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

FORM 10-K/A NO. 1
(Mark One)

[X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required]

For the fiscal year ended December 31, 1994
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]

For the transition period from to
___________ ___________

Commission File Number 1-7418
______

ESSEX GROUP, INC.
______________________________________________________
(Exact name of registrant as specified in its charter)

MICHIGAN 35-1313928
__________________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1601 WALL STREET, FORT WAYNE, INDIANA 46802
__________________________________________________________________________
(Address of principal executive offices) (Zip Code)

Registrant's telephone number: (219) 461-4000

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

Name of each exchange on
Title of each class which registered

10% Senior Notes due 2003 Pacific Stock Exchange

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

None
__________________________________________________________________________
(Title of class)

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

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.

[X ] Yes [ ] No

No voting stock is held by non-affiliates of the registrant.

As of February 28, 1995 the registrant had outstanding 100 shares of $.01
Par Value Common Stock.

The registrant does not have a class of equity securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934.

DOCUMENTS INCORPORATED BY REFERENCE - None

ITEM 3. LEGAL PROCEEDINGS

LEGAL AND ENVIRONMENTAL MATTERS

The Company is engaged in certain routine litigation arising in the
ordinary course of business. The Company does not believe that the
adverse determination of any pending litigation, either singly or in the
aggregate, would have a material adverse effect upon its business,
financial condition or results of operations.

Potential environmental liability to the Company arises from both
on-site contamination by, and off-site disposal of, hazardous substances.
On-site contamination at certain Company facilities is the result of
historic disposal activities, including activities attributable to Company
operations and those occurring prior to the use of a facility site by the
Company. Off-site liability would include cleanup responsibilities at
various sites to be remedied under federal or state statutes for which the
Company has been identified by the United States Environmental Protection
Agency (the "EPA") (or the equivalent state agency) as a Potentially
Responsible Party ("PRP").

The Company has been named in government proceedings which involve
environmental matters with potential remediation costs and, in certain
instances, sanctions. Once the Company has been named as a PRP, it
estimates the extent of its potential liability based upon, among other
things, the number of other identified PRPs and the relative contribution
of Company waste at the site. The Company believes that, subject to the
$4.0 million "basket" described below and five other identified sites, it
will not bear the cost of investigation and cleanup at any of these sites
because, pursuant to the Stock Purchase Agreement dated January 15, 1988
(the "1988 Acquisition Agreement") covering the 1988 Acquisition, UTC
agreed to indemnify the Company against all losses, as defined in the 1988
Acquisition Agreement, incurred under any environmental protection and
pollution control laws or resulting from or in connection with damage or
pollution to the environment, and arising from events, operations or
activities of the Company prior to February 29, 1988 or from conditions or
circumstances existing at or prior to February 29, 1988. Except for
certain matters relating to permit compliance, the Company believes that
it is fully indemnified with respect to conditions, events and
circumstances known to UTC prior to February 29, 1988, (i.e., matters
referred to in documents which were in UTC's possession, custody or
control prior to the 1988 Acquisition or matters identified to UTC through
the due diligence of Holdings.) Further, the Company is indemnified,
subject to a $4.0 million "basket" (the "Basket"), for losses related to
any environmental events, conditions, or circumstances identified prior to
February 28, 1993 to the extent such losses were not caused by activities
of the Company after February 29, 1988. None of the foregoing was
affected by the change in control of Holdings on October 9, 1992.

The Company is not aware of any inability or refusal on the part of
UTC to pay amounts which are owing under the UTC indemnity. There are
currently no disputes between the Company and UTC concerning matters that
are covered by the indemnification but the Company and UTC are discussing
application of the Basket to certain post-February 28, 1993 claims. There
are five identified sites not covered by the indemnity or the Basket as it
has been applied to date. The Company has provided a reserve to cover
contingencies associated with four of these sites. The Company does not
believe that, in light of the UTC indemnity, any of the environmental

proceedings in which it is involved for four of those sites and for which
it may be liable under the Basket or otherwise will, individually or in
the aggregate, have a material adverse effect upon its business, financial
condition or results of operations and none involves sanctions for amounts
of $0.1 million or more. With respect to three of the four sites, the
Company has been named as a PRP and with respect to the fourth site, the
Company is one of several defendants in a civil lawsuit to recover alleged
site investigation and groundwater remediation costs by the owner of the
site. With respect to the fifth site, the Company has been notified that
it is one of several PRPs and is in the process of investigating the
related facts and circumstances. Pending the outcome of such
investigation, the Company has insufficient knowledge upon which to base
an estimate of its potential liability.

In 1967, following an investigation regarding the alleged violation
of United States antitrust laws, the Company agreed that in the future it
would refrain from tying the sale of magnet wire to the purchase of other
products.

SIGNATURE

Pursuant to the requirements 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.

ESSEX GROUP, INC.
(Registrant)

June 6, 1995 /s/ James D. Rice
---------------------
James D. Rice
Senior Vice President,
Corporate Controller
(Principal Accounting Officer)

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholder
Essex Group, Inc.

We have audited the accompanying consolidated balance sheets
of Essex Group, Inc. Successor as of December 31, 1994 and 1993 and the
related consolidated statements of operations and cash flows of Essex
Group, Inc. Successor for the years ended December 31, 1994 and 1993 and
the three month period ended December 31, 1992, and the consolidated
statements of operations and cash flows of Essex Group, Inc. Predecessor
for the nine month period ended September 30, 1992. Our audits also
included the financial statement schedule listed in the Index at Item 14
(a). These financial statements and schedule are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements and schedules based on our audits.

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

In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Essex Group, Inc. Successor at December 31, 1994 and 1993 and
the consolidated results of operations and cash flows of Essex Group,
Inc. Successor for the years ended December 31, 1994 and 1993, and the
three month period ended December 31, 1992, and of Essex Group,
Inc. Predecessor for the nine month period ended September 30, 1992, in
conformity with generally accepted accounting principles. Also, in our
opinion, the related financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents
fairly in all material respects the information set forth therein.

ERNST & YOUNG LLP

Indianapolis, Indiana
January 27, 1995, except for Note 14 as to
which the date is March 21, 1995 and the
first paragraph of Note 12 as to which the
date is May 22, 1995

F-1

ESSEX GROUP, INC.

CONSOLIDATED BALANCE SHEETS

December 31,
---------------------------
In Thousands of Dollars, Except Per Share Data 1994 1993
--------------------------------------------------------------------------------------

ASSETS

Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . $16,894 $10,346
Accounts receivable (net of allowance of
$3,537 and $2,811 . . . . . . . . . . . . . . . . . . 144,595 116,733
Inventories . . . . . . . . . . . . . . . . . . . . . 145,706 139,357
Other current assets . . . . . . . . . . . . . . . . . 20,496 9,738
-------- --------

Total current assets . . . . . . . . . . . . . 327,691 276,174

Property, plant and equipment, net . . . . . . . . . . . 276,134 273,084
Excess of cost over net assets acquired (net of
accumulated amortization of $9,145 and $5,081) . . . . . 133,100 137,164
Other intangible assets and deferred costs
(net of accumulated amortization of $5,146
and $2,986) . . . . . . . . . . . . . . . . . . . . . . 11,563 13,921
Other assets . . . . . . . . . . . . . . . . . . . . . . 1,812 6,654
-------- --------

$750,300 $706,997
======== ========

See Notes to Consolidated Financial Statements

F-2

ESSEX GROUP, INC.

CONSOLIDATED BALANCE SHEETS - continued

December 31,
---------------------------
In Thousands of Dollars, Except Per Share Data 1994 1993
--------------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . $47,421 $45,535
Accrued liabilities . . . . . . . . . . . . . . . . . 45,821 42,863
Deferred income taxes . . . . . . . . . . . . . . . . 10,408 14,277

Due to Holdings . . . . . . . . . . . . . . . . . . . 32,979 18,363
-------- --------

Total current liabilities . . . . . . . . . . . 136,629 121,038

Long-term debt . . . . . . . . . . . . . . . . . . . . . 200,000 200,000
Deferred income taxes . . . . . . . . . . . . . . . . . . 72,771 77,794

Other long-term liabilities . . . . . . . . . . . . . . . 6,997 4,433

Stockholders' equity:
Common stock, par value $.01 per share; 1,000 shares
authorized; 100 shares issued and outstanding; plus
additional paid in capital . . . . . . . . . . . . . 302,784 302,784
Retained earnings . . . . . . . . . . . . . . . . . . 31,119 948
-------- --------

Total stockholders' equity . . . . . . . . . . 333,903 303,732
-------- --------

$750,300 $706,997
======== ========

See Notes to Consolidated Financial Statements

F-3

ESSEX GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

SUCCESSOR PREDECESSOR
-------------------------------------- ------------
Three Month Nine Month
Year Ended Year Ended Period Ended Period Ended
December 31, December 31, December 31, September 30,

In Thousands of Dollars 1994 1993 1992 1992
--------------------------------------------------------------------------------------

REVENUES:
Net sales $1,010,075 $868,846 $209,354 $699,997

Interest income 246 265 88 73
Other income 1,553 1,724 87 921
--------- -------- -------- --------

1,011,874 870,835 209,529 700,991
-------- -------- --------
---------

COSTS AND EXPENSES:
Cost of goods sold 846,611 745,875 186,026 594,122
Selling and administrative 85,129 75,489 22,349 59,609
Interest expense 24,554 25,241 8,086 14,505
Other expense (income) 2,709 1,801 30 (98)

Merger related expenses - - - 18,139
-------- -------- -------- --------
959,003 848,406 216,491 686,277
-------- -------- -------- --------
Income (loss) before income
taxes and extraordinary charge 52,871 22,429 (6,962) 14,714

Provision (benefit) for income
taxes 22,700 13,052 (1,900) 9,278
-------- -------- -------- --------

Income (loss) before
extraordinary charge 30,171 9,377 (5,062) 5,436
Extraordinary charge - debt
retirement, net of income tax
benefit - 3,367 - 122
-------- -------- -------- --------

Net income (loss) $30,171 $ 6,010 $ (5,062) $ 5,314
======== ======== ======== ========

See Notes to Consolidated Financial Statements

F-4

ESSEX GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

SUCCESSOR PREDECESSOR
-------------------------------------- ------------
Three Month Nine Month
Year Ended Year Ended Period Ended Period Ended
December 31, December 31, December 31, September 30,

In Thousands of Dollars 1994 1993 1992 1992
--------------------------------------------------------------------------------------

OPERATING ACTIVITIES
Net income (loss) $30,171 $6,010 $(5,062) $5,314
Adjustments to reconcile net
income (loss) to cash
provided by operating
activities:

Depreciation and
amortization 31,420 29,879 8,743 16,913
Non cash interest expense 2,630 4,968 3,251 1,460
Non cash pension expense 2,328 2,124 591 2,852
Provision (credit) for
losses on accounts
receivable 1,332 850 75 (1,848)
Provision (benefit) for
deferred income taxes (8,964) (622) (1,581) 1,267
(Gain) loss on disposal of
property, plant and
equipment 1,354 436 (44) (389)
Loss on repurchase of debt - 5,519 - 200

Changes in operating assets
and liabilities:
(Increase) decrease in
accounts receivable (27,160) (5,314) 18,275 (24,426)
Increase in inventories (4,515) (5,659) (863) (5,130)
Increase (decrease) in
accounts payable and
accrued liabilities 4,575 (720) 1,750 10,901
Net (increase) decrease in
other assets and
liabilities (10,725) 4,908 (2,347) (2,589)
Increase (decrease) in due
to Holdings 14,616 18,288 (12,017) 18,128
-------- -------- -------- --------

NET CASH PROVIDED BY
OPERATING ACTIVITIES 37,062 60,667 10,771 22,653
-------- -------- -------- --------

See Notes to Consolidated Financial Statements

F-5

ESSEX GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

SUCCESSOR PREDECESSOR
--------------------------------------- ------------
Three Month Nine Month
Year Ended Year Ended Period Ended Period Ended
December 31, December 31, December 31, September 30,

In Thousands of Dollars 1994 1993 1992 1992
--------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Additions to property, plant
and equipment (30,109) (26,167) (14,705) (16,475)
Proceeds from disposal of
property, plant and
equipment 227 352 45 2,179
Investment in subsidiary and
joint venture (236) (4,970) - (1,220)
-------- -------- -------- --------
NET CASH USED FOR
INVESTING ACTIVITIES (30,118) (30,785) (14,660) (15,516)
-------- -------- -------- --------

FINANCING ACTIVITIES
Proceeds from senior notes - 200,000 - -
Proceeds from term loan - - 130,000 -
Retire prior indebtedness - - (94,000) -
Net increase (decrease) in
revolving loan - (11,000) 11,000 33,000
Net payments of other
long-term debt (396) (120,500) (9,500) (34,540)

Repurchase of 12 3/8% senior
subordinated debentures - (89,983) (11,692) (2,291)
Cash dividends paid - - (7,500) -
Debt issuance costs - (7,086) (17,232) (653)
-------- -------- -------- --------
NET CASH PROVIDED BY
(USED FOR) FINANCING
ACTIVITIES (396) (28,569) 1,076 (4,484)
-------- -------- -------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 6,548 1,313 (2,813) 2,653
Cash and cash equivalents at
beginning of period 10,346 9,033 11,846 9,193
-------- -------- -------- --------
Cash and cash equivalents at
end of period $16,894 $10,346 $9,033 $11,846
======== ======== ======== ========

See Notes to Consolidated Financial Statements

F-6

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In Thousands of Dollars
-----------------------

NOTE 1 ORGANIZATION AND ACQUISITION

ACQUISITION OF THE COMPANY

On February 29, 1988, MS/Essex Holdings Inc. ("Holdings"), acquired
Essex Group, Inc. (the "Company") from United Technologies Corporation
("UTC") (the "1988 Acquisition") and operated it as a wholly-owned
subsidiary ("Predecessor"). The outstanding common stock of Holdings was
beneficially owned by the Morgan Stanley Leveraged Equity Fund II, L.P.
("MSLEF II"), certain directors and members of management of Holdings and
the Company, and others.

On October 9, 1992, Holdings was acquired (the "Acquisition") by
merger (the "Merger") of B E Acquisition Corporation ("BE") with and into
Holdings with Holdings surviving under the name BCP/Essex Holdings Inc.
("Successor"). BE was a newly organized Delaware corporation formed for
the purpose of effecting the Acquisition. Shareholders of BE include
Bessemer Capital Partners, L.P. ("BCP"), affiliates of Goldman, Sachs &
Co. ("Goldman Sachs"), affiliates of Donaldson, Lufkin & Jenrette, Inc.
("DLJ"), Chemical Equity Associates, A California Limited Partnership and
members of management and other employees of the Company. Pursuant to the
Acquisition and Merger, (i) stockholders of Holdings, prior to the
Acquisition and Merger, became entitled to receive approximately $2.86 for
each outstanding share of common stock of Holdings held by them, (ii)
holders of options to purchase Holdings common stock, other than those
persons entering into an option continuation agreement, became entitled to
receive the difference between approximately $2.86 per share and the per
share exercise price of such options and (iii) the capital stock of BE was
converted into capital stock of Holdings. The Acquisition and Merger
resulted in a change in control of Holdings. Further, the Acquisition and
Merger occurred at the Holdings level and, therefore, did not directly
affect the Company's status as a wholly-owned subsidiary of Holdings. In
December 1993, BCP transferred its ownership interest in Holdings to
Bessemer Holdings, L.P. ("BHLP") an affiliate of BCP.

In connection with the Acquisition and Merger, the Company recorded
certain merger related expenses of $18,139 consisting primarily of bonus
and option payments to certain employees, and certain merger fees and
expenses, which were charged to operations as of September 30, 1992.

For financial statement purposes, the Acquisition and Merger was
accounted for by Holdings as a purchase acquisition effective October 1,
1992. Because the Company is a wholly-owned subsidiary of Holdings, the
effects of the Acquisition and Merger have been reflected in the Company's
financial statements, resulting in a new basis of accounting reflecting
estimated fair values for the Successor's assets and liabilities at that
date. However, to the extent that Holdings' management had a continuing
investment interest in Holdings' common stock, such fair values (and
contributed stockholder's equity) were reduced proportionately to reflect
the continuing interest (approximately 10%) at the prior historical cost
basis. As a result, the Company's financial statements for the periods

F-7

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

subsequent to September 30, 1992 are presented on the Successor's new
basis of accounting, while the financial statements for September 30, 1992
and prior periods are presented on the Predecessor's historical cost basis
of accounting.

The aggregate purchase price of Holdings and a reconciliation to the
initial capitalization of Successor are as follows:

Purchase price, including related fees:

Purchase price, excluding Seller's expenses . . . . $138,445
Related fees and expenses . . . . . . . . . . . . . 6,168
--------
144,613
Less reduction to reflect proportionate historical
cost basis for management's continuing common stock
interest . . . . . . . . . . . . . . . . . . . . . (15,259)
--------

129,354
Holdings debt ($191,645) and deferred debt
issuance costs, deferred and refundable income
taxes and other minor Holdings amounts not
reflected in Successor financial statements
(See Note 9) . . . . . . . . . . . . . . . . . . . 173,430
--------

Initial capitalization of Successor . . . . . . . . $302,784
========

The allocation of the purchase price to historical assets and
liabilities of the Company was as follows:

Net assets at prior historical cost . . . . . . . . . . . . . . . . . . $132,257
Increase in inventories . . . . . . . . . . . . . . . . . . . . . . . . 18,959
Increase in property, plant and equipment . . . . . . . . . . . . . . . 98,131
Deferred debt expense and changes in other assets and liabilities . . . 1,335
Long-term debt premium . . . . . . . . . . . . . . . . . . . . . . . . (5,812)

Adjust deferred income taxes to new basis . . . . . . . . . . . . . . . (84,331)
Excess of cost over net assets acquired . . . . . . . . . . . . . . . . 142,245
--------
$302,784
========

F-8

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

The unaudited pro forma consolidated net loss for the twelve month
period ended December 31, 1992 would have been $6,026 assuming the
Acquisition and Merger had occurred on January 1, 1992 (no effect on
revenues). The primary pro forma effects are revised depreciation and
amortization charges, interest expense and income taxes.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CONSOLIDATION AND BUSINESS SEGMENT

The consolidated financial statements include the accounts of the
Company and all majority-owned subsidiaries. All intercompany accounts
and transactions have been eliminated in consolidation. The Company
operates in one industry segment. The Company develops, manufactures and
markets electrical wire and cable and insulation products. Among the
Company's products are magnet wire for electromechanical devices such as
motors, transformers and electrical controls; building wire for the
construction industry; wire for automotive and appliance applications;
voice and data communication wire and cable; and insulation products for
the electrical industry. The Company's customers are principally located
throughout the United States, without significant concentration in any one
region or any one customer. The Company performs periodic credit
evaluations of its customers' financial condition and generally does not
require collateral.

CASH AND CASH EQUIVALENTS

All highly liquid investments with a maturity of three months or less
at the date of purchase are considered to be cash equivalents.

INVENTORIES

Inventories are stated at cost, determined principally on the
last-in, first-out ("LIFO") method, which is not in excess of market.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are recorded at cost and depreciated
over estimated useful lives using the straight-line method.

INVESTMENT IN JOINT VENTURE

An investment in a joint venture is stated at cost adjusted for the
Company's share of undistributed earnings or losses.

INCOME TAXES

Effective October 1, 1992, concurrent with the new basis of
accounting, the Successor adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," ("FAS 109"). FAS 109
requires recognition of deferred tax liabilities and assets for the

F-9

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

expected future tax consequences of events that have been included in the
financial statements or tax returns. Using this method, deferred tax
liabilities and assets are determined based on the difference between the
financial statement and tax bases of assets and liabilities. These
deferred taxes are measured by applying current tax laws. Through
September 30, 1992, deferred income taxes were provided by Predecessor for
significant timing differences in the recognition of revenue and expense
for tax and financial statement purposes.

Holdings and the Company file a consolidated U.S. federal income tax
return. The Company operates under a tax sharing agreement with Holdings
whereby the Company's aggregate income tax liability is calculated as if
it filed a separate tax return with its subsidiaries.

EXCESS OF COST OVER NET ASSETS ACQUIRED

Excess of cost over net assets acquired represents the excess of
Holdings contribution to capital, based on its purchase price over the
fair value of net assets acquired in the Acquisition, and is being
amortized by the straight-line method over 35 years.

OTHER INTANGIBLE ASSETS

In connection with the 1988 Acquisition, a covenant not to compete
agreement was entered into whereby, in general, UTC agreed that until
March 1, 1993, it would not engage in or carry on any business directly
competing with any business carried on by the Company on February 29,
1988. The $34,000 purchase price allocated by the Predecessor to the
covenant not to compete was classified as an intangible asset and was
amortized over five years through February 1993.

RECOGNITION OF REVENUE

Substantially all of the Company's revenue is recognized at the time
the product is shipped.

POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS

In 1993, the Company adopted Statement of Financial Accounting
Standards No. 106 "Employers' Accounting for Postretirement Benefits Other
Than Pensions" and Statement of Financial Accounting Standards No. 112
"Employers' Accounting for Postemployment Benefits". The effect of
adopting the new rules was not material to the Company's 1993 consolidated
results of operations or financial condition.

UNUSUAL ITEMS

Included in Successor's cost of goods sold for the three month period
ended December 31, 1992 is a charge of approximately $2,600 to reflect the
estimated cost of plant consolidations, primarily costs to move equipment
and personnel related expenses. Amounts spent in 1993 and 1994, and

F-10

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

amounts remaining to be spent at December 31, 1994 are not material to the
consolidated financial statements. In the nine month period ended
September 30, 1992, Predecessor recorded a charge of approximately $1,500
to selling and administrative expenses for the relocation of a business
unit which was completed in 1993.

NOTE 3 INVENTORIES

The components of inventories are as follows:

December 31,
-------------------------------
1994 1993
---------- ----------

Finished goods . . . . . . . . . . . . . . $130,236 $97,332
Raw materials and work in process . . . . . 54,560 27,927
-------- --------
184,796 125,259
LIFO reserve . . . . . . . . . . . . . . . (39,090) 14,098
-------- --------
$145,706 $139,357
======== ========

Principal elements of cost included in the Company's inventories are
copper, purchased materials, direct labor and manufacturing overhead.
Inventories valued using the LIFO method amounted to $141,847 and $136,980
at December 31, 1994 and 1993, respectively.

F-11

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

NOTE 4 PROPERTY, PLANT AND EQUIPMENT

The components of property, plant and equipment are as follows:

December 31,
----------------------------
1994 1993
---------- ----------

Land . . . . . . . . . . . . . . . . . . . . $ 9,319 $ 9,255
Buildings and improvements . . . . . . . . . 87,113 82,664
Machinery and equipment . . . . . . . . . . 225,343 201,871
Construction in process . . . . . . . . . . 11,486 9,667
-------- --------

333,261 303,457
Less: accumulated depreciation . . . . . . . 57,127 30,373
-------- --------

$276,134 $273,084
======== ========

NOTE 5 ACCRUED LIABILITIES

Accrued liabilities include the following:

December 31,
----------------------------
1994 1993
---------- ----------

Salaries, wages and employee benefits . . . $15,418 $12,099
Amounts due customers . . . . . . . . . . . 5,352 4,328
Other . . . . . . . . . . . . . . . . . . . 25,051 26,436
-------- --------
$45,821 $42,863
======== ========

NOTE 6 LONG-TERM DEBT

BANK FINANCING

In connection with the Acquisition and Merger, the Company entered
into a credit agreement dated September 25, 1992, among the Company,

F-12

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

Holdings, the lenders named therein and Chemical Bank, as agent (the
"Credit Agreement"). Under the Credit Agreement, the Company borrowed
$130,000 in term loans (the "Term Credit") of which $94,000 was used to
repay all indebtedness outstanding under the previous credit agreement and
the balance was used to pay a portion of the consideration payable to
Holdings' shareholders and option holders in the Merger and certain fees
and expenses in connection with the Acquisition and Merger and for other
general corporate purposes. In May 1993, the Company applied $111,000 of
the proceeds from the sale of its 10% Senior Notes due 2003 (the "Senior
Notes") to repay the outstanding balance under the Term Credit. See
Senior Notes below. The Company recognized an extraordinary charge of
$3,055, net of applicable tax benefit of $1,953, in the second quarter of
1993 representing the write-off of unamortized debt costs associated with
the outstanding Term Credit.

In May 1993, an amendment and restatement of the Credit Agreement
(the "Restated Credit Agreement") became effective. The Restated Credit
Agreement provides for $175,000 in revolving credit, subject to specified
percentages of eligible assets, reduced by outstanding letters of credit
($12,079 at December 31, 1994) (the "Revolving Credit"). Further, the
amount of Revolving Credit available to the Company is also subject to
certain debt limitation covenants contained in the indenture under which
the Senior Notes were issued. The Revolving Credit expires in 1998.
Revolving Credit loans bear interest at floating rates at bank prime rate
plus 1.25% or a reserve adjusted Eurodollar rate (LIBOR) plus 2.25%. The
effective interest rate can be reduced by 0.25% to 0.75% if certain
specified financial conditions are achieved. Commitment fees during the
revolving loan period are 0.5% of the average daily unused portion of the
available credit. At December 31, 1994 and 1993, the Company's
incremental borrowing rate under the Restated Credit Agreement, including
applicable margins, approximated 9.0% and 7.3%, respectively.

The Restated Credit Agreement contains various covenants which
include, among other things: (a) the maintenance of certain financial
ratios and compliance with certain financial tests and limitations; (b)
limitations on investments and capital expenditures; (c) limitations on
cash dividends paid; and (d) limitations on leases and the sale of assets.
Through December 31, 1994, the Company fully complied with all of the
financial ratios and covenants contained in the Restated Credit Agreement.

The indebtedness under the Restated Credit Agreement is guaranteed by
Holdings and all of the Company's subsidiaries, and is secured by a pledge
of the capital stock of the Company and its subsidiaries and by a first
lien on substantially all assets.

SENIOR NOTES

At December 31, 1994 and 1993 $200,000 aggregate principal amount of
its Senior Notes were outstanding which bear interest at 10% per annum
payable semiannually and are due in May 2003. Net proceeds in May 1993 to
the Company from the sale of the Senior Notes, after underwriting

F-13

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

discounts, commissions and other offering expenses, were $193,450. The
Company applied $111,000 of such proceeds to the repayment of the Term
Credit and in June 1993 applied the balance of such proceeds, together
with new borrowings under the Revolving Credit, to redeem all of its
outstanding 12 3/8% Senior Subordinated Debentures due 2000 (the
"Debentures").

The Senior Notes rank pari passu in right of payment with all other
senior indebtedness of the Company. To the extent that any other senior
indebtedness of the Company is secured by liens on the assets of the
Company, the holders of such secured senior indebtedness will have a claim
prior to any claim of the holders of the Senior Notes as to those assets.

At the option of the Company, the Senior Notes may be redeemed,
commencing in May 1998 in whole, or in part, at redemption prices ranging
from 103.75% in 1998 to 100% in 2001, or at 109% for up to $67,000 with
the proceeds from any public equity offering prior to June 30, 1996. Upon
a Change in Control, as defined in the indenture covering the Senior Notes
(the "Indenture"), each holder of Senior Notes will have the right to
require the Company to repurchase all or any part of such holder's Senior
Notes at a repurchase price equal to 101% of the principal amount thereof.
The Indenture contains various covenants which include, among other
things, limitations on debt, on the sale of assets, and on cash dividends
paid. Through December 31, 1994, the Company fully complied with all of
the financial ratios and covenants contained in the Indenture.

DEBENTURES

The Debentures were due in 2000 and bore interest at 12 3/8% per
annum payable semiannually. However, the Restated Credit Agreement
required the Debentures, which were callable at 106% commencing May 15,
1993, to be retired no later than June 30, 1993. Because of the mandatory
retirement, the Debentures were valued by the Successor at the expected
retirement cost, discounted at 11.5%. In June 1993, the Company redeemed
all outstanding Debentures at 106% of their principal amount, resulting in
a net loss of $312, net of applicable tax benefit of $199, which has been
reported as an extraordinary charge.

During 1992 the Company repurchased outstanding Debentures which had
a carrying value of $13,843. The net loss resulting from this repurchase,
which includes the write-off of a portion of unamortized debt costs,
totalled $122, net of applicable income tax benefit of $78, for
Predecessor, which has been reported as an extraordinary charge.

OTHER

The Company capitalized interest costs of $132, $1,599, $116 and $220
for Successor in 1994 and 1993 and Successor and Predecessor in 1992,
respectively, with respect to qualifying assets.

F-14

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

Total interest paid was $20,826, $20,961, $7,344 and $10,076, for
Successor in 1994 and 1993 and Successor and Predecessor in 1992,
respectively.

There are no maturities of long-term debt within the next five years,
although future amounts outstanding, if any, under the Restated Credit
Agreement would be due in 1998.

SUBSEQUENT EVENT

See Note 14 -- Subsequent Event.

NOTE 7 INCOME TAXES

Effective October 1, 1992, concurrent with the new basis of
accounting, the Successor adopted FAS 109. The Predecessor's statement of
operations for the nine month period ended September 30, 1992 reflects the
historical accounting method for income taxes and has not been restated to
reflect FAS 109. Under FAS 109 assets and liabilities acquired, and the
resulting charges or credits reflected in future statements of operations,
are stated at the gross fair value at the date of acquisition, whereas
under the previous historical method, assets and liabilities and the
resulting charges or credits were recorded at amounts net of the related
tax differences between fair value and the tax basis.

Deferred income taxes at December 31, 1994 and 1993 reflect the net
tax effects of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and amounts used
for income tax purposes. Significant components of deferred tax
liabilities and assets are as follows:

F-15

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

December 31,
-------------------------
1994 1993
-------- --------

Deferred tax liabilities:
Property, plant and equipment . . . . $73,108 $75,923
Inventory . . . . . . . . . . . . . . 28,236 27,935
Other . . . . . . . . . . . . . . . . 4,201 4,274
-------- --------

Total deferred tax liabilities . . . 105,545 108,132
-------- --------
Deferred tax assets:
Accrued liabilities . . . . . . . . . 7,671 8,793
Alternative minimum tax ("AMT") credit
carryforward . . . . . . . . . . . . 4,984 -
Other . . . . . . . . . . . . . . . . 9,711 7,268
-------- --------

Total deferred tax assets . . . . . 22,366 16,061
-------- --------

Net deferred tax liabilities . . . $83,179 $92,071
======== ========

The AMT credit carryforward is available to the Company indefinitely to
reduce future years federal income taxes subject to certain limitations.

F-16

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

The components of income tax expense (benefit) are:

SUCCESSOR PREDECESSOR
-------------------------------------- ------------
Three Month Nine Month
Year Ended Year Ended Period Ended Period Ended
December 31, December 31, December 31, September 30,

1994 1993 1992 1992
----------------------------------------------------

Current:
Federal . . . . . . . . $27,157 $10,978 $(431) $6,868
State . . . . . . . . . 4,507 2,696 112 1,143

Deferred:

Federal . . . . . . . . (8,362) 127 (1,297) 1,109
State . . . . . . . . . (602) (749) (284) 158
-------- ------- -------- --------

$22,700 $13,052 $(1,900) $9,278
======== ======= ======== ========

In compliance with the Omnibus Budget Reconciliation Act of 1993, the
Company's tax balances were adjusted in 1993 to reflect the increase in
the federal statutory tax rate from 34% to 35%. The adjustment had the
effect of increasing income tax expense by $2,250 for 1993.

Total income taxes paid were $11,484, $1,131, $8,608 and $6,604 for
Successor in 1994 and 1993 and Successor and Predecessor in 1992,
respectively.

The Predecessor's deferred tax provision is attributable to timing
differences in the recognition of revenue and expense for tax and
financial reporting purposes. Sources of these differences were primarily
related to depreciation and accruals deductible in different periods for
tax purposes.

Principal differences between the effective income tax rate and
the statutory federal income tax rate are:

F-17

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

SUCCESSOR PREDECESSOR
--------------------------------------- -------------
Three Month Nine Month
Year Ended Year Ended Period Ended Period Ended
December 31, December 31, December 31, September 30,
1994 1993 1992 1992
------------- ------------ ------------ ------------

Statutory federal income tax rate . . . 35.0% 35.0% (34.0)% 34.0%

State and local taxes, net of
federal benefit . . . . . . . . . . . 4.8 5.6 (1.6) 5.8
Permanent differences from applying
purchase accounting . . . . . . . . . - - - 12.2
Amortization of excess of cost over net
assets acquired . . . . . . . . . . . 2.7 6.3 5.1 -
Federal rate increase . . . . . . . . . - 10.0 - -
Tax sharing agreement limitation . . . - - - 8.2
Other, net . . . . . . . . . . . . . . .4 1.3 3.2 2.9
------ ------ ------ ------
Effective income tax rate . . . . . . . 42.9% 58.2% (27.3)% 63.1%
====== ====== ====== ======

The Company elected not to step up its tax bases in the assets
acquired. Accordingly, the income tax bases in the assets acquired have
not been changed from pre-1988 Acquisition values. Depreciation and
amortization of the higher allocated financial statement bases are not
deductible for income tax purposes, thus increasing the effective income
tax rate reflected in the Predecessor's consolidated financial statements.
Under FAS 109, the Successor has recorded deferred income taxes for such
differences.

F-18

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

NOTE 8 RETIREMENT BENEFITS

The Company participates in two defined benefit retirement
plans for substantially all salaried and hourly employees. The Company
also sponsors a supplemental executive retirement plan, which provides
retirement benefits based on the same formula as in effect under the
salaried employees' plan, but which only takes into account compensation
in excess of amounts that can be recognized under the salaried employees'
plan. Salaried plan retirement benefits are generally based on years of
service and the employee's compensation during the last several years of
employment. Hourly plan retirement benefits are based on hours worked and
years of service with a fixed dollar benefit level. The Company's funding
policy is based on an actuarially determined cost method allowable under
Internal Revenue Service regulations, the projected unit credit method.
Pension plan assets consist principally of fixed income and equity
securities and cash and cash equivalents.

The components of net periodic pension cost for the plans are as
follows:

Service cost benefits earned
during the period . . . . . . . . . . $2,964 $2,611 $628 $2,282

Interest costs on projected benefit
obligation . . . . . . . . . . . . . . 3,643 3,521 799 2,479
Actual return on plan assets . . . . . 2,409 (6,078) (841) (1,544)
Net amortization and deferral . . . . . (6,458) 2,573 5 (365)
-------- -------- -------- --------

Net periodic pension cost . . . . . . . $2,558 $2,627 $591 $2,852
======== ======== ======== ========

The following table summarizes the funded status of these pension
plans and the related amounts that are recognized in the consolidated
balance sheets:

F-19

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

December 31,
----------------------------------
1994 1993
---------------- -----------------

Actuarial present value of benefit obligation:
Vested . . . . . . . . . . . . . . . . . . . . $29,469 $32,313

Nonvested . . . . . . . . . . . . . . . . . . 2,470 3,110
-------- --------

Accumulated benefit obligation . . . . . . . . 31,939 35,423
Effect of projected future salary increases . 9,566 15,409
-------- --------

Projected benefit obligation . . . . . . . . . 41,505 50,832
Plan assets at fair value . . . . . . . . . . . . . . 42,436 45,137
-------- --------

Fair value of plan assets in excess of
(less than) projected benefit obligation . . . . . . 931 (5,695)
Unrecognized net (gain) loss . . . . . . . . . . . . (7,703) 614
Unrecognized prior service cost . . . . . . . . . . . (353) -
-------- --------

Pension liability recognized in balance sheets . . . $(7,125) $(5,081)
======== ========

Certain actuarial assumptions were revised in 1994 and 1993
resulting in a decrease of $13,883 and an increase of $3,448,
respectively, in the projected benefit obligation.

F-20

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

Following is a summary of significant actuarial assumptions used:

Discount rates . . . . . . . . 8.5% 7.0% 8.0% 7.1%

Rates of increase in
compensation levels . . . . . 5.0% 5.0% 6.0% 7.0%
Expected long-term rate of
return on assets . . . . . . . 9.0% 9.0% 9.0% 7.1%

In addition to the defined benefit retirement plans as detailed
above, the Company also sponsors defined contribution savings plans which
cover substantially all salaried employees of the Company and certain
hourly employees, represented by collective bargaining agreements, who
negotiate this benefit into their contract. The hourly plan was
established in 1994. The purpose of these savings plans is generally to
provide additional financial security during retirement by providing
employees with an incentive to make regular savings. The Company's
contributions to the defined contribution plans are based on employee
contributions and totalled $1,088, $1,030, $276 and $733 for Successor in
1994 and 1993 and Successor and Predecessor in 1992, respectively.

During 1994, the Company implemented an unfunded, nonqualified
deferred compensation plan which permits certain key management employees
to annually elect to defer a portion of their compensation and earn a
guaranteed interest rate on the deferred amounts. The total amount of
participant deferrals and accrued interest, which is reflected in other
long-term liabilities, was $101 at December 31, 1994.

F-21

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

NOTE 9 STOCKHOLDERS' EQUITY

The following is an analysis of changes to the Company's
stockholders' equity:

Common
Stock Plus
Additional Total
Paid In Retained Stockholder's
Capital Earnings Equity
---------- ---------- --------------

PREDECESSOR
-----------
Balance at January 1, 1992 . . . . . . . . . . . . . . $58,000 $62,354 $120,354
Net income . . . . . . . . . . . . . . . . . . . . . . - 5,314 5,314

Merger related expenses payable by Holdings . . . . . . 14,089 - 14,089
Cash dividends paid to Holdings . . . . . . . . . . . . - (7,500) (7,500)
-------- -------- --------

Balance at September 30, 1992 . . . . . . . . . . . . . $72,089 $60,168 $132,257
======== ======== ========
SUCCESSOR
---------
Initial capitalization at October 1, 1992:
Initial capitalization . . . . . . . . . . . . . $318,043 $ - $318,043

Reduction of equity to reflect proportionate
historical cost basis for management's
continuing common stock interest . . . . . . . (15,259) - (15,259)
-------- -------- --------
302,784 - 302,784
Net loss . . . . . . . . . . . . . . . . . . . . . . . - (5,062) (5,062)
-------- -------- --------

Balance at December 31, 1992 . . . . . . . . . . . . . 302,784 (5,062) 297,722
Net income . . . . . . . . . . . . . . . . . . . . . . - 6,010 6,010
-------- -------- --------

Balance at December 31, 1993 . . . . . . . . . . . . . 302,784 948 303,732
Net income . . . . . . . . . . . . . . . . . . . . . . - 30,171 30,171
-------- -------- --------

Balance at December 31, 1994 . . . . . . . . . . . . . $302,784 $31,119 $333,903
======== ======== ========

F-22

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

NOTE 10 RELATED PARTY TRANSACTIONS

Advisory services fees of $1,000, $1,000 and $229 were paid to
affiliates of BHLP and BCP for 1994, 1993 and the three month period ended
December 31, 1992, respectively, and to MSLEF II in the amount of $210
during the nine month period ended September 30, 1992. It is expected
that financial advisory fees to an affiliate of BHLP will continue to be
paid for such services in the future. Also, in connection with the
Acquisition and Merger, an affiliate of BCP received financial advisory
fees of $1,900 associated with the financing plus certain out of pocket
expenses. DLJ and Goldman Sachs acted as underwriters in the Senior Notes
offering, and in such capacity received aggregate underwriting discounts
and commissions of $5,300. In addition, during the nine month period
ended September 30, 1992, management fees to Holdings of $1,875 were
incurred.

In May 1989, Holdings issued $342,000 aggregate principal amount
($135,117 aggregate proceeds amount) of its senior discount debentures due
2004 (the "Holdings Debentures"), the proceeds of which were used to pay a
dividend to Holdings shareholders, cash bonuses to certain members of its
management, and related expenses. During 1992, the Company paid cash
dividends of $7,500 which were used to finance a portion of the
Acquisition. As of December 31, 1994, Holdings had a liability of
$258,960 related to the Holdings Debentures. The Holdings Debentures are
unsecured debt of Holdings and are effectively subordinated to all
outstanding indebtedness of the Company, including the Senior Notes, and
will be effectively subordinated to other indebtedness incurred by direct
and indirect subsidiaries of Holdings if issued. Cash payment of interest
at 16% is required to be made by Holdings semiannually commencing November
15, 1995.

Holdings is a holding company with no operations and has virtually
no assets other than its ownership of the outstanding common stock of the
Company. All of such stock is pledged, however, to the lenders under the
Restated Credit Agreement. Accordingly, Holdings' ability to meet its
obligations when due under the terms of its indebtedness will be dependent
on the Company's ability to pay dividends, to loan, or otherwise advance
or transfer funds to Holdings in amounts sufficient to service Holdings'
debt obligations.

NOTE 11 DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE INFORMATION

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

F-23

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars, Except Per Copper Data
-----------------------------------------------

FOREIGN EXCHANGE RISK MANAGEMENT

The Company engages in the sale and purchase of goods and services
which periodically require payment or receipt of amounts denominated in
foreign currencies. To protect the Company's related anticipated cash
flows from the risk of adverse foreign currency exchange fluctuations for
firm sales and purchase commitments, the Company enters into foreign
currency forward exchange contracts. At December 31, 1994, the Company
had Deutschemark forward exchange sales and purchase contracts of $5,360
and $1,260, respectively. The fair value of such contracts approximated
contract amount. Foreign currency gains or losses resulting from the
Company' operating and hedging activities are recognized in earnings in
the period in which the hedged currency is collected or paid. The related
amounts due to or from counterparties are included in other liabilities or
other assets.

COMMODITY PRICE RISK MANAGEMENT

Copper is the Company's principal raw material and, as a metal
commodity, experiences marked fluctuations in market prices, thereby
subjecting the Company to copper price risk with respect to firm and
anticipated customer sales contracts. Derivative financial instruments in
the form of copper futures contracts are utilized by the Company to reduce
those risks. At December 31, 1994, the Company had outstanding futures
contracts to hedge 2.8 million pounds of copper (approximately $2,400
contract amount; $3,700 fair value amount) for sale in 1995. Deferred and
unrealized gains on these futures contracts are included within other
assets and will be recognized in earnings in the period in which the
hedged copper is sold or at the point in time when a sale is no longer
expected to occur.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments, exclusive of certain foreign
currency exchange and futures contracts as discussed above, generally
consist of cash and cash equivalents and the Company's long-term debt.
The carrying amounts of the Company's financial instruments approximate
fair value at December 31, 1994, except for the Senior Notes which exceed
fair value by approximately $12,000.

NOTE 12 CONTINGENT LIABILITIES AND COMMITMENTS

There are various claims and pending legal proceedings against the
Company including environmental matters and other matters arising out of
the ordinary course of its business. Pursuant to the 1988 Acquisition,
UTC agreed to indemnify the Company against all losses (as defined)
resulting from or in connection with damage or pollution to the
environment and arising from events, operations, or activities of the
Company prior to February 29, 1988 or from conditions or circumstances
existing at February 29, 1988. Except for certain matters relating to
permit compliance, the Company is fully indemnified with respect to

F-24

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars, Except Per Copper Data
-----------------------------------------------

conditions, events or circumstances known to UTC prior to February 29,
1988. Further, the Company believes it is indemnified, subject to a
$4,000 "basket" for losses related to any environmental events, conditions
or circumstances identified prior to February 28, 1993, to the extent such
losses were not caused by activities of the Company after February 29,
1988. After consultation with counsel, in the opinion of management, the
ultimate cost to the Company, exceeding amounts provided, will not
materially affect the consolidated financial position or results of
operations. However, in April, 1995 the Company was notified with respect
to an environmental matter that it is one of several potentially
responsible parties and is in the process of investigating the related
facts and circumstances. Pending the outcome of such investigation, the
Company has insufficient knowledge upon which to base an estimate of its
potential liability.

At December 31, 1994, the Company had purchase commitments of 448.8
million pounds of copper. This is not expected to be either a quantity in
excess of needs or at prices in excess of amounts that can be recovered
upon sale of the related copper products. The commitments are to be
priced based on the New York Commodity Exchange, Inc. ("COMEX") price in
the contractual month of shipment except for 37.8 million pounds of copper
that have been priced at fixed amounts through forward purchase contracts
covered by customer sales agreements at copper prices at least equal to
the Company's copper commitment.

At December 31, 1994, the Company had committed $7,959 to outside
vendors for certain capital projects.

The Company occupies space and uses certain equipment under lease
arrangements. Rent expense was $6,912, $6,224, $1,949 and $4,138 under
such arrangements for 1994 and 1993, the three month period ended December
31, 1992 and the nine month period ended September 30, 1992, respectively.
Rental commitments at December 31, 1994 under long-term noncancellable
operating leases were as follows:

Real Estate Equipment Total
----------- --------- -----

1995 $2,427 $2,316 $4,743
1996 1,838 2,186 4,024
1997 1,401 1,225 2,626
1998 1,232 1,015 2,247
1999 1,037 860 1,897
After 1999 12,665 - 12,665
------- ------ -------
$20,600 $7,602 $28,202
======= ====== =======

F-25

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

NOTE 13 QUARTERLY FINANCIAL DATA (UNAUDITED)

1994 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
----------------------------------- ------------ ------------ ------------ ------------

Net sales . . . . . . . . . . . . . $231,832 $246,558 $265,897 $265,788
Gross margin . . . . . . . . . . . 40,184 38,680 42,375 42,225

Net income . . . . . . . . . . . . $7,783 $7,145 $7,998 $7,245

1993 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
----------------------------------- ------------ ------------ ------------ ------------

Net sales . . . . . . . . . . . . . $204,309 $230,465 $220,249 $213,823
Gross margin . . . . . . . . . . . 29,543 30,067 27,547 35,814
Income (loss) before
extraordinary charge (b) . . . . 1,536 2,583 (988) 6,246

Net income (loss) (a)(b) . . . . . $1,536 $(784) $(988) $6,246

(a) In the second quarter 1993, the Company recognized an extraordinary
charge of $3,055 net of applicable income tax benefit of $1,953,
representing the write-off of unamortized debt costs associated with
retirement of the outstanding Term Credit. During 1993 the Company
repurchased outstanding Debentures resulting in extraordinary
charges of $312 net of applicable income tax benefits of $199 (See
Note 6).

NOTE 14 SUBSEQUENT EVENT

Holdings presently intends to effect at least a partial redemption of
the Holdings Debentures at par value plus accrued interest on or about May
15, 1995, when the Holdings Debentures accrete to their full face value.
Holdings expects to finance this redemption through cash received from the
Company by way of repayment of an intercompany account payable and a
dividend. The Company expects to obtain the necessary funds for such cash
payments from borrowings under a new credit agreement and a capital lease
financing facility. To the extent a full redemption of the Holdings

F-26

ESSEX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

In Thousands of Dollars
-----------------------

Debentures is effected, additional financing is expected to be obtained by
the Company through an unsecured term loan.

The Company and certain lenders have agreed in principle to a new
credit agreement (the "New Credit Agreement") involving a senior secured
revolving credit facility of up to $260,000 (the "New Revolving Credit")
subject to specified percentages of eligible assets. The New Credit
Agreement is expected to replace the existing Restated Credit Agreement
and its $175,000 revolving credit facility. The New Revolving Credit is
expected to have a five year maturity with interest rates, commitment
fees, collateral and covenants comparable to the existing Restated Credit
Agreement. Additionally, the Company and one of the lending banks have
agreed in principle to a capital lease facility (the "Capital Lease
Facility"), which is expected to generate proceeds of approximately
$25,000, before associated fees and expenses, from the sale and leaseback
of certain of its fixed assets. The Company may have available for its
use an unsecured term loan facility (the "Term Loan Facility") to
refinance a portion of the Holdings Debentures. The applicable terms and
conditions of the New Credit Agreement, the Capital Lease Facility and the
Term Loan Facility have not yet been finalized.

There can be no assurance that Holdings will complete the redemption
and refinancing as described above.

F-27