ALPINE GROUP INC /DE/ - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
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FORM 10-K

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

OR

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

FOR THE TRANSITION PERIOD FROM ________TO __________

COMMISSION FILE NUMBER 1-9078
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THE ALPINE GROUP, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 22-1620387
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1790 BROADWAY
NEW YORK, NEW YORK 10019-1412
(Address of principal (Zip code)
executive offices)

Registrant's telephone number, including area code 212-757-3333
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Securities registered pursuant to Section 12(b) of the Act:

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Common Stock, par value $.10 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 |X| No | |

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. | |

At March 23, 2001, the registrant had 13,736,914 shares of common
stock, par value $.10 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 $23.7 million based on the closing
price of $2.35 per share of such common stock on such date.

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

The Alpine Group, Inc. (together with its subsidiaries, unless the
context otherwise requires, "Alpine" or the "Company") is an industrial holding
company with investments in three publicly traded industrial manufacturing
companies; including (i) a 51.5% common equity interest in Superior TeleCom Inc.
(a consolidated subsidiary); (ii) a 48% common equity interest and a $23.3
million preferred equity investment in PolyVision Corporation; and (iii) a 2%
common equity investment in Cookson Group, plc. Alpine was incorporated in New
Jersey on May 7, 1957 and reincorporated in Delaware on February 3, 1987.

SUPERIOR TELECOM INC.

GENERAL

Superior TeleCom Inc. (together with its subsidiaries, unless the
context otherwise requires, "Superior"), is a publicly traded New York Stock
Exchange listed company (NYSE: SUT) engaged in the manufacture of wire and cable
products.

Superior TeleCom Inc. 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 31 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
Alpine. On October 2, 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. On October 17, 1996, Superior completed an initial
public offering of its common stock, generating net proceeds of approximately
$100 million which were used to reduce outstanding bank debt and pay Alpine
certain previously declared dividends. As a result of the initial public
offering, Alpine's common stock ownership position in Superior was reduced to
approximately 50.1%. As a result of treasury stock repurchases and other
transactions, Alpine's current common stock interest in Superior is 51.5%.

Superior effected a five-for-four stock split on February 2, 1998 and
again on February 3, 1999, and issued a 3% stock dividend on February 11, 2000.

RECENT SIGNIFICANT GROWTH

Over the past six years, Superior, including its predecessors, has led
a 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 telephone wire and cable.

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On November 27, 1998, Superior, through a newly formed, 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, on March 31, 1999, Essex
merged with that wholly-owned subsidiary of Superior. In the merger, holders of
the remaining 19% of the outstanding shares of common stock of Essex each
received 0.64 (in the aggregate $167 million liquidation value) of an 8 1/2%
trust convertible preferred security of Superior Trust I, a Delaware trust in
which Superior owns all the common equity interests, for each share of Essex
common stock owned. Upon completion of the merger, Essex became a wholly-owned
subsidiary of Superior. Essex, through its subsidiaries, manufactures and
distributes wire and cable and insulation products, including magnet wire and
insulation materials for electromechanical devices, building wire for commercial
and residential construction applications, copper communications wire and cable
and industrial wire. As a result of the acquisition of Essex, Superior is now a
diversified supplier of wire and cable products and is 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 presence in international
markets. On May 5, 1998, Superior acquired 51% of the issued and outstanding
shares of common stock of Cables of Zion United Works, Ltd. ("Cables of Zion")
for approximately $25.0 million in cash. Cables of Zion is an Israel-based cable
and wire manufacturer whose primary products include fiber and copper
communications wire and cable and power cable. Cables of Zion products are sold
primarily into the Israeli and European markets.

On December 31, 1998, Superior, through Cables of Zion, acquired the
business and certain operating assets of Cvalim-The Electric Wire & Cable
Company of Israel Ltd. and its wholly-owned subsidiary, Dash Cable Industries
(Israel) Ltd., for approximately $41.2 million in cash. Cvalim was the leading
Israeli manufacturer of electrical, communications and industrial wire and cable
products. Furthermore, in October 1999 Cables of Zion acquired the business and
certain operating assets of Pica Plast Limited, the remaining major wire and
cable company in Israel, for a purchase price of approximately $10 million. As a
result of these acquisitions, Cables of Zion, which has changed its name to
Superior Cables Limited, is the dominant wire and cable manufacturer in Israel
with an approximate 80% market share. Superior believes that expanding its
operational presence in Israel will enable it to participate further in the
growing communications wire and cable markets in Europe and the Middle East. The
operations of Superior Cables Limited, including the acquired operations of
Cvalim and Pica Plast, are hereinafter referred to as "Superior Israel".

RECENT CORPORATE REORGANIZATION AND OPERATIONAL RESTRUCTURINGS

During 1999 and continuing into 2000, and in connection with the Essex
acquisition, Superior initiated 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, Superior 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, approximate $25 million.

Superior has 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. Total cash proceeds from these sales amounted to $11
million.

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Additionally, the Company has substantially completed a restructuring
and rationalization of the operating assets comprising Essex's Electrical Group.
During the past two years, the Company shut down or sold six electrical wire
manufacturing plants. This has resulted in the Electrical Group's manufacturing
being consolidated into six remaining manufacturing facilities. This
restructuring resulted in the elimination of 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, Superior has eliminated
approximately 1,100 positions in the aggregate, a 25% reduction in Essex's total
workforce since the beginning of 1999.

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's North American operations manufacture and
sell the following communications wire and cable products:

(1) Copper outside plant ("OSP") wire and cable for voice and data
transmission, used in the distribution or local loop portion
of the telecommunications infrastructure, principally by the
local exchange carriers ("LECs");

(2) Fiber optic OSP cable products used principally for trunking
and feeder applications in local exchange, CATV, and long
distance networks; and OSP composite (or hybrid) cables
(including fiber optic/twisted pair and coaxial/twisted pair
cables) for local exchange feeder, distribution and service
wire applications; and

(3) Copper and fiber optic premise wire and cable used within
homes, offices and switching structures for local area
networks ("LANs"), Internet connectivity and other
applications.

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

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.

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 regional Bell operating
companies ("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:

o the installed base of copper cable and associated switches, connectors
and other accessory components represents an investment of over $150
billion that must be maintained by the LECs;

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o the lower installation costs of copper compared to optical fiber and
other media;

o technological advances, such as digital subscriber line ("xDSL")
technologies and integrated services digital networks ("ISDN"), that
increase the bandwidth of the installed local loop copper network;

o the increasing demand by consumers for affordable enhanced services,
which, because of technological advances, can be supported by the
copper-based local loop; and

o the increasing demand for affordable multiple residential access lines
to support fax machines, Internet access and multiple voice lines.

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 of new access lines is, in turn,
partially dependent on the level of new home construction and expansion of
business and, increasingly in recent years, on demand for additional telephone
and data lines dedicated to facsimile machines and computer modems, which are
used for, among other purposes, business communications and access to the
Internet.

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 advances include xDSL and ISDN technologies. 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, 2000, net sales of copper OSP products
accounted for 63% of the Communications Group's net sales.

Superior has historically been a key supplier of copper OSP wire and
cable to the RBOCs and the two major independent telephone companies, GTE
Corporation and Sprint Corporation. It is estimated that

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the RBOCs, GTE and Sprint comprise approximately 80% of the approximately $1.3
billion 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. However, the Essex acquisition
provided Superior both the capacity and the established distributor network to
address this market. For the year ended December 31, 2000, 63% of Superior's OSP
net sales were to the RBOCs and the two major independent telephone companies.
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 percentage 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, 2000, Superior had multi-year
arrangements with two of the four RBOCs and with the two major independent
telephone companies.

BROADBAND PRODUCTS

The Company's broadband products include: (i) OSP fiber and composite
cables and (ii) copper and fiber optic premise wire and cable products. These
products are designed to meet the highest 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 in 2000 were $141 million, representing a
growth rate of 69% over 1999.

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. In recent years, the demand for
fiber optic cable has 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. Further, technological
advances now have allowed other manufacturers to cost efficiently produce fiber
optic OSP cable products and effectively compete with the major vertically
integrated fiber optic cable producers.

Superior began manufacturing fiber optic OSP cable products in 1999. In
2000 Superior completed a major expansion of its fiber optic cabling
capabilities and successfully produced and sold $47 million of fiber optic OSP
cable products, a growth rate of 273% over 1999. The Company expects to continue
to invest in expanding its fiber optic cabling capabilities and anticipates
continued revenue growth in this product segment.

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 traditional customers, such as distributors and
LECs (including the RBOCs), as well as new customers, such as CATV companies,
inter-exchange carriers and competitive access providers.

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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.
Superior expects demand for premise wire and cable products to continue to
increase, particularly as new office buildings are constructed, existing office
buildings are upgraded to accommodate advanced network requirements and multiple
residential access lines for facsimile machines, home offices, home networks and
access to the Internet are installed.

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 anticipates that UTP and
fiber optic cable will provide the most significant growth opportunities due to
increasing demands in the premise market for cost-effective, high bandwidth
solutions.

Continued high growth for new LAN installations, as well as voice
system upgrades, have resulted in increased demand for LAN UTP cables,
particularly Category 5, Category 5e and Category 6 cables. These high bandwidth
cables have made it possible for UTP to compete with fiber and LAN STP for
high-speed LAN applications. The other large component of the premise segment is
fiber optic cable, which meets the needs of communications services requiring
bandwidth capabilities greater than can be provided by copper based
technologies.

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, Category 5e and Category 5 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 is
continuing to expand its manufacturing capabilities for both copper UTP and
fiber optic cable products with an anticipated increase in sales and market
share in 2001.

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 and domestic telephone companies
and private overseas contractors for installation in the 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 (an Alcatel company), 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 $2.0 billion.

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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 optical fiber 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 27% of total sales for the year ended December 31, 2000. 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 Superior has completed a manufacturing
restructuring project to improve and expand this operation. This enhanced
production capability provides Superior an opportunity 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 280,000 square foot magnet wire
manufacturing facility located in Torreon, Mexico . This new facility is
strategically located to service, on a cost effective basis, Mexican based
manufacturing locations of current major OEM customers as well as to take
advantage of one of the world's largest and fastest growing markets for magnet
wire. 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.

For the year ended December 31, 2000, sales of magnet wire accounted
for 74% of the OEM Group's 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.

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The North American market demand for magnet wire has experienced
continued growth since 1991. Sales growth in the magnet wire industry is driven
by increasing demand for electrical devices containing motors for, among other
things, home appliances and automobiles. Additionally, federal government
mandates are requiring higher energy efficiency from electric devices, which is
achieved by using, on average, 25% more magnet wire in motors and transformers.
Strong consumer demand for greater numbers of electrical convenience items in
homes, offices and vehicles has resulted in increased sales of household
appliances and increased demand for magnet wire for use in electric motors and
coils.

Due to the substantial initial capital costs associated with magnet
wire production, the importance of consistent quality, stringent technological
requirements and the cost efficiencies achieved by 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. Electromagnetic devices have numerous applications
in industrial and household settings.

Superior works closely with global OEMs to develop new magnet wire for
applications in energy efficient motors, generators and transformers. In recent
years, Superior has introduced the Ultra Shield(TM) Plus wire, for use by global
OEM motor manufacturers in inverter drive motors where high voltage spikes are
encountered. Other new products include Soderon(R)/180 and Soderex(R)/180, two
new magnet wires that are 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.

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 based on a
percentage of the customers' total requirements and on a negotiated fixed price,
subject to adjustment for the cost of copper. For the year ended December 31,
2000, 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 in that
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.

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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 is expected to result 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, submersible pump cable,
power cable, 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. Superior
estimates that the building wire market has grown, on average, approximately
2%-4% per annum over the past five years. Sales growth in the building wire
industry has resulted primarily from renovation activity, as well as new
nonresidential and residential construction. Both new construction and
renovation growth are being affected by the increased number of circuits and
amperage handling capacity needed to support the increasing demand for
electrical services. In addition, there has been a greater wiring density
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
and task lighting, electric garages 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 also increasing in size and thus influencing demand in this industry.

The building wire industry has experienced significant consolidation in
recent years, declining from approximately 28 manufacturers in 1980 to nine
primary manufacturers in 1999. 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 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, mine expansion 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's net
sales.

Notwithstanding this consolidation of suppliers, there still exists
manufacturing overcapacity 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. During 1999 and 2000, market
pricing for building wire products declined substantially, with copper adjusted
pricing reaching five year lows

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through much of this period. 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.

Prior to 1998, Superior served the wholesale electrical and specialty
distributors through a network of over 30 service centers and stocking locations
in the United States. In 1998, Essex, prior to its acquisition by Superior,
began an initiative to consolidate the service centers and stocking locations
into a smaller number of 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
metal processing center also 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 contracts which
extend for a one-year period and are normally based on the COMEX price, plus a
premium to cover transportation and payment terms.

Historically, Superior has had adequate supplies of copper and other
raw materials 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

11

price futures contracts to manage its commodity price risk. Superior does not
hold or issue such contracts for trading purposes.

During 2000 Superior substantially increased its production capability
for fiber optic cable, requiring a significant increase in procurement of
optical fiber. The Company was able to satisfy its requirement for fiber in 2000
and believes it has secured an available supply of optical fiber from multiple
suppliers sufficient to meet its 2001 production plan. However, demand for
optical fiber has increased dramatically in recent years and there is no
assurance that existing optical fiber producers can continue to meet the growing
demand of manufacturers of fiber optic cable such as Superior.

Superior's manufacturing strategy is primarily focused on maximizing
product quality and production efficiencies while maintaining a high level of
vertical integration through internal production of its principal raw materials.
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, 2000 were
$98.7 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 3-5 weeks of sales depending on seasonal issues. Superior's other product
lines have no significant order backlog because Superior follows the industry
practice of manufacturing products on an ongoing basis to meet customer demand
on a just-in-time basis. The Company believes that the ability to supply orders
in a timely fashion is a competitive factor in the markets in which Superior
operates. Historically, sales returns have not had a material adverse effect on
the Company'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. The Company believes
that Superior 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,
the Company believes that Superior's distribution networks enable it to compete
effectively with respect to delivery time.

12

RESEARCH AND DEVELOPMENT

In response to the changing requirements of the communications
industry, Superior established a product development center during the fourth
quarter of fiscal 1997. This 58,000 square foot facility is located in Kennesaw,
Georgia and is dedicated to defining and creating new wire and cable systems
that meet the needs of the evolving communications networks. Recent projects
include the development of single mode and multimode fiber optic cable products
for use in LANs as well as telephone networks. Initial sales and shipments of
these products began in 1998.

Superior also has development projects underway for performance
enhanced copper-based communications wire products that are designed to meet the
existing and future needs of telephone and datacom customers. Several of these
projects have been undertaken in conjunction with Superior's telephone company
customers and include the development of composite cables that incorporate
copper twisted pair wire and coaxial cable or optical fibers in a single cable
construction.

Superior also operates research and development facilities in Lafayette
and Fort Wayne, Indiana. Research activities at the Lafayette facility are
focused on 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 during the fiscal years
ended April 30, 1998 and 1999, the eight months ended December 31, 1999 and the
year ended December 31, 2000 amounted to $3.0 million, $5.1 million and $4.1
million and $7.2 million, respectively.

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

EMPLOYEES

As of December 31, 2000, the Company employed approximately 5,900
employees substantially all of which are employees of Superior. Approximately
2,350 persons employed by the Company are represented by unions. Collective
bargaining agreements expire at various times between 2001 and 2004, with
contracts covering approximately 41% of the Company's unionized work force due
to expire at various times in 2001. The Company considers relations with its
employees to be satisfactory.

ENVIRONMENTAL MATTERS

The manufacturing operations of the Company'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. The Company does not believe that compliance with environmental
laws and regulations will have a material effect on the level of capital
expenditures of the Company or its business, financial condition, liquidity or
results of operations. No material expenditures relating to these matters were
made in 1998, 1999 or 2000. 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 the Company.

13

POLYVISION CORPORATION

Alpine holds a 48% common equity interest and $23.3 million of
convertible preferred stock and accrued dividends thereon in its unconsolidated
affiliate, PolyVision Corporation, a publicly traded American Stock Exchange
listed company (AMEX: PLI). PolyVision is a global manufacturer of visual
communications and related products for the education/office markets, menus and
merchandising boards for food service and banking institutions, and high
performance wall systems used in the education, transportation and select
architectural markets.

COOKSON GROUP PLC

On August 6, 1999, Alpine completed the sale of its wholly-owned
subsidiary, Premier Refractories International Inc. ("Premier"), to Cookson
Group plc ("Cookson"), a London Stock Exchange listed company engaged in the
manufacture and sale of a variety of industrial materials.

The sale was effected through the merger of Premier and a wholly-owned
subsidiary of Cookson. In connection with the transaction, Cookson assumed all
of Premier's existing indebtedness, issued to Alpine approximately 32.3 million
shares of Cookson common stock and paid to Alpine $15.6 million in cash.
Immediately prior to the sale of Premier, Alpine acquired the 16.6% minority
equity interest in Premier for approximately $31.1 million in cash. In
connection with this transaction, Alpine recognized an after tax gain of $35.4
million. Alpine's current ownership in Cookson common stock approximates 2%.

14

ITEM 2. PROPERTIES

Alpine conducts its principal operations at the facilities set forth
below which, except for corporate offices, represent the facilities of Superior:

SQUARE
OPERATION LOCATION FOOTAGE LEASED/OWNED
-------- ------- ------------

COMMUNICATIONS
OSP/Datacom.................... Brownwood, Texas 415,000 Leased (expires 2013)
Chester, South Carolina 210,000 Owned
Elizabethtown, Kentucky 165,000 Owned
Hoisington, Kansas 275,000 Owned
Kennesaw, Georgia 58,000 Leased (expires 2002)
Tarboro, North Carolina 295,000 Owned
Winnipeg, Manitoba 184,000 Owned
DNE............................ Wallingford, Connecticut 65,000 Leased (expires 2007)
Superior Israel................ Shaar Hanegav, Israel 351,000 Owned
Bet-Shean, Israel 181,000 Leased (expires 2002)
Maalot, Israel 46,000 Leased (expires 2003)
OEM
Magnet Wire.................... Charlotte, North Carolina 26,000 Leased (expires 2006)
Fort Wayne, Indiana 181,000 Owned
Franklin, Indiana 35,000 (a)
Franklin, Tennessee 289,000 Leased (expires 2008)
Huyton Quarry, U.K. 146,000 Owned
Kendallville, Indiana 88,000 Owned
Rockford, Illinois 319,000 Owned
Torreon, Mexico 317,000 Owned
Vincennes, Indiana 267,000 Owned
Accessory Products............. Athens, Georgia 30,000 Leased (expires 2016)
Clifton Park, New York 22,000 Leased (expires 2016)
Willowbrook, Illinois 60,000 Leased (expires 2016)
ELECTRICAL
Building Wire.................. Anaheim, California 174,000 Owned
Columbia City, Indiana 400,000 Owned
Florence, Alabama 129,000 Owned
Orleans, Indiana 425,000 Owned
Sikeston, Missouri 189,000 Owned
Industrial Wire................ Lafayette, Indiana 350,000 Owned
METALS PROCESSING................. Columbia City, Indiana 75,000 Owned
Jonesboro, Indiana 56,000 Owned
ADMINISTRATIVE OFFICES............ Atlanta, Georgia 39,000 Leased (expires 2008)
Fort Wayne, Indiana 295,000 Owned
New York, New York 5,400 Leased (expires 2002)

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

(a) The Franklin, Indiana facility is approximately 70,000 square feet, of
which 35,000 square feet is leased to Femco Magnet Wire corporation as
a joint venture between Superior and the

15

Furukawa Electric Co., Ltd., Tokyo, Japan. Femco manufactures and
markets magnet wire with special emphasis on products required by
Japanese manufacturers with production facilities in the United
States.

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 that its plants are generally suitable and adequate
for the business being conducted and to service the requirements of its
customers. Capital spending plans are primarily designed to keep up with current
and best available technology, to increase capacity in existing product lines
and for cost reduction initiatives. The extent of current utilization is
generally consistent with historical patterns and, in the view of management, is
satisfactory. Superior does not view any of its plants as being underutilized. A
majority of Superior's plants operate on 24 hour-a-day schedules, on either a
five day or seven day per week basis. During the year ended December 31, 2000,
the Company's facilities have operated at approximately 90% capacity.

ITEM 3. LEGAL PROCEEDINGS

The Company is engaged in certain routine litigation arising in the
ordinary course of business. While the outcome of litigation can never be
predicted with certainty, the Company does not believe that any of its existing
litigation, 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 operates 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 facilities and at off-site
disposal locations. On-site contamination at certain of Superior's facilities is
the result of historic disposal activities, including 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 at various
sites, to be remedied under federal or state statutes, for which Superior has
been identified by the United States Environmental Protection Agency, or the
equivalent state agency, as a Potentially Responsible Party ("PRP").

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 the indemnity are handled directly by United
Technologies and all payments required to be made are paid directly by United
Technologies. These sites are all mature sites where allocations have been
settled and remediation is well underway or has been completed. The Company is
not aware of any inability or refusal on the part of United Technologies to pay
amounts that are owing under the indemnity or any disputes with United
Technologies concerning matters covered by the 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
Technologies in

16

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. To date, Essex has incurred less than $0.2 million in the
basket.

Apart from the indemnified sites and those subject to the basket
indemnity, 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. Alpine, as to one site, and
Superior Telecommunications Inc., as to one site, are involved in investigatory
and remedial activities subject to the oversight of a state governmental
authority. Essex is cooperating with a state environmental agency to resolve a
notice of violation issued against one Essex facility alleging that certain of
such facility's operations are in violation of that state's air quality rules
(the "Air Quality Matter"). Essex anticipates resolving the matter through
agreed administrative order providing for the installation of certain air
emission control equipment and possibly a monetary penalty in an amount not yet
specified by the state regulatory agency. Superior has provided an accrual in
the amount of $2.5 million to cover its environmental contingencies as of
December 31, 2000. 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
sanctions, fines or administrative penalties against 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 express terms and limits of
the respective policies. The Company 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.

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, 2000.

PART II

ITEM 5. MARKET FOR REGISTRANT'S SECURITIES AND RELATED SECURITY HOLDER MATTERS

(a) Market Information

Alpine's common stock, $0.10 par value, is listed on the New York Stock
Exchange (the "NYSE") under the symbol AGI. The following table sets forth the
range of high and low daily closing sales prices for the Alpine common stock for
the fiscal year ended April 30, 1999, the eight months ended December 31, 1999,
and the year ended December 31, 2000.

17

HIGH LOW
---- ---

Fiscal Year Ended April 30, 1999
First Quarter ended July 31, 1998...................... $21.88 $16.50
Second Quarter ended October 31, 1998.................. 18.25 13.19
Third Quarter ended January 31, 1999................... 18.75 13.13
Fourth Quarter ended April 30, 1999.................... 14.25 9.38
Eight Months Ended December 31, 1999
First Quarter ended July 31, 1999...................... $17.63 $13.75
Second Quarter ended October 31, 1999.................. 18.63 11.44
Two month period ended December 31, 1999............... 12.88 10.69
Year Ended December 31, 2000
First Quarter ended March 31, 2000..................... $12.88 $8.88
Second Quarter ended June 30, 2000..................... 10.00 6.38
Third Quarter ended September 30, 2000................. 7.75 4.38
Fourth Quarter ended December 31, 2000................. 4.81 0.88

(b) Holders

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

At March 23, 2001, 13,736,914 shares of Alpine common stock were issued and
outstanding, and there were approximately 1,578 record holders (exclusive of
beneficial owners of shares held in street name or other nominee form) thereof.

(c) Dividends

Alpine has no recent history of paying cash dividends and does not
currently intend to declare cash dividends on the Alpine common stock in the
foreseeable future. Any payment of future cash dividends and the amounts thereof
will be dependent upon the Company's earnings, financial requirements and other
factors, including contractual obligations.

18

ITEM 6. SELECTED FINANCIAL DATA

HISTORICAL FINANCIAL DATA

Set forth below are certain selected historical consolidated financial
data of Alpine. This information should be read in conjunction with the
consolidated financial statements of Alpine 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 year ended December 31, 2000, for,
and as of the end of, the eight months ended December 31, 1999, and for, and as
of the end of, each of the fiscal years in the four-year period ended April 30,
1999, are derived from the audited consolidated financial statements of Alpine.

EIGHT
YEAR ENDED MONTHS ENDED FISCAL YEAR ENDED APRIL 30 (1)
DECEMBER 31, DECEMBER 31, ----------------------------------------
2000 1999 (2) 1999 1998 1997 1996
---- ---- ---- ---- ---- ----

(IN MILLIONS, EXCEPT PER SHARE DATA)

STATEMENT OF OPERATIONS DATA:
Net sales(4)....................................... $2,049.0 $1,376.9 $1,148.1 $518.5 $463.8 $410.4
Cost of goods sold(4).............................. 1,708.9 1,122.6 915.5 419.3 384.2 362.9
----------- ----------- --------- -------- -------- --------
Gross profit.................................... 340.1 254.3 232.6 99.2 79.6 47.5
Selling, general and administrative expenses....... 164.7 102.5 93.9 28.8 25.3 20.2
Infrequent and unusual charges..................... 15.0 4.7 7.3 - - -
Amortization of goodwill........................... 21.1 13.8 8.4 1.7 1.7 1.4
----------- ----------- --------- -------- -------- --------
Operating income................................ 139.3 133.3 123.0 68.7 52.6 25.9
Interest (expense)................................. (138.5) (85.1) (60.1) (10.8) (13.8) (19.3)
Gain on sale of subsidiary stock................... - - - - 80.4 -
Loss on sale of securities......................... (10.5) - - - - -
Other income, net.................................. 6.9 4.7 2.0 4.2 1.9 1.7
----------- ----------- --------- -------- -------- --------
Income (loss) from continuing operations before
income taxes, distributions on preferred
securities of subsidiary trust, minority
interest, equity in earnings of affiliate
and extraordinary (loss)..................... (2.8) 52.9 64.9 62.1 121.1 8.3
Provision for income taxes...................... (1.1) (21.7) (28.0) (24.8) (53.9) (1.3)
----------- ----------- --------- -------- -------- --------
Income (loss) from continuing operations before
distributions on preferred securities of
subsidiary trust, minority interest, equity in
earnings of affiliate and extraordinary (loss).. (3.9) 31.2 36.9 37.3 67.2 7.0
Distributions on preferred securities of
subsidiary trust................................ (15.1) (10.0) (1.3) - - -
----------- ----------- --------- -------- -------- --------
Income (loss) from continuing operations before
minority interest, equity in earnings of
affiliate and extraordinary (loss).............. (19.0) 21.2 35.6 37.3 67.2 7.0
Minority interest in earnings of subsidiaries, net. 6.1 (11.4) (18.7) (20.3) (8.1) -
Equity in earnings of affiliate.................... 1.7 2.2 - - - -
----------- ----------- --------- -------- -------- --------
Income (loss) from continuing operations before
extraordinary (loss)............................ (11.2) 12.0 16.9 17.0 59.1 7.0
Income (loss) from discontinued operations(3)...... 35.4 (2.7) (0.2) (2.3) (4.0)
----------- ----------- --------- -------- -------- --------
Income (loss) before extraordinary (loss).......... (11.2) 47.4 14.2 16.8 56.8 3.0
Extraordinary (loss) on early extinguishment of
debt, net of tax................................ - (1.0) (0.6) (1.5) (20.1) (4.9)
----------- ----------- --------- -------- -------- --------
Net income (loss).................................. $ (11.2) $ 46.4 $ 13.6 $ 15.3 $ 36.7 $ (1.9)
=========== =========== ========= ======== ======== ========

19

EIGHT
YEAR ENDED MONTHS ENDED FISCAL YEAR ENDED APRIL 30 (1)
DECEMBER 31, DECEMBER 31, ----------------------------------------
2000 1999 (2) 1999 1998 1997 1996
---- ---- ---- ---- ---- ----

(IN MILLIONS, EXCEPT PER SHARE DATA)

Income (loss) per share of common stock:
BASIC
Income (loss) from continuing operations. $(0.77) $0.81 $1.03 $1.00 $3.28 $0.33
Income (loss) from discontinued
operations............................ - 2.39 (0.17) (0.01) (0.13) (0.22)
Extraordinary (loss) on early
extinguishment of debt................ - (0.07) (0.04) (0.09) (1.12) (0.27)
Preferred stock redemption premium....... - - - - (0.29) -
------- ------- ------ ------ ----- -------
Net income (loss) per share of common
stock................................. $(0.77) $3.13 $0.82 $0.90 $1.74 $(0.16)
====== ===== ===== ===== ===== ======

DILUTED
Income (loss) from continuing operations. $(0.77) $0.68 $0.91 $0.90 $2.98 $0.33
Income (loss) from discontinued
operations............................ - 2.17 (0.15) (0.01) (0.12) (0.22)
Extraordinary (loss) on early
extinguishment of debt................ - (0.06) (0.04) (0.08) (1.01) (0.27)
Preferred stock redemption premium....... - - - - (0.26) -
------- ------- ------ ------ ----- -------
Net income (loss) per share of common
stock................................. $(0.77) $2.79 $0.72 $0.81 $1.59 $(0.16)
======= ======= ====== ====== ===== ======

BALANCE SHEET DATA (AT END OF PERIOD):
Working capital.......................... $ 40.6 $ 170.0 $ 247.4 $ 64.8 $ 99.0 $103.8
Total assets............................. 2,093.7 2,183.6 2,109.0 320.4 303.8 318.7
Total long-term debt..................... 1,284.4 1,338.9 1,302.4 97.1 140.8 202.7
Mandatorily redeemable preferred stock... 134.9 134.0 133.4 - - -
---------- --------- --------- -------- -------- --------
Total debt, including mandatorily
redeemable preferred stock............. 1,419.3 1,472.9 1,435.8 97.1 140.8 202.7
Preferred stock.......................... 0.4 0.4 0.4 0.4 1.9 11.8
Total stockholders' equity............... 64.6 95.0 56.4 77.5 54.4 43.1

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

(1) The results of operations include, on a prospective basis the
acquisition of Alcatel N.A. by Superior on May 11, 1995, the
acquisition of 51% of Cables of Zion by Superior on May 5, 1998, the
acquisition of 81% of Essex by Superior on November 27, 1998 and the
acquisition of the remaining 19% of Essex by Superior on March 31,
1999.

(2) On December 20, 1999, the Company elected to change its fiscal year
end to December 31 from April 30. This change was made effective on
December 31, 1999.

(3) On August 6, 1999, the Company completed the disposition by merger of
its subsidiary Premier Refractories International Inc. In July 1995,
Alpine completed the spin-off of its information display segment,
PolyVision Corporation, which consisted of Alpine PolyVision Inc.,
Posterloid Corporation and Information Display Technologies, Inc. The
results of operations (including the gain on sale from the disposition
of Premier Refractories International Inc.) for these segments have
been reflected as discontinued operations for the periods presented.
(See Note 4 to Alpine's consolidated financial statements).

20

(4) Certain reclassifications have been made to net sales and cost of
goods sold for the fiscal years ended April 30, 1998 and 1999, and the
eight months ended December 31, 1999 to conform with the December 31,
2000 presentation as discussed in Note 2 to the accompanying
consolidated financial statements. The fiscal years ended April 30,
1997 and 1996 have not been restated.

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

GENERAL

The Alpine Group, Inc. (together with its subsidiaries, unless the
context otherwise requires, "Alpine" or the "Company") is an industrial holding
company with investments in three industrial manufacturing companies.

SUPERIOR TELECOM INC.

Alpine holds a 51.5% common equity interest in its consolidated
subsidiary, Superior TeleCom Inc. (together with its subsidiaries, unless the
context otherwise requires, "Superior"), whose balance sheet accounts and
results of operations are consolidated with the financial statements of Alpine.

Superior 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,
distributors and systems integrators, principally in North America. In addition,
included within the Communications Group is Superior'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 and Superior Israel (see Note 5 to
the consolidated financial statements), Superior's operations consisted
principally of its North American communications wire and cable business. 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. The May 1998 acquisition of 51% of Superior
Israel and Superior Israel's subsequent acquisition of two major Israeli
competitors, resulted in the addition to Superior's operating results of its
Israeli operations. These acquisitions were accounted for under the purchase
method of accounting with the operating results from these acquired businesses
being included in Superior's consolidated statements of operations
prospectively, from the dates of acquisition. Accordingly, comparisons to
results of operations for periods prior to the dates of these acquisitions will
be impacted.

Industry segment financial data (including sales and operating income
by industry segment) for the twelve month period ended December 31, 2000, the
eight month transition period ended December 31, 1999 and the fiscal years ended
April 30, 1999 and 1998 is included in Note 22 to the accompanying consolidated
financial statements.

Copper is one of the principal raw materials used in Superior'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 Superior, in most cases, has the
ability to adjust prices billed for its products to properly match the copper
cost component of its inventory shipped.

21

POLYVISION CORPORATION

Alpine holds a 48% common equity interest and $23.3 million of
convertible preferred stock (including accrued dividends) in its unconsolidated
affiliate, PolyVision Corporation, a global manufacturer of visual
communications and related products for the education/office markets, menus and
merchandising boards for food service and banking institutions, and high
performance wall systems used in the education, transportation and select
architectural markets.

Alpine currently accounts for its investment in PolyVision under the
equity method of accounting resulting in recognition of Alpine's proportionate
share of PolyVision's earnings as a one-line item within the statement of
operations. Prior to November 1998, Alpine's equity interest in PolyVision was
less than 20%, with such investment accounted for on the cost basis.

DISCONTINUED OPERATIONS/COOKSON GROUP PLC

On August 6, 1999, Alpine completed the sale of its subsidiary, Premier
Refractories International Inc. ("Premier"), to Cookson Group plc ("Cookson").
The gain on the sale of Premier of $35.4 million and the historical net
operating results of Premier have been classified as discontinued operations
within the consolidated financial statements (see Note 4 to the consolidated
financial statements).

The sale of Premier was effected through the merger of Premier and a
wholly-owned subsidiary of Cookson. In connection with the transaction, Cookson
assumed all of Premier's existing indebtedness, issued to Alpine approximately
32.3 million shares of Cookson common stock and paid to Alpine $15.6 million in
cash. Immediately prior to the sale of Premier, Alpine acquired the 16.6%
minority equity interest in Premier for approximately $31.1 million in cash.

Alpine's current ownership of Cookson common stock approximates 2%,
with such investment accounted for as an available for sale investment with
unrealized holding gains and losses reflected as a component of other
comprehensive income. Dividend income on the Cookson stock is recognized in the
statement of operations, as received.

CHANGE IN ALPINE'S FISCAL YEAR-END

Alpine changed its year end to December 31 from April 30, effective for
the December 31, 1999 period. Accordingly, the Company has reported results of
operations for an eight month transitional period ended December 31, 1999.

RESULTS OF OPERATIONS-TWELVE MONTHS ENDED DECEMBER 31, 2000 (2000)
COMPARED TO THE EIGHT MONTHS ENDED DECEMBER 31, 1999 (1999)

The comparison of operating results for the year ended December 31,
2000 with the eight months ended December 31, 1999 is impacted by the difference
in comparative periods (eight months versus twelve months).

Net sales were $2.049 billion for 2000 as compared to sales of $1.377
billion for the eight months ended December 31, 1999. The comparative increase
in net sales was due primarily to the longer comparison period.

Gross profit in 2000 was $340.1 million, an increase of $85.8 million
as compared to gross profit of $254.3 million in 1999. The increase in gross
profit resulted primarily from the inclusion of twelve months of operations in
2000 versus only eight months during the prior period. The gross margin
percentage in 2000 was 16.6% as compared to 18.5% for the eight months ended
December 31, 1999. The decline in gross profit percentage was principally
attributable to Superior's Electrical Group, where comparative pricing
pressures, lower sales and higher per unit production costs negatively impacted
gross profit and gross margin in 2000.

22

Selling, general and administrative expenses ("SG&A expenses") in 2000
were $164.7 million, an increase of $62.2 million over the prior period. The
increase is primarily due to the longer comparison period (twelve months versus
eight months) as well as to 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.

Goodwill amortization increased from $13.8 million for the eight months
ended December 31, 1999 to $21.1 million in 2000 primarily due to the longer
comparison period.

The Company incurred infrequent and unusual charges of $15.0 million
during 2000 and $4.7 million during the eight months ended December 31, 1999.
The infrequent and unusual charges in 2000 include $12.4 million related to the
restructuring and consolidation program in Superior's building wire (Electrical
Group) operations and in the Company's Superior Israel operations and $2.6
million of start-up costs for Superior's Mexican magnet wire facility. The
charges incurred during 1999 included $0.9 million associated with the
evaluation and termination of a management information system project at Essex,
$2.1 million related to manufacturing rationalization activities at Essex, $1.3
million related to manufacturing and corporate restructuring activities of
Superior Israel and $0.4 million of start-up costs for Superior's Mexican magnet
wire facility.

Operating income before infrequent and unusual charges was $154.3
million for 2000 as compared to $138.0 million for the eight months ended
December 31, 1999. The increase was primarily due to the longer comparison
period (twelve months versus eight months) partially offset by lower sales and
margins in Superior's Electrical Group and the impact of increased raw material
and other costs impacting all of the Company's business segments in 2000.

Interest expense for 2000 was $138.5 million representing an increase
of $53.4 million over the prior period. The increase in interest expense is
primarily due to the longer comparison period as well as higher short-term
(LIBOR) interest rates in 2000.

Loss on sale of securities of $10.5 million in 2000 was due to the
liquidation of 14.0 million shares of the Company's common equity investment in
Cookson during such period.

Other income, net amounted to $6.9 million for 2000 and $4.7 million
for 1999, which included dividend income from the Company's common equity
investment in Cookson of $4.5 million in 2000 and 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 $6.1 million related to the
common equity minority interest component of losses incurred by Superior Israel
and Superior. For 1999, the Company recorded a minority interest charge of $11.4
million primarily related to the minority interest component of Superior's net
income.

Equity in earnings of affiliate was $1.7 million in 2000 and $2.2
million in 1999, which represented the Company's preferred and common equity
interests in earnings of PolyVision Corporation.

Income before infrequent and unusual charges and goodwill amortization
was $11.7 million, or $0.78 per diluted share, in 2000 as compared to income
from continuing operations before infrequent, unusual and extraordinary charges
and goodwill amortization in 1999 of $20.4 million, or $1.25 per diluted share,
for 1999. After infrequent, unusual and goodwill amortization charges, the
Company incurred a net loss of $11.2 million, or $0.77 per diluted share, for
2000 as compared to net income of $46.4 million, or $2.79 per diluted share, for
1999.

23

RESULTS OF OPERATIONS-EIGHT MONTH PERIOD ENDED DECEMBER 31, 1999
COMPARED TO THE TWELVE MONTH PERIOD ENDED APRIL 30, 1999

The comparison of operating results for the eight month period ended
December 31, 1999 with the twelve month period ended April 30, 1999 ("fiscal
1999") is impacted by: (i) the inclusion of the acquired operations of Essex for
the entire period for the eight months ended December 31, 1999 as compared to
only five months in fiscal 1999 and (ii) the difference in comparative periods
(eight months versus twelve months).

Net sales were $1.376 billion for the eight months ended December 31,
1999 compared to net sales of $1.148 billion for fiscal 1999. The comparative
increase in net sales was due primarily to the inclusion of the acquired
operations of Essex for the full eight month period versus only five months
during fiscal 1999, partially offset by the shorter comparison period (eight
months versus twelve months).

Gross profit for the eight months ended December 31, 1999 was $254.3
million as compared to $232.6 million for fiscal 1999. The increase in gross
profit resulted from the inclusion of gross profit contributed by the acquired
operations of Essex for eight months versus only five months during fiscal 1999.
The gross margin percentage was 18.5% for the eight months ended December 31,
1999 as compared to 20.3% for fiscal 1999. The reduction in gross margin
percentage for the December 1999 eight month period was primarily attributable
to the change in product mix resulting from the product lines acquired in the
Essex acquisition.

SG&A expenses increased from $93.9 million in fiscal 1999 to $102.5
million for the eight months ended December 31, 1999. The increase resulted from
incremental expenses associated with the acquired operations of Essex, partially
offset by corporate cost reductions and the shorter comparison period (eight
months versus twelve months).

Goodwill amortization increased from $8.4 million for fiscal 1999 to
$13.8 million for the eight months ended December 31, 1999 with such increase
due to incremental goodwill associated with the acquisition of Essex.

Operating income (excluding infrequent and unusual charges) was $138.0
million for the eight months ended December 31, 1999 as compared to $130.3
million for fiscal 1999. The increase reflects the impact of the acquired
operations of Essex for the full eight months versus five months during fiscal
1999, partially offset by the shorter comparison period.

The Company incurred infrequent and unusual charges of $4.7 million
during the eight months ended December 31, 1999 as previously discussed and $7.3
million during fiscal 1999. The infrequent and unusual charges in fiscal 1999
consisted of a $2.9 million restructuring charge at Superior Israel related to
plant consolidations and corporate rationalization activities and $4.4 million
associated with the evaluation and termination of a management information
system project at Essex.

Interest expense was $85.1 million for the eight months ended December
31, 1999 as compared to $60.1 million for fiscal 1999. The increase was
attributable to the debt incurred in connection with the Essex acquisition.

Distributions on preferred securities of subsidiary trust were $10.0
million for the eight months ended December 31, 1999 and $1.3 million in fiscal
1999. The amounts include dividends paid under the $167 million (face amount) of
8 1/2% Mandatorily Redeemable Trust Convertible Preferred Securities of Superior
Trust I issued in connection with the Essex acquisition.

The minority interest charge of $11.4 million for the eight months
ended December 31, 1999 represented the minority stockholders' interest in
Superior's net income for such period. The minority interest charge of $18.7
million in fiscal 1999 included the minority stockholders' interest in
Superior's net income

24

and the minority stockholders' interest (approximately 19%) in Essex's net
income from November 27, 1998 (the date on which Superior acquired an 81%
ownership position in Essex) until March 31, 1999 (the date on which Superior
acquired the remaining 19% outstanding ownership position in Essex) (Note 5).

Equity in earnings of affiliate during the eight months ended December
31, 1999 represented the Company's preferred and common equity interest in
earnings of PolyVision Corporation.

Income from continuing operations before infrequent and unusual charges
and goodwill amortization was $20.4 million, or $1.25 per diluted share, for the
eight months ended December 31, 1999 compared to $22.1 million, or $1.24 per
diluted share, for fiscal 1999. After infrequent, unusual and goodwill
amortization charges, income from continuing operations for the eight months
ended December 31, 1999 was $12.0 million, or $0.68 per diluted share, as
compared to $16.9 million, or $0.91 per diluted share, for fiscal 1999.

During the eight months ended December 31, 1999, the Company completed
the sale of Premier to Cookson. The transaction resulted in an after tax gain on
disposition of discontinued operations of $35.4 million, or $2.17 per diluted
share. In fiscal 1999, the Company incurred a net loss from the discontinued
operating activities of Premier of $2.7 million, or $0.15 per diluted share.

The Company recorded after tax extraordinary charges of $1.0 million,
or $0.06 per diluted share, and $0.6 million, or $0.04 per diluted share, during
the eight months ended December 31, 1999 and fiscal 1999, respectively. The
charges represent previously capitalized deferred financing fees written off in
connection with the early extinguishment of debt.

Net income (after discontinued operations and extraordinary loss) for
the eight months ended December 1999 was $46.4 million, or $2.79 per diluted
share, as compared to $13.5 million, or $0.72 per diluted share, for fiscal
1999.

RESULTS OF OPERATIONS-FISCAL YEAR 1999 COMPARED TO FISCAL YEAR 1998

In fiscal 1999, net sales were $1,148.1 million representing an
increase of $629.6 million, or 122%, as compared to the twelve month period
ended April 30, 1998 ("fiscal 1998") net sales of $518.5 million. The increase
in net sales in fiscal 1999 was principally the result of incremental revenues
from the acquired operations of Essex and Superior Israel along with continued
demand growth in 1999 for copper communications wire and cable products within
Superior's existing communications segment.

Along with the comparative increase in net sales in fiscal 1999, the
Company also achieved substantial growth in gross profit and an expansion of its
gross margin percentage during such fiscal period. In fiscal 1999, gross profit
increased $133.4 million, or 134%, to $232.6 million, as compared to fiscal
1998.

The increase in the gross margin percentage from 19.2% in fiscal 1998
to 20.3% in fiscal 1999 was attributable to the communications segment including
the benefit of substantial manufacturing cost reductions and efficiencies
coupled with copper adjusted price increases. The overall gross margin
percentage was negatively impacted in fiscal 1999 as a result of lower margins
associated with the acquired OEM and Electrical segments of Essex and lower
margins in the acquired Superior Israel operations.

SG&A expenses increased from $28.8 million in fiscal 1998 to $93.9
million in fiscal 1999. The comparative increase in SG&A expenses of $65.1
million during fiscal 1999 was primarily due to incremental SG&A expenses
associated with the acquired operations of Essex and Superior Israel.

The Company incurred infrequent and unusual charges during fiscal 1999
of $7.3 million, consisting of (i) a $2.9 million restructuring charge recorded
by Superior Israel relating to planned manufacturing plant consolidations and
overhead rationalization associated with the acquisition of Cvalim and (ii) $4.4
million in charges associated with the evaluation and termination of a
management information system project at Essex.

25

As a result of the Essex acquisition, amortization of goodwill
increased to $8.4 million in fiscal 1999 from $1.7 million in fiscal 1998.

Commensurate with the growth in net sales and gross profit, the
Company's operating income increased substantially in fiscal 1999. Excluding the
impact of infrequent and unusual charges, operating income in fiscal 1999 was
$130.4 million, representing an increase of 90%, as compared to fiscal 1998
operating income of $68.7 million. The increase in fiscal 1999 operating income
resulted from: (i) the Essex and Superior Israel acquisitions, which acquired
operations contributed $38.6 million in operating income, and (ii) a strong
comparative improvement in the existing communications segment's gross margin
percentage resulting from cost reductions and other manufacturing and operating
efficiencies achieved during the year.

Interest expense in fiscal 1999 was $60.1 million, representing an
increase of $49.3 million as compared to fiscal 1998 interest expense of $10.8
million. This comparative increase was directly attributable to
acquisition-related debt associated with the acquisitions of Essex and Superior
Israel.

The minority interest charge of $18.7 million in fiscal 1999
represented (i) the approximate 49% minority stockholders' interest in
Superior's net income, (ii) the approximate 49% minority stockholders' interest
in Superior Israel's net income from the date of acquisition and (iii) the
approximate 19% minority interest in Essex's net income from November 27, 1998
until the final completion of the Essex acquisition on March 31, 1999. The
minority interest charge of $20.3 million in fiscal 1998 represented the
approximate 49% minority stockholders' interest in Superior's net income.

Loss from discontinued operations, net of tax, for fiscal 1999 was $2.7
million, or $0.15 per diluted share. This compares to losses from discontinued
operations for fiscal 1998 of $0.2 million, or $0.01 per diluted share.

Income before extraordinary loss was $14.2 million in fiscal 1999 and
$16.7 million in fiscal 1998. Income from continuing operations before
infrequent and unusual charges and goodwill amortization was $22.1 million, or
$1.24 per share, for fiscal 1999 compared to $17.8 million, or $0.95 per share,
for fiscal 1998.

In fiscal 1999 and fiscal 1998, the Company incurred an after tax
extraordinary loss on early extinguishment of debt of $0.6 million and $1.5
million, respectively (See Note 9 to Alpine's consolidated financial
statements).

LIQUIDITY AND CAPITAL RESOURCES

GENERAL

For the year ended December 31, 2000, the Company generated $94.1
million in cash flow from operating activities, consisting of $45.7 million
in income generated from operations (net income plus non-cash charges) plus
$48.4 million in cash flows provided from reductions in net working capital.
Included in cash flows generated from operating activities was a use of cash
flow from operating activities of $5.1 million in Superior's separately
financed Israeli subsidiary, Superior Israel. The remainder of the Company's
wholly-owned operations generated $99.2 million in cash flows from operating
activities, including $43.5 million in cash flow generated primarily from net
working capital reductions, principally from inventory reduction. Cash used
for investing activities amounted to $47.7 million with the principal
activity including $78.4 million in capital expenditures and $24.0 million in
pre-arranged long-term loans ("Israel Customer Loans") made to one of
Superior Israel's principal customers partially offset by $53.2 million in
proceeds generated from asset sales. Cash used for financing activities
amounted to $43.4 million. The major components were a net increase in
borrowings of Superior Israel of $32.9 million (including $24.0 million
related to Superior Israel Customer Loans), and other debt reductions (net)
of $68.2 million.

26

SUPERIOR TELECOM

Superior finances its operating activities (exclusive of operating
activities of Superior Israel which are financed under separate non-recourse
financing arrangements) and other capital requirements from operating cash flow
and funding availability under its $1.15 billion amended and restated credit
agreement (the "Credit Agreement") and a $200 million senior subordinated credit
agreement (the "Sub Notes"). Obligations under the Credit Agreement are secured
by substantially all of the assets of Superior and its domestic subsidiaries,
and by the common stock of Superior's domestic subsidiaries and 65% of the
common stock of its principal foreign subsidiaries. At December 31, 2000,
Superior had $149.7 million in excess availability under the Credit Agreement.
The Credit Agreement contains certain performance and financial covenants that
are measured quarterly. As of December 31, 2000, Superior was in compliance with
all performance and financial covenants. Superior believes it can maintain
compliance with such financial covenants through 2001 or obtain waivers from, or
modifications to such covenants. In 2002, these financial covenants do require a
significant improvement in financial performance from current operating levels
to maintain compliance with such covenants.

In addition to financing provided by the Credit Agreement and Sub
Notes, Superior has financing availability under a receivable securitization
program providing for up to $160 million in short term financing through the
issuance of secured commercial paper. The receivable securitization program
expires on November 30, 2001, although it may be extended for successive
one-year periods, subject to agreement. Superior intends to seek an extension of
this agreement prior to its expiration. At December 31, 2000, $160.0 million was
outstanding under this program bearing an interest rate of 7.23%.

Superior's principal debt service commitments for the next twelve
months (excluding Superior Israel) amount to $80.4 million. Capital expenditures
(excluding Superior Israel) for the next twelve months which are substantially
discretionary are expected to approximate $30.0-$35.0 million. Management
anticipates that Superior will continue to generate positive cash flows from its
operating activities over the next twelve months subject to fluctuations
resulting from operating performance and working capital changes. The Company
believes that operating cash flows plus excess funds available under Superior's
credit facilities will be sufficient to fund its aforementioned debt service and
estimated capital expenditure levels over the next twelve month period.

Superior Israel's operations are funded and financed separately, on a
non-recourse basis to Superior, and include a $93.0 million credit facility,
consisting of a $63.0 million term loan and a $30.0 million revolving credit
facility. Obligations under this credit facility are secured by all of the
assets of Superior Israel. The credit facility contains customary performance
and financial covenants. At December 31, 2000, Superior Israel had $7.7 million
in excess availability under its revolving credit facility.

ALPINE CORPORATE

As of December 31, 2000, Alpine had corporate cash, cash equivalents
and marketable securities (excluding its investments in Superior, PolyVision and
Cookson) of approximately $17.3 million (of which $7.7 million was restricted,
to be used solely for payment of tax obligations or reduction of debt). Alpine
also owns approximately 10.5 million common shares (representing 51.5% common
share ownership) of Superior (NYSE:SUT) with a market value on March 23, 2001 of
approximately $43.5 million. Additionally, the estimated fair market value on
March 23, 2000 of Alpine's investment in PolyVision common stock (AMEX: PLI) and
preferred stock amounted to $29.5 million.

At December 31, 2000 Alpine had $47.1 million outstanding under a
corporate revolving credit facility, which matures in October 2001. Alpine
intends to reduce its outstanding borrowings under this facility through
application of cash proceeds from a systematic liquidation of its Cookson common
stock position, with any remaining balance at maturity being refinanced or
otherwise liquidated. From January 1, 2001 through March 28, 2001, the Company
has sold 3.0 million shares of Cookson common stock, resulting

27

in 15.3 million shares owned with a current fair market value of $34.6 million.
At March 23, 2001, the balance under the Alpine corporate credit facility has
been reduced to $36.4 million. In addition to the corporate credit facility,
Alpine has approximately $12 million in additional corporate debt, with no
material principal repayment requirements over the next twelve months.

Alpine has no other major commitments other than the aforementioned
debt service requirements, certain income tax payments and Alpine corporate
overhead expense.

For the next twelve month period, Alpine expects to fund its
aforementioned annual commitments from management fees paid by Superior, cash
dividends from Cookson, interest income and available cash reserves.

DERIVATIVE FINANCIAL INSTRUMENTS

To a limited extent, Superior uses forward fixed price contracts and
derivative financial instruments to manage foreign currency exchange and
commodity price risks. To protect Superior's anticipated cash flows from the
risk of adverse foreign currency exchange fluctuations for firm sales and
purchase commitments, Superior enters into foreign currency forward exchange
contracts. Superior's principal raw material, copper, experiences marked
fluctuations in market prices, thereby subjecting Superior 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 Superior 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
counterparties for foreign exchange forward contracts, metal forward price
contracts and metals futures contracts; however, the Company does not anticipate
nonperformance by any of these counterparties. The amount of such exposure is
generally the unrealized gains with respect to the underlying contracts.

28

RECENT ACCOUNTING PRONOUNCEMENT

In June 1998, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." In
June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments
and Hedging Activities-Deferral of Effective Date of FASB Statement No. 133-an
amendment of FASB Statement No. 133" which delayed SFAS No. 133's effective date
for one year. In June 2000, the FASB issued SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities-an amendment of FASB
Statement No. 133" which amends certain paragraphs of SFAS No. 133. SFAS No. 133
as amended, which is effective for the Company beginning January 1, 2001,
establishes accounting and reporting standards for derivative instruments and
requires 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 for derivative
instruments recorded on January 1, 2001 was not material.

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 rate changes. At December 31,
2000, Superior has an interest rate cap on $400 million principal amount with a
90-day LIBOR rate cap at 7.0% expiring December 10, 2001. A one percent increase
in 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 8% or $10.5 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.

29

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Alpine's consolidated financial statements as of December 31, 2000 and
1999, and April 30, 1999 and for the year ended December 31, 2000, the eight
months ended December 31, 1999 and each of the two years in the period ended
April 30, 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.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

The information required by this Item is incorporated herein by
reference to Alpine'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 ("Alpine's Proxy Statement").

ITEM 11. EXECUTIVE COMPENSATION

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

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

30

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) Agreement and Plan of Merger, dated as of December 21, 1994, as amended, by
and among Information Display Technology, Inc., IDT PolyVision Acquisition
Corp., IDT Posterloid Acquisition Corp., The Alpine Group, Inc.,
Alpine/PolyVision, Inc. and Posterloid Corporation (incorporated herein by
reference to Exhibit 2 to Amendment No. 1 to Alpine's Statement on Schedule
13D relating to its beneficial ownership of equity securities of
Information Display Technology, Inc. dated December 28, 1994).
2(d) Amendment to the Agreement and Plan of Merger, dated as of December 21,
1994, by and among Information Display Technology, Inc., IDT PolyVision
Acquisition Corp., IDT Posterloid Acquisition Corp., Alpine,
Alpine/PolyVision, Inc. and Posterloid Corporation (incorporated herein by
reference to Exhibit 1 to Amendment No. 2 to Alpine's Statement on Schedule
13D relating to its beneficial ownership of equity securities of
Information Display Technology Inc. dated May 5, 1995).
2(e) 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(f) 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).
2(g) 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 (the "1996 10-K")).
2(h) 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(i) Agreement and Plan of Merger, dated as of October 21, 1998, by and among
Superior Telecom Inc. ("Superior TeleCom"), 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 Superior TeleCom and
Superior Trust I, as filed with the Commission on December 14, 1998, as
amended (the "Superior Form S-4")).
2(j) Amendment No. 1 to Agreement and Plan of Merger, dated as of February 24,
1999, by and among Superior TeleCom, SUT Acquisition Corp. and Essex
International Inc. (incorporated

31

herein by reference to Appendix A-2 to the Joint Proxy Statement/Prospectus
filed as part of the Superior Form S-4).
2(k) 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).
2(l) 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 Current Report on
Form 8-K of the Company dated December 31, 1998).
2(m) Agreement and Plan of Merger, dated as of May 28, 1999, among Cookson Group
plc, PRI Acquisition, Inc., Alpine and Premier Refractories International
Inc. (incorporated herein by reference to Exhibit 2(o) to the Annual Report
on Form 10-K of Alpine for the fiscal year ended April 30, 1999 (the "1999
10-K")).
3(a) Certificate of Incorporation of Alpine (incorporated herein by reference to
Exhibit 3(a) to the Annual Report on Form 10-K of Alpine for the year ended
April 30, 1995 (the "1995 10-K")).
3(b) Amendment to the Certificate of Incorporation of Alpine (incorporated
herein by reference to Exhibit 3(aa) of Post-Effective Amendment No. 1 to
the Registration Statement on Form S-3 (Registration No. 33-53434) of
Alpine, as filed with the Commission on May 12, 1993).
3(c) Certificate of the Powers, Designations, Preferences and Rights of the 9%
Cumulative Convertible Preferred Stock of Alpine (incorporated herein by
reference to Exhibit 1 to the Quarterly Report on Form 10-Q of Alpine for
the quarter ended January 31, 1989).
3(d) Certificate of the Powers, Designations, Preferences and Rights of the 9%
Cumulative Convertible Senior Preferred Stock of Alpine (incorporated
herein by reference to Exhibit 3(c) to the Annual Report on Form 10-K of
Alpine for the fiscal year ended April 30, 1992 ("1992 10-K")).
3(e) Certificate of the Powers, Designations, Preferences and Rights of the 8.5%
Cumulative Convertible Senior Preferred Stock of Alpine (incorporated
herein by reference to Exhibit 3(e) to the Annual Report on Form 10-K of
Alpine for the fiscal year ended April 30, 1994).
3(f) Certificate of the Powers, Designations, Preferences and Rights of the 8%
Cumulative Convertible Senior Preferred Stock of the Company (incorporated
herein by reference to Exhibit 3(f) to the 1995 10-K).
3(g) By-laws of Alpine (incorporated herein by reference to Exhibit 3(g) to the
1995 10-K).
4(a) Indenture, dated as of July 15, 1995, by and among Alpine, Adience, Inc.,
Superior Telecommunications Inc. ("STI"), Superior Cable Corporation and
Marine Midland Bank ("Marine Midland"), as trustee (incorporated herein by
reference to Exhibit 10(ee) to the 1995 10-K).
4(b) Supplemental Indenture to the above Indenture, dated as of October 2, 1996,
among Alpine, STI, Adience, Inc., Superior Cable Corporation and Marine
Midland, as trustee (incorporated herein by reference to Exhibit 4(b) to
the Annual Report on Form 10-K of Alpine for the fiscal year ended April
30, 1997 (the "1997 10-K")).
4(c) Second Supplemental Indenture to the above Indenture, dated as of January
31, 1997, among Alpine, STI, Adience, Inc., Superior Cable Corporation and
Marine Midland, as trustee (incorporated herein by reference to Exhibit
4(c) to the 1997 10-K).
4(d) Pledge Agreement, dated as of July 21, 1995, by and between Alpine and
Marine Midland (incorporated herein by reference to Exhibit 10(ff) to the
1995 10-K).
4(e) Amendment, dated as of October 2, 1996, between Alpine and Marine Midland,
as trustee, to the above Pledge Agreement (incorporated herein by reference
to Exhibit 4(e) to the 1997 10-K).

32

4(f) Amendment No. 2, dated as of January 27, 1997, between Alpine and Marine
Midland, as trustee, to the above Pledge Agreement (incorporated herein by
reference to Exhibit 4(f) to the 1997 10-K).
4(g) Rights Agreement, dated as of February 17, 1999, between Alpine and
American Stock Transfer & Trust Company, as Rights Agent (incorporated
herein by reference to Exhibit 4.1 to the Form 8-A of Alpine, as filed with
the Commission on February 18, 1999).
10(a) Amended and Restated 1984 Restricted Stock Plan of Alpine (incorporated
herein by reference to Exhibit 10.5 to the Registration Statement on Form
S-4 (Registration No. 33-9978) of Alpine, as filed with the Commission on
October 5, 1993 (the "S-4 Registration Statement")).
10(b) Amended and Restated 1987 Long-Term Equity Incentive Plan of Alpine
(incorporated herein by reference to Exhibit 10.4 to the S-4 Registration
Statement).
10(c) Employee Stock Purchase Plan of Alpine (incorporated herein by reference
to Exhibit B to the proxy statement of Alpine dated August 22, 1997).
10(d) 1997 Stock Option Plan (incorporated herein by reference to Exhibit 10(tt)
to the 1997 10-K).
10(e) Stock Compensation Plan for Non-Employee Directors of Alpine (incorporated
herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of
Alpine for the quarter ended January 30, 1999).
10(f) Lease Agreement by and between ALP(TX) QRS 11-28, Inc., and Superior
TeleTec Transmission Products, Inc., dated as of December 16, 1993
(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(g) 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 1995 10-K).
10(h) 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 10-K).
10(i) 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 Registration
Statement on Form S-1 (Registration No. 333-09933) of Superior TeleCom, as
filed with the Commission on August 9, 1996, as amended (the "TeleCom
S-1")).
10(j) First Amendment to Guaranty and Surety Agreement, dated as of October 2,
1996, among the Company, Superior TeleCom and ALP (TX) QRS 11-28, Inc.
(incorporated herein by reference to Exhibit 10.12 to the TeleCom S-1).
10(k) Employment Agreement, dated as of April 26, 1996, by and between Alpine
and Steven S. Elbaum (incorporated herein by reference to Exhibit 10(q) to
the 1996 10-K).
10(l) Employment Agreement, dated as of April 26, 1996, by and between Alpine
and Stewart H. Wahrsager (incorporated herein by reference to Exhibit 10(r)
to the 1996 10-K).
10(m) Employment Agreement, dated as of April 26, 1996, by and between Alpine
and Bragi F. Schut (incorporated herein by reference to Exhibit 10(s) to
the 1996 10-K).
10(n) Employment Agreement, dated as of April 26, 1996, by and between Alpine
and Stephen M. Johnson (incorporated herein by reference to Exhibit 10(t)
to the 1996 10-K).
10(o) Employment Agreement, dated as of April 26, 1996, by and between Alpine
and David S. Aldridge (incorporated herein by reference to Exhibit 10(u) to
the 1996 10-K).
10(p) Employment Agreement, dated as of April 26, 1996, between STI and Justin
F. Deedy, Jr. (incorporated herein by reference to Exhibit 10.3 to the
TeleCom S-1).
10(q) Employment Agreement, dated as of October 17, 1996, between Superior
TeleCom and Steven S. Elbaum (incorporated herein by reference to exhibit
10(14) to the Quarterly Report on Form 10-Q of Superior TeleCom for the
quarter ended January 31, 1997).
10(r) Amended and Restated Credit Agreement, dated as of November 27, 1998,
among Superior/Essex Corp., Essex Group, Inc., the guarantors named
therein, various lenders, Merrill Lynch & Co., as Documentation Agent,

33

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, Superior TeleCom, Superior/Essex Corp. and
SUT Acquisition Corp., as filed with the Commission on December 7, 1998).
10(s) Senior Subordinated Credit Agreement, dated as of May 26, 1999 (the
"Superior Senior Subordinated Credit Agreement"), among Superior/Essex
Corp., as Borrower, Superior TeleCom, as Parent, the Subsidiary Guarantors
listed therein, the Lending Institutions listed therein, 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 Superior TeleCom for the year ended
December 31, 1999 (the "Superior 1999 10-K")
10(t) 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 Current Report on
Form 8-K of the Company dated December 31, 1998).
10(u) Letter Agreement between the Company and Superior TeleCom, dated October
8, 1996, relating to a capital contribution by the Company to Superior
TeleCom (incorporated herein by reference to Exhibit 10.2 to the TeleCom
S-1).
10(v) Letter Agreement between the Company and Superior TeleCom, dated October
2, 1996, relating to tax indemnification (incorporated herein by reference
to Exhibit 10.5 to the TeleCom S-1).
10(w) Tax Allocation Agreement, dated as of October 2, 1996, among the Company,
Superior TeleCom and its subsidiaries (incorporated herein by reference to
Exhibit 10.9 to the TeleCom S-1).
10(x) Exchange Agreement between the Company and Superior TeleCom, dated October
2, 1996 (incorporated herein by reference to Exhibit 10.10 to the TeleCom
S-1).
10(y) Registration Rights Agreement, dated October 2, 1996, between the Company
and Superior TeleCom (incorporated herein by reference to Exhibit 10.11 to
the TeleCom S-1).
10(z) Services Agreement, dated October 2, 1996 (the "Services Agreement"),
between the Company and Superior TeleCom (incorporated herein by reference
to Exhibit 10.4 to the TeleCom S-1).
10(aa) Amendment No. 1, dated as of May 1, 1997, to the Services Agreement
(incorporated herein by reference to Exhibit 10(pp) to the 1997 10-K).
10(bb) Amendment No. 2, dated as of May 1, 1998, to the Services Agreement
(incorporated herein by reference to Exhibit 10(uu) to the Annual Report on
Form 10-K of Alpine for the fiscal year ended April 30, 1998).
10(cc) Amendment No. 1, dated as of March 15, 1999, to The Alpine Group, Inc.
1997 Stock Option Plan (incorporated herein by reference to Exhibit 10(ll)
to the 1999 10-K).
10(dd) Amendment No. 2, dated as of April 1, 1999, to The Alpine Group, Inc.
1997 Stock Option Plan (incorporated herein by reference to Exhibit 10(mm)
to the 1999 10-K).
10(ee) Amendment No. 3, dated as of May 14, 1999, to The Alpine Group, Inc. 1997
Stock Option Plan (incorporated herein by reference to Exhibit 10(nn) to
the 1999 10-K).
10(ff) Credit Agreement, dated as of November 23, 1999 (the "Alpine Credit
Agreement"), among The Alpine Group, Inc., Various Lenders, Fleet Bank,
N.A., as Syndication Agent, Bank of America, N.A., as Documentation Agent,
and Bankers Trust Company, as Administrative Agent (incorporated herein by
reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Alpine
for the quarter ended October 31, 1999).
10(gg) Amendment No. 1, dated as of December 10, 1999, to the Superior Senior
Subordinated Credit Agreement (incorporated herein by reference to Exhibit
10(v) to the Superior 1999 10-K).
10(hh) Amendment No. 2, dated as of February 18, 2000, to the Superior Senior
Subordinated Credit Agreement (incorporated herein by reference to Exhibit
10(w) to the Superior 1999 10-K).
10(ii) 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 Superior 1999
10-K).
10(jj) Second Amendment to Guaranty and Suretyship Agreement, dated as of
November 27, 1998, among ALP (TX) QRS 11-28, Inc., Superior TeleCom and
Alpine (incorporated herein by reference to Exhibit 10(y) to the Superior
1999 10-K).

34

10(kk) Amendment No. 3, dated as of May 1, 1999, to the Services Agreement
(incorporated herein by reference to Exhibit 10.1 to the Quarterly Report
on Form 10-Q of the Company for the quarter ended September 30, 2000).
10(ll) Amendment No. 1 dated as of December 31, 1998, to the Superior Credit
Agreement (incorporated herein by reference to Exhibit 10(aa) to the Annual
Report on Form 10-K of Superior TeleCom for the year ended December 31,
2000 (the "Superior 2000 10-K")).
10(mm) Amendment No. 2 and Waiver, dated as of December 10, 1999, to the
Superior Credit Agreement (incorporated herein by reference to Exhibit
10(bb) to the Superior 2000 10-K).
10(nn) Amendment No. 3 and Waiver, dated as of March 13, 2000, to the Superior
Credit Agreement (incorporated herein by reference to Exhibit 10.1 to the
Quarterly Report on Form 10-Q of Superior TeleCom for the quarter ended
September 30, 2000).
10(oo) Amendment No. 4 and Waiver, dated as of September 30, 2000, to the
Superior Credit Agreement (incorporated herein by reference to Exhibit 10.2
to the Quarterly Report on Form 10-Q of Superior TeleCom for the quarter
ended September 30, 2000).
10(pp) Amendment No. 3, dated as of March 30, 2000, to the Superior Senior
Subordinated Credit Agreement (incorporated herein by reference to Exhibit
10 (ee) to the Superior 2000 10-K).
10(qq) Amendment No. 4, dated as of April 20, 2000, to the Superior Senior
Subordinated Credit Agreement (incorporated herein by reference to Exhibit
10(ff) to the Superior 2000 10-K).
10(rr) Amendment No. 5, dated as of June 5, 2000, to the Superior Senior
Subordinated Credit Agreement (incorporated herein by reference to Exhibit
10(gg) to the Superior 2000 10-K).
10(ss)* The Alpine Group, Inc. Deferred Stock Account Plan.
10(tt)* The Alpine Group, Inc. Deferred Cash Account Plan.
10(uu)* US Pledge Agreement, dated as of November 23, 1999 (the "US Pledge
Agreement") made by the Company in favor of Bankers Trust Company.
10(vv)* First Amendment and Waiver to the Alpine Credit Agreement, dated as of
November 1, 2000.
10(ww)* Modification to Waiver to the Alpine Credit Agreement, dated as of
November 10, 2000.
10(xx)* Second Amendment to the Alpine Credit Agreement and First Amendment to
the US Pledge Agreement, dated as of November 17, 2000.
10(yy)* Third Amendment to the Alpine Credit Agreement and Second Amendment to
the US Pledge Agreement and Acknowledgment, dated as of January 26, 2001.
18* Letter regarding change in accounting principles.
21* List of Subsidiaries
23(a)* Consent of Arthur Andersen LLP

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

* Filed herewith.

35

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 2, 2001

THE ALPINE GROUP, INC.
By: /s/ STEVEN S. ELBAUM
------------------------------
Steven S. Elbaum
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER

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.

/s/ Steven S. Elbaum
- ---------------------------
Steven S. Elbaum Chairman of the Board and Chief Executive Officer
(principal executive officer) April 2, 2001

/s/ David S. Aldridge
- ---------------------------
David S. Aldridge Chief Financial Officer and Treasurer (principal
financial and accounting officer) April 2, 2001

/s/ Kenneth G. Byers
- ---------------------------
Kenneth G. Byers Director April 2, 2001

/s/ Randolph Harrison
- ---------------------------
Randolph Harrison Director April 2, 2001

/s/ John C. Jansing
- ---------------------------
John C. Jansing Director April 2, 2001

/s/ Ernest C. Janson, Jr.
- ---------------------------
Ernest C. Janson, Jr. Director April 2, 2001

/s/ James R. Kanely
- ---------------------------
James R. Kanely Director April 2, 2001

/s/ Bragi F. Schut
- ---------------------------
Bragi F. Schut Director April 2, 2001

36

INDEX TO FINANCIAL STATEMENTS

PAGE
----

AUDITED CONSOLIDATED FINANCIAL STATEMENTS:

Report of independent public accountants............................................................. F-2

Consolidated balance sheets at December 31, 2000 and 1999, and April 30, 1999........................ F-3

Consolidated statements of operations for the year ended December 31, 2000, the eight months ended
December 31, 1999, and the years ended April 30, 1999 and 1998.................................... F-4

Consolidated statements of stockholders' equity for the year ended December 31, 2000, the eight
months ended December 31, 1999, and the years ended April 30, 1999 and 1998....................... F-6

Consolidated statements of cash flows for the year ended December 31, 2000, the eight months ended
December 31, 1999, and the years ended April 30, 1999 and 1998.................................... F-8

Notes to consolidated financial statements........................................................... F-11

SCHEDULES:

Schedule I--Condensed financial information of registrant (Parent Company)............................ F-45

Schedule II--Valuation and qualifying accounts........................................................ F-49

F-1

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To The Alpine Group, Inc.:

We have audited the accompanying consolidated balance sheets of The
Alpine Group, Inc. (a Delaware corporation) and subsidiaries as of December 31,
2000 and 1999 and April 30, 1999, and the related consolidated statements of
operations, stockholders' equity and cash flows for the year ended December 31,
2000, the eight months ended December 31, 1999, and the years ended April 30,
1999 and 1998. These financial statements and the financial statement schedules
referred to below are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules 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 The Alpine Group,
Inc. and subsidiaries as of December 31, 2000 and 1999, and April 30, 1999 and
the results of their operations and their cash flows for the year ended December
31, 2000, the eight months ended December 31, 1999, and the years ended April
30, 1999 and 1998, in conformity with accounting principles generally accepted
in the United States.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed in the index to
financial statements are presented for the purpose of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required to be
set forth therein in relation to the basic financial statements taken as a
whole.

Arthur Andersen LLP

Atlanta, Georgia
February 13, 2001

F-2

THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

DECEMBER 31, DECEMBER 31, APRIL 30,
2000 1999 1999
---- ---- ----

ASSETS
Current assets:
Cash and cash equivalents......................................... $ 22,553 $ 19,542 $ 33,000
Restricted cash................................................... 7,739 - -
Marketable securities............................................. - 7,841 14,957
Accounts receivable............................................... 280,411 261,263 261,318
Inventories....................................................... 261,859 313,571 337,122
Net assets of discontinued operations............................. - - 34,557
Other current assets.............................................. 40,605 42,262 42,464
---------- --------- ----------
Total current assets......................................... 613,167 644,479 723,418
Property, plant and equipment, net................................... 540,682 515,763 511,577
Long-term investments and other assets............................... 164,537 226,606 67,695
Goodwill, net........................................................ 775,360 796,781 806,343
---------- --------- ----------
Total assets................................................. $2,093,746 $2,183,629 $2,109,033
========== ========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings............................................. $ 160,000 $ 140,369 $ 142,645
Current portion of long-term debt................................. 163,994 85,910 65,080
Accounts payable.................................................. 143,969 147,336 138,665
Accrued expenses.................................................. 104,577 100,843 129,584
---------- --------- ----------
Total current liabilities.................................... 572,540 474,458 475,974
Long-term debt, less current portion................................. 1,120,391 1,253,020 1,237,353
Minority interest in subsidiaries.................................... 60,204 66,459 58,980
Deferred taxes....................................................... 104,873 122,521 112,407
Other long-term liabilities.......................................... 36,167 38,229 34,574
---------- --------- ----------
Total liabilities............................................ 1,894,175 1,954,687 1,919,288
---------- --------- ----------
Subsidiary-obligated Mandatorily Redeemable Trust
Convertible Preferred Securities of Superior Trust I holding
solely convertible debentures of Superior, net of discount..... 134,941 133,959 133,362
Commitments and contingencies
Stockholders' equity:
9% cumulative convertible preferred stock at liquidation value.... 427 427 427
Common stock, $.10 par value; (21,763,055, 21,663,041 and
20,096,479 shares issued at December 31, 2000 and 1999 and
April 30, 1999, respectively).................................. 2,176 2,166 2,009
Capital in excess of par value.................................... 162,912 158,268 138,860
Accumulated other comprehensive income (deficit).................. (18,910) 451 (5,222)
Retained earnings (deficit)....................................... 15,762 27,056 (19,304)
---------- --------- ----------
162,367 188,368 116,770
Treasury stock, at cost (8,050,646, 7,418,534 and 4,923,932 shares at
December 31, 2000 and 1999, and April 30, 1999, respectively)
(96,824) (92,396) (59,398)
Receivable from stockholders...................................... (913) (989) (989)
---------- --------- ----------
Total stockholders' equity................................... 64,630 94,983 56,383
---------- --------- ----------
Total liabilities and stockholders' equity................ $2,093,746 $2,183,629 $2,109,033
========== ========== ==========

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

F-3

THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

EIGHT YEAR ENDED
YEAR ENDED MONTHS ENDED ----------
DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30,
2000 1999 1999 1998
---- ---- ---- ----

Net sales........................................ $2,049,048 $1,376,893 $1,148,118 $518,459
Cost of goods sold............................... 1,708,920 1,122,599 915,524 419,218
---------- ---------- ---------- ---------
Gross profit.................................. 340,128 254,294 232,594 99,241
Selling, general and administrative expenses..... 164,725 102,513 93,888 28,832
Infrequent and unusual charges................... 14,961 4,660 7,282 -
Amortization of goodwill......................... 21,065 13,778 8,369 1,715
---------- ---------- ---------- ---------
Operating income.............................. 139,377 133,343 123,055 68,694
Interest expense................................. (138,539) (85,116) (60,119) (10,755)
Loss on sale of securities....................... (10,545) - - -
Other income, net................................ 6,869 4,732 1,874 4,094
---------- ---------- ---------- ---------
Income (loss) from continuing operations
before income taxes, distributions on
preferred securities of subsidiary trust,
minority interest, equity in earnings of
affiliate and extraordinary (loss)......... (2,838) 52,959 64,810 62,033
Provision for income taxes....................... (1,119) (21,746) (27,955) (24,796)
---------- ---------- ---------- ---------
Income (loss) from continuing operations
before distributions on preferred securities
of subsidiary trust, minority interest,
equity in earnings of affiliate and
extraordinary (loss)........................ (3,957) 31,213 36,855 37,237
Distributions on preferred securities of
subsidiary trust.............................. (15,145) (9,998) (1,252) -
---------- ---------- ---------- ---------
Income (loss) from continuing operations before
minority interest, equity in earnings of
affiliate and extraordinary (loss).........
(19,102) 21,215 35,603 37,237
Minority interest in (earnings) loss of subsidiary
6,148 (11,404) (18,693) (20,296)
Equity in earnings of affiliate.................. 1,706 2,196 - -
---------- ---------- ---------- ---------
Income (loss) from continuing operations before
extraordinary (loss)....................... (11,248) 12,007 16,910 16,941
Income (loss) from discontinued operations....... - 35,369 (2,707) (194)
---------- ---------- ---------- ---------
Income (loss) before extraordinary (loss)..... (11,248) 47,376 14,203 16,747
Extraordinary (loss) on early extinguishment of
debt.......................................... - (990) (634) (1,464)
---------- ---------- ---------- ---------
Net income (loss) ......................... (11,248) 46,386 13,569 15,283
Preferred stock dividends........................ (46) (26) (39) (69)
---------- ---------- ---------- ---------
Net income (loss) applicable to common stock
$ (11,294) $ 46,360 $ 13,530 $ 15,214
========== ========== ========== =========

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

F-4

THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

EIGHT YEAR ENDED
YEAR ENDED MONTHS ENDED ----------
DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30,
2000 1999 1999 1998
---- ---- ---- ----

Net income (loss) per share of common stock:
Basic:
Income (loss) from continuing operations...... $(0.77) $0.81 $1.03 $1.00
Income (loss) from discontinued
operations.................................. - 2.39 (0.17) (0.01)
Extraordinary (loss) on early
extinguishment of debt...................... - (0.07) (0.04) (0.09)
----- ----- ----- -----
Net income (loss) per basic share of
common stock................................ $(0.77) $3.13 $0.82 $0.90
====== ===== ===== =====

Diluted:
Income (loss) from continuing operations...... $(0.77) $0.68 $0.91 $0.90
Income (loss) from discontinued
operations.................................. - 2.17 (0.15) (0.01)
Extraordinary (loss) on early
extinguishment of debt...................... - (0.06) (0.04) (0.08)
----- ----- ----- -----
Net income (loss) per diluted share of
common stock................................ $(0.77) $2.79 $0.72 $0.81
====== ===== ===== =====

Weighted average shares outstanding:
Basic 14,779 14,817 16,405 16,986
====== ====== ====== ======
Diluted 14,779 16,334 17,887 18,774
====== ====== ====== ======

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

F-5

THE ALPINE GROUP, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)

YEAR ENDED EIGHT MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 2000 DECEMBER 31, 1999 APRIL 30, 1999 APRIL 30, 1998
----------------- ----------------- -------------- --------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------

Common stock:
Balance at beginning of
period...................... 21,663,041 $2,166 20,096,479 $2,009 19,865,990 $1,986 18,834,256 $1,883
Recapitalization of equity
method investment - - - - 9,509 1 - -
Exercise of stock options..... 18,500 2 1,475,575 148 107,538 11 553,157 56
Employee stock purchase plan.. 65,801 6 43,318 4 53,389 5 23,241 2
Compensation expense related
to stock options and grants. 15,713 2 47,669 5 27,675 3 93,133 9
Exercise of warrants........ - - - - 32,378 3 172,330 17
Conversion of convertible
preferred stock........... - - - - - - 189,873 19
---------- ------- ---------- ------- ---------- ------- ---------- -------
Balance at end of period.. 21,763,055 2,176 21,663,041 2,166 20,096,479 2,009 19,865,990 1,986
---------- ------- ---------- ------- ---------- ------- ---------- -------

Capital in excess of par value:
Balance at beginning of
period...................... 158,268 138,860 136,598 113,459
Effect of subsidiaries'
equity transactions......... 1,120 346 238 -
Issuance of minority equity
interest in subsidiary...... - - - 15,222
Recapitalization of equity
method investment........... - - 189 -
Exercise of stock options..... 593 7,210 322 2,562
Employee stock purchase plan.. 411 400 569 222
Compensation expense related
to stock options and grants. 2,520 1,292 947 3,669
Exercise of warrants.......... - - (3) (17)
Conversion of convertible
preferred stock............. - - - 1,481
Deposit of stock into
grantor trust............... - 10,160 - -
------- ------- ------- -------
Balance at end of period.... 162,912 158,268 138,860 136,598
------- ------- ------- -------

9% cumulative convertible
preferred stock:
Balance at beginning of
period...................... 427 427 427 427 427 427 1,927 1,927
Conversion of convertible
preferred stock............. - - - - - - (1,500) (1,500)
---------- ------- ---------- ------- ---------- ------- ---------- -------
Balance at end of period.... 427 $ 427 427 $ 427 427 $ 427 427 $ 427
---------- ------- ---------- ------- ---------- ------- ---------- -------

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

F-6

THE ALPINE GROUP, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (CONTINUED)
(IN THOUSANDS, EXCEPT SHARE DATA)

YEAR ENDED EIGHT MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 2000 DECEMBER 31, 1999 APRIL 30, 1999 APRIL 30, 1998
----------------- ----------------- -------------- --------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------

Accumulated other comprehensive
deficit:
Balance at beginning of
period.................... $ 451 $(5,222) $ (814) $(2,032)
Foreign currency translation
adjustment................ (1,860) 931 (3,579) 502
Additional minimum pension
liability................ 55 379 (829) -
Unrealized gain on securities
available for sale....... (17,556) 4,363 - 716
------- ------- ------- -------
Balance at end of period.. (18,910) 451 (5,222) (814)
------- ------- ------- -------

Retained earnings:
Balance at beginning of
period.................... 27,056 (19,304) (32,834) (48,048)
Net income (loss) .......... (11,248) 46,386 13,569 15,283
Dividends on preferred stock (46) (26) (39) (69)
------- ------- ------- -------
Balance at end of period.. 15,762 27,056 (19,304) (32,834)
------- ------- ------- -------

Treasury stock:
Balance at beginning of
period.................... (7,418,534) (92,396) (4,923,932) (59,398) (2,704,732) (26,890) (1,612,047) (12,130)
Purchase of treasury stock.. (682,443) (5,051) (1,688,819) (22,838) (2,219,200) (32,508) (1,092,685) (14,760)
Deposit of stock into
grantor trust............. - - (805,783) (10,160) - - - -
Compensation expense related
to stock options and
grants.................... 50,331 623 - - - - - -
---------- ------- ---------- ------- ---------- ------- ---------- -------
Balance at end of period.. (8,050,646) (96,824) (7,418,534) (92,396) (4,923,932) (59,398) (2,704,732) (26,890)
---------- ------- ---------- ------- ---------- ------- ---------- -------

Receivable from stockholders:
Balance at beginning of
period.................... (989) (989) (958) (633)
Loans to stockholders....... - - (88) (325)
Compensation expense related
to stock options and grants
76 - 57 -
------- ------- ------- -------
Balance at end of period.. (913) (989) (989) (958)
------- ------- ------- -------

Total stockholders' equity....... 13,712,836 $ 64,630 14,244,934 $94,983 15,172,974 $56,383 17,161,685 $77,515
========== ======== ========== ======= ========== ======= ========== =======
Comprehensive income (loss) ..... $(30,609) $52,059 $9,161 $16,501
======== ======= ====== =======

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

F-7

THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

YEAR EIGHT MONTHS YEAR ENDED
ENDED ENDED ----------
DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30,
2000 1999 1999 1998
---- ---- ---- ----

Cash flows from operating activities:
Income (loss) from continuing operations........ $(11,248) $12,007 $16,910 $16,941
Adjustments to reconcile income (loss) from
continuing operations to net cash provided by
operating activities:
Depreciation and amortization................ 63,370 40,548 29,147 10,205
Amortization of deferred debt issuance costs
and accretion of debt discount............. 6,060 3,431 3,221 1,441
Compensation expense related to stock options
and grants................................. 2,720 1,297 962 1,757
Provision (benefit) for deferred income taxes (7,394) 22,099 (2,758) (830)
Minority interest in earnings (losses) of
subsidiary................................. (6,148) 11,404 18,693 20,296
Equity in earnings of affiliate.............. (1,706) (2,196) (1,544) -
Other, net................................... - - 211 (655)
Change in assets and liabilities, net of
effects from companies acquired:
Accounts receivable........................ (18,575) 1,596 (19,702) 1,971
Inventories................................ 52,097 24,359 (16,962) 12,998
Other current assets....................... 2,427 55 16,189 (4,733)
Other assets............................... 11,829 625 399 (431)
Accounts payable and accrued expenses...... 2,836 (51,933) 23,801 8,452
Other, net................................. (2,155) 527 (11) 275
------- --------- ----------- ---------
Cash flows provided by continuing operations....... 94,113 63,819 68,556 67,687
Cash flows provided by (used for) discontinued
operations...................................... - 1,439 6,412 (1,396)
------- --------- ----------- ---------
Cash flows provided by operating activities........ 94,113 65,258 74,968 66,291
------- --------- ----------- ---------
Cash flows from investing activities:
Acquisitions, net of cash acquired.............. - (10,842) (1,105,408) -
Capital expenditures............................ (78,443) (57,070) (43,901) (19,508)
Proceeds from marketable securities............. 7,841 7,619 715 135
Investment in PolyVision Corporation............ - (2,000) (5,000) -
Proceeds from sale of assets.................... 10,195 12,925 2,033 5,361
Proceeds from sale of investment................ 42,958 - - -
Proceeds from the sale of discontinued operations - 15,563 - -
Purchase of minority interest................... - (31,127) - -
Superior Israel customer loans.................. (23,989) (28,708) - -
Restricted cash................................. (7,739) - - -
Other........................................... 1,450 (53) (1,688) (145)
------- --------- ----------- ---------
Cash flows used for continuing operations.......... (47,727) (93,693) (1,153,249) (14,157)
Cash flows used for discontinued operations........ - (2,526) (10,204) (109,034)
------- --------- ----------- ---------
Cash flows used for investing activities........... (47,727) (96,219) (1,163,453) (123,191)
------- --------- ----------- ---------

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

F-8

THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(IN THOUSANDS)

YEAR EIGHT MONTHS YEAR ENDED
ENDED ENDED ----------
DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30,
2000 1999 1999 1998
---- ---- ---- ----

Cash flows from financing activities:
Short-term borrowings, net...................... $19,631 $ (2,276) $ 9,640 $ -
Borrowings (repayments) under revolving credit
facilities, net.............................. (8,986) 64,631 20,965 (42,307)
Long-term borrowings............................ 61,232 277,288 1,154,715 10,665
Repayments of long-term borrowings.............. (107,156) (303,604) - (13,803)
Proceeds from exercise of stock options......... 595 1,966 333 2,618
Debt issuance costs............................. (4,597) (7,144) (31,748) (400)
Dividends on preferred stock.................... (46) (26) (39) (69)
Dividends paid on subsidiary common stock....... - (1,238) (3,014) (504)
Purchase of treasury stock...................... (5,051) (16,330) (32,508) (14,760)
Purchase of subsidiary common stock............. - (3,273) (15,870) -
Other........................................... 1,003 6,422 (3,163) (151)
-------- -------- ---------- --------
Cash flows provided by (used for) continuing
operations...................................... (43,375) 16,416 1,099,311 (58,711)
Cash flows provided by discontinued operations..... - 3,034 10,393 111,846
-------- -------- ---------- --------
Cash flows provided by (used for) financing
activities...................................... (43,375) 19,450 1,109,704 53,135
-------- -------- ---------- --------

Cash flows provided by discontinued operations..... - 1,947 6,601 1,416
Net (increase) decrease in discontinued operations
cash and cash equivalents....................... - (1,947) (3,889) 2,759
Net increase (decrease) in continuing operations
cash and cash equivalents....................... 3,011 (13,458) 14,618 (5,181)
Cash and cash equivalents at beginning of year..... 19,542 33,000 15,670 16,676
-------- -------- ---------- -------
Cash and cash equivalents at end of year........... $ 22,553 $ 19,542 $ 33,000 $15,670
======== ======== ========== =======

Supplemental disclosures:
Cash paid for interest, net of amount capitalized $124,831 $84,604 $47,980 $ 9,923
======== ======= ======= =======
Cash paid for income taxes, net of refunds...... $ 7,355 $23,514 $22,633 $25,840
======== ======= ======= =======

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

F-9

THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(IN THOUSANDS)

YEAR EIGHT MONTHS YEAR ENDED
ENDED ENDED ----------
DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30,
2000 1999 1999 1998
---- ---- ---- ----

Noncash investing and financing activities:
Exchange of common stock for preferred stock:
Preferred stock acquired..................... $1,500
======
Common stock issued.......................... $1,500
======
Capitalized lease obligation incurred........... $ 375
======
Acquisition of businesses:
Assets, net of cash acquired................. $1,702,774
Liabilities assumed.......................... (447,793)
Minority equity interest in subsidiaries..... (16,283)
Issuance of Subsidiary-obligated Mandatorily
Redeemable Trust Convertible Preferred
Securities of Superior Trust I holding
solely convertible debentures in exchange
for subsidiary common stock held by
minority shareholders (net of discount of
$33.2 million)............................. (133,290)
----------
Net cash paid.............................. $1,105,408
==========
PolyVision recapitalization:
Exchange of PolyVision series A preferred stock
and a note receivable including accrued and
unpaid interest.............................. $(17,282)
========
For PolyVision Series B cumulative preferred
stock and PolyVision common stock............ $17,282
=======
Disposition of business:
Fair market value of common stock received...... $(123,285)
Net assets of discontinued operations including
purchased minority interest.................. 65,960
Gain on sale of discontinued operation,
net of tax................................... 35,369
Income taxes and other liabilities.............. 37,519
-------
Net cash received............................... $15,563
=======

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

F-10

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS

The accompanying consolidated financial statements include the accounts
of The Alpine Group, Inc. and its majority-owned subsidiaries (collectively
"Alpine" or the "Company", unless the context otherwise requires). These
financial statements present the consolidated balance sheets of the Company at
December 31, 2000 and 1999, and April 30, 1999 and the related consolidated
statements of operations, stockholders' equity and cash flows for the year ended
December 31, 2000, for the eight months ended December 31, 1999 and for the
years ended April 30, 1999 ("fiscal 1999") and 1998 ("fiscal 1998"). All
significant intercompany accounts and transactions have been eliminated.

Alpine was incorporated in New Jersey in 1957 and reincorporated in
Delaware in 1987. Alpine's operations are carried out through Superior TeleCom
Inc. ("Superior"), a 51.5% owned subsidiary, which manufactures wire and cable
products for the communications, original equipment manufacturer ("OEM") and
electrical markets. Superior is a manufacturer and supplier of
telecommunications wire and cable products to telephone companies, distributors
and system integrators; 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 manufacturing and distribution facilities in the
United States, Canada, the United Kingdom, Israel and Mexico.

On November 27, 1998, Superior completed a cash tender offer for 81% of
the outstanding common shares of Essex International, Inc. ("Essex"). On March
31, 1999, Superior acquired the remaining 19% of Essex common stock through the
issuance of 8 1/2% trust convertible preferred securities of Superior Trust I, a
Delaware trust in which Superior owns all the common equity interests (see Notes
5 and 19).

On August 6, 1999, Alpine sold its subsidiary, Premier Refractories
International Inc. ("Premier"), to Cookson Group plc ("Cookson") (see Note 4).
Accordingly, Premier has been accounted for as a discontinued operation in the
accompanying consolidated financial statements.

CHANGE IN YEAR END

On December 20, 1999, the Company elected to change its year end to
December 31 from April 30. This change was made effective December 31, 1999.

CASH AND CASH EQUIVALENTS

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

RESTRICTED CASH

Restricted cash is restricted to repayment of certain debt or
payment of certain income tax liabilities.

MARKETABLE SECURITIES

Short-term investments in marketable securities are classified as
trading securities and are stated at fair value. Net unrealized holding gains
and losses are included in other income and net realized gains and losses are
determined at the time of sale on the specific identification cost basis.
Long-term investments in marketable securities are classified as
available-for-sale. Unrealized holding gains and losses are included in other
comprehensive income net of any related tax effect.

F-11

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INVENTORIES

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 stated at the lower of cost or market, primarily
using the last-in, first-out ("LIFO") cost method.

PROPERTY, PLANT AND EQUIPMENT

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 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.......................... 10 to 40 years
Machinery 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 the year ended
December 31, 2000 and the eight months ended December 31, 1999, $5.0 million and
$2.0 million, respectively, was capitalized in connection with various capital
projects.

GOODWILL

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, 2000 and 1999, and April
30, 1999, was $49.5 million, $28.6 million and $15.0 million, respectively. The
Company periodically reviews goodwill to assess recoverability from future
operations using undiscounted cash flows. If the carrying amount exceeds
undiscounted cash flows, an impairment loss would be recognized for the
difference between the carrying amount and its estimated fair value.

DEFERRED FINANCING COSTS

Origination costs incurred in connection with outstanding debt
financings are included in the consolidated balance sheet in long-term
investments and other assets. These deferred financing costs are being amortized
over the lives of the related debt on a straight-line basis and are charged to
operations as additional interest expense.

AMOUNTS DUE CUSTOMERS

Included in accrued expenses at December 31, 2000 and 1999, and April
30, 1999, are certain amounts due customers totaling $14.6 million, $12.8
million, and $8.9 million, respectively, representing cash discount liabilities
to customers who meet certain contractual sales volume criteria. Such discounts
are paid periodically to those qualifying customers.

F-12

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REVENUE RECOGNITION

Revenue is recognized when the following criteria are met: 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.

FOREIGN CURRENCY TRANSLATION

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 the balance sheet date. The
resulting translation gains and losses are credited or 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. Revenues and expenses are translated at average exchange rates
prevailing during the period reported. Foreign currency exchange gains and
losses incurred on foreign currency transactions are included in income as they
occur.

SUBSIDIARY STOCK TRANSACTIONS

The Company's ownership percentage in subsidiary stock is impacted by
the Company's purchase of additional subsidiary stock, as well as subsidiary
stock transactions, including the subsidiary's purchase of its own stock and the
subsidiary's issuance of its own stock under stock-based compensation plans. The
Company reflects these subsidiary stock transactions through adjustments to
minority interest, goodwill and stockholders' equity on the consolidated balance
sheets. The net increase to goodwill totaling $0.3 million during the eight
months ended December 31, 1999 and $6.9 million during fiscal 1999 is amortized
over periods not exceeding 40 years.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs are expensed as incurred. Research
and development costs during the year ended December 31, 2000, the eight
months ended December 31, 1999 and fiscal 1999 and 1998 amounted to $7.2
million, $4.1 million, $5.1 million and $3.0 million, respectively.

ADVERTISING COSTS

Advertising costs are expensed as incurred.

EARNINGS PER SHARE

Basic earnings per common share is computed by dividing net income
applicable to common stock by the weighted average number of shares of common
stock outstanding for the period. Diluted earnings per common share is
determined assuming (i) the conversion of outstanding stock options, warrants
and grants under the treasury stock method, (ii) the conversion of convertible
preferred stock and (iii) the dilution in subsidiary earnings resulting from the
assumed conversion of subsidiary stock options.

COMPREHENSIVE INCOME

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

CONCENTRATIONS OF CREDIT RISK AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

During fiscal 1999 and 1998, sales to the regional Bell operating
companies and major independent telephone companies represented 36% and 84%,
respectively, of net sales. At December 31, 2000 and 1999, and April 30, 1999,
accounts receivable from these customers were $27.2 million, $25.6 million and
$30.6 million, respectively.

Accounts receivable include allowances for doubtful accounts of $5.0
million, $3.2 million and $5.0 million at December 31, 2000 and 1999, and
April 30, 1999, respectively.

F-13

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

USE OF ESTIMATES

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.

RECLASSIFICATIONS

Certain reclassifications have been made to the December 31, 1999,
fiscal 1999 and 1998 consolidated financial statements to conform with the
December 31, 2000 presentation.

NEW ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." In
June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments
and Hedging Activities-Deferral of Effective Date of FASB Statement No. 133-an
amendment of FASB Statement No. 133" which delayed SFAS No. 133's effective date
for one year. In June 2000, the FASB issued SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities-an amendment of FASB
Statement No. 133" which amends certain paragraphs of SFAS No. 133. SFAS No. 133
as amended, which is effective for the Company beginning January 1, 2001,
establishes accounting and reporting standards for derivative instruments and
requires recognition of all derivatives as either assets or liabilities in the
statements of financial position and measurement of those instruments at fair
value. The Company has evaluated the effect of these statements on its
derivative instruments, which are primarily commodity futures, foreign currency
forward contracts and interest rate swaps. The cumulative effect of the change
in accounting for derivative instruments recorded on January 1, 2001 was not
material.

In September 2000, the Emerging Issues Task Force ("EITF") reached a
consensus on EITF Issue 00-10 - ACCOUNTING FOR SHIPPING AND HANDLING FEES AND
COSTS. The EITF consensus establishes guidance on the income statement
classification of amounts charged to customers for shipping and handling, as
well as for costs incurred related to shipping and handling. The EITF concluded
that amounts billed to a customer in a sale transaction related to shipping and
handling should be classified as revenue. The EITF consensus also requires an
entity to disclose the amount of shipping and handling costs and the line item
on the income statement which includes such costs if the costs are not included
in cost of sales and are significant. The Company implemented EITF 00-10 in the
fourth quarter of 2000. Prior to implementing EITF 00-10, shipping and handling
costs billed to a customer were netted against shipping and handling costs
recorded in cost of goods sold. Shipping and handling revenues that were
reclassified from cost of sales to net sales were $10.8 million, $6.5 million,
$4.9 million and $1.9 million for the year ended December 31, 2000, the eight
months ended December 31, 1999 and fiscal 1999 and 1998, respectively.

F-14

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

NEW ACCOUNTING STANDARDS (CONTINUED)

In December 1999, the Securities and Exchange Commission ("SEC")
released Staff Accounting Bulletin No. 101 REVENUE RECOGNITION IN FINANCIAL
STATEMENTS ("SAB 101") which provides the SEC's views regarding revenue
recognition in financial statements, including income statement presentation and
disclosure. SAB 101 clarifies that revenue generally is realized or realizable
when pervasive evidence of an arrangement exists, delivery has occurred or
services have been rendered, the seller's price to the buyer is fixed or
determinable and collectibility is reasonably assured. The SEC subsequently
released SAB 101B deferring implementation of SAB 101 to the fourth quarter of
2000. The Company is in compliance with the provisions of SAB 101 and this
bulletin had no effect on the results of operations or financial position of the
Company.

2. INVENTORIES

At December 31, 2000 and 1999, and April 30, 1999, the components of
inventories are as follows:

DECEMBER 31, DECEMBER 31, APRIL 30,
2000 1999 1999
---- ---- ----
(IN THOUSANDS)

Raw materials.................. $ 45,793 $ 50,618 $ 46,008
Work in process................ 42,006 42,150 43,889
Finished goods................. 190,782 233,142 241,275
--------- --------- ---------
278,581 325,910 331,172
LIFO reserve................... (16,722) (12,339) 5,950
--------- --------- ---------
$261,859 $313,571 $337,122
========= ========= =========

During the eight months 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 to consistent operational and accounting policies for
the Company's communications segment. The impact of this accounting change was
not material.

Inventories valued using the LIFO method amounted to $133.6 million,
$167.3 million and $224.7 million at December 31, 2000 and 1999, and April 30,
1999, 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 $0.8 million.

F-15

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. PROPERTY, PLANT AND EQUIPMENT

At December 31, 2000 and 1999, and April 30, 1999, property, plant and
equipment consist of the following:

DECEMBER 31, DECEMBER 31, APRIL 30,
2000 1999 1999
---- ---- ----
(IN THOUSANDS)

Land.......................................... $ 23,652 $ 25,230 $ 24,154
Buildings and improvements.................... 148,906 123,151 125,252
Machinery and equipment....................... 486,158 445,685 408,595
--------- --------- ---------
658,716 594,066 558,001
Less accumulated depreciation................. 118,034 78,303 46,424
--------- --------- ---------
$540,682 $515,763 $511,577
========= ========= =========

Depreciation expense for the year ended December 31, 2000, the eight
months ended December 31, 1999, and fiscal 1999 and 1998 was $41.3 million,
$26.1 million, $20.8 million and $8.5 million, respectively.

4. DISCONTINUED OPERATIONS

On August 6, 1999, Alpine completed the disposition of Premier (the
"Premier Disposition") through the merger of Premier and a wholly-owned
subsidiary of Cookson, a London Stock Exchange listed company. In connection
with the Premier Disposition, Cookson assumed all of Premier's existing
indebtedness, issued to Alpine approximately 32.3 million shares of Cookson
common stock and paid to Alpine $12.2 million in cash. The approximate fair
market value of Cookson common stock received by Alpine was $123 million at
August 6, 1999 (based on closing market value as quoted on the London Stock
Exchange). The Cookson common stock is held for purposes other than trading and
net unrealized holding gains and losses are included as a component of
accumulated other comprehensive income on the balance sheet. In connection with
the Premier Disposition, Alpine retained the right to receive a contingent cash
payment of up to $6.6 million based upon future earnings of the American
Minerals business, which was spun-off concurrently with Premier's acquisition of
American Premier Holdings, Inc. in January 1998. Prior to the Premier
Disposition, Alpine purchased the 16.6% minority interest in Premier for a
purchase price of approximately $31.1 million.

The Company has accounted for Premier as a discontinued operation. The
net assets of Premier, totaling $34.6 million at April 30, 1999, are included in
the consolidated balance sheets. The operating results of Premier have been
segregated from the Company's continuing operations and are reported as a
separate line item within the statements of operations as discontinued
operations. For the eight month period ended December 31, 1999, the Company
recorded income from discontinued operations of $35.4 million (net of taxes of
$27.0 million) reflecting the gain on the Premier Disposition, net of operating
losses incurred from May 1, 1999 (measurement date) through the date of the
Premier Disposition.

F-16

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. DISCONTINUED OPERATIONS (CONTINUED)

Premier's results of operations for fiscal 1999 and 1998 are summarized
as follows:

YEAR ENDED APRIL 30,
--------------------
1999 1998
---- ----
(IN THOUSANDS)

Net sales...................................... $485,960 $402,480
Loss before income tax (benefit) provision of
$1.6 million and $(0.1) million in fiscal
1999 and 1998, respectively................. (1,691) (351)
Loss before extraordinary loss................. (2,707) (194)

5. ACQUISITIONS

ESSEX ACQUISITION

On November 27, 1998, Superior 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, Superior acquired the
remaining outstanding common stock of Essex through the issuance of
approximately $167 million (face amount) of 8 1/2% Subsidiary-obligated
Mandatorily Redeemable Trust Convertible Preferred Securities of Superior Trust
I holding solely convertible debentures of Superior (see Note 19).

The acquisition of Essex was accounted for using the purchase method
and, accordingly, the results of operations of Essex have been 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.

CABLES OF ZION AND CVALIM ACQUISITIONS

On May 5, 1998, Superior acquired 51% of the common stock of Cables of
Zion United Works Ltd. ("Cables of Zion"), an Israel-based cable and wire
manufacturer whose common stock is traded on the Tel Aviv Stock Exchange, for
approximately $25 million in cash.

On December 31, 1998, Cables of Zion acquired the business and certain
operating assets of Cvalim-The Electric Wire and Cable Company of Israel Ltd.
("Cvalim") for an adjusted purchase price of $41.2 million in cash. Following
the Cvalim acquisition, Cables of Zion changed its name to Superior Cables
Limited ("Superior Israel").

On October 20, 1999, Superior Israel acquired the business and certain
operating assets of Pica Plast Limited for $10.8 million in cash.

F-17

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. ACQUISITIONS (CONTINUED)

CABLES OF ZION AND CVALIM ACQUISITIONS

The acquisitions of Cables of Zion, Cvalim and Pica Plast were
accounted for using the purchase method and, accordingly, the results of
operations of Cables of Zion, Cvalim and Pica Plast are included in the
Company's consolidated financial statements on a prospective basis from the date
of their respective 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.

PRO FORMA FINANCIAL DATA (UNAUDITED) (CONTINUED)

Unaudited condensed pro forma results of operations for fiscal 1998 and
1999, which give effect to the acquisition of Essex, Cables of Zion and Cvalim
as if the transactions had occurred on May 1, 1997, are presented below. The pro
forma amounts reflect acquisition-related purchase accounting adjustments,
including adjustments to depreciation and amortization expense and interest
expense on acquisition debt 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 had the
acquisitions taken place at the beginning of the periods presented or of future
results of operations.

YEAR ENDED
----------
APRIL 30, APRIL 30,
1999 1998
---- ----
(IN THOUSANDS, EXCEPT PER
SHARE DATA)

Net sales.......................................................... $2,008,233 $2,277,246
Income from continuing operations before income taxes,
distribution on preferred securities of subsidiary trust,
minority interest and extraordinary (loss)...................... 57,319 113,745
Income from continuing operations before extraordinary (loss)...... 8,605 23,308
Loss from discontinued operations.................................. (2,707) (194)
Extraordinary (loss) on early extinguishment of debt............... (634) (1,464)
Net income applicable to common stock.............................. 5,225 21,581
Net income per diluted share of common stock:
Income from continuing operations before extraordinary (loss)...... $0.44 $1.24
Loss from discontinued operations.................................. (0.15) (0.01)
Extraordinary (loss) on early extinguishment of debt............... (0.04) (0.08)
----- -----
Net income per diluted share of common stock....................... $0.25 $1.15
===== =====

F-18

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. LONG-TERM INVESTMENTS AND OTHER ASSETS

At December 31, 2000 and 1999, and April 30, 1999, long-term
investments and other assets consist of the following:

DECEMBER 31, DECEMBER 31, APRIL 30,
2000 1999 1999
---- ---- ----
(IN THOUSANDS)

Equity investment and advances to PolyVision (a)....... $ 25,520 $ 25,837 $24,280
Investment in Cookson common stock (b)................. 47,795 130,556 -
Other assets........................................... 91,222 70,213 43,415
-------- -------- -------
$164,537 $226,606 $67,695
======== ======== =======

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

(a) At May 1, 1998, Alpine's equity investment in PolyVision consisted of
approximately $25.2 million in liquidation value of PolyVision 8%
Series A Preferred Stock (the "PolyVision Preferred") and approximately
1.4 million shares of PolyVision common stock (approximately 17% of
PolyVision outstanding shares).

In November 1998, in connection with PolyVision's acquisition of
Alliance International Group Inc., Alpine exchanged approximately $25.2
million in PolyVision Preferred (plus accrued dividends) and a loan
receivable from PolyVision of approximately $7.4 million for 5.3
million shares of PolyVision's common stock and approximately $12.4
million in liquidation value of PolyVision's Series B Convertible
Preferred Stock. As part of this transaction, Alpine also acquired $5.0
million of PolyVision's Series C Convertible Preferred Stock for cash
and received a further $0.5 million Series B Convertible Preferred
Stock and 0.2 million shares of PolyVision common stock for
professional services rendered to PolyVision in connection with its
acquisition.

The aforementioned recapitalization resulted in the Company's common
share equity ownership in PolyVision increasing to 48% from 17%, with
such recapitalization being accounted for by the Company as a
step-acquisition. The resulting excess of the fair value over the
proportion of PolyVision net assets acquired of approximately $4.1
million has been allocated to goodwill and is being amortized ratably
over 30 years. Following the recapitalization, the Company is
accounting for its investment in PolyVision under the equity method.

During 1999, the Company acquired an additional $2.0 million face
amount of PolyVision 9% series C cumulative convertible preferred
stock. At December 31, 2000, the Company's equity investment in
PolyVision consisted of approximately $12.8 million face amount of
PolyVision 9% series B cumulative convertible preferred stock, $7.0
million face amount of PolyVision 9% series C cumulative convertible
preferred stock and approximately 6.8 million shares of PolyVision
common stock with a fair market value of approximately $8.5 million
based on PolyVision's (AMEX: PLI) closing stock price on December 29,
2000.

(b) During 2000, the Company sold 14.0 million shares of Cookson stock
for $43.0 million resulting in a loss of $10.5 million.

F-19

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. ACCRUED EXPENSES

At December 31, 2000 and 1999, and April 30 1999, accrued expenses
consist of the following:

DECEMBER 31, DECEMBER 31, APRIL 30,
2000 1999 1999
---- ---- ----
(IN THOUSANDS)

Accrued wages, salaries and employee
benefits................................. $ 24,456 $ 27,154 $ 29,280
Other accrued expenses...................... 80,121 73,689 100,304
--------- --------- --------
$104,577 $100,843 $129,584
========= ========= ========

8. SHORT-TERM BORROWINGS

At December 31, 2000 and 1999, and April 30, 1999, short-term
borrowings consist principally of $160.0 million, $140.4 million and $127.6
million, respectively, in borrowings under Superior's 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. Under the Superior receivable securitization program,
Superior has granted a security interest in certain of its trade accounts
receivable to secure borrowings under the facility. The Superior receivable
securitization program expires on November 30, 2001, although it may be extended
for successive one-year periods subject to agreement. Borrowings under this
agreement bear interest at the lender's commercial paper rate (which
approximated 6.88%, 6.37% and 5.32% at December 31, 2000 and 1999, and April 30,
1999, respectively) plus 0.35%.

9. LONG-TERM DEBT

At December 31, 2000 and 1999, and April 30, 1999, long-term debt
consists of the following:

DECEMBER 31, DECEMBER 31, APRIL 30,
2000 1999 1999
---- ---- ----
(IN THOUSANDS)

Superior revolving credit facility (a)................. $ 71,001 $ 53,735 $ 43,093
Superior term loan A (a)............................... 374,420 446,433 489,500
Superior term loan B (a)............................... 408,346 415,542 423,786
Superior senior subordinated notes (a)................. 200,000 200,000 200,000
Superior Israel credit facility (b).................... 88,522 82,507 50,330
12.25% Senior Secured Notes (principal amount $12.2
million) (c)........................................ 11,725 11,665 11,553
Alpine revolving credit facility (d)................... 47,102 70,000 39,700
Alpine term loan (d)................................... - - 10,000
Other.................................................. 83,269 59,048 34,471
---------- ---------- ----------
Total long-term debt................................... 1,284,385 1,338,930 1,302,433
Less current portion of long-term debt................. 163,994 85,910 65,080
---------- ---------- ----------
$1,120,391 $1,253,020 $1,237,353
========== ========== ==========

F-20

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. LONG-TERM DEBT (CONTINUED)

At December 31, 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 $1.185 million. The Company has entered into several interest rate
swap and interest rate cap agreements in order to limit the effect of changes in
interest rates on several of the Company's floating rate long-term obligations.
Amounts currently due to or from interest rate swap counterparties are recorded
in interest expense in the period in which they accrue. The Company does not
enter into financial instruments for trading or speculative purposes. The fair
market value of the interest rate caps and swaps was approximately $6.4 million
and $4.6 million at December 31, 1999 and April 30, 1999, respectively. At
December 31, 2000, Superior had an interest rate cap outstanding with a notional
amount of $400 million with a 90-day LIBOR rate cap at 7.0% and a fair value of
zero.

The aggregate principal maturities of long-term debt subsequent to
December 31, 2000, are as follows:

AMOUNT
YEAR (IN THOUSANDS)

2001................................................ $ 163,994
2002................................................ 106,870
2003................................................ 212,746
2004................................................ 330,950
2005................................................ 201,953
Thereafter.......................................... 267,872
----------
$1,284,385
==========

(a) In connection with the Essex Acquisition (see Note 5), Superior amended
and restated its existing credit facilities. Superior's amended and
restated credit facilities provide for total borrowing availability of
up to $1.35 billion, consisting of a $225.0 million revolving credit
facility, a $500.0 million term loan A facility, a $425.0 million term
loan B facility and $200.0 million in senior subordinated notes.

The Superior revolving credit facility is available to Superior's
principal subsidiaries. Borrowings under the facility are allowable up
to $225 million in the aggregate and mature May 27, 2004. Interest on
the outstanding balance is based upon LIBOR plus 3.25% or the base rate
(prime) plus 2.25% (10.03%, 9.97% and 7.94% at December 31, 2000 and
1999, and April 30, 1999, respectively) and is payable quarterly.

The Superior term loan A is repayable in varying installments over five
and one-half years, with interest payable quarterly based upon LIBOR
plus 3.25% or the base rate (prime) plus 2.25% (10.06%, 10.5% and 8.00%
at December 31, 2000 and 1999, and April 30, 1999, respectively), and
matures on May 27, 2004.

F-21

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. LONG-TERM DEBT (CONTINUED)

The Superior term loan B is repayable in varying installments over
seven years, with interest payable quarterly based upon LIBOR plus 4.0%
or the base rate (prime) plus 3.0% (10.88%, 9.94% and 8.81% at December
31, 2000 and 1999, and April 30, 1999, respectively), and matures on
November 27, 2005.

On May 26, 1999, the Company refinanced the $200 million Superior
senior subordinated notes. The new senior subordinated notes include a
$120 million term note A and an $80 million term note B, which are due
May 26, 2007. Interest for the term note A for the first 270 days
ranges from LIBOR plus 2.5% to LIBOR plus 4.0% and after the nine month
anniversary of the borrowing date through maturity is LIBOR plus 5%
(11.81% and 10.19% at December 31, 2000 and 1999). Interest on the term
note B for the first 270 days ranges from LIBOR plus 3.625% to LIBOR
plus 4.0% and after the nine month anniversary of the borrowing date
through maturity is LIBOR plus 5% (11.13% and 10.19% at December 31,
2000 and 1999). At April 30, 1999 and prior to the refinancing,
interest on the $200 million Superior senior subordinated notes was
9.31% based on LIBOR plus 4.25% or base rate (prime) plus 3.25%.

All of the borrowings under the above described credit agreement are
guaranteed by each of Superior's principal domestic subsidiaries. The
common stock of all such domestic subsidiaries of Superior and 65% of
the common stock of its foreign subsidiaries have been pledged to
secure the guarantees (other than those guarantees given with respect
to the senior subordinated notes). The obligations under these Superior
credit arrangements (other than the senior subordinated notes) are
secured by substantially all of the assets of Superior and its domestic
subsidiaries.

(b) In connection with the December 31, 1998 acquisition of the 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.

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%. Interest on the
Superior Israel revolving credit facility outstanding balance is based
upon either LIBOR plus 0.4%, the lending bank's prime rate minus 1.1%,
or a rate to be agreed upon by the parties. The Superior Israel credit
facility terminates on December 31, 2003. Obligations under the
Superior Israel credit facility are secured by all of the assets of
Superior Israel. At December 31, 2000, Superior Israel was not in
compliance with certain financial covenants under the Superior Israel
revolving credit facility and has classified the $25.4 million
outstanding under this facility as current in the December 31, 2000
balance sheet.

F-22

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. LONG-TERM DEBT (CONTINUED)

(c) The 12.25% Senior Secured Notes are due 2003 and pay interest
semiannually on January 15 and July 15 of each year. The Senior Notes
were issued at a price of 91.74% and the discount is being added to the
recorded amount through maturity utilizing the effective interest
method.

(d) In November 1999, Alpine entered into a $100.0 million revolving
credit facility (the "Alpine Revolving Credit Facility") replacing
the existing $50.0 million senior secured credit agreement (the
"Alpine Senior Secured Facility") comprised of a $40.0 million
revolving credit facility and a $10.0 million senior secured term
loan. Borrowings under the Alpine Revolving Credit Facility are for
ongoing working capital and corporate needs of Alpine, and are
secured by Alpine's holdings in Cookson common stock and Superior
common stock. Under the Alpine Revolving Credit Facility, the
proceeds from the sale of Cookson stock are to be used for repayment
of the Alpine Revolving Credit Facility and payment of related
income taxes. Interest on the Alpine Revolving Credit Facility is
based upon LIBOR plus 2.5% or the base rate (prime) plus 1.5%, and
was 9.31% and 9.06% at December 31, 2000 and 1999. Interest on the
revolving credit facility component of the Alpine Senior Secured
Facility was based upon LIBOR plus 1.5% or the base rate (prime) and
was 6.94% at April 30, 1999. Interest on the senior secured term
loan component of the Alpine Senior Secured Facility was based upon
LIBOR plus 2.0% or base rate (prime) plus 0.5% and was 6.75% at
April 30, 1999. The Alpine Revolving Credit Facility matures on
October 31, 2001.

The above credit agreements contain 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 common stock and restrictions on additional indebtedness. During 2000, the
Superior credit facilities described in (a) above were amended with respect to
certain restrictive covenants relating to maintenance of certain financial
ratios.

During the eight months ended December 31, 1999, the Company recognized
an extraordinary charge in the early extinguishment of debt of $1.0 million (net
of income taxes of $0.6 million), or $0.06 per diluted share.

During fiscal 1999, the Company recognized an extraordinary charge on
the early extinguishment of debt of $0.6 million, or $0.04 per diluted share,
associated with the amendment and restatement of Superior's credit facilities.

During fiscal 1998, the Company retired $9.0 million face amount ($8.3
million recorded amount) of its 12.25% Senior Secured Notes and $5.0 million
face amount ($4.7 million recorded amount) of Premier's 11% Senior Notes. In
connection with this early extinguishment of debt, the Company recognized an
after-tax extraordinary charge of $1.5 million, or $0.08 per diluted share.

F-23

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. EARNINGS PER SHARE

The computation of basic and diluted earnings per share for the year
ended December 31, 2000, the eight months ended December 31, 1999, and fiscal
1999 and 1998 is as follows:

YEAR ENDED EIGHT MONTHS ENDED
DECEMBER 31, 2000 DECEMBER 31, 1999
----------------- -----------------
NET PER SHARE NET PER SHARE
LOSS SHARES AMOUNT INCOME SHARES AMOUNT
---- ------ ------ ------ ------ ------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Income (loss) attributable to
common stock from continuing
operations before extraordinary
(loss)........................... $(11,248) $12,007
Less: preferred stock dividends..... (46) (26)
-------- --------
Basic earnings (loss) per common
share from continuing operations. (11,294) 14,779 $(0.77) 11,981 14,817 $0.81
====== =====
Dilutive impact of stock options,
warrants and grants.............. - - - 1,466
Dilution in subsidiary earnings
from subsidiary stock options.... (72) - (852) -
Assumed conversion of preferred
stock............................ - - 26 51
---------- -------- -------- -------
Diluted earnings per share from
continuing operations............ $(11,366) 14,779 $(0.77) $11,155 16,334 $0.68
======== ====== ====== ======= ====== =====

YEAR ENDED YEAR ENDED
APRIL 30, 1999 APRIL 30, 1998
-------------- --------------
NET PER SHARE NET PER SHARE
INCOME SHARES AMOUNT INCOME SHARES AMOUNT
------ ------ ------ ------ ------ ------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Income attributable to common stock
from continuing operations
before extraordinary (loss).... $16,910 $16,941
Less: preferred stock dividends... (39) (69)
--------- --------
Basic earnings per common share
from continuing operations..... 16,871 16,405 $1.03 16,872 16,986 $1.00
===== =====
Dilutive impact of stock options,
warrants and grants............ - 1,431 - 1,663
Dilution in subsidiary earnings
from subsidiary stock options.. (669) - - -
Assumed conversion of preferred
stock.......................... 39 51 69 125
---------- -------- ------- --------
Diluted earnings per share from
continuing operations.......... $16,241 17,887 $0.91 $16,941 18,774 $0.90
======= ====== ===== ======= ====== =====

The Company has excluded the conversion of Superior's Trust Convertible
Preferred Securities from the Company's earnings per share calculation as the
impact would be anti-dilutive.

F-24

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. STOCK BASED COMPENSATION PLANS

The Company sponsors the Employee Stock Purchase Plan ("ESPP") which
allows eligible employees the right to purchase common stock of the Company on a
quarterly 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 500,000 shares of common stock reserved under the
ESPP, of which 65,801 shares, 43,318 shares, 53,389 shares and 23,241 shares
were purchased by employees during the year ended December 31, 2000, the eight
months ended December 31, 1999 and fiscal 1999 and 1998, respectively.

Alpine has two long-term equity incentive plans: the 1987 Long-Term
Equity Incentive Plan (the "1987 Plan") and the 1997 Stock Option Plan (the
"1997 Plan"). No further options may be granted under the 1987 Plan. The 1997
Plan has 1,500,000 shares of common stock reserved for issuance. There were
224,939 shares of common stock available for issuance under the 1997 Plan for
granting of options at December 31, 2000. Participation in the 1997 Plan is
generally limited to key employees and consultants of Alpine and its
subsidiaries. The 1997 Plan provides for the granting of incentive and
non-qualified stock options and stock appreciation rights. Under the 1997 Plan,
options cannot be exercised after ten years from the date of grant. During
the year ended December 31, 2000 and the eight months ended December 31,
1999, the Company granted non-qualified stock options to purchase 425,000 and
595,000 shares, respectively, of the Company's common stock under individual
option agreements to certain key management employees, exercisable at the
fair market value of the common stock on the date of grant. Any shares issued
upon exercise of these options will be issued from the Company's treasury
stock. In March 1999, the Company adopted the 1999 Stock Option Reload
Program under the 1997 Plan, which enabled certain key management employees
to receive a new reload stock option equal to the total shares tendered by
the employee to the Company by December 31, 1999 in order to pay the exercise
price and related taxes on the exercise of certain vested stock options. The
reload stock option is priced at the fair market value of the common stock on
the exercise date.

In addition, during the year ended December 31, 2000 and the eight
months ended December 31, 1999, the Company granted certain key management
employees non-qualified stock options to purchase 177,000 and 243,000 shares,
respectively, of the common stock of PolyVision and 86,000 and 76,220 shares,
respectively, of the common stock of Superior. Any shares issued upon
exercise of these options will be made available only from issued shares of
the common stock of PolyVision and shares of the common stock of Superior
owned by the Company.

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 restricted 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 in the form of restricted 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.

Alpine also has a Restricted Stock Plan under which a maximum of
600,000 shares of Alpine common stock have been reserved for issuance. At
December 31, 2000, there are 82,344 shares available for issuance. During the
year ended December 31, 2000, the eight months ended December 31, 1999 and
fiscal 1999 and 1998, noncash compensation expense of $0.2 million, $0.3
million, $0.6 million and $1.0 million, respectively, was recorded representing
the amortization, over the applicable vesting period, of the fair market value
of common stock issued under the Restricted Stock Plan.

F-25

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. STOCK BASED COMPENSATION PLANS (CONTINUED)

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 and shares issued upon stock option exercises,
as defined by the plans. The plans also provide for matching contributions of
Company common stock on shares deferred upon exercise of stock options. Shares
issued pursuant to the deferred stock component of these plans are held in an
irrevocable grantor trust. At December 31, 2000, 0.8 million shares of the
Company's common stock issued upon stock option exercises have been deferred and
are included in the grantor trust. These shares and the corresponding liability
are classified as components of treasury stock and additional paid-in capital,
respectively, in the consolidated balance sheets.

Total compensation expense related to all stock based compensation
plans for the year ended December 31, 2000, the eight months ended December 31,
1999 and fiscal 1999 and 1998 was $3.7 million, $1.3 million, $0.9 million and
$1.0 million, respectively.

The Company continues to account for its stock-based compensation plans
(including options issued under the plans) 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 value. Application of
the provisions of APB No. 25 resulted in no charge to earnings for the year
ended December 31, 2000 and during the eight months ended December 31, 1999, and
a charge to earnings of $0.4 million and $0.8 million in fiscal 1999 and 1998,
respectively, for certain performance-based stock options granted in prior
years. However, 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,
Alpine's net income, net income applicable to common stock, basic net income per
share of common stock and diluted net income per share of common stock for the
year ended December 31, 2000, the eight months ended December 31, 1999 and
fiscal 1999 and 1998, would approximate the pro forma amounts below:

YEAR ENDED EIGHT MONTHS ENDED
DECEMBER 31, 2000 DECEMBER 31, 1999
----------------- ------------------
AS REPORTED PRO FORMA AS REPORTED PRO FORMA
----------- --------- ----------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Net income (loss)......................... $(11,248) $(16,783) $46,386 $42,540
Net income (loss) applicable to
common stock............................ (11,294) (16,829) 46,360 42,514
Net income (loss) per basic share of
common stock............................ (0.77) (1.14) 3.13 2.87
Net income (loss) per diluted share of
common stock.......................... (0.77) (1.14) 2.79 2.60

YEAR ENDED YEAR ENDED
APRIL 30, 1999 APRIL 30, 1998
--------------- ---------------
AS REPORTED PRO FORMA AS REPORTED PRO FORMA
----------- --------- ----------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Net income................................ $13,569 $9,282 $15,283 $13,315
Net income applicable to common stock..... 13,530 9,243 15,214 13,246
Net income per basic share of common
stock................................... 0.82 0.56 0.90 0.78
Net income per diluted share of
common stock.......................... 0.72 0.48 0.81 0.71

F-26

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. STOCK BASED COMPENSATION PLANS (CONTINUED)

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
stock options is amortized to expense over 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 the year ended December 31, 2000,
the eight months ended December 31, 1999 and fiscal 1999 and 1998, respectively:
dividend yield of 0% for each year; expected volatility of 77%, 55%, 44% and
45%; risk-free interest rate of 5.11%, 6.30%, 4.92% and 5.53%; and expected life
of four years for all periods. The weighted average per share fair value of
options granted (using the Black-Scholes option-pricing model) for the year
ended December 31, 2000, the eight months ended December 31, 1999 and fiscal
1999 and 1998 was $5.11, $5.16, $6.29 and $5.70, respectively.

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. Because the Company's employee and consultant 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
estimates, 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 fiscal 1998
and 1999, the eight months ended December 31, 1999 and the year ended December
31, 2000.

WEIGHTED-
SHARES AVERAGE EXERCISE
OUTSTANDING PRICE
---------- ----------------

Outstanding at April 30, 1997.................... 3,272,370 $ 5.38
Exercised........................................ (559,880) 4.94
Canceled......................................... (56,466) 6.32
Granted.......................................... 184,001 13.83
------------
Outstanding at April 30, 1998.................... 2,840,025 5.93
Exercised........................................ (111,741) 4.15
Canceled......................................... (32,545) 15.34
Granted.......................................... 1,452,714 16.07
----------
Outstanding at April 30, 1999.................... 4,148,453 9.38
Exercised........................................ (1,475,575) 4.88
Canceled......................................... (319,007) 18.57
Granted.......................................... 584,525 13.20
------------
Outstanding at December 31, 1999................. 2,938,396 11.40
Exercised........................................ (18,500) 5.05
Canceled......................................... (23,919) 14.51
Granted.......................................... 496,729 8.53
-------------
Outstanding at December 31, 2000................. 3,392,706 11.01

F-27

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. STOCK BASED COMPENSATION PLANS (CONTINUED)

Information with respect to stock-based compensation plan stock options
outstanding and exercisable at December 31, 2000 is as follows:

OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------- -------------------
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
NUMBER REMAINING AVERAGE NUMBER AVERAGE
RANGE OF OF OPTIONS CONTRACTUAL EXERCISE OF OPTIONS EXERCISE
EXERCISE PRICES OUTSTANDING LIFE PRICE EXERCISABLE PRICE
--------------- ----------- ----------- -------- ----------- ---------

$0.88................. 5,758 9.99 $0.88 - $0.00
$2.05................. 32,333 0.97 $2.05 32,333 $2.05
$3.44-$5.13........... 472,604 5.15 $4.52 461,791 $4.53
$5.57-$8.13........... 579,329 4.86 $7.86 573,025 $7.87
$8.75-$12.88.......... 1,614,767 7.26 $10.54 729,470 $11.79
$13.69-$20.50......... 170,315 8.03 $16.39 84,999 $16.23
$20.81................ 517,600 7.54 $20.81 345,063 $20.81
--------- ---------
3,392,706 6.58 $11.01 2,226,681 $10.70
========= =========

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.

The Company sponsors several defined benefit pension plans and unfunded
supplemental executive retirement plans (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.

F-28

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. EMPLOYEE BENEFITS (CONTINUED)

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 net income for the year
ended December 31, 2000 being $0.5 million or $0.03 per diluted share greater
than net income under the previous method. The impact related to prior quarters
of the year 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
postretirement health care benefit plans for the year ended December 31, 2000,
the eight months ended December 31, 1999 and fiscal 1999 and 1998, are presented
below, along with amounts recognized in the respective consolidated balance
sheets and consolidated statements of operations:

DEFINED BENEFIT PENSION PLANS POSTRETIREMENT HEALTH CARE BENEFITS
----------------------------- -----------------------------------
DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30, DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30,
2000 1999 1999 1998 2000 1999 1999 1998
---- ---- ---- ---- ---- ---- ---- ----
(IN THOUSANDS)

CHANGE IN BENEFIT OBLIGATION:
Benefit obligation at
beginning of year........ $96,657 $106,042 $7,997 $5,912 $2,085 $2,131 $1,994 $1,265
Impact of acquisitions...... - - 99,364 - - - - -
Service cost................ 3,895 3,764 2,676 320 60 50 66 52
Interest cost............... 7,584 5,051 3,280 461 166 106 137 129
Actuarial (gain) loss....... 4,869 (14,662) (6,175) 1,441 168 (152) - 607
Impact of foreign currency (205) (14) - - - - - -
exchange.................
Benefits paid............... (2,978) (3,524) (1,100) (137) (85) (50) (66) (59)
-------- -------- -------- ------- -------- -------- ------ -------
Benefit obligation at end
of year.................. $109,822 $96,657 $106,042 $7,997 $2,394 $2,085 $2,131 $1,994
======== ======= ======== ======= ======== ======== ====== =======
CHANGE IN PLAN ASSETS:
Fair value of plan assets
at beginning of year..... $88,148 $84,108 $4,360 $3,568 $ - $ - $ - $ -
Impact of acquisitions...... - - 77,060 - - - - -
Actual return on plan assets 5,014 5,521 3,445 751 - - - -
Employer contribution....... 3,914 2,118 343 178 85 50 66 59
Impact of foreign currency (137) (75) - - - - - -
exchange...............
Benefits paid............... (2,978) (3,524) (1,100) (137) (85) (50) (66) (59)
-------- -------- -------- ------- -------- -------- ------ -------
Fair value of plan assets
at end of year........... $93,961 $88,148 $84,108 $4,360 $ - $ - $ - $ -
======= ======= ======= ====== ========= ========= ======== =======
Funded status............... $(15,861) $(8,509) $(21,934) $(3,637) $(2,394) $(2,085) $(2,131) $(1,994)
Unrecognized actuarial (10,468) (20,655) (5,430) 830 413 250 411 424
(gain) loss..............
Unrecognized prior service
cost..................... 1,791 1,952 2,056 2,235 - - - -
-------- -------- -------- ------- -------- -------- ------ -------
Accrued benefit cost........ $(24,538) $(27,212) $(25,308) $ (572) $(1,981) $(1,835) $(1,720) $(1,570)
======= ======= ======= ====== ========= ========= ======== =======
AMOUNTS RECOGNIZED IN THE
CONSOLIDATED BALANCE
SHEETS CONSIST OF:
Prepaid benefit cost........ $ 420 $ - $ - $ 35 $ - $ - $ - $ -
Accrued benefit liability... (26,228) (28,438) (28,829) (2,345) (1,981) (1,835) (1,720) (1,570)
Additional minimum liability (1,085) (1,165) - - - - - -
Intangible asset............ 1,544 1,525 2,056 1,738 - - - -
Accumulated other
comprehensive income... 811 866 1,465 - - - - -
-------- -------- -------- ------- -------- -------- ------ -------
Accrued benefit cost........ $(24,538) $(27,212) $(25,308) $(572) $(1,981) $(1,835) $(1,720) $(1,570)
======= ======= ======= ====== ========= ========= ======== =======

F-29

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. EMPLOYEE BENEFITS (CONTINUED)

DEFINED BENEFIT PENSION PLANS POSTRETIREMENT HEALTH CARE BENEFITS
----------------------------- -----------------------------------
DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30, DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30,
2000 1999 1999 1998 2000 1999 1999 1998
---- ---- ---- ---- ---- ---- ---- ----
(IN THOUSANDS)

COMPONENTS OF NET PERIODIC
BENEFIT COST:
Service cost................ $3,895 $3,764 $2,676 $320 $ 60 $50 $66 $52
Interest cost............... 7,584 5,051 3,280 461 166 106 137 129
Expected return on plan (7,869) (4,894) (3,256) (281) - - - -
assets...................
Amortization of prior 160 114 162 161 - 33 - 5
service cost.............
Actuarial (gain) loss....... (2,466) 79 56 - 5 (13) 13 -
------ ------- ------ ---- ----- ----- ----- -----
Net periodic benefit cost... $1,304 $4,114 $2,918 $661 $231 $176 $216 $186
====== ====== ====== ==== ===== ===== ===== =====

The actuarial present value of the projected pension benefit obligation
and the postretirement health care benefits obligation at December 31, 2000 and
1999, and April 30, 1999 and 1998, were determined based upon the following
assumptions:

DEFINED BENEFIT PENSION PLANS POSTRETIREMENT HEALTH CARE BENEFITS
----------------------------- -----------------------------------
DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30, DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30,
2000 1999 1999 1998 2000 1999 1999 1998
---- ---- ---- ---- ---- ---- ---- ----

Discount rate............. 7.5% 8.0% 6.0%-7.0% 6.5%-7.0% 7.5% 8.0% 7.0% 7.0%
Expected return on plan 9.0% 9.0% 8.0%-9.0% 7.5%-9.5% N/A N/A N/A N/A
assets.................
Increase in future 4.5% 5.0% 4.0% 4.0% N/A N/A N/A N/A
compensation...........

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 year ended December 31, 2000, the eight months ended
December 31, 1999, and fiscal 1999 and 1998, were $5.4 million, $2.7 million,
$3.2 million and $0.9 million, respectively.

13. INCOME TAXES

The provision (benefit) for income taxes for the year ended December
31, 2000, the eight months ended December 31, 1999 and fiscal 1999 and 1998, and
is comprised of the following:

EIGHT MONTHS
YEAR ENDED ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30,
2000 1999 1999 1998
---- ---- ---- ----
(IN THOUSANDS)

Current:
Federal.......................... $8,853 $(1,209) $24,044 $19,315
State............................ (881) - 3,048 2,959
Foreign.......................... 541 229 3,210 2,484
------- -------- -------- --------
Total current.................... 8,513 (980) 30,302 24,758
------- -------- -------- --------
Deferred:
Federal.......................... (3,713) 22,552 (2,501) (1,123)
State............................ (919) (96) (390) (162)
Foreign.......................... (2,762) (357) 133 455
------- -------- -------- --------
Total deferred................... (7,394) 22,099 (2,758) (830)
------- -------- -------- --------
Total income tax expense......... $ 1,119 $21,119 $27,544 $23,928
======= ======== ======== ========

F-30

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. INCOME TAXES (CONTINUED)

The provision (benefit) for income taxes differs from the amount
computed by applying the U.S. federal income tax rate of 35% for the year ended
December 31, 2000, the eight months ended December 31, 1999 and fiscal 1999 and
1998, because of the effect of the following items:

EIGHT MONTHS
YEAR ENDED ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30,
2000 1999 1999 1998
---- ---- ---- ----
(IN THOUSANDS)

Continuing operations:
Expected income tax expense
(benefit) at U.S. federal
statutory tax rate............... $(993) $18,536 $22,684 $21,712
State income taxes, net of U.S.
federal income tax benefit....... (1,126) 1,745 2,630 2,717
Taxes on foreign income at rates
which differ from the U.S.
federal statutory rate........... 1,315 380 384 288
Distributions on preferred
securities of subsidiary trust... (5,300) (3,317) (439) -
Nondeductible goodwill amortization. 7,099 4,780 2,706 382
Change in valuation allowance....... - - - (738)
Reduction in reserves............... (1,500) - - -
Other, net.......................... 1,624 (378) (10) 435
--------- -------- --------- -------
Provision for income taxes from
continuing operations............ 1,119 21,746 27,955 24,796
Extraordinary loss.................. - (627) (411) (868)
--------- -------- --------- -------
Total income tax expense...... $ 1,119 $21,119 $27,544 $23,928
========= ======== ======== =======

The Company accounts for income taxes under an asset and liability
approach that requires the recognition of deferred tax assets and liabilities
for both the expected future tax impact of temporary differences arising from
assets and liabilities whose tax bases are different from financial statement
amounts and for the expected future tax benefit to be derived from tax loss
carryforwards. 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 (including tax
loss carryforwards) is dependent on Alpine's ability to generate taxable income
within the carryforward period and the periods in which net temporary
differences reverse. Although no assurance can be given that sufficient taxable
income will be generated for utilization of certain of the Company's
consolidated net operating loss carryforwards or for reversal of certain
temporary differences, the Company believes it is more likely than not that all
of the net deferred tax asset, after valuation allowance, will be realized.

F-31

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. INCOME TAXES (CONTINUED)

Income from continuing operations before income taxes, distributions on
preferred securities of subsidiary trust, minority interest, equity in earnings
of affiliate and extraordinary loss attributable to domestic and foreign
operations for the years ended December 31, 2000, the eight months ended
December 31, 1999 and fiscal 1999 and 1998 was as follows:

EIGHT
YEAR ENDED MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30,
2000 1999 1999 1998
---- ---- ---- ----
(IN THOUSANDS)

United States.......................... $ 6,501 $53,376 $58,218 $44,553
Foreign................................ (9,339) (417) 6,592 17,480
------- --------- -------- -------
Income (loss) before income taxes,
distributions on preferred
securities of Superior Trust I,
minority interest and
extraordinary loss................ $(2,838) $52,959 $64,810 $62,033
======= ======= ======= =======

Items that result in deferred tax assets and liabilities and the
related valuation allowance at December 31, 2000 and 1999, and April 30, 1999
and are as follows:

DECEMBER 31, DECEMBER 31, APRIL 30,
2000 1999 1999
---- ---- ----
(IN THOUSANDS)

Deferred tax assets:
Sale/leaseback....................................... $ 1,875 $ 1,875 $ 1,950
Accruals not currently deductible for tax............ 13,752 18,453 23,939
Pension and postretirement benefits.................. 11,541 13,535 9,945
Compensation expense related to unexercised stock
options and stock grants........................ 2,491 1,561 1,152
Net operating loss carryforwards..................... 20,704 15,297 7,827
Alternative minimum tax credit carryforwards......... 500 500 2,500
Other................................................ 1,814 5,810 2,130
---------- --------- ---------
Total deferred tax assets............................ 52,677 57,031 49,443
Less valuation allowance............................. 6,595 6,595 6,595
---------- --------- ---------
Net deferred tax assets.............................. 46,082 50,436 42,848
---------- --------- ---------
Deferred tax liabilities:
Depreciation......................................... 110,658 88,125 94,705
Inventory............................................ 11,536 10,830 6,807
Long-term investments................................ 6,180 50,829 22,920
Other................................................ 18,122 16,310 13,220
---------- --------- ---------
Total deferred tax liabilities.................. 146,496 166,094 137,652
---------- --------- ---------
Net deferred tax liability...................... $100,414 $115,658 $ 94,804
========== ========= =========

F-32

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. INCOME TAXES (CONTINUED)

At December 31, 2000, Alpine had significant state operating loss
carryforwards that can be used to offset future taxable income. The net
operating loss carryforwards expire beginning in 2005 through 2020. Availability
of the net operating loss carryforwards might be challenged upon taxing
authorities' examinations of the related tax returns, which could affect the
availability of such carryforwards. Alpine believes, however, that any
challenges that would limit the utilization of net operating loss carryforwards
would not have a material adverse effect on Alpine's financial position.

The Company provides taxes on undistributed earnings of certain
domestic subsidiaries and investments based on anticipated taxable
distributions. U.S. income taxes have not been provided for undistributed
earnings of certain foreign subsidiaries whose earnings are considered to be
indefinitely reinvested. If distributed, the Company would be subject to both
U.S. income tax and withholding taxes payable to various foreign countries.

14. RESTRUCTURING AND INFREQUENT AND UNUSUAL CHARGES

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 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 eight months ended December 31, 1999, the Company recorded
infrequent and unusual charges of $4.7 million, which included (i) a $1.3
million charge related to restructuring activities at Superior Israel, (ii) $2.1
million in charges primarily associated with the rationalization of certain
Essex manufacturing facilities, (iii) $0.9 million in charges associated with
the evaluation and termination of a management information system project at
Essex and (iv) $0.4 million of start-up costs for the Company's Torreon, Mexico
magnet wire facility.

During fiscal 1999, the Company recorded infrequent and unusual charges
of $7.3 million consisting of a $2.9 million restructuring charge recorded by
Superior Israel relating to planned manufacturing plant consolidations and
overhead rationalization associated with the acquisition of Cvalim and $4.4
million in charges primarily associated with the evaluation and termination of a
management information system project at Essex.

ESSEX

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
initially accrued as part of the Essex Acquisition purchase price a $29.7
million provision, which included $11.8 million of employee termination and
relocation cost, $11.9 million of facility consolidation cost, $4.4 million of
management information system project termination costs, and $1.6 million of
other exit costs. During the eight months ended December 31, 1999, the Company
revised its estimate and, as a result, increased the provision for employee
termination and relocation costs, facility consolidation costs, and other exit
costs by $6.1 million, $0.2 million and $1.3 million, respectively, and
decreased the provision for management information system project termination by
$1.4 million. The net increase to the accrual of $6.2 million has been reflected
as an increase in goodwill. As of December 31, 2000, $17.2 million, $11.1
million, $3.0 million and $2.6 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

F-33

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. RESTRUCTURING AND INFREQUENT AND UNUSUAL CHARGES (CONTINUED)

ESSEX (CONTINUED)

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 fiscal 1999, the Company also wrote off $10.4 million of
previously capitalized costs related to a discontinued management information
system project at Essex. During the eight months ended December 31, 1999, 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.

SUPERIOR ISRAEL

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. During fiscal 1999, 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 within Cvalim, and approximately 146 positions have
been eliminated.

During the eight months ended December 31, 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. The restructuring actions resulted in the elimination of
approximately 123 positions, most of which were manufacturing related employees.
All significant aspects of the restructuring plan are complete.

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 counterparties for foreign exchange forward
contracts, metal forward price contracts and metals futures contracts but the
Company does not anticipate nonperformance by any of these counterparties. The
amount of such exposure is generally the unrealized gains within the underlying
contracts.

F-34

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE INFORMATION (CONTINUED)

FOREIGN EXCHANGE RISK MANAGEMENT

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, 2000, the Company had no forward exchange sales
contracts, but did have $6.7 million of purchase contracts whose fair value
approximated the contract amount. Foreign currency gains or losses resulting
from the Company's operating and hedging activities are recognized in earnings
in the period in which the hedged currency is collected or paid.

COMMODITY PRICE RISK MANAGEMENT

The cost of copper, the Company's most significant raw material, has
been subject to considerable volatility over the past several years. 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, 2000, the
Company had sales contracts for 3.2 million copper pounds, or $2.7 million, with
an estimated fair value of $2.7 million. Unrealized gains and losses on the
qualified hedges, as appropriate, are included in other assets and are
recognized when the related underlying copper is purchased or sold or when a
sale is no longer expected to occur.

16. COMMITMENTS AND CONTINGENCIES

Total rent expense under cancelable and noncancelable operating leases
was $14.2 million, $8.5 million, $8.0 million and $1.6 million during the year
ended December 31, 2000, for the eight months ended December 31, 1999, and
fiscal 1999 and 1998, respectively.

At December 31, 2000, future minimum lease payments under noncancelable
operating leases are as follows:

AMOUNT
------
YEAR (IN THOUSANDS)
----

2001...................................................... $ 9,409
2002...................................................... 8,252
2003...................................................... 7,501
2004...................................................... 6,694
2005...................................................... 6,265
Thereafter................................................ 13,653
--------
$51,774
========

Approximately 40% of the Company's total labor force is covered by
collective bargaining agreements.

F-35

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16. COMMITMENTS AND CONTINGENCIES (CONTINUED)

The Company is subject to routine 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
Alpine's consolidated 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 $4.0 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 limited 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 express 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, 2000, the Company had forward fixed
price purchase commitments for 67.0 million copper pounds.

Pursuant to the Premier Merger Agreement dated May 28, 1999, Alpine
extended to Cookson certain customary warranties, representations and
indemnities including certain indemnities related to environmental claims. Such
indemnities are subject to an aggregate monetary limit and substantially all
obligations under these warranties and representations expired on May 31, 2000.

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 two to three times annual cash compensation
and bonus and the continuation for stipulated periods of other benefits, as
defined.

F-36

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17. RELATED PARTY TRANSACTIONS

At December 31, 2000, Alpine has loaned certain officers $0.9 million
relating to the tax implications associated with the exercise in prior years of
stock options and restricted stock grants. The unpaid balance, which is deducted
from stockholders' equity, bears interest at prime plus 0.5%. During fiscal
1999, the Company agreed to forgive a $300,000 loan made by the Company in June
1987 to an executive of the Company to finance the exercise of certain stock
options, with such forgiveness to occur over a four year period, subject to
certain employment conditions.

18. PREFERRED STOCK

Alpine has authorized 500,000 shares of preferred stock with a par
value of $1.00 per share. The preferred stock may be issued at the discretion of
the Board of Directors in one or more series with differing terms, limitations
and rights.

At December 31, 2000, Alpine has outstanding 250 shares of 9%
Cumulative Convertible Senior Preferred Stock ("9% Senior Preferred Stock") and
177 shares of 9% Cumulative Convertible Preferred Stock ("9% Preferred Stock").

The 9% Senior Preferred Stock is senior in ranking to holders of
Alpine's common stock and the 9% Preferred Stock. Each share is convertible at
any time into shares of Alpine common stock at a conversion price of $7.90 per
share, subject to customary adjustments, and is redeemable by Alpine under
certain conditions.

The 9% Senior Preferred Stock carries 100 votes per share, votes as a
single class with Alpine's common stock on all matters submitted to stockholders
and is entitled to vote as a separate class in the event of any proposal to (i)
amend any of the principal terms of the preferred stock; (ii) authorize, create,
issue or sell any class of stock senior to or on a parity with the 9% Senior
Preferred Stock as to dividends or liquidation preference; or (iii) merge into,
consolidate with, or sell all or substantially all of the assets of Alpine to
another entity. The holders of not less than 66 2/3% of the 9% Senior Preferred
Stock must approve any transaction subject to the class voting rights.

The 9% Preferred Stock is convertible into 105 1/2 shares of common
stock, subject to customary adjustments. Alpine may redeem the stock at any
time, in whole or in part at a price equal to the liquidation value per share.

During fiscal 1998, 1,500 shares of 9% Senior Preferred Stock were
converted into 189,873 shares of Common Stock.

F-37

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

19. SUPERIOR TRUST CONVERTIBLE PREFERRED SECURITIES

On March 31, 1999, Superior Trust I (the "Trust"), a trust in which
Superior owns all the common equity interests, issued 3,332,254 8 1/2% Trust
Convertible Preferred Securities ("Trust Convertible Preferred Securities") with
a liquidation value of $50 per share. The sole assets of the Trust are
Superior's 81/2% Convertible Subordinated Debentures ("Convertible Debentures")
due 2014 with an aggregate principal amount of $171,765,650, at an interest rate
of 8 1/2% per annum and a maturity date of March 30, 2014. Superior 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 Superior at the rate of 1.1496 shares
of Superior'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. Dividends on
the Trust Convertible Preferred Securities are payable 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 dividends.

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 Superior at a per share redemption price
of $52.55, periodically declining to $50.00 in April 2008 and thereafter. In
addition, Superior has the option to call the Trust Convertible Preferred
Securities during the one-year period commencing on March 31, 2002, at a per
share price cash redemption of $52.975, plus accrued and unpaid dividends, if
any, provided the average closing price of Superior'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. Superior has
reserved 3,830,759 shares of its common stock for possible conversion of the
Trust Convertible Preferred Securities.

Superior may cause the Trust to defer the payment of dividends for
successive periods of up to 20 consecutive quarters. During such periods,
accrued dividends on the Trust Convertible Preferred Securities will accrue
interest at the rate of 8 1/2% per annum and Superior may not declare or pay
dividends on its common stock. Also during such period, if holders of Trust
Convertible Preferred Securities convert such securities into Superior common
stock, the holder will not receive any cash related to the deferred dividends.

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, 2000, the
fair value of the Trust Convertible Preferred Securities, based on quoted market
price, was approximately $23.3 million.

F-38

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

20. STOCKHOLDER RIGHTS AGREEMENT

Under the Company's Stockholder Rights Plan ("the 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 $75.00, 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
or 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
February 17, 2009 at a redemption price of $0.01 per Right. At December 31,
2000, 200,000 shares of Series A Junior Participating Preferred Stock were
reserved for issuance under this Plan.

21. CHANGE IN YEAR END (UNAUDITED)

The Company's unaudited results of operations for the eight months
ended December 31, 1998 are summarized as follows:

EIGHT MONTHS ENDED
DECEMBER 31, 1998
-----------------
(IN THOUSANDS,
EXCEPT PER SHARE DATA)

Net sales............................................. $488,279
Gross profit.......................................... 102,995
Provision for income taxes............................ 16,996
Net income............................................ 13,049
Net income per basic share of common stock............ $0.78
=====
Net income per diluted share of common stock.......... $0.70
=====

22. 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)
outside plant wire and cable for voice and data transmission in
telecommunications networks and (ii) copper and fiber optic datacom or premise
wire and cable for use within homes and offices for local networks, Internet
connectivity and other applications. The OEM segment includes magnet wire and
related products. The electrical segment includes building and industrial wire
and cable.

F-39

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

22. BUSINESS SEGMENTS AND FOREIGN OPERATIONS (CONTINUED)

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 EIGHT MONTHS YEAR ENDED
ENDED ENDED ----------
DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30,
2000 1999 1999 1998
---- ---- ---- ----
(IN THOUSANDS)

Net sales(a):
Communications......................... $ 848,099 $ 511,413 $ 630,008 $518,459
OEM.................................... 613,382 390,892 247,909 -
Electrical............................. 587,567 474,588 270,201 -
----------- ----------- ----------- --------
$2,049,048 $1,376,893 $1,148,118 $518,459
========== =========== =========== ========

Depreciation and amortization expense:
Communications......................... $20,240 $11,850 $12,336 $8,330
OEM.................................... 9,287 6,863 4,212 -
Electrical............................. 7,560 4,432 2,844 -
Corporate and other.................... 5,218 3,625 1,386 160
Amortization of goodwill............... 21,065 13,778 8,369 1,715
------- ------- ------- -------
$63,370 $40,548 $29,147 $10,205
======= ======= ======= =======

Operating income (loss):
Communications......................... $120,071 $86,849 $114,751 $80,975
OEM.................................... 75,839 55,538 31,113 -
Electrical............................. 6,797 24,714 17,502 -
Corporate and other.................... (27,304) (15,320) (24,660) (10,566)
Infrequent and unusual charges......... (14,961) (4,660) (7,282) -
Amortization of goodwill............... (21,065) (13,778) (8,369) (1,715)
-------- -------- -------- -------
$139,377 $133,343 $123,055 $68,694
======== ======== ======== =======

F-40

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

22. BUSINESS SEGMENTS AND FOREIGN OPERATIONS (CONTINUED)

YEAR EIGHT MONTHS YEAR ENDED
ENDED ENDED ----------
DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30,
2000 1999 1999 1998
---- ---- ---- ----
(IN THOUSANDS)

Total assets:
Communications......................... $ 539,987 $ 510,537 $ 488,247 $230,700
OEM.................................... 295,930 274,103 248,293 -
Electrical............................. 265,336 323,154 309,987 -
Corporate and other.................... 992,493 1,075,835 1,027,949 48,229
----------- ---------- ---------- ---------
2,093,746 2,183,629 2,074,476 278,929
Discontinued operations................ - - 34,557 41,480
----------- ---------- ---------- ---------
$2,093,746 $2,183,629 $2,109,033 $320,409
========== ========== ========== =========

Capital expenditures:
Communications......................... $33,552 $22,563 $23,072 $18,488
OEM.................................... 35,363 20,363 7,694 -
Electrical............................. 6,564 6,851 7,564 -
Corporate and other.................... 2,964 7,293 5,571 1,020
------- ------- ------- -------
$78,443 $57,070 $43,901 $19,508
======= ======= ======= =======

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

(a) No customers accounted for more than 10% of net sales for the year
ended December 31, 2000, for the eight months ended December 31, 1999
or in fiscal 1999. Five customers accounted for 19%, 19%, 17%, 16% and
13% of net sales in fiscal 1998.

F-41

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

22. BUSINESS SEGMENTS AND FOREIGN OPERATIONS (CONTINUED)

The following provides information about domestic and foreign
operations for the year ended December 31, 2000, the eight months ended December
31, 1999 and fiscal 1999 and 1998:

YEAR EIGHT MONTHS YEAR ENDED
ENDED ENDED ----------
DECEMBER 31, DECEMBER 31, APRIL 30, APRIL 30,
2000 1999 1999 1998
---- ---- ---- ----
(IN THOUSANDS)

Net sales:
United States.............. $1,818,510 $1,225,973 $1,002,665 $473,879
Canada..................... 48,664 23,801 43,757 44,580
Israel..................... 139,363 95,944 83,368 -
United Kingdom............. 42,511 31,175 18,328 -
---------- ---------- ---------- --------
$2,049,048 $1,376,893 $1,148,118 $518,459
========== ========== ========== ========

Long-lived assets:
United States.............. $394,215 $399,444 $422,197 $73,575
Canada..................... 11,944 13,431 12,832 10,773
Israel..................... 75,453 74,093 65,416 -
United Kingdom............. 12,189 14,093 9,490 -
Mexico..................... 46,881 14,702 1,642 -
---------- ---------- ---------- --------
$540,682 $515,763 $511,577 $84,348
========== ========== ========== ========

23. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Selected unaudited quarterly data is presented below:

2000
----------------------------------------------------------------------------
QUARTER ENDED
----------------------------------------------------------- YEAR ENDED
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 DECEMBER 31
-------- ------- ------------ ----------- ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Net sales............................. $497,896 $550,086 $507,223 $493,843 $2,049,048
Gross profit.......................... 85,622 98,695 80,325 75,486 340,128
Operating income...................... 34,208 49,077 30,184 25,908 139,377
Net income (loss)..................... $ (130) $ 2,814 $ (3,031) $(10,901) $ (11,248)
======== ======== ======== ======== ==========
Net income (loss) per diluted share of
common stock(a) ................... $ (0.01) $ 0.18 $ (0.21) $ (0.75) $ (0.77)
======== ======== ======== ======== ==========

F-42

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

23. QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (CONTINUED)

1999
----------------------------------------------------------------
QUARTER ENDED TWO MONTHS EIGHT MONTHS
---------------------------- ENDED ENDED
JULY 31 OCTOBER 31 DECEMBER 31 DECEMBER 31
------- ---------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Net sales........................................ $517,433 $530,932 $328,528 $1,376,893
Gross profit..................................... 96,599 101,117 56,578 254,294
Operating income................................. 52,172 56,536 24,635 133,343
Income from continuing operations................ 6,012 5,665 330 12,007
Discontinued operations.......................... - 35,369 - 35,369
Extraordinary (loss) on early extinguishment of
debt.......................................... (836) - (154) (990)
---------- --------- ----------- -----------
Net income............................... $ 5,176 $41,034 $ 176 $ 46,386
========== ========= =========== ===========

Net income per diluted share of common stock:
Income from continuing operations............. $ 0.34 $ 0.32 $ 0.02 $ 0.68
Discontinued operations....................... - 2.17 - 2.17
Extraordinary (loss) on early extinguishment
of debt.................................... (0.05) - (0.01) (0.06)
---------- --------- ----------- -----------
Net income per diluted share of common
stock (a)............................. $ 0.29 $ 2.49 $ 0.01 $ 2.79
========== ========= =========== ===========

FISCAL 1999
-------------------------------------------------------------------
QUARTER ENDED
------------------------------------------------------ YEAR ENDED
JULY 31 OCTOBER 31 JANUARY 31 APRIL 30 APRIL 30
------- ---------- ----------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Net sales........................................ $157,751 $146,771 $327,872 $515,724 $1,148,118
Gross profit..................................... 34,296 33,472 63,169 101,657 232,594
Operating income................................. 23,874 23,923 22,920 52,338 123,055
Income from continuing operations................ 4,737 5,917 1,195 5,061 16,910
Discontinued operations.......................... 1,503 (209) (170) (3,831) (2,707)
Extraordinary (loss) on early extinguishment of
debt.......................................... - - (634) - (634)
---------- --------- ----------- ---------- -----------
Net income.................................... $ 6,240 $ 5,708 $ 391 $ 1,230 $ 13,569
========== ========= =========== ========== ===========

F-43

THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

23. QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (CONTINUED)

FISCAL 1999
-------------------------------------------------------------------
QUARTER ENDED
------------------------------------------------------ YEAR ENDED
JULY 31 OCTOBER 31 JANUARY 31 APRIL 30 APRIL 30
------- ---------- ----------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Net income per diluted share of common stock:
Income from continuing operations............. $ 0.24 $ 0.31 $ 0.07 $ 0.29 $ 0.91
Discontinued operations....................... 0.08 (0.01) (0.01) (0.21) (0.15)
Extraordinary (loss) on early extinguishment
of debt.................................... - - (0.04) - (0.04)
---------- ---------- -------- -------- --------
Net income per diluted share of common
stock (a)............................. $ 0.32 $ 0.30 $ 0.02 $ 0.08 $ 0.72
========= ========== ======== ======== ========

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

(a) Net income per diluted share of common stock for the twelve month and
the eight month periods is determined by computing a year-to-date
weighted average of the number of incremental shares included in each
quarterly diluted net income per share calculation. As a result, the
sum of net income per share for the four quarters may not equal the net
income per share for the year ended December 31, 2000, the eight months
ended December 31, 1999 and the year ended April 30, 1999.

F-44

SCHEDULE I

THE ALPINE GROUP, INC.
(PARENT COMPANY)
CONDENSED BALANCE SHEETS
(IN THOUSANDS)

DECEMBER 31, DECEMBER 31, APRIL 30,
2000 1999 1999
---- ---- ----

ASSETS
Current assets:
Cash and cash equivalents..................................... $ 9,551 $ 5,237 $ 17,253
Restricted cash............................................... 7,739 - -
Marketable securities......................................... - 7,841 14,957
Other current assets.......................................... 1,193 3,937 4,586
---------- ---------- ----------
Total current assets.................................. 18,483 17,015 36,796
Investment in consolidated subsidiaries....................... 58,873 60,399 88,017
Property, plant and equipment, net............................ 1,617 1,849 1,277
Long-term investments and other assets........................ 83,950 164,411 30,561
---------- ---------- ----------
Total assets.......................................... $162,923 $243,674 $156,651
========== ========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt.............................. $ 47,187 $ 79 $ 39
Accounts payable............................................... 42 46 853
Accrued expenses............................................... 7,296 9,030 6,409
Advances and loans from subsidiaries........................... (506) (612) 4,272
---------- --------- ---------
Total current liabilities.............................. 54,019 8,543 11,573
Long-term debt, less current portion........................... 12,834 82,877 61,865
Other long-term liabilities.................................... 31,440 57,271 26,830
---------- ---------- ----------
Total liabilities...................................... 98,293 148,691 100,268
Stockholders' equity:
9% cumulative convertible preferred stock at liquidation value. 427 427 427
Common stock, $.10 par value; authorized 25,000,000 shares;
21,763,055, 21,663,041 and 20,096,479 shares issued at
December 31, 2000 and 1999 and April 30, 1999, respectively. 2,176 2,166 2,009
Capital in excess of par value................................. 162,912 158,268 138,860
Accumulated other comprehensive income (deficit)............... (18,910) 451 (5,222)
Retained earnings (accumulated deficit)........................ 15,762 27,056 (19,304)
---------- ---------- ----------
162,367 188,368 116,770
Shares of common stock in treasury, at cost; 8,050,646,
7,418,534 and 4,923,932 shares at December 31, 2000 and
1999, and April 30, 1999, respectively...................... (96,824) (92,396) (59,398)
Receivable from stockholders................................... (913) (989) (989)
---------- ---------- ----------
Total stockholders' equity............................... 64,630 94,983 56,383
---------- ---------- ----------
Total liabilities and stockholders' equity............. $162,923 $243,674 $156,651
========== ========== ==========

F-45

THE ALPINE GROUP, INC.
(PARENT COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

EIGHT MONTHS YEAR ENDED
YEAR ENDED ENDED APRIL 30,
DECEMBER 31, DECEMBER 31, ---------
2000 1999 1999 1998
---- ---- ---- ----

Revenues:
Interest and dividend income........................... $ 5,893 $ 3,461 $ 316 $3,808
Intercompany interest.................................. 39 26 39 37
Other income........................................... - - 10,686 43
----------- ---------- -------- -------
5,932 3,487 11,041 3,888
----------- ---------- -------- -------
Expenses:
General and administrative............................. 8,394 5,518 7,806 5,064
Interest expense....................................... 8,673 4,471 4,037 2,665
Loss on sale of securities............................. 10,545 - - -
----------- ---------- -------- -------
27,612 9,989 11,843 7,729
----------- ---------- -------- -------
Loss before income taxes, equity in net income of
affiliates, equity in net income (loss) of
subsidiaries, income (loss) from discontinued
operations and extraordinary (loss) on early
extinguishments of debt.............................. (21,680) (6,502) (802) (3,841)
Benefit for income taxes.................................... 9,806 2,503 73 1,435
----------- ---------- -------- -------
(11,874) (3,999) (729) (2,406)
Equity in net income of affiliates......................... 1,706 2,196 - -
Equity in net income (loss) of subsidiaries, net........... (1,080) 12,820 17,005 18,958
----------- ---------- -------- -------
Income (loss) from continuing operations before
extraordinary (loss)................................. (11,248) 11,017 16,276 16,552
Income (loss) from discontinued operations.................. - 35,369 (2,707) (194)
----------- ---------- -------- -------
Income (loss) before extraordinary (loss) ............. (11,248) 46,386 13,569 16,358
Extraordinary (loss) on early extinguishment of debt........ - - - (1,075)
----------- ---------- -------- -------
Net income (loss).................................. $(11,248) $46,386 $13,569 $15,283
=========== ========== ======== =======

F-46

THE ALPINE GROUP, INC.
(PARENT COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

EIGHT MONTHS YEAR ENDED
YEAR ENDED ENDED APRIL 30,
DECEMBER 31, DECEMBER 31, ---------
2000 1999 1999 1998
---- ---- ---- ----

Cash flows provided by (used for) operating
activities.................................... $(11,761) $(27,954) $7,600 $2,234
--------- --------- ------- ---------
Cash flows from investing activities:
Capital expenditures.......................... (104) (791) (311) (1,020)
Proceeds from sale of marketable securities
and other investments..................... 50,799 7,619 715 135
Dividends received from subsidiaries, net of
tax....................................... - - 1,525 507
Investment in PolyVision Corporation.......... - (2,000) (5,000) -
Restricted cash............................... (7,739) - - -
Other......................................... - - (740) 103
--------- --------- ------- ---------
Cash flows provided by (used for) investing
activities..................................... 42,956 4,828 (3,811) (275)
--------- --------- ------- ---------
Cash flows from financing activities:
Borrowings (repayments) under revolving credit
facility, net............................. (22,898) 30,300 39,700 -
Long-term borrowings.......................... - 785 - 10,665
Repayments of long-term borrowings............ (97) (10,033) (32) (9,840)
Debt issuance costs........................... - (850) (280) (400)
Dividends on preferred stock.................. (46) (25) (39) (69)
Proceeds from stock options exercised......... 595 1,195 333 2,618
Purchase of treasury shares................... (5,051) (16,330) (32,508) (14,760)
Other......................................... 616 6,068 486 7
--------- --------- ------- ---------
Cash flows provided by (used for) financing
activities..................................... (26,881) 11,110 7,660 (11,779)
--------- --------- ------- ---------
Net increase (decrease) in cash and cash
equivalents.................................... 4,314 (12,016) 11,449 (9,820)
Cash and cash equivalents at beginning of year....
5,237 17,253 5,804 15,624
--------- --------- ------- ---------
Cash and cash equivalents at end of year.......... $ 9,551 $ 5,237 $17,253 $ 5,804
========= ========= ======= =========

Supplemental cash flow disclosures:
Cash paid for interest........................ $ 7,690 $ 4,065 $ 3,194 $ 2,521
========== ========= ======== =========

Cash paid (refunded) for income taxes, net.... $ (16) $ 8,450 $ (8,426) $ (3,592)
============ ========= ======== ========

F-47

THE ALPINE GROUP, INC.
(PARENT COMPANY)
APPENDIX A

DECEMBER 31, DECEMBER 31, APRIL 30,
2000 1999 1999
---- ---- ----
(IN THOUSANDS)

Long-term debt consists of:
12.25% Senior Secured Notes (due 2003, principal amount
$12.2 million)................................................ $11,725 $11,665 $11,553
Term loan (due 2001, interest at LIBOR plus 2.0%)................ - - 10,000
Revolving credit facility........................................ 47,102 70,000 39,700
Other............................................................ 1,194 1,291 651
-------- ------- -------
60,021 82,956 61,904
Less current portion............................................. 47,187 79 39
-------- ------- -------
$12,834 $82,877 $61,865
======== ======= =======

Minimum current maturities of long-term debt outstanding as of December
31, 2000 are as follows:

AMOUNT
FISCAL YEAR ------
----------- (IN THOUSANDS)

2001....................................................... $47,187
2002....................................................... 93
2003....................................................... 11,829
2004....................................................... 110
2005....................................................... 118
Thereafter................................................. 684
-------
$60,021
=======

F-48

SCHEDULE II

THE ALPINE GROUP, INC. AND SUBSIDIARIES
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED DECEMBER 31, 2000 AND
THE EIGHT MONTHS ENDED DECEMBER 31, 1999, AND THE YEAR ENDED APRIL 30, 1999
(IN THOUSANDS)

ADDITIONS
---------
BALANCE AT CHARGED TO CHARGED TO
BEGINNING OF COSTS AND OTHER BALANCE AT
DESCRIPTION PERIOD EXPENSES ACCOUNTS DEDUCTIONS END OF PERIOD
----------- ------ -------- -------- ---------- -------------

YEAR ENDED DECEMBER 31, 2000:
Allowance for restructuring
activities.................. $14,326 $2,085 $ - $(14,085)(a) $2,326
Allowance for doubtful
accounts.................... 3,193 2,490 - (685)(b) 4,998
EIGHT MONTHS ENDED DECEMBER
31, 1999:
Allowance for restructuring
activities.................. 31,115 1,321 6,231(c) (24,341)(a) 14,326
YEAR ENDED APRIL 30, 1999:
Allowance for restructuring
activities.................. - 2,881 33,088(c) (4,854)(a) 31,115

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

(a) Payments for restructuring liabilities

(b) Write-offs net of recoveries

(c) Accrued as a component of acquisition purchase price

F-49