Financial Analysis February 12, 1993 Analysis & Design

- 2 - XXXX Product1 A&D Financial Analysis Approach Evaluated financial aspects of XXXX by measuring against competitor positions Analyzed Product2 and Product1 specific financial information available for 1990, 1991, 1992 Reviewed published 1993 profit objective and critical operating tasks Reveiwed cost components of the business

- 3 - XXXX Product1 A&D Financial Analysis Industry Competitor Comparison 1991 $MM *: Not available Source: Standard & Poor’s Industry Surveys; Kidder Peabody Industry Analysis

- 4 - XXXX Product1 A&D Financial Analysis Earnings and Revenue Growth Continue To be Modest Source: XXXX Blue Book December 1992, XXXX Green Book 1993

- 5 - XXXX Product1 A&D Financial Analysis Product2 Accounts For 16% of XXXX’s Revenues, But Almost 33% of Its Operating Income 1992 XXXX Total Revenues ($46,733 MM) 1992 XXXX After Tax Operating Income (Total = $1,581MM) Chemicals Product2 Polymers Diversified Petroleum Chemicals Product2 Polymers Diversified Petroleum Source: December 1992 Blue Book

- 6 - XXXX Product1 A&D Financial Analysis Product1 Makes Up a Substantial Portion of Product2’ Revenue & Income 1992 XXXX Product2 Revenue ($6.5B Total)1992 XXXX Product2 ATOI ($.5B Total)* Source: November 1992 YTD straight line annualization from Global Financial Data Base

- 7 - XXXX Product1 A&D Financial Analysis Product1 Revenues are Dependant on Commodity Products Yarn and Staple 1992 Actuals Source: Textile Division - Product1 December 1992 Results (Summary)

- 8 - XXXX Product1 A&D Financial Analysis Raw Materials and Plant Labor Account for 70% of Product1 Expense 82% of Total Costs are Controlable Total Costs 1992 ($MM) $1,123 50% of Controlable Costs are fixed Controlable Costs 1992 ($MM) $714 Labor and Benefits comprise 50% of Controllable Plant Costs Plant Costs 1992 ($MM) $249 Source: Textile Division - Product1 Income Statement; Product1 Controllable Fixed Cost Analysis Variable

- 9 - XXXX Product1 A&D Financial Analysis In 1992 Product1 Began a 2 Year, $360 MM Modernization Program Product1 ® ’s modernization program was designed to: (a) address the 1993 entrance of Nan Ya into the U.S. Market; (b) counteract backward integration by Unifi; and (c) address customer concerns regarding Product1 long term supply competitiveness. The modernization plan includes: Installation of 2 SOA production lines at Kinston (Y6, Y7) to be on line in January, 1994 Additional annual capacity of 230 MM pounds (20%) Fixed cost decrease of 20% at the plant manufacturing level –current goal is $232MM; 1992 controlable fixed costs were $249MM ($16MM variance) A 25% reduction in workforce (1000 jobs) –current workforce is 3600 Project NPV and IRR are $265MM and 23% respectivly Capital restraints have delayed full implementation of the program now estimated for completion in 1996

XXXX Product1 A&D Financial Analysis Capital Restraints and Competitive Factors Will Resrict 1993 Growth/Earnings Potential Source: Textile Division Product1 Income Statement Worldwide