GENTEK INC - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)

__X__ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

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 001-14789

GENTEK INC.
(Exact name of Registrant as specified in its charter)

DELAWARE 02-0505547
(STATE OF OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)

LIBERTY LANE
HAMPTON, NEW HAMPSHIRE 03842
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

Registrant's telephone number, including area code: (603) 929-2264

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

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

Common stock, par value $.01 per share

(TITLE OF CLASS)

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

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

Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act). Yes [ ] No [X]

State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was last sold, or the average bid and asked price of such common
equity, as of the last business day of the registrant's most recently completed
second fiscal quarter: $2,471,762.

The aggregate market value of the voting stock held by non-affiliates
of the registrant as of February 28, 2003, was approximately $247,167. The
number of outstanding shares of the Registrant's Common Stock and Class B Common
Stock as of February 28, 2003 was 20,586,063 and 4,750,107, respectively.

DOCUMENTS INCORPORATED BY REFERENCE:

The Registrant's Proxy Statement for the Annual Meeting of Stockholders
to be held on May 2, 2003 is incorporated by reference into Part III.

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PART I

ITEM 1. BUSINESS.

GENERAL

GenTek Inc. (the "Company" or "GenTek") is a technology-driven
manufacturer of communications products, industrial components and performance
chemicals. GenTek was spun off from The General Chemical Group Inc. on April 30,
1999 (the "Spinoff"). The Company operates through three primary business
segments: communications, manufacturing and performance products. The
communications segment serves the public telecom and the private enterprise
network markets. The manufacturing segment serves the automotive, appliance and
electronic and industrial markets. The performance products segment serves
customers in many industries including the environmental services,
pharmaceutical and personal care, technology and chemical processing markets.
The Company's products are frequently highly engineered and are important
components of, or provide critical attributes to, its customers' end products or
operations. The Company operates over 80 manufacturing and production facilities
located primarily in the U.S. and Canada, with additional facilities in
Australia, Austria, China, Germany, Great Britain, India, Ireland and Mexico.

On October 11, 2002, GenTek and 31 of its direct and indirect
subsidiaries, including its Noma Company subsidiary (collectively, the
"Debtors"), filed voluntary petitions for reorganization relief (the "Filing")
under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in
the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"). The Debtors' cases are being jointly administered as Case No. 02-12986
(MFW). As a result of the Filing, an automatic stay was imposed against efforts
by claimants to collect amounts due or to proceed against property of the
Debtors. The Debtors have been operating, and will continue to operate, their
respective businesses as "debtors-in-possession" under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions of the
Bankruptcy Code and orders of the Bankruptcy Court. As such, they are permitted
to engage in ordinary course of business transactions without prior approval of
the Bankruptcy Court. Transactions outside of the ordinary course of business,
including certain sales of assets and certain requests for additional
financings, will require approval by the Bankruptcy Court. There is no assurance
that such approvals will be granted when requested.

On December 10, 2002, Noma Company sought and obtained from the Ontario
Superior Court of Justice, Canada, (the "Ontario Court") an initial order
pursuant to section 18.6 of the COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C.
1985, c. C-36, as amended ("CCAA"), recognizing the Filing and granting Noma
Company, among other things, a stay against claims, proceedings and the exercise
of any contractual rights against it or its property in Canada, and recognizing
various orders granted by the Bankruptcy Court.

The Debtors filed for relief under Chapter 11 as a result of the
Company's inability to obtain an amendment to its senior credit facility. The
Company believes that the protection afforded by Chapter 11 best preserves the
Debtors' ability to continue to serve their customers and preserve the value of
their businesses, while it reorganizes, and develops and implements a new
strategic plan to deleverage the Company's balance sheet and create an improved
long-term capital structure.

Since the Filing, the Company's available cash and continued cash flow
from operations have been adequate to fund ongoing operations and meet
anticipated obligations to customers, vendors and employees in the ordinary
course of business during the Chapter 11 process, and management believes it
will continue to remain adequate. Further, in order to augment its financial
flexibility during the Chapter 11 process, the Company negotiated with certain
members of its current pre-petition bank syndicate, and received approval from
the Bankruptcy Court on March 6, 2003, and approval from the Ontario Court on
March 13, 2003, to enter into a debtor-in-possession credit facility. The new
facility will enable the Company to issue up to $50 million of letters of
credit, including approximately $30 million of letters of credit issued under
the pre-petition credit facility, to support the Company and its subsidiaries'
undertakings (other than ordinary trade credit) and will provide the Company's
Noma Company

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subsidiary with a $10 million revolving credit facility for working capital and
other general corporate purposes of Noma Company. The facility matures on
September 30, 2003, but may be extended to December 31, 2003 by the holders of a
majority of the commitments. To support the payment obligations under the new
facility, the Bankruptcy Court awarded super-priority administrative expense
status to such obligations and granted the lenders senior priming liens (with
certain exceptions) on the Debtors' assets.

At hearings held on October 17, 2002 and November 7, 2002, the
Bankruptcy Court granted the Debtors' "first day" motions for various relief
designed to stabilize their operations and business relationships with their
customers, vendors, employees and other entities, and entered orders granting
authority to the Debtors to, among other things: (1) pay certain pre-petition
and post-petition employee wages, benefits and other employee obligations; (2)
honor customer programs; (3) pay certain pre-petition taxes and fees; (4) pay
certain pre-petition obligations to foreign vendors; (5) pay certain
pre-petition shipping charges; and (6) pay certain pre-petition claims of
critical vendors. The Bankruptcy Court also entered orders authorizing the
Debtors to use cash collateral of their senior lenders, and Noma Company to use
GenTek's cash collateral, on terms specified in such orders. All such orders
were also recognized by the Ontario Court.

As previously mentioned, as a result of the Filing, pending
pre-petition litigation and claims against the Debtors have been stayed
automatically in accordance with Section 362 of the Bankruptcy Code and no party
may take any action to seek payment on its pre-petition claims or to proceed
against property of the Debtors' estates except pursuant to further order of the
Bankruptcy Court. The filing resulted in an immediate acceleration of the
Company's senior credit facility and 11% Senior Subordinated Notes, subject
to the automatic stay.

As a general rule, all of the Debtors' contracts and leases continue in
effect in accordance with their terms notwithstanding the Filing, unless
otherwise ordered by the Bankruptcy Court. The Bankruptcy Court provides the
Debtors with the opportunity to reject any contracts or leases that are
burdensome or assume any contracts or leases that are favorable or otherwise
necessary to their business operations. In the event of a rejection of a
contract or lease by the Debtors, the affected parties may file rejection damage
claims, which are considered to be pre-petition claims. As a condition to
assumption of a contract or lease, the Debtors are required to cure breaches
under such agreements, including, without limitation, payment of any amounts due
and owing.

GenTek and the other Debtors have incurred, and will continue to incur,
significant administrative and reorganization expenses resulting from the Filing
and the continuing Chapter 11 proceedings. The amount of these expenses, which
are being expensed as incurred and reported as reorganization items, are
expected to have a material effect on the Company's results of operations.

The potential adverse publicity associated with the Filing and the
continuing Chapter 11 proceedings, and the resulting uncertainty regarding the
Company's future prospects may hinder the Company's ongoing business activities
and its ability to operate, fund and execute its business plan by: impairing
relations with existing and potential customers; limiting the Company's ability
to obtain trade credit; impairing present and future relationships with vendors;
and negatively impacting the ability of the Company to attract, retain and
compensate key employees and to retain employees generally.

The Company anticipates that most liabilities of the Debtors as of the
date of the Filing will be treated in accordance with one or more Chapter 11
plans of reorganization which will be proposed to be voted on by interested
parties and approved by the Bankruptcy Court in accordance with the provisions
of the Bankruptcy Code. Although the Debtors expect to file a plan that may
provide for its emergence from Chapter 11 during 2003, there can be no assurance
that a plan will be proposed by the Debtors or confirmed by the Bankruptcy
Court, or that any such plan will be consummated. At this time, it is not
possible for the Company to predict the effect of the Chapter 11 reorganization
process on the Company's businesses, various creditors and security holders, or
when it may be possible for the Debtors to emerge from Chapter 11.

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The ultimate treatment of and recovery, if any, by creditors and
security holders will not be determined until confirmation of a plan or plans of
reorganization. GenTek and the other Debtors are unable to predict at this time
what the treatment of creditors and equity holders of the respective Debtors
will ultimately be under any plan or plans of reorganization finally confirmed.
Although until a plan is approved there is substantial uncertainty as to the
treatment of creditors and equity holders, based upon information available to
it, the Company currently believes that the Debtors' proposed reorganization
plan or plans will provide for the cancellation of existing equity interests and
for limited recoveries by holders of debt securities. Accordingly, the Company
urges that appropriate caution be exercised with respect to existing and future
investments in any of these securities.

On February 28, 2003, the Company and Esseco S.p.A. announced plans to
form a joint venture, Esseco General Chemical LLC, to supply various sodium and
sulfur-based chemistries to the North American market. Initially, the joint
venture will focus on the supply and distribution of all grades of sodium
metabisulfite, sodium sulfite and sodium thiosulfate, among other products. It
is anticipated that the joint venture will be operational early in the second
quarter of 2003. The implementation of the joint venture is subject to certain
conditions, including approval of the Bankruptcy Court in Delaware. A motion
seeking such approval was filed on March 11, 2003.

On February 28, 2003, the Company announced a plan to wind down and
close operations in North Claymont, Delaware at the South Plant of the Delaware
Valley Works complex, an industrial facility owned and operated by the Company.
The plan is subject to approval by the Bankruptcy Court. A motion seeking such
approval was filed on March 4, 2003. If approved by the Bankruptcy Court, the
South Plant is expected to cease production on or about September 30, 2003. The
South Plant contains sulfuric acid regeneration and production facilities as
well as other operations. Failure of the Company to achieve such approval could
have a material adverse effect on the Company's results of operations. The
Company intends to comply fully with all of its environmental obligations in
connection with the decommissioning of the facility including, without
limitation, those relating to any investigation and remediation of the facility
required by law. Depending on the scope of any investigation and any remedial
activity required as a result, additional costs above those currently estimated
could be incurred over a period of the next several years. The Company is
currently unable to estimate the nature and extent of these potential additional
costs. As such, it is possible that the final outcome could have a material
adverse effect on the Company's results of operations, cash flows and financial
condition. Operations at the Delaware Valley Works' other manufacturing areas
located in the North Plant of the facility, including the production of sulfur,
fluorine, potassium and ammonia-based compounds and warehousing, distribution
and transportation operations, will continue.

To minimize the impact of the South Plant closure on its sulfuric acid
regeneration and merchant acid customers, the Company has made arrangements to
continue offering products and services to these customers through its four
other sulfuric acid facilities, supplemented by agreements with certain
strategic partners. In particular, the Company has negotiated with Rhodia Inc.
to assume responsibility for five of its sulfuric acid regeneration contracts,
subject to entering into appropriate modified contracts with the customers. A
motion seeking the Bankruptcy Court's approval of the transaction with Rhodia
Inc. was filed on March 11, 2003.

The consolidated financial statements included elsewhere in this report
have been prepared in accordance with Statement of Position 90-7 ("SOP 90-7"),
"FINANCIAL REPORTING BY ENTITIES IN REORGANIZATION UNDER THE BANKRUPTCY CODE,"
and on a going concern basis, which contemplates continuity of operations,
realization of assets and liquidation of liabilities in the ordinary course of
business. However, as a result of the Filing, such realization of assets and
liquidation of liabilities are subject to uncertainty. While operating as
debtors-in-possession under the protection of Chapter 11 of the Bankruptcy Code
and subject to Bankruptcy Court approval or otherwise as permitted in the normal
course of business, the Debtors may sell or otherwise dispose of assets and
liquidate or settle liabilities for amounts other than those reflected in the
consolidated financial statements. Further, a plan of reorganization could
materially change the amounts and classifications reported in the consolidated
financial statements, which do not give effect to any adjustments to the
carrying value of assets or amount of liabilities that might be necessary as
consequence of a plan of reorganization. Liabilities and

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obligations whose treatment and satisfaction is dependent on the outcome of the
Chapter 11 cases have been segregated and classified as liabilities subject to
compromise in the consolidated balance sheet.

Pursuant to the Bankruptcy Code, schedules have been filed by the
Debtors with the Bankruptcy Court setting forth the assets and liabilities of
the Debtors as of the date of Filing. Differences between amounts recorded by
the Debtors and claims filed by creditors will be investigated and resolved as
part of the proceedings in the Chapter 11 cases. A bar date of April 14, 2003
has been set for the filing of proofs of claim against the Debtors. Accordingly,
the ultimate number and allowed amount of such claims are not presently known.

PRODUCTS AND SERVICES BY SEGMENT

The following table sets forth the Company's sales by segment for each
of the three years in the period ended December 31, 2002.

YEARS ENDED DECEMBER 31,
------------------------------------------------
2002 2001 2000
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(IN MILLIONS)
Communications................. $ 294.0 $ 405.0 $ 507.8
Manufacturing.................. 477.1 478.5 553.3
Performance Products........... 357.4 360.9 353.1
------------ ------------ ------------
$ 1,128.5 $ 1,244.4 $ 1,414.2
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COMMUNICATIONS SEGMENT

The communications segment is a global provider of products, systems
and services for local and wide area data and communications networks. These
products and services use and build on the throughput-enhancing technology that
the Company has developed. The Company's offerings include throughput-optimized
copper and fiber-optic cabling and connectivity products for both public and
private enterprise networks, as well as design, installation and maintenance
services for wide-area wireline and wireless networks.

The Company competes in the global markets for telecommunications and
data networking equipment and services, particularly the public telecom (or
access) and private enterprise (or premise) segments of these markets. The
public telecommunications network is comprised of the long-haul network (long
distance copper and fiber cables), the metro area (city wide) network, and the
access portion of the network. The Company competes primarily in this access
portion which consists of the telecommunications central office, remote
terminals and the local loop also known as the "last mile." The local loop links
the enterprise customer's home or office to the metro area and the long-haul
portions of the public network. The enterprise segment of the market consists of
the voice, data and video networks located within the customer's (or end-user's)
premises.

The communications segment's customers include Fortune 1000 companies,
incumbent local exchange carriers (ILECs), competitive local exchange carriers
(CLECs), internet service providers (ISPs), managed service providers (MSPs),
data networking equipment distributors, government institutions, public
utilities and academic institutions.

MANUFACTURING SEGMENT

The manufacturing segment provides a broad range of engineered
components and services to three principal markets: AUTOMOTIVE, APPLIANCE AND
ELECTRONIC, AND INDUSTRIAL. The Company's products for these markets are
described below:

AUTOMOTIVE. For the automotive market, the Company provides:

o precision-engineered components for valve-train systems, including
stamped and machined rocker and roller-rocker arms, cam follower
rollers, cam follower roller axles, antifriction

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bearings and other hardened/machined components;

o electronic wire and cable assemblies, such as wire harnesses, ignition
cables, molded parts, electro-mechanical assemblies, engine block
heaters, battery blankets and various electrical switches, used in the
manufacture of automobiles, light and heavy duty trucks and personal
recreation vehicles such as snowmobiles and jet-skis;

o computer-aided and mechanical vehicle and component testing services
for the transportation industry; and

o fluid transport and handling equipment for automotive service
applications.

The Company's precision-engineered stamped and machined engine
components for valve-train systems improve engine efficiency by reducing engine
friction and component mass. These components are used both in traditional
overhead valve and in the increasingly popular single and double overhead cam
(OHC) engines which power cars, light trucks and sport utility vehicles. The
increased use of these OHC engines has resulted in significant volume growth
through market share gains, as vehicle manufacturers are able to obtain better
fuel economy and higher horsepower using OHC engines.

The Company's wire and cable assembly products include a variety of
automotive electronic components for use in OEM production and the aftermarket.
The Company is a leading Tier-2 supplier of products such as wire harnesses,
ignition cables, engine block heaters, battery blankets and various electrical
and electro-mechanical switches and assemblies.

Through its automotive testing offerings, the Company provides
mechanical testing services and computer-aided design, engineering and
simulation services for automotive structural and mechanical systems to OEMs and
Tier 1 suppliers. The Company provides a wide range of testing services for
automotive components and systems from single sub-systems, such as chassis,
suspension, seats and seating assemblies, to entire vehicles. The Company's
engineering and simulation services provide customers with finite element
modeling, kinematics, crash and variation simulation analyses, experimental
dynamics and vehicle development programs, and allow its customers to test their
automotive products for durability, stress, noise, vibration and environmental
considerations.

Automotive manufacturers generally award business to their suppliers by
individual engine line or model, often for multiple-model years. The loss of any
individual engine line or model contract would not be material to the Company.
However, an economic downturn in the automotive industry as a whole or other
events (e.g., labor disruptions) resulting in significantly reduced operations
of any of DaimlerChrysler, Ford or General Motors could have a material adverse
impact on the results of the Company's manufacturing segment. None of these
customers accounted for 10 percent or more of the Company's revenues in 2002.

APPLIANCE AND ELECTRONIC. The Company produces custom-designed power
cord systems and wire and cable assemblies for a broad range of appliances and
electronic products including:

o household appliances, such as refrigerators, freezers, dishwashers,
washing machines, ovens, ranges and vacuum cleaners;

o electronic office equipment, including copiers and printers; and

o various electronic products, such as medical equipment, ATM machines
and gaming machines.

The Company's specialized wiring expertise and high quality wire and
cable assemblies are generally provided to larger OEM customers. A highly
competitive environment has required the Company's customers to improve their
productivity by outsourcing to lower cost suppliers. The Company's manufacturing
facilities are strategically located in both Canada and Mexico, permitting the
Company to share with customers efficiencies gained through its operating scale
and lower costs.

The Company also owns a 50% interest in PrettlNoma Systems GmbH, a
joint venture that produces modular control panel systems for consumer appliance
manufacturers. PrettlNoma Systems is based in Neuruppin, Germany and, in
addition, operates facilities in Mexico, Poland and Turkey.

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INDUSTRIAL. For the industrial market, the Company manufactures:

o custom-designed wire harness and power cord systems for power tools,
motors, pumps and other industrial products; and

o wire and cable for industrial markets, the commercial and residential
construction industries and for a wide variety of end market uses by
OEMs.

The Company produces a broad product line of single and multi conductor
wire and cable, wire harnesses and power cord systems. The Company's wire
jacketing expertise includes the use of polyvinyl chloride (PVC), rubber,
thermoplastic elastomer (TPE) and cross-link compounds.

PERFORMANCE PRODUCTS SEGMENT

The Company's performance products segment provides a broad range of
value-added products and services to four principal markets: ENVIRONMENTAL
SERVICES, PHARMACEUTICAL AND PERSONAL CARE, TECHNOLOGY and CHEMICAL PROCESSING.
The Company's products and services for these markets are described below.

ENVIRONMENTAL SERVICES. With a network of 35 plants strategically
located throughout the United States and Canada, the Company is the largest
North American producer of aluminum sulfate, or "alum," which is used as a
coagulant in potable water and waste water treatment applications, and a leading
supplier of ferric sulfate and other specialty flocculents (polymer-based
materials used for settling and/or separating solids from liquids). The
Company's water treatment products and services are designed to address the
important environmental issues confronting its customers. These value-added
products and services provide cleaner drinking water, restore algae-infested
lakes, reduce damaging phosphorus runoff from agricultural operations, and
significantly reduce pollution from industrial waste water.

In the environmental market, the Company also provides sulfuric acid
regeneration services to the refining and chemical industries, and pollution
abatement and sulfur recovery services to selected refinery customers.
Refineries use sulfuric acid as a catalyst in the production of alkylate, a
gasoline blending component with favorable performance and environmental
properties. The alkylation process contaminates and dilutes the sulfuric acid,
thereby creating the need to dispose of or regenerate the contaminated acid. The
Company transports the contaminated acid back to the Company's facilities for
recycling and redelivers the fresh, recycled acid back to customers. This
"closed loop" process offers customers significant savings versus alternative
disposal methods and also benefits the environment by significantly reducing
refineries' waste streams. Similar regeneration services are provided to
manufacturers of ion exchange resins and silicone polymers.

PHARMACEUTICAL AND PERSONAL CARE. The Company is a leading supplier of
the active chemical ingredients used in the manufacture of antiperspirants, and
also supplies active ingredients used in prescription pharmaceuticals,
nutritional supplements, nutraceuticals, veterinary health products and other
personal care products.

TECHNOLOGY. The Company provides ultrahigh-purity electronic chemicals
for the semiconductor and disk drive industries. The Company's electronic
chemicals include ultrahigh-purity acids, caustics, solvents, etchants and
formulated photo ancillaries for use in the manufacture of semiconductor
processing chips and computer disk drives.

CHEMICAL PROCESSING. The Company manufactures and/or distributes a
broad range of products that serve as chemical intermediates in the production
of such everyday products as newspapers, tires, paints, dyes and carpets. The
Company's products include:

o alum and polymer-based enhanced coagulants used in paper manufacturing
to impart water resistance;

o sodium and ammonia sulfites used to produce fixing and developing
solutions for conventional film and x-ray processing;

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o sodium nitrite, of which the Company is one of only two North American
producers, primarily used as a reactant in the manufacture of dyes,
pigments and rubber processing chemicals;

o potassium fluoride and fluoborate derivatives sold into the metal
treatment, agrochemical, surfactant and analytical reagent markets; and

o sulfuric acid, which is used in the manufacture of titanium pigments,
fertilizers, synthetic fibers, steel, petroleum and paper, as well as
many other products.

For further information on geographic and segment data, see "Note 16 -
Geographic and Industry Segment Information" in the Notes to the Consolidated
Financial Statements.

RESTRUCTURING

During 2002, the Company initiated a restructuring program to reduce
its workforce in its communications segment, and recorded charges of
approximately $13 million primarily related to employee termination costs.

During 2001, the Company initiated a restructuring program to reduce
its workforce, close several plants and discontinue certain product lines. As a
result of the above actions, the Company recorded restructuring charges of
approximately $37 million, comprised of $20 million related to employee
termination costs, $12 million for asset write-downs related to management's
decision to exit a business and $5 million for lease obligations and other
closure costs for facilities which will no longer be used.

The Company expects to substantially complete implementation of its
restructuring programs by the end of 2003. Management does not expect that the
restructuring programs will have a material impact on the Company's revenues.
Cash payments charged against the restructuring liability totaled $9 million for
employee termination costs and $1 million for facility exit costs in 2001 and
$10 million for employee termination costs and $1 million for facility exit
costs in 2002. Management expects that cash outlays related to the restructuring
program will be substantially completed by the end of 2003, however certain
severance and facility exit costs, primarily lease obligations, have payment
terms extending beyond 2003. Management intends to fund these cash outlays from
cash flow generated by operations. Management expects that the actions described
above will result in an estimated annual reduction in employee and facility
related expense and cash flows of approximately $40-$45 million. The Company
began to realize these reductions in the third quarter of fiscal 2001.

COMPETITION

Competition in the markets served by the communications segment is
based on a number of factors, including but not limited to: product features,
quality, performance and reliability; product-line breadth and end-to-end
systems capabilities; global distribution and customer support capabilities;
customer service and technical support; relationships with customers,
distributors and system integrators; product interoperability and the ability to
support emerging protocols; brand recognition and price. Further, the ability to
achieve and maintain successful performance is dependent on our ability to
develop products that meet the ever-changing requirements of data and voice
communications technology. Due to the breadth of the Company's products and
services, it competes against different competitors in different product and
service areas, with the majority of its competitors focusing on only particular
segments of the total market in which the Company competes.

In the cabling and connectivity systems market, the primary competitors
capable of supplying entire solutions are Avaya, Cable Design Technologies,
Nexans and Tyco/AMP. Additionally, competitors that supply only the cabling
portion of a complete structured cabling solution include Belden, CommScope,
General Cable and Optical Cable Corporation. Connectivity competitors include
ADC Telecommunications, Hubbell, Huber & Suhner, Molex, Ortronics, Reichle &
De-Massari and 3M/Quante.

Competition in the manufacturing segment's markets is based upon a
number of factors including

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design and engineering capabilities, quality, price and the ability to meet
customer delivery requirements. In the automotive market, the Company competes
with, among others, Eaton, Hitchiner, INA, Ingersoll-Rand, Sumitomo, Yazaki and
captive OEMs. In the appliance and electronic and industrial markets, the
Company competes with Belden, General Cable, International Wire, Nexans and
Viasystems, among others.

Although the Company's performance products segment generally has
significant market share positions in the product areas in which it competes,
most of its end markets are highly competitive. In the pharmaceuticals and
personal care market, the Company's major competitors include Giulini, Summit
and Westwood. The Company's competitors in the environmental market include the
refineries that perform their own sulfuric acid regeneration, as well as Arch
Chemical, DuPont, Marsulex, PVS and Rhodia, which also have sulfuric acid
regeneration facilities that are generally located near their major customers.
In addition, the Company competes with Geo Specialty Chemicals, U.S. Aluminates
and other regional players in the water treatment market. Competitors in the
technology market include Ashland and Tyco/Mallinckrodt-Baker. Competitors in
the chemical processing market include BASF, Calabrian, Rhodia, Solvay S.A. and
U.S. Salt.

SUPPLIERS; AVAILABILITY OF RESOURCES

The Company purchases a variety of raw materials for its businesses.
The primary raw materials used by the communications segment are copper, steel
and plastic. The Company's primary raw materials in its manufacturing segment
are copper and steel. The Company's performance products segment's competitive
cost position is, in part, attributable to its control of certain raw materials
that serve as the feedstocks for many of its products. Consequently, major raw
material purchases are limited primarily to sulfuric acid where it is
uneconomical for the Company to supply itself due to distribution costs, soda
ash (for the manufacture of sodium nitrites), bauxite and hydrate (for the
manufacture of alum), zirconium oxychloride (for the manufacture of
antiperspirant active ingredients) and sulfur (for the manufacture of sulfuric
acid).

The Company purchases raw materials from a number of suppliers and, in
most cases, believes that alternative sources are available to fulfill its
needs. In the Company's opinion, the raw materials needed for its businesses
will be available in sufficient supply on a competitive basis for the
foreseeable future.

SALES AND DISTRIBUTION

The Company's communications segment has approximately 500 sales,
marketing and customer service personnel in 25 countries around the world. The
Company's products are sold directly to key account customers, often pursuant to
multi-year agreements, and via its international third-party sales and
distribution network for smaller accounts.

The Company's manufacturing segment has approximately 50 sales,
marketing and customer service personnel. Generally, the Company markets its
products directly to its customers, but in certain industrial markets a
distribution network is used. The manufacturing segment's technical and
engineering staff is an integral part of the segment's sales and distribution
effort. Since many of the Company's products are precision-engineered and
custom-designed to customer specifications, the Company's sales force and
engineers work closely with its customers in designing, producing, testing and
improving its products.

In the Company's performance products segment, the Company employs
approximately 120 sales, marketing, distribution and customer service personnel.
The sales force is divided into several specialized groups which focus on
specific products, end-users and geographic regions. This targeted approach
provides the Company with insight into emerging industry trends and creates
opportunities for product development.

-8-

SEASONALITY; BACKLOGS

The businesses of the communications and manufacturing segments are
generally not seasonal. Within the performance products segment, the
environmental services business has higher volumes in the second and third
quarters of the year, owing to (i) higher spring and summer demand for sulfuric
acid regeneration services from gasoline refinery customers to meet peak summer
driving season demand and (ii) higher spring and summer demand from water
treatment chemical customers to manage seasonally high and low water conditions.
The other markets that the performance products segment serves are generally not
seasonal. Due to the nature of the Company's businesses, there are no
significant backlogs.

ENVIRONMENTAL MATTERS

The Company's various manufacturing operations, which have been
conducted at a number of facilities for many years, are subject to numerous laws
and regulations relating to the protection of human health and the environment
in the U.S., Canada, Australia, Austria, China, Germany, Great Britain, India,
Ireland, Mexico and other countries in which it operates. The Company believes
that it is in substantial compliance with such laws and regulations. However, as
a result of its operations, the Company is involved from time to time in
administrative and judicial proceedings and inquiries relating to environmental
matters. Based on information available at this time with respect to potential
liability involving these facilities, the Company believes that any such
liability will not have a material adverse effect on its financial condition,
cash flows or results of operations. However, modifications of existing laws and
regulations or the adoption of new laws and regulations in the future,
particularly with respect to environmental and safety standards, could require
capital expenditures which may be material or otherwise adversely impact the
Company's operations.

The Company has an established program to ensure that its facilities
comply with environmental laws and regulations. In 2002, expenditures made in
connection with this program approximated $17 million (of which approximately $3
million represented capital expenditures and approximately $14 million related
to ongoing operations and the management and remediation of potential
environmental contamination from prior operations). Expenditures for 2001
approximated $16 million (of which approximately $4 million represented capital
expenditures and approximately $12 million related to ongoing operations and the
management and remediation of potential environmental contamination from prior
operations). Management expects expenditures similar to 2002 levels in 2003. In
addition, if environmental laws and regulations affecting the Company's
operations become more stringent, costs for environmental compliance may
increase above historical levels.

The Comprehensive Environmental Response Compensation and Liability Act
of 1980 ("CERCLA") and similar state statutes have been construed as imposing
joint and several liability, under certain circumstances, on present and former
owners and operators of contaminated sites and transporters and generators of
hazardous substances regardless of fault. The Company's facilities have been
operated for many years by the Company or its prior owners and operators, and
adverse environmental conditions of which the Company is not aware may exist.
The discovery of additional or unknown environmental contamination at any of the
Company's current or former facilities could have a material adverse effect on
the Company's financial condition, cash flows and/or results of operations. In
addition, the Company has received written notice from the Environmental
Protection Administration that it has been identified as a "potentially
responsible party" under CERCLA at three third-party sites. The Company does not
believe that its liability, if any, for these sites will be material to its
results of operations, cash flows or financial condition.

At any time, the Company may be involved in proceedings with various
regulatory authorities which could require the Company to pay various fines and
penalties due to violations of environmental laws and regulations at its sites,
remediate contamination at some of these sites, comply with applicable standards
or other requirements, or incur capital expenditures to modify certain pollution
control equipment or processes at its sites. Again, although the amount of any
liability that could arise with respect to these matters cannot be accurately
predicted, the Company believes that the ultimate resolution of these matters
will have no material adverse effect on its results of operations, cash flows or
financial condition.

-9-

AVTEX SITE AT FRONT ROYAL, VIRGINIA. On March 22, 1990, the
Environmental Protection Agency (the "EPA") issued to the Company a Notice of
Potential Liability pursuant to Section 107(a) of CERCLA with respect to a site
located in Front Royal, Virginia, owned at the time by Avtex Fibers Front Royal,
Inc., which has filed for bankruptcy. A sulfuric acid plant adjacent to the main
Avtex site was previously owned and operated by the Company. On September 30,
1998, the EPA issued an administrative order under Section 106 of CERCLA, which
requires The General Chemical Group Inc. (whose obligations the Company assumed
in connection with the Spinoff), AlliedSignal Inc. (now Honeywell) and Avtex to
undertake certain removal actions at the acid plant. On October 19, 1998, the
Company delivered to the EPA written notice of its intention to comply with that
order, subject to numerous defenses. The requirements of the order include
preparation of a study to determine the extent of any contamination at the acid
plant site. The Company has provided for the estimated costs of $1.7 million for
these activities in its accrual for environmental liabilities relating to the
order. The Company is working cooperatively with the EPA with respect to
compliance with the order and believes that such compliance will not have a
material effect on its results of operations or financial condition.

DELAWARE VALLEY FACILITY. On September 7, 2000, the U.S. Environmental
Protection Agency issued to the Company an Initial Administrative Order (an
"IAO") pursuant to Section 3008(h) of the Resource Conservation and Recovery Act
("RCRA"), which requires that the Company conduct an environmental investigation
of certain portions of the Company's Delaware Valley facility (the "Facility")
and, if necessary, propose and implement corrective measures to address any
historical environmental contamination at the Facility. The Company is working
cooperatively with the EPA and Honeywell Inc. (formerly AlliedSignal Inc.),
prior owner of the Facility and current owner of a plant adjacent to the
Facility, to implement the actions required under the IAO. The requirements of
the IAO will be performed over the course of the next several years. The Company
has provided for the estimated costs of $2.4 million for these activities in its
accrual for environmental liabilities. As previously mentioned, on February 28,
2003 the Company announced a plan to wind down and close most South Plant
operations of its Delaware Valley facility. This closure could result in an
expansion of the investigation to be performed under the IAO. Depending on the
scope of any potential expansion of the investigation under the IAO and any
additional remedial activity required as a result, additional costs above those
currently estimated could be incurred over a period of the next several years.
The Company is currently unable to estimate the nature and extent of these
potential additional costs. As such, it is possible that the final outcome could
have a material adverse effect on the Company's results of operations, cash
flows or financial condition.

ANACORTES, WASHINGTON FACILITY. On March 30, 2000, the Company received
a Notice of Violation issued by the U.S. Environmental Protection Agency,
pursuant to which the EPA alleged that the routine replacement of certain
catalysts at the Company's Anacortes, Washington facility in 1990 constituted a
violation of the EPA's Prevention of Significant Deterioration ("PSD")
regulations promulgated under Sections 165 - 169 of the Clean Air Act. The
Company denies such allegation and will defend itself vigorously in this matter.
There has been no activity with respect to this matter during 2001 or 2002. In
the event that the Company is unsuccessful in its defense or cannot otherwise
resolve this matter with the EPA, potential penalties could exceed $100,000.
Management does not expect that this matter will have a material effect on the
financial condition, cash flows or results of operations of the Company.

Claims against the Debtors for environmental liabilities arising prior
to the Filing will be addressed in the Chapter 11 cases. In general, monetary
claims by private (non-governmental) parties relating to remedial actions at
off-site locations used for disposal prior to the Filing and penalties resulting
from violations of applicable environmental law before that time will be treated
as general unsecured claims. The Debtors are obligated to comply with applicable
environmental law in the conduct of their business as debtors-in-possession,
including any potential obligation to conduct investigations and implement
remedial actions at facilities the Company owns or operates, and thus will be
required to pay such expenses in full.

-10-

EMPLOYEES/LABOR RELATIONS

At December 31, 2002, the Company had approximately 7,500 employees, of
whom approximately 2,500 were full-time salaried employees, approximately 2,200
were full-time hourly employees (represented by 11 different unions) and
approximately 2,800 were hourly employees working in nonunion facilities.
Approximately 500 of the Company's 2,500 salaried employees are based in
Germany. German-based employees are members of unions and are subject to
industry-wide and other collective bargaining agreements.

The Company's union contracts have durations which vary from two to
four years. The Company's relationships with its different unions are generally
good.

EXECUTIVE OFFICERS AND KEY EMPLOYEES

Set forth below is information with respect to each of the Company's
executive officers and/or key employees.

Richard R. Russell, 60, President and Chief Executive Officer and a
Director since April 1999. From 1994 until April 1999, he served as the
President and Chief Executive Officer and a Director of The General Chemical
Group Inc. Mr. Russell has also been the President and Chief Executive Officer
of General Chemical Corporation since 1986.

Matthew R. Friel, 36, Vice President, Chief Financial Officer and
Treasurer since September 2001. From September 1997 to September 2002, Mr. Friel
served as Managing Director of Latona Associates Inc. ("Latona Associates").
Latona Associates has provided GenTek with strategic management, business and
financial advisory services since 1995.

Michael R. Herman, 40, Vice President and General Counsel since April
1999. From 1997 until April 1999, he served as the Vice President and General
Counsel of General Chemical Corporation.

Ronald A. Lowy, 47, Chief Operating Officer of the Krone Group since
December 2000. Mr. Lowy served as Vice President and General Manager -
Automotive and Industrial Products of Prestolite Wire Corporation from January
2000 to December 2000, and Vice President and General Manager - Automotive
Products of Prestolite Wire Corporation from 1995 to 2000.

Kevin J. O'Connor, 52, Vice President and Controller since April 1999.
From March 1996 until April 1999, he served as the Controller of The General
Chemical Group Inc. Mr. O'Connor has also served as Controller of General
Chemical Corporation since 1986.

Ramanlal L. Patel, 57, President of the Manufacturing segment since
December 2001. Mr. Patel has also served as President and Chief Executive
Officer of Noma Company since December 2000. From 1997 to December 2000, he was
Chief Executive Officer of Pram Filtration Corporation.

Charles W. Shaver, 44, Vice President and General Manager for
Performance Products since November 2001. Mr. Shaver served as Vice President
and General Manager for Performance Products for Arch Chemicals, Inc. from 1999
to November 2001. From September 1996 to 1999 he served as Vice President of
Operations and Chief Operating Officer for MMT, Inc.

Matthew M. Walsh, 36, Vice President and Operations Controller since
December 2000. Mr. Walsh served as Vice President and Treasurer from January
2000 through December 2000. Mr. Walsh served as Group Controller-Performance
Products of General Chemical Corporation from October 1997 to December 1999.

-11-

ITEM 2. PROPERTIES.

The Company operates over 80 manufacturing and production facilities
located in the United States, Canada, Australia, Austria, China, Germany, Great
Britain, India, Ireland and Mexico. The Company's headquarters are located in
Hampton, New Hampshire.

Set forth below are the locations and uses of the Company's major
properties:

LOCATION USE
-------- ---

COMMUNICATIONS SEGMENT

Centennial, Colorado(1).......................... Offices
Sidney, Nebraska(2).............................. Production Facility
North Bennington, Vermont(1)..................... Production Facility
Racine, Wisconsin(2)............................. Production Facility and Offices
Sydney, Australia................................ Production Facility and Offices
Trumau, Austria.................................. Production Facility
Cheltenham, England.............................. Production Facility and Offices
Berlin, Germany(1)............................... Production Facility and Offices
Toluca, Mexico(1)................................ Production Facility
Shanghai, People's Republic of China............. Production Facility
Bangalore, India................................. Production Facility

MANUFACTURING SEGMENT

Southfield, Michigan(1).......................... Offices
Troy, Michigan(1)................................ Production Facility and Offices
Westland, Michigan(1)............................ Production Facility
Weaverville, North Carolina(2)................... Production Facility
Upper Sandusky, Ohio(1).......................... Production Facility
Toledo, Ohio..................................... Production Facility
Defiance, Ohio................................... Production Facility
Perrysburg, Ohio(1).............................. Production Facility and Offices
Mineral Wells, Texas............................. Production Facility
Imuris, Mexico................................... Production Facility
Juarez, Mexico(1)................................ Production Facility
Nogales, Mexico.................................. Production Facility
Concord, Ontario(2).............................. Production Facility
Guelph, Ontario(1)............................... Production Facility
Scarborough, Ontario(2).......................... Production Facility
Stouffville, Ontario(2).......................... Production Facility
Tillsonburg, Ontario(1).......................... Production Facility
Waterdown, Ontario............................... Production Facility

PERFORMANCE PRODUCTS SEGMENT

Hollister, California(2)......................... Production Facility and Offices
Pittsburg, California(2)......................... Production Facility
Richmond, California(2).......................... Production Facility
North Claymont, Delaware(2)...................... Production Facility, Offices and Warehouse
Augusta, Georgia................................. Production Facility
East St. Louis, Illinois......................... Production Facility
Berkeley Heights, New Jersey(2).................. Production Facility, Offices and Warehouse
Newark, New Jersey(2)............................ Production Facility
Solvay, New York(2).............................. Production Facility

-12-

Marcus Hook, Pennsylvania(2)..................... Production Facility, Offices and Warehouse
Celina, Texas(2)................................. Production Facility
Midlothian, Texas(2)............................. Production Facility
Anacortes, Washington............................ Production Facility
Dublin, Ireland.................................. Production Facility, Offices and Warehouse
Thorold, Ontario................................. Production Facility
Valleyfield, Quebec.............................. Production Facility

OFFICES
Hampton, New Hampshire(1)........................ Headquarters
Parsippany, New Jersey(1)........................ Offices

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

(1) Leased.
(2) Mortgaged as security under the Company's senior credit facility.

ITEM 3. LEGAL PROCEEDINGS.

The Company is involved in claims, litigation, administrative
proceedings and investigations of various types, including the Sunoco Employee
litigation discussed below, and certain environmental proceedings previously
discussed. Although the amount of any liability that could arise with respect to
these actions cannot be accurately predicted, the opinion of management based
upon currently-available information is that any such liability not covered by
insurance will have no material adverse effect on the Company's results of
operations, cash flows or financial condition. See Item 1. "Business -
Environmental Matters" above.

As previously discussed, on October 11, 2002, GenTek and 31 of its
direct and indirect subsidiaries, including its Noma Company subsidiary
(collectively, the "Debtors") filed voluntary petitions for reorganization
relief (the "Filing") under Chapter 11 of the United States Bankruptcy Code (the
"Bankruptcy Code") in the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court"). The Debtors' cases are being jointly
administered as Case No. 02-12986 (MFW). As a result of the Debtors'
commencement of the Chapter 11 cases, an automatic stay has been imposed against
the commencement or continuation of legal proceedings against the Debtors
outside of the Bankruptcy Court. Claimants against the Debtors may assert their
claims in the Chapter 11 cases by filing a proof of claim, to which the Debtors
may object and seek a determination from the Bankruptcy Court as to the
allowability of the claim. Claimants who desire to liquidate their claims in
legal proceedings outside of the Bankruptcy Court will be required to obtain
relief from the automatic stay by order of the Bankruptcy Court. If such relief
is granted, the automatic stay will remain in effect with respect to the
collection of liquidated claim amounts. As a general rule, all claims against
the Debtors that seek a recovery from assets of the Debtors' estates will be
addressed in the Chapter 11 cases and paid only pursuant to the terms of a
confirmed plan of reorganization.

Sunoco Employee Litigation. In April 1998, approximately 40 employees
(and their respective spouses) of the Sunoco refinery in Marcus Hook,
Pennsylvania, filed lawsuits in the Court of Common Pleas, Delaware County,
Pennsylvania, against The General Chemical Group Inc. (whose obligations have
been assumed by the Company pursuant to the terms of the Spinoff), alleging that
sulfur dioxide and sulfur trioxide releases from the Company's Delaware Valley
facility caused various respiratory and pulmonary injuries. Unspecified damages
in excess of $50,000 for each plaintiff are sought. As a result of pretrial
proceedings, there are presently only 36 employees who are pursuing individual
personal injury claims and 29 spouses claiming loss of consortium. The scheduled
trial date is March 2003, but the trial will not commence at this time due to
the automatic stay previously mentioned. The Company has denied all material
allegations of the complaints and will continue to defend itself vigorously in
this matter. Management further believes that current accruals and available
insurance should provide adequate coverage in the event of an adverse result in
this matter and that, based on currently available information, this matter will
not have a material adverse effect on the Company's results of operations,

-13-

cash flows or financial condition.

In addition, on September 24, 1999 the same attorneys that filed the
April 1998 individual actions against the Company also filed a purported class
action complaint against the Company, titled Whisnant vs. General Chemical
Corporation, (in the Court of Common Pleas, Delaware County, Pennsylvania), on
behalf of more than 1,000 current and former employees of the Sunoco Marcus
Hook, Pennsylvania refinery located immediately adjacent to the Company's
Delaware Valley facility. The complaint alleges that unspecified releases of
sulfur dioxide and sulfur trioxide over unspecified timeframes caused injuries
to the plaintiffs, and seeks, among other things, to establish a "trust fund"
for medical monitoring for the plaintiffs. In May 2002, the trial court denied
plaintiffs' motion to certify the case to proceed as a class action. Plaintiffs
have appealed that decision. The Company will vigorously defend itself in this
matter. Management further believes that the Company's current accruals and
available insurance should provide adequate coverage in the event of an adverse
result in this matter, and that, based on currently available information, this
matter will not have a material adverse effect on the Company's results of
operations, cash flows or financial condition. Unless otherwise ordered by the
Bankruptcy Court, the claim is subject to the automatic stay and recoveries (if
any) sought thereon from assets of the Debtors will be addressed in the Chapter
11 cases.

Richmond Litigation. Starting on or about April 29, 2002, lawyers
claiming to represent approximately 44,000 persons filed approximately 24
lawsuits in Contra Costa, San Francisco and Alameda counties in California state
court, making claims against the Company and a third party arising out of a May
1, 2001 release of sulfur dioxide and sulfur trioxide from the Company's
Richmond, California sulfuric acid facility. A class action lawsuit arising out
of the same facts has also been filed. The release was caused when the third
party's truck hit a power pole and damaged an electrical substation owned by the
local utility, thereby knocking out electrical power to a number of users,
including the Company. This resulted in a loss of vacuum pressure at the
Company's facility, which led to the release. The Company, which has also filed
suit against the third party in California State Court in Contra Costa County in
connection with the May 1, 2001 incident, has been served with some of the
lawsuits. Some of the filed lawsuits also appear to allege damages arising out
of a separate alleged release of sulfur trioxide from the Richmond facility on
November 29, 2001, but it is unclear how many parties have actually made claims
at this time. The lawsuits claim various damages for alleged injuries,
including, without limitation, claims for personal injury, emotional distress,
medical monitoring, nuisance, loss of consortium and punitive damages, but the
amount of damages sought is not known. The Company has filed a petition for
coordination asking that all of the lawsuits be coordinated before a single
judge. That petition is pending. The Company will vigorously defend itself
against these lawsuits. The Company believes it has sufficient insurance
coverage in the event of an adverse result in these lawsuits and does not
believe that this matter will have a material adverse effect on its financial
condition, cash flows or results of operations. Unless otherwise ordered by the
Bankruptcy Court, the lawsuits are subject to the automatic stay and recoveries
(if any) sought thereon from assets of the Debtors will be addressed in the
Chapter 11 cases.

Delaware Valley Settlement. On July 2, 2002, the Company's Delaware
Valley facility experienced a release of fluosulfonic acid while loading a
railcar for delivery to a customer. In connection with this accident and other
releases and emissions at the Delaware Valley facility, the Company and
representatives of the Delaware Department of Natural Resources and
Environmental Control ("DNREC") have reached agreement to resolve all alleged
violations relating to the July 2, 2002 accident and any other releases and
emissions occurring on or after January 1, 2001. Without admitting liability,
the Company agreed to pay a $475,000 civil penalty, plus DNREC's out-of-pocket
costs in investigating the July 2, 2002 incident. In addition, the Company also
agreed, among other things to make certain improvements to its process safety
and risk management programs at the facility. The settlement was approved by the
Superior Court of the State of Delaware on September 25, 2002. On December 2,
2002, the Bankruptcy Court issued an order approving payment of the civil
penalty, and the Company has paid the penalty in full.

Other Claims. The Company is subject to various other claims and legal
actions that arise in the ordinary course of business. Claims and legal actions
against the Debtors that existed as of the date of the

-14-

Filing are subject to the automatic stay, and recoveries sought thereon from
assets of the Debtors will be required to be dealt with in the Chapter 11 cases.

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

No items were submitted to a vote of security holders of the Company,
through the solicitation of proxies or otherwise, during the fourth quarter of
fiscal 2002.

-15-

PART II

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

MARKET INFORMATION

The Company's Common Stock is currently traded on the Over The Counter
Bulletin Board under the symbol "GNKIQ." The Company's Class B Common Stock has
ten votes per share, is subject to significant restrictions on transfer and is
convertible at any time into Common Stock on a share-for-share basis. The Common
Stock and Class B Common Stock are substantially identical, except as to the
disparity in voting power, restriction on transfer and conversion provisions.
There is no established public trading market for the Company's Class B Common
Stock. The table below shows the high and low recorded sales prices of the
Company's Common Stock, for each quarterly period within the last two years.

2002
--------------------------------------------------
First Second Third Fourth
Stock price - high $ 1.97 $ .47 $ .23 $ .095
Stock price - low $ .30 $ .15 $ .08 $ .015

2001
--------------------------------------------------
First Second Third Fourth
Stock price - high $ 16.60 $ 13.00 $ 7.75 $ 4.00
Stock price - low $ 10.40 $ 5.26 $ 3.25 $ 1.11

As of March 13, 2003, there were 141 stockholders of record of the
Company's Common Stock and 4 stockholders of record of the Company's Class B
Common Stock.

DIVIDENDS

The Company paid a regular quarterly cash dividend of $.05 per share
for the first, second and third quarters of 2001. During the fourth quarter of
2001, the Company suspended the payment of quarterly dividends and no dividends
were paid in 2002.

EQUITY COMPENSATION PLAN INFORMATION

Number of securities Weighted-average Number of securities remaining
to be issued upon exercise exercise price of for future issuance under equity
of outstanding options, outstanding options, compensation plans (excluding
Plan Category warrants and rights warrants and rights securities reflected in column (a)
- ----------------------- ----------------------------- ------------------------ ------------------------------------
(a) (b) (c) (1)

Equity compensation
plans approved by
security holders 2,951,923 $11.66 (2) 1,330,165

Equity compensation
plans not approved
by security holders 0 N/A 0
----------------------------- ------------------------ ------------------------------------
Total 2,951,923 $11.66 1,330,165

(1) The shares listed in column (c) may be issued in the form of options or
other stock-based awards, which include restricted or unrestricted
stock, restricted stock appreciation rights, performance shares and
performance units and dividend equivalents.
(2) Calculation does not include 110,923 restricted units, which represent
rights to receive common stock, included in column (a) which have no
exercise price.

-16-

ITEM 6. SELECTED FINANCIAL DATA.

The following selected consolidated financial data of the Company have
been derived from and should be read in conjunction with the Company's
Consolidated Financial Statements.

YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------
2002 2001 2000 1999 1998
---- ---- ---- ---- ----

(IN THOUSANDS, EXCEPT PER SHARE DATA)

STATEMENT OF OPERATIONS DATA:
Net revenues ............................ $ 1,128,533 $ 1,244,420 $1,414,187 $1,032,925 $ 534,838
Restructuring and impairment charges .... 78,238 187,417 -- -- --
Operating profit (loss) ................. (25,071) (172,746)(1) 159,291(2) 115,087(3) 50,950(4)
Interest expense ........................ 60,135 74,980 74,948 45,979 18,163
Income (loss) from continuing operations (5) (199,524)(6) (170,844)(1) 50,241(2) 35,033(3) 36,759(7)
Income from discontinued operations ..... -- -- -- 1,006 10,299
Net income (loss) (5)(8) ................ $ (360,649)(6) $ (170,844)(1) $ 50,241(2) $ 31,100(3) $ 43,397(7)

PER SHARE:
Income (loss) from continuing operations
- basic (5) ............................. $ (7.82)(6) $ (6.72)(1) $ 2.04(2) $ 1.67(3) $ 1.74(7)
Income (loss) from continuing operations
- diluted (5) ........................... (7.82)(6) (6.72)(1) 1.99(2) 1.64(3) 1.69(7)
Net income (loss) - basic (5)(8) ........ (14.13)(6) (6.72)(1) 2.04(2) 1.48(3) 2.06(7)
Net income (loss) - diluted (5)(8) ...... (14.13)(6) (6.72)(1) 1.99(2) 1.45(3) 1.99(7)
Dividends (9) ........................... -- .15 .20 .20 .20

OTHER DATA:
Capital expenditures .................... $ 52,440 $ 77,778 $ 81,298 $ 47,323 $ 41,961
Depreciation and amortization ........... 47,903 68,317 68,973 54,222 25,514

BALANCE SHEET DATA (AT END OF PERIOD):
Cash and cash equivalents ............... $ 133,030 $ 9,205 $ 4,459 $ 20,687 $ 61,598
Total assets ............................ 956,985 1,164,843 1,350,722 1,254,866 570,283
Long-term debt (including current
portion) .............................. 939,529 832,426 818,812 724,115 357,531
Total equity (deficit) .................. (510,321) (142,337) 47,658 56,403 (28,465)

- ---------------------
(1) Includes charges of $60.0 million ($36.3 million after tax or $1.43 per
share), principally related to provisions for obsolete and excess inventory
and loss provisions for accounts receivable.
(2) Includes a charge of $5.8 million ($3.5 million after tax or $.14 per
share) for purchased in-process research and development.
(3) Includes a charge of $6.2 million ($3.7 million after tax or $.17 per
share) primarily related to the Spinoff.
(4) Includes a charge of $12.1 million ($7.3 million after tax or $.33 per
share) primarily due to an asset impairment write-down for two of the
Company's manufacturing facilities and incremental accruals of $9.8 million
($5.9 million after tax or $.27 per share) principally related to
litigation and environmental spending.
(5) Includes an increase to the deferred tax asset valuation allowance of
$142.8 million ($5.59 per share) in 2002 to record a valuation allowance
for the Company's net domestic deferred tax assets and, in 2000, a charge
of $2.8 million ($.11 per share) to revalue certain deferred tax assets in
Germany.
(6) Includes reorganization items of $11.6 million ($.46 per share).
(7) Includes a nonrecurring gain of $19.5 million ($.89 per share) related to
an income tax settlement and the impact of the adjustments in footnote
four.
(8) Includes the cumulative effect of a change in accounting principle of
$161.1 million ($6.31 per share) in 2002 and extraordinary losses net of
tax of $4.9 million ($.23 per share) and $3.7 million ($.17 per share),
related to the early retirement of certain indebtedness, for the years 1999
and 1998, respectively.
(9) During the fourth quarter of 2001, the Company suspended the payment of
quarterly dividends.

-17-

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

OVERVIEW

GenTek Inc. is a technology-driven manufacturer of communications
products, industrial components and performance chemicals. The Company operates
through three primary business segments: communications, manufacturing and
performance products. The communications segment serves the public telecom and
the private enterprise network markets. The manufacturing segment serves the
automotive, appliance and electronic and industrial markets. The performance
products segment serves customers in many industries including the environmental
services, pharmaceutical and personal care, technology and chemical processing
markets.

On October 11, 2002, GenTek and 31 of its direct and indirect
subsidiaries, including its Noma Company subsidiary (collectively, the
"Debtors"), filed voluntary petitions for reorganization relief (the "Filing")
under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in
the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"). The Debtors' cases are being jointly administered as Case No. 02-12986
(MFW). As a result of the Filing, an automatic stay was imposed against efforts
by claimants to collect amounts due or to proceed against property of the
Debtors. The Debtors have been operating, and will continue to operate, their
respective businesses as "debtors-in-possession" under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions of the
Bankruptcy Code and orders of the Bankruptcy Court. As such, they are permitted
to engage in ordinary course of business transactions without prior approval of
the Bankruptcy Court. Transactions outside of the ordinary course of business,
including certain sales of assets and certain requests for additional
financings, will require approval by the Bankruptcy Court. There is no assurance
that such approvals will be granted when requested.

On December 10, 2002, Noma Company sought and obtained from the Ontario
Superior Court of Justice, Canada (the "Ontario Court"), an initial order
pursuant to section 18.6 of the COMPANIES' CREDITORS ARRANGEMENT Act, R.S.C.
1985, c. C-36, as amended ("CCAA"), recognizing the Filing and granting Noma
Company, among other things, a stay against claims, proceedings and the exercise
of any contractual rights against it or its property in Canada, and recognizing
various orders granted by the Bankruptcy Court.

The Debtors filed for relief under Chapter 11 as a result of the
Company's inability to obtain an amendment to its senior credit facility. The
Company believes that the protection afforded by Chapter 11 best preserves the
Debtors' ability to continue to serve their customers and preserve the value of
its businesses, while it reorganizes, and develops and implements a new
strategic plan to deleverage the Company's balance sheet and create an improved
long-term capital structure.

Since the Filing, the Company's available cash and continued cash flow
from operations have been adequate to fund ongoing operations and meet
anticipated obligations to customers, vendors and employees in the ordinary
course of business during the Chapter 11 process, and management believes it
will continue to remain adequate. Further, in order to augment its financial
flexibility during the Chapter 11 process, the Company negotiated with certain
members of its pre-petition bank syndicate, and received approval from the
Bankruptcy Court on March 6, 2003, and approval from the Ontario Court on March
13, 2003, to enter into a debtor-in-possession credit facility. The new facility
will enable the Company to issue up to $50 million of letters of credit,
including approximately $30 million of letters of credit issued under the
pre-petition credit facility, to support the Company and its subsidiaries'
undertakings (other than ordinary trade credit) and will provide the Company's
Noma Company subsidiary with a $10 million revolving credit facility for working
capital and other general corporate purposes of Noma Company. The facility
matures on September 30, 2003, but may be extended to December 31, 2003 by the
holders of a majority of the commitments. To support the payment obligations
under the new facility, the Bankruptcy Court awarded super-priority
administrative expense status to such obligations and granted the lenders senior
priming liens (with certain exceptions) on the Debtors' assets.

-18-

At hearings held on October 17, 2002 and November 7, 2002, the
Bankruptcy Court granted the Debtors' "first day" motions for various relief
designed to stabilize their operations and business relationships with their
customers, vendors, employees and other entities, and entered orders granting
authority to the Debtors to, among other things: (1) pay certain pre-petition
and post-petition employee wages, benefits and other employee obligations; (2)
honor customer programs; (3) pay certain pre-petition taxes and fees; (4) pay
certain pre-petition obligations to foreign vendors; (5) pay certain
pre-petition shipping charges; and (6) pay certain pre-petition claims of
critical vendors. The Bankruptcy Court also entered orders authorizing the
Debtors to use cash collateral of their senior lenders, and Noma Company to use
GenTek's cash collateral, on terms specified in such orders. All such orders
were also recognized by the Ontario Court.

As previously mentioned, as a result of the Filing, pending
pre-petition litigation and claims against the Debtors have been stayed
automatically in accordance with Section 362 of the Bankruptcy Code and no party
may take any action to seek payment on its pre-petition claims or to proceed
against property of the Debtors' estates except pursuant to further order of the
Bankruptcy Court. The Filing resulted in an immediate acceleration of the
Company's senior credit facility and 11% Senior Subordinated Notes, subject
to the automatic stay.

As a general rule, all of the Debtors' contracts and leases continue in
effect in accordance with their terms notwithstanding the Filing, unless
otherwise ordered by the Bankruptcy Court. The Bankruptcy Court provides the
Debtors with the opportunity to reject any contracts or leases that are
burdensome or assume any contracts or leases that are favorable or otherwise
necessary to their business operations. In the event of a rejection of a
contract or lease by the Debtors, the affected parties may file rejection damage
claims, which are considered to be pre-petition claims. As a condition to
assumption of a contract or lease, the Debtors are required to cure breaches
under such agreements, including, without limitation, payment of any amounts due
and owing.

GenTek and the other Debtors have incurred, and will continue to incur,
significant administrative and reorganization expenses resulting from the Filing
and the continuing Chapter 11 proceedings. The amount of these expenses, which
are being expensed as incurred and reported as reorganization items, are
expected to have a material effect on the Company's results of operations.

The potential adverse publicity associated with the Filing and the
continuing Chapter 11 proceedings, and the resulting uncertainty regarding
the Company's future prospects may hinder the Company's ongoing business
activities and its ability to operate, fund and execute its business plan by:
impairing relations with existing and potential customers; limiting the
Company's ability to obtain trade credit; impairing present and future
relationships with vendors; and negatively impacting the ability of the Company
to attract, retain and compensate key employees and to retain employees
generally.

The Company anticipates that most liabilities of the Debtors as of the
date of the Filing will be treated in accordance with one or more Chapter 11
plans of reorganization which will be proposed to be voted on by interested
parties and approved by the Bankruptcy Court in accordance with the provisions
of the Bankruptcy Code. Although the Debtors expect to file a plan that may
provide for its emergence from Chapter 11 during 2003, there can be no assurance
that a plan will be proposed by the Debtors or confirmed by the Bankruptcy
Court, or that any such plan will be consummated. At this time, it is not
possible for the Company to predict the effect of the Chapter 11 reorganization
process on the Company's businesses, various creditors and security holders, or
when it may be possible for the Debtors to emerge from Chapter 11.

The ultimate treatment of and recovery, if any, by creditors and
security holders will not be determined until confirmation of a plan or plans of
reorganization. GenTek and the other Debtors are unable to predict at this time
what the treatment of creditors and equity holders of the respective Debtors
will ultimately be under any plan or plans of reorganization finally confirmed.
Although until a plan is approved there is substantial uncertainty as to the
treatment of creditors and equity holders, based upon information available to
it, the Company currently believes that the Debtors' proposed reorganization
plan or plans will provide for the cancellation of existing equity interests and
for limited recoveries by

-19-

holders of debt securities. Accordingly, the Company urges that appropriate
caution be exercised with respect to existing and future investments in any of
these securities.

On February 28, 2003, the Company and Esseco S.p.A. announced plans to
form a joint venture, Esseco General Chemical LLC, to supply various sodium and
sulfur-based chemistries to the North American market. Initially, the joint
venture will focus on the supply and distribution of all grades of sodium
metabisulfite, sodium sulfite and sodium thiosulfate, among other products. It
is anticipated that the joint venture will be operational early in the second
quarter of 2003. The implementation of the joint venture is subject to certain
conditions, including approval of the Bankruptcy Court in Delaware. A motion
seeking such approval was filed on March 11, 2003.

On February 28, 2003, the Company announced a plan to wind down and
close operations in Claymont, Delaware at the South Plant of the Delaware Valley
Works complex, an industrial facility owned and operated by the Company. The
plan is subject to approval by the Bankruptcy Court. A motion seeking such
approval was filed on March 4, 2003. If approved by the Bankruptcy Court, the
South Plant is expected to cease production on or about September 30, 2003.
Failure of the Company to achieve such approval could have a material adverse
effect on the Company's results of operations. The South Plant contains sulfuric
acid regeneration and production facilities as well as other operations. The
Company intends to comply fully with all of its environmental obligations in
connection with the decommissioning of the facility including, without
limitation, those relating to any investigation and remediation of the facility
required by law. Depending on the scope of any investigation and any remedial
activity required as a result, additional costs above those currently estimated
could be incurred over a period of the next several years. The Company is
currently unable to estimate the nature and extent of these potential additional
costs. As such, it is possible that the final outcome could have a material
adverse effect on the Company's results of operations, cash flows and financial
condition. Operations at the Delaware Valley Works' other manufacturing areas
located in the North Plant of the facility, including the production of sulfur,
fluorine, potassium and ammonia-based compounds and warehousing, distribution
and transportation operations, will continue.

To minimize the impact of the South Plant closure on its sulfuric acid
regeneration and merchant acid customers, the Company has made arrangements to
continue offering products and services to these customers through its four
other sulfuric acid facilities, supplemented by agreements with certain
strategic partners. In particular, the Company has negotiated with Rhodia Inc.
to assume responsibility for five of its sulfuric acid regeneration contracts,
subject to entering into appropriate modified contracts with the customers. A
motion seeking the Bankruptcy Court's approval of the transaction with Rhodia
Inc. was filed on March 11, 2003.

The consolidated financial statements included elsewhere in this report
have been prepared in accordance with Statement of Position 90-7 ("SOP 90-7"),
"FINANCIAL REPORTING BY ENTITIES IN REORGANIZATION UNDER THE BANKRUPTCY CODE,"
and on a going concern basis, which contemplates continuity of operations,
realization of assets and liquidation of liabilities in the ordinary course of
business. However, as a result of the Filing, such realization of assets and
liquidation of liabilities are subject to uncertainty. While operating as
debtors-in-possession under the protection of Chapter 11 of the Bankruptcy Code
and subject to Bankruptcy Court approval or otherwise as permitted in the normal
course of business, the Debtors may sell or otherwise dispose of assets and
liquidate or settle liabilities for amounts other than those reflected in the
consolidated financial statements. Further, a plan of reorganization could
materially change the amounts and classifications reported in the consolidated
financial statements, which do not give effect to any adjustments to the
carrying value of assets or amount of liabilities that might be necessary as
consequence of a plan of reorganization. Liabilities and obligations whose
treatment and satisfaction is dependent on the outcome of the Chapter 11 cases
have been segregated and classified as liabilities subject to compromise in the
consolidated balance sheet.

Pursuant to the Bankruptcy Code, schedules have been filed by the
Debtors with the Bankruptcy Court setting forth the assets and liabilities of
the Debtors as of the date of Filing. Differences between amounts recorded by
the Debtors and claims filed by creditors will be investigated and resolved as
part of the proceedings in the Chapter 11 cases. A bar date of April 14, 2003
has been set for the filing of proofs

-20-

of claim against the Debtors. Accordingly, the ultimate number and allowed
amount of such claims are not presently known.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates. Our significant accounting policies are described in Note
2 to the consolidated financial statements. The significant accounting policies
which we believe are the most critical to the understanding of reported
financial results include the following:

Accounts Receivable - GenTek maintains allowances for doubtful accounts
for estimated losses resulting from the inability of our customers to make
required payments. If the financial condition of our customers were to
deteriorate, additional allowances may be required.

Inventories - GenTek provides estimated inventory allowances for
obsolete and excess inventory based on assumptions about future demand and
market conditions. If future demand or market conditions are different than
those projected by management, adjustments to inventory allowances may be
required.

Deferred Taxes - GenTek records a valuation allowance to reduce its
deferred tax assets to the amount the Company believes is more likely than not
to be realized based upon historical taxable income, projected future taxable
income and available tax planning strategies. Our estimates of future taxable
income are based upon our current operating forecast, which we believe to be
reasonable. During the second quarter of 2002, the Company revised its
projection of domestic taxable income. These estimates projected significantly
lower domestic taxable income than previous projections, principally due to the
downturn in the global communications market. As a result of lower projected
domestic taxable income during 2002 and the Company's evaluation of potential
tax-planning strategies, the Company has concluded that it is more likely than
not that it will not be able to realize its domestic net deferred tax assets.
Accordingly, during 2002 the Company recorded an increase to its valuation
allowance of $143 million effectively reducing the carrying value of its
domestic net deferred tax assets to zero. The Company will continue to monitor
the likelihood of realizing its net deferred tax assets and future adjustments
to the deferred tax asset valuation allowances will be recorded as necessary.
However, different assumptions regarding our current operating forecast could
materially effect our estimates.

Impairment of Goodwill and Other Intangible Assets - Gentek records
impairment losses on goodwill and other intangible assets based upon an annual
review of the value of the assets or when events and circumstances indicate that
the asset might be impaired and when the recorded value of the asset is more
than its fair value. Our estimates of fair value are based upon independent
appraisals and our current operating forecast, which we believe to be
reasonable. However, different assumptions regarding our current operating
forecast could materially effect our estimates.

Impairment of Long-Lived Assets - GenTek records impairment losses on
long-lived assets when events and circumstances indicate that the assets might
be impaired and the undiscounted cash flows estimated to be generated by those
assets are less than their carrying amount. Our estimates of future cash flows
are based upon our current operating forecast, which we believe to be
reasonable. However, different assumptions regarding such cash flows could
materially affect our estimates.

Pension and Other Post Retirement Benefits - GenTek records pension and
other post retirement benefit costs based on amounts developed from actuarial
valuations. Inherent in these valuations are key assumptions provided by the
Company to our actuaries, including the discount rate and expected long-term
rate of return on plan assets. Material changes in pension and other post
retirement benefit costs may occur in the future due to changes in these
assumptions, differences between actual experience and the assumptions used and
changes in the benefit plans.

Environmental Liabilities - GenTek has recorded accruals for
environmental liabilities based on

-21-

current interpretation of environmental laws and regulations when it is probable
that a liability has been incurred and the amount of such liability can be
reasonably estimated. However, discovery of unknown environmental contamination,
the adoption of new laws or regulations or modifications or changes in
enforcement of existing laws and regulations could require adjustments to these
accruals.

The impact and any associated risks related to these policies on our
business operations is discussed throughout Management's Discussion and Analysis
of Financial Condition and Results of Operations where such policies affect our
reported and expected financial results.

RESULTS OF OPERATIONS

The following table sets forth the Company's net revenues and operating
profit (loss) by segment for each of the three years in the period ended
December 31, 2002.

YEARS ENDED DECEMBER 31,
--------------------------------------------------------------
2002 2001 2000
----------------- ------------------ -------------------
(IN MILLIONS)

Net Revenues:
- -------------
Performance Products............................ $ 357.4 $ 360.9 $ 353.1
Manufacturing................................... 477.1 478.5 553.3
Communications.................................. 294.0 405.0 507.8
--------- --------- ---------
Total...................................... $ 1,128.5 $ 1,244.4 $ 1,414.2
========= ========= =========

Operating Profit (Loss):
- ------------------------
Performance Products............................ $ 28.6 $ (30.4) $ 40.0
Manufacturing................................... 44.8 (10.8) 64.2
Communications.................................. (89.5) (119.1) 59.9
Elimination/Other Corporate..................... (9.0) (12.4) (4.8)
--------- --------- ---------
Total...................................... $ (25.1) $ (172.7) $ 159.3
========= ========= =========

2002 COMPARED WITH 2001

Net revenues were $1,129 million for the year 2002 compared with $1,244
million for 2001. This decrease is principally due to a decrease in sales in the
communications segment as a result of lower volumes and pricing pressures,
principally driven by a continuing weakness in demand for the Company's public
and private network products and services in the North American and European
markets. Sales in the performance products segment decreased $4 million due to
lower sales in the environmental services and chemical processing markets,
partially offset by higher sales in the pharmaceutical and personal care market
and the technology market. Sales in the manufacturing segment decreased $1.4
million as the result of lower sales in the appliance and electronic market and
the automotive services market, partially offset by higher sales in the
industrial and automotive markets.

Gross profit of $229 million in 2002 was $21 million below the prior
year level. This decrease is principally due to lower sales volume in the
communications segment and costs associated with the expedited repair of two
boilers and a loss of production at one of the Company's performance products
facilities, partially offset by a $31 million charge to cost of sales recorded
during 2001 primarily due to obsolete and excess inventory, discontinued
products and fixed asset write-offs, and lower goodwill amortization and
depreciation expense.

Selling, general and administrative expense was $176 million for 2002
as compared with $236 million for 2001. This decrease is the result of a $29
million charge the Company recorded in 2001 principally due to a loss provision
for accounts receivable and lower expenses in the communications segment
reflecting the impact of the Company's restructuring programs, which included
the closure of two non-core research and development facilities in 2001.

During 2002, the Company initiated a restructuring program to reduce
its workforce in its communications segment, and recorded charges of
approximately $13 million primarily related to employee termination costs.

-22-

The Company has continued to experience significant declines in its
communications businesses resulting in operating losses for several business
units in 2002. The Company's revised forecast for these businesses indicated
that, based upon continuing diminished prospects in the market served by these
operations, the cash flow to be generated by these businesses would not be
sufficient to recover the carrying value of the long-lived assets at these
operations. In the second quarter of 2002, the Company recorded non-cash
impairment charges totaling $22 million primarily related to fixed assets at two
manufacturing facilities in the communications segment. In the third quarter of
2002, the Company recorded non-cash impairment charges totaling $42 million
primarily related to fixed assets in the Company's connectivity products
business in the communications segment. The charges were due to changes in the
principal markets served by these operations. The fair values of the assets were
determined based upon a calculation of the present value of the expected future
cash flows.

Operating loss for 2002 was $25 million as compared to an operating
loss of $173 million in 2001. The operating loss for 2001 includes
restructuring, impairment and other charges totaling $247 million related to
asset impairments, severance, plant closures, discontinuation of certain product
lines and receivable and inventory write downs. The operating loss for 2002
includes restructuring and impairment charges totaling $78 million, lower
depreciation expense as a result of asset impairment charges recorded in 2001
and lower amortization expense due to an accounting change related to SFAS No.
142. Excluding these factors, operating income for 2002 decreased $44 million
versus the prior year principally due to the lower sales volume in the
communication segment, unfavorable performance in the performance products
segment due to costs associated with the expedited repair of two boilers and a
loss of production at one of the Company's facilities, partially offset by
favorable performance in the manufacturing segment reflecting a more stable
automotive production environment and the impact of the Company's restructuring
program implemented in 2001, partially offset by lower prices.

Interest expense was $60 million for the year 2002 as compared to $75
million for the prior year. This decrease is principally due to no interest
expense being recorded on the Company's senior credit facility and 11% Senior
Subordinated Notes subsequent to the Company's Chapter 11 filing on October 11,
2002 and lower interest rates during the first nine months of 2002, partially
offset by higher average debt balances during the first nine months of 2002 as
compared to 2001. The Company is currently making adequate protection payments
to its senior creditors, which are being treated for accounting purposes as
reductions in principle.

The Company recorded income tax expense of $107 million for the year
2002. During the second quarter of 2002, the Company revised its projection of
domestic taxable income. These estimates projected significantly lower domestic
taxable income than previous projections, principally due to the downturn in the
global communications market. As a result of lower projected domestic taxable
income and the Company's evaluation of potential tax planning strategies, the
Company concluded that it is more likely than not that it will not be able to
realize its domestic net deferred tax assets. Accordingly, during 2002 the
Company recorded an increase to its valuation allowance of $143 million
effectively reducing the carrying value of its domestic net deferred tax assets
to zero. The Company will continue to monitor the likelihood of realizing its
net deferred tax assets and future adjustments to the deferred tax asset
valuation allowances will be recorded as necessary.

The Company adopted SFAS No. 142 "GOODWILL AND OTHER INTANGIBLE ASSETS"
effective January 1, 2002, which resulted in a charge of $161 million (net of a
tax benefit of $40 million) reported as a cumulative effect of a change in
accounting principle. Please see "Recent Accounting Pronouncements".

2001 COMPARED WITH 2000

Net revenues were $1,244 million for the year 2001 compared with $1,414
million for 2000. This decrease reflects lower volumes in the manufacturing and
communications segments reflecting the general economic slowdown, partially
offset by higher sales in the performance products segment, principally due to
higher volumes in the environmental services market. Manufacturing volumes were
negatively impacted principally by lower production levels in the North American
automotive sector. Lower communications volumes were principally driven by a
slowdown in the Company's North American public and premises network markets.

-23-

Gross profit of $250 million in 2001 was $127 million below the prior
year level. This decrease reflects the above mentioned lower volumes in the
communications and manufacturing segments, lower pricing in the manufacturing
segment and a $31 million charge to cost of sales principally due to obsolete
and excess inventory, discontinued products and fixed asset write-offs.

Selling, general and administrative expense of $236 million was $23
million higher than the prior year level. This increase was attributable to a
$29 million charge the Company recorded principally due to a loss provision for
accounts receivable for certain customers who have filed for bankruptcy or whose
current financial condition and payment history indicate payment is doubtful.
This increase was partially offset by the benefits of the Company's cost
reduction programs implemented in the second, third and fourth quarters of 2001.

During 2001, the Company initiated a restructuring program to reduce
its workforce, close several plants and discontinue certain product lines. As a
result of the above actions, the Company recorded restructuring charges of
approximately $37 million, comprised of $20 million related to employee
termination costs, $12 million for asset write-downs related to management's
decision to exit a business and $5 million for lease obligations and other
closure costs for facilities which will no longer be used.

In the early part of 2001, operating losses were experienced in certain
of the Company's operations. Additionally, forecasts updated at that time
indicated significantly diminished prospects for these operations. As a result
of these circumstances, management determined that the long-lived assets of
these operations should be assessed for impairment. Based on the outcome of this
assessment, the Company recorded a non-cash asset impairment charge of $84
million in the second quarter of 2001. This charge includes write-downs of fixed
assets of $57 million, goodwill and intangible assets of $24 million and an
investment and other long-term assets of $3 million. The second-quarter charge
primarily related to nine facilities in the performance products segment
totaling $59 million and certain intangible assets in the communications segment
totaling $22 million. The charge for eight of the nine performance products
facilities was due to changes in the principal markets served by these units.
The fair values of the assets of these facilities were determined based upon a
calculation of the present value of the expected future cash flows to be
generated by these facilities. The charge for one performance products facility
resulted from the facility's principal customer's decision to close its plant.
The fair value of the assets at this facility was based upon a third-party
appraisal. The impairment charge for the Company's communications segment is
related to certain purchased technologies acquired in 2000 for the purpose of
developing new products and services and expanding existing product offerings,
and was due to the significant downturn in the telecommunications market to be
served by these acquisitions. The Company determined the fair values of the
related goodwill and intangible assets using a calculation of the present value
of the expected future cash flows. During 2001, development of new products and
service offerings based upon these purchased technologies was ultimately
discontinued.

As the year progressed, the Company experienced a significant decline
in certain other businesses resulting in operating losses for these business
units. The Company's revised forecast prepared in the fourth quarter indicated
that, based upon diminished prospects in the markets served by certain
operations, the cash flows to be generated by these businesses would not be
sufficient to recover the carrying value of the long-lived assets at these
operations. In the fourth quarter of 2001, the Company recorded additional
non-cash impairment charges for long-lived assets totaling $67 million, of which
$55 million related to fixed assets, $9 million to goodwill and intangibles and
$3 million to an equity investment. The charge primarily related to two
facilities in the communications segment totaling $46 million and two facilities
and an equity investment in the manufacturing segment totaling $21 million. The
charge for one facility in the manufacturing segment relates to notification by
the facility's largest customer in the fourth quarter that the customer was
terminating its contract. As a result, management re-evaluated the forecast for
this business and deemed it appropriate to test the carrying value of long-lived
assets for impairment. The charge was recorded to reduce the carrying value to
fair

-24-

value, as determined using the present value of expected future cash flows. The
charge for the other facilities was due to changes in the principal markets
served by these units. The fair values of the assets were determined based upon
a calculation of the present value of the expected future cash flows.

Interest expense was $75 million for the year 2001, which was
comparable to the prior year level. Higher average outstanding debt balances
were offset by the effect of lower interest rates on the Company's floating rate
debt. The Company's average effective interest rate was 8.7 percent in 2001
compared with 10.2 percent in 2000.

The Company recorded an income tax benefit of $75 million for the year
2001 compared to a provision of $39 million for the year 2000. On July 14, 2000
legislation was enacted in Germany reducing income tax rates beginning January
1, 2001. Accordingly, the Company recorded a $2.8 million charge to income tax
expense during 2000 reflecting the revaluation of certain deferred tax assets at
the new lower effective tax rates. Prior to its acquisition by GenTek, Digital
was a division of Prestolite Wire Corporation ("Prestolite"), which is an
S-Corporation and, consequently, is not subject to federal income taxes. The pro
forma income tax provision that would have been reported by the Company had
Prestolite not been an S-Corporation prior to the acquisition was $41 million
for 2000.

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents were $133 million at December 31, 2002
compared with $9 million at year-end 2001. During 2002, the Company generated
cash flow from operations of $46 million, had proceeds from asset sales of $14
million and had net proceeds from long-term debt of $116 million, which was used
in part to make capital expenditures of $52 million.

The Company had working capital of $256 million at December 31, 2002 as
compared with $79 million at December 31, 2001. This increase in working capital
principally reflects higher cash and lower accounts payable balances.

During the first quarter of 2002, the Company borrowed all of its
remaining availability on its revolving credit facility, which approximated $155
million. As of December 31, 2002, the Company had approximately $133 million in
cash on hand, which management believes will provide sufficient liquidity to
fund ongoing operations and meet anticipated obligations to customers, vendors
and employees in the ordinary course of business during the Chapter 11 process.
At hearings held on October 17 and November 7, 2002, the Bankruptcy Court
entered orders authorizing the Debtors' to use cash collateral of their senior
lenders, and Noma Company to use GenTek's cash collateral, on terms specified in
such orders. In order to augment its financial flexibility during the Chapter 11
process, the Company negotiated with certain members of its pre-petition bank
syndicate, and received approval from the Bankruptcy Court on March 6, 2003, and
approval from the Ontario Court on March 13, 2003, to enter into a
debtor-in-possession credit facility. The new facility will enable the Company
to issue up to $50 million of letters of credit, including approximately $30
million of letters of credit issued under the pre-petition credit facility, to
support the Company and its subsidiaries' undertakings (other than ordinary
trade credit) and will provide the Company's Noma Company subsidiary with a $10
million revolving credit facility for working capital and other general
corporate purposes of Noma Company. The facility matures on September 30, 2003,
but may be extended to December 31, 2003 by the holders of a majority of the
commitments. To support the payment obligations under the new facility, the
Bankruptcy Court awarded super-priority administrative expense status to such
obligations and granted the lenders senior priming liens (with certain
exceptions) on the Debtors' assets.

The Filing resulted in an immediate acceleration of the principal
amount and accrued and unpaid interest on the Company's senior credit facility
and 11% Senior Subordinated Notes. Outstanding balances for the senior credit
facility and the 11% Senior Subordinated Notes have been reclassified to
liabilities subject to compromise. In connection with its use of cash collateral
under the credit facility, the Company is currently making adequate protection
payments to its senior creditors, which are being recorded as reductions in
principle for accounting purposes.

-25-

GenTek and the other Debtors will incur significant administrative and
reorganization expenses resulting from the Chapter 11 filing. The amount of
these expenses, which will be expensed as incurred, are expected to have a
material effect on the Company's results of operations.

The potential adverse publicity associated with the Filing and the
continuing Chapter 11 proceedings, and the resulting uncertainty regarding the
Company's future prospects may hinder the Company's ongoing business activities
and its ability to operate, fund and execute its business plan by: impairing
relations with existing and potential customers; limiting the Company's ability
to obtain trade credit; impairing present and future relationships with vendors;
and negatively impacting the ability of the Company to attract, retain and
compensate key employees and to retain employees generally.

At December 31, 2002, as a result of the recent investment performance
of the assets in the Company's various pension trusts, the Company's domestic
pension plans were underfunded by approximately $72 million. As a result, the
Company anticipates that, beginning in 2004, it will be required to make
contributions to its domestic pension plans which will average approximately $16
million per year for the next four years. In addition, for 2003 the Company will
lower its expected rate of return used in calculating pension expense from 9% to
8% for its domestic pension plans. The effect of this assumption change, the
change in the discount rate used from 7.25% to 6.5% and the pension assets
recent investment performance will be to increase pension expense by
approximately $4 million over 2002 levels.

RESTRUCTURING

The Company expects to substantially complete implementation of its
restructuring programs by the end of 2003. Management does not expect that the
restructuring programs will have a material impact on the Company's revenues.
Cash payments charged against the restructuring liability totaled $9 million for
employee termination costs and $1 million for facility exit costs in 2001 and
$10 million for employee termination costs and $2 million for facility exit
costs in 2002. Management expects that cash outlays related to the restructuring
program will be substantially completed by the end of 2003, however certain
severance and facility exit costs, primarily lease obligations, have payment
terms extending beyond 2003. Management intends to fund these cash outlays from
cash flow generated by operations. Management expects that the actions described
above will result in an estimated annual reduction in employee and facility
related expense and cash flows of approximately $40-$45 million. The Company
began to realize these reductions in the third quarter of fiscal 2001.

ENVIRONMENTAL MATTERS

The Company's various manufacturing operations, which have been
conducted at a number of facilities for many years, are subject to numerous laws
and regulations relating to the protection of human health and the environment
in the U.S., Canada, Australia, Austria, China, Germany, Great Britain, India,
Ireland, Mexico and other countries in which it operates. The Company believes
that it is in substantial compliance with such laws and regulations. However, as
a result of its operations, the Company is involved from time to time in
administrative and judicial proceedings and inquiries relating to environmental
matters. Based on information available at this time with respect to potential
liability involving these proceedings and inquiries, the Company believes that
any such liability would not have a material adverse effect on its financial
position or results of operations. However, modifications or changes in
enforcement of existing laws and regulations or the adoption of new laws and
regulations in the future, particularly with respect to environmental and safety
standards, could require expenditures which might be material to the Company's
financial position, cash flows or results of operations. See also "Business -
Environmental Matters."

The Company's accruals for environmental liabilities are recorded based
on current interpretation of environmental laws and regulations when it is
probable that a liability has been incurred and the amount of such liability can
be reasonably estimated. At December 31, 2002, accruals for environmental
matters were $27 million. The Company maintains a comprehensive insurance
program, including customary comprehensive general liability insurance for
bodily injury and property damage

-26-

caused by various activities and occurrences and significant excess coverage to
insure against catastrophic occurrences. However, the Company does not maintain
any insurance other than as described above for potential liabilities related
specifically to remediation of existing environmental contamination or future
environmental contamination, if any.

The Company has an established program to ensure that its facilities
comply with environmental laws and regulations. In 2002, expenditures made in
connection with this program approximated $17 million (of which approximately $3
million represented capital expenditures and approximately $14 million related
to ongoing operations and the management and remediation of potential
environmental contamination from prior operations). Expenditures for 2001
approximated $16 million (of which approximately $4 million represented capital
expenditures and approximately $12 million related to ongoing operations and the
management and remediation of potential environmental contamination from prior
operations). Management expects expenditures similar to 2002 levels in 2003. In
addition, if environmental laws and regulations affecting the Company's
operations become more stringent, costs for environmental compliance may
increase above historical levels.

Claims against the Debtors for environmental liabilities arising prior
to the Filing will be addressed in the Chapter 11 cases. In general, monetary
claims by private (non-governmental) parties relating to remedial actions at
off-site locations used for disposal prior to the Filing and penalties resulting
from violations of applicable environmental law before that time will be treated
as general unsecured claims. The Debtors are obligated to comply with applicable
environmental law in the conduct of their business as debtors-in-possession,
including any potential obligation to conduct investigations and implement
remedial actions at facilities the Company owns or operates, and thus will be
required to pay such expenses in full.

RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 141 "BUSINESS COMBINATIONS" and SFAS No. 142 "GOODWILL AND OTHER
INTANGIBLE ASSETS." SFAS No. 141 requires business combinations initiated after
June 30, 2001 to be accounted for using the purchase method of accounting, and
broadens the criteria for recording intangible assets separate from goodwill.
SFAS No. 142 requires the use of a nonamortization approach to account for
purchased goodwill and certain intangibles. Under a nonamortization approach,
goodwill and certain intangibles will not be amortized into results of
operations, but instead would be reviewed for impairment and written down and
charged to results of operations only in the periods in which the recorded value
of goodwill and certain intangibles is more than its fair value. The provisions
of each statement which apply to goodwill and intangible assets acquired prior
to June 30, 2001 were adopted by the Company on January 1, 2002. Accordingly,
the Company ceased amortizing goodwill. Upon adoption of SFAS No. 142, the
Company recorded a charge of $161 million (net of a tax benefit of $40 million)
as a cumulative effect of a change in accounting principle. The following
illustrates what net income (loss) and income (loss) per share would have been
had these provisions been adopted for all periods presented (in thousands,
except per share data):

YEARS ENDED DECEMBER 31,
------------------------------------------
2002 2001 2000
---- ---- ----

Reported net income (loss) ................ $ (360,649) $ (170,844) $ 50,241
Add back: goodwill amortization ....... -- 13,519 12,914
----------- ----------- -----------
Adjusted net income (loss) ............ $ (360,649) $ (157,325) $ 63,155
=========== =========== ===========

Income (loss) per share, basic:
Reported net income (loss) ............ $ (14.13) $ (6.72) $ 2.04
Add back: goodwill amortization ....... -- .53 .52
----------- ----------- -----------
Adjusted net income (loss) ............ $ (14.13) $ (6.19) $ 2.56
=========== =========== ===========

Income (loss) per share, assuming dilution:
Reported net income (loss) ............ $ (14.13) $ (6.72) $ 1.99
Add back: goodwill amortization ....... -- .53 .51
----------- ----------- -----------
Adjusted net income (loss) ............ $ (14.13) $ (6.19) $ 2.50
=========== =========== ===========

-27-

In July 2001, the FASB issued SFAS No. 143 "ACCOUNTING FOR ASSET
RETIREMENT OBLIGATIONS," which requires that the fair value of a liability for
an asset retirement obligation be recognized in the period in which it is
incurred and the associated asset retirement costs are capitalized as part of
the carrying amount of the long-lived asset. SFAS No. 143 is effective for years
beginning after June 15, 2002. The Company is currently evaluating the impact
that adoption of this standard will have on its consolidated financial
statements.

In August 2001, the FASB issued SFAS No. 144 "ACCOUNTING FOR THE
IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS," which requires all long-lived
assets classified as held for sale to be valued at the lower of their carrying
amount or fair value less cost to sell and which broadens the presentation of
discontinued operations to include more disposal transactions. The Company
adopted this standard on January 1, 2002. There was no effect upon adoption on
the Company's consolidated financial statements.

In July 2002, the FASB issued SFAS No. 146 "ACCOUNTING FOR COSTS
ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES," which requires that a liability
for costs associated with an exit or disposal activity be recognized when the
liability is incurred. This differs from prior guidance, which required the
liability to be recognized when a commitment plan was put into place. SFAS No.
146 also establishes that fair value is the objective for initial measurement of
the liability. This statement is effective for exit or disposal activities that
are initiated after December 31, 2002. The Company does not expect that the
adoption of this standard will have a material impact on its financial position,
results of operations or cash flow.

In November 2002, the FASB issued Interpretation No. 45, "GUARANTOR'S
ACCOUNTING AND DISCLOSURE REQUIREMENTS FOR GUARANTEES, INCLUDING INDIRECT
GUARANTEES OF INDEBTEDNESS TO OTHERS, AN INTERPRETATION OF FASB STATEMENTS NO.
5, 57 AND A RESCISSION OF FASB INTERPRETATION NO. 34", which expands on the
disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under guarantees issued. It also clarifies that
a guarantor is required to recognize, at inception of a guarantee, a liability
for the fair value of the obligation undertaken. The initial recognition and
measurement provisions are applicable to guarantees issued or modified after
December 31, 2002 and are not expected to have a material effect on the
Company's financial statements. The disclosure requirements are effective for
financial statements of interim and annual periods ending after December 15,
2002.

In December 2002, the FASB issued SFAS No. 148 "ACCOUNTING FOR
STOCK-BASED COMPENSATION-TRANSITION AND DISCLOSURE, AN AMENDMENT OF FASB
STATEMENT NO. 123", which requires expanded disclosure regarding stock-based
compensation in the Summary of Significant Accounting Policies. The Company has
adopted this standard for its 2002 financial statements, and has included the
expanded disclosure in Note 2.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K includes forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Certain statements, other than statements of historical facts, included in this
Annual Report may constitute forward-looking statements. Forward-looking
statements are generally identifiable by use of forward-looking terminology such
as "may," "will," "should," "potential," "intend," "expect," "endeavor," "seek,"
"anticipate," "estimate," "overestimate," "underestimate," "believe," "could,"
"project," "predict," "continue" or other similar words or expressions. The
Company has based these forward-looking statements on its current expectations
and projections about future events. Although the Company believes that its
assumptions made in connection with the forward-looking statements are
reasonable, there can be no assurances that these assumptions and expectations
will prove to have been correct. Important factors that could cause

-28-

actual results to differ from these expectations are disclosed in this Annual
Report and include various risks, uncertainties and assumptions such as, among
other things:

o potential adverse publicity associated with the Filing and the continuing
Chapter 11 proceedings and the resulting uncertainty regarding the
Company's future prospects;
o potential that the Company fails to develop and propose a reorganization
plan, or that any such plan fails to be confirmed by the Bankruptcy Court
or fails to be consummated;
o potential of adverse impacts if the Bankruptcy Court does not approve
certain motions of the Company filed in connection with its operations;
o in the event that a reorganization plan cannot be completed, the Company
may not be able to continue as a going concern;
o the Company's outstanding indebtedness and leverage, and the restrictions
imposed by its indebtedness;
o potential that investment returns on pension assets could be lower than
assumed, resulting in substantially larger cash funding requirements;
o failure to achieve targeted cost reductions;
o potential that actual results differ from the estimates and assumptions
used by management in the preparation of the consolidated financial
statements;
o continued or increased price pressure in the Company's markets,
particularly the automotive and communications markets;
o the cyclical nature of certain of the Company's businesses and markets;
o domestic and international economic conditions, particularly affecting the
automotive and communications markets;
o the high degree of competition in certain of the Company's businesses, and
the potential for new competitors to enter into those businesses;
o the extent to which the Company undertakes new acquisitions or enters into
strategic joint ventures or partnerships;
o future technological advances which may affect the Company's existing
product lines;
o future modifications to existing laws and regulations affecting the
environment, health and safety;
o discovery of unknown contingent liabilities, including environmental
contamination at the Company's facilities;
o fluctuations in interest rates and in foreign currency exchange rates;
o increases in the cost of raw materials, including energy, and other inputs
used to make the Company's products; and
o customers and suppliers seeking contractual and credit terms less favorable
to the Company.

The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this Annual Report might not occur.

RELATED PARTY AGREEMENTS

The Company is party to a management agreement with Latona Associates
Inc. ("Latona Associates"). Latona Associates is a management company that has
provided the Company with strategic management, business and financial advisory
services, including guidance and advice relating to financings, security
offerings, recapitalizations, restructurings, acquisitions, risk management and
insurance, investor relations, public relations, tax and employee benefit
matters. Paul M. Montrone, the controlling stockholder and Chairman of the
Board of the Company, also controls Latona Associates. In addition, Paul M.
Meister, Vice Chairman of the Board is a Managing Director of Latona Associates.

The Company's agreement with Latona Associates extends through 2004.
The Company's agreement with Latona Associates provides for payments to Latona
Associates of an amount, currently approximately $5 million annually, payable
quarterly in advance, adjusted annually for increases in the U.S. Department of
Labor, Bureau of Labor Statistics, Consumer Price Index. The Company paid only
75% of the amount due to Latona Associates with respect to the first quarter of
2003, and currently

-29-

intends to similarly reduce payments for the second quarter of 2003. Although
the Company has discussed this reduction with Latona Associates, and Latona
Associates has agreed not to take any action during the first and second
quarters of 2003 with respect to any outstanding amounts not paid when due,
Latona Associates has not agreed to waive any rights to the unpaid portion of
the fees due to it. In addition to the annual payment, if the Company requests
Latona Associates to provide advisory services in connection with any
acquisition, business combination or other strategic transaction, the Company
will pay Latona Associates additional fees comparable to those received by
investment banking firms for such services (subject to the approval of a
majority of our independent directors).

While there can be no assurance that the amount of fees paid by the
Company to Latona Associates for services does not exceed the amount that the
Company would have to pay to obtain similar services from unaffiliated third
parties, the Company believes that the employees of Latona Associates have
extensive knowledge concerning its businesses which would be impractical for a
third party to obtain. As a result, the Company has not compared the fees
payable to Latona Associates with fees that might be charged by third parties
for similar services.

GenTek provides The General Chemical Group Inc. with certain
administrative services pursuant to a transition support agreement entered into
in connection with the Spinoff. For the years ended December 31, 2002, 2001 and
2000, GenTek charged The General Chemical Group Inc. $1 million, $1 million and
$2 million, respectively, related to this agreement. In addition, at the time of
the Spinoff, the Company entered into various other agreements, including,
without limitation, a separation agreement, employee benefits agreement, an
intellectual property agreement, sublease agreement and a sale agreement for the
Canadian performance products business. Currently, The General Chemical Group
supplies soda ash and calcium chloride to GenTek. For the years ended December
31, 2002, 2001, and 2000, purchases from The General Chemical Group amounted to
$3 million, $4 million and $4 million, respectively.

In addition, on August 25, 2000, the Company acquired the digital
communications business of Prestolite Wire Corporation ("Prestolite"). Mr.
Montrone beneficially owns a controlling interest in Prestolite, and he and Mr.
Meister are on the Board of Prestolite. As part of the acquisition of the
Prestolite digital communications business, which was approved by a special
committee of disinterested directors of the Board of Directors of GenTek, the
Company paid Prestolite $0.3 million in 2000 for various corporate and
administrative transition services provided by Prestolite in respect of the
digital communications business. Also as part of this transaction, Prestolite
agreed to pay the Company to provide various management services to Prestolite's
remaining businesses. Prestolite paid the Company $2 million and $3 million in
2002 and 2001, respectively, in respect of such services.

GenTek and Prestolite buy and sell certain wire and cable products from
each other. Purchases from Prestolite for the years ended December 31, 2002,
2001 and 2000 were $11 million, $10 million and $22 million, respectively. Sales
to Prestolite for the years ended December 31, 2002, 2001 and 2000 were $4
million, $3 million and $3 million, respectively. In addition, the Company
permits Prestolite to utilize a portion of its Nogales, Arizona warehouse, for
which Prestolite currently pays the Company a portion of the cost of leasing and
operating the facility. Payments from Prestolite for the years ended December
31, 2002 and 2001 were $0.2 million and $0.2 million, respectively. Certain of
Prestolite's insurance is written under the Company's policies. Prestolite pays
its ratable share of the Company's premium for this insurance. Payments from
Prestolite for the years ended December 31, 2002, 2001 and 2000 were $0.3
million, $0.1 million and $0.1 million, respectively. Prestolite permits one of
the Company's subsidiaries to share its Southfield, Michigan corporate location.
The Company pays Prestolite 25 percent of the cost of leasing and operating the
Southfield premises. Payments by the Company for the years ended December 31,
2002 and 2001 were $0.1 million and $0.1 million, respectively.

To the extent that any of the agreements with related parties are
executory contracts under the Bankruptcy Court, the Company has the right to
seek an order authorizing their assumption or their rejection.

-30-

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company's cash flows and earnings are subject to fluctuations
resulting from changes in interest rates and changes in foreign currency
exchange rates and it selectively uses financial instruments to manage these
risks. The Company's objective in managing exposure to changes in foreign
currency exchange rates and interest rates is to reduce volatility on earnings
and cash flow associated with such changes. The Company has not entered, and
does not intend to enter, into financial instruments for speculation or trading
purposes. Additional information regarding financial instruments is contained in
Note 15 to the Consolidated Financial Statements.

The Company measures the market risk related to its holding of
financial instruments based on changes in interest rates and foreign currency
rates using a sensitivity analysis. The sensitivity analysis measures the
potential loss in fair values, cash flows and earnings based on a hypothetical
10 percent change in interest and currency exchange rates. The Company used
current market rates on debt and derivative portfolios to perform the
sensitivity analysis. Such analysis indicates that a hypothetical 10 percent
change in interest rates or foreign currency exchange rates would not have a
material impact on the fair values, cash flows or earnings of the Company.

-31-

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

See "Item 15. Exhibits, Financial Statement Schedules and Reports on
Form 8-K."

-32-

INDEPENDENT AUDITORS' REPORT

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF GENTEK INC.:

We have audited the accompanying consolidated balance sheets of GenTek
Inc. and subsidiaries as of December 31, 2002 and 2001, and the related
consolidated statements of operations, changes in equity (deficit) and cash
flows for each of the three years in the period ended December 31, 2002. Our
audits also included the financial statement schedule listed in the Index at
Item 15. These financial statements and the financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statements and the financial statement schedule based
on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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, such consolidated financial statements present fairly,
in all material respects, the financial position of GenTek Inc. and subsidiaries
at December 31, 2002 and 2001, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 2002 in
conformity with accounting principles generally accepted in the United States of
America. Also, in our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.

As discussed in Note 1, the Company has filed for reorganization under
Chapter 11 of the United States Bankruptcy Code. The accompanying financial
statements do not purport to reflect or provide for the consequences of the
bankruptcy proceedings. In particular, such financial statements do not purport
to show (a) as to assets, their realizable value on a liquidation basis or their
availability to satisfy liabilities; (b) as to prepetition liabilities, the
amounts that may be allowed for claims or contingencies, or the status and
priority thereof; (c) as to stockholder accounts, the effect of any changes that
may be made in the capitalization of the Company; or (d) as to operations, the
effect of any changes that may be made in its business.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
1, the Company's recurring losses from operations and stockholders' deficit and
the Company's dependence upon, among other things, confirmation of a plan of
reorganization, the Company's ability to generate sufficient cash flows from
operations, asset sales and financing arrangements to meet its obligations,
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans concerning these matters are also discussed in Note
1. The financial statements do not include adjustments that might result from
the outcome of this uncertainty.

As discussed in Note 2 to the financial statements, effective January
1, 2002 the Company changed its method of accounting for goodwill and certain
intangible assets to conform to Statement of Financial Accounting Standards No.
142.

DELOITTE & TOUCHE LLP
Parsippany, New Jersey
March 26, 2003

-33-

GENTEK INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

YEARS ENDED DECEMBER 31,
------------------------
2002 2001 2000
---- ---- ----

Net revenues ...................................................... $ 1,128,533 $ 1,244,420 $ 1,414,187
Cost of sales ..................................................... 899,177 993,946 1,036,363
Selling, general and administrative expense ....................... 176,189 235,803 212,733
Restructuring and impairment charges .............................. 78,238 187,417 --
Purchased in-process research and development ..................... -- -- 5,800
----------- ----------- -----------
Operating profit (loss) ....................................... (25,071) (172,746) 159,291
Interest expense (contractual interest for 2002 was $75,418) ...... 60,135 74,980 74,948
Interest income ................................................... 2,104 1,200 1,678
Reorganization items .............................................. 11,631 -- --
Other (income), net ............................................... (1,806) (783) (2,806)
----------- ----------- -----------
Income (loss) before income taxes and cumulative effect of a
change in accounting principle ............................ (92,927) (245,743) 88,827
Income tax provision (benefit) .................................... 106,597 (74,899) 38,586
----------- ----------- -----------
Income (loss) before cumulative effect of a change in
accounting principle ...................................... (199,524) (170,844) 50,241
Cumulative effect of a change in accounting principle (net of a
tax benefit of $39,760) ................................... (161,125) -- --
----------- ----------- -----------
Net income (loss) ..................................... $ (360,649) $ (170,844) $ 50,241
=========== =========== ===========

Earnings (loss) per common share - basic:
Income (loss) before cumulative effect of a change in
accounting principle ...................................... $ (7.82) $ (6.72) $ 2.04
Cumulative effect of a change in accounting principle ......... (6.31) -- --
----------- ----------- -----------
Net income (loss) ......................................... $ (14.13) $ (6.72) $ 2.04
=========== =========== ===========

Earnings (loss) per common share - assuming dilution:
Income (loss) before cumulative effect of a change in
accounting principle ...................................... $ (7.82) $ (6.72) $ 1.99
Cumulative effect of a change in accounting principle ......... (6.31) -- --
----------- ----------- -----------
Net income (loss) ......................................... $ (14.13) $ (6.72) $ 1.99
=========== =========== ===========

See the accompanying notes to the consolidated financial statements.

-34-

GENTEK INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

ASSETS DECEMBER 31,
--------------------------
2002 2001
---- ----

Current assets:
Cash and cash equivalents .................................................... $ 133,030 $ 9,205
Receivables, net ............................................................. 185,825 183,962
Inventories .................................................................. 104,718 107,674
Deferred income taxes ........................................................ 3,328 39,345
Other current assets ......................................................... 24,027 13,471
----------- -----------
Total current assets ....................................................... 450,928 353,657
Property, plant and equipment, net ............................................. 308,825 358,526
Goodwill ....................................................................... 127,724 328,975
Deferred income taxes .......................................................... 42,789 79,447
Other assets ................................................................... 26,719 44,238
----------- -----------
Total assets ............................................................... $ 956,985 $ 1,164,843
=========== ===========

LIABILITIES AND DEFICIT

Current liabilities:
Accounts payable ............................................................. $ 50,852 $ 99,719
Accrued liabilities .......................................................... 128,714 142,757
Current portion of long-term debt ............................................ 15,091 32,674
----------- -----------
Total current liabilities .................................................. 194,657 275,150
Long-term debt ................................................................. 2,452 799,752
Liabilities subject to compromise .............................................. 1,143,765 --
Other liabilities .............................................................. 126,432 232,278
----------- -----------
Total liabilities .......................................................... 1,467,306 1,307,180
----------- -----------
Deficit:
Preferred Stock, $.01 par value; authorized 10,000,000 shares;
none issued or outstanding ................................................. -- --
Common Stock, $.01 par value; authorized 100,000,000 shares;
issued: 20,736,376 and 20,712,973 shares at December 31, 2002
and 2001, respectively ..................................................... 207 207
Class B Common Stock, $.01 par value; authorized 40,000,000
shares; issued and outstanding: 4,750,107 shares at
December 31, 2002 and 2001 ................................................. 48 48
Paid in capital .............................................................. 3,305 3,830
Accumulated other comprehensive loss ......................................... (31,111) (24,302)
Accumulated deficit .......................................................... (481,525) (120,876)
Treasury stock, at cost: 150,313 and 145,570 shares at
December 31, 2002 and 2001, respectively ................................... (1,245) (1,244)
----------- -----------
Total deficit .............................................................. (510,321) (142,337)
----------- -----------
Total liabilities and deficit .............................................. $ 956,985 $ 1,164,843
=========== ===========

See the accompanying notes to the consolidated financial statements.

-35-

GENTEK INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

YEARS ENDED DECEMBER 31,
-----------------------------------
2002 2001 2000
---- ---- ----

Cash flows from operating activities:
Net income (loss) ................................................ $(360,649) $(170,844) $ 50,241
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Cumulative effect of a change in accounting principle ......... 161,125 -- --
Depreciation and amortization ................................. 47,903 68,317 68,973
Asset impairment and write-down charges ....................... 64,819 161,953 --
Reorganization items .......................................... 11,631 -- --
Purchased in-process research and development ................. -- -- 5,800
Net (gain) loss on disposition of long-term assets ............ 122 1,465 (731)
Long-term incentive plan costs, net ........................... (525) (86) 1,392
(Increase) decrease in receivables ............................ 12,351 37,903 (19,358)
(Increase) decrease in inventories ............................ 7,292 32,267 (26,636)
(Increase) decrease in deferred tax assets .................... 119,915 (55,213) 28,665
Increase (decrease) in accounts payable ....................... (11,742) (5,984) 16,406
Increase (decrease) in accrued liabilities .................... 1,073 2,509 (9,996)
Increase (decrease) in other liabilities and assets, net ...... (7,224) (3,880) (27,486)
--------- --------- ---------
Net cash provided by operations ............................ 46,091 68,407 87,270
--------- --------- ---------
Net cash used for reorganization items ............................... (464) -- --
--------- --------- ---------
Cash flows from investing activities:
Capital expenditures ............................................. (52,440) (77,778) (81,298)
Proceeds from sales or disposals of long-term assets ............. 13,542 11,541 6,911
Acquisition of businesses net of cash acquired* .................. (464) (610) (138,380)
Other investing activities ....................................... -- (4,032) (18,682)
--------- --------- ---------
Net cash used for investing activities ..................... (39,362) (70,879) (231,449)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from sale of stock ...................................... -- -- 37,957
Proceeds from long-term debt ..................................... 168,153 93,551 608,227
Repayment of long-term debt ...................................... (52,310) (81,515) (512,134)
Payments to acquire treasury stock ............................... (1) (370) (597)
Exercise of stock options ........................................ -- 209 292
Dividends ........................................................ -- (3,777) (5,005)
Capital contributions ............................................ -- -- 879
--------- --------- ---------
Net cash provided by financing activities .................. 115,842 8,098 129,619
--------- --------- ---------
Effect of exchange rate changes on cash .............................. 1,718 (880) (1,668)
--------- --------- ---------
Increase (decrease) in cash and cash equivalents ..................... 123,825 4,746 (16,228)
Cash and cash equivalents at beginning of period ..................... 9,205 4,459 20,687
--------- --------- ---------
Cash and cash equivalents at end of period ........................... $ 133,030 $ 9,205 $ 4,459
========= ========= =========
Supplemental information:
Cash paid (refunded) for income taxes ............................ $ (14,810) $ 10,743 $ 24,034
========= ========= =========
Cash paid for interest ........................................... $ 51,541 $ 75,467 $ 72,729
========= ========= =========
* Acquisition of businesses net of cash acquired:
Working capital, other than cash .............................. $ 59 $ -- $ (2,374)
Property, plant and equipment ................................. (364) (610) (6,040)
Other assets .................................................. (159) -- (41,728)
Noncurrent liabilities ........................................ -- -- 1,762
--------- --------- ---------
Cash used to acquire businesses ............................... (464) (610) (48,380)
Cash to acquire Digital Communications Group .................. -- -- (90,000)
--------- --------- ---------
Total cash used to acquire businesses ...................... $ (464) $ (610) $(138,380)
========= ========= =========

See the accompanying notes to the consolidated financial statements.

-36-

GENTEK INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
FOR THE THREE YEARS ENDED DECEMBER 31, 2002
(IN THOUSANDS, EXCEPT PER SHARE DATA)

ACCUMULATED RETAINED
CLASS B OTHER EARNINGS
COMMON COMMON TREASURY PAID IN COMPREHENSIVE (ACCUMULATED
STOCK STOCK STOCK CAPITAL (LOSS) DEFICIT) TOTAL
----- ----- ----- ------- ------ -------- -----

Balance at December 31, 1999 ................... $ 169 $40 $ (277) $ 50,071 $ (2,109) $ 8,509 $ 56,403
Components of comprehensive income:
Net income .............................. -- -- -- -- -- 50,241 50,241
Change in net unrealized loss on
securities (net of tax of $64) ....... -- -- -- -- (97) -- (97)
Foreign currency translation adjustments
(net of tax of $4,559) ............... -- -- -- -- (6,969) -- (6,969)
---------
Comprehensive income ........................ 43,175
Dividends (per share $.20) .................. -- -- -- -- -- (5,005) (5,005)
Capital contributions ....................... -- -- -- 879 -- -- 879
Rights offering ............................. 34 8 -- 37,915 -- -- 37,957
Exercise of stock options ................... 1 -- -- 291 -- -- 292
Long-term incentive plan grants, net ........ -- -- -- 1,392 -- -- 1,392
Purchase of treasury stock .................. -- -- (597) -- -- -- (597)
Digital acquisition (net of tax of $3,162)... -- -- -- (86,838) -- -- (86,838)
--------- --- ------- -------- -------- --------- ---------
Balance at December 31, 2000 ................... 204 48 (874) 3,710 (9,175) 53,745 47,658
Components of comprehensive loss:
Net loss ................................ -- -- -- -- -- (170,844) (170,844)
Change in net unrealized loss on
securities (net of tax of $84) ........ -- -- -- -- (129) -- (129)
Minimum pension liability adjustments
(net of tax of $748) .................. -- -- -- -- (1,144) -- (1,144)
Cumulative effect of accounting change
(net of tax of $1,941) ................ -- -- -- -- (2,966) -- (2,966)
Change in net unrealized loss on
derivative instruments (net of tax of
$2,238)................................ -- -- -- -- (3,421) -- (3,421)
Foreign currency translation adjustments
(net of tax of $4,884) ................ -- -- -- -- (7,467) -- (7,467)
----------
Comprehensive loss .......................... (185,971)
Dividends (per share $.15) .................. -- -- -- -- -- (3,777) (3,777)
Exercise of stock options ................... 3 -- -- 206 -- -- 209
Long-term incentive plan grants, net......... -- -- -- (86) -- -- (86)
Purchase of treasury stock .................. -- -- (370) -- -- -- (370)
--------- --- ------- -------- -------- --------- ---------
Balance at December 31, 2001 ................... 207 48 (1,244) 3,830 (24,302) (120,876) (142,337)
Components of comprehensive loss:
Net loss ................................ -- -- -- -- -- (360,649) (360,649)
Change in net unrealized loss on
securities (net of tax of $148)........ -- -- -- -- 226 -- 226
Minimum pension liability adjustments.... -- -- -- -- (24,346) -- (24,346)
Change in net unrealized loss on
derivative instruments (net of tax of
$(39))................................. -- -- -- -- 2,544 -- 2,544
Foreign currency translation adjustments
(net of tax of $4,322) ................ -- -- -- -- 14,767 -- 14,767
---------
Comprehensive loss .......................... (367,458)
Long-term incentive plan grants, net......... -- -- -- (525) -- -- (525)
Purchase of treasury stock .................. -- -- (1) -- -- -- (1)
--------- --- ------- -------- -------- --------- ---------
Balance at December 31, 2002 ................... $ 207 $48 $(1,245) $ 3,305 $(31,111) $(481,525) $(510,321)
========= === ======= ======== ======== ========= =========

See the accompanying notes to the consolidated financial statements.

-37-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 1 - BASIS OF PRESENTATION

GenTek Inc. ("GenTek" or the "Company") was spun off from The General
Chemical Group Inc. ("GCG") on April 30, 1999 (the "Spinoff"). The Spinoff has
been treated as a reverse spinoff for financial statement purposes because a
greater proportion of the former assets and operations of GCG are held by
GenTek.

On August 25, 2000, the Company acquired the Digital Communications
Group ("Digital") of Prestolite Wire Corporation ("Prestolite") for $90,000 and
reflected such payment as a reduction to paid in capital. As Prestolite is
controlled by the controlling stockholder of GenTek, the transaction has been
accounted for in a manner similar to a pooling of interests, and accordingly,
the accompanying financial information has been restated to include the accounts
of Digital for all periods presented. Digital manufactures voice- and
data-quality copper and fiber-optic cable for the telecommunications industry.

Adjustments represent elimination of intercompany sales. There were no
material adjustments to conform accounting policies.

On October 11, 2002, GenTek and 31 of its direct and indirect
subsidiaries, including its Noma Company subsidiary (collectively, the
"Debtors"), filed voluntary petitions for reorganization relief (the "Filing")
under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in
the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"). The Debtors' cases are being jointly administered as Case No. 02-12986
(MFW). As a result of the Filing, an automatic stay was imposed against efforts
by claimants to collect amounts due or to proceed against property of the
Debtors. The Debtors have been operating, and will continue to operate, their
respective businesses as "debtors-in-possession" under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions of the
Bankruptcy Code and orders of the Bankruptcy Court. As such, they are permitted
to engage in ordinary course of business transactions without prior approval of
the Bankruptcy Court. Transactions outside of the ordinary course of business,
including certain sales of assets and certain requests for additional
financings, will require approval by the Bankruptcy Court. There is no assurance
that such approvals will be granted if requested.

On December 10, 2002, Noma Company sought and obtained from the Ontario
Superior Court of Justice, Canada (the "Ontario Court"), an initial order
pursuant to section 18.6 of the COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C.
1985, c. C-36, as amended ("CCAA"), recognizing the Filing and granting Noma
Company, among other things, a stay against claims, proceedings and the exercise
of any contractual rights against it or its property in Canada, and recognizing
various orders granted by the Bankruptcy Court.

The Debtors filed for relief under Chapter 11 as a result of the
Company's inability to obtain an amendment to its senior credit facility. The
Company believes that the protection afforded by Chapter 11 best preserves the
Debtors' ability to continue to serve their customers and preserve the value of
their businesses, while it reorganizes, and develops and implements a new
strategic plan to deleverage the Company's balance sheet and create an improved
long-term capital structure.

Since the Filing, the Company's available cash and continued cash flow
from operations have been adequate to fund ongoing operations and meet
anticipated obligations to customers, vendors and employees in the ordinary
course of business during the Chapter 11 process, and management believes it
will continue to remain adequate. Further, in order to augment its financial
flexibility during the Chapter 11 process, the Company negotiated with certain
members of its pre-petition bank syndicate, and received approval from the
Bankruptcy Court on March 6, 2003, and approval from the Ontario Court on March
13, 2003, to enter into a debtor-in-possession credit facility. The new facility
will enable the Company to issue up to $50,000 of letters of credit, including
approximately $30,000 of letters of credit

-38-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

issued under the pre-petition credit facility, to support the Company and its
subsidiaries' undertakings (other than ordinary trade credit) and will provide
the Company's Noma Company subsidiary with a $10,000 revolving credit facility
for working capital and other general corporate purposes of Noma Company. The
facility matures on September 30, 2003, but may be extended to December 31, 2003
by the holders of a majority of the commitments. To support the payment
obligations under the new facility, the Bankruptcy Court awarded super-priority
administrative expense status to such obligations and granted the lenders senior
priming liens (with certain exceptions) on the Debtors' assets.

At hearings held on October 17, 2002 and November 7, 2002, the
Bankruptcy Court granted the Debtors' "first day" motions for various relief
designed to stabilize their operations and business relationships with their
customers, vendors, employees and other entities, and entered orders granting
authority to the Debtors to, among other things: (1) pay certain pre-petition
and post-petition employee wages, benefits and other employee obligations; (2)
honor customer programs; (3) pay certain pre-petition taxes and fees; (4) pay
certain pre-petition obligations to foreign vendors; (5) pay certain
pre-petition shipping charges; and (6) pay certain pre-petition claims of
critical vendors. The Bankruptcy Court also entered orders authorizing the
Debtors to use cash collateral of their senior lenders, and Noma Company to use
GenTek's cash collateral, on terms specified in such orders. All such orders
were also recognized by the Ontario Court.

As a result of the Filing, pending pre-petition litigation and claims
against the Debtors have been stayed automatically in accordance with Section
362 of the Bankruptcy Code and no party may take any action to seek payment on
its pre-petition claims or to proceed against property of the Debtors' estates
except pursuant to further order of the Bankruptcy Court. The Filing resulted in
an immediate acceleration of the Company's senior credit facility and 11%
Senior Subordinated Notes, subject to the automatic stay.

As a general rule, all of the Debtors' contracts and leases continue in
effect in accordance with their terms notwithstanding the Filing, unless
otherwise ordered by the Bankruptcy Court. The Bankruptcy Court provides the
Debtors with the opportunity to reject any contracts or leases that are
burdensome or assume any contracts or leases that are favorable or otherwise
necessary to their business operations. In the event of a rejection of a
contract or lease by the Debtors, the affected parties may file rejection damage
claims, which are considered to be pre-petition claims. As a condition to
assumption of a contract or lease, the Debtors are required to cure breaches
under such agreements, including, without limitation, payment of any amounts due
and owing.

GenTek and the other Debtors have incurred, and will continue to incur,
significant administrative and reorganization expenses resulting from the Filing
and the continuing Chapter 11 proceedings. The amount of these expenses, which
are being expensed as incurred and reported as reorganization, are expected to
have a material effect on the Company's results of operations.

The potential adverse publicity associated with the Filing and the
continuing Chapter 11 proceedings, and the resulting uncertainty regarding the
Company's future prospects may hinder the Company's ongoing business activities
and its ability to operate, fund and execute its business plan by: impairing
relations with existing and potential customers; limiting the Company's ability
to obtain trade credit; impairing present and future relationships with vendors;
and negatively impacting the ability of the Company to attract, retain and
compensate key employees and to retain employees generally.

The Company anticipates that most liabilities of the Debtors as of the
date of the Filing will be treated in accordance with one or more Chapter 11
plans of reorganization which will be proposed to be voted on by interested
parties and approved by the Bankruptcy Court in accordance with the provisions
of the Bankruptcy Code. Although the Debtors expect to file a plan that may
provide for its emergence from Chapter 11 during 2003, there can be no assurance
that a plan will be proposed by the Debtors or

-39-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

confirmed by the Bankruptcy Court, or that any such plan will be consummated. At
this time, it is not possible for the Company to predict the effect of the
Chapter 11 reorganization process on the Company's businesses, various creditors
and security holders, or when it may be possible for the Debtors to emerge from
Chapter 11.

The ultimate treatment of and recovery, if any, by creditors and
security holders will not be determined until confirmation of a plan or plans of
reorganization. GenTek and the other Debtors are unable to predict at this time
what the treatment of creditors and equity holders of the respective Debtors
will ultimately be under any plan or plans of reorganization finally confirmed.
Although until a plan is approved there is substantial uncertainty as to the
treatment of creditors and equity holders, based upon information available to
it, the Company currently believes that its proposed reorganization plan will
provide for the cancellation of existing equity interests and for limited
recoveries by holders of debt securities. Accordingly, the Company urges that
appropriate caution be exercised with respect to existing and future investments
in any of these securities.

The consolidated financial statements have been prepared in accordance
with Statement of Position 90-7 ("SOP 90-7"), "FINANCIAL REPORTING BY ENTITIES
IN REORGANIZATION UNDER THE BANKRUPTCY CODE," and on a going concern basis,
which contemplates continuity of operations, realization of assets and
liquidation of liabilities in the ordinary course of business. However, as a
result of the Filing, such realization of assets and liquidation of
liabilities are subject to uncertainty. While operating as debtors-in-
possession under the protection of Chapter 11 of the Bankruptcy Code and
subject to Bankruptcy Court approval or otherwise as permitted in the normal
course of business, the Debtors may sell or otherwise dispose of assets and
liquidate or settle liabilities for amounts other than those reflected in the
consolidated financial statements. Further, a plan of reorganization could
materially change the amounts and classifications reported in the consolidated
financial statements, which do not give effect to any adjustments to the
carrying value of assets or amount of liabilities that might be necessary as
consequence of a plan of reorganization. Liabilities and obligations whose
treatment and satisfaction is dependent on the outcome of the Chapter 11 cases
have been segregated and classified as liabilities subject to compromise in
the consolidated balance sheets.

Pursuant to the Bankruptcy Code, schedules have been filed by the
Debtors with the Bankruptcy Court setting forth the assets and liabilities of
the Debtors as of the date of Filing. Differences between amounts recorded by
the Debtors and claims filed by creditors will be investigated and resolved as
part of the proceedings in the Chapter 11 cases. A bar date of April 14, 2003
has been set for the filing of proofs of claim against the Debtors. Accordingly,
the ultimate number and allowed amount of such claims are not presently known.

-40-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

The consolidated financial statements include the accounts of the
Company and all of its majority owned subsidiaries. Investments in affiliates in
which ownership is at least 20 percent, but less than a majority voting
interest, are accounted for using the equity method. Investments in less than 20
percent owned affiliates are accounted for using the cost method. Intercompany
balances and transactions are eliminated in consolidation.

All highly liquid instruments purchased with a maturity of three months
or less are considered to be cash equivalents.

Inventories are valued at the lower of cost or market, using the
last-in, first-out ("LIFO") method for certain domestic production inventories
and the first-in, first-out ("FIFO") or average-cost method for all other
inventories. Production inventory costs include material, labor and factory
overhead.

Property, plant and equipment are carried at cost and are depreciated
principally using the straight-line method. Estimated lives range from five to
35 years for buildings and leasehold improvements and three to 15 years for
machinery and equipment.

The Company reviews long-lived assets for impairment whenever events
and circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by
comparing the carrying amount of these assets against the estimated undiscounted
future cash flows to be generated by the assets. At the time such evaluations
indicate that the future cash flows are not sufficient to recover the carrying
value of such assets, the carrying values are adjusted to their fair values,
which have been determined on a discounted cash flow basis. Assets to be
disposed of are reported at the lower of their carrying amount or fair value
less costs to sell.

The Company reviews goodwill and other intangible assets for impairment
annually and whenever events and circumstances indicate that the recorded value
of the assets might be more than its fair value. Estimated fair values are
determined based upon independent appraisals and current operating forecasts.

Accruals for product warranties are estimated based upon historical
warranty experience and are recorded at the time revenue is recognized.

Accruals for environmental liabilities are recorded based on current
interpretations of environmental laws and regulations when it is probable that a
liability has been incurred and the amount of such a liability can be reasonably
estimated.

Revenue is recognized from product sales consistent with the related
shipping terms, generally at the time products are shipped.

-41-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Compensation cost for stock-based employee compensation plans is
recognized using the intrinsic value method. The following table illustrates the
effect on net income (loss) and earnings (loss) per share if the Company had
applied the fair value based method to recognize stock-based employee
compensation.

YEARS ENDED DECEMBER 31,
--------------------------------------------
2002 2001 2000
---- ---- ----

Net income (loss) as reported.......................................... $ (360,649) $ (170,844) $ 50,241
Deduct: Total stock-based employee compensation expense
determined under fair value based method for all awards, net
of related tax effects............................................. (1,623) (1,737) (2,560)
----------- ----------- -----------
Pro forma net income (loss)............................................ $ (362,272) $ (172,581) $ 47,681
=========== =========== ===========

Earnings (loss) per share:
Basic - as reported................................................. $ (14.13) $ (6.72) $ 2.04
=========== =========== ===========
Basic - pro forma................................................... $ (14.19) $ (6.79) $ 1.93
=========== =========== ===========
Diluted - as reported............................................... $ (14.13) $ (6.72) $ 1.99
=========== =========== ===========
Diluted - pro forma................................................. $ (14.19) $ (6.79) $ 1.89
=========== =========== ===========

For purposes of this calculation, the fair value of each option grant
was estimated on the grant date using the Black-Scholes option-pricing model
with the following assumptions (N/A for 2002 as there were no grants made):

2002 2001 2000
---- ---- ----

Dividend yield.............................. N/A 2.8% 2.0%
Expected volatility......................... N/A 87% 57%
Risk-free interest rate..................... N/A 4.0% 6.4%
Expected holding period (in years).......... N/A 6 6
Weighted average fair value................. N/A $1.15 $5.29

Research and development costs are expensed as incurred and are
included in selling, general and administrative expenses. Research and
development costs for the years ended December 31, 2002, 2001 and 2000, were
$7,096, $12,778, and $12,892, respectively.

The Company does not hold or issue financial instruments for trading
purposes. The Company uses derivative financial instruments primarily for
purposes of hedging exposures to fluctuations in interest rates and foreign
currency exchange rates. The differential to be paid or received on interest
rate swaps is recognized as an adjustment to interest expense. Gains and losses
on hedges of existing assets or liabilities are included in the carrying amounts
of those assets or liabilities and ultimately recognized in earnings. Gains and
losses related to qualifying hedges of firm commitments or anticipated
transactions are deferred and are recognized in earnings or as adjustments of
carrying amounts when the hedged transaction occurs.

-42-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The components of accumulated other comprehensive loss are as follows:

DECEMBER 31,
-----------------------------
2002 2001
---- ----

Foreign currency translation............................................. $ 1,778 $ 16,545
Net unrealized loss on securities........................................ -- 226
Minimum pension liability adjustments.................................... 25,490 1,144
Net unrealized loss on derivative instruments............................ 3,843 6,387
----------- -----------
Accumulated other comprehensive loss..................................... $ 31,111 $ 24,302
=========== ===========

In June 2000, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 138, "ACCOUNTING FOR CERTAIN DERIVATIVE FINANCIAL INSTRUMENTS AND
CERTAIN HEDGING ACTIVITIES - AN AMENDMENT OF FASB STATEMENT NO. 133." This
statement amends the accounting and reporting standards of SFAS 133 for certain
derivative instruments and for certain hedging activities. The Company adopted
SFAS 133 and SFAS 138 on January 1, 2001. The effect of the adoption of these
pronouncements was a reduction of approximately $2,966 ($4,907 pre-tax) to other
comprehensive income attributable to the net liability to be recorded for cash
flow hedges.

In July 2001, the FASB issued SFAS No. 141 "BUSINESS COMBINATIONS" and
SFAS No. 142 "GOODWILL AND OTHER INTANGIBLE ASSETS." SFAS No. 141 requires
business combinations initiated after June 30, 2001 to be accounted for using
the purchase method of accounting, and broadens the criteria for recording
intangible assets separate from goodwill. SFAS No. 142 requires the use of a
nonamortization approach to account for purchased goodwill and certain
intangibles. Under a nonamortization approach, goodwill and certain intangibles
will not be amortized into results of operations, but instead would be reviewed
for impairment and written down and charged to results of operations only in the
periods in which the recorded value of goodwill and certain intangibles is more
than its fair value. The provisions of each statement which apply to goodwill
and intangible assets acquired prior to June 30, 2001 were adopted by the
Company on January 1, 2002, and accordingly, the Company ceased amortizing
goodwill. Upon adoption of SFAS No. 142, the Company recorded a charge of
$161,125 (net of a tax benefit of $39,760) as a cumulative effect of a change in
accounting principle. The following illustrates what net income (loss) and
income (loss) per share would have been had these provisions been adopted for
all periods presented:

YEARS ENDED DECEMBER 31,
--------------------------------------------
2002 2001 2000
---- ---- ----

Reported net income (loss)............................. $ (360,649) $ (170,844) $ 50,241
Add back: goodwill amortization.................... -- 13,519 12,914
----------- ----------- ----------
Adjusted net income (loss)......................... $ (360,649) $ (157,325) $ 63,155
============ =========== ==========

Income (loss) per share, basic:
Reported net income (loss)......................... $ (14.13) $ (6.72) $ 2.04
Add back: goodwill amortization.................... -- .53 .52
----------- ----------- ----------
Adjusted net income (loss)......................... $ (14.13) $ (6.19) $ 2.56
=========== =========== ==========

Income (loss) per share, assuming dilution:
Reported net income (loss)......................... $ (14.13) $ (6.72) $ 1.99
Add back: goodwill amortization.................... -- .53 .51
----------- ----------- ----------
Adjusted net income (loss)......................... $ (14.13) $ (6.19) $ 2.50
=========== =========== ==========

-43-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Carrying amount of goodwill by segment is as follows:

PERFORMANCE
PRODUCTS MANUFACTURING COMMUNICATIONS CONSOLIDATED
-------- ------------- -------------- ------------

Balance at December 31, 2000..................... $ 74,839 $ 174,739 $ 126,927 $ 376,505
Amortization..................................... (3,230) (5,130) (5,159) (13,519)
Impairments...................................... (5,844) (15,346) (7,381) (28,571)
Foreign currency translation..................... -- (89) (5,351) (5,440)
------- ----------- ----------- -----------
Balance at December 31, 2001..................... 65,765 154,174 109,036 328,975
Adoption of SFAS No. 142......................... (44,027) (48,200) (109,036) (201,263)
Foreign currency translation..................... -- 12 -- 12
------- ----------- ----------- -----------
Balance at December 31, 2002..................... $ 21,738 $ 105,986 $ -- $ 127,724
======= =========== =========== ===========

Income taxes are accounted for under the asset and liability method.
Under this method, deferred tax assets and liabilities are recognized for the
estimated future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases, and operating loss and tax credit carryforwards.
Deferred tax assets and liabilities are measured using enacted tax rates in
effect for the year in which those temporary differences are expected to be
recovered or settled. A valuation allowance is recorded to reduce the carrying
amounts of deferred tax assets if it is more likely than not that such assets
will not be realized.

In July 2001, the FASB issued SFAS No. 143 "ACCOUNTING FOR ASSET
RETIREMENT OBLIGATIONS," which requires that the fair value of a liability for
an asset retirement obligation be recognized in the period in which it is
incurred and the associated asset retirement costs are capitalized as part of
the carrying amount of the long-lived asset. SFAS No. 143 is effective for years
beginning after June 15, 2002. The Company is currently evaluating the impact
that adoption of this standard will have on its consolidated financial
statements.

In August 2001, the FASB issued SFAS No. 144 "ACCOUNTING FOR THE
IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS," which requires all long-lived
assets classified as held for sale to be valued at the lower of their carrying
amount or fair value less cost to sell and which broadens the presentation of
discontinued operations to include more disposal transactions. The Company
adopted this standard on January 1, 2002. There was no effect upon adoption on
the Company's consolidated financial statements.

In July 2002, the FASB issued SFAS No. 146 "ACCOUNTING FOR COSTS
ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES," which requires that a liability
for costs associated with an exit or disposal activity be recognized when the
liability is incurred. This differs from prior guidance, which required the
liability to be recognized when a commitment plan was put into place. SFAS No.
146 also establishes that fair value is the objective for initial measurement of
the liability. This statement is effective for exit or disposal activities that
are initiated after December 31, 2002. The Company does not expect that the
adoption of this standard will have a material impact on its financial position,
results of operations or cash flow.

In November 2002, the FASB issued Interpretation No. 45, "GUARANTOR'S
ACCOUNTING AND DISCLOSURE REQUIREMENTS FOR GUARANTEES, INCLUDING INDIRECT
GUARANTEES OF INDEBTEDNESS TO OTHERS, AN INTERPRETATION OF FASB STATEMENTS NO.
5, 57 AND A RESCISSION OF FASB INTERPRETATION NO. 34," which expands on the
disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under guarantees issued. It also clarifies that
a guarantor is required to recognize, at inception of a guarantee, a liability
for the fair value of the obligation undertaken. The initial recognition and
measurement provisions are applicable to guarantees issued or modified after
December 31, 2002 and

-44-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

are not expected to have a material effect on the Company's financial
statements. The disclosure requirements are effective for financial statements
of interim and annual periods ending after December 15, 2002.

In December 2002, the FASB issued SFAS No. 148 "ACCOUNTING FOR
STOCK-BASED COMPENSATION - TRANSITION AND DISCLOSURE, AN AMENDMENT OF FASB
STATEMENT NO. 123," which requires expanded disclosure regarding stock-based
compensation in the Summary of Significant Accounting Policies. The Company has
adopted this standard for its 2002 financial statements, and has included the
expanded disclosure in Note 2.

Certain prior-period amounts have been reclassified to conform with the
current presentation.

NOTE 3 - DEBTOR FINANCIAL INFORMATION

The condensed combined financial statements of the Debtors are
presented below. These statements reflect the financial position, results of
operations and cash flows of the Debtors on a combined basis, including certain
amounts and transactions between Debtors and non-debtor subsidiaries of the
Company which are eliminated in the consolidated financial statements.

CONDENSED COMBINED STATEMENT OF OPERATIONS

YEAR ENDED
DECEMBER 31, 2002
-----------------

Net revenues ...................................................... $ 881,483
Cost of sales ..................................................... 723,651
Selling, general and administrative expense ....................... 109,804
Restructuring and impairment charges .............................. 23,285
---------
Operating profit .............................................. 24,743
Interest expense (contractual interest for 2002 was $57,827) ...... 42,544
Reorganization items .............................................. 11,631
Other expense, net ................................................ 13,531
---------
Loss before income taxes and cumulative effect of a change in
accounting principle .................................... (42,963)
Income tax provision .............................................. 125,603
Cumulative effect of a change in accounting
principle ..................................................... (95,048)
Equity in income (loss) from subsidiaries ......................... (97,035)
---------
Net loss ...................................................... $(360,649)
=========

-45-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

CONDENSED COMBINED BALANCE SHEET

DECEMBER 31, 2002
-----------------
Current assets:

Cash and cash equivalents ............................ $ 94,708
Receivables, net ..................................... 132,089
Inventories .......................................... 66,395
Other current assets ................................. 21,754
-----------
Total current assets .............................. 314,946
Property, plant and equipment, net ....................... 231,505
Goodwill ................................................. 126,563
Intercompany receivable (payable) ........................ 12,653
Investment in subsidiaries ............................... 96,481
Other assets ............................................. 21,848
-----------
Total assets ......................................... $ 803,996
===========
Current liabilities:
Accounts payable ..................................... $ 31,978
Accrued liabilities .................................. 98,147
Current portion of long-term debt .................... 101
-----------
Total current liabilities ......................... 130,226
Long-term debt ........................................... 596
Liabilities subject to compromise ........................ 1,143,765
Other liabilities ........................................ 39,730
-----------
Total liabilities .................................... 1,314,317
Deficit .................................................. (510,321)
-----------
Total liabilities and deficit ........................ $ 803,996
===========

CONDENSED COMBINED STATEMENT OF CASH FLOWS

YEAR ENDED
DECEMBER 31, 2002
-----------------

Net cash provided by operating activities .................... $ 21,944
---------
Net cash used for reorganization items ....................... (464)
---------
Net cash (used in) investing activities ...................... (31,608)
---------
Cash flows from financing activities:
Intercompany cash transfers .............................. (30,650)
Other .................................................... 142,143
---------
Net cash provided by financing activities .................... 111,493
---------
Increase in cash and cash equivalents ....................... 101,365
Cash and cash equivalents at beginning of year ............... (6,657)
---------
Cash and cash equivalents at end of year ..................... $ 94,708
=========

-46-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Liabilities subject to compromise in the Consolidated and
Debtor-in-Possession balance sheets consist of the following items at December
31, 2002:

Accounts payable....................................... $ 44,331
Accrued interest payable............................... 17,795
Accrued liabilities.................................... 12,644
Long-term debt......................................... 921,986
Long-term liabilities.................................. 147,009
----------
$1,143,765
==========

Reorganization items in the Consolidated and Debtor-in-Possession
statement of operations consist of the following for the year ended December 31,
2002:

Professional fees...................................... $ 6,006
Employee costs......................................... 2,528
Interest income........................................ (185)
Settlement of pre-petition liabilities................. (990)
Other.................................................. 4,272
-------
$11,631
=======

NOTE 4 - SPECIAL CHARGES

RESTRUCTURING CHARGES

The Company's 2002 restructuring program consists of a workforce
reduction in its communications segment. The Company recorded charges of $13,152
related to employee termination costs for 430 employees and $267 for lease
obligations and other closure costs at three facilities that will no longer be
used. As of December 31, 2002, approximately 240 employees have been terminated
pursuant to the 2002 restructuring program.

The Company's 2001 restructuring program consists of a workforce
reduction, several plant closings and the discontinuation of certain product
lines. During the year ended December 31, 2001, the Company recorded
restructuring charges of $37,384 consisting of: $20,160 related to employee
termination costs for approximately 2,000 employees; $11,920 associated with the
write-down of assets resulting from plant closings and product line
discontinuance; and $5,304 related primarily to lease obligations and other
closure costs at facilities that will no longer be used. The employee
terminations impacted all of the Company's business segments, with the majority
of the terminations occurring in the manufacturing and communications segments.
As of December 31, 2002, approximately 1,350 employees had been terminated
pursuant to the 2001 restructuring program.

The Company expects to substantially complete implementation of its
restructuring programs by the end of 2003. Management does not expect that its
restructuring programs will have a material impact on the Company's revenues.

-47-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The following tables summarize the Company's accruals for restructuring
costs:

IMPAIRMENT CHARGES

The Company has continued to experience significant declines in its
communications businesses resulting in operating losses for several business
units in 2002. The Company's revised forecast for these businesses indicated
that, based upon continuing diminished prospects in the market served by these
operations, the cash flow to be generated by these businesses would not be
sufficient to recover the carrying value of the long-lived assets at these
operations. In the second quarter of 2002, the Company recorded non-cash
impairment charges totaling $22,417 million primarily related to fixed assets at
two manufacturing facilities in the communications segment. In the third quarter
of 2002, the Company recorded non-cash impairment charges totaling $42,402
million primarily related to fixed assets in the Company's connectivity products
business in the communications segment. The charges were due to changes in the
principal markets served by these operations. The fair values of the assets were
determined based upon a calculation of the present value of the expected future
cash flows.

In the early part of 2001, operating losses were experienced in certain
of the Company's operations. Additionally, forecasts updated at that time
indicated significantly diminished prospects for these operations. As a result
of these circumstances, management determined that the long-lived assets of
these operations should be assessed for impairment. Based on the outcome of this
assessment, the Company recorded a non-cash asset impairment charge of $83,623
in the second quarter of 2001. This charge includes write-downs of fixed assets
of $57,298, goodwill and intangible assets of $23,905 and an investment and
other long-term assets of $2,420. The second-quarter charge primarily related to
nine facilities in the performance products segment totaling $59,185 and certain
intangible assets in the communications segment totaling $21,956. The charge for
eight of the nine performance products facilities was due to changes in the
principal markets served by these units. The fair values of the assets of these
facilities were determined based upon a calculation of the present value of the
expected future cash flows to be generated by these facilities. The charge for
one performance products facility resulted from the facility's principal
customer's decision to close its plant. The fair value of the assets at this
facility was based upon a third-party appraisal. The impairment charge for the
Company's communications segment is related to certain purchased technologies
acquired in 2000 for the purpose of developing new products and services and
expanding existing product offerings, and was due to the significant downturn in
the telecommunications market to be served by these acquisitions. The Company
determined the fair values of the related goodwill and intangible assets using a
calculation of the present value of the expected future cash flows. During 2001,
development of new products and service offerings based upon these purchased
technologies was ultimately discontinued.

As 2001 progressed, the Company experienced a significant decline in
certain other businesses resulting in operating losses for these business units.
The Company's revised forecast prepared in the fourth quarter indicated that,
based upon diminished prospects in the markets served by certain operations, the
cash flows to be generated by these businesses would not be sufficient to
recover the carrying value of the long-lived assets at these operations. In the
fourth quarter of 2001, the Company recorded additional non-cash impairment
charges for long-lived assets totaling $66,410, of which $54,728 related to
fixed assets, $8,795 to goodwill and intangibles and $2,887 to an equity
investment. The charge primarily related to two facilities in the communications
segment totaling $45,753 and two facilities and an equity investment in the
manufacturing segment totaling $20,538. The charge for one facility in the
manufacturing segment relates to notification by its largest customer in the
fourth quarter

-48-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

that the customer was terminating its contract. As a result, management
re-evaluated the forecast for this business and deemed it appropriate to test
the carrying value of long-lived assets for impairment. The charge was recorded
to reduce the carrying value to fair value, as determined using the present
value of expected future cash flows. The charge for the other facilities was due
to changes in the principal markets served by these units. The fair values of
the assets were determined based upon a calculation of the present value of the
expected future cash flows.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

Included in selling, general and administrative expense for the year
ended December 31, 2001 is a $28,646 charge principally related to a loss
provision for accounts receivable for certain customers who have filed for
bankruptcy or whose financial condition and payment history indicate payment is
doubtful. The Company will continue to monitor the status of these accounts and
further adjustments may be necessary.

COST OF SALES

Included in cost of sales for the year ended December 31, 2001 is a
$31,367 charge principally related to a loss provision for obsolete and excess
inventory due to a significant decline in actual and forecasted revenue for
certain of the Company's product lines as well as the discontinuation of certain
of the Company's product lines.

NOTE 5 - EARNINGS PER SHARE

The computation of basic earnings per share is based on the weighted
average number of common shares outstanding during the period. The computation
of diluted earnings per share assumes the foregoing and, in addition, the
exercise of all stock options and restricted units, using the treasury stock
method.

-49-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The components of the denominator for basic earnings per common share
and diluted earnings per common share are reconciled as follows:

YEARS ENDED DECEMBER 31,
--------------------------------------------------------
2002 2001 2000
---- ---- ----

Basic earnings per common share:
Weighted average common shares outstanding.............. 25,527,570 25,434,802 24,670,854
--------------- --------------- ---------------
Diluted earnings per common share:
Weighted average common shares outstanding.............. 25,527,570 25,434,802 24,670,854
Options and restricted units............................ -- -- 542,117
--------------- --------------- ---------------
Total............................................... 25,527,570 25,434,802 25,212,971
=============== =============== ===============

During 2002 and 2001, options and restricted units were not included in
the computation of diluted earnings per common share due to their antidilutive
effect. Options to purchase 748,625 shares of common stock were outstanding
during 2000, but were not included in the computation of diluted earnings per
common share because the exercise price was greater than the average market
price of the common shares.

NOTE 6 - ACQUISITIONS - PURCHASE METHOD

GenTek has made a number of acquisitions which have been recorded using
the purchase method of accounting. Accordingly, the net assets and results of
operations of the acquisitions have been included in the financial statements
from their respective acquisition date. Prior to 2002, goodwill was amortized on
a straight-line basis over periods ranging from five to 35 years.

On May 31, 2000, the Company acquired approximately 85 percent (81
percent on a fully diluted basis) of the outstanding stock of CON-X Corporation
for approximately $18,000. During the third quarter of 2000 the Company received
a definitive appraisal of the tangible and intangible assets acquired, including
in-process research and development. Accordingly, the Company recorded a
non-cash charge of $5,800 as this technology had not yet reached technological
feasibility and had no alternative future use. The value assigned to purchased
in-process research and development was determined by employment of a discounted
cash flow model. The estimated cash flows span a 12-year period. These net cash
flows were discounted back to their present value using a risk adjusted discount
rate of 60 percent. The remaining purchase price was allocated to tangible and
intangible assets, including goodwill and existing technology, less liabilities
assumed. During 2001, development of new CON-X products was discontinued and all
of the remaining acquired intangible assets were written off. The proforma
impact of acquisitions made in 2000 in the aggregate is not material.

NOTE 7 - INCOME TAXES

Income from continuing operations before income taxes is as follows:

YEARS ENDED DECEMBER 31,
-----------------------------------------
2002 2001 2000
---- ---- ----

United States.................................. $ (89,931) $(260,549) $ 28,759
Foreign ...................................... (2,996) 14,806 60,068
---------- --------- ----------

Total..................................... $ (92,927) $(245,743) $ 88,827
========== ========= ==========

-50-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The components of the income tax provision are as follows:

YEARS ENDED DECEMBER 31,
-----------------------------------------
2002 2001 2000
---- ---- ----

United States:
Current............................... $ (8,674) $ (20,025) $ 13,203
Deferred.............................. 104,238 (43,732) 4,515
Foreign:
Current............................... 5,728 6,968 9,391
Deferred.............................. (8,703) (2,120) 9,453
State:
Current............................... 1,166 (7,264) 886
Deferred.............................. 12,842 (8,726) 1,138
----------- --------- ----------
Total.............................. $ 106,597 $ (74,899) $ 38,586
=========== ========== ==========

A summary of the components of deferred tax assets and liabilities is
as follows:

DECEMBER 31,
--------------------------
2002 2001
---- ----

Net operating loss carry forwards........................ $ 30,439 $ 16,398
Postretirement benefits.................................. 37,030 35,465
Nondeductible accruals................................... 71,851 82,670
Goodwill................................................. 38,668 4,892
Foreign operations....................................... 6,044 6,044
Deferred tax on comprehensive income..................... 16,838 15,899
Other.................................................... 9,600 7,102
---------- ----------
Deferred tax assets............................... 210,470 168,470
---------- ----------
Property, plant and equipment............................ 20,848 47,113
---------- ----------
Deferred tax liabilities.......................... 20,848 47,113
Valuation allowance...................................... 148,861 6,044
---------- ----------
Net deferred tax assets........................... $ 40,761 $ 115,313
========== ==========

At December 31, 2002 and 2001, the Company has deferred tax assets of
$6,044 related to foreign tax credits, for which a full valuation allowance had
been provided. Net operating loss carryforwards in the United States expire
through 2017. Net operating loss carryforwards in Germany do not expire. The
Company has concluded that it is more likely than not that it will not be able
to realize its domestic net deferred tax assets. Accordingly, during 2002 the
Company recorded an increase to its valuation allowance of $143 million
effectively reducing the carrying value of its domestic net deferred tax assets
to zero. The Company will continue to monitor the likelihood of realizing its
net deferred tax assets and future adjustments to the deferred tax asset
valuation allowances will be recorded as necessary.

-51-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The difference between the Company's effective income tax rate and the
United States statutory rate is reconciled below:

YEARS ENDED DECEMBER 31,
------------------------
2002 2001 2000
---- ---- ----

U.S. federal statutory rate .............. (35.0)% (35.0)% 35.0%
State income taxes, net of federal benefit (4.4) (4.2) 1.8
Tax effect of foreign operations ......... 3.5 5.8 3.8
Income from S-Corporations not subject
to income tax ........................... -- -- (3.0)
Non-deductible goodwill .................. -- 3.5 1.9
Revaluation of deferred taxes ............ -- -- 3.2
Valuation allowance ...................... 151.7 -- --
Other .................................... (1.1) (.6) .7
----- ----- -----
Total ........................... 114.7% (30.5)% 43.4%
===== ===== =====

Prior to its acquisition, Digital was a division of Prestolite, which
is an S-Corporation and, consequently, is not subject to federal income taxes.
The pro forma income tax provision that would have been reported by the Company
had Prestolite not been an S-Corporation prior to the acquisition was $40,759
for the year ended December 31, 2000.

On July 14, 2000, legislation was enacted in Germany reducing income
tax rates beginning January 1, 2001. Accordingly, the Company recorded a charge
of $2,800 to income tax expense reflecting the revaluation of deferred tax
assets at the new, lower effective tax rates.

In connection with the Spinoff, GenTek entered into a tax sharing
agreement with GCG which requires GenTek to indemnify and hold harmless GCG for
consolidated tax liabilities attributable to periods before the Spinoff.

NOTE 8 - PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS

The Company maintains several defined benefit pension plans covering
certain employees in Canada, Germany, Ireland and the United States. A
participating employee's annual postretirement pension benefit is determined by
the employee's credited service and, in most plans, final average annual
earnings with the Company. Vesting requirements are from two to five years. The
Company's funding policy is to annually contribute the statutorily required
minimum amount as actuarially determined.

The Company also sponsors several defined contribution pension plans
covering certain employees in Canada, Hong Kong and the United States. The
Company's contributions are based upon a formula utilizing an employee's
credited service and average annual salary. Vesting requirements are from two to
five years. The Company's cost to provide this benefit was $1,132, $1,217 and
$1,013 for the years ended December 31, 2002, 2001, and 2000, respectively.

The Company also maintains several plans providing postretirement
benefits other than pensions covering certain hourly and salaried employees in
Canada and the United States. The Company funds these benefits on a
pay-as-you-go basis.

-52-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

PENSION BENEFITS OTHER POSTRETIREMENT BENEFITS
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
--------------------------------- ------------------------------------
2002 2001 2000 2002 2001 2000
---- ---- ---- ---- ---- ----

UNITED STATES:
Components of net periodic benefit cost:
Service cost ........................... $ 4,167 $ 3,825 $ 4,179 $ 1,108 $ 1,016 $ 908
Interest cost........................... 12,138 11,529 11,355 3,573 3,170 3,047
Expected return on plan assets.......... (14,649) (14,075) (12,926) -- -- --
Amortization of net:
Prior service cost.................. 300 346 263 (782) (739) (739)
(Gain)/loss......................... (371) (778) (258) 30 (428) (640)
--------- ---------- --------- ----------- --------- ---------
Net periodic benefit cost............... $ 1,585 $ 847 $ 2,613 $ 3,929 $ 3,019 $ 2,576
========= ========= ========= =========== ========= =========

PENSION BENEFITS OTHER POSTRETIREMENT BENEFITS
DECEMBER 31, DECEMBER 31,
--------------------------- -------------------------------
2002 2001 2002 2001
---- ---- ---- ----

Change in benefit obligation:
Benefit obligation at prior measurement date......... $ 172,139 $ 164,380 $ 51,440 $ 43,512
Service cost ........................................ 4,167 3,825 1,108 1,016
Interest cost........................................ 12,138 11,529 3,573 3,170
Actuarial loss....................................... 17,776 520 5,871 6,976
Benefits paid........................................ (9,947) (9,492) (3,539) (3,234)
Plan amendments...................................... (239) 1,377 (441) --
----------- ----------- ---------- -----------
Benefit obligation at measurement date............... $ 196,034 $ 172,139 $ 58,012 $ 51,440
=========== =========== ========== ===========

Change in plan assets:
Fair value of assets at prior measurement date....... $ 145,162 $ 169,481 $ -- $ --
Actual return on plan assets......................... (12,114) (15,741) -- --
Employer contributions............................... 844 914 3,539 3,234
Benefits paid........................................ (9,947) (9,492) (3,539) (3,234)
----------- ----------- ---------- -----------
Fair value of assets at measurement date............. $ 123,945 $ 145,162 $ -- $ --
=========== =========== ========== ===========

Reconciliation of funded status:
Funded status........................................ $ (72,089) $ (26,977) $ (58,012) $ (51,440)
Unrecognized net:
Prior service cost............................... 1,619 1,918 (1,785) (2,126)
(Gain)/loss...................................... 48,191 3,521 5,130 (712)
----------- ----------- ---------- -----------
Net amount recognized................................ $ (22,279) $ (21,538) $ (54,667) $ (54,278)
=========== =========== ========== ===========

For pension plans included above with accumulated benefit obligations
in excess of plan assets, for 2002 and 2001, the projected benefit obligations
were $196,034 and $159,275, respectively, the accumulated benefit obligations
were $171,662 and $139,649, respectively, and the fair values of plan assets for
those plans were $123,945 and $133,119, respectively.

-53-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The weighted-average assumptions used in accounting for the plans were:

2002 2001 2000
---- ---- ----

Discount rate ............................................... 6 1/2% 7 1/4% 7 1/2%
Long-term rate of return on assets........................... 9% 9% 9%
Average rate of increase in employee compensation............ 5% 5% 5%

The health care cost trend rate used in accounting for the medical
plans was 11 percent in 2001 and 10 percent in 2002 (decreasing to 6 percent in
the year 2007 and beyond). A one percent increase in the health care trend rate
would increase the accumulated postretirement benefit obligation by $4,267 at
year-end 2002 and the net periodic cost by $409 for the year. A one percent
decrease in the health care trend rate would decrease the accumulated
postretirement benefit obligation by $4,601 at year-end 2002 and the net
periodic cost by $439 for the year.

The dates used to measure plan assets and liabilities were October 31,
2002 and 2001 for all plans. Pension plan assets are invested primarily in
stocks, bonds, short-term securities and cash equivalents.

PENSION BENEFITS OTHER POSTRETIREMENT BENEFITS
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
--------------------------------- -------------------------------
2002 2001 2000 2002 2001 2000
---- ---- ---- ---- ---- ----

FOREIGN:
Components of net periodic benefit cost:
Service cost .............................. $ 630 $ 590 $ 587 $ 16 $ 14 $ 13
Interest cost.............................. 2,980 2,774 2,817 74 64 66
Expected return on plan assets............. (705) (786) (1,087) -- -- --
Amortization of net:
Prior service cost....................... 6 6 6 -- -- --
(Gain)/loss.............................. 141 -- 355 7 -- --
--------- --------- --------- -------- -------- --------
Net periodic benefit cost.................. $ 3,052 $ 2,584 $ 2,678 $ 97 $ 78 $ 79
========= ========= ========= ======== ======== ========

-54-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

PENSION BENEFITS OTHER POSTRETIREMENT BENEFITS
DECEMBER 31, DECEMBER 31,
--------------------------- ------------------------------
2002 2001 2002 2001
---- ---- ---- ----

Change in benefit obligation:
Benefit obligation at prior measurement date........... $ 49,175 $ 49,553 $ 909 $ 884
Service cost........................................... 630 590 16 14
Employee contributions................................. 130 29 -- --
Interest cost.......................................... 2,980 2,774 74 64
Actuarial loss......................................... 47 1,517 853 37
Foreign currency translation........................... 8,277 (2,796) 9 (51)
Benefits paid.......................................... (2,748) (2,492) (43) (39)
----------- ----------- ----------- -----------
Benefit obligation at measurement date................. $ 58,491 $ 49,175 $ 1,818 $ 909
=========== =========== =========== ===========

Change in plan assets:
Fair value of assets at prior measurement date.......... $ 8,198 $ 9,663 $ -- $ --
Actual return on plan assets............................ (1,068) (997) -- --
Employer contributions.................................. 3,063 2,519 43 39
Employee contributions.................................. 130 29 -- --
Foreign currency translation............................ 753 (524) -- --
Benefits paid........................................... (2,748) (2,492) (43) (39)
----------- ----------- ----------- -----------
Fair value of assets at measurement date................ $ 8,328 $ 8,198 $ -- $ --
=========== =========== =========== ===========

Reconciliation of funded status:
Funded status ........................................ $ (50,163) $ (40,977) $ (1,818) $ (909)
Unrecognized net:
Prior service cost.................................... 20 26 -- --
Loss ................................................. 4,687 2,984 856 11
----------- ----------- ----------- -----------
Net amount recognized................................... $ (45,456) $ (37,967) $ (962) $ (898)
=========== =========== =========== ===========

For pension plans included above with accumulated benefit obligations
in excess of plan assets, for 2002 and 2001, the projected benefit obligations
were $54,557 and $45,086, respectively, the accumulated benefit obligations were
$53,364 and $43,599, respectively, and the fair values of plan assets for those
plans were $4,537 and $4,102, respectively.

The weighted-average assumptions used in accounting for the plans were:

2002 2001 2000
---- ---- ----

Discount rate.............................................. 5 3/4% 6% 6%
Long-term rate of return on assets......................... 8% 8 1/2% 9%
Average rate of increase in employee compensation.......... 3 3/4% 5% 5%

The health care cost trend rate used in accounting for the medical plan
was 10 percent in 2002 (decreasing to 5 percent in the year 2010 and beyond) and
7.2 percent in 2001 (decreasing to 6 percent in the year 2003 and beyond). A one
percent increase in the health care trend rate would increase the accumulated
postretirement benefit obligation by $334 at year-end 2002 and the net periodic
cost by $34 for the year. A one percent decrease in the health care trend rate
would decrease the accumulated postretirement benefit obligation by $275 at
year-end 2002 and the net periodic cost by $27 for the year.

The dates used to measure plan assets and liabilities were October 31,
2002 and 2001 for all plans. Pension plan assets are invested primarily in
stocks, bonds, short-term securities and cash equivalents.

-55-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 9 - COMMITMENTS AND CONTINGENCIES

Future minimum rental payments for operating leases (primarily for
transportation equipment, offices and warehouses) having initial or remaining
noncancellable lease terms in excess of one year as of December 31, 2002 are as
follows:

YEARS ENDING
DECEMBER 31,
2003............................ $ 10,166
2004............................ 6,621
2005............................ 5,259
2006............................ 4,599
2007............................ 2,828
thereafter...................... 4,395
---------
$ 33,868
=========

Rental expense for the years ended December 31, 2002, 2001 and 2000 was
$17,185, $20,355 and $18,938, respectively.

ENVIRONMENTAL MATTERS

Accruals for environmental liabilities are recorded based on current
interpretations of applicable environmental laws and regulations when it is
probable that a liability has been incurred and the amount of such liability can
be reasonably estimated. Estimates are established based upon information
available to management to date, the nature and extent of the environmental
liability, the Company's experience with similar activities undertaken,
estimates obtained from outside consultants and the legal and regulatory
framework in the jurisdiction in which the liability arose. The potential costs
related to environmental matters and their estimated impact on future operations
are difficult to predict due to the uncertainties regarding the extent of any
required remediation, the complexity and interpretation of applicable laws and
regulations, possible modification of existing laws and regulations or the
adoption of new laws or regulations in the future, and the numerous alternative
remediation methods and their related varying costs. The material components of
the Company's environmental accruals include potential costs, as applicable, for
investigation, monitoring, remediation and ongoing maintenance activities at any
affected site. Accrued liabilities for environmental matters were $27,363 and
$24,657 at December 31, 2002 and 2001, respectively. These amounts do not
include third-party recoveries nor have they been discounted.

PRODUCT WARRANTIES

Accruals for product warranties are estimated based upon historical
warranty experience and are recorded at the time revenue is recognized. Activity
in the aggregate product warranty liability is summarized as follows:

2002 2001
---- ----
Balance at beginning of period....... $ 6,119 $ 6,474
Accruals............................. 2,711 1,329
Payments............................. (968) (1,530)
Adjustments and other................ (749) (154)
-------- --------
Balance at end of period............. $ 7,113 $ 6,119
======== ========

CONTINGENCIES

The Company is involved in various claims, litigation, administrative
proceedings and investigations. Although the amount of any ultimate liability
which could arise with respect to these

-56-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

matters cannot be accurately predicted, it is the opinion of management, based
upon currently available information, that any such liability will have no
material adverse effect on the Company's financial condition, results of
operations or cash flows.

NOTE 10 - RELATED PARTY TRANSACTIONS

ALLOCATIONS

Prior to its acquisition, Digital was a division of Prestolite Wire
Corporation. Prestolite provided certain services to Digital such as accounting,
legal, human resources, information technology and other corporate services. The
accompanying statements of operations include allocations of $2,292 for the year
ended December 31, 2000. Interest expense of $3,518 for the year ended December
31, 2000 has been charged to Digital based on a net assets basis utilizing
Prestolite's effective interest rate and the cash flows of Digital. These
allocations were made consistently in each period, and management believes the
allocations are reasonable. However, such allocations are not necessarily
indicative of the level of expenses that might have been incurred had Digital
been operating as a stand-alone entity or which might be expected to be incurred
as part of GenTek.

MANAGEMENT AGREEMENT

The Company is party to a management agreement with Latona Associates
Inc., which is controlled by a stockholder of the Company, under which the
Company receives corporate supervisory and administrative services and strategic
guidance. The Company was charged $5,017, $4,864, and $4,655, for the years
2002, 2001 and 2000, respectively. In addition, the Company paid $600 in
connection with acquisitions during 2000.

OTHER TRANSACTIONS

GenTek provides GCG with certain administrative services pursuant to a
transition support agreement entered into in connection with the Spinoff. For
the years ended December 31, 2002, 2001, and 2000, GenTek charged GCG $1,383,
$1,355 and $1,692, respectively, related to this agreement. GCG supplies soda
ash and calcium chloride to GenTek. For the years ended December 31, 2002, 2001,
and 2000, purchases from GCG amounted to $2,794, $4,036 and $4,389,
respectively.

In connection with the acquisition of Digital, Prestolite provided
GenTek with various corporate and administrative transition services in respect
of the digital business. The Company was charged $250 for the year ended
December 31, 2000. GenTek provides Prestolite with corporate and administrative
services, pursuant to a management agreement. For the years ended December 31,
2002 and 2001, GenTek charged Prestolite $2,078 and $2,529. GenTek and
Prestolite buy and sell certain wire and cable products from each other.
Purchases from Prestolite for the years ended December 31, 2002, 2001 and 2000
were $11,021, $9,805 and $22,324, respectively. Sales to Prestolite for the
years ended December 31, 2002, 2001 and 2000 were $3,761, $2,613 and $2,707,
respectively. In addition, the Company permits Prestolite to utilize a portion
of its Nogales, Arizona warehouse, for which Prestolite currently pays the
Company a portion of the cost of leasing and operating the facility. Payments
from Prestolite for the years ended December 31, 2002 and 2001 were $228 and
$165, respectively. Certain of Prestolite's insurance is written under the
Company's policies. Prestolite pays its ratable share of the Company's premium
for this insurance. Payments from Prestolite for the years ended December 31,
2002, 2001 and 2000 were $268, $111 and $146, respectively. Prestolite permits
one of the Company's subsidiaries to share its Southfield, Michigan corporate
location. The Company pays Prestolite 25 percent of the cost of leasing and
operating the Southfield premises. Payments by the Company for the years ended
December 31, 2002 and 2001 were $113 and $76, respectively.

-57-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

To the extent that any of the agreements with related parties are
executory contracts under the Bankruptcy Code, the Company has the right to seek
an order authorizing their assumption or their rejection.

NOTE 11 - ADDITIONAL FINANCIAL INFORMATION

RECEIVABLES DECEMBER 31,
------------------------------
2002 2001
---- ----

Trade................................................... $ 189,281 $ 199,718
Other................................................... 18,822 16,306
Allowance for doubtful accounts......................... (22,278) (32,062)
------------ ------------
$ 185,825 $ 183,962
============ ============

INVENTORIES DECEMBER 31,
------------------------------
2002 2001
---- ----
Raw materials........................................... $ 41,003 $ 47,112
Work in process......................................... 16,363 15,156
Finished products....................................... 42,077 40,795
Supplies and containers................................. 5,275 4,611
----------- -----------
$ 104,718 $ 107,674
=========== ===========

Inventories valued at LIFO amounted to $27,011 and $25,401 at December
31, 2002 and 2001, respectively, which were below estimated replacement cost by
$1,114 and $913, respectively. The impact of LIFO liquidations in 2002, 2001 and
2000 was not significant.

PROPERTY, PLANT AND EQUIPMENT DECEMBER 31,
----------------------------
2002 2001
---- ----

Land and improvements................................... $ 39,437 $ 37,402
Machinery and equipment................................. 525,797 508,995
Buildings and leasehold improvements.................... 93,346 90,583
Construction in progress................................ 48,883 52,659
----------- -----------
707,463 689,639
Less accumulated depreciation and amortization.......... (398,638) (331,113)
----------- -----------
$ 308,825 $ 358,526
=========== ===========

ACCRUED LIABILITIES DECEMBER 31,
----------------------------
2002 2001
---- ----
Wages, salaries and benefits............................ $ 33,959 $ 36,547
Interest................................................ 14 12,166
Income taxes............................................ 850 5,908
Taxes, other than income taxes.......................... 6,982 7,109
Other................................................... 86,909 81,027
----------- -----------
$ 128,714 $ 142,757
=========== ===========

-58-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 12 - LONG-TERM DEBT

DECEMBER 31,
----------------------------

MATURITIES 2002 2001
---------- ---- ----

Bank term loans - floating rates....................... 2002-2007 $ 463,401 $ 486,250
Revolving credit facility - floating rate.............. 2005 264,718 115,000
Senior Subordinated Notes - 11%........................ 2009 193,867 200,000
Other debt - floating rate............................. 2002-2018 17,543 31,176
----------- -----------
Total debt.................................... 939,529 832,426
Less: current portion........................ 15,091 32,674
Liabilities subject to compromise............. 921,986 --
----------- -----------
Net long-term debt............................ $ 2,452 $ 799,752
=========== ===========

Aggregate maturities of long term debt, exclusive of liabilities
subject to compromise, are as follows: 2003, $15,091; 2004, $1,651; 2005, $308;
2006, $210; 2007, $25; thereafter, $258.

On August 9, 2000, the Company entered into a restated and amended
credit agreement, which provides for $500,000 in term loans and a $300,000
revolving credit facility, which includes letters of credit up to $50,000. On
August 1, 2001, the Company entered into an amendment of its credit facility
which made certain modifications to the financial covenants and other terms of
the credit facility. The unused letter of credit balance was $330 and $20,253 at
December 31, 2002 and 2001, respectively. The term loans and revolving credit
facility bear interest at a rate equal to a spread over a reference rate. The
rate in effect for the revolving credit facility at December 31, 2002 and 2001
was 5.8 percent and 5.0 percent, respectively. The weighted average rate in
effect for the term loans at December 31, 2002 and 2001 was 6.3 percent and 5.3
percent, respectively. The facility is secured by a first priority security
interest in all of the capital stock of the Company's domestic subsidiaries, 65
percent of the capital stock of the Company's foreign subsidiaries and a
security interest in certain real property, intellectual property and other
assets of the Company in the United States and Canada.

On October 11, 2002, the Company and 31 of its direct and indirect
subsidiaries filed voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code. The filing of a bankruptcy petition resulted in an immediate
acceleration of the principal amount and accrued and unpaid interest on the
Company's senior credit facility and 11% Senior Subordinated Notes.
Outstanding balances for the senior credit facility and the 11% Senior
Subordinated Notes have been reclassified to liabilities subject to compromise.
In connection with its use of cash collateral under the credit facility, the
Company is currently making adequate protection payments to its senior
creditors, based upon the interest rates stated above for its credit
facility, which are being recorded as reductions in principle for accounting
purposes. See Note 1 for further discussion of the Company's bankruptcy.

Commitment fees paid for the Company's credit facilities were $92,
$624, and $556 for 2002, 2001 and 2000, respectively.

In order to augment its financial flexibility during the Chapter 11
process, the Company negotiated with certain members of its pre-petition bank
syndicate, and received approval from the Bankruptcy Court on March 6, 2003, and
approval from the Ontario Court on March 13, 2003, to enter into a
debtor-in-possession credit facility. The new facility will enable the Company
to issue up to $50,000 of letters of credit, including approximately $30,000 of
letters of credit issued under the pre-petition credit facility, to support the
Company and its subsidiaries' undertakings (other than ordinary trade credit)
and will provide the Company's Noma Company subsidiary with a $10,000 revolving
credit facility for working capital and other general corporate purposes of Noma
Company. Borrowings under the revolving credit facility will bear interest at
variable rates based on prime plus 2.25 percent or LIBOR plus 3.50 percent. The
facility matures on September 30, 2003, but may be extended to December 31,

-59-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

2003 by the holders of a majority of the commitments. To support the payment
obligations under the new facility, the Bankruptcy Court awarded super-priority
administrative expense status to such obligations and granted the lenders senior
priming liens (with certain exceptions) on the Debtors' assets.

NOTE 13 - CAPITAL STOCK

The Company's authorized capital stock consists of 100,000,000 shares
of Common Stock, par value $.01 per share, of which 20,586,063 and 20,567,403
were outstanding at December 31, 2002 and 2001, respectively, and 40,000,000
shares of Class B Common Stock, par value $.01 per share, which has ten votes
per share, is subject to significant restrictions on transfer and is convertible
at any time into Common Stock on a share-for-share basis, of which 4,750,107
shares were outstanding at December 31, 2002 and 2001. The Common Stock and
Class B Common Stock are substantially identical, except for the disparity in
voting power, restriction on transfer and conversion provisions.

The Company's Preferred Stock, par value $.01 per share, consists of
10,000,000 authorized shares, none of which were outstanding at December 31,
2002 and 2001.

On February 22, 2000, the Company issued 3,371,340 shares of Common
Stock and 791,685 shares of Class B Common Stock in connection with the
Company's rights offering. Pursuant to the rights offering, the holders of
record of the Company's Common Stock and Class B Common Stock as of January 24,
2000 received, at no cost, 0.20 rights to purchase one share of Common Stock or
Class B Common stock of the Company, as appropriate, for each share of such
stock they held as of the record date. Each whole right entitled the holder to
purchase one share of Common Stock or Class B Stock, as the case may be, at the
price of $9.43 per share. The net proceeds to the Company from this issuance of
Common Stock and Class B Common Stock were approximately $38,000.

NOTE 14 - STOCK INCENTIVE PLANS

The Company has several long-term incentive plans pursuant to which
stock options and other equity-related incentive awards may be granted to
officers, non-employee directors and other key people. Stock options generally
are granted with an exercise price equal to the market price on the day the
option is granted, vest over three years and have a maximum term of 10 years.
Restricted units, which represent common stock to be issued to the participant
upon vesting, vest over five years for employees and four years for non-employee
directors. Compensation cost (income) recorded for stock-based compensation
under those plans was $(525), $(86), and $1,392, for the years ended December
2002, 2001 and 2000, respectively. As of December 31, 2002, the total number of
shares authorized for grants under these plans was approximately 4,900,000, with
approximately 1,300,000 shares available for grant.

Information with respect to all stock options is summarized below:

2002 2001 2000
-------------------------- ------------------------- -------------------------

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

Outstanding at
beginning of year........ 3,004,000 $ 11.60 3,100,700 $12.32 1,933,800 $ 13.66
Options granted........... -- -- 313,000 2.62 1,221,000 10.27
Options exercised......... -- -- 21,900 9.43 22,000 13.29
Options cancelled......... 163,000 10.56 387,800 10.26 32,100 14.18
----------- ----------- ---------
Outstanding at end
of year.................. 2,841,000 $ 11.66 3,004,000 $11.60 3,100,700 $ 12.32
=========== =========== =========
Exercisable at end
of year.................. 1,950,200 $ 12.45 1,387,400 $13.26 739,400 $ 14.20

-60-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The following table summarizes information about stock options
outstanding at December 31, 2002:

OUTSTANDING EXERCISABLE
------------------------------------------------------------ ----------------------------------

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

$ 1.11 - $ 5.00 210,000 8.8 $ 1.33 63,000 $ 1.33
$ 5.00 - $10.00 903,500 7.0 $ 9.48 609,700 $ 9.53
$ 10.00 - $15.00 1,374,000 4.2 $13.05 940,000 $13.08
$ 15.00 - $18.73 353,500 5.0 $17.99 337,500 $18.05
------------ ------------
2,841,000 1,950,200
============ ============

NOTE 15 - FINANCIAL INSTRUMENTS

INVESTMENTS

All marketable equity securities are classified as available-for-sale,
with net unrealized gains and losses shown as a component of accumulated other
comprehensive income (loss). At December 31, 2002, there were no marketable
equity securities held by the Company. At December 31, 2001, gross unrealized
losses were $375. At December 31, 2000, gross unrealized gains and losses were
$254 and $415, respectively. Realized gains and losses are determined on the
average cost method. Sales of investments were as follows:

DECEMBER 31,
------------------------------------------------
2002 2001 2000
---- ---- ----

Proceeds............................................... $ 561 $ 4,582 $ 4,140
Gross realized gains................................... -- $ 1,123 $ 1,893
Gross realized losses.................................. $ 386 $ 564 --

SWAP AGREEMENTS

The Company periodically enters into interest rate swap agreements to
effectively convert a portion of its floating-rate to fixed-rate debt in order
to reduce the Company's exposure to movements in interest rates and achieve a
desired proportion of variable versus fixed-rate debt, in accordance with the
Company's policy. Such agreements involve the exchange of fixed and floating
interest rate payments over the life of the agreement without the exchange of
the underlying principal amounts. Accordingly, the impact of fluctuations in
interest rates on these interest rate swap agreements is fully offset by the
opposite impact on the related debt. Swap agreements are only entered into with
strong creditworthy counterparties. All swap agreements have been designated as
cash flow hedges, and all were 100 percent effective. As a result, there is no
impact to earnings due to hedge ineffectiveness. As a result of the Filing, the
Company discontinued hedge accounting for its interest rate swaps since it was
no longer probable that the forecasted variable interest payments would occur.
Additionally, a charge of $4,272 was recorded in reorganization items, which
represents amounts which would have been reclassified from accumulated other
comprehensive income amounts to the statement of operations had interest
payments been made during the estimated period of time the Company will be
reorganizing under Chapter 11. During 2002, the Company received notices from
counterparties to the Company's interest rate swap agreements that they were
exercising their rights to terminate the agreements. The termination payment
demands received totaled $12,941, which has not been paid and is recorded as
liabilities subject to compromise. The swap agreements in effect were as
follows:

-61-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

INTEREST RATE
NOTIONAL -----------------------------
AMOUNT MATURITIES RECEIVE (1) PAY (2)
------ ---------- ----------- -------

December 2001............ $ 175,000 2002-2006 2.0% 6.8%

(1) Three-month LIBOR.
(2) Represents the weighted average rate.

FAIR VALUE OF FINANCIAL INSTRUMENTS

DECEMBER 31, 2002 DECEMBER 31, 2001
-------------------------- ------------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
------ ----- ------ -----

Marketable equity securities................. $ -- $ -- $ 572 $ 572
Long-term debt............................... $939,529 $442,657 $832,426 $748,426
Interest rate swap agreements................ $ -- $ -- $(10,566) $(10,566)

The fair values of cash and cash equivalents, receivables and payables
approximate their carrying values due to the short-term nature of the
instruments. The fair value of the Company's investments in marketable
equity securities is based on quoted market prices. The fair value of the
Company's long-term debt was based on quoted market prices for traded debt and
discounted cash flow analyses on its nontraded debt. The fair value of the
Company's interest rate swap agreements is the estimated amount the Company
would have to pay or receive to terminate the swap agreements based upon quoted
market prices as provided by financial institutions which are counterparties to
the swap agreements.

NOTE 16 - GEOGRAPHIC AND INDUSTRY SEGMENT INFORMATION

GenTek operates through three primary business segments:
communications, manufacturing and performance products. The business segments
were determined based on several factors including products and services
provided and markets served. Each segment is managed separately. The
communications segment is a global provider of products, systems and services,
including copper and fiber-optic cabling and connection products, for local and
wide area data and communications networks. The manufacturing segment provides a
broad range of engineered components and services to the automotive, appliance
and electronic and industrial markets. The performance products segment
manufactures a broad range of products and services to four principal markets:
environmental services, pharmaceutical and personal care, chemical processing
and technology. The accounting policies of the segments are the same as those
described in the summary of significant accounting policies.

-62-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Industry segment information is summarized as follows:

NET REVENUES OPERATING PROFIT (LOSS)
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
---------------------------------------- ---------------------------------------
2002 2001 2000 2002 2001 2000
---- ---- ---- ---- ---- ----

Performance Products................... $ 357,427 $ 360,927 $ 353,125 $ 28,657 $ (30,444) $ 40,024
Manufacturing.......................... 477,113 478,488 553,262 44,807 (10,831) 64,206
Communications ........................ 293,993 405,005 507,800 (89,519) (119,108) 59,851
------------ ------------ ------------ ----------- ----------- ----------
Total segments.................. 1,128,533 1,244,420 1,414,187 (16,055) (160,383) 164,081
Eliminations and other corporate
expenses............................. -- -- -- (9,016) (12,363) (4,790)
------------ ------------ ------------ ------------ ----------- ---------
Consolidated........................... $ 1,128,533 $ 1,244,420 $ 1,414,187 (25,071) (172,746) 159,291
============ ============ ============
Interest expense ..................... 60,135 74,980 74,948
Other (income), expense net............ 7,721 (1,983) (4,484)
------------ ------------ ----------
Consolidated income (loss) before income taxes
and cumulative effect of a change in
accounting principle................ $ (92,927) $ (245,743) $ 88,827
============ ============ ==========

CAPITAL EXPENDITURES DEPRECIATION AND AMORTIZATION
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
-------------------------------------- -----------------------------------
2002 2001 2000 2002 2001 2000
---- ---- ---- ---- ---- ----

Performance Products.................. $ 23,808 $ 20,554 $ 20,023 $ 15,484 $ 21,203 $ 23,346
Manufacturing......................... 15,855 12,383 16,376 16,891 23,043 23,115
Communications........................ 12,777 44,841 44,899 15,528 24,071 22,512
----------- ----------- ----------- ---------- ---------- ----------
Consolidated.......................... $ 52,440 $ 77,778 $ 81,298 $ 47,903 $ 68,317 $ 68,973
=========== =========== =========== ========== ========== ==========

IDENTIFIABLE ASSETS
DECEMBER 31,
------------------------------
2002 2001
---- ----

Performance Products...................................................................... $ 249,326 $ 303,788
Manufacturing (1)......................................................................... 369,415 409,006
Communications............................................................................ 258,595 426,767
Corporate................................................................................. 79,649 25,282
------------ ------------
Consolidated.............................................................................. $ 956,985 $ 1,164,843
============ ============

(1) Includes equity method investments of $18,274 and $21,608, respectively.

-63-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Geographic area information is summarized as follows:

EXTERNAL REVENUES (1) LONG-LIVED ASSETS (2)
YEARS ENDED DECEMBER 31, DECEMBER 31,
-------------------------------------------- --------------------------
2002 2001 2000 2002 2001
---- ---- ---- ---- ----

United States......... $ 746,492 $ 811,788 $ 951,608 $ 276,705 $ 376,638
Canada................ 115,957 99,647 113,574 112,881 159,993
Other Foreign......... 266,084 332,985 349,005 73,682 195,108
------------- ------------- ------------- ------------ ------------
Consolidated.......... $ 1,128,533 $ 1,244,420 $ 1,414,187 $ 463,268 $ 731,739
============= ============= ============= ============ ============

(1) Revenues are attributed to geographic areas based on the locations of
customers.
(2) Represents all non-current assets except deferred tax assets and
financial instruments.

NOTE 17 - SUMMARIZED FINANCIAL INFORMATION

The Company's Senior Subordinated Notes due 2009 are fully and
unconditionally guaranteed, on a joint and several basis, by all of the
Company's wholly owned, domestic subsidiaries ("Subsidiary Guarantors"). The
non-guarantor subsidiaries are foreign.

The following condensed consolidating financial information illustrates
the composition of the combined Subsidiary Guarantors. The Company believes that
the separate complete financial statements of the respective guarantors would
not provide additional material information which would be useful in assessing
the financial composition of the Subsidiary Guarantors.

-64-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2002

NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ---------- ------------ ------------ ------------

Net revenues..................................... $ -- $ 725,087 $ 442,333 $ (38,887) $ 1,128,533
Cost of sales.................................... -- 588,978 349,086 (38,887) 899,177
Selling, general and administrative expense...... 1,362 100,571 74,256 -- 176,189
Restructuring and impairment charges............. -- 23,285 54,953 -- 78,238
--------- ----------- ----------- ---------- -------------
Operating profit (loss)...................... (1,362) 12,253 (35,962) -- (25,071)
Interest expense................................. 48,354 46,521 8,551 (43,291) 60,135
Other (income) expense, net...................... (39,512) 4,797 (855) 43,291 7,721
--------- ----------- ----------- ----------- -------------
Income (loss) before income taxes and
cumulative effect of a change in
accounting principle....................... (10,204) (39,065) (43,658) -- (92,927)
Income tax provision (benefit)................... 138,911 (15,001) (17,313) -- 106,597
Cumulative effect of a change in accounting
principle.................................... -- (65,359) (95,766) -- (161,125)
Equity in income (loss) from subsidiaries........ (211,534) (122,111) -- 333,645 --
--------- ----------- ---------- ----------- -------------
Net income (loss)............................ $(360,649) $ (211,534) $ (122,111) $ 333,645 $ (360,649)
========= =========== ========== =========== =============

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2001

NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ---------- ------------ ------------ ------------

Net revenues..................................... $ -- $ 766,783 $ 517,181 $ (39,544) $ 1,244,420
Cost of sales.................................... -- 643,812 389,678 (39,544) 993,946
Selling, general and administrative expense...... 2,801 149,322 83,680 -- 235,803
Restructuring and impairment charges............. -- 161,150 26,267 -- 187,417
--------- ----------- ----------- ---------- ------------
Operating profit (loss)...................... (2,801) (187,501) 17,556 -- (172,746)
Interest expense................................. 60,123 69,567 17,005 (71,715) 74,980
Other (income) expense, net...................... (56,318) (10,094) (7,286) 71,715 (1,983)
--------- ----------- ----------- ---------- ------------
Income (loss) before income taxes............ (6,606) (246,974) 7,837 -- (245,743)
Income tax provision (benefit)................... (2,008) (75,273) 2,382 -- (74,899)
Equity in income (loss) from subsidiaries........ (166,246) 5,455 -- 160,791 --
--------- ----------- ----------- ---------- ------------
Net income (loss)............................ $(170,844) $ (166,246) $ 5,455 $ 160,791 $ (170,844)
========= =========== =========== ========== ============

-65-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2000

NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ---------- ------------ ------------ ------------

Net revenues..................................... $ -- $ 901,743 $ 554,593 $ (42,149) $ 1,414,187
Cost of sales.................................... -- 687,025 391,487 (42,149) 1,036,363
Selling, general and administrative expense...... 2,298 127,891 88,344 -- 218,533
---------- ----------- ----------- ---------- -------------
Operating profit (loss)...................... (2,298) 86,827 74,762 -- 159,291
Interest expense................................. 53,278 58,678 19,574 (56,582) 74,948
Other (income) expense, net...................... (52,896) (8,801) 631 56,582 (4,484)
---------- ----------- ----------- ---------- -------------
Income (loss) before income taxes............ (2,680) 36,950 54,557 -- 88,827
Income tax provision (benefit)................... (1,072) 20,662 18,996 -- 38,586
Equity in income from subsidiaries............... 51,849 35,561 -- (87,410) --
---------- ----------- ----------- ---------- -------------
Net income................................... $ 50,241 $ 51,849 $ 35,561 $ (87,410) $ 50,241
========== =========== =========== ========== =============

CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2002

NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ---------- ------------ ------------ ------------

Current assets:
Cash and cash equivalents................ $ 64,046 $ 22,230 $ 46,754 $ -- $ 133,030
Receivables, net......................... 8,674 95,978 81,173 -- 185,825
Inventories.............................. -- 51,776 52,942 -- 104,718
Other current assets..................... (29,129) 46,215 10,269 -- 27,355
----------- ----------- ----------- ----------- ------------
Total current assets..................... 43,591 216,199 191,138 -- 450,928
Property, plant and equipment, net........... -- 211,525 97,300 -- 308,825
Goodwill..................................... -- 45,005 82,719 -- 127,724
Intercompany receivable (payable)............ 714,357 (696,631) (17,726) -- --
Investment in subsidiaries................... (335,365) 83,305 -- 252,060 --
Other assets................................. (83,903) 90,104 63,307 -- 69,508
----------- ----------- ----------- ----------- ------------
Total assets............................. $ 338,680 $ (50,493) $ 416,738 $ 252,060 $ 956,985
=========== =========== =========== =========== ============
Current liabilities:
Accounts payable......................... $ 6 $ 24,445 $ 26,401 $ -- $ 50,852
Accrued liabilities...................... 25,036 53,071 50,607 -- 128,714
Current portion of long-term debt........ -- 101 14,990 -- 15,091
----------- ----------- ----------- ----------- ------------
Total current liabilities................ 25,042 77,617 91,998 -- 194,657
Long-term debt............................... -- 596 1,856 -- 2,452
Liabilities subject to compromise............ 821,895 169,960 151,910 -- 1,143,765
Other liabilities ........................... 2,064 36,699 87,669 -- 126,432
----------- ----------- ----------- ----------- ------------
Total liabilities........................ 849,001 284,872 333,433 -- 1,467,306
Equity (deficit)............................. (510,321) (335,365) 83,305 252,060 (510,321)
----------- ----------- ----------- ----------- ------------
Total liabilities and equity (deficit)... $ 338,680 $ (50,493) $ 416,738 $ 252,060 $ 956,985
=========== =========== =========== =========== ============

-66-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2001

NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ---------- ------------ ------------ ------------

Current assets:
Cash and cash equivalents................ $ -- $ 443 $ 8,762 $ -- $ 9,205
Receivables, net......................... -- 105,246 78,716 -- 183,962
Inventories.............................. -- 55,205 52,469 -- 107,674
Other current assets..................... 1,488 43,633 7,695 -- 52,816
---------- ----------- ----------- ----------- -----------
Total current assets..................... 1,488 204,527 147,642 -- 353,657
Property, plant and equipment, net........... -- 270,780 87,746 -- 358,526
Goodwill..................................... -- 161,664 167,311 -- 328,975
Intercompany receivable (payable)............ 643,909 (742,123) 98,214 -- --
Investment in subsidiaries................... (88,541) 203,931 -- (115,390) --
Other assets................................. 3,995 110,242 9,448 -- 123,685
---------- ----------- ----------- ----------- -----------
Total assets ........................... $ 560,851 $ 209,021 $ 510,361 $ (115,390) $ 1,164,843
========== =========== =========== =========== ===========
Current liabilities:
Accounts payable......................... $ 274 $ 66,062 $ 33,383 $ -- $ 99,719
Accrued liabilities...................... 37,211 60,243 45,303 -- 142,757
Current portion of long-term debt........ 15,125 110 17,439 -- 32,674
---------- ----------- ----------- ----------- -----------
Total current liabilities................ 52,610 126,415 96,125 -- 275,150
Long-term debt............................... 639,875 678 159,199 -- 799,752
Other liabilities ........................... 10,703 170,469 51,106 -- 232,278
---------- ----------- ----------- ----------- -----------
Total liabilities........................ 703,188 297,562 306,430 -- 1,307,180
Equity (deficit)............................. (142,337) (88,541) 203,931 (115,390) (142,337)
---------- ----------- ----------- ----------- -----------
Total liabilities and equity (deficit)... $ 560,851 $ 209,021 $ 510,361 $ (115,390) $ 1,164,843
========== =========== =========== =========== ===========

-67-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2002

NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES CONSOLIDATED
------ ---------- ------------ ------------

Net cash (used in) provided by operating
activities................................. $ (5,786) $ 28,097 $ 23,316 $ 45,627
--------- ----------- ----------- -----------
Net cash (used in) investing activities...... -- (29,829) (9,533) (39,362)
--------- ----------- ----------- -----------
Cash flows from financing activities:
Intercompany cash transfers.............. (65,879) 24,205 41,674 --
Other.................................... 135,711 (686) (19,183) 115,842
--------- ----------- ----------- -----------
Net cash provided by financing activities.... 69,832 23,519 22,491 115,842
--------- ----------- ----------- -----------
Effect of exchange rates on cash............. -- -- 1,718 1,718
--------- ----------- ----------- -----------
Increase in cash and cash equivalents........ 64,046 21,787 37,992 123,825
Cash and cash equivalents at beginning
of year.................................. -- 443 8,762 9,205
--------- ----------- ----------- -----------
Cash and cash equivalents at end of year..... $ 64,046 $ 22,230 $ 46,754 $ 133,030
========= =========== =========== ===========

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2001

NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES CONSOLIDATED
------ ---------- ------------ ------------

Net cash provided by operating activities.... $ 11,506 $ 14,629 $ 42,272 $ 68,407
--------- ----------- ----------- -----------
Net cash (used in) investing activities...... -- (53,154) (17,725) (70,879)
--------- ----------- ----------- -----------
Cash flows from financing activities:
Intercompany cash transfers.............. (20,943) 41,316 (20,373) --
Other.................................... 9,437 2,541 (3,880) 8,098
--------- ----------- ----------- -----------
Net cash provided by (used in) financing
activities............................... (11,506) 43,857 (24,253) 8,098
--------- ----------- ----------- -----------
Effect of exchange rates on cash............. -- -- (880) (880)
--------- ----------- ----------- -----------
Increase (decrease) in cash and cash
equivalents............................. -- 5,332 (586) 4,746
Cash and cash equivalents at beginning
of year.................................. -- (4,889) 9,348 4,459
--------- ----------- ----------- -----------
Cash and cash equivalents at end of year..... $ -- $ 443 $ 8,762 $ 9,205
========= =========== =========== ===========

-68-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2000

NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES CONSOLIDATED
------ ---------- ------------ ------------

Net cash provided by (used in) operating
activities................................... $ 18,971 $ 132,721 $ (64,422) $ 87,270
--------- ----------- ------------ -----------
Cash flows from investing activities:
Acquisition of businesses net of cash
acquired................................... -- (138,380) -- (138,380)
Other........................................ -- (77,035) (16,034) (93,069)
--------- ----------- ----------- -----------
Net cash (used in) investing activities.......... -- (215,415) (16,034) (231,449)
--------- ------------ ----------- -----------
Cash flows from financing activities:
Proceeds from sale of stock.................. 37,957 -- -- 37,957
Intercompany cash transfers.................. 300,883 (400,106) 99,223 --
Other........................................ (357,862) 471,736 (22,212) 91,662
--------- ----------- ----------- -----------
Net cash provided by (used in) financing
activities................................... (19,022) 71,630 77,011 129,619
--------- ----------- ----------- -----------
Effect of exchange rates on cash................. -- -- (1,668) (1,668)
--------- ----------- ----------- -----------
(Decrease) in cash and cash
equivalents.................................. (51) (11,064) (5,113) (16,228)
Cash and cash equivalents at beginning
of year...................................... 51 6,175 14,461 20,687
--------- ----------- ----------- -----------
Cash and cash equivalents at end of year......... $ -- $ (4,889) $ 9,348 $ 4,459
========= =========== =========== ===========

NOTE 18 - SUBSEQUENT EVENT

On February 28, 2003, the Company announced a plan to wind down and
close operations in Claymont, Delaware at the South Plant of the Delaware Valley
Works complex, an industrial facility owned and operated by the Company. The
plan is subject to approval by the Bankruptcy Court. A motion seeking such
approval was filed on March 4, 2003. If approved by the Bankruptcy Court, the
South Plant is expected to cease production on or about September 30, 2003.
Failure of the Company to achieve such approval could have a material adverse
effect on the Company's results of operations. The South Plant contains sulfuric
acid regeneration and production facilities as well as other operations. The
Company intends to comply fully with all of its environmental obligations in
connection with the decommissioning of the facility including, without
limitation, those relating to any investigation and remediation of the facility
required by law. Depending on the scope of any investigation and any remedial
activity required as a result, additional costs above those currently estimated
could be incurred over a period of the next several years. The Company is
currently unable to estimate the nature and extent of these potential additional
costs. As such, it is possible that the final outcome could have a material
adverse effect on the Company's results of operations, cash flows and financial
condition. Operations at the Delaware Valley Works' other manufacturing areas
located in the North Plant of the facility, including the production of sulfur,
fluorine, potassium and ammonia-based compounds and warehousing, distribution
and transportation operations, will continue.

To minimize the impact of the South Plant closure on its sulfuric acid
regeneration and merchant acid customers, the Company has made arrangements to
continue offering products and services to these customers through its four
other sulfuric acid facilities, supplemented by agreements with certain
strategic partners. In particular, the Company has negotiated with Rhodia Inc.
to assume responsibility for five of its sulfuric acid regeneration contracts,
subject to entering into appropriate modified contracts with the customers. A
motion seeking the Bankruptcy Court's approval of the transaction with Rhodia
Inc. was filed on March 11, 2003.

-69-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONCLUDED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 19 - UNAUDITED QUARTERLY INFORMATION

2002
-----------------------------------------------------------------------------
FIRST SECOND THIRD FOURTH YEAR
----- ------ ----- ------ ----

Net revenues ................................. $ 276,937 $ 302,729 $ 279,458 $ 269,409 $ 1,128,533
Gross profit ................................. 55,308 63,415 58,510 52,123 229,356
Income (loss) before cumulative effect of a
change in accounting principle.............. (3,147) (146,214) (57,832) 7,669 (199,524)
Net income (loss) ............................ (164,272)(1) (146,214)(2) (57,832)(3) 7,669(4) (360,649)
=========== ========== ========== =========== ============
Earnings (loss) per common share - basic:
Income (loss) before cumulative effect of a
change in accounting principle.............. $ (.12) $ (5.73) $ (2.26) $ .30 $ (7.82)
=========== ========== ========== =========== ============
Net income (loss) ............................ $ (6.45) $ (5.73) $ (2.26) $ .30 $ (14.13)
=========== ========== ========== =========== ============
Earnings (loss) per common share - diluted:
Income (loss) before cumulative effect of a
change in accounting principle.............. $ (.12) $ (5.73) $ (2.26) $ .30 $ (7.82)
=========== ========== ========== =========== ============
Net income (loss) ............................ $ (6.45) $ (5.73) $ (2.26) $ .30 $ (14.13)
=========== ========== ========== =========== ============

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

(1) Includes the cumulative effect of a change in accounting principle of
$161,125 or $6.33 per share.
(2) Includes restructuring and impairment charges of $23,618.
(3) Includes restructuring and impairment charges of $49,722.
(4) Includes restructuring charges of $4,898.

2001
-----------------------------------------------------------------------------
FIRST SECOND THIRD FOURTH YEAR
----- ------ ----- ------ ----

Net revenues................................. $ 339,962 $ 319,474 $ 299,698 $ 285,286 $ 1,244,420
Gross profit................................. 76,395 55,493 (1) 66,889 51,697 (3) 250,474
Net income (loss)............................ 2,475 (102,429)(1) 190(2) (71,080)(3) (170,844)
=========== =========== ============= ============ ============
Earnings (loss) per common share - basic:.... $ .10 $ (4.03) $ .01 $ (2.79) $ (6.72)
=========== =========== ========== ============ ============
Earnings (loss) per common share -
assuming dilution:....................... $ .10 $ (4.03) $ .01 $ (2.79) $ (6.72)
=========== =========== ========== ============ ============

- ---------------------
(1) Includes charges to income totaling $150,769 ($99,333 after tax or $3.91
per share), which includes restructuring and impairment charges of
$108,018, charges included in cost of sales of $16,431, principally related
to loss provisions for obsolete and excess inventory, and charges included
in selling, general administrative expenses of $26,320, principally related
to loss provisions for accounts receivable.
(2) Includes restructuring charges of $2,910 ($1,759 after tax or $.07 per
share).
(3) Includes charges to income totaling $93,751 ($66,005 after tax or $2.59 per
share), which includes restructuring and impairment charges of $76,489,
charges included in cost of sales of $14,936, principally related to loss
provisions for obsolete and excess inventory, and charges included in
selling, general and administrative expenses of $2,326, principally related
to loss provisions for accounts receivable.

-70-

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

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

DIRECTORS. For information relating to the Company's Directors, see the
information under the caption "Nomination and Election of Directors" in the
Company's definitive 2002 Proxy Statement (the "Proxy Statement"), to be filed
within 120 days after year-end, which is hereby incorporated by reference.

EXECUTIVE OFFICERS. For information relating to the Company's executive
officers, see the information contained under the caption "Executive Officers
and Key Employees" in Part I of this report.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT. For information
relating to the compliance of the directors and officers of the Company, as well
as any holder of ten percent or more of any registered class of the equity
securities of the Company with Section 16(a) of the Exchange Act, see the
information under the caption "Section 16(a) Beneficial Ownership Reporting
Compliance" in the Company's Proxy Statement, which is hereby incorporated by
reference.

ITEM 11. EXECUTIVE COMPENSATION.

EXECUTIVE COMPENSATION. For information relating to the compensation of
the Company's executives, see the information under the caption "Compensation of
Directors and Executive Officers" in the Company's Proxy Statement, which is
hereby incorporated by reference.

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

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. For information
relating to the beneficial ownership of more than five percent of the Company's
Common Stock and Class B Common Stock, see the information under the caption
"Security Ownership of Certain Beneficial Owners and Management" in the
Company's Proxy Statement, which is hereby incorporated by reference.

SECURITY OWNERSHIP OF MANAGEMENT. For information relating to the
beneficial ownership of the Company's Common Stock and Class B Common Stock by
Management, see the information under the caption "Management Stockholders" in
the Company's Proxy Statement, which is hereby incorporated by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. For information
relating to certain relationships and related transactions of the Company, see
the information under the caption "Certain Relationships and Transactions" in
the Company's Proxy Statement, which is hereby incorporated by reference.

-71-

ITEM 14. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures. The Company's
Chief Executive Officer and Chief Financial Officer have evaluated the
effectiveness of the Company's disclosure controls and procedures (as such term
is defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of
1934, as amended) (the "Exchange Act") as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"). Based on such
evaluation, such officers have concluded that, as of the Evaluation Date, the
Company's disclosure controls and procedures are effective in alerting them on a
timely basis to material information relating to the Company required to be
included in the Company's reports filed and submitted under the Exchange Act.

(b) Changes in Internal Controls. Since the Evaluation Date, there have
not been any significant changes in the Company's internal controls or in other
factors that could significantly affect such controls.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a) FINANCIAL STATEMENTS

See Item 8, beginning on page 32.

FINANCIAL STATEMENT SCHEDULES

See Index to Financial Statement Schedule on page 78.

(b) REPORTS ON FORM 8-K

Form 8-K filed with the Securities and Exchange Commission dated
October 15, 2002, regarding the Registrant and certain of its direct and
indirect subsidiaries in the United States and Canada filing voluntary petitions
for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code
for the District of Delaware on October 11, 2002.

Form 8-K filed with the Securities and Exchange Commission dated
December 11, 2002, attaching a press release issued by Noma Company ("Noma"),
the Registrant's Canadian subsidiary, announcing that the Superior Court of
Justice in Ontario entered an order that recognized the Chapter 11 proceedings
commenced by Noma in the United States as "foreign proceedings" under Section
18.6 of the Companies' Creditors Arrangement Act (CCAA) and that certain orders
made in the U.S. Chapter 11 proceedings are effective in Canada.

Form 8-K filed with the Securities and Exchange Commission dated
February 28, 2003, attaching two press releases issued by General Chemical
Corporation, a subsidiary of the Registrant, announcing that General Chemical
Corporation plans to decommission the sulfuric acid production operation located
at its Delaware Valley facility in Claymont, Delaware and that General Chemical
Corporation and Esseco S.p.A. have plans to form a joint venture, Esseco General
Chemical LLC, to supply various sodium and sulfur-based chemistries to the North
American market.

-72-

(c) LIST OF EXHIBITS

EXHIBIT NO. DESCRIPTION

3.1 -- Amended and Restated Certificate of Incorporation of GenTek Inc.
Incorporated by reference to the relevant exhibit to the Amendment
No. 2 to Registration Statement on Form 10 of GenTek Inc. (File No.
001-14789), filed with the Securities and Exchange Commission on
April 8, 1999 (the "1999 GenTek Form 10")

3.2 -- Amended and Restated By-Laws of GenTek Inc. Incorporated by
reference to the relevant exhibit to the 1999 GenTek Form 10.

10.01 -- GenTek Inc. Restricted Unit Plan for Non-Employee Directors.
Incorporated by reference to the relevant exhibit to the 1999 GenTek
Form 10.

10.02 -- GenTek Inc. Retirement Plan for Non-Employee Directors. Incorporated
by reference to the relevant exhibit to the 1999 GenTek Form 10.

10.03 -- GenTek Inc. Performance Plan. Incorporated by reference to the
relevant exhibit to the 1999 GenTek Form 10.

10.04 -- GenTek Inc. Long-Term Incentive Plan. Incorporated by reference to
the relevant exhibit to the 1999 GenTek Form 10.

10.05 -- Employee Benefits Agreement among GenTek Inc., The General Chemical
Group Inc., General Chemical Industrial Products Inc. and General
Chemical Corporation. Incorporated by reference to the relevant
exhibit to the 1999 GenTek Form 10.

10.06 -- Tax Sharing Agreement between GenTek Inc. and The General Chemical
Group Inc. Incorporated by reference to the relevant exhibit to the
1999 GenTek Form 10.

10.07 -- Intellectual Property Agreement among GenTek Inc., General Chemical
Corporation, The General Chemical Group Inc. and General Chemical
Industrial Products Inc. Incorporated by reference to the relevant
exhibit to the 1999 GenTek Form 10.

10.08 -- Management Agreement between GenTek Inc. and Latona Associates Inc.
Incorporated by reference to the relevant exhibit to the 1999 GenTek
Form 10.

10.09 -- Registration Rights Agreement between Paul M. Montrone and The
General Chemical Group Inc., as assumed by GenTek Inc. with respect
to Common Stock of GenTek Inc. Incorporated by reference to the
relevant exhibit to the 1999 GenTek Form 10.

10.10 -- Credit Agreement among GenTek Inc., Noma Company, the several
lenders from time to time party hereto, The Bank of Nova Scotia, as
Syndication Agent, Bankers Trust Company, as Documentation Agent,
and The Chase Manhattan Bank, as Administrative Agent, dated as of
April 30, 1999 as amended and restated as of August 9, 2000 and as
of August 1, 2001. Incorporated by reference to the relevant exhibit
to GenTek Inc.'s 10-Q for the three months ended September 30, 2001
filed with the Securities and Exchange Commission on November 7,
2001.

10.11 -- Amended and Restated Guarantee and Collateral Agreement made by
GenTek Inc. and certain of its subsidiaries in favor of The Chase
Manhattan Bank, as Administrative Agent, dated as of April 30, 1999,
as amended and restated as of October 30, 2001. Incorporated by
reference to the relevant exhibit to GenTek Inc.'s 10-Q for the
three months ended September 30, 2001 filed with the Securities and
Exchange Commission on November 7, 2001.

10.12 -- Indenture, dated as of August 9, 1999, between the Company and U.S.
National Trust Association, as Trustee. Incorporated by reference to
the relevant exhibit to GenTek Inc.'s 10-Q for the nine months ended
September 30, 1999 filed with the Securities and Exchange Commission
on November 15, 1999.

10.13 -- Management Agreement, dated as of August, 2000, between GenTek Inc.,
a Delaware Corporation, and Prestolite Wire Corporation, a Delaware
Corporation.

10.14 -- GenTek Inc. Key Employee Retention Plan

10.15 -- Credit, Guarantee and Security Agreement among GenTek Inc. and
Noma Company, Debtors and Debtors-in-Possession under Chapter 11 of
the Bankruptcy Code as Borrowers, and the

-73-

subsidiaries of GenTek Inc. named herein, as Guarantors, and the
Lenders party hereto, and JP Morgan Chase Bank, as Administrative
Agent.

21.1 -- Subsidiaries of GenTek Inc.

99.1 -- Certification of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

-74-

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, on the 31st day of
March, 2003.

GENTEK INC.

By: /s/ RICHARD R. RUSSELL
---------------------------------------------
NAME: RICHARD R. RUSSELL
TITLE: PRESIDENT AND CHIEF EXECUTIVE OFFICER

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

SIGNATURE TITLE DATE
--------- ----- ----

PRINCIPAL EXECUTIVE OFFICER:

/s/ RICHARD R. RUSSELL President and Chief Executive Officer March 31, 2003
- ---------------------------------------
RICHARD R. RUSSELL

PRINCIPAL FINANCIAL AND ACCOUNTING
OFFICER:

/s/ MATTHEW R. FRIEL Vice President, Chief Financial Officer March 31, 2003
- --------------------------------------- and Treasurer
MATTHEW R. FRIEL

DIRECTORS:

/s/ PAUL M. MONTRONE Chairman and Director March 31, 2003
- ---------------------------------------
PAUL M. MONTRONE

/s/ PAUL M. MEISTER Vice Chairman and Director March 31, 2003
- ---------------------------------------
PAUL M. MEISTER

/s/ RICHARD R. RUSSELL Director March 31, 2003
- ---------------------------------------
RICHARD R. RUSSELL

/s/ SCOTT M. SPERLING Director March 31, 2003
- ---------------------------------------
SCOTT M. SPERLING

/s/ IRA STEPANIAN Director March 31, 2003
- ---------------------------------------
IRA STEPANIAN

/s/ BRUCE L. KOEPFGEN Director March 31, 2003
- ---------------------------------------
BRUCE L. KOEPFGEN

-75-

CERTIFICATIONS

I, Richard R. Russell, certify that:

1. I have reviewed this annual report on Form 10-K of GenTek Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

Date March 31, 2003 /s/ Richard R. Russell
--------------------- -------------------------------------
RICHARD R. RUSSELL
President and Chief Executive Officer

-76-

I, Matthew R. Friel, certify that:

1. I have reviewed this annual report on Form 10-K of GenTek Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

Date March 31, 2003 /s/ Matthew R. Friel
------------------ -------------------------------------------
MATTHEW R. FRIEL
Vice President and Chief Financial Officer

-77-

GENTEK INC.
INDEX TO FINANCIAL STATEMENT SCHEDULE

Schedule II -- Valuation and Qualifying Accounts ......................... 79

Schedules required by Article 12 of Regulation S-X, other than those
listed above, are omitted because of the absence of the conditions under which
they are required or because the required information is included in the
consolidated financial statements or notes thereto.

-78-

GENTEK INC.
VALUATION AND QUALIFYING ACCOUNTS

BALANCE AT ADDITIONS BALANCE AT
BEGINNING OF CHARGED DEDUCTIONS END OF
PERIOD TO INCOME FROM RESERVES OTHER* PERIOD
------ --------- ------------- ------ ------
(IN THOUSANDS)

Year ended December 31, 2002
Allowance for doubtful accounts.......... $ 32,062 $ 4,249 $ (14,519) $ 486 $ 22,278
Year ended December 31, 2001
Allowance for doubtful accounts.......... $ 8,350 $ 26,498 $ (2,536) $ (250) $ 32,062
Year ended December 31, 2000
Allowance for doubtful accounts.......... $ 7,348 $ 2,669 $ (1,734) $ 67 $ 8,350

* Primarily acquisitions and foreign exchange

-79-

EXHIBIT INDEX

PAGE
EXHIBIT NO. NUMBER
- ----------- ------

3.1 -- Amended and Restated Certificate of Incorporation of GenTek Inc. Incorporated
by reference to the relevant exhibit to Amendment No. 2 to the Registration
Statement on Form 10 of GenTek Inc. (File No. 001-14789), filed with the
Securities and Exchange Commission on April 8, 1999 (the "1999 GenTek Form 10").........

3.2 -- Amended and Restated By-Laws of GenTek Inc. Incorporated by reference to the
relevant exhibit to the 1999 GenTek Form 10.............................................

10.01 -- GenTek Inc. Restricted Unit Plan for Non-Employee Directors. Incorporated by
reference to the relevant exhibit to the 1999 GenTek Form 10............................

10.02 -- GenTek Inc. Retirement Plan for Non-Employee Directors. Incorporated by
reference to the relevant exhibit to the 1999 GenTek Form 10............................

10.03 -- GenTek Inc. Performance Plan. Incorporated by reference to the relevant
exhibit to the 1999 GenTek Form 10......................................................

10.04 -- GenTek Inc. Long-Term Incentive Plan. Incorporated by reference to the
relevant exhibit to the 1999 GenTek Form 10.............................................

10.05 -- Employee Benefits Agreement among GenTek Inc., The General Chemical Group
Inc., General Chemical Industrial Products Inc. and General Chemical
Corporation. Incorporated by reference to the relevant exhibit to the 1999
GenTek Form 10..........................................................................

10.06 -- Tax Sharing Agreement between GenTek Inc. and The General Chemical Group Inc.
Incorporated by reference to the relevant exhibit to the 1999 GenTek Form 10............

10.07 -- Intellectual Property Agreement among General Chemical Corporation, The
General Chemical Group Inc., GenTek Inc. and General Chemical Industrial
Products Inc. Incorporated by reference to the relevant exhibit to the 1999
GenTek Form 10..........................................................................

10.08 -- Management Agreement between GenTek Inc. and Latona Associates Inc.
Incorporated by reference to the relevant exhibit to the 1999 GenTek Form 10............

10.09 -- Registration Rights Agreement between Paul M. Montrone and The General
Chemical Group Inc., as assumed by GenTek Inc. with respect to Common Stock of
GenTek Inc. Incorporated by reference to the relevant exhibit to the 1999
GenTek Form 10..........................................................................

10.10 -- Credit Agreement among GenTek Inc., Noma Company, the several lenders from
time to time party hereto, The Bank of Nova Scotia, as Syndication Agent,
Bankers Trust Company, as Documentation Agent, and The Chase Manhattan Bank,
as Administrative Agent, dated as of April 30, 1999 as amended and restated as
of August 9, 2000 and as of August 1, 2001. Incorporated by reference to the
relevant exhibit to GenTek Inc.'s 10-Q for the three months ended September
30, 2001 filed with the Securities and Exchange Commission on November 7, 2001.........

10.11 -- Amended and Restated Guarantee and Collateral Agreement made by GenTek Inc.
and certain of its subsidiaries in favor of The Chase Manhattan Bank, as
Administrative Agent, dated as of April 30, 1999, as amended and restated as
of October 30, 2001. Incorporated by reference to the relevant exhibit to
GenTek Inc.'s 10-Q for the three months ended September 30, 2001 filed with
the Securities and Exchange Commission on November 7, 2001.............................

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