superior Telecommunications Inc. acquired the North American copper telecommunications wire and cable operations of Alcatel N.A.
Cable Systems, Inc. and Alcatel Canada Wire, Inc. With this acquisition, Superior became the largest North American manufacturer of copper communications wire and cable.

In
November 1998, Superior, through a wholly-owned subsidiary, acquired approximately 81% of the outstanding shares of common stock of Essex International Inc. ("Essex")
through a cash tender offer for an aggregate price of approximately $770 million. Then, in March 1999, Essex merged with Superior's wholly-owned subsidiary, pursuant to which the holders
of the remaining 19% of the outstanding shares of common stock of Essex received, in the aggregate, $167 million liquidation value of an 81/2% trust convertible preferred
security of Superior Trust I, a Delaware trust in which Superior owns all the common equity interests. Essex, through its subsidiaries, manufactured and distributed wire and cable products, including
magnet wire, building wire and copper communications wire and cable. As a result of the acquisition of Essex, Superior became the largest wire and cable manufacturer in North America and the fourth
largest wire and cable manufacturer in the world.

During
1998, Superior also expanded its international operations with the acquisition of a 51% controlling interest in Cables of Zion United Works, Ltd. ("Cables of Zion"). Cables
of Zion was an Israel-based cable and wire manufacturer whose primary products included fiber and copper communications wire and cable and power cable. Cables of Zion products were sold primarily into
the

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Israeli and European markets. During 1998 and 1999, Cables of Zion also acquired two other wire and cable companies in Israel, CvalimThe Electric Wire & Cable Company of
Israel Ltd. and Pica Plast Limited. As a result of these acquisitions, Cables of Zion, which changed its name to Superior Cables Limited, became the largest wire and cable manufacturer in
Israel with an approximate 80% market share. The operations of Superior Cables Limited, including the acquired operations of Cvalim and Pica Plast, are hereinafter referred to as "Superior Israel".

Corporate Reorganization and Operational Restructurings

During 1999 and 2000, the Company completed a significant corporate reorganization at Essex and a major restructuring of certain operations of Essex, including
the sale of non-strategic business lines and
the rationalization of certain manufacturing assets. In April 1999, the Company completed a corporate reorganization which included the elimination of more than 130 corporate and divisional
general and administrative positions at Essex. Annual savings in corporate expenses from these personnel reductions, along with other corporate general and administrative cost reductions and
synergies, approximated $25 million. The Company also divested non-core product lines, including the sale of the business and operating assets of Essex's insulation products
business in October 1999 and its Interstate operations (wiring assemblies for trucks and buses) in December 1999. Additionally during this period, the Company completed a restructuring
and rationalization of the operating assets comprising Essex's Electrical Group which included the shutdown or sale of six electrical wire manufacturing plants with the Electrical Group manufacturing
operations being consolidated into six remaining facilities. This restructuring resulted in the elimination of approximately 600 positions and a reduction of 22% in the Electrical Group's
manufacturing capacity, all of which was considered excess capacity. As a result of the above mentioned activities, the Company had eliminated by December 31, 2001 approximately 1,100 positions
in the aggregate, a 25% reduction in Essex's total workforce since the beginning of 1999.

During
2001 and in response to weak economic and business conditions, the Company further reduced its production and manufacturing costs through a combination of permanent job
eliminations and temporary plant shutdowns and short-term furloughs and layoffs. During 2001, the Company's work force was reduced by an additional 677 employees through permanent job
eliminations.

Recent Debt Amendments

During 2001 and through March 31, 2002, the Company completed three major amendments to its principal bank credit agreements. In June 2001, the
Company completed an amendment to its senior secured bank credit agreement which included, among other matters, a provision requiring that the Company complete a deleveraging event, in the form of an
asset sale or other equity transaction, that would generate at least $175 million in net proceeds to be applied to senior secured debt reduction by July 1, 2002. As a result of this
amendment, the Company initiated a process in August 2001 contemplating the sale of its Communications Group operations. Due to the slowing U.S. economy, the events of September 11, 2001
and the ensuing impact on the financial and capital markets, the Company announced in December 2001 that it was postponing this asset sale process until business and economic conditions
improved and the financial and capital markets stabilized. On December 27, 2001, the Company entered into a subsequent amendment to its senior secured bank credit agreement which extended the
date for completion of the asset sale or other equity transaction and $175 million debt repayment through January 3, 2003. In March 2002, the Company entered into a further
amendment to its senior bank credit agreement which eliminated the requirement that it repay $175 million of its senior secured bank debt by January 3, 2003. The March 2002
amendment also deferred until January 31, 2003 certain term loan principal amortization requirements otherwise due in 2002 and modified certain financial covenants for 2002 lowering the minimum
operating performance hurdles for compliance. As a result of the March 2002 amendment, the Company will not be required to complete

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a deleveraging event, in the form of an asset divestiture or other equity transaction during 2002. However, the Company will continue to consider asset divestitures as a possible course of action for
further deleveraging the Company's balance sheet based on economic conditions, financial markets and asset valuations.

The
Company's capital structure is highly leveraged and the Company continues to be exposed to liquidity risks associated with, among other factors, the requirement that it comply with
various financial covenants imposed by its senior secured bank credit agreement and the uncertainty of future operating results and other factors, such as working capital changes (including the impact
of changes in vendor trade credit arrangements) that may impact the Company's liquidity on an ongoing basis. For further discussion of these matters, see Item 7. "Management's Discussion and Analysis
of Financial Condition and Results of OperationLiquidity and Capital Resources."

Communications Group

Superior's Communications Group includes its North American communications wire and cable operations as well as the operations of Superior Israel.

The
Communications Group North American operations manufacture and sell the following communications wire and cable products:



Superior
is the largest manufacturer of copper communications cable in North America, and the largest manufacturer of copper OSP wire and cable products worldwide.

The
Communications Group North American operations also include the operations of DNE Systems, Inc. ("DNE"). DNE designs and manufactures data communications equipment, integrated
access devices and other electronic equipment for defense, government and commercial applications. DNE's net sales are not material in relation to the total net sales of the Communications Group.

Current Business Environment

The Communications Group North American operations experienced reduced demand levels in 2001 in each of the Communications wire and cable product sectors
delineated above. These reduced demand levels particularly impacted the fourth quarter of 2001 and continue to impact demand through the early portion of 2002.

In
the copper OSP wire and cable product sector, revenues declined 25% in the fourth quarter of 2001 as compared to the 2001 third quarter and were 31% below comparative revenues in the
fourth quarter of 2000, reflecting substantial infrastructure spending reductions initiated by the regional Bell operating companies ("RBOCs") and independent telephone operating companies during the
latter half of 2001. In addition, four of the major telephone operating companies experienced negative access line growth in the local loop in 2001 which contributed to reduced demand for copper OSP
products. Forecasts for capital spending by major telephone operating companies for 2002 are below levels experienced in 2000 and 2001. As discussed further herein, the Company believes that more than
50%

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of its copper OSP product sales are associated with repair and maintenance applications within the local loop. Thus, while there can be no certainty, the Company believes that demand for copper OSP
products will improve later in 2002 since, in management's opinion expenditures for maintenance and repair cannot be deferred indefinitely.

In
the fiber optic OSP cable product sector, the dramatic growth in demand for fiber optic OSP products experienced over the past 3-5 years came to an abrupt halt in
2001, with demand declining by approximately 60% in the second half of 2001 compared to the first half of the year. Pricing levels also declined over this same period. The significant reduction in
demand for fiber OSP products is believed to be attributable to the substantial overbuild over the past several years of long haul fiber optic networks by emerging, as well as established, long
distance companies, and, to a lesser degree, CATV operators and major telephone companies.

In
the copper and fiber optic premise product sector, demand for LAN and voice cable declined approximately 20-25% in 2001 as compared to 2000 with an attendant impact on the
pricing in these markets. Reduction in demand for premise products is principally associated with reductions in overall investments in telecom projects including reduced spending for computer networks
and other information technology infrastructure projects.

In
response to the continued weak demand in early 2002, the Communications Group closed its manufacturing facility in Elizabethtown, Kentucky in March. This closure, representing
approximately 15% of the Communications Group total capacity, will permit the Communications Group to permanently eliminate the fixed and variable costs associated with this facility and redistribute
its production requirements to operate its remaining facilities in a more cost-efficient manner without loss
of service to its customers. Including the headcount reductions associated with this closing, the Communications Group has permanently reduced its employee workforce by more than 22% since the
beginning of 2001.

Copper OSP Products

Copper wire and cable are the most widely-used media for voice and data transmission in the local loop portion of the traditional telecommunications
infrastructure operated by the LECs, which include the RBOCs and the independent telephone operating companies. The local loop is the segment of the telecommunications network that connects the
customer's premises to the nearest telephone company switching center or central office. Superior believes that copper will continue to be a leading transmission medium in the local loop due to
factors such as:



Demand
for copper OSP wire and cable is dependent on several factors, including the rate at which new access lines are installed in homes and businesses, the level of infrastructure
spending for items such as road-widenings and bridges, which generally necessitates replacement of existing utilities including telephone cable, and the level of general maintenance
spending by the LECs. The installation

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of new access lines is, in turn, partially dependent on the level of new home construction and expansion of business.

The
local loop comprises approximately 185 million residential and business access lines in the United States. The installed base of copper wire and cable and associated switches
and other components utilized in the local loop represents an investment of over $150 billion that must be maintained by the LECs. Although other media, such as fiber optic cable, are used for
trunk lines between central offices and for feeder lines connecting central offices to the local loop, a substantial portion of all local loop lines and systems continue to be copper-based. Superior
believes that in the local loop, copper-based networks require significantly lower installation costs than other alternative networks such as fiber optics.

Copper
usage in the local loop continues to be supported by technological advances that expand the use and bandwidth of the installed local loop copper network. These technologies,
together with regulatory developments and increased competition among service providers, have accelerated the demand for and the introduction of new high-speed and bandwidth-intensive
telecommunications services, such as integrated voice and data, broadcast and conference quality video, Internet, high-speed LAN-to-LAN connectivity and other
specialized bandwidth-intensive applications, all of which can now be provided over the copper based local loop network.

Superior's
copper OSP products include distribution cable and service wire products, ranging in size from a single twisted pair wire to a 4,200-pair cable. The basic unit of
virtually all copper OSP wire and cable is the "twisted pair," a pair of insulated conductors twisted around each other. Twisted pairs are bundled together to form communications wire and cable.
Superior's copper OSP wire and cable products are differentiated by a multitude of design variations, depending on where the cable is to be installed. Copper OSP products normally have metallic
shields for mechanical protection and electromagnetic shielding, as well as an outer polyethylene jacket.

For
the year ended December 31, 2001, net sales of copper OSP products accounted for 63% of the Communications Group net sales.

Superior
has historically been a key supplier of copper OSP wire and cable to the RBOCs and Sprint Corporation. It is estimated that the RBOCs and Sprint comprise approximately 80% of
the North American copper OSP market. The remaining 20% of the North American market is comprised of more than 1,200 smaller independent telephone companies. Prior to the Essex acquisition, Superior
was not a major supplier to the smaller independent telephone companies due to capacity constraints and lack of established distributor relationships. The Essex acquisition provided Superior both the
capacity and the established distributor network to address this market. For the year ended December 31, 2001, 56% of Superior's copper OSP net sales were to the RBOCs and Sprint. Superior
sells to the RBOCs and major independent telephone companies through a direct sales force. With the acquisition of Essex, Superior's OSP wire and cable products are increasingly being sold through
domestic and international distributors and sales representatives.

Superior's
sales to the RBOCs and the major independent telephone operating companies are generally pursuant to multi-year supply arrangements in which the customer agrees to
have Superior supply a certain portion of the customer's OSP wire or cable needs during the term of the arrangement.
Typically, customers are not required to purchase any minimum quantities of product under these arrangements. At December 31, 2001, Superior had multi-year arrangements with three
of the four RBOCs and with Sprint.

Broadband Products

The Company's broadband products include: (1) OSP fiber and composite cables and (2) copper and fiber optic premise wire and cable products. These
products are designed to meet the highest

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bandwidth requirements necessary in trunking and feeder applications to service the growing demand for increasing transmission rates within the copper based local loop distribution network and to
service the high transmission rate requirements of local area and wide area networks. Sales of broadband products for the year ended December 31, 2001 accounted for 15% of the Communications
Group net sales.

Fiber Optic OSP Products

For many years the use of fiber optic OSP cable was principally limited to trunking applications and, to a lesser degree, high density feeder applications within
the local exchange network. During this period the fiber optic OSP cable market was dominated by major vertically integrated optical fiber producers, including Corning, Inc. and Lucent
Technologies Inc., who held significant technological and cost advantages. Prior to 2001, the demand for fiber optic cable increased dramatically in the feeder network as a funnel to support
the emerging high bandwidth digital copper loops and as both a backbone and distribution medium for CATV applications. Technological advances have now allowed other manufacturers to cost efficiently
produce fiber optic OSP cable products and effectively compete with the major vertically integrated fiber optic cable producers.

The
fiber optic OSP cables Superior manufacturers can be used in a variety of installations such as aerial, buried and underground conduit and can be configured with two to over 280
fibers, which are typically single-mode fibers. These cables are sold to the Company's traditional customers, such as distributors and LECs (including the RBOCs), as well as new customers,
such as CATV companies and campus networks. Superior estimates the North American market for fiber optic OSP cables similar to those manufactured by Superior to be approximately $1.9 billion.

Premise Products

Premise wire and cable is used within buildings to provide connectivity for telecommunications networks and LANs and within switching structures to connect
various electronic switching and testing
components. Rapid technological advances in communication and computer system capabilities have created increasing demand for greater bandwidth capabilities in wire and cable products. Demand for
premise wire and cable products is dependent upon new office building construction, technological upgrades of existing office buildings networks and residential access line demand.

There
are two primary applications for communications wiring systems within buildings: voice applications, estimated at 15% of new wiring system investment and data applications,
estimated at 85% of new wiring system investment. The primary voice application consists of networking telephone stations. The primary data application is LANs, which require the wired interconnection
of workstations and peripherals, such as printers and file servers, to form a network.

Four
major types of cables are currently deployed in premise applications: (1) LAN copper twisted pair (unshielded twisted pair or "UTP" and shielded twisted pair or "STP"),
(2) LAN fiber optic cable, (3) LAN coaxial cable and (4) voice grade twisted copper pair.

Superior's
current premise wire and cable product offerings include voice grade twisted pair, LAN UTP and LAN fiber optic cable. Superior's LAN UTP product offerings include
Category 6 cables and Category 5e cables ranging in size from 4-pair to 25-pair. These cables are designed and manufactured for use in both plenum (horizontal)
and riser (vertical) applications. Superior has recently developed and has begun manufacturing, marketing and selling LAN fiber optic cables. These cables, which may be used for LAN trunking or
distribution applications, contain from one to 144 fibers, and are used in plenum and riser applications within buildings.

Superior's
premise wire and cable products are sold primarily through major national and international distributors, smaller regional distributors who in turn resell to contractors,
international

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and domestic telephone companies and private overseas contractors for installation in industrial, commercial and residential markets.

The
premise wire and cable market is fragmented with nearly 25 premise wire and cable manufacturers in North America and more than 75 worldwide. Major suppliers in North America include
Lucent Technologies Inc., Cable Design Technologies Corporation, Berk-Tek, Belden Inc., CommScope Inc., General Cable Corporation, Corning, Inc. and
Avaya Inc. Superior estimates the North American market for premise wire and cable products similar to those manufactured by Superior to be approximately $1.7 billion.

Superior Israel

As previously discussed, during 1998 Superior acquired 51% of the outstanding common stock of Cables of Zion, an Israeli wire and cable company. Cables of Zion,
in subsequent transactions, acquired the business and certain operating assets of Cvalim and Pica Plast. With the consolidation of these three businesses, Superior Israel is the largest Israeli wire
and cable manufacturer with an approximate 80% share of the Israeli wire and cable market.

Superior
Israel's major product offerings include: (1) communications cable including copper and fiber optic OSP and premise products; (2) high and medium voltage power
cable utilized by power utilities; and (3) industrial and automotive wire and cable.

Superior
Israel's major customers include the two largest public utilities in Israel: Bezeq, the largest Israeli telephone company and IEC, the largest Israeli power utility. Product
export sales outside of Israel amounted to 29% of total sales for the year ended December 31, 2001. The major export markets include Europe, Latin America and Southeast Asia.

As
a result of the combination of the operations of Cables of Zion, Cvalim and Pica Plast, Superior has consolidated certain manufacturing facilities and administrative functions. This
restructuring resulted in closure of five manufacturing facilities, closure of administrative offices in Rishon LeZion and elimination of 299 personnel to date. Superior Israel currently operates
three manufacturing plants.

OEM Group

Superior's OEM Group develops, manufactures and markets magnet wire and other related products to major OEMs for use in motors, transformers and electrical
controls. Through its Essex Brownell distribution business, Superior also distributes its magnet wire and certain related accessory products to smaller OEMs as well as to motor repair
facilities.

In
1998, Essex, prior to its acquisition by Superior, acquired BICC's UK-based magnet wire operations. This acquisition allows Superior to participate in growth arising from
the consolidation of the Western European magnet wire market and from economic growth and development in Eastern Europe. During 2000, Superior substantially completed construction of a new magnet wire
manufacturing facility located in Torreon, Mexico. This new facility is strategically located to service, on a cost effective basis, major U.S. OEM customers with Mexican manufacturing locations as
well as to service directly new market opportunities in Mexico and Central America. In the fourth quarter of 2001, the Company was granted a full maquila permit allowing it to manufacture, market and
distribute a full range of products to Mexican national companies. With the addition of the Torreon facility, the OEM Group operates 12 manufacturing plants and 21 warehousing and distribution
locations in North America and the U.K.

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For the year ended December 31, 2001, sales of magnet wire accounted for 74% of the OEM Group net sales.

Magnet Wire

Superior is the leading manufacturer and supplier of magnet wire in the North American market. Magnet wire is used in electrical motors, with the principal end
market applications including electrical motors used in automotive and industrial applications, and for appliances. Magnet wire is also used in transformers for power generation by power utilities and
for power conversion and electrical controls in industrial applications.

Due
to the weak industrial economic environment, the North American market for magnet wire declined by an estimated 10-15% during 2001 resulting in a reduction in net sales
of magnet wire products in 2001. Although sales of automobiles were at record levels during 2001, magnet wire producers did not experience significant gains from this sector as auto manufacturers
reduced inventories and automobile production did not keep pace with sales. Additionally, the demand for household appliances, industrial motors, compressors, transformers and generators experienced a
marked decline in 2001. However, over the long-term, the Company believes there will be growth in the magnet wire industry driven by increasing demand for electrical devices containing
motors for, among other things, home appliances and automobiles. The automotive industry's shift to a 42-volt electrical system should also stimulate demand for magnet wire as more
electrical systems and components are added to vehicles. Additionally, federal government mandates are requiring higher energy efficiency from electrical devices, which is achieved by using, on
average, 25% more magnet wire in higher efficiency motors and transformers.

Due
to the substantial initial capital costs associated with magnet wire production, the importance of consistent quality, stringent technological requirements and the cost advantages of
larger magnet wire producers, significant industry consolidation has occurred during the past ten years in the North American magnet wire industry. In addition, the percentage of domestic magnet wire
produced by independent magnet wire manufacturers, such as Superior, has grown over the last several years as the manufacturing capacity of captive magnet wire producers (electrical equipment
manufacturers who internally produce their own magnet wire) has declined as a result of outsourcing. It is estimated that captive magnet wire manufacturers now represent only 7% of total magnet wire
production in North America.

Superior
offers a comprehensive line of magnet wire products including over 500 types of magnet wire used in a wide variety of applications. Magnet wire is insulated copper or aluminum
wire that is wound into coils for use in electromagnetic devices including motors, alternators, transformers, control devices and power generators.

Superior
works closely with global OEMs to develop new magnet wire products for applications in energy efficient motors, generators and transformers. In recent years, Superior has
introduced the Ultra Shield Plus wire for use by global OEM motor manufacturers in inverter drive motors where high voltage spikes are encountered. Other new products include
Soderon®/180 and Soderex®/180 both used in appliance controls in higher temperature applications. These products allow for increased throughput with faster soldering times than
conventional high temperature type products. Superior is also a leader in product palletizing and packaging with a focus on ease of handling, reduced freight damage, environmental disposal issues and
cost reduction.

Superior's
magnet wire products are sold directly to major OEMs and, through its Essex Brownell distribution business, to secondary OEMs, aftermarket repair facilities, coil
manufacturers and distributors. Products are also marketed internationally through authorized distributors.

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Sales
to major OEMs, including, among others, Emerson, Delphi Automotive Systems, A.O. Smith, Howard Industries, Cooper Power and Tecumseh, are typically pursuant to annual or
multi-year supply agreements with a percentage of each customer's total requirements awarded at a negotiated fixed price, subject to adjustment for the cost of copper. For the year ended
December 31, 2001, approximately 84% of magnet wire sales were pursuant to such supply arrangements.

Essex Brownell Distribution and Accessory Products

Through its Essex Brownell distribution operations, Superior sells magnet wire, insulation and other related accessory products to the motor repair and secondary
OEM markets. The Essex Brownell distribution operations include a nationwide sales force, supported by over 20 strategically located distribution and warehouse locations. In addition to magnet wire,
the Essex Brownell line includes products from manufacturers such as 3M, Permacel, Dow Corning and P.D. George. Superior believes that it has a distinct competitive advantage as it is the only major
North American magnet wire producer that also distributes a full line of complementary electrical accessory products used by the motor repair and secondary OEM markets.

Electrical Group

Superior's Electrical Group manufactures and distributes a complete line of building wire products as well as a limited line of industrial wire products. As
discussed above in "Recent Corporate Reorganization and Operational Restructurings", the Electrical Group has consolidated its manufacturing operations reducing its manufacturing facilities from
twelve to six remaining manufacturing facilities in the United States. This manufacturing consolidation eliminated excess capacity and has resulted in lowered manufacturing cost and an overall
improved cost structure.

Building
wire products include a wide variety of thermoplastic and thermoset insulated wires for the commercial and industrial construction markets and service entrance cable,
underground feeder wire and nonmetallic jacketed wire and cable for the residential construction market. These products are generally installed behind walls, in ceilings and underground. The
industrial wire product segment (which forms a much smaller component of sales than building wire) includes appliance wire, motor lead wire, bulk flexible cord, power supply cord sets, welding cable
and recreational vehicle wire.

Superior
is one of the leading manufacturers in North America of copper building wire products used in commercial and residential applications. Demand for building wire is correlated
with the level of renovation activity, as well as new construction. The demand for building wire in both new construction and renovation is affected by the increased number of circuits and amperage
handling capacity needed to support the increasing demand for electrical services. In addition, greater wiring density is required in new construction and renovation projects to provide for the
electrical needs of appliances such as trash compactors, microwave ovens, air conditioners, entertainment centers, lighting and climate controls, specialty lighting, and outdoor lighting systems. New
home automation and computer systems contribute to the increased cable and wire density requirements in new and renovation construction as well. The average new home is increasing in size and thus
influencing demand in this industry.

The
building wire industry has experienced significant consolidation in recent years, declining from approximately 30 manufacturers in 1980 to 8 primary manufacturers in 2001. Superior
believes this consolidation is due primarily to cost efficiencies achieved by the larger building wire producers as they capitalize on the benefits of vertical integration and manufacturing,
purchasing and distribution economies of scale. In 2001, there was a major industry consolidation between the Company's two largest competitors, with Southwire acquiring the building wire operations
of General Cable. With the acquisition, Southwire became the largest manufacturer of building wire with an approximate 40% market share. Notwithstanding this consolidation of suppliers, there still
exists excess manufacturing

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capacity for building wire which is generally viewed as a commodity product. As a result, the market is extremely competitive, with price and availability being the most important factors. Since
1999, market pricing for building wire products has declined substantially with copper adjusted pricing reaching five year lows in 2001. As previously discussed, the Company has responded to these
conditions by eliminating excess capacity and consolidating remaining production capacity to achieve cost reductions necessary to offset, in part, the impact of the recent period price declines.

In
the industrial wire market, Superior has a significantly smaller market position than in the building wire industry. Factors impacting sales growth in this market include the
construction and expansion of manufacturing plants and consumer spending for hard goods. Due to the diversity of product offerings within this industry, Superior's competition is fragmented across
product lines and markets served.

Superior
sells its electrical wire and cable products nationally through an internal sales force and through manufacturers' representatives. Its customer base is large and diverse,
consisting primarily of wholesale electrical and specialty distributors, consumer product retailers and hardware wholesalers. No single customer accounts for more than 10% of the Electrical Group net
sales.

Superior
serves wholesale electrical and specialty distributors through strategically located regional distribution centers ("RDCs"). These RDCs provide for centralized stocking of
"off-the-shelf" products including substantially all of Superior's building and industrial wire products. To a lesser degree, these RDCs provide regionally centralized
distribution for communication wire and cable, magnet wire and related insulation products. The Company currently operates four RDCs located in Georgia, Missouri, California and Indiana.

Raw Materials and Manufacturing

The principal raw materials used by Superior in the manufacture of its wire and cable products are copper, aluminum, bronze, steel, optical fibers and plastics
such as polyethylene and polyvinyl chloride. Copper rod is the most significant raw material used in Superior's manufacturing process. Superior estimates it is the largest North American consumer of
copper rod with over 900 million pounds used annually in its production process. Due to the importance of copper to its business, Superior maintains a centralized metals operation that manages
copper procurement and provides vertical integration in the production of copper rod and in scrap recycling.

Superior
maintains four copper rod continuous casting units strategically located in proximity to many of its major wire producing plants to minimize freight costs. These facilities
convert copper cathode into copper rod which is then shipped and utilized directly in Superior's manufacturing operations. Through these continuous casting units, Superior is able to produce
approximately 70% of its North American copper rod requirements.

In
addition to converting copper cathode into copper rod, Superior's also has a metal processing center which processes copper scrap, both internally generated scrap as well as scrap
purchased from other copper wire producers. Copper scrap is processed in rotary furnaces, which also have refining capability to remove impurities. Superior uses a continuous casting process to
convert scrap material directly into copper rod. Management believes that internal reclamation of scrap copper provides greater control over the cost to recover Superior's principal manufacturing
by-product.

Superior
purchases copper cathode and, to the extent not provided internally, copper rod from a number of copper producers and metals merchants. Generally, copper cathode and rod
purchases are pursuant to supply agreements which extend for a one-year period and are normally based on the COMEX price and, in the case of rod, an adder to reflect cathode conversion,
plus a premium to cover transportation and payment terms.

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Historically,
Superior has had adequate supplies of copper available to it from producers and merchants, both foreign and domestic. In addition, competition from other users of copper
has not affected Superior's ability to meet its copper procurement requirements. Although Superior has not experienced any shortages in the recent past, no assurance can be given that Superior will be
able to procure adequate supplies of its essential raw materials to meet its future needs.

The
cost of copper has been subject to considerable volatility over the past several years. Fluctuations in the cost of copper have not had a material impact on profitability due to the
ability of Superior in most cases to adjust product pricing in order to properly match the price of copper billed with the copper cost component of its inventory shipped. Additionally, Superior, to a
limited extent, utilizes COMEX fixed price futures contracts to manage its commodity price risk. Superior does not hold or issue such contracts for trading purposes.

During
1999 and 2000, availability of optical fiber was limited at times due to rapid growth in product demand. Demand for optical fiber declined dramatically in 2001 resulting in
substantial excess capacity for optical fiber. Accordingly, the Company does not anticipate any shortfall in meeting its procurement requirements for optical fiber in the foreseeable future.

In
addition to copper rod, Superior is also vertically integrated in the production of magnet wire enamels and extrudable polymeric compounds. Superior believes one of its primary cost
and quality advantages in the magnet wire business is the ability to produce most of its enamel and copper rod requirements internally. Similarly, Superior believes its ability to develop and produce
PVC and rubber compounds, which are used as insulation and jacketing materials for many of its building wire, communication wire and industrial wire products, provides competitive advantages because
greater control over the cost and quality of essential compounds used in production can be achieved.

Export Sales

Superior's export sales during the year ended December 31, 2001 were $140.5 million. Superior's primary markets for export sales are Latin America
and Europe.

Backlog; Returns

Backlog in the communications wire and cable segment typically consists of 2-5 weeks of sales depending on seasonal and overall industry demand
issues. Superior's other product lines have no significant order backlog because Superior follows the industry practice of stocking finished goods to meet customer demand on a
just-in-time basis. Superior believes that the ability to fill orders in a timely fashion is a competitive factor in the markets in which it operates. Historically, sales
returns have not had a material adverse effect on Superior's results of operations.

Competition

The market for wire and cable products is highly competitive. Each of Superior's businesses competes with at least one major competitor. However, due to the
diversity of Superior's product lines as a whole, no single competitor competes with Superior across the entire spectrum of Superior's product lines.

Many
of Superior's products are made to industry specifications and, therefore may be interchangeable with competitors' products. Superior is subject to competition in many markets on
the basis of price, delivery time, customer service and its ability to meet specialty needs. Superior believes it enjoys strong customer relations resulting from its long participation in the
industry, emphasis on customer service, commitment to quality control, reliability and substantial production resources. Furthermore, Superior believes that its distribution networks enable it to
compete effectively with respect to delivery time.

11

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Research and Development

Superior operates research and development facilities in Kennesaw, Georgia, Lafayette, Indiana and Fort Wayne, Indiana. The Kennesaw facility's efforts primarily
address the needs of the Communications Group premise product lines and product cost-reduction activities. The Lafayette facility is focused on the development of improved PVC and rubber
compounds which are used as insulation and jacketing materials for many communication, automotive, building and industrial wire products. At the Fort Wayne facility, Superior's metallurgical and
chemical labs are focused on the development of magnet wire metal properties and processing qualities, as well as enhancement of enamels and their application in the magnet wire manufacturing process.

Aggregate
research and development expenses of Superior during years ended December 31, 1999, 2000 and 2001, amounted to $6.6 million, $7.2 million and
$9.0 million, respectively.

Although
Superior holds certain trademarks, licenses and patents, none is considered to be material to its business.

Employees

As of December 31, 2001, Superior employed approximately 5,300 employees with approximately 1,989 persons represented by unions. The Company closed its
Elizabethtown, Kentucky facility in March 2002 reducing the number employed by approximately 200 persons. Collective bargaining agreements expire at various times between 2002 and 2004, with
contracts covering approximately 14% of Superior's unionized work force due to expire at various times in 2002. Superior considers relations with its employees to be satisfactory.

Environmental Matters

The manufacturing operations of Superior's subsidiaries are subject to extensive and evolving federal, foreign, state and local environmental laws and regulations
relating to, among other things, the storage, handling, disposal, emission, transportation and discharge of hazardous substances, materials and waste products, as well as the imposition of stringent
permitting requirements. Superior does not believe that compliance with environmental laws and regulations will have a material effect on the level of capital expenditures of Superior or its business,
financial condition, liquidity or results of operations. However, violation of, or non-compliance with, such laws, regulations or permit requirements, even if inadvertent, could result in
an adverse impact on the operations, business, financial condition, liquidity or results of operations of Superior. No material expenditures relating to these matters were made in 1999 or 2000. During
2001, expenditures of $1.4 million were made principally related to the installation of air emission control equipment at one of the Company's facilities in Indiana.

12

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Item 2. Properties

The Company conducts its principal operations at the facilities set forth below:

|Operation              |                    | Location                                                         |                                                                                                                                                                                        | Square
Footage       |                                                                      | Leased/Owned                                     
|---------------------- | ------------------ | ---------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | -------------------------------------------------------------------- | -------------------------------------------------
|Communications         |                    |                                                                  |                                                                                                                                                                                        |                      |                                                                      |                                                  
|                       | OSP/Datacom        |                                                                  | Brownwood, Texas
Chester, South Carolina
Elizabethtown, Kentucky(a)
Hoisington, Kansas
Kennesaw, Georgia
Tarboro, North Carolina
Winnipeg, Manitoba                                    |                      | 415,000
210,000
190,000
275,000
58,000
295,000
184,000               |                                                  
|                       | DNE                |                                                                  | Wallingford, Connecticut                                                                                                                                                               |                      | 65,000                                                               |                                                  
|                       | Superior Israel    |                                                                  | Shaar Hanegav, Israel
Bet-Shean, Israel
Maalot, Israel                                                                                                                                 |                      | 351,000
181,000
46,000                                               |                                                  
|OEM                    |                    |                                                                  |                                                                                                                                                                                        |                      |                                                                      |                                                  
|                       | Magnet Wire        |                                                                  | Charlotte, North Carolina
Fort Wayne, Indiana
Franklin, Indiana(b)
Franklin, Tennessee
Huyton Quarry, U.K.
Kendallville, Indiana
Rockford, Illinois
Torreon, Mexico
Vincennes, Indiana |                      | 26,000
181,000
35,000
289,000
146,000
88,000
319,000
317,000
267,000 |                                                  
|                       | Accessory Products |                                                                  | Athens, Georgia
Clifton Park, New York
Willowbrook, Illinois                                                                                                                           |                      | 30,000
22,000
60,000                                                 |                                                  
|Electrical             |                    |                                                                  |                                                                                                                                                                                        |                      |                                                                      |                                                  
|                       | Building Wire      |                                                                  | Anaheim, California
Columbia City, Indiana
Florence, Alabama
Orleans, Indiana
Sikeston, Missouri                                                                                       |                      | 174,000
400,000
129,000
425,000
189,000                              |                                                  
|                       | Industrial Wire    |                                                                  | Lafayette, Indiana                                                                                                                                                                     |                      | 350,000                                                              |                                                  
|Metals Processing      |                    | Columbia City, Indiana
Jonesboro, Indiana                        |                                                                                                                                                                                        | 75,000
56,000        |                                                                      | Owned
Owned                                      
|Administrative Offices |                    | Atlanta, Georgia
Fort Wayne, Indiana
East Rutherford, New Jersey |                                                                                                                                                                                        | 39,000
295,000
3,800 |                                                                      | Leased (expires 2008)
Owned
Leased (expires 2005)

---



13

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In
addition to the facilities described in the table above, Superior owns or leases 29 warehousing and distribution facilities throughout the United States, Canada and United Kingdom to
facilitate the sale and distribution of its products.

Superior
believes its facilities are generally suitable and adequate for the business being conducted and to service the requirements of its customers. In 2000 and 1999, the utilization
of the facilities was consistent with historical patterns and, in the view of management, was satisfactory. Manufacturing facilities operated on 24 hour-a-day schedules
on either a five or seven day a week basis. During 2001, the Company experienced a decline in demand for its products due to the overall recessionary environment and certain industry specific
conditions. In response, the Company curtailed production at certain facilities and reduced the level of operations in each of its segments at various times during the year. In early 2002, the Company
closed its Communications Group facility in Elizabethtown, Kentucky to more closely align the productive capacity of the Communications Group with market demand. Management will continue, as
necessary, to take the appropriate actions to adjust its productive capacity.

Item 3. Legal Proceedings

The Company is engaged in certain litigations arising in the ordinary course of business. While the outcome of these litigations can never be predicted with
certainty, the Company does not believe that any of the existing litigation or threatened proceedings, either individually or in the aggregate, will have a material adverse effect upon its business,
financial condition, liquidity or results of operations.

Superior's
operations are subject to environmental laws and regulations in each of the jurisdictions in which it owns or operates facilities governing, among other things, emissions into
the air, discharges to water, the use, handling and disposal of hazardous substances and the investigation and remediation of soil and groundwater contamination both on-site at Superior's
past and current facilities and at off-site disposal locations. On-site contamination at certain of Superior's facilities is the result of historic activities, including
certain activities attributable to Superior's operations and those occurring prior to the use of a facility by Superior. Off-site liability includes clean-up responsibilities
and response costs incurred by others at various sites, under federal or state statutes, for which Superior has been identified by the United States Environmental Protection Agency, or state
environmental agency, as a Potentially Responsible Party ("PRP") or the equivalent.

Essex
(including subsidiaries thereof) has been named as a PRP at a number of sites. Most of the sites for which Essex is currently named as a PRP are covered by an indemnity from United
Technologies Corporation provided in connection with the February 1988 sale of Essex by United Technologies to
Essex. Pursuant to the indemnity, United Technologies agreed to indemnify Essex against losses incurred under any environmental protection and pollution control laws or resulting from, or in
connection with, damage or pollution to the environment arising from events, operations or activities of Essex prior to February 29, 1988, or from conditions or circumstances existing at or
prior to February 29, 1988. In order to be covered by the indemnity, the condition, event or circumstance must have been known to United Technologies prior to February 29, 1988. The
sites covered by this indemnity historically have been handled directly by United Technologies and all payments required to be made have been paid directly by United Technologies. Most of these sites
are mature sites where allocations of liability have been settled and remediation is well underway or has been completed. Superior is not aware of any inability or refusal on the part of United
Technologies to pay amounts that are owing under this indemnity or any disputes with United Technologies concerning matters covered by this indemnity.

United
Technologies also provided an additional environmental indemnity, referred to as the "basket indemnity." This indemnity relates to liabilities arising from environmental events,
conditions or circumstances existing at or prior to February 29, 1988 that only became known to United

14

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Technologies in the five-year period commencing February 29, 1988. As to such liabilities, Essex is responsible for the first $4.0 million incurred. Thereafter, United
Technologies has agreed to indemnify Essex fully for any liabilities in excess of $4.0 million.

Apart
from the indemnified sites, Essex has been named as a PRP or a defendant in a civil lawsuit at eleven sites. Operations of Superior Telecommunications Inc. and DNE have
resulted in releases of hazardous substances or wastes at sites currently or formerly owned or operated by such companies. Superior Telecommunications Inc. is involved in investigatory and
remedial activities at one site subject to the oversight of a state governmental authority. Essex is cooperating with a state environmental agency to resolve a notice of violation issued alleging that
one of Essex's facilities in Indiana is in violation of that state's air quality rules (the "Air Quality Matter"). Essex anticipates resolving the matter through an agreed administrative order
providing for the installation of certain air emission control equipment (which equipment has already been purchased and installed) and possibly a monetary penalty in an amount not yet specified by
the state regulatory agency. In or about February 2002, Essex received a Notice of Demand (the "Notice") from the Michigan Department of Environmental Quality ("MDEQ") notifying Essex of its
purported legal responsibility for the remediation of contamination at a property that was formerly owned by Essex in Michigan and for reimbursement of the State's past and future response costs
associated therewith. The property that is the subject of the Notice was sold many years prior to Superior's acquisition of Essex. Superior has begun to investigate the facts relating to the Notice
and is evaluating its potential liability, possible defenses and whether it has claims for indemnification or otherwise against others. Superior has an accrual in the amount of $2.3 million to
cover its environmental contingencies as of December 31, 2001. This accrual is based on management's best estimate of Superior's exposure in light of relevant available information. Superior
currently does not believe that any of the environmental proceedings in which it is involved, and for which it may be liable, will individually, or in the aggregate, have a material adverse effect
upon its business, financial condition, liquidity or results of operations. There can be no assurance that future developments will not alter this conclusion. Except for the Air Quality Matter, none
of the sites or matters mentioned above involves the imposition of sanctions, fines or administrative penalties on Superior.

Since
approximately 1990, Essex has been named as a defendant in a number of product liability lawsuits brought by electricians and other skilled tradesmen claiming injury from exposure
to asbestos found in electrical wire products produced many years ago. Litigation against various past insurers of Essex who had previously refused to defend and indemnify Essex against these lawsuits
was settled during 1999. Pursuant to the settlement, Essex was reimbursed for substantially all of its costs and expenses incurred in the defense of these lawsuits, and the insurers have undertaken to
defend, are currently directly defending and, if it should become necessary, will indemnify Essex against such asbestos lawsuits, subject to the terms and limits of the respective policies. Superior
believes that Essex's liability, if any, in these matters will not have a material adverse effect either individually, or in the aggregate, upon its business, financial condition, liquidity or results
of operations. There can be no assurance, however, that future developments will not alter this conclusion. In January 2002, United Technologies brought a third party claim against Essex in a
civil action in Massachusetts. United Technologies had been sued by one of the insurers referenced above for approximately $1.75 million in retrospective premiums that had been calculated in
1999 and 2000, relating to claims that arose while United Technologies owned Essex. United Technologies contends that Essex agreed to pay those premiums in a February 1988 Stock Purchase
Agreement and seeks to have Essex held liable to United Technologies if it is required to pay the premiums to the insurer. Essex believes that it has no such obligation under the Stock Purchase
Agreement to pay these premiums to United Technologies, that it has other defenses to this and any related claims for retrospective premiums and intends vigorously to defend against the claim, which
is still in the very early stages.

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

The Company did not submit any matter to a vote of security holders during the fourth quarter of the year ended December 31, 2001.

15

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PART II

Item 5. Market for Registrant's Securities and Related Security Holder Matters

(a)
Market Information

The
Company's common stock, $.01 par value, is listed on the New York Stock Exchange (the "NYSE") under the symbol SUT. The following table sets forth the high and low daily closing
sales prices for the Superior common stock as reported on the NYSE (adjusted for the impact of a stock dividend) for the years ended December 31, 2000 and 2001.

High

LowYear Ended December 31, 2000First Quarter ended March 31, 2000

$
17.48

$
11.06Second Quarter ended June 30, 2000


13.69


9.94Third Quarter ended September 30, 2000


10.63


6.00Fourth Quarter ended December 31, 2000


6.19


1.81Year Ended December 31, 2001First Quarter ended March 31, 2001

$
4.86

$
2.75Second Quarter ended June 30, 2001


3.55


2.30Third Quarter ended September 30, 2001


2.90


1.35Fourth Quarter ended December 31, 2001


1.40


0.69


(b)
Holders

The
Company's transfer agent is American Stock Transfer & Trust Company, 40 Wall Street, New York, New York 10005.

At
March 25, 2002, 21,343,476 shares of Superior common stock were issued and outstanding, and there were approximately 358 record holders (exclusive of beneficial owners of
shares held in street name or other nominee form) thereof.

On
December 10, 2001, Alpine was notified by the NYSE that it had fallen below the NYSE's continued listing standard requiring a total market capitalization of not less than
$50 million over a 30 trading-day period and stockholders' equity of not less than $50 million. On March 8, 2002, Superior was notified by the NYSE that it had fallen
below the NYSE's continued listing standard requiring an average per share closing price of a security of not less than $1.00 over a consecutive 30 trading-day period. Superior was also
notified by the NYSE that it was close to falling below the NYSE's continued listing standard requiring a total market capitalization of not less than $15 million over a 30
trading-day period.

Alpine
submitted its current business plan to the NYSE demonstrating its expected compliance with the continued listing standard relating to its market capitalization and stockholders'
equity within the required 18-month period. At the time Superior received notification from the NYSE, it was informed that, because Superior is an integral part of Alpine's business plan,
its prospects were being assessed by the NYSE in connection with the NYSE's review of Alpine's business plan.

The
NYSE has reviewed and accepted Alpine's 18-month business plan, and informed Alpine and Superior that it will perform quarterly reviews during the required
18-month period to determine their compliance with such plan. If (i) Alpine or Superior fails to achieve its financial and operational goals, (ii) Alpine does not achieve a
total market capitalization of at least $50 million over a 30 trading-day period and stockholders' equity of at least $50 million by the end of the required
18-month period, or (iii) Superior fails to attain both a $1.00 share price and a $1.00 average share price over 30 trading days by the end of the six month period that began on
March 8, 2002, Alpine's and Superior's common

16

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stock will be subject to suspension and delisting by the NYSE. If Superior's common stock is delisted by the NYSE it will pursue alternative listing options.

(c)
Dividends

The
Company paid no cash dividends on the Superior common stock during the years ended December 31, 2000 and 2001. The Company does not currently intend to declare cash dividends
on the Superior common stock in the foreseeable future. The Company's principal credit agreements contain certain limitations and restrictions on the payment of cash dividends on the Superior common
stock.

On
December 28, 2000, the Board of Directors of the Company declared a dividend distribution of one preferred stock purchase right (a "Right") for each outstanding share of
Superior common stock, payable to the stockholders of record on January 10, 2001. The Board of Directors also authorized and directed the issuance of one Right with respect to each share of
Superior common stock issued thereafter until the date of distribution of separate certificates evidencing the Rights (or the earlier redemption or expiration of the Rights).

Subject
to certain exceptions, each Right, when it becomes exercisable, entitles the registered holder to purchase one one-hundredth of a share of Series A Junior
Participating Preferred Stock, $.01 par value, at a price of $10.88, subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement, dated as of December 28,
2000, between the Company and American Stock Transfer & Trust Company, as Rights Agent.

17

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Item 6. Selected Financial Data

HISTORICAL FINANCIAL DATA

Set forth below are certain selected historical consolidated financial data of the Company. This information should be read in conjunction with the consolidated
financial statements of the Company and related notes thereto appearing elsewhere herein and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations." The
selected historical consolidated financial data for, and as of the end of, the years ended December 31, 2001, 2000 and 1999, for, and as of the end of, the eight months ended
December 31, 1998, and for, and as of the end of, each of the fiscal years in the two-year period ended April 30, 1998, are derived from the audited consolidated financial
statements of Superior.

|                                             |                                                                                                                                          |                                                     |   |           |         |   |           |         |   | Fiscal Year Ended
April 30, |        
|-------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | - | --------- | ------- | - | --------- | ------- | - | --------------------------- | -------
|
|
|
|Statement of Operations Data(b)(c)(d):       |                                                                                                                                          |                                                     |   |           |         |   |           |         |   |                             |        
|                                             | Net sales                                                                                                                                |                                                     | $ | 1,747,302 |         | $ | 2,049,048 |         | $ | 2,036,732                   |        
|                                             | Cost of goods sold                                                                                                                       |                                                     |   | 1,471,409 |         |   | 1,708,920 |         |   | 1,652,839                   |        
|                                             |                                                                                                                                          |                                                     |   |           |         |   |           |         |   |                             |        
|                                             |                                                                                                                                          | Gross profit                                        |   |           | 275,893 |   |           | 340,128 |   |                             | 383,893
|                                             | Selling, general and administrative expenses                                                                                             |                                                     |   | 156,017   |         |   | 156,437   |         |   | 150,833                     |        
|                                             | Infrequent and unusual charges                                                                                                           |                                                     |   | 5,358     |         |   | 14,961    |         |   | 8,431                       |        
|                                             | Amortization of goodwill                                                                                                                 |                                                     |   | 21,057    |         |   | 20,959    |         |   | 19,629                      |        
|                                             |                                                                                                                                          |                                                     |   |           |         |   |           |         |   |                             |        
|                                             |                                                                                                                                          | Operating income                                    |   |           | 93,461  |   |           | 147,771 |   |                             | 205,000
|                                             | Interest expense                                                                                                                         |                                                     |   | (115,048  | )       |   | (129,905  | )       |   | (120,100                    | )      
|                                             | Other income (expense), net                                                                                                              |                                                     |   | 1,270     |         |   | 976       |         |   | 2,503                       |        
|                                             |                                                                                                                                          |                                                     |   |           |         |   |           |         |   |                             |        
|                                             | Income (loss) before income taxes, distributions on preferred securities of Superior Trust I, minority interest and extraordinary (loss) |                                                     |   | (20,317   | )       |   | 18,842    |         |   | 87,403                      |        
|                                             | Benefit (provision) for income taxes                                                                                                     |                                                     |   | 3,617     |         |   | (10,925   | )       |   | (36,733                     | )      
|                                             |                                                                                                                                          |                                                     |   |           |         |   |           |         |   |                             |        
|                                             | Income (loss) before distributions on preferred securities of Superior Trust I, minority interest and extraordinary (loss)               |                                                     |   | (16,700   | )       |   | 7,917     |         |   | 50,670                      |        
|                                             | Distributions on preferred securities of Superior Trust I                                                                                |                                                     |   | (15,362   | )       |   | (15,145   | )       |   | (11,289                     | )      
|                                             |                                                                                                                                          |                                                     |   |           |         |   |           |         |   |                             |        
|                                             | Income (loss) before minority interest and extraordinary (loss)                                                                          |                                                     |   | (32,062   | )       |   | (7,228    | )       |   | 39,381                      |        
|                                             | Minority interest in (earnings) losses of subsidiaries                                                                                   |                                                     |   | 2,430     |         |   | 5,088     |         |   | (596                        | )      
|                                             |                                                                                                                                          |                                                     |   |           |         |   |           |         |   |                             |        
|                                             | Income (loss) before extraordinary (loss)                                                                                                |                                                     |   | (29,632   | )       |   | (2,140    | )       |   | 38,785                      |        
|                                             | Extraordinary (loss) on early extinguishment of debt                                                                                     |                                                     |   | (2,871    | )       |   |          |         |   | (1,617                      | )      
|                                             |                                                                                                                                          |                                                     |   |           |         |   |           |         |   |                             |        
|                                             |                                                                                                                                          | Net income (loss)                                   |   | $         | (32,503 | ) | $         | (2,140  | ) | $                           | 37,168 
|                                             |                                                                                                                                          |                                                     |   |           |         |   |           |         |   |                             |        
|Net income (loss) per share of common stock: |                                                                                                                                          |                                                     |   |           |         |   |           |         |   |                             |        
|                                             | Basic:                                                                                                                                   |                                                     |   |           |         |   |           |         |   |                             |        
|                                             | Income (loss) before extraordinary (loss)                                                                                                |                                                     | $ | (1.44     | )       | $ | (0.11     | )       | $ | 1.91                        |        
|                                             | Extraordinary (loss) on early extinguishment of debt                                                                                     |                                                     |   | (0.14     | )       |   |          |         |   | (0.08                       | )      
|                                             |                                                                                                                                          |                                                     |   |           |         |   |           |         |   |                             |        
|                                             |                                                                                                                                          | Net income (loss) per basic share of common stock   |   | $         | (1.58   | ) | $         | (0.11   | ) | $                           | 1.83   
|                                             |                                                                                                                                          |                                                     |   |           |         |   |           |         |   |                             |        
|                                             | Diluted:                                                                                                                                 |                                                     |   |           |         |   |           |         |   |                             |        
|                                             | Income (loss) before extraordinary (loss)                                                                                                |                                                     | $ | (1.44     | )       | $ | (0.11     | )       | $ | 1.86                        |        
|                                             | Extraordinary (loss) on early extinguishment of debt                                                                                     |                                                     |   | (0.14     | )       |   |          |         |   | (0.08                       | )      
|                                             |                                                                                                                                          |                                                     |   |           |         |   |           |         |   |                             |        
|                                             |                                                                                                                                          | Net income (loss) per diluted share of common stock |   | $         | (1.58   | ) | $         | (0.11   | ) | $                           | 1.78   
|                                             |                                                                                                                                          |                                                     |   |           |         |   |           |         |   |                             |        

18

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|                                       |                                                              |  |   |           |  |   |           |  |   | Fiscal Year Ended
April 30,
|-------------------------------------- | ------------------------------------------------------------ |  | - | --------- |  | - | --------- |  | - | ---------------------------
|
|
|
|Balance Sheet Data (at end of period): |                                                              |  |   |           |  |   |           |  |   |                            
|                                       | Current assets                                               |  | $ | 520,741   |  | $ | 597,302   |  | $ | 627,464                    
|                                       | Current liabilities                                          |  |   | 433,092   |  |   | 521,139   |  |   | 465,915                    
|                                       | Total assets                                                 |  |   | 1,875,939 |  |   | 1,992,314 |  |   | 2,000,354                  
|                                       | Total long-term debt(e)                                      |  |   | 1,233,007 |  |   | 1,224,364 |  |   | 1,255,974                  
|                                       | Mandatorily redeemable preferred stock                       |  |   | 136,040   |  |   | 134,941   |  |   | 133,959                    
|                                       |                                                              |  |   |           |  |   |           |  |   |                            
|                                       | Total debt, including mandatorily redeemable preferred stock |  |   | 1,369,047 |  |   | 1,359,305 |  |   | 1,389,933                  
|                                       | Total stockholders' equity                                   |  |   | 76,740    |  |   | 110,003   |  |   | 113,008                    

---



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

General

Superior TeleCom Inc. ("Superior" or the "Company") manufactures a portfolio of wire and cable products grouped into the following primary industry
segments: (i) communications, (ii) original equipment manufacturer ("OEM") and (iii) electrical. The Communications Group includes communications wire and cable products sold to
telephone companies, CATV companies, distributors and systems integrators, principally in North America. In addition, included within the Communications Group is the Company's 50.2% owned Israeli
subsidiary, Superior Cables Limited ("Superior Israel"), which manufactures a range of wire and cable products in Israel including communications cable, power cable and other industrial and electronic
wire and cable products. The OEM Group includes magnet wire and accessory products for motors, transformers and electrical controls sold primarily to OEMs. The Electrical Group includes
building and industrial wire for applications in commercial and residential construction and industrial facilities.

Prior
to the acquisitions of Essex (see Note 5 to the consolidated financial statements), the Company's operations consisted principally of its North American and Israeli
communications wire and cable businesses. The Essex acquisition, which occurred on November 27, 1998, resulted in the addition of the OEM and Electrical Group product lines as well as
incremental sales of communications wire and cable. This acquisition was accounted for under the purchase method of accounting with the operating results from the acquired business being included in
the Company's consolidated statements of operations prospectively, from the date of acquisition.

Industry
segment financial data (including sales and operating income by industry segment) for the years ended December 31, 2001, 2000 and 1999, is included in Note 18 to
the accompanying consolidated financial statements.

19

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Impact of Copper Price Fluctuations on Operating Results

Copper is one of the principal raw materials used in the Company's wire and cable product manufacturing. Fluctuations in the price of copper do affect per unit
product pricing and related revenues. However, the cost of copper has not had a material impact on profitability as the Company, in most cases, has the ability to adjust prices billed for its products
to properly match the copper cost component of its inventory shipped.

Results of OperationsTwelve Months Ended December 31, 2001 ("2001")
Compared to the Twelve Months Ended December 31, 2000 ("2000")

Net sales for 2001 were $1.75 billion as compared to sales of $2.05 billion for 2000. Adjusted for a constant cost of copper, net sales in 2001
declined 12% as compared to 2000. The Company experienced a comparative decline in net sales in 2001 in each of its three principal industry segments due to the impact of the general recessionary
environment in 2001 as well as certain industry specific conditions, particularly in the Communications sector.

Communications
Group sales for 2001 were $726.8 million, a decrease of 13% on a copper-adjusted basis as compared to 2000. The comparative sales decline in 2001 was due primarily
to a 14% reduction in comparative sales of copper outside plant ("OSP") cables, which are used principally by telephone companies in the local loop segment of the telephony network. OSP cable sales
were lower due to significantly reduced spending levels by major telephone company customers following enacted budgetary spending constraints by such customers in the second half of 2001. Also
contributing to the comparative sales decline were lower sales of fiber optic and premise wire and cable products (collectively referred to as "broadband products") in 2001 which decreased 23% as
compared to 2000. The decline was attributable to an industry-wide slowdown in investment in broadband based telecom and datacom networks by a wide range of network service providers.

OEM
Group sales were $533.6 million for 2001, reflecting a copper-adjusted decline of 11% as compared to 2000. The comparative sales decline reflected continued soft demand for
magnet wire from the Company's major OEM customers due principally to the general industrial sector weakness and overall economic recessionary conditions (particularly in the power distribution and
generation and industrial equipment sectors) which have existed since the third quarter of 2000.

Electrical
Group sales were $486.9 million for 2001, a 10% decline on a copper-adjusted basis as compared to 2000. The comparative sales decline was due principally to weaker
industry-wide demand levels as a result of overall economic conditions and, to a lesser degree, lower pricing levels in 2001 as compared to 2000.

Gross
profit in 2001 was $275.9, a decline of $64.2 million as compared to gross profit of $340.1 million in 2000. The gross profit percentage in 2001 was 15.8%, a decline
on a copper-adjusted basis of 140 basis points as compared to the prior year. The comparative decline in gross profit was principally the result of (i) lower sales and lower gross profit
margins in all of the Company's industry segments, (ii) the impact, particularly in the 2001 fourth quarter, of unfavorable manufacturing cost absorption as the Company curtailed production
output to control inventory levels and working capital and (iii) the impact, particularly in the 2001 fourth quarter, associated with competitive industry pricing conditions.

Selling,
general and administrative expenses ("SG&A expenses") in 2001 were $156.0 million, comparable to SG&A expenses of $156.4 million in 2000.

Operating
income in 2001 before infrequent and unusual charges and goodwill amortization was $119.9 million, a decline of $63.8 million as compared to 2000. Operating
income after such charges in 2001 was $93.5 million, a decline of $54.3 million from 2000. The comparative decline in operating income for the current year was principally attributable
to lower sales and profit margins in all of the

20

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Company's operations associated with the aforementioned general economic, industrial sector and telecom sector business conditions.

The
Company incurred infrequent and unusual charges of $5.4 million during 2001 and $15.0 million during 2000. The infrequent and unusual charges in 2001 included
$3.1 million related to legal and professional fees associated with the Company's recent bank credit agreement amendment and with the Company's asset divestiture activities and
$2.3 million related to restructuring activities in the Company's Superior Israel operations. The infrequent and unusual charges in 2000 included $12.4 million related to the
restructuring and consolidation program in the Company's building wire (Electrical Group) operations and in the Company's Superior Israel operations and $2.6 million of start-up
costs for the Company's Mexican magnet wire facility.

Interest
expense for 2001 was $115.0 million representing a decrease of $14.9 million from the prior year. The decrease in interest expense was the result of lower
short-term (LIBOR) interest rates in 2001 as substantially all of the Company's debt is linked to short-term interest rates.

Other
income, net amounted to $1.3 million for 2001 and $1.0 million for 2000 with such income due primarily to gains on the sale of certain fixed assets. The Company also
recorded income of $2.4 million in 2001 and $5.1 million in 2000 related to the common equity minority interest component (49.8%) of losses incurred by Superior Israel.

The
Company recorded an after tax extraordinary charge for early extinguishment of debt of $2.9 million or $0.14 per diluted share in 2001. This charge represented previously
capitalized deferred financing fees written off in connection with the refinancing of the Company's $200.0 million senior subordinated notes, which refinancing under generally accepted
accounting principles was treated as an extinguishment of debt (see Note 7 to the consolidated financial statements).

Loss
before infrequent and unusual charges, goodwill amortization and extraordinary loss for 2001 was $5.5 million ($0.27 per diluted share) as compared to income before
infrequent and unusual charges and goodwill amortization in 2000 of $27.5 million ($1.37 per diluted share) with the comparative reduction in the current year being due to lower operating
income partially offset by lower interest expense. After infrequent and unusual charges, goodwill amortization and extraordinary loss, the Company incurred a net loss in 2001 of $32.5 million
($1.58 per diluted share) as compared to a net loss for 2000 of $2.1 million ($0.11 per diluted share).

Results of OperationsTwelve Months Ended December 31, 2000 ("2000")
Compared to the Twelve Months Ended December 31, 1999 ("1999")

Net sales for 2000 were $2.05 billion as compared to sales of $2.04 billion for 1999. Adjusted to a constant cost of copper, net sales in 2000
declined 4% as compared to 1999. The reduction in copper-adjusted sales for 2000 was due to lower sales in the Company's Electrical and OEM Groups partially offset by comparative sales growth in the
Company's Communications Group.

Communications
Group sales for 2000 were $848.1 million, an increase of 8% on a copper-adjusted basis over 1999. Sales growth in 2000 as compared to 1999 was due to a 69% increase
in sales of broadband products which totaled $141.0 million in 2000. Sales growth in this product line was the result of strong industry demand trends as well as market share gains attributable
to recent capacity additions, new product introductions and broadened marketing and sales activities. 2000 sales of copper OSP products decreased 1% as compared to copper-adjusted sales for the prior
year primarily due to the loss of business under a major customer contract impacting the second half of 2000. This volume decline was offset partially by overall industry demand growth and increased
sales in the distributor and international market.

OEM
Group sales were $613.4 million for 2000, reflecting a copper-adjusted decline of 1% as compared to 1999. The comparative sales decline reflected softening demand for magnet
wire from the

21

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Company's major OEM customers due principally to an industry-wide economic slowdown in the second half of 2000.

Electrical
Group sales were $587.6 million for 2000, representing a decline of 21% on a copper-adjusted basis as compared to 1999. Sales volume in the Electrical Group was
impacted by lower available productive capacity during 2000 as the Company was in the process of relocating and consolidating manufacturing equipment and balancing capacity in its building wire
operations. Additionally, softening industry demand also impacted sales volume in the fourth quarter of 2000.

Gross
profit in 2000 was $340.1 million, a decline of $43.8 million as compared to gross profit of $383.9 million in 1999. The gross profit percentage in 2000 was
16.6%, a decline on a copper-adjusted basis of 130 basis points as compared to the prior year. The decline in gross profit and gross profit percentage was principally attributable to the Electrical
Group, where comparative pricing pressures, lower sales and higher per unit production costs negatively impacted the gross profit and margin.

SG&A
expenses in 2000 were $156.4 million, an increase of 4% as compared to SG&A expenses of $150.8 million in 1999. The 2000 increase in SG&A expenses included higher
Communications Group selling and marketing expenses to support broadband sales growth and incremental Superior Israel SG&A expenses related to entities acquired in late 1999, partially offset by the
benefit of corporate restructuring actions initiated in the second quarter of 1999.

The
Company incurred infrequent and unusual charges of $15.0 million during 2000 and $8.4 million during 1999. The infrequent and unusual charges in 2000 include
$12.4 million related to the restructuring and consolidation program in the Company's building wire (Electrical Group) operations and in the Company's Superior Israel operations and
$2.6 million of start-up costs for the Company's Mexican magnet wire facility. The charges incurred during 1999 included $4.4 million associated with the evaluation and
termination of a management information system project at Essex, $2.2 million related to manufacturing rationalization activities at Essex, $1.3 million related to manufacturing and
corporate restructuring activities of Superior Israel and $0.5 million of start-up costs for the Company's Mexican magnet wire facility.

Operating
income before infrequent and unusual charges and goodwill amortization was $183.7 million, a decline of $49.4 million as compared to 1999. After such charges,
operating income was $147.8, a decline of $57.2 from 1999. The comparative decline in operating income for 2000 was principally attributable to lower sales and margins in the Electrical Group.

Interest
expense for 2000 was $129.9 million representing an increase of $9.8 million over the prior year. The increase in interest expense was the result of higher
short-term (LIBOR) interest rates in 2000 and, to a lesser degree, higher interest costs at Superior Israel associated with acquisition related debt.

Other
income, net amounted to $1.0 million for 2000 and $2.5 million for 1999 with such income due primarily to currency translation gains at Superior Israel on certain
debt linked to non-functional currencies (principally Euro-linked) as well as gains on the sale of certain fixed assets and investments.

For
2000, the Company recorded income of $5.1 million related to the common equity minority interest component (49.8%) of losses incurred by Superior Israel. For 1999, the Company
recorded a minority interest charge of $0.6 million reflecting the common equity minority interest component (19%) of Essex net income for the March 31, 1999 quarter, reduced by the
minority interest component of Superior Israel's net loss for 1999.

The
Company recorded an after tax extraordinary charge of $1.6 million, or $0.08 per diluted share, in 1999. This charge represented previously capitalized deferred financing fees
written off in connection with the refinancing of the Company's $200.0 million senior subordinated notes.

22

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Income
before infrequent and unusual charges and goodwill amortization for 2000 was $27.5 million ($1.37 per diluted share) as compared to income before infrequent, unusual and
extraordinary charges and goodwill amortization of $62.9 million ($3.01 per diluted share) for 1999, with the reduction in income in the current year being due to lower operating income
combined with the impact of rising interest rates and higher interest expense. After infrequent, unusual and goodwill amortization charges, the Company incurred a net loss of $2.1 million
($0.11 per diluted share) for 2000 as compared to net income of $37.2 million ($1.78 per diluted share) for 1999.

Liquidity and Capital Resources

For the year ended December 31, 2001, the Company generated $58.9 million in cash flows from operating activities consisting of $50.4 million
in cash flows generated from operations (net loss plus non-cash charges) plus $8.5 million in cash flows provided from reductions in net working capital. Included in cash flows
generated from operating activities was $12.0 million of cash flow from operating activities in the Company's 50.2% owned, separately financed Israeli subsidiary, Superior Israel. The remainder
of the Company's wholly-owned operations generated $46.9 million in cash flow from operating activities. Cash used for investing activities amounted to $33.9 million and consisted
principally of capital expenditures and pre-arranged long-term loans ("Israel Customer Loans") made to one of Superior Israel's principal customers. Cash used for financing
activities amounted to $18.5 million. The major components were a net increase in borrowings of Superior Israel of $1.3 million (including $13.0 million related to Superior Israel
Customer Loans) and other debt reductions (net) of $19.2 million.

The
Company finances its operating activities (exclusive of operating activities of Superior Israel which are financed under separate financing arrangements and non-recourse
to Superior) and other capital requirements from (i) operating cash flow, (ii) funding availability under its revolving credit facility and (iii) allowable borrowings under its
accounts receivable securitization financing arrangement.

The
revolving credit facility provides for borrowings up to $225 million (subject to certain interim reductions in 2002 which limit the total facility to $214 million) and
matures in May 2004. $169 million was outstanding under the revolving credit facility at December 31, 2001. The revolving credit facility along with term loan A and term loan B
(see Note 7 to the consolidated financial statements) comprise the Company's senior credit facilities which are governed by an Amended and Restated Credit Agreement (the "Credit Agreement").
The total balance outstanding on term loans A and B at December 31, 2001 amounted to $703 million. Obligations under the Credit Agreement are secured by substantially all of the assets
of the Company and its subsidiaries. The Credit Agreement contains certain restrictive covenants, including, among other things, requirements to maintain certain financial ratios, limitations on the
amount of dividends the Company is allowed to pay on its capital stock and restrictions on additional indebtedness.

The
Company's accounts receivable securitization program provides for funding up to $160.0 million (based on the level of accounts receivable) in short-term financing
through the issuance of commercial paper. At December 31, 2001, $124 million was outstanding under this program which, based on the then current level of accounts receivable, was fully
drawn. This program expires on June 30, 2002. The Company is seeking, and believes it can obtain, an alternative receivables financing arrangement. Failure to obtain an alternative receivables
financing arrangement is an event of default under the Credit Agreement.

In
addition to the above, the Company also has outstanding $203 million in senior subordinated notes due in December 2007 ("Senior Subordinated Notes").

During
December 2001 the Company entered into a major amendment to the Credit Agreement. Such amendment (i) reduced operating performance levels required to meet certain
financial covenants

23

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through December 31, 2002; (ii) required the Company to make an accelerated payment under term loans A and B of $175 million in the aggregate by January 3, 2003 from the
proceeds of an asset divestiture or other equity transaction (which requirement has been eliminated as discussed below); (iii) increased the rate of interest during 2002, under certain
conditions and at certain intervals, on the revolving credit facility and term loans A and B by an aggregate of 1%; (iv) reduced allowed annual capital expenditures and (v) restricted
the Company's cash payment of quarterly interest payments during 2002 on its Senior Subordinated Notes unless certain conditions are met, such conditions principally including satisfaction of certain
levels of liquidity available under its revolving credit facility as of the date such interest payments under the Senior Subordinated Notes are due and the completion of asset divestitures or
satisfaction of certain milestones facilitating the completion of asset divestitures. Up to two cash interest payments on the Senior Subordinated Notes are allowed to be made from proceeds of any
junior capital issuances of the Company (see Note 7 to the consolidated financial statements).

In
March 2002, the Company entered into an additional amendment to the Credit Agreement which (i) further reduced operating performance levels required to meet certain
financial covenants through December 31, 2002; (ii) deferred until January 31, 2003 term loan principal payments otherwise due March 31, 2002 amounting to
$19.4 million and (iii) eliminated the required $175 million accelerated term loan payment due on January 3, 2003.

In
December 2001, the Company entered into a major amendment to the agreement governing the Senior Subordinated Notes. Such amendment allows the Company in certain circumstances
the option to make three of the four quarterly interest payments due in 2002 in the form of payment-in-kind notes ("PIK notes") in lieu of cash interest payments. Alpine has
provided a funded cash commitment on behalf of the Company that will make available to the Company sufficient cash to make one quarterly cash interest payment in 2002 (see Note 17 to the
consolidated financial statements). If PIK notes are issued (in lieu of cash) for the February 2002 interest payment, then the interest rate on the Senior Subordinated Notes will increase to
LIBOR plus 9%. If PIK notes are issued (in lieu of cash) for the August and November quarterly interest payments, then the interest rate on the Senior Subordinated Notes will increase to LIBOR plus
11% and LIBOR plus 12%, respectively.

In
2001, the Company initiated a process to effect a major asset divestiture which, if successfully completed, would have allowed the Company to meet the then required
$175 million prepayment under the Credit Agreement. This divestiture process was discontinued in the fourth quarter of 2001 due to the impact on the financial markets and the impact on the
operating results of the targeted business to be divested of the events of September 11th and the general economic recessionary conditions. As a result of the March 2002
amendment to the Credit Agreement, which eliminated the $175 term loan prepayment requirement, the Company will not be required to complete an asset divestiture during 2002. However, the Company will
continue to consider asset divestitures as a possible course of action for further deleveraging the Company's balance sheet based on prevailing economic conditions, financial market and asset
valuation levels. If the Company does complete an asset divestiture, the cash proceeds from such sale are required to be used to pay down the amounts outstanding under the Credit Agreement.

At
December 31, 2001 the Company had unused and excess borrowing availability under its revolving credit facility of $52 million and cash on hand of $19 million
resulting in total operating funds availability of $71 million which, along with its operating cash flow, is used to service the Company's normal operating commitments.

Over
the next twelve month period, the Company (excluding its Superior Israel operations) anticipates a reduction in cash flow required to service interest costs, distributions on its
Trust Convertible Preferred Securities and capital expenditure obligations. Further, as a result of the

24

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March 2002 amendment to the Credit Agreement, the Company's term loan principal amortization requirements will be reduced in 2002 as compared to 2001.

The
Company is currently benefiting from the substantial reduction in market interest rates that has occurred over the past twelve months which, along with the Company's option in
certain circumstances to pay interest on the Senior Subordinated Notes in the form of PIK notes rather than cash, should result in a reduction in cash outlays for interest expense in 2002. Cash
interest expense, based on current market interest rates, is expected to approximate only $65-$70 million in 2002, a reduction of approximately $35 million as compared to
cash interest costs incurred in 2001. Capital expenditures are expected to approximate $15-$20 million in 2002. The Company also intends to continue to defer during 2002
distributions on its outstanding Trust Convertible Preferred Securities which will result in additional annualized cash flow savings of $7 million as compared to cash distributions paid in
2001. Deferred distributions under the Trust Convertible Preferred Securities are cumulative and accrue interest at a rate of 8.50% per annum.

In
addition to outlays for cash interest and capital expenditures, the Company also has principal amortization requirements on its term loans A and B and on certain capital leases, which
aggregate $74 million during 2002 (as compared to $80 million in 2001). In total, the Company's cash outlays for interest, distributions on its Trust Convertible Preferred Securities,
capital expenditures and term loan principal amortization in 2002 are estimated to be more than $50 million less than comparable outflows in 2001.

The
Company intends to service the aforementioned cash requirements in 2002 from operating cash flow and, to the extent required, availability under its revolving credit facility and
available cash balances. The Company believes its operating cash flow, combined with revolver availability and cash on hand will be sufficient to fund these commitments in 2002. Based on full year
2001 results, operating cash flow would have been sufficient to meet the 2002 cash obligations. However, operating cash flow did decline in the fourth quarter of 2001 and is expected to be lower in
the first quarter of 2002 as compared to the first quarter of 2001. Also impacting the Company's cash flow are changes in working capital requirements and fluctuations in short-term
interest rates. An increase in working capital requirements or a substantial increase in short-term interest rates, neither of which is presently anticipated, could negatively impact the
Company's cash flow and liquidity. Accordingly, while the Company believes it will be able to meet all of its cash requirements in 2002, there can be no assurance that such requirement will be met.

The
Company's access to availability under its revolving credit facility is also subject to the Company maintaining compliance with the financial covenants under the Credit Agreement.
While such covenants were reset in March 2002, the Company will need to improve its operating results in 2002 as compared to the fourth quarter of 2001 in order to maintain compliance during
the year. While there can be no assurance, the Company currently believes it can maintain compliance or otherwise obtain appropriate waivers or modifications to these financial covenants, if required,
so as to avoid a default under the Credit Agreement.

Superior
Israel's operations are funded and financed separately, with recourse to Superior Israel but otherwise on a non-recourse basis to the Company, and include a
$93.0 million credit facility consisting of a $63.0 million term loan and a $30.0 million revolving credit facility. At December 31, 2001, Superior Israel had
$11.8 million in excess availability under its revolving credit facility.

As
discussed under Item 5. "Market for Registrant's Securities and Related Security Holder Matters", Superior was notified by the NYSE on March 8, 2002 that it had fallen below
the NYSE's continued listing standard. The potential delisting of Superior's stock could impact Superior's ability to raise funds in the equity markets in the future.

25

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Derivative Financial Instruments

To a limited extent, the Company uses forward fixed price contracts and derivative financial instruments to manage foreign currency exchange and commodity price
risks. To protect the Company's anticipated cash flows from the risk of adverse foreign currency exchange fluctuations for firm sales and purchase commitments, the Company enters into foreign currency
forward exchange contracts. Superior TeleCom's principal raw material, copper, experiences marked fluctuations in market prices, thereby subjecting the Company to copper price risk with respect to
copper repurchases on fixed customer sales contracts. Forward fixed price contracts and derivative financial instruments in the form of copper futures contracts are utilized by the Company to reduce
those risks. The Company does not hold or issue financial instruments for financial or trading purposes. The Company is exposed to credit risk in the event of nonperformance by counter parties for
foreign exchange forward contracts, metal forward price contracts and metals futures contracts; however, the Company does not anticipate nonperformance by any of these counter parties. The amount of
such exposure is generally the unrealized gains with respect to the underlying contracts.

Accounting Policies

The Company's consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States. In the preparation
of these financial statements, management makes judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. The significant accounting policies followed in the preparation of the financial statements are detailed in Note 2 to the
consolidated financial statements. Management believes that the application of policies regarding the establishment of allowances for accounts receivable and inventories, valuation allowances for
deferred tax assets and certain accrued expenses involve significant levels of judgments, estimates and complexity.

Allowances
for discounts and sales incentives are made at the time of sale based on incentive programs available to the customer. The cost of these programs is dependent on various
factors including the timing of the sale and the volume of sales achieved by the customer. These sales incentives may also be revised between the time the Company records the sale and the time the
sale occurs. The Company monitors these factors and revises the provisions when necessary.

The
Company's allowances for surplus and obsolete inventory are based on estimates of future sales and production. Changes in demand and product design can impact these estimates. The
Company periodically evaluates and updates assumptions when assessing the adequacy of inventory allowances.

Valuation
allowances for deferred tax assets are established when it is estimated it is more likely than not that the tax assets will not be realized. These estimates are based on
projections of future income in certain tax jurisdictions. Changes in industry conditions and the competitive environment may impact the accuracy of the Company's projections.

Insurance
reserves are provided for estimates of losses due to claims for worker's compensation, product liability and other liabilities for which the Company is
self-insured. These estimates are based on the ultimate value of claims, which often have long periods of resolution. The Company closely monitors the claims to maintain adequate reserves.

Due
to the level of judgment, complexity and period of time over which many of these items are resolved, actual results could differ from those estimated at the time of preparation of
the financial statements. Adjustments to these estimates would impact the Company's financial position and future results of operations.

26

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Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141 "Business Combinations" and SFAS No. 142 "Goodwill and
Other Intangible Assets." SFAS No. 141 requires use of the purchase method of accounting for business combinations initiated after June 30, 2001. SFAS No. 142, which is effective
for the Company beginning January 1, 2002, requires that the amortization of goodwill and certain other intangible assets cease and that the related asset values be reviewed annually for
impairment. The Company recorded $21.1 million in goodwill amortization charges in 2001. Beginning in 2002, the Company's goodwill, which amounted to $750.5 million at
December 31, 2001, will no longer be amortized; however it will be subject to an initial impairment review in the first quarter of 2002. If the carrying value (including goodwill) of any of the
Company's business segments exceeds the fair value (determined on a discounted cash flow basis or other fair value method), impairment of goodwill may exist which would result in a charge to earnings
for the amount of any such impairment. Prior assessments of goodwill impairment have not resulted in any charge for goodwill impairment; however, such prior assessment utilized undiscounted cash flows
for purposes of evaluating whether impairment exists. While the initial impairment assessment under SFAS No. 142 has not been performed, the impact of recent economic and industry specific
conditions could result in lowered fair values for certain of its business segments and, thus may give rise to material goodwill impairment charges in 2002.

In
July 2001, the FASB also issued SFAS No. 143, "Accounting for Asset Retirement Obligations". SFAS No. 143 requires entities to record the fair value of a
liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially recorded, the entity capitalizes the cost by increasing the carrying amount of the
related long-lived asset. Over time, the liability is accreted to its present value each period and the capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the liability, the entity either settles the obligation for the amount recorded or incurs a gain or loss. SFAS No. 143 is effective for fiscal years beginning after
June 15, 2002. The Company does not anticipate any material impact on its results of operations or financial position related to implementation of SFAS No. 143.

In
August 2001, the FASB issued Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". SFAS No. 144 supersedes FASB
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" and the accounting and reporting provisions of APB
Opinion No. 30, "Reporting the Results of OperationsReporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions" for the disposal of a segment of a business (as previously defined in APB Opinion 30). The FASB issued SFAS No. 144 to establish a single accounting model, based on the framework
established in SFAS No. 121 for long-lived assets to be disposed of by sale. SFAS No. 144 broadens the presentation of discontinued operations in the income statement to
include a component of an entity (rather than a segment of a business). A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial
reporting purposes, from the rest of the entity. SFAS No. 144 also requires that discontinued operations be measured at the lower of the carrying amount or fair market value less cost to sell.
SFAS No. 144 is effective for fiscal years beginning after December 15, 2001 and should be applied prospectively. The Company does not anticipate any material impact on its results of
operations or financial position related to implementation of SFAS No. 144.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The Company's exposure to market risk primarily relates to interest rates on long-term debt. The Company enters into interest rate swap and cap
agreements to manage its exposure to interest rates changes. At December 31, 2001, the Company had an interest rate cap on $362 million principal amount with a 90-day LIBOR
cap at 4.4% expiring December 27, 2002. A one percent increase in

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interest rates affecting the Company's $1.15 billion Credit Agreement and its $200 million Senior Subordinated Notes would increase annual interest expense by approximately 9% or
$10.8 million.

Except for the historical information herein, the matters discussed in this Annual Report on Form 10-K include forward-looking statements that
may involve a number of risks and uncertainties. Actual results may vary significantly based on a number of factors, including, but not limited to, risks in product and technology development, market
acceptance of new products and continuing product demand, prediction and timing of customer orders, the impact of competitive products and pricing, changing economic
conditions, including changes in short term interest rates and foreign exchange rates, and other risk factors detailed in the Company's most recent filings with the Securities and Exchange
Commission.

Item 8. Financial Statements and Supplementary Data

The Company's consolidated financial statements as of December 31, 2001 and 2000 and for the years ended December 31, 2001 and 2000 and 1999, and
the report of the independent public accountants thereon and financial statement schedules required under Regulation S-X are submitted herein as a separate section following Item 14
of this report.

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

None.

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PART III

Item 10. Directors and Executive Officers of Registrant

The information required by this Item is incorporated herein by reference to the Company's definitive Proxy Statement to be filed with the Securities and Exchange
Commission pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this report (the "Company's Proxy Statement").

Item 11. Executive Compensation

The information required by this item is incorporated herein by reference to the Company's Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The information required by this item is incorporated herein by reference to the Company's Proxy Statement.

Item 13. Certain Relationships and Related Transactions

The information required by this item is incorporated herein by reference to the Company's Proxy Statement.

PART IV

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

(a)(1),
(a)(2) See the separate section of this report following Item 14 for a list of financial statements and schedules filed herewith.

(a)(3)
Exhibits as required by Item 601 of Regulation S-K are listed in Item 14(c) below.

(b)
None.

Item 14(c) Exhibits

|Exhibit Number |   | Description                                                                                                                                                                                                                                                                                                                                                           
|-------------- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2(a            | ) | Stock Purchase Agreement, dated February 14, 1992, by and between Alpine and Dataproducts Corporation, relating to the purchase of shares of capital stock of DNE Systems, Inc. (incorporated herein by reference to
Exhibit 1 to the Current Report on Form 8-K of Alpine dated March 2, 1992).                                                                      
|2(b            | ) | Agreement and Plan of Merger, dated as of June 17, 1993 and amended on September 24, 1993, by and between Alpine and Superior TeleTec Inc. (incorporated herein by reference to Exhibit 2 to the Registration
Statement on Form S-4 (Registration No. 33-9978) of Alpine, as filed with the Securities and Exchange Commission (the "Commission") on October 5, 1993).
|2(c            | ) | Asset Purchase Agreement, dated as of March 17, 1995, by and among Alcatel NA Cable Systems, Inc., Alcatel Canada Wire, Inc., Superior Cable Corporation and Superior TeleTec Inc. (the "Alcatel Acquisition Agreement")
(incorporated herein by reference to Exhibit 1 to the Current Report on Form 8-K of Alpine dated May 24, 1995).                              
|2(d            | ) | Amendment dated May 11, 1995 to Asset Purchase Agreement by and among Alcatel NA Cable Systems, Inc., Alcatel Canada Wire, Inc., Superior Cable Corporation and Superior TeleTec Inc. (incorporated herein by reference
to Exhibit 2 to the Current Report on Form 8-K of Alpine dated May 24, 1995).                                                                 

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|2(e | ) | Agreement Regarding Certain Employee Benefit Plans, amending the Alcatel Acquisition Agreement, dated June 10, 1996 (incorporated herein by reference to Exhibit 2(b) to the Annual Report on Form 10-K of
Alpine for the year ended April 30, 1996).                                                                                                                                                                                  
|--- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2(f | ) | Share Purchase Agreement, dated as of May 5, 1998, among CLAL Industries and Investments Ltd., ISAL Holland B.V. and Halachoh Hane'eman Hashivim Veshmona Ltd. (incorporated herein by reference to Exhibit 1 to
the Current Report on Form 8-K of the Company dated May 5, 1998).                                                                                                                                                     
|2(g | ) | Agreement and Plan of Merger, dated as of October 21, 1998, by and among the Company, SUT Acquisition Corp. and Essex International Inc. (incorporated herein by reference to Appendix A-1 to the Joint Proxy
Statement/Prospectus filed as part of the Registration Statement on Form S-4 (Registration No. 333-68889) of the Company and Superior Trust I, as filed with the Commission on December 14, 1998, as amended (the "S-4"))
|2(h | ) | Amendment No. 1 to Agreement and Plan of Merger, dated as of February 24, 1999, by and among the Company, SUT Acquisition Corp. and Essex International Inc. (incorporated herein by reference to Appendix A-2
to the Joint Proxy Statement/Prospectus filed as part of the S-4).                                                                                                                                                      
|2(i | ) | Asset Purchase Agreement, dated October 2, 1998, among Cables of Zion United Works Ltd., CvalimThe Electric Wire and Cable Company of Israel Ltd. and Dash Cable Industries (Israel) Ltd. (incorporated herein by
reference to Exhibit 1 to the Current Report on Form 8-K of the Company dated December 31, 1998 (the "Cvalim 8-K")).                                                                                                
|2(j | ) | Amendment No. 1 to Asset Purchase Agreement, dated December 31, 1998, among Cables of Zion United Works Ltd., CvalimThe Electric Wire and Cable Company of Israel Ltd. and Dash Cable Industries (Israel)
Ltd. (incorporated herein by reference to Exhibit 2 to the Cvalim 8-K).                                                                                                                                                     
|3(a | ) | Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.2 to the Registration Statement on Form S-1 (Registration No. 333-09933) of the Company, as filed with the
Commission on August 9, 1996, as amended (the "S-1")).                                                                                                                                                                           
|3(b | ) | Certificate of Amendment, dated July 12, 1996, to the Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.2 to the S-1).                                                                                                                                                                                                                                                                        
|3(c | ) | Certificate of Amendment, dated August 6, 1996, to the Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.3 to S-1).                                                                                                                                                                                                                                                                           
|3(d | ) | Certificate of Amendment, dated March 31, 1999, to the Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 4.4 to the Registration Statement on Form S-3 (Registration
No. 333-68889) of the Company, as filed with the Commission on August 17, 1999 (the "S-3")).                                                                                                                               
|3(e | ) | By-laws of the Company (incorporated herein by reference to Exhibit 3.4 to the S-1).                                                                                                                                                                                                                                                                                                                                                   
|3(f | ) | Amendment to the By-Laws of the Company (incorporated herein by reference to Exhibit 3(f) to the Annual Report on Form 10-K of the Company for the year ended December 31, 2000).                                                                                                                                                                                                                                                      
|4(a | ) | Amended and Restated Declaration of Trust of Superior Trust I, dated as of March 31, 1999, among the Company, American Stock Transfer & Trust Company, as Property Trustee, Wilmington Trust Company, as
Delaware Trustee, and the Administrative Trustees named therein (incorporated herein by reference to Exhibit 4.6 to the S-3).                                                                                                 
|4(b | ) | Indenture for the 81/2% Convertible Subordinated Debentures of the Company Due 2014, dated as of March 31, 1999, between the Company and American Stock Transfer & Trust Company, as Indenture
Trustee (incorporated herein by reference to Exhibit 4.7 to the S-3).                                                                                                                                                                   
|4(c | ) | Guarantee Agreement for the 81/2% Trust Convertible Preferred Securities of Superior Trust I, dated as of March 31, 1999, between the Company and American Stock Transfer & Trust Company, as
Guarantee Trustee (incorporated herein by reference to Exhibit 4.8 to the S-e).                                                                                                                                                          

30

---

|4(d  | ) | Rights Agreement, dated as of December 28, 2000, between the Company and American Stock Transfer & Trust Company, as Rights Agent (incorporated herein by reference to Exhibit 4.1 to the Form 8-A of the Company, as
filed with the Commission on January 9, 2001).                                                                                                                                                                                                                                                                      
|---- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10(a | ) | Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 10.1 to the S-1).                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10(b | ) | Lease Agreement, dated as of December 16, 1993, by and between ALP(TX) QRS 11-28, Inc. and Superior TeleTec Transmission Products, Inc. (incorporated herein by reference to Exhibit (i) to the Quarterly Report on Form 10-Q
of Alpine for the quarter ended January 31, 1994).                                                                                                                                                                                                                                                          
|10(c | ) | First Amendment to Lease Agreement, dated as of May 10, 1995, by and between ALP (TX) QRS 11-28, Inc. and Superior TeleTec Inc. (incorporated herein by reference to Exhibit 10(o) to the Annual Report on Form 10-K of
Alpine for the year ended April 30, 1995 (the "1995 Alpine 10-K")).                                                                                                                                                                                                                                               
|10(d | ) | Second Amendment to Lease Agreement, dated as of July 21, 1995, by and between ALP (TX) QRS 11-28, Inc. and Superior Telecommunications Inc. (incorporated herein by reference to Exhibit 10(x) to the 1995 Alpine
10-K).                                                                                                                                                                                                                                                                                                                 
|10(e | ) | Third Amendment to Lease Agreement, dated as of October 2, 1996, by and between ALP (TX) QRS 11-28, Inc. and Superior Telecommunications Inc. (incorporated herein by reference to Exhibit 10.8 to the S-1).                                                                                                                                                                                                                                                                                                                              
|10(f | ) | First Amendment to Guaranty and Surety Agreement, dated as of October 2, 1996, among the Company, Alpine and ALP (TX) QRS 11-28, Inc. (incorporated herein by reference to Exhibit 10.12 to the S-1).                                                                                                                                                                                                                                                                                                                                     
|10(g | ) | Employment Agreement, dated April 26, 1996, between Superior Telecommunications Inc. and Justin F. Deedy, Jr. (incorporated herein by reference to Exhibit 10.3 to the S-1).                                                                                                                                                                                                                                                                                                                                                              
|10(h | ) | Letter Agreement, dated October 8, 1996, between the Company and Alpine relating to a capital contribution by Alpine to the Company (incorporated herein by reference to Exhibit 10.2 to the S-1).                                                                                                                                                                                                                                                                                                                                        
|10(i | ) | Letter Agreement, dated October 2, 1996, between the Company and Alpine relating to tax indemnification (incorporated herein by reference to Exhibit 10.5 to the S-1).                                                                                                                                                                                                                                                                                                                                                                    
|10(j | ) | Tax Allocation Agreement, dated as of October 2, 1996, among Alpine, the Company and its subsidiaries (incorporated herein by reference to Exhibit 10.9 to the S-1).                                                                                                                                                                                                                                                                                                                                                                      
|10(k | ) | Exchange Agreement, dated October 2, 1996, between the Company and Alpine (incorporated herein by reference to Exhibit 10.10 to the S-1).                                                                                                                                                                                                                                                                                                                                                                                                 
|10(l | ) | Registration Rights Agreement, dated October 2, 1996, between the Company and Alpine (incorporated herein by reference to Exhibit 10.11 to the S-1).                                                                                                                                                                                                                                                                                                                                                                                      
|10(m | ) | Services Agreement, dated October 2, 1996, between the Company and Alpine (incorporated herein by reference to Exhibit 10.4 to the S-1).                                                                                                                                                                                                                                                                                                                                                                                                  
|10(n | ) | Amendment No. 1, dated as of May 1, 1997, to the Services Agreement (incorporated herein by reference to Exhibit 10(t) to the Annual Report on Form 10-K of the Company for the year ended April 30, 1997).                                                                                                                                                                                                                                                                                                                               
|10(o | ) | Amendment No. 2, dated as of May 1, 1998, to the Services Agreement (incorporated herein by reference to Exhibit 10(w) to the Annual Report on Form 10-K of the Company for the year ended April 30, 1998).                                                                                                                                                                                                                                                                                                                               
|10(p | ) | Amended and Restated Credit Agreement, dated as of November 27, 1998 (the "Credit Agreement"), among Superior/Essex Corp., Essex Group, Inc., the guarantors named therein, various lenders, Merrill Lynch & Co., as
documentation agent, Fleet National Bank, as syndication agent, and Bankers Trust Company, as administrative agent (incorporated herein by reference to Exhibit 99.7 to the Schedule 13D/A of Alpine, the Company, Superior/Essex Corp. and SUT
Acquisition Corp., as filed with the Commission on December 7, 1998).

31

---

|10(q  | ) | Senior Subordinated Credit Agreement, dated as of May 26, 1999 (the "Senior Subordinated Credit Agreement"), among Superior/Essex Corp., as borrower, the Company, as parent, the subsidiary guarantors named therein,
various lenders, Fleet Corporate Finance, Inc., as syndication agent, and Bankers Trust Company, as administrative agent (incorporated herein by reference to Exhibit 10(s) to the Annual Report on Form 10-K of the Company for the year ended December
31, 1999 (the "1999 10-K").
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10(r  | ) | Addendum No. 1 to the Application to Open an Account, dated December 29, 1998, between Cables of Zion United Works Ltd. and Bank Hapoalim B.M. (incorporated herein by reference to Exhibit 3 to the Cvalim 8-K).                                                                                                                                                                                                                                                                                          
|10(s  | ) | Amendment No. 1, dated as of December 10, 1999, to the Senior Subordinated Credit Agreement (incorporated herein by reference to Exhibit 10(v) to the 1999 10-K).                                                                                                                                                                                                                                                                                                                                          
|10(t  | ) | Amendment No. 2, dated as of February 18, 2000, to the Senior Subordinated Credit Agreement (incorporated herein by reference to Exhibit 10(w) to the 1999 10-K).                                                                                                                                                                                                                                                                                                                                          
|10(u  | ) | Fourth Amendment to Lease Agreement, dated as of November 27, 1998, between ALP (TX) QRS 11-28, Inc. and Superior Telecommunications Inc. (incorporated herein by reference to Exhibit 10(x) to the 1999 10-K).                                                                                                                                                                                                                                                                                            
|10(v  | ) | Second Amendment to Guaranty and Suretyship Agreement, dated as of November 27, 1998, among ALP (TX) QRS 11-28, Inc., the Company and Alpine (incorporated herein by reference to Exhibit 10(y) to the 1999
10-K).                                                                                                                                                                                                                                                                                         
|10(w  | ) | Amendment No. 3, dated as of May 1, 1999, to the Services Agreement (incorporated herein by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2000 (the
"September 2000 10-Q")).                                                                                                                                                                                                                                                           
|10(x  | ) | Amendment No. 1, dated as of December 31, 1998, to the Credit Agreement (incorporated herein by reference to Exhibit 10(aa) to the Annual Report on Form 10-K of the Company for the year ended December 31, 2000 (the "2000
10-K")).                                                                                                                                                                                                                                                                      
|10(y  | ) | Amendment No. 2 and Waiver, dated as of December 10, 1999, to the Credit Agreement (incorporated herein by reference to Exhibit 10(bb) to the 2000 10-K).                                                                                                                                                                                                                                                                                                                                                  
|10(z  | ) | Amendment No. 3 and Waiver, dated as of March 13, 2000, to the Credit Agreement (incorporated herein by reference to Exhibit 10.1 to the September 2000 10-Q).                                                                                                                                                                                                                                                                                                                                             
|10(aa | ) | Amendment No. 4 and Waiver, dated as of September 30, 2000, to the Credit Agreement (incorporated herein by reference to Exhibit 10.2 to the September 2000 10-Q).                                                                                                                                                                                                                                                                                                                                         
|10(bb | ) | Amendment No. 3, dated as of March 30, 2000, to the Senior Subordinated Credit Agreement (incorporated herein by reference to Exhibit 10(ee) to the 2000 10-K).                                                                                                                                                                                                                                                                                                                                            
|10(cc | ) | Amendment No. 4, dated as of April 20, 2000, to the Senior Subordinated Credit Agreement (incorporated herein by reference to Exhibit 10(ff) to the 2000 10-K).                                                                                                                                                                                                                                                                                                                                            
|10(dd | ) | Amendment No. 5, dated as of June 5, 2000, to the Senior Subordinated Credit Agreement (incorporated herein by reference to Exhibit 10(gg) to the 2000 10-K).                                                                                                                                                                                                                                                                                                                                              
|10(ee | ) | Superior TeleCom Inc. Deferred Stock Account Plan (incorporated herein by reference to Exhibit 10(hh) to the 2000 10-K).                                                                                                                                                                                                                                                                                                                                                                                   
|10(ff | ) | Superior TeleCom Inc. Deferred Cash Account Plan (incorporated herein by reference to Exhibit 10(ii) to the 2000 10-K).                                                                                                                                                                                                                                                                                                                                                                                    
|10(gg | ) | Amended and Restated Employment Agreement, dated effective as of January 1, 2001, between the Company, Superior Telecommunications, Inc. and Steven S. Elbaum (incorporated herein by reference to Exhibit 10.1 to the
Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2001 (the "March 2001 10-Q")).                                                                                                                                                                         
|10(hh | ) | Employment Agreement, dated effective as of January 1, 2001, between the Company, Superior Telecommunications, Inc. and David S. Aldridge (incorporated herein by reference to Exhibit 10.2 to the March 2001 10-Q)
).                                                                                                                                                                                                                                                                                     
|10(ii | ) | Employment Agreement, dated effective as of January 1, 2001, between the Company, Superior Telecommunications, Inc. and Stephen C. Knup (incorporated herein by reference to Exhibit 10.3 to the March 2001 10-Q)
).                                                                                                                                                                                                                                                                                       

32

---

|10(jj | )  | Employment Agreement, dated effective as of January 1, 2001, between the Company, Superior Telecommunications, Inc. and Stewart H. Wahrsager (incorporated herein by reference to Exhibit 10.4 to the March 2001
10-Q)).                                                                                                                                                                                                                                                                
|----- | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10(kk | )  | Amendment Number One to the Superior TeleCom Inc. Deferred Stock Account Plan (incorporated herein by reference to Exhibit 10.5 to the March 2001 10-Q)).                                                                                                                                                                                                                                                                                                                               
|10(ll | )  | Amendment No. 5, dated as of June 30, 2001 to the Amended and Restated Credit Agreement dated as of November 27, 1998, among Superior Telecommunications Inc., Essex Group Inc., the guarantors named therein, various
lenders, Bankers Trust Company, as administrative agent and Fleet National Bank, as syndication agent, (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2001 (the "June 2001
10-Q").
|10(mm | )  | Amendment dated as of January 1, 2001, to the Services Agreement between The Alpine Group, Inc. and Superior TeleCom Inc. (incorporated by reference to Exhibit 10.2 to the June 2001 10-Q).                                                                                                                                                                                                                                                                                            
|10(nn | )* | Amendment Number Six and Waiver, dated as of November 30, 2001, to the Amended and Restated Credit Agreement dated as of November 27, 1998, among Superior Telecommunications Inc., Essex Group Inc., the guarantors named
therein, various lenders, Bankers Trust Company, as administrative agent and Fleet National Bank, as syndication agent.                                                                                                                                      
|10(oo | )* | Amendment Number Seven, dated as of March 28, 2001, to the Amended and Restated Credit Agreement dated as of November 27, 1998, among Superior Telecommunications Inc., Essex Group Inc., the guarantors named therein,
various lenders, Bankers Trust Company, as administrative agent and Fleet National Bank, as syndication agent.                                                                                                                                                  
|10(pp | )* | Amendment Number Six, dated as of December 27, 2001, to the Senior Subordinated Credit Agreement.                                                                                                                                                                                                                                                                                                                                                                                       
|10(qq | )* | Reimbursement Agreement, dated as of November 30, 2001 among The Alpine Group, Inc., Superior Telecommunications Inc. and Superior TeleCom Inc.                                                                                                                                                                                                                                                                                                                                         
|10(rr | )* | Warrants, dated December 27, 2001, to purchase 200,000 shares of common stock issued by Superior TeleCom Inc. to The Alpine Group, Inc.                                                                                                                                                                                                                                                                                                                                                 
|10(ss | )* | Employment agreement, dated effective as of January 1, 2001, between Superior Telecommunications Inc. and Christopher L. Mapes                                                                                                                                                                                                                                                                                                                                                          
|10(tt | )* | Employment agreement, dated effective as of January 1, 2001, between Superior Telecommunications Inc. and Harold M. Karp                                                                                                                                                                                                                                                                                                                                                                
|10(uu | )* | Superior TeleCom Inc. Stock Compensation Plan for Non-Employee Directors (Amended and Restated Effective as of July 1, 2001).                                                                                                                                                                                                                                                                                                                                                           
|10(vv | )  | Superior TeleCom Inc.1996 Stock Incentive Plan (incorporated by reference to Appendix B to the proxy statement of the Company dated April 30, 2001).                                                                                                                                                                                                                                                                                                                                    
|10(ww | )* | Amendment No. 1 to the Superior TeleCom Inc.1996 Stock Incentive Plan (Amended and Restated as of January 1, 2001).                                                                                                                                                                                                                                                                                                                                                                     
|10(xx | )  | Amendment to Employee Stock Purchase Plan (incorporated by reference to Appendix C to the proxy statement of the Company dated April 30, 2001).                                                                                                                                                                                                                                                                                                                                         
|10(yy | )* | Fifth Amendment to Lease Agreement and Waiver, dated as of December 27, 2001, between ALP (TX) QRS 11-28, Inc. and Superior Telecommunications Inc.                                                                                                                                                                                                                                                                                                                                     
|18*   |    | Letter regarding change in accounting principles.                                                                                                                                                                                                                                                                                                                                                                                                                                       
|21*   |    | List of Subsidiaries                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|23(a  | )* | Consent of Arthur Andersen LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|99.1  | *  | Letter regarding Arthur Andersen LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                    

---

33

---



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.

|Dated: April 1, 2002 |  | SUPERIOR TELECOM INC.
|-------------------- |  | ---------------------
|                     |  | By:                  
|                     |  |                      

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

|Name                                          |  | Title                                                                              |  | Date         
|--------------------------------------------- |  | ---------------------------------------------------------------------------------- |  | -------------
|                                              |  |                                                                                    |  |              
|/s/STEVEN S. ELBAUMSteven S. Elbaum           |  | Chairman of the Board and Chief Executive Officer (principal executive officer)    |  | April 1, 2002
|/s/DAVID S. ALDRIDGEDavid S. Aldridge         |  | Chief Financial Officer and Treasurer (principal financial and accounting officer) |  | April 1, 2002
|/s/KENNETH G. BYERS, JR.Kenneth G. Byers, Jr. |  | Director                                                                           |  | April 1, 2002
|/s/EUGENE P. CONNELLEugene P. Connell         |  | Director                                                                           |  | April 1, 2002
|/s/JOHN C. JANSINGJohn C. Jansing             |  | Director                                                                           |  | April 1, 2002
|/s/JAMES R. KANELYJames R. Kanely             |  | Director                                                                           |  | April 1, 2002
|/s/ROBERT J. LEVENSONRobert J. Levenson       |  | Director                                                                           |  | April 1, 2002
|/s/CHARLES Y.C. TSECharles Y.C. Tse           |  | Director                                                                           |  | April 1, 2002
|/s/BRAGI F. SCHUTBragi F. Schut               |  | Director                                                                           |  | April 1, 2002

34

---



INDEX TO FINANCIAL STATEMENTS

|                                                                                                     |  | Page
|---------------------------------------------------------------------------------------------------- |  | ----
|AUDITED CONSOLIDATED FINANCIAL STATEMENTS:                                                           |  |     
|Report of independent public accountants                                                             |  | F-2 
|Consolidated balance sheets as of December 31, 2001 and 2000                                         |  | F-3 
|Consolidated statements of operations for the years ended December 31, 2001, 2000 and 1999           |  | F-4 
|Consolidated statements of stockholders' equity for the years ended December 31, 2001, 2000 and 1999 |  | F-5 
|Consolidated statements of cash flows for the years ended December 31, 2001, 2000 and 1999           |  | F-6 
|Notes to consolidated financial statements                                                           |  | F-8 
|SCHEDULE:                                                                                            |  |     
|Report of independent public accountants                                                             |  | F-41
|Schedule II-Valuation and qualifying accounts                                                        |  | F-42

F-1

---



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To
Superior TeleCom Inc.:

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

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

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

Arthur
Andersen LLP

Atlanta,
Georgia
February 18, 2002 (except with respect to Notes 1, 6, 7 and 20,
    as to which the date is March 28, 2002)

F-2

---



SUPERIOR TELECOM INC. AND SUBSIDIARIES        CONSOLIDATED BALANCE SHEETS        (in thousands, except share data)

|                                                                                                                                                                          |                                                                                                    | December 31,
2001          |                                            | December 31,
2000 |          
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------------------------ | ----------------- | ---------
|ASSETS                                                                                                                                                                    |                                                                                                    |                            |                                            |                   |          
|Current assets:                                                                                                                                                           |                                                                                                    |                            |                                            |                   |          
|                                                                                                                                                                          | Cash and cash equivalents                                                                          |                            | $                                          | 19,311            |          
|                                                                                                                                                                          | Accounts receivable, net                                                                           |                            |                                            | 201,376           |          
|                                                                                                                                                                          | Inventories, net                                                                                   |                            |                                            | 263,210           |          
|                                                                                                                                                                          | Other current assets                                                                               |                            |                                            | 36,844            |          
|                                                                                                                                                                          |                                                                                                    |                            |                                            |                   |          
|                                                                                                                                                                          |                                                                                                    | Total current assets       |                                            |                   | 520,741  
|Property, plant and equipment, net                                                                                                                                        |                                                                                                    |                            | 508,768                                    |                   |          
|Other assets                                                                                                                                                              |                                                                                                    |                            | 95,887                                     |                   |          
|Goodwill, net                                                                                                                                                             |                                                                                                    |                            | 750,543                                    |                   |          
|                                                                                                                                                                          |                                                                                                    |                            |                                            |                   |          
|                                                                                                                                                                          |                                                                                                    | Total assets               |                                            | $                 | 1,875,939
|                                                                                                                                                                          |                                                                                                    |                            |                                            |                   |          
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                      |                                                                                                    |                            |                                            |                   |          
|Current liabilities:                                                                                                                                                      |                                                                                                    |                            |                                            |                   |          
|                                                                                                                                                                          | Short-term borrowings                                                                              |                            | $                                          | 124,388           |          
|                                                                                                                                                                          | Superior Israel revolving credit facility                                                          |                            |                                            | 18,221            |          
|                                                                                                                                                                          | Current portion of long-term debt                                                                  |                            |                                            | 86,572            |          
|                                                                                                                                                                          | Accounts payable                                                                                   |                            |                                            | 110,465           |          
|                                                                                                                                                                          | Accrued expenses                                                                                   |                            |                                            | 93,446            |          
|                                                                                                                                                                          |                                                                                                    |                            |                                            |                   |          
|                                                                                                                                                                          |                                                                                                    | Total current liabilities  |                                            |                   | 433,092  
|Long-term debt, less current portion                                                                                                                                      |                                                                                                    |                            | 1,128,214                                  |                   |          
|Minority interest in subsidiaries                                                                                                                                         |                                                                                                    |                            | 5,393                                      |                   |          
|Other long-term liabilities                                                                                                                                               |                                                                                                    |                            | 96,460                                     |                   |          
|                                                                                                                                                                          |                                                                                                    |                            |                                            |                   |          
|                                                                                                                                                                          |                                                                                                    | Total liabilities          |                                            |                   | 1,663,159
|                                                                                                                                                                          |                                                                                                    |                            |                                            |                   |          
|Company-obligated Mandatorily Redeemable Trust Convertible Preferred Securities of Superior Trust I holding solely convertible debentures of the Company, net of discount |                                                                                                    |                            | 136,040                                    |                   |          
|Commitments and contingencies (Notes 7 and 16)                                                                                                                            |                                                                                                    |                            |                                            |                   |          
|Stockholders' equity:                                                                                                                                                     |                                                                                                    |                            |                                            |                   |          
|                                                                                                                                                                          | Common stock (21,667,661 and 21,133,361 shares issued at December 31, 2001 and 2000, respectively) |                            |                                            | 217               |          
|                                                                                                                                                                          | Capital in excess of par value                                                                     |                            |                                            | 43,651            |          
|                                                                                                                                                                          | Accumulated other comprehensive deficit                                                            |                            |                                            | (12,164           | )        
|                                                                                                                                                                          | Retained earnings                                                                                  |                            |                                            | 63,833            |          
|                                                                                                                                                                          |                                                                                                    |                            |                                            |                   |          
|                                                                                                                                                                          |                                                                                                    |                            | 95,537                                     |                   |          
|                                                                                                                                                                          | Treasury stock, at cost (813,357 and 828,300 shares at December 31, 2001 and 2000, respectively)   |                            |                                            | (18,797           | )        
|                                                                                                                                                                          |                                                                                                    |                            |                                            |                   |          
|                                                                                                                                                                          |                                                                                                    | Total stockholders' equity |                                            |                   | 76,740   
|                                                                                                                                                                          |                                                                                                    |                            |                                            |                   |          
|                                                                                                                                                                          |                                                                                                    |                            | Total liabilities and stockholders' equity |                   | $        
|                                                                                                                                                                          |                                                                                                    |                            |                                            |                   |          

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

F-3

---

SUPERIOR TELECOM INC. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF OPERATIONS        (in thousands, except per share data)

|                                                          |                                                                                                                                          | Years Ended                                          |          
|--------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------- | ---------
|
|Net sales                                                 |                                                                                                                                          | $                                                    | 1,747,302
|Cost of goods sold                                        |                                                                                                                                          |                                                      | 1,471,409
|                                                          |                                                                                                                                          |                                                      |          
|                                                          | Gross profit                                                                                                                             |                                                      |          
|Selling, general and administrative expenses              |                                                                                                                                          |                                                      | 156,017  
|Infrequent and unusual charges                            |                                                                                                                                          |                                                      | 5,358    
|Amortization of goodwill                                  |                                                                                                                                          |                                                      | 21,057   
|                                                          |                                                                                                                                          |                                                      |          
|                                                          | Operating income                                                                                                                         |                                                      |          
|Interest expense                                          |                                                                                                                                          |                                                      | (115,048 
|Other income, net                                         |                                                                                                                                          |                                                      | 1,270    
|                                                          |                                                                                                                                          |                                                      |          
|                                                          | Income (loss) before income taxes, distributions on preferred securities of Superior Trust I, minority interest and extraordinary (loss) |                                                      |          
|Benefit (provision) for income taxes                      |                                                                                                                                          |                                                      | 3,617    
|                                                          |                                                                                                                                          |                                                      |          
|                                                          | Income (loss) before distributions on preferred securities of Superior Trust I, minority interest and extraordinary (loss)               |                                                      |          
|Distributions on preferred securities of Superior Trust I |                                                                                                                                          |                                                      | (15,362  
|                                                          |                                                                                                                                          |                                                      |          
|                                                          | Income (loss) before minority interest and extraordinary (loss)                                                                          |                                                      |          
|Minority interest in (earnings) losses of subsidiaries    |                                                                                                                                          |                                                      | 2,430    
|                                                          |                                                                                                                                          |                                                      |          
|                                                          | Income (loss) before extraordinary (loss)                                                                                                |                                                      |          
|Extraordinary (loss) on early extinguishment of debt, net |                                                                                                                                          |                                                      | (2,871   
|                                                          |                                                                                                                                          |                                                      |          
|                                                          | Net income (loss)                                                                                                                        |                                                      | $        
|                                                          |                                                                                                                                          |                                                      |          
|Net income (loss) per share of common stock:              |                                                                                                                                          |                                                      |          
|                                                          | Basic:                                                                                                                                   |                                                      |          
|                                                          |                                                                                                                                          | Income (loss) before extraordinary (loss)            |          
|                                                          |                                                                                                                                          | Extraordinary (loss) on early extinguishment of debt |          
|                                                          |                                                                                                                                          |                                                      |          
|                                                          |                                                                                                                                          | Net income (loss) per basic share of common stock    |          
|                                                          |                                                                                                                                          |                                                      |          
|                                                          | Diluted:                                                                                                                                 |                                                      |          
|                                                          |                                                                                                                                          | Income (loss) before extraordinary (loss)            |          
|                                                          |                                                                                                                                          | Extraordinary (loss) on early extinguishment of debt |          
|                                                          |                                                                                                                                          |                                                      |          
|                                                          |                                                                                                                                          | Net income (loss) per diluted share of common stock  |          
|                                                          |                                                                                                                                          |                                                      |          
|Weighted average shares outstanding:                      |                                                                                                                                          |                                                      |          
|                                                          | Basic                                                                                                                                    |                                                      |          
|                                                          |                                                                                                                                          |                                                      |          
|                                                          | Diluted                                                                                                                                  |                                                      |          
|                                                          |                                                                                                                                          |                                                      |          

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

F-4

---



SUPERIOR TELECOM INC. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY        (in thousands, except share data)

|                                         |                                                                                          | Years Ended              |           
|---------------------------------------- | ---------------------------------------------------------------------------------------- | ------------------------ | ----------
|
|
|Common stock:                            |                                                                                          |                          |           
|                                         | Balance at beginning of period                                                           |                          | 21,133,361
|                                         | Exercise of stock options                                                                |                          |          
|                                         | Employee stock purchase plan                                                             |                          | 534,300   
|                                         | Stock dividend                                                                           |                          |          
|                                         |                                                                                          |                          |           
|                                         |                                                                                          | Balance at end of period |           
|Capital in excess of par value:          |                                                                                          |                          |           
|                                         | Balance at beginning of period                                                           |                          |           
|                                         | Exercise of stock options                                                                |                          |           
|                                         | Employee stock purchase plan                                                             |                          |           
|                                         | Compensation expense related to stock grants and options                                 |                          |           
|                                         | Stock dividend                                                                           |                          |           
|                                         |                                                                                          |                          |           
|                                         |                                                                                          | Balance at end of period |           
|Accumulated other comprehensive deficit: |                                                                                          |                          |           
|                                         | Balance at beginning of period                                                           |                          |           
|                                         | Foreign currency translation adjustment                                                  |                          |           
|                                         | Additional minimum pension liability (net of tax benefit of $1,221 at December 31, 2001) |                          |           
|                                         | Other                                                                                    |                          |           
|                                         |                                                                                          |                          |           
|                                         |                                                                                          | Balance at end of period |           
|Retained earnings:                       |                                                                                          |                          |           
|                                         | Balance at beginning of period                                                           |                          |           
|                                         | Net income (loss)                                                                        |                          |           
|                                         | Cash dividends declared                                                                  |                          |           
|                                         | Stock dividend                                                                           |                          |           
|                                         | Stock grants                                                                             |                          |           
|                                         |                                                                                          |                          |           
|                                         |                                                                                          | Balance at end of period |           
|Treasury stock:                          |                                                                                          |                          |           
|                                         | Balance at beginning of period                                                           |                          | (828,300  
|                                         | Purchase of treasury stock                                                               |                          |          
|                                         | Stock dividend                                                                           |                          |          
|                                         | Stock grants                                                                             |                          | 14,943    
|                                         |                                                                                          |                          |           
|                                         |                                                                                          | Balance at end of period |           
|Total stockholders' equity               |                                                                                          | 20,854,304               |           
|                                         |                                                                                          |                          |           
|Comprehensive income (loss)              |                                                                                          |                          |           
|                                         |                                                                                          |                          |           

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

F-5

---

SUPERIOR TELECOM INC. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF CASH FLOWS        (in thousands)

|                                            |                                                                                                              | Years Ended                           |        
|------------------------------------------- | ------------------------------------------------------------------------------------------------------------ | ------------------------------------- | -------
|
|Cash flows from operating activities:       |                                                                                                              |                                       |        
|                                            | Income (loss) before extraordinary (loss)                                                                    |                                       | $      
|                                            | Adjustments to reconcile income (loss) before extraordinary (loss) to cash provided by operating activities: |                                       |        
|                                            | Depreciation and amortization                                                                                |                                       |        
|                                            | Deferred distributions on Trust Convertible Preferred Securities                                             |                                       |        
|                                            | Amortization of deferred financing costs                                                                     |                                       |        
|                                            | Provision (benefit) for deferred taxes                                                                       |                                       |        
|                                            | Minority interest in earnings (losses) of subsidiary                                                         |                                       |        
|                                            | Change in assets and liabilities, net of effects from companies acquired:                                    |                                       |        
|                                            |                                                                                                              | Accounts receivable                   |        
|                                            |                                                                                                              | Inventories                           |        
|                                            |                                                                                                              | Other current and noncurrent assets   |        
|                                            |                                                                                                              | Accounts payable and accrued expenses |        
|                                            |                                                                                                              | Other, net                            |        
|                                            |                                                                                                              |                                       |        
|Cash flows provided by operating activities |                                                                                                              |                                       | 58,895 
|                                            |                                                                                                              |                                       |        
|Cash flows from investing activities:       |                                                                                                              |                                       |        
|                                            | Acquisitions, net of cash acquired                                                                           |                                       |        
|                                            | Capital expenditures                                                                                         |                                       |        
|                                            | Net proceeds from sale of assets                                                                             |                                       |        
|                                            | Superior Israel customer loans                                                                               |                                       |        
|                                            | Other                                                                                                        |                                       |        
|                                            |                                                                                                              |                                       |        
|Cash flows used for investing activities    |                                                                                                              |                                       | (33,882
|                                            |                                                                                                              |                                       |        
|Cash flows from financing activities:       |                                                                                                              |                                       |        
|                                            | Short-term borrowings (repayments), net                                                                      |                                       |        
|                                            | Borrowings under revolving credit facilities, net                                                            |                                       |        
|                                            | Debt issuance costs                                                                                          |                                       |        
|                                            | Long-term borrowings                                                                                         |                                       |        
|                                            | Repayments of long-term borrowings                                                                           |                                       |        
|                                            | Dividends paid on common stock                                                                               |                                       |        
|                                            | Purchase of treasury stock                                                                                   |                                       |        
|                                            | Other                                                                                                        |                                       |        
|                                            |                                                                                                              |                                       |        
|Cash flows used for financing activities    |                                                                                                              |                                       | (18,544
|                                            |                                                                                                              |                                       |        
|Effect of exchange rate changes on cash     |                                                                                                              |                                       | (160   
|                                            |                                                                                                              |                                       |        

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

F-6

---

|                                                     |                                                   | Years Ended                                                                                                                                                                              |       
|---------------------------------------------------- | ------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------
|
|Net increase (decrease) in cash and cash equivalents |                                                   | $                                                                                                                                                                                        | 6,309 
|Cash and cash equivalents at beginning of period     |                                                   |                                                                                                                                                                                          | 13,002
|                                                     |                                                   |                                                                                                                                                                                          |       
|Cash and cash equivalents at end of period           |                                                   | $                                                                                                                                                                                        | 19,311
|                                                     |                                                   |                                                                                                                                                                                          |       
|Supplemental disclosures:                            |                                                   |                                                                                                                                                                                          |       
|                                                     | Cash paid for interest, net of amount capitalized |                                                                                                                                                                                          | $     
|                                                     |                                                   |                                                                                                                                                                                          |       
|                                                     | Cash paid for income taxes, net of refunds        |                                                                                                                                                                                          | $     
|                                                     |                                                   |                                                                                                                                                                                          |       
|                                                     | Acquisition of Essex minority interest:           |                                                                                                                                                                                          |       
|                                                     |                                                   | Net assets acquired including goodwill                                                                                                                                                   |       
|                                                     |                                                   | Minority interest in subsidiary                                                                                                                                                          |       
|                                                     |                                                   |                                                                                                                                                                                          |       
|                                                     |                                                   | Issuance of Company-obligated Mandatorily Redeemable Trust Convertible Preferred Securities of Superior Trust I holding solely convertible debentures (net of discount of $33.3 million) |       
|                                                     |                                                   |                                                                                                                                                                                          |       

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

F-7

---



SUPERIOR TELECOM INC. AND SUBSIDIARIES        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization



Superior TeleCom Inc. (together with its subsidiaries, unless the context otherwise requires, the "Company" or "Superior") manufactures wire and cable
products for the communications, original equipment manufacturer ("OEM"), and electrical markets. The Company is a manufacturer and supplier of communications wire and cable products; magnet wire and
insulation materials for motors, transformers and electrical controls; and building and industrial wire for applications in commercial and residential construction and industrial facilities. The
Company operates manufacturing and distribution facilities in the United States, Canada, the United Kingdom, Israel and Mexico.



Superior was incorporated in July 1996 as a wholly owned subsidiary of The Alpine Group, Inc. ("Alpine"). On October 2, 1996, Alpine
completed a reorganization (the "Reorganization") whereby 100% of the common stock of two of Alpine's subsidiaries, Superior Telecommunications Inc. and DNE Systems, Inc., were
contributed to the Company in exchange for 100% of the shares of the Company's then outstanding common stock. In October 1996, the Company sold 9.4 million shares of its common stock
through an initial public offering (the "Offering"). As a result of the Offering, Alpine's ownership interest was reduced to 50.1%. As a result of treasury stock purchases and other transactions
subsequent to the Offering, Alpine's ownership interest was approximately 50.2% at December 31, 2001.

On
November 27, 1998, the Company completed a cash tender offer for 81% of the outstanding common shares of Essex International Inc. ("Essex"). On March 31, 1999,
the Company acquired the remaining 19% of the Essex common stock through the issuance of 81/2% trust convertible preferred securities of Superior Trust I, a Delaware trust in which
Superior owns all the common equity interests (see Note 5).



The Company has indebtedness which is substantial in relation to its stockholders' equity and current cash flows from operations. As of December 31, 2001,
the Company had total debt of approximately $1.2 billion (excluding (i) debt of its 50.2% owned subsidiary, Superior Israel, which debt is non-recourse to Superior TeleCom or
its other subsidiaries and (ii) approximately $167 million of 81/2% Trust Convertible Preferred Securities due in 2014) compared to approximately $76.7 million of
stockholders' equity. As further discussed in Note 7, the Company had additional borrowings available under its revolving credit facility at December 31, 2001 of approximately
$50 million and its cash balance at December 31, 2001 was $19.3 million. The available borrowings under the revolving credit facility declined during 2001 from approximately
$150 million at December 31, 2000. In addition, the Company's $160 million accounts receivable securitization facility (see Note 6) expires on June 30, 2002.

The
Company's leveraged financial position exposes it to the risk of increased interest rates, may impede its ability to obtain financing in the future for working capital, capital
expenditures and general corporate purposes, and may make the Company more vulnerable to economic downturns and limit its ability to withstand competitive pressures.

The
Company's results of operations have declined over the past two years with the most pronounced reductions occurring in the third and fourth quarters of 2001 and continuing in the
first

F-8

---

quarter of 2002. The Company believes the declines in sales in 2001 relate to generally depressed economic conditions and specific industry conditions in its key business segments, but believes
operating results will improve in 2002. As discussed in Note 7, pursuant to agreements reached with its subordinated debt holders, the Company has suspended cash interest payments on its
subordinated debt; and as discussed in Note 8, the Company has also deferred the payment of distributions on the 81/2% Trust Convertible Preferred Securities (which deferral is
contractually permitted for a period of 20 consecutive quarters). As further discussed in Note 7, the Company's term loan payment requirements also have been reduced in 2002. Notwithstanding
these reductions in cash outflows in 2002, the Company still will need to use a large portion of its future cash flows to pay principal and interest on its debt obligations, which will reduce the
amount of money available for use in its operations or for responding to potential business opportunities if these arise. The Company believes it will generate enough cash to service its debt
obligations and fund necessary capital expenditures during 2002; however, there can be no assurance that the Company will be able to meet its principal and interest on its debt obligations during
2002.

2. Summary of significant accounting policies



The consolidated financial statements represent the consolidation of all majority owned companies. The Company records all affiliate companies representing 20% to
50% ownership using the equity method of accounting. Other investments representing ownership of less than 20% are recorded at cost. These financial statements present the consolidated balance sheets
of the Company at December 31, 2001 and 2000, and the related consolidated statements of operations, stockholders' equity and cash flows for the years ended December 31, 2001, 2000 and
1999. All significant intercompany accounts and transactions have been eliminated. Minority interest recorded in the consolidated financial statements is related to the Company's 50.2% owned
subsidiary, Superior Cables Limited ("Superior Israel").



All highly liquid investments purchased with a maturity at acquisition of 90 days or less are considered to be cash equivalents.



Inventories of communications products are stated at the lower of cost or market, using the first-in, first-out ("FIFO") cost method.
Inventories of OEM and electrical products are primarily stated at the lower of cost or market, using the last-in, first-out ("LIFO") cost method. Inventories include costs of
materials, labor and manufacturing overhead. See Note 3.



Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Leasehold improvements are amortized over the lesser of the
estimated useful lives of the assets or the

F-9

---

lease term. Depreciation and amortization are provided over the estimated useful lives of the assets using the straight-line method. The estimated lives are as follows:

Buildings and improvements

6 to 40 yearsMachinery and equipment

3 to 15 years


Maintenance
and repairs are charged to expense as incurred. Long-term improvements are capitalized as additions to property, plant and equipment. Upon retirement or other
disposal, the asset cost and related accumulated depreciation are removed from the accounts and the net amount, less any proceeds, is charged or credited to income. Interest is capitalized during the
active construction period of major capital projects. During 2001, 2000 and 1999, $1.4 million, $5.0 million and $2.0 million, respectively, was capitalized in connection with
various capital projects.



The excess of the purchase price over the net identifiable assets of businesses acquired is amortized ratably over periods not exceeding 40 years.
Accumulated amortization of goodwill at December 31, 2001 and 2000 was $70.5 million and $49.6 million, respectively. The Company periodically reviews goodwill and
long-lived assets to assess recoverability from future operations using an undiscounted cash flow method. If the carrying amount exceeds undiscounted cash flows from future operations, an
impairment loss would be recognized for the difference between the carrying amount and its estimated fair value determined on a discounted cash flow method. To date, no impairment has been recorded.
The Company also evaluates the amortization periods assigned to its intangible assets to determine whether events or changes in circumstances warrant a revised estimate of useful lives. To date, no
adjustment in useful lives has been required. See "New accounting standards" for discussion of new standards effective January 1, 2002 related to goodwill amortization and impairment loss
determination.



Origination costs incurred in connection with outstanding debt financings are included in the balance sheet in other assets. These deferred financing costs are
being amortized over the lives of the applicable debt instruments on an effective interest rate basis and are charged to operations as additional interest expense. Total unamortized deferred financing
fees at December 31, 2001 and 2000 were approximately $31.2 million and $29.2 million, respectively.



Included in accrued expenses at December 31, 2001 and 2000 are certain amounts due customers totaling $11.9 million and $14.6 million,
respectively, representing cash discount liabilities to customers who meet certain contractual sales volume criteria. Such discounts are paid periodically to those qualifying customers.



The Company accounts for income taxes under an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected
future tax impact of temporary

F-10

---

differences arising from assets and liabilities whose tax bases are different from financial statement amounts. A valuation allowance is established if it is more likely than not that all or a
portion of deferred tax assets will not be realized. Realization of the future tax benefits of deferred tax assets is dependent on the Company's ability to generate taxable income within the
carryforward period and the periods in which net temporary differences reverse.



Effective January 1, 2001, the Company adopted SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities" as amended by SFAS
No. 137 and SFAS No. 138. These statements establish accounting and reporting standards for derivative instruments and require recognition of all derivatives as either assets or
liabilities in the statements of financial position and measurement of those instruments at fair value. The cumulative effect of the change in accounting upon adoption of SFAS No. 133 was not
material.

All
derivatives are recognized on the balance sheet at fair value. On the date the derivative contract is entered, the Company designates the derivative as either (i) a fair value
hedge of a recognized liability, (ii) a cash flow hedge of a forecasted transaction, (iii) a hedge of a net investment in a foreign operation, or (iv) a non-designated
derivative instrument. The Company currently engages in certain derivatives that are classified as fair value hedges and non-designated derivative instruments. Changes in the fair value of
a derivative that is designated as a fair value hedge are recorded in the consolidated statements of operations in the same line item as the underlying exposure being hedged with any ineffective
portion of a financial instrument hedge immediately recognized in earnings. Changes in the fair value of non-designated derivative contracts and the ineffective portion of designated
derivative instruments are reported in current earnings.

The
Company formally documents all relationships between hedging instruments and hedged items, as well as the risk management objectives and strategy for undertaking various hedge
transactions. The Company 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 flow of hedged items. When it is determined that a derivative is no longer highly effective as a hedge, hedge accounting is discontinued on a prospective basis.
Derivative financial instruments and derivative transactions reflected in the consolidated financial statements are discussed in Note 15.



Revenue is recognized when pervasive evidence of an agreement exists, delivery has occurred, the Company's price to the buyer is fixed and determinable and
collectability is reasonably assured.



The financial position and results of operations of foreign subsidiaries are measured using local currency as the functional currency. Assets and liabilities
denominated in foreign currencies are translated into U.S. dollars at exchange rates in effect at year-end. Revenues and expenses are translated at average exchange rates prevailing during
the year. The resulting translation gains and losses are charged directly to accumulated other comprehensive income, a component of stockholders' equity, and are not included in net income until
realized through sale or liquidation of the investment.

F-11

---

Foreign currency exchange gains and losses incurred on foreign currency transactions are included in income as they occur.



Research and development costs are expensed as incurred. Research and development costs during the years ended December 31, 2001, 2000 and 1999 amounted to
$9.0 million, $7.2 million and $6.6 million, respectively.



Advertising costs are expensed as incurred. Advertising costs during the year ended December 31, 2001 amounted to $2.1 million.



It is the policy of the Company to self-insure up to certain limits (on an individual and aggregate basis) for certain insurable risks related
primarily to workers' compensation, health insurance and comprehensive general and vehicle liability. Provisions for losses expected under these programs are recorded based on the Company's estimate
of the aggregate liabilities for the claims incurred.



The Company accounts for shipping and handling fees and costs in accordance with Emerging Issues Task Force ("EITF") 00-10, "Accounting for Shipping
and Handling Fees and Costs." Accordingly all shipping and handling costs are included in costs of sales and all billings associated with these costs are included in revenues.



Basic earnings per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding for the period. The
computation of diluted earnings per share does not assume conversion or exercise of securities that would have an antidilutive effect on earnings
per share. Diluted earnings per common share is determined assuming the conversion of outstanding stock options and grants under the treasury stock method.



Comprehensive income includes all changes in equity from non-owner sources such as net income, foreign currency translation adjustments, change in the
fair value of derivatives and minimum pension liability adjustments.



At December 31, 2001 and 2000, accounts receivable from the regional Bell operating companies ("RBOCs") and major independent telephone companies amounted
to $17.6 million and $27.2 million, respectively. See Note 18 for concentrations of risk within the Company's business segments.

F-12

---



2. Summary of significant accounting policies

Accounts receivable are net of allowances for doubtful accounts of $8.4 million and $5.0 million at December 31, 2001 and 2000, respectively.



The Company's consolidated financial statements are prepared in accordance with generally accepted accounting principles, which require management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported
amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.



Certain reclassifications have been made to the December 31, 2000 and 1999 consolidated financial statements to conform with the December 31, 2001
presentation.



In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141 "Business Combinations" and SFAS No. 142 "Goodwill and
Other Intangible Assets." SFAS No. 141 requires use of the purchase method of accounting for business combinations initiated after June 30, 2001. SFAS
No. 142, which is effective for the Company beginning January 1, 2002, requires that the amortization of goodwill and certain other intangible assets cease and that the related asset
values be reviewed annually for impairment. The Company recorded $21.1 million in goodwill amortization charges in 2001. Beginning in 2002, the Company's goodwill, which amounted to
$750.5 million at December 31, 2001, will no longer be amortized; however it will be subject to an initial impairment review in the first quarter of 2002. If the carrying value
(including goodwill) of any of the Company's business segments exceeds the fair value (determined on a discounted cash flow basis or other fair value method), impairment of goodwill may exist which
would result in a charge to earnings for the amount of any such impairment. Prior assessments of goodwill impairment (see "Goodwill and long-lived assets" above) have not resulted in any
charge for goodwill impairment; however, such prior assessment utilized undiscounted cash flows for purposes of evaluating whether impairment exists. While the initial impairment assessment under SFAS
No. 142 has not been performed, the impact of recent economic and industry specific conditions could result in lowered fair values for certain of its business segments and, thus may give rise
to material goodwill impairment charges in 2002.

In
July 2001, the FASB also issued SFAS No. 143, "Accounting for Asset Retirement Obligations". SFAS No. 143 requires entities to record the fair value of a
liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially recorded, the entity capitalizes the cost by increasing the carrying amount of the
related long-lived asset. Over time, the liability is accreted to its present value each period and the capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the liability, the entity either settles the obligation for the amount recorded or incurs a gain or loss. SFAS No. 143 is effective for fiscal years beginning after
June 15, 2002. The Company does not anticipate any material impact on its results of operations or financial position related to implementation of SFAS No. 143.

In
August 2001, the FASB issued Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". SFAS No. 144 supersedes FASB
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" and the accounting

F-13

---

and reporting provisions of APB Opinion No. 30, "Reporting the Results of OperationsReporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions" for the disposal of a segment of a business (as previously defined in APB Opinion 30). The FASB issued SFAS No. 144 to establish a single
accounting model, based on the framework established in SFAS No. 121 for long-lived assets to be disposed of by sale. SFAS No. 144 broadens the presentation of discontinued
operations in the income statement to include a component of an entity (rather than a segment of a business). A component of an entity comprises operations and cash flows that can be clearly
distinguished, operationally and for financial reporting purposes, from the rest of the entity. SFAS No. 144 also requires that discontinued operations be measured at the lower of the carrying
amount or fair market value less cost to sell. SFAS No. 144 is effective for fiscal years beginning after December 15, 2001 and should be applied prospectively. The Company does not
anticipate any material impact on its results of operations or financial position related to implementation of SFAS No. 144.

3. Inventories

At December 31, 2001 and 2000, the components of inventories are as follows:

December 31,
2001

December 31,
2000(in thousands)Raw materials

$
37,743

$
45,793Work in process


35,148


42,006Finished goods


185,688


190,782258,579


278,581LIFO reserve


4,631


(16,722
)$
263,210

$
261,859


During
the year ended December 31, 1999, the Company changed its method of determining the cost of inventories for the acquired communications segment of Essex from the LIFO
method to the FIFO method. This change was made to conform operational and accounting policies for the Company's communications segment. Utilization of the FIFO method of accounting for the year ended
December 31, 1999 resulted in net income being $0.6 million or $0.03 per diluted share greater than net income under the LIFO method. During the year ended December 31, 2001, the
Company changed the number of pools used to segregate inventory for the purpose of calculating LIFO inventory from three to five in order to reflect the copper component separately. This change was
made to more accurately reflect inventory costs in accordance with the LIFO approach as the changes in the prices of copper do not mirror the changes in prices of the other components of inventory.
Utilization of the new method for the year ended December 31, 2001 resulted in the net loss being $0.6 million or $0.03 per diluted share less than the net loss under the previous
method. The cumulative effect of the change in accounting principle was not material.

Inventories
valued using the LIFO method amounted to $149.8 million and $133.6 million at December 31, 2001 and 2000, respectively. During the year ended
December 31, 2000, inventory quantities were reduced which resulted in a LIFO layer liquidation. The impact of the liquidation reduced net loss by $1.6 million in 2000.

F-14

---

4. Property, plant and equipment

At December 31, 2001 and 2000, property, plant and equipment consists of the following:

December 31,
2001

December 31,
2000(in thousands)Land

$
23,602

$
23,652Buildings and improvements


144,682


148,540Machinery and equipment


496,967


483,459665,251


655,651Less accumulated depreciation


156,483


116,586$
508,768

$
539,065


Depreciation
expense for the years ended December 31, 2001, 2000 and 1999 was $45.1 million, $41.0 million and $38.5 million, respectively.

5. Acquisitions



On November 27, 1998, the Company completed a cash tender offer for 81% of the outstanding common shares of Essex, at an aggregate cash tender value of
$770 million (the "Essex Acquisition"). On March 31, 1999, the Company acquired the remaining outstanding common stock of Essex through the issuance of approximately $167 million
(face amount) of 81/2% Company-obligated Mandatorily Redeemable Trust Convertible Preferred Securities of Superior Trust I holding solely convertible debentures (see Note 8).

The
acquisition of Essex was accounted for using the purchase method and, accordingly, the results of operations of Essex were included in the consolidated financial statements on a
prospective basis from the dates of acquisition. The purchase price was allocated based upon assessments of the fair values of assets and liabilities at the dates of acquisition which included
accruals for planned consolidations, overhead rationalization and loss contingencies. The excess of the purchase price over the net assets acquired is being amortized on a straight-line
basis over 40 years (see Note 2).

On
October 20, 1999, Superior Israel acquired the business and certain operating assets of Pica Plast Limited ("Pica Plast") for $10.8 million in cash. The acquisition of
Pica Plast was accounted for using the purchase method and, accordingly, the results of operations of Pica Plast are included in the Company's consolidated financial statements on a prospective basis
from the date of acquisition. The purchase price was allocated based upon the estimated fair values of assets and liabilities at the date of acquisition. The excess of the purchase price over the net
assets acquired is being amortized on a straight-line basis over 30 years.



Unaudited condensed pro forma results of operations for the year ended December 31, 1999, which give effect to the acquisition of the 19% minority interest
in Essex as if the transaction had occurred on January 1, 1999, are presented below. The pro forma results of operations do not include the results of operations of Pica Plast prior to its date
of acquisition as they are not material to the

F-15

---

Company's consolidated results of operations. The pro forma amounts reflect acquisition-related purchase accounting adjustments, including adjustments to amortization expense and certain other
adjustments, together with related income tax effects. The pro forma financial information does not purport to be indicative of either the results of operations that would have occurred if the
transactions had taken place at the beginning of the period presented or of the future results of operations.

Year Ended December 31, 1999(in thousands,
except per
share data)Net sales

$
2,036,732Income before income taxes, distributions on preferred securities of subsidiary trust, minority interest and extraordinary (loss)


86,613Income before extraordinary (loss)


37,429Extraordinary (loss) on early extinguishment of debt


(1,617
)Net income applicable to common stock

$
35,812Net income per diluted share of common stock:Income before extraordinary (loss)

$
1.79Extraordinary (loss) on early extinguishment of debt


(0.08
)Net income per diluted share of common stock

$
1.71


6. Short-term borrowings

At December 31, 2001 and 2000, short-term borrowings consist principally of $124.4 million and $160.0 million, respectively, in
borrowings under an accounts receivable securitization program which provides for up to $160.0 million in short-term financing through the issuance of secured commercial paper
through a limited purpose subsidiary. Borrowings under this facility are limited based on a percentage of eligible receivables, as defined by the program. At December 31, 2001, there was no
undrawn availability under this facility based on levels of accounts receivables on such date. Under the receivable securitization program, the Company has granted a security interest in all its trade
accounts receivable of domestic subsidiaries to secure borrowings under the facility. The receivable securitization program expires on June 30, 2002. Borrowings under this agreement bear
interest at the lender's commercial paper rate (which approximated 2.25% and 6.88% at December 31, 2001 and 2000, respectively) plus 0.70% at December 31, 2001 and plus 0.35% at
December 31, 2000.

F-16

---

7. Debt

At December 31, 2001 and 2000, long-term debt consists of the following:

December 31,
2001

December 31,
2000(in thousands)Senior credit facility:Senior revolving credit facility

$
169,000

$
71,001Term loan A


299,808


374,420Term loan B


403,272


408,346Senior subordinated notes


203,029


200,000Superior Israel credit facilities


80,287


100,246Superior Israel bank borrowings (secured by notes receivable)


63,637


53,666Other


13,974


16,685Total debt


1,233,007


1,224,364Less current portion of long-term debt


104,793


116,807$
1,128,214

$
1,107,557


Long-term
debt of Superior Israel (a 50.2% owned subsidiary of the Company) included above amounted to $143.9 million at December 31, 2001. Such debt is
recourse only to Superior Israel and not to Superior TeleCom or its other subsidiaries.

At
December 31, 2001 and 2000, the fair value of the Company's debt, based on the quoted market prices for the same or similar issues or on the current rates offered to the
Company for debt of the same remaining maturities, was approximately $936.5 million and $1,124.6 million, respectively. The Company has entered into several interest rate cap agreements
in order to limit the effect of changes in interest rates on certain of the Company's floating rate long-term obligations. Amounts currently due to or from interest rate cap counterparties
are recorded in interest expense in the period in which they accrue. At December 31, 2001, the Company had an interest rate cap outstanding with a notional amount of $362 million with a
90-day LIBOR cap at 4.4% and a fair value of $0.1 million. The 90-day LIBOR at December 31, 2001 was 1.93%. At December 31, 2000, the Company had an
interest rate cap outstanding with a notional amount of $400 million with a 90-day LIBOR cap at 7.0% and a nominal fair value.

F-17

---

The
aggregate principal maturities of long-term debt for the five years subsequent to December 31, 2001 are as follows:

Year

Amount(in thousands)2002

$
104,7932003


226,8562004


512,4822005


116,3072006


13,500Thereafter


259,069$
1,233,007




The Company's senior credit facility is comprised of a revolving credit facility along with a term loan A and a term loan B, all of which are governed by an
Amended and Restated Credit Agreement (the "Credit Agreement").

The
Company's operating activities are financed principally by the accounts receivable securitization financing arrangement (see Note 6) and the revolving credit facility which
allows for borrowings by the Company's non Superior Israel subsidiaries of up to $225 million in the aggregate (subject to interim reductions in 2002 which limit total borrowings to
$214 million). The revolving credit facility matures May 27, 2004. At December 31, 2001, interest on the outstanding balance is based upon LIBOR plus 4.0% or the base rate (prime)
plus 3.0% (6.37% and 10.03% at December 31, 2001 and 2000, respectively) subject to certain rate increases as discussed below.

The
term loan A is repayable in varying installments through its maturity in May 2004. At December 31, 2001, interest is based upon LIBOR plus 4.0% or the base rate (prime)
plus 3.0%, (6.56% and 10.06% and at December 31, 2001 and 2000, respectively) subject to certain rate increases as discussed below.

The
term loan B is repayable in varying installments through its maturity in November 2005. At December 31, 2001, interest is based upon LIBOR plus 4.5% or the base rate
(prime) plus 3.5% (7.06%
and 10.88% at December 31, 2001 and 2000, respectively), subject to certain rate increases discussed below.

In
June 2001 the Company entered into an amendment to the Credit Agreement effective June 30, 2001. Such amendment (i) increased the interest rate on the revolving
credit facility and the term loan A and B by 0.25%, (ii) reduced operating performance levels required to meet certain financial covenants through December 31, 2002,
(iii) prohibited the payment of distributions on the 81/2% Trust Convertible Preferred Securities and restricted cash payment of interest on the Senior Subordinated Notes
beginning in November 2001 unless certain asset sales were consummated and (iv) required the Company to make an accelerated payment under its term loans A and B of $175 million in
the aggregate by July 1, 2002 from the proceeds of an asset divestiture or other equity transaction. Refer to the December 2001 and March 2002 amendments below which further
modified the Credit Agreement.

F-18

---

During
December 2001 the Company entered into another amendment to the Credit Agreement. Such amendment (i) further reduced operating performance levels required to meet
certain financial covenants through December 31, 2002; (ii) extended until January 3, 2003 the date for making an accelerated payment under its term loans A and B of
$175 million in the aggregate from the proceeds of an asset divestiture or other equity transaction; (iii) increased the rate of interest during 2002, under certain conditions and at
certain intervals, on the revolving credit facility and term loans A and B by an aggregate of 1%; (iv) reduced allowed annual capital expenditures and (v) restricted the Company's cash
payment of quarterly interest payments during 2002 on its Senior Subordinated Notes unless certain conditions are met, such conditions principally including achievement of certain levels of liquidity
available under its revolving credit facility as of the date such interest payments under the Senior Subordinated Notes are due and the completion of asset divestitures or achievement of certain
milestones towards completing asset divestitures. Up to two cash interest payments on the Senior Subordinated Notes are allowed to be made from proceeds of junior capital issuances of the Company.
Additionally, the Credit Agreement amendment provided that any proceeds from an asset sale pursuant to (ii) above exceeding $175 million shall first be applied to the outstanding amounts
of the revolving credit facility in excess of $169 million then to the term loans until paid in full, with any balance applied to the revolving credit facility. If the revolving credit facility
is paid down with excess proceeds from an asset sale, the total revolving loan commitment shall be reduced by 85% of such amount but at no point shall it be reduced to an amount less than
$50 million.

In
March 2002, the Company entered into an additional amendment to the Credit Agreement which (i) further reduced operating performance levels required to meet certain
financial covenants through December 31, 2002; (ii) deferred until January 31, 2003 term loan principal payments due March 31, 2002 amounting to $19.4 million and
(iii) eliminated the required $175 million accelerated term loan payment due on January 3, 2003.

In
2001, the Company initiated a process to effect a major asset divestiture which, if completed, would have allowed the Company to meet the then required $175 million prepayment
under the Credit Agreement. This divestiture process was discontinued in the fourth quarter of 2001 due to the impact
on the financial markets and the operating results of the targeted business to be divested of the events of September 11th and the general economic recessionary conditions. As a
result of the March 2002 amendment to the Credit Agreement, which eliminated the $175 million term loan repayment requirement, the Company will not be required to complete an asset
divestiture during 2002. However, the Company will continue to consider asset divestitures as a possible course of action for further deleveraging the Company's balance sheet based on economic
conditions, financial market status and asset valuation levels. If the Company does complete an asset divestiture, the cash proceeds from the sale are required to be used to pay down the amounts
outstanding under the Credit Agreement.

In
order to maintain adequate liquidity during 2002 to continue to operate its business on a normal basis, the Company must generate sufficient cash flow to meet scheduled payments on
its term loans (which aggregate approximately $64 million for 2002) so as not to be in default under the Credit Agreement. While the Company's operating results and cash flow declined in 2001
and operating results in 2002 may decline further, the Company believes, although there can be no certainty, that it will be able to meet all scheduled principal payments in 2002. The Company's
operating results must also be sufficient to meet the revised financial covenants for 2002. The Company believes if it is not able to maintain compliance with these covenants, that modifications or
waivers can successfully be obtained, although there is no assurance of such. The Credit Agreement amendments also include

F-19

---

more stringent financial covenants for the period ending March 31, 2003 which would likely result in the Company being in default at such time, requiring the Company to seek a waiver or other
modification. The December and March Credit Agreement amendments also require the Company to obtain a renewal or replacement of the accounts receivable securitization facility (see Note 6) by
June 11, 2002 or an event of default will occur under the Credit Agreement. The Company believes it will be able to renew or replace the accounts receivable securitization facility by the
required date, although there can be no certainty of such.

In
connection with the June and December 2001 amendments discussed above, the Company was charged aggregate bank amendment fees of $11.7 million, of which
$2.3 million was paid in cash and $9.4 million will be paid upon completion of a major asset divestiture, the occurrence of an event of default or at maturity. In connection with the
March 2002 amendment, the Company incurred bank fees of $5.5 million of which $4.0 million was paid in cash in March 2002 with the balance payable upon a major asset divestiture, the
occurrence of an event of default or at maturity.

All
the borrowings under the Credit Agreement are guaranteed by each of the Company's principal subsidiaries, other than its Canadian and Israeli subsidiaries. The common stock of all
such guarantor subsidiaries of the Company and 65% of the common stock of its other foreign subsidiaries have been pledged to secure the guarantees. The obligations under the Credit Agreement are
secured by substantially all of the assets of the Company and its guarantor subsidiaries.

The
Credit Agreement contains certain restrictive covenants, including, among other things discussed herein, limitations on the amount of dividends the Company is allowed to pay on its
common stock and restrictions on additional indebtedness. At December 31, 2001, the Company was in compliance with all covenants.

As
previously mentioned and in accordance with the amendments to the Credit Agreement during 2001 and 2002, the Company is required to maintain compliance with certain financial
covenants on a monthly basis in 2002. These covenants include, among others, an interest coverage ratio, as defined, and a fixed charge coverage ratio, as defined.



The Senior Subordinated Notes include a $120 million term note A and an $80 million term note B which are due in 2007. Interest at
December 31, 2001 was based on LIBOR plus 5% (7.50% and 11.81% at December 31, 2001 and 2000, respectively).

In
December 2001, the Company entered into an amendment to the agreement governing the Senior Subordinated Notes. Such amendment allows the Company in certain circumstances the
option to make three of the four quarterly interest payments due in 2002 in the form of payment-in-kind notes ("PIK notes") in lieu of cash interest payments. Alpine has
provided a funded cash commitment to the Company that will provide the Company sufficient cash to make one quarterly cash interest payment in 2002. If PIK notes are issued (in lieu of cash) for the
February 2002 interest payment, then the interest rate on the Senior Subordinated Notes will increase to LIBOR plus 9%. If PIK notes are issued (in lieu of cash) for the August and November
quarterly interest payments, then the interest rate on the Senior Subordinated Notes will increase to LIBOR plus 11% and LIBOR plus 12%, respectively.

F-20

---

The
Company was charged a fee for the subordinated note amendment of $3.0 million, which was paid in the form of a PIK note. All PIK notes are payable upon maturity of the Senior
Subordinated Notes in 2007.

Amendments
to the Senior Subordinated Notes in the years ended December 31, 2001 and 1999 qualified as early extinguishments of debt. As such, the Company recognized extraordinary
charges of $2.9 million (net of income taxes of $1.7 million) or $0.14 per diluted share and $1.6 million (net of income taxes of $1.0 million) or $0.08 per diluted share
in 2001 and 1999, respectively. Such extraordinary charges included the write-off of the then existing unamortized debt issuance costs related to such debt.



In connection with the December 31, 1998 acquisition of the CvalimThe Electric Wire and Cable Company of Israel Ltd. ("Cvalim") assets,
Superior Israel entered into an $83.0 million credit facility consisting of a $53.0 million term loan ("Superior Israel term loan") and a $30.0 million revolving credit facility
("Superior Israel revolving credit facility"). Proceeds from these facilities were used to finance the acquisition of the Cvalim assets, pay related transaction expenses and provide for ongoing
working capital requirements. In October 1999, Superior Israel increased the amount available under the credit facility by $10.0 million, which increased the term loan availability to
$63.0 million. On December 31, 2001, the availability period to draw down the Superior Israel term loan expired.

The
Superior Israel term loan is repayable on December 31, 2008. Interest on the Superior Israel term loan is based upon LIBOR plus 1.0% or the average of the gross yield to
maturity of all the series of fixed rate bonds issued by the State of Israel, listed on the Tel-Aviv stock exchange and having a remaining maturity of 18-30 months, plus
1.3% or the lending bank's wholesale rate of interest for credits linked to the Israeli consumer price index plus 0.7%. The Superior Israel term loan rate was 6.34% at December 31, 2001.
Interest on the Superior Israel revolving credit facility outstanding balance is based upon either LIBOR plus 0.5%, the lending bank's prime rate minus 1.0%, or a rate to be agreed upon by the
parties. The revolving credit facility terminates on December 31, 2003. Obligations under these facilities are secured by assets of Superior Israel. At December 31, 2001 and 2000,
Superior Israel was not in compliance with certain financial covenants and has classified the $18.2 million and $25.4 million, respectively, outstanding under the revolving credit
facility as current in the December 31, 2001 and 2000 balance sheet, respectively.

Superior
Israel had $9.6 million and $11.7 million outstanding under additional revolving credit facilities at December 31, 2001 and 2000, respectively. The
obligations are secured by assets of Superior Israel.



Superior Israel has granted long-term loans to one of its principal customers as required by the terms of the contracts with the customer related to
the sale of products to the customer. These customer loans are repayable to Superior Israel over periods of 10.5 to 11.0 years and include interest at a rate of LIBOR plus 0.475% to LIBOR plus
1.0%. Superior Israel's obligation to issue such customer loans expired on December 31, 2001. Such customer loans are reflected as notes receivable and $63.6 million and
$53.7 million in such notes receivable are included in other assets in the accompanying consolidated balance sheets at December 31, 2001 and 2000, respectively. Superior Israel

F-21

---

financed these customer loans with bank borrowings in amounts equivalent to and with terms similar to the customer loans. Such bank borrowings are secured by the customer notes receivable held by
Superior Israel. At December 31, 2001 and 2000, $63.6 million and $53.7 million, respectively, in bank borrowings related to such customer loans was outstanding.



Other debt includes debt associated with lease finance obligations of $13.9 million and other miscellaneous items. The lease finance obligations have cross
default provisions associated with other debt of the Company, including debt under the Credit Agreement.

8. Trust Convertible Preferred Securities

On March 31, 1999, Superior Trust I (the "Trust"), a trust in which the Company owns all the common equity interests, issued 3,332,254 81/2%
Trust Convertible Preferred Securities ("Trust Convertible Preferred Securities") with a liquidation value of $50 per share. The sole assets of the Trust are the Company's 81/2%
Convertible Subordinated Debentures ("Convertible Debentures") with an aggregate principal amount of $171,765,650, at an interest rate of 81/2% per annum and a maturity date of
March 30, 2014. The Company has fully and unconditionally guaranteed the Trust's obligations under the Trust Convertible Preferred Securities. The Trust Convertible Preferred Securities are
currently convertible into common stock of the Company at the rate of 1.1496 shares of the Company's common stock for each Trust Convertible Preferred Security (equivalent to a conversion price of
$43.49 per share of common stock). This conversion rate is subject to customary anti-dilution adjustments. Distributions on the Trust Convertible Preferred Securities are payable (subject
to rights to defer distributions as discussed below) quarterly by the Trust. The Trust Convertible Preferred Securities are subject to mandatory redemption on March 30, 2014, at a redemption
price of $50 per Trust Convertible Security, plus accrued and unpaid distributions.

The
Trust Convertible Preferred Securities are not redeemable before April 1, 2003. At any time on and after that date, the Trust Convertible Preferred Securities may be redeemed
by the Company at a per share redemption price of $52.55, periodically declining to $50.00 in April 2008 and thereafter. In addition, the Company has the option to call the Trust Convertible
Preferred Securities during the one-year period commencing on March 31, 2002, at a per share cash redemption price of $52.975, plus accrued and unpaid distributions, if any,
provided the average closing price of the Company's common stock, for any 10 consecutive trading days preceding the date of the call, multiplied by the then effective conversion rate, equals or
exceeds $65.00 per share. The Company has reserved 3,830,759 shares of its common stock for possible conversion of the Trust Convertible Preferred Securities.

F-22

---



8. Trust Convertible Preferred Securities (Continued)

Pursuant to the provisions of the related indentures, the Company may defer quarterly cash distribution payments for a period of up to twenty consecutive
quarters, during which period unpaid distributions are cumulative and accrue interest at a rate of 8.5% per annum. Additionally, during such deferral periods the Company, among other things, cannot
pay cash dividends on its common stock, or redeem or repurchase any of its capital stock. During 2001, the Company elected to defer quarterly payments of distributions for the September 30 and
December 31, 2001 periods. Based on restrictions included in an amendment of the Company's Credit Agreements during 2001, the Company is currently restricted from paying such distributions in
cash and will likely defer distribution payments at least through 2002.

The
estimated aggregate fair value of the Trust Convertible Preferred Securities, when issued, was approximately $133.3 million based on average per share trading values on the
New York Stock Exchange. The resulting discount of $33.3 million is being amortized using the effective interest method over the term of the Trust Convertible Preferred Securities. At
December 31, 2001, the fair value of the Trust Convertible Preferred Securities, based on quoted market price, was approximately $13.3 million.

9. Earnings per share

The computation of basic and diluted earnings per share for the years ended December 31, 2001, 2000 and 1999, is as follows:

|                                                                     |  | Year Ended
|-------------------------------------------------------------------- |  | ----------
|
|
|
|Basic earnings (loss) per common share before extraordinary (loss)   |  | $         
|                                                                     |  |           
|Dilutive impact of stock options and grants                          |  |           
|                                                                     |  |           
|Diluted earnings (loss) per common share before extraordinary (loss) |  | $         
|                                                                     |  |           

As a publicly traded company, Superior Israel has certain stock options outstanding pursuant to stock option plans in existence prior to the
acquisition. At December 31, 2001 and 2000, the impact of stock options to the Company's earnings per share calculation was anti-dilutive. The Company has excluded the assumed
conversion of the Trust Convertible Preferred Securities from the earnings per share calculation as the impact would be anti-dilutive.

10. Stockholders' equity

The Company has 35,000,000 shares of common stock authorized for issuance, with a $0.01 par value. At December 31, 2001 and 2000, the Company had
21,667,661 and 21,133,361 common shares, respectively, issued and 20,854,304 and 20,305,061 common shares, respectively, outstanding.

F-23

---

On
January 25, 2000, the Company declared a 3% stock dividend to stockholders of record on February 3, 2000. As a result, 612,069 shares were issued on February 11,
2000. On January 11, 1999, the Company declared a five-for-four common stock split, which was effected in the form of a 25% stock dividend paid on February 3,
1999. As a result, 4,059,700 shares were issued to stockholders of record on January 20, 1999. All references to common shares (except shares authorized and issued) and to per share information
in the consolidated financial statements have been adjusted to reflect the stock split and stock dividend on a retroactive basis.

The
Company declared a $0.25 per common share cash dividend payable quarterly at a rate of $0.0625 per share beginning in January 1998 and continuing through October 1999.
Cash dividends, totaling $4.9 million, were declared and paid during the year ended December 31, 1999.

In
December 2000, the Company adopted a Stockholder Rights Plan (the "Rights Plan"). Under the Rights Plan, a Preferred Share Purchase Right ("Right") is attached to each share of
common stock pursuant to which the holder will, in certain takeover-related circumstances, become entitled to purchase from the Company one one-hundredth of a share of Series A
Junior Participating Preferred Stock at a price of $10.88, subject to adjustment, with each share having substantially the rights and preferences of 100 shares of common stock. The Rights will
separate from the common shares after a person or entity or group of affiliated or associated persons acquire, or commence a tender offer that would result in a person or group acquiring beneficial
ownership of 15% or more of the outstanding common shares. Also, in certain takeover-related circumstances, each Right (other than those held by an acquiring person) will be exercisable for shares of
common stock of the Company and stock of the acquiring person having a market value of twice the exercise price. Once certain triggering events have occurred to cause the Rights to become exercisable,
each Right may be exchanged by the Company for one share of common stock. The Rights are redeemable at any time, prior to the time that a person becomes an acquiring person, by the Company before
their expiration on December 28, 2010 at a redemption price of $0.01 per Right. At December 31, 2001, 500,000 shares of Series A Junior Participating Preferred Stock were reserved
for issuance under this Plan.

11. Stock based compensation plans

The Company sponsors the Superior TeleCom Inc. 1996 Stock Incentive Plan (the "Option Plan") which has 6,858,750 shares of common stock reserved for
issuance. At December 31, 2001 and 2000, there were 1,357,866 and 174,597 shares of common stock, respectively, available for issuance under the Option Plan. Participation in the Option Plan is
limited to employees, directors, and consultants of the Company, its parent and affiliates thereof. The Option Plan provides for grants of incentive and non-qualified stock options, which
cannot be exercised in the first year or after ten years from the date of grant. In January 2001, the Company adopted a stock option restructuring program under the Option Plan pursuant to
which designated employees and non-employee directors could elect to cancel certain of their outstanding stock options in exchange for the grant of replacement stock options or shares of
restricted stock, depending upon the number of stock options held. Approximately 2.9 million options were cancelled and the new options granted were accounted for on a variable basis. As the
stock price of the variable options was above the stock price of the Company at December 31, 2001, no compensation expense was recorded for the year ended December 31, 2001.

The
Company also sponsors the Superior TeleCom Employee Stock Purchase Plan (the "ESPP") which allows eligible employees the right to purchase common stock of the Company on a quarterly

F-24

---

basis at the lower of 85% of the common stock's fair market value on the last day of the preceding calendar quarter or on the last day of the current calendar quarter. There are 1,000,000 shares of
the Company's common stock reserved under the ESPP, of which 534,300 shares, 153,260 shares, and 63,655 shares were issued to employees during the years ended December 31, 2001, 2000 and 1999,
respectively. As of December 31, 2001, there were approximately 68,076 shares available for grant under the ESPP. Because of the depletion of authorized common shares allocated for issuance,
the ESPP was suspended effective December 31, 2001.

The
Company also adopted the Stock Compensation Plan for Non-Employee Directors (the "Stock Plan") in January 1999. Under the Stock Plan, each non-employee
director of the Company automatically receives 50% of the annual retainer in either deferred common stock or non-qualified stock options, as elected by the director. In addition, each
non-employee director may also elect to receive all or a portion of the remaining amount of the annual retainer and any meeting fees payable for meetings prior to July 1, 2001 in
the form of deferred common stock or stock options in lieu of cash payment. Any shares issued pursuant to the Stock Plan will be issued from the Company's treasury stock.

The
Company sponsors unfunded deferred compensation plans whereby certain key management employees are permitted to defer the receipt of all, or a portion of, their salary or bonus
(including cash or shares of restricted stock) and shares issued upon stock option exercises, as defined by the plans. The plans also provide for matching contributions by the Company in various
percentages upon shares of common stock deferred therein. Shares issued pursuant to the deferred stock component of these plans are held in irrevocable grantor trusts. Compensation expense related to
these plans for the years ended December 31, 2001 and 2000 was $0.6 million and $0.5 million, respectively.

The
Company continues to account for stock-based compensation (including options issued under the Option Plan and the ESPP) using the intrinsic value method prescribed by APB Opinion
No. 25, under which no compensation cost for stock options is recognized for stock option awards granted to employees or directors at an exercise price at or above the common stock's fair
market value (except for replacement options issued in 2001 which are accounted for on a variable basis). Had compensation expense been determined based on the fair value of the stock option award at
the grant date as prescribed by SFAS No. 123, the Company's net income and basic and diluted net income per share of common stock for the years ended December 31, 2001, 2000 and 1999,
would approximate the following pro forma amounts:

|                                                    |  | Year Ended
|--------------------------------------------------- |  | ----------
|
|
|
|Net income (loss)                                   |  | $         
|Net income (loss) per basic share of common stock   |  | $         
|Net income (loss) per diluted share of common stock |  | $         

The
effects of applying SFAS No. 123 in the pro forma disclosure are not necessarily indicative of future amounts, since the estimated fair value of common stock options is
amortized to expense over

F-25

---

the vesting period and additional options may be granted in future years. The fair value for these options was estimated at the date of grant using the Black-Scholes option-pricing model with the
following weighted-average assumptions for December 31, 2001, 2000 and 1999, respectively: dividend yield of 0%, 2% and 2%, expected volatility of 72%, 64% and 53%; risk-free
interest rate of 4.16%, 5.11% and 6.30%; and expected life of four years for all periods. The weighted average per share fair value of options granted at an exercise price equal to the fair market
value (using the Black-Scholes option-pricing model) during December 31, 2001, 2000 and 1999, was $1.52, $5.33 and $7.99, respectively. The weighted average per share fair value of options
granted at an exercise price above the fair market value during the year ended December 31, 1999 was $19.47. The weighted average per share fair value of options granted at an exercise price
below the fair market value during the year ended December 31, 2001 was $1.94.

The
Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition,
option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Since the Company's employee stock options have characteristics significantly
different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of its employee stock options.

The
following table summarizes stock option activity for the years ended December 31, 1999, 2000 and 2001:

|                                 |           | Shares
Outstanding |            | Weighted-Average
Exercise Price
|-------------------------------- | --------- | ------------------ | ---------- | -------------------------------
|Outstanding at December 31, 1998 |           | 1,799,226          |            | 17.33                          
|                                 | Exercised |                    | (18,644    | )                              
|                                 | Canceled  |                    | (35,295    | )                              
|                                 | Granted   |                    | 1,197,567  |                                
|                                 |           |                    |            |                                
|Outstanding at December 31, 1999 |           | 2,942,854          |            | 17.54                          
|                                 | Canceled  |                    | (282,019   | )                              
|                                 | Granted   |                    | 646,692    |                                
|                                 |           |                    |            |                                
|Outstanding at December 31, 2000 |           | 3,307,527          |            | 16.29                          
|                                 | Canceled  |                    | (3,105,392 | )                              
|                                 | Granted   |                    | 4,137,400  |                                
|                                 |           |                    |            |                                
|Outstanding at December 31, 2001 |           | 4,339,535          |            | 3.70                           

F-26

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11. Stock based compensation plans (Continued)

Information with respect to stock-based compensation plan stock options outstanding at December 31, 2001 is as follows:

|                |  | Options Outstanding |  | Options Exercisable
|--------------- |  | ------------------- |  | -------------------
|
|$1.05           |  | 30,000              |  | 9.78               
|$1.40 - $1.90   |  | 95,612              |  | 6.66               
|$2.75 - $3.35   |  | 3,981,824           |  | 9.01               
|$9.94 - $12.81  |  | 60,138              |  | 7.62               
|$13.67 - $17.23 |  | 61,901              |  | 7.32               
|$27.55 - $29.51 |  | 110,060             |  | 7.11               
|                |  |                     |  |                    
|                |  | 4,339,535           |  | 8.87               
|                |  |                     |  |                    

12. Employee benefits

Superior provides for postretirement employee health care and life insurance benefits for a limited number of its employees. Superior established a maximum amount
it will pay per employee for such benefits; therefore, health care cost trends do not affect the calculation of the postretirement benefit obligation or its net periodic benefit cost.

Superior
sponsors several defined benefit pension plans and an unfunded supplemental executive retirement plan (the "SERP"). The SERP provides retirement benefits based on the same
formula as in effect under a certain salaried employees' plan, but only takes into account compensation in excess of amounts that can be recognized under the salaried employees' plan. The defined
benefit pension plans and the SERP generally provide for payment of benefits, commencing at retirement (between the ages of 55 and 65), based on the employee's length of service and earnings. Assets
of the plans consist principally of cash and cash equivalents, short-term investments, equities and fixed income instruments.

During
the fourth quarter ended December 31, 2000 and effective as of January 1, 2000, the Company changed its method of amortizing unrecognized actuarial gains and losses
in computing annual pension
cost for certain plans. Unrecognized actuarial gains and losses exceeding ten percent of the greater of the projected benefit obligation or the market value of plan assets are amortized over five
years. Under the previous method, all unrecognized gains and losses exceeding the ten percent corridor were amortized over the average remaining service life of active employees. Amortizing these
amounts over five years results in more timely recognition of significant actuarial gains and losses in annual pension cost. This change resulted in the net loss for the year ended December 31,
2000 being $1.0 million or $0.05 per diluted share less than the net loss under the previous method. The impact related to prior quarters of 2000 was not material.

The
change in the projected benefit obligation, the change in plan assets and the funded status of the defined benefit pension plans and the post-retirement health care
benefits plans during the years

F-27

---

ended December 31, 2001 and 2000, are presented below, along with amounts recognized in the respective consolidated balance sheets:

|                                                       |                                                | Defined Benefit Pension Plans |   | Post-Retirement
Health Care Benefits |  
|------------------------------------------------------ | ---------------------------------------------- | ----------------------------- | - | ------------------------------------ | -
|
|
|Change in benefit obligation:                          |                                                |                               |   |                                      |  
|                                                       | Benefit obligation at beginning of year        |                               | $ | 105,287                              |  
|                                                       | Service cost                                   |                               |   | 3,486                                |  
|                                                       | Interest cost                                  |                               |   | 7,349                                |  
|                                                       | Actuarial loss                                 |                               |   | 901                                  |  
|                                                       | Impact of foreign currency exchange            |                               |   | (347                                 | )
|                                                       | Benefits paid                                  |                               |   | (3,567                               | )
|                                                       |                                                |                               |   |                                      |  
|                                                       | Benefit obligation at end of year              |                               | $ | 113,109                              |  
|                                                       |                                                |                               |   |                                      |  
|Change in plan assets:                                 |                                                |                               |   |                                      |  
|                                                       | Fair value of plan assets at beginning of year |                               | $ | 93,961                               |  
|                                                       | Actual return (loss) on plan assets            |                               |   | (3,422                               | )
|                                                       | Employer contributions                         |                               |   | 3,263                                |  
|                                                       | Impact of foreign currency exchange            |                               |   | (263                                 | )
|                                                       | Benefits paid                                  |                               |   | (3,567                               | )
|                                                       |                                                |                               |   |                                      |  
|                                                       | Fair value of plan assets at end of year       |                               | $ | 89,972                               |  
|                                                       | Funded status                                  |                               | $ | (23,137                              | )
|                                                       | Unrecognized actuarial (gain) loss             |                               |   | 2,548                                |  
|                                                       | Unrecognized prior service cost                |                               |   | 995                                  |  
|                                                       |                                                |                               |   |                                      |  
|                                                       | Accrued benefit cost                           |                               | $ | (19,594                              | )
|                                                       |                                                |                               |   |                                      |  
|Amounts recognized in the consolidated balance sheets: |                                                |                               |   |                                      |  
|                                                       | Prepaid benefit cost                           |                               | $ | 644                                  |  
|                                                       | Accrued benefit liability                      |                               |   | (20,238                              | )
|                                                       | Additional minimum liability                   |                               |   | (4,278                               | )
|                                                       | Intangible asset                               |                               |   | 995                                  |  
|                                                       | Accumulated other comprehensive income         |                               |   | 3,283                                |  
|                                                       |                                                |                               |   |                                      |  
|                                                       | Accrued benefit cost                           |                               | $ | (19,594                              | )
|                                                       |                                                |                               |   |                                      |  

The
aggregate projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets
were $33.1 million, $32.5 million and $22.0 million, respectively, as of December 31, 2001.

F-28

---

The
components of net periodic benefit cost of the defined benefit pension plans and the post-retirement health care benefit plans during the years ended December 31,
2001, 2000 and 1999 are presented below:

|                                         |                                    | Defined Benefit Pension Plans |   | Post-Retirement
Health Care Benefits
|---------------------------------------- | ---------------------------------- | ----------------------------- | - | ------------------------------------
|
|Components of net periodic benefit cost: |                                    |                               |   |                                     
|                                         | Service cost                       |                               | $ | 3,486                               
|                                         | Interest cost                      |                               |   | 7,349                               
|                                         | Expected return on plan assets     |                               |   | (8,378                              
|                                         | Amortization of prior service cost |                               |   | 84                                  
|                                         | Actuarial (gain) loss              |                               |   | (1,671                              
|                                         |                                    |                               |   |                                     
|                                         | Net periodic benefit cost          |                               | $ | 870                                 
|                                         |                                    |                               |   |                                     

The
actuarial present value of the projected pension benefit obligation and the postretirement health care benefits obligation at December 31, 2001, 2000 and 1999 were determined
based upon the following assumptions:

|                                |  | Defined Benefit Pension Plans |   | Post-Retirement
Health Care Benefits |  
|------------------------------- |  | ----------------------------- | - | ------------------------------------ | -
|
|Discount rate                   |  | 7.25                          | % | 7.5                                  | %
|Expected return on plan assets  |  | 9.0                           |   | 9.0                                  | %
|Increase in future compensation |  | 4.5                           | % | 4.5                                  | %

The
Company and its subsidiaries sponsor several defined contribution plans covering substantially all U.S. and Israeli employees. The plans provide for limited company matching of
participants' contributions. The Company's contributions during the years ended December 31, 2001, 2000 and 1999 were $4.8 million, $5.3 million and $4.7 million,
respectively.

F-29

---

13. Income taxes

The Company's provision for income tax expense (benefit) for the years ended December 31, 2001, 2000 and 1999 is comprised of the following:

Year EndedDecember 31,
2001

December 31,
2000

December 31,
1999(in thousands)Current:Federal

$
(6,641
)
$
5,046

$
16,400State


99


(1,683
)

6,040Foreign


3,694


540


1,757Total current


(2,848
)

3,903


24,197Deferred:Federal


3,404


8,504


16,952State


(2,375
)

1,280


(3,915
)Foreign


(1,798
)

(2,762
)

(501
)Total deferred


(769
)

7,022


12,536Total income tax expense (benefit)

$
(3,617
)
$
10,925

$
36,733


Income
(loss) before income taxes, distributions on preferred securities of Superior Trust I, minority interest and extraordinary loss attributable to domestic and foreign
operations for the years ended December 31, 2001, 2000 and 1999 was as follows:

Year EndedDecember 31,
2001

December 31,
2000

December 31,
1999(in thousands)United States

$
(21,257
)
$
28,181

$
84,032Foreign


940


(9,339
)

3,371Income before income taxes, distributions on preferred securities of Superior
Trust I, minority interest and extraordinary loss

$
(20,317
)
$
18,842

$
87,403


F-30

---

The
provision for income taxes differs from the amount computed by applying the U.S. federal income tax rate of 35% for December 31, 2001, 2000 and 1999 because of the effect of
the following items:

Year EndedDecember 31,
2001

December 31,
1999

December 31,
1999(in thousands)Expected income tax expense at U.S. federal statutory tax rate

$
(7,111
)
$
6,595

$
30,591State income tax expense (benefit), net of U.S. federal income tax benefit


(931
)

679


2,340Taxes on foreign income at rates which differ from the U.S. federal statutory rate


1,897


668


725Distributions on preferred securities of Superior Trust I


(5,377
)

(5,300
)

(3,760
)Nondeductible goodwill amortization


7,113


7,099


6,649Change in valuation allowance





647


Other, net


792


537


188Provision (benefit) for income taxes

$
(3,617
)
$
10,925

$
36,733


At
December 31, 2001, the Company's foreign subsidiaries had $18.6 million in distributable earnings, exclusive of amounts that if remitted in the future, would result in
little or no tax under current laws. The Company's earnings from foreign subsidiaries are considered to be indefinitely reinvested and, accordingly, no provision for U.S. federal and state income
taxes has been made for these earnings. Upon distribution of foreign subsidiary earnings in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes (subject to an
adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries.

F-31

---

Items
that result in deferred tax assets and liabilities at December 31, 2001 and 2000 are as follows:

December 31,
2001

December 31,
2000Deferred tax assets:Sale leaseback

$
1,875

$
1,875Accruals not currently deductible for tax


11,366


11,114Pension and post retirement benefits


9,471


10,034Net operating loss carryforwards


20,521


13,143Other


5,043


3,549Total deferred tax assets


48,276


39,715Deferred tax liabilities:Inventory reserves


12,511


11,536Depreciation and amortization


93,833


95,207Other


6,323


6,661Total deferred tax liabilities


112,667


113,404Net deferred income tax liability

$
64,391

$
73,689


The
Company established a valuation allowance of $0.6 million associated with net operating loss carryforwards of Superior Israel. The valuation allowance was established as it
was more likely than not that a portion of the deferred tax assets would not be realized. The net operating loss carryforwards expire beginning in 2018.

14. Restructuring and infrequent and unusual charges

During the year ended December 31, 2001, the Company recorded infrequent and unusual charges of $5.4 million, which included (i) a
$3.1 million charge related to professional and legal fees incurred for corporate debt restructurings and, (ii) a $2.3 million charge related to operational restructuring
activities at Superior Israel. During the year ended December 31, 2000, the Company recorded infrequent and unusual charges of $15.0 million, which included (i) a
$3.8 million charge related to operational restructuring activities at Superior Israel; (ii) $8.6 million in charges primarily associated with the rationalization of certain Essex
manufacturing facilities, and (iii) $2.6 million of start-up costs for the Company's Torreon, Mexico magnet wire facility. During the year ended December 31, 1999, the
Company recorded unusual charges of $8.4 million, which included (i) $4.4 million in charges associated with the evaluation and termination of a management information system
project at Essex, (ii) a $1.3 million charge related to operational restructuring activities at Superior Israel, (iii) $2.2 million in charges primarily associated with the
rationalization of certain Essex manufacturing facilities and (iv) $0.5 million of start-up costs for the Company's Torreon, Mexico magnet wire facility.



Since the completion of the acquisition of Essex, the Company has been involved in the consolidation and integration of manufacturing, corporate and distribution
functions of Essex into Superior. As a result, the Company accrued as part of the Essex Acquisition purchase price a $35.9 million provision, which included $17.9 million of employee
termination and relocation cost,

F-32

---

$12.1 million of facility consolidation cost, $3.0 million of management information system project termination costs, and $2.9 million of other exit costs. During 2001, the
Company revised its estimate and, as a result, decreased the provision for other exit costs by $0.1 million which was reflected as income in the statement of operations. As of
December 31, 2001, $17.8 million, $11.7 million, $3.0 million
and $2.7 million have been incurred and paid related to employee termination and relocation costs, facility consolidation costs, management information system project costs and other exit
costs, respectively. The provision for employee termination and relocation costs was primarily associated with selling, general and administrative functions within Essex. The provisions for facility
consolidation costs included both manufacturing and distribution facility rationalization and the related costs associated with employee severance. The restructuring resulted in the severance of
approximately 1,100 employees. All significant aspects of the plan are complete.

During
1999, the Company also wrote off $10.4 million of previously capitalized costs related to a discontinued management information system project at Essex. In addition, under
purchase accounting, the Company adjusted the carrying value of certain fixed assets by $17.3 million to reflect their net realizable value. These adjustments have been reflected as increases
to goodwill.



On December 31, 1998, Superior Israel purchased Cvalim. Included in the allocated purchase price was a $3.5 million provision for the restructuring
of Cvalim's manufacturing and corporate functions. The provisions included $2.6 million of employee termination and severance costs and $0.9 million of other miscellaneous costs.
Additionally during the eight months ended December 31, 1998, Superior Israel recorded a $2.9 million restructuring charge, which included a provision for the consolidation of seven
manufacturing facilities into five and two headquarters facilities into one. All aspects of the restructuring plan have been completed. As of December 31, 2000, approximately
$5.5 million has been incurred and paid related to employee termination and severance costs and $0.9 million has been incurred and paid related to other miscellaneous costs. The
provision for employee termination and severance costs was primarily associated with manufacturing, selling, general and administrative functions, and approximately 146 positions have been eliminated.

During
1999, Superior Israel recorded a $1.3 million restructuring charge, which included a provision for the consolidation of manufacturing facilities. The restructuring actions
resulted in the elimination of approximately 30 positions, most of which were manufacturing related employees. All aspects of the restructuring plan are complete.

During
2000, Superior Israel recorded a $3.8 million restructuring charge, which included a provision for further consolidation of manufacturing facilities. As of
December 31, 2001, $3.8 million has been incurred and paid. The restructuring actions resulted in the elimination of approximately 123 positions, most of which were manufacturing related
employees. During the year ended December 31, 2001, Superior Israel recorded a $2.3 million restructuring charge for additional exit costs associated with the restructuring. All
significant aspects of the restructuring plan are complete.

F-33

---



15. Derivative financial instruments and fair value information

The Company, to a limited extent, uses forward fixed price contracts and derivative financial instruments to manage foreign currency exchange and commodity price
risks. The Company does not hold or issue financial instruments for investment or trading purposes. The Company is exposed to credit risk in the event of nonperformance by counter parties for foreign
exchange forward contracts, metal forward price contracts and metals futures contracts but the Company does not anticipate nonperformance by any of these counter parties. The amount of such exposure
is generally limited to any unrealized gains within the underlying contracts.



The Company engages in the sale and purchase of goods and services which periodically require payment or receipt of amounts denominated in foreign currencies. To
protect the Company's related anticipated cash flows from the risk of adverse foreign currency exchange fluctuations for firm sales and purchase commitments, the Company enters into foreign currency
forward exchange contracts. At December 31, 2001, the Company had no forward exchange sales contracts, but did have $8.3 million of purchase contracts whose fair value approximated the
contract amount. The Company uses foreign currency forward contracts to hedge certain receivables and payables on the Company's balance sheet that are denominated in foreign currencies other than the
functional currency. These forward contracts are classified as non-designated derivative instruments and are stated at fair value with any gain or loss being recorded immediately in
earnings. The underlying receivable or payable is also recorded at fair value resulting in gains or losses that substantially offset the effects of the forward contracts.



The cost of copper, the Company's most significant raw material, is subject to volatility. So that the Company may manage the matching of the copper component of
customer product pricing with the
copper cost component of the inventory shipped, the Company enters into futures contracts as qualifying hedges. At December 31, 2001, the Company had sales contracts for 15.4 million
copper pounds, or $10.1 million, with an estimated fair value of $10.8 million. At December 31, 2001, the Company had purchase contracts for 16.7 million copper pounds
whose contracts approximated fair value. Changes in the fair value of these contracts are recorded in the consolidated statement of operations in the same line item as the underlying exposure being
hedged with any ineffective portion of a financial instrument hedge immediately recognized in earnings.

In
order to hedge the risk associated with the anticipated future liquidation of a LIFO layer created during 2001, the Company entered into certain future contracts that were classified
as cash flow hedges. During the second quarter of 2001, the Company determined that the hedge was no longer effective, as the LIFO layer was deemed to be permanent in nature. On July 1, 2001,
the Company removed the hedge designation for certain LIFO inventory hedge contracts and settled such contracts in September. As a result, the Company recorded $1.1 million as a reduction in
inventory carrying value and a gain of $0.5 million related to changes in the fair market value of these contracts subsequent to the removal of the hedge designation. The Company has no LIFO
layer hedges outstanding at December 31, 2001. The net impact of hedge ineffectiveness for the year ended December 31, 2001 was immaterial.

16. Commitments and contingencies

Total rent expense under cancelable and noncancelable operating leases was $13.2 million, $13.9 million and $13.7 million for the years ended
December 31, 2001, 2000 and 1999, respectively.

F-34

---

At
December 31, 2001, future minimum lease payments under noncancelable operating leases are as follows:

Year

Amount(in thousands)2002

$
10,8402003


10,3322004


9,3992005


8,4852006


7,035Thereafter


10,255$
56,346


Approximately
38% of the Company's total labor force is covered by collective bargaining agreements. Contracts covering approximately 14% of the Company's unionized work force are due to
expire at various times in 2002. The Company considers relations with its employees to be satisfactory.

The
Company is subject to lawsuits incidental to its business. In the opinion of management, based on its examination of such matters and discussions with counsel, the ultimate
resolution of all pending or threatened litigation, claims and assessments will have no material adverse effect upon the Company's financial position, liquidity or results of operations.

In
connection with Essex's 1988 acquisition of Essex Group, Inc., United Technologies Corporation ("UTC"), Essex's former parent, has indemnified Essex against all losses
resulting from or in connection with damage or pollution to the environment and arising from events, operations, or activities of Essex prior to February 29, 1988, or from conditions or
circumstances existing at February 29, 1988, known to UTC prior to February 29, 1988. The sites covered by the indemnity are handled directly by UTC and all payments required to be made
are paid directly by UTC. UTC also provided an additional environmental indemnity which deals with liabilities related to environmental events, conditions or circumstances existing at or prior to
February 29, 1988, which became known prior to February 28, 1993. As to such liabilities, the Company is responsible for the first $4 million incurred. The Company accrues for
these costs when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

Essex
has been named as a defendant in a number of product liability lawsuits brought by electricians and other skilled tradesmen claiming injury from exposure to asbestos found in
electrical wire products
produced many years ago. Litigation against various past insurers of Essex, who had previously refused to defend and indemnify Essex against these lawsuits, was settled during 1999. Pursuant to the
settlement, Essex was reimbursed for substantially all of its costs and expenses incurred in defense of these lawsuits, and the insurers have undertaken and are currently defending and, if it should
become necessary, indemnifying Essex against such asbestos lawsuits, subject to the terms and limits of their respective policies.

The
Company accepts certain customer orders for future delivery at fixed prices. As copper is the most significant raw material used in the manufacturing process, the Company enters into
forward purchase fixed price commitments for copper to properly match its cost to the value of the copper to be billed to the customers. At December 31, 2001, the Company had forward fixed
price purchase commitments for 72.9 million copper pounds (see Note 15).

F-35

---

At
December 31, 2001, the Company had committed $2.2 million to outside vendors for certain capital projects.

Certain
executives of the Company have employment contracts which generally provide minimum base salaries, cash bonuses based on the Company's achievement of certain performance
objectives, stock options and restricted stock grants, and certain retirement and other employee benefits. Further, in the event of termination or voluntary resignation for "good reason" accompanied
by a change in control, as defined, such employment agreements provide for severance payments not in excess of three times (or in the case of the chief executive officer up to the number of years
remaining in his employment term) annual cash compensation and bonus and the continuation for stipulated periods of other benefits, as defined.

17.  Related party transactions

The Company and Alpine are parties to a services agreement (the "Services Agreement") whereby Alpine has provided during certain periods financial, audit and
accounting, corporate finance and strategic planning, legal, treasury, insurance and administrative services in return for an annual fee in addition to reimbursement of incidental costs and expenses
incurred in connection with Alpine's provision of such services. Under the Services Agreement as amended to date, Superior TeleCom incurred expense of $2.9 million, $3.5 million and
$2.7 million during the years ended December 31, 2001, 2000 and 1999, respectively. The Services Agreement currently extends through June 30, 2002 with $1.0 million in
payments remaining to be made, but only upon completion by the Company of certain deleveraging transaction events.

Alpine
has entered into a commitment to advance to the Company approximately $3.8 million to be used solely by the Company to make one quarterly cash interest payment on the
Senior Subordinated Notes (see Note 7 to the consolidated financial statements). If such commitment is funded, Alpine will be issued subordinated notes in the face amount of the funds advanced
with such notes due seven years from the date issued.

Alpine
was issued warrants to acquire 250,000 shares of common stock of the Company at an exercise price of $1.41 per share for granting the unconditional commitment to fund these
obligations. If such commitment is funded, Alpine will be issued additional warrants to acquire 2.1 million shares of common stock of the Company at an exercise price of $1.69. Interest on the
Alpine notes will be paid in the form of PIK notes for as long as the debt under the Credit Agreement remains outstanding. The interest rate on the Alpine notes will fluctuate (based on certain
conditions) from the lesser of the applicable rate of interest in respect of the Superior Senior Subordinated Notes or the rate of 15% per annum.

Prepaid
amounts under the Services Agreement amounted to $1.0 million at December 31, 2001, which is included in other current assets. The Company also had a payable due to
Alpine of $0.5 million at December 31, 2000, which is included in accrued expenses in the consolidated balance sheets.

18. Business segments and foreign operations

The Company's reportable segments are strategic businesses that offer different products and services to different customers. These segments are communications,
OEM and electrical. The communications segment includes (i) copper and fiber optic outside plant wire and cable for voice and

F-36

---

data transmission in telecommunications networks (ii) copper and fiber optic datacom or premise wire and cable for use within homes and offices for local area networks, Internet connectivity
and other applications, and (iii) all of Superior Israel's products. The OEM segment includes magnet wire and related products. The electrical segment includes building and industrial wire and
cable.

The
Company evaluates segment performance based on a number of factors with operating income being the most critical. Intersegment sales are generally recorded at cost, are not
significant and, therefore, have been eliminated below.

Operating
results for each of the Company's three reportable segments are presented below. Corporate and other items shown below are provided to reconcile to the Company's consolidated
statements of operations, cash flows and balance sheets.

Year EndedDecember 31,
2001

December 31,
2000

December 31,
1999(in thousands)Net sales (a):Communications (b)

$
726,768

$
848,099

$
755,225OEM


533,634


613,382


594,716Electrical


486,900


587,567


686,791$
1,747,302

$
2,049,048

$
2,036,732Depreciation and amortization expense:Communications

$
21,864

$
20,240

$
18,036OEM


11,921


9,287


10,333Electrical


9,945


7,560


6,534Corporate and other


2,462


4,885


4,281Amortization of goodwill


21,057


20,959


19,629$
67,249

$
62,931

$
58,813Operating income (loss):Communications

$
100,627

$
120,071

$
131,675OEM


48,791


75,839


82,633Electrical


(4,074
)

6,797


36,962Corporate and other


(25,468
)

(19,016
)

(18,210
)Infrequent and unusual charges


(5,358
)

(14,961
)

(8,431
)Amortization of goodwill


(21,057
)

(20,959
)

(19,629
)$
93,461

$
147,771

$
205,000Total assets:Communications

$
482,886

$
544,561

$
510,537OEM


294,674


302,690


278,878Electrical


256,370


271,831


324,788Corporate and other


842,009


873,232


886,151$
1,875,939

$
1,992,314

$
2,000,354


F-37

---



18. Business segments and foreign operations (Continued)

Year EndedDecember 31,
2001

December 31,
2000

December 31,
1999(in thousands)Capital expenditures:Communications

$
16,741

$
33,552

$
26,306OEM


5,352


35,363


24,972Electrical


2,655


6,564


10,562Corporate and other


2,516


2,860


10,397$
27,264

$
78,339

$
72,237


---



The
following provides information about domestic and foreign operations for the years ended December 31, 2001, 2000 and 1999.

Year EndedDecember 31,
2001

December 31,
2000

December 31,
1999(in thousands)Net sales:United States

$
1,542,742

$
1,818,510

$
1,825,709Canada


41,964


48,664


36,990Israel


125,868


139,363


128,380United Kingdom


36,728


42,511


45,653$
1,747,302

$
2,049,048

$
2,036,732Long-lived assets:United States

$
374,266

$
392,598

$
397,595Canada


10,452


11,944


13,431Israel


64,190


75,453


74,093United Kingdom


10,809


12,189


14,093Mexico


49,051


46,881


14,702$
508,768

$
539,065

$
513,914


F-38

---

19. Quarterly financial information (unaudited)

Selected
unaudited quarterly data is presented below:

|                                                                    |  | 2001 |        
|------------------------------------------------------------------- |  | ---- | -------
|
|
|
|
|Net sales                                                           |  | $    | 478,316
|Gross profit                                                        |  |      | 77,579 
|Infrequent and unusual charges                                      |  |      | 823    
|Operating income                                                    |  |      | 31,713 
|Loss before extraordinary item                                      |  |      | (4,202 
|Net loss                                                            |  | $    | (4,202 
|                                                                    |  |      |        
|Loss before extraordinary item per basic share of common stock(a)   |  | $    | (0.21  
|                                                                    |  |      |        
|Loss before extraordinary item per diluted share of common stock(a) |  | $    | (0.21  
|                                                                    |  |      |        
|Net loss per basic share of common stock(a)                         |  | $    | (0.21  
|                                                                    |  |      |        
|Net loss per diluted share of common stock(a)                       |  | $    | (0.21  
|                                                                    |  |      |        

|                                                       |  | 2000 |        
|------------------------------------------------------ |  | ---- | -------
|
|
|
|
|Net sales                                              |  | $    | 497,896
|Gross profit                                           |  |      | 85,622 
|Infrequent and unusual charges                         |  |      | 5,856  
|Operating income                                       |  |      | 36,537 
|Net income (loss)                                      |  | $    | 381    
|                                                       |  |      |        
|Net income (loss) per basic share of common stock(a)   |  | $    | 0.02   
|                                                       |  |      |        
|Net income (loss) per diluted share of common stock(a) |  | $    | 0.02   
|                                                       |  |      |        

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F-39

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20. Subsequent events

During March 2002, the Company closed its manufacturing facility in Elizabethtown, Kentucky in response to continued weak demand for the Company's
Communications cable products. This closure will eliminate certain fixed and variable costs associated with this facility and allow the Company to achieve cost efficiencies associated with
redistributing its production to its remaining facilities. The Company expects to incur approximately $10 to $20 million in costs associated with the closure. As required by EITF
94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs incurred in a Restructuring)", certain costs must be
expensed as incurred. The majority of the costs related to the facility closure will be recorded during the first quarter of 2002 in accordance with the authoritative literature.

As
discussed in Note 7, the Company entered into an amendment to the Credit Agreement on March 28, 2002.

F-40

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Report of Independent Public Accountants

To Superior TeleCom Inc.:

We
have audited in accordance with auditing standards generally accepted in the United States, the financial statements of Superior TeleCom Inc. and subsidiaries included in this
annual report on Form 10-K and have issued our report thereon dated February 18, 2002 (except with respect to the matters discussed in Notes 1, 6, 7 and 20, as to which the
date is March 28, 2002). Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The Schedule II listed in the index to financial
statements is the responsibility of the Company's management and is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial
statements. This schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic financial statements taken as a whole.

Arthur
Andersen LLP

Atlanta,
Georgia
February 18, 2002

F-41

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SUPERIOR TELECOM INC. AND SUBSIDIARIES    SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS    Years Ended December 31, 2001 and 2000    (in thousands)

|                                       |  |        |  | Additions |  |       |     |        
|-------------------------------------- |  | ------ |  | --------- |  | ----- | --- | -------
|
|2001:                                  |  |        |  |           |  |       |     |        
|Allowance for restructuring activities |  | 2,326  |  | 194       |  |      |     | (1,912 
|Allowance for doubtful accounts        |  | 4,998  |  | 2,820     |  | 1,658 | (d) | (1,085 
|2000:                                  |  |        |  |           |  |       |     |        
|Allowance for restructuring activities |  | 14,326 |  | 2,085     |  |      |     | (14,085
|Allowance for doubtful accounts        |  | 3,193  |  | 2,490     |  |      |     | (685   
|1999:                                  |  |        |  |           |  |       |     |        
|Allowance for restructuring activities |  | 35,969 |  | 1,321     |  | 6,231 | (c) | (29,195

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F-42

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