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FORM 10-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

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

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

COMMISSION FILE NUMBER 333-57099

WKI HOLDING COMPANY, INC.

(Registrant)

DELAWARE 16-1403318
(State of incorporation) (I.R.S. Employer Identification No.)

ONE PYREX PLACE, P.O. BOX 1555, ELMIRA, NEW 14902-1555
YORK
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: 607-377-8000

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

SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT: NONE

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to the filing
requirements for at least 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 be contained, to the best
of registrant's knowledge, in any information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. Yes /X/ No / /

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:

66,857,143 shares of WKI Holding Company, Inc.'s, $0.01 Par Value, were
outstanding as of March 28, 2000.

Documents incorporated by reference in this annual report--See the Exhibit
index in Item 14.

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PART I

ITEM 1--BUSINESS

GENERAL

WKI Holding Company, Inc. (formerly known as CCPC Holding Company, Inc.),
(the Company or WKI) is a leading manufacturer and marketer of housewares,
including bakeware, dinnerware, rangetop cookware, kitchen and household
products, cleaning products, cutlery and precision cutting tools. The Company
believes that its brands, including Corningware-Registered Trademark-,
Pyrex-Registered Trademark-, Corelle-Registered Trademark-, Revere
Ware-Registered Trademark-, Visions-Registered Trademark-,
EKCO-Registered Trademark-, Via-Registered Trademark-, Baker's
Secret-Registered Trademark-, Chicago Cutlery-Registered Trademark-, Clean
Results-Registered Trademark-, OLO-Registered Trademark-,
OXO-Registered Trademark- and Grilla Gear-Registered Trademark- constitute one
of the broadest and best recognized collection of brands in the housewares
industry.

The Company's business began as an unincorporated division of Corning
Incorporated (Corning) in 1915 with the invention of the heat-resistant glass
that has become known as Pyrex-Registered Trademark- brand glassware. In 1958,
Corning introduced CorningWare-Registered Trademark- bakeware, a versatile
glass-ceramic cookware product evolved from materials originally developed for a
U.S. ballistic missile program. Corelle-Registered Trademark- dinnerware, a
proprietary three-layer, two-glass product with high mechanical strength
properties and designed for everyday use was launched in 1970.
Visions-Registered Trademark- cookware, a lower cost, clear glass-ceramic
cookware line was introduced in 1982. In 1988 Corning supplemented its cookware
product lines with the acquisition of the Revere business, which distributes
stainless steel and aluminum cookware and rangetop products under the Revere
Ware-Registered Trademark- brand.

The Company was formed in 1991 when Corning, in an effort to expand the
international sales of its consumer products, entered into a joint venture with
Vitro S.A., the leading glass manufacturer in Mexico. In connection with that
joint venture (which was unwound in 1993 when it did not achieve its strategic
and financial objectives), Corning contributed or licensed to the Company
substantially all of its assets used in Corning's consumer products business. In
November 1994, Corning and the Company sold their European, Russian, Middle
Eastern and African consumer products businesses to Newell a significant
competitor of the Company. Currently Newell serves as the exclusive distributor
for certain of the Company's products in the stated regions. These sales
represent less than 1% of the Company's net sales in 1999.

On March 2, 1998, Corning, the Company, Borden, Inc., and CCPC Acquisition
Corp. entered into a Recapitalization Agreement pursuant to which on April 1,
1998 (Closing Date) CCPC Acquisition acquired 92% of the outstanding shares of
common stock, par value $0.01 per share of WKI from Corning for $110.4 million
(Recapitalization). The stock acquisition was financed by an equity investment
in CCPC Acquisition by BW Holding LLC, an affiliate of Kohlberg, Kravis
Roberts & Co., L.P. (KKR), and the parent company of Borden and CCPC
Acquisition. Pursuant to the Recapitalization Agreement, WKI paid a cash
dividend to Corning of $472.6 million prior to the consummation of the
Recapitalization. On July 10, 1998, post-closing adjustments to the cash
dividend were agreed upon by WKI and Corning, and the Company distributed
$10.2 million to Corning. As a result of the Recapitalization, Corning continues
to hold 8.0% of the outstanding shares of common stock of WKI.

Pursuant to the Recapitalization Agreement, the Company was required to
change its corporate name to remove the word "Corning" within three years of the
Closing Date. Effective January 2000, the Company changed its corporate name to
WKI Holding Company, Inc. and changed the name of its subsidiary, Corning
Consumer Products Company, Inc., to World Kitchen, Inc.

In the first quarter of 1999 the Company initiated a plan to restructure its
manufacturing and supply organization as part of a program designed to reduce
costs through the elimination of under-utilized capacity, unprofitable product
lines and increased utilization of the remaining facilities.

The restructuring includes the discontinuation of the commercial tableware
product line, which products were sold to restaurants and other institutions,
and closure of the related portion of the Company's manufacturing facility in
Charleroi, Pennsylvania. In order to improve the utilization of the Charleroi
facility, the Company has moved Corelle -Registered Trademark- cup production to
its Martinsburg, West Virginia facility and third party suppliers. In addition,
the Company terminated its supply contract with Corning's Greenville, Ohio
facility and Pyrex-Registered Trademark- production was consolidated at the
Charleroi facility. Additionally, the Company has discontinued manufacturing and
distributing rangetop cookware at its facility in Clinton, Illinois. Future
supply of rangetop cookware will be sourced from third party manufacturers.

In addition, in 1999 the Company completed the acquisition of EKCO
Group, Inc. effective September 13,1999 (EKCO) and General Housewares Corp. on
October 21, 1999 (GHC) in two separate transactions. The acquisitionS were
accounted for under the purchase method of accounting. The results of operations
of the acquired companies have been included in results of operations for the
Company from their dates of acquisition.

The EKCO transaction was closed by the Company on October 24, 1999 following
EKCO's initial purchase by CCPC Acquisition Corp (the Company's parent), on
September 13, 1999. Throughout this filing the Company's purchase is considered
to have occurred on September 13, 1999. The Company acquired EKCO for
approximately $229 million, including EKCO common stock, the assumption of debt
and transaction fees. The Company financed this acquisition through the issuance
of $150 million in common stock to the Company's parent and a short term
borrowing from an affiliate of the Company's parent.

EKCO is a manufacturer and marketer of branded consumer products. EKCO's
products include household items such as bakeware, kitchen and household tools,
cleaning products, brooms, brushes and mops.

The Company acquired GHC for approximately $159 million, including the
repayment of debt and transaction fees. The Company financed the acquisition
through the issuance of $50 million Junior Cumulative Preferred Stock (Junior
Preferred Stock) to an affiliate of the Company's parent and additional
borrowings under the Company's existing credit facilities. The junior preferred
stock consists of two million shares with each share having a liquidation
preference of $25.00. Under the terms of the junior preferred stock the Company
can pay cash dividends of $1.00 per share per quarter if certain financial
ratios are satisfied, subject to compliance with the Company's debt covenants.

GHC manufactures and markets consumer durable goods with principal lines of
business consisting of kitchen and household tools, precision cutting tools,
kitchen cutlery and cookware. In addition, GHC sells products through its chain
of manufacturers retail outlet stores.

PRODUCTS

The Company's products are sold primarily in the bakeware, dinnerware,
rangetop, cookware, kitchen and household tools, cleaning products, cutlery and
precision cutting tools categories under

core brand names. The following table sets forth the sales of the Company's
products in their primary categories from 1997 through 1999.

YEAR ENDED DECEMBER 31,
------------------------------
1999 1998 1997
-------- -------- --------

NET SALES(1)
Bakeware.................................................... $227,489 $197,378 $206,499
Dinnerware.................................................. 174,940 180,338 204,597
Rangetop Cookware........................................... 96,312 100,710 109,667
Kitchen/Household Tools..................................... 35,083 -- --
Cleaning Products........................................... 5,959 -- --
Cutlery..................................................... 10,051 -- --
Precision Cutting Tools..................................... 3,626 -- --
Other(2).................................................... 64,118 54,642 52,097
-------- -------- --------
Total................................................... $617,578 $533,068 $572,860
======== ======== ========

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(1) Certain 1998 and 1997 amounts have been reclassified to conform with 1999
presentation.

(2) "Other" sales include selected kitchen accessories manufactured by third
parties which are principally sold through the Company-operated factory
stores.

BAKEWARE

CORNINGWARE-REGISTERED TRADEMARK-. Corningware-Registered Trademark-
cookware was introduced in 1958 as the cookware that "does it all," going from
freezer to oven to stovetop to refrigerator to table. This versatility results
from the Corningware-Registered Trademark- manufacturing process, which creates
a glass-ceramic material with high resistance to thermal shock. This
glass-ceramic material was originally fabricated for missile nose cones due to
its ability to withstand thermal extremes. Corningware-Registered Trademark-
products include round, oval and square cooking/ serving vessels with glass and
plastic covers and comprise product lines: Corningware-Registered Trademark-
French White-TM-, Corningware-Registered Trademark- Classics-TM-,
Corningware-Registered Trademark- Pop-Ins-TM-, Corningware-Registered Trademark-
Casual Elegance-TM- and Microwave-TM-.

PYREX-REGISTERED TRADEMARK-. Pyrex-Registered Trademark- products are made
of borosilicate and tempered soda lime glass and are available in a number of
colors, shapes and sizes. The Company's Pyrex-Registered Trademark- products
comprise five product lines: Pyrex-Registered Trademark- Original-TM-,
Sculptured-TM- Pyrex-Registered Trademark-, Storage Plus-Registered Trademark-,
Pyrex-Registered Trademark- Storage Deluxe-TM- and Pyrex-Registered Trademark-
Portables-Registered Trademark-.

EKCO-REGISTERED TRADEMARK-. EKCO-Registered Trademark- products consist of
a broad line of uncoated bakeware products including cookie sheets, muffin tins,
brownie pans, loaf pans and similar items.

BAKER'S SECRET-REGISTERED TRADEMARK-. Baker's Secret-Registered Trademark-
products consist of a broad line of non-stick coated and insulated "no burn"
bakeware items.

FARBERWARE-REGISTERED TRADEMARK-. Farberware-Registered Trademark- brand
name products consist of non-stick coated and uncoated bakeware items, which are
sourced and sold under a sublicense with Meyer Marketing Co. Ltd.

CUISINART-REGISTERED TRADEMARK-. Cuisinart-Registered Trademark- brand name
products consist of premium non-stick coated bakeware items, which are sourced
and sold under a license with Conair Corporation.

VIA-REGISTERED TRADEMARK-. Via-Registered Trademark- products include
baking equipment such as cooling racks, cookie cutter sets and cast aluminum
ovenware.

DINNERWARE

CORELLE-REGISTERED TRADEMARK-. Corelle-Registered Trademark-, the Company's
dinnerware product line developed in 1971, is produced using a proprietary
manufacturing process. This manufacturing process combines three layers of glass
and allows the Company to manufacture a dinnerware that is durable and
break/chip resistant, as well as light, thin and stackable.

OTHER DINNERWARE. Corelle-Registered Trademark- cups and mugs are produced
using material under the Pyroceram-Registered Trademark- trademark. The
manufacturing process involves pressing and glazing the shapes.

The Company also manufactures a glass tableware product through a pressing
process that is sold in similar channels as the Corelle-Registered Trademark-
line. Corelle-Registered Trademark- mugs are also produced from a glass ceramic
substrate through a pressing process to yield a durable and aesthetically
pleasing product.

RANGETOP COOKWARE

REVERE WARE-REGISTERED TRADEMARK-. The Company's Revere
Ware-Registered Trademark- brand products include stainless steel cookware and
aluminum non-stick cookware that is made by other manufacturers.

The Company's Revere Ware-Registered Trademark- stainless steel cookware
products are comprised of a number of product lines including the traditional
Revere Ware-Registered Trademark- product line and the Revere
Ware-Registered Trademark- Solutions-TM- and Revere Ware-Registered Trademark-
Proline-TM- product lines. Certain Revere Ware-Registered Trademark-
Solutions-TM- products feature patented double pourspouts and steam holes, steam
venting nozzles and textured handles. Revere Ware-Registered Trademark-
Proline-TM- products are professional style, stainless steel products which
compete at higher price points. Other Revere-Registered Trademark- product lines
include; the Revere Ware-Registered Trademark- Pro Line Limited-TM- line with
products featuring hard anodized aluminum exteriors, stainless steel interiors
and glass lids, Revere-Registered Trademark- Centura-TM- featuring stainless
steel products with pourspouts and straining lids offered both with copper and
tri-ply and stainless steel/aluminum bottoms, Revere-Registered Trademark-
Centura Pro-TM- with products of hard anodized aluminum construction with
pourspouts and straining lids, Revere-Registered Trademark- Independence-TM-,
Revere-Registered Trademark- Liberation-TM-, and Revere-Registered Trademark-
Revolution-TM- all of which feature products with non-stick aluminum
construction with pourspouts and straining lids, and Ultra Glide-TM- by
Revere-Registered Trademark- which is a line of non-stick aluminum skillets.

EKCO-REGISTERED TRADEMARK-. EKCO-Registered Trademark- brand products
include stainless steel and aluminum cookware that is made by other
manufacturers. The Company's EKCO-Registered Trademark- brand of stainless steel
products are comprised of the EKCO-Registered Trademark- Endura-TM-, the
EKCO-Registered Trademark- Enterna-Registered Trademark- line, and the
EKCO-Registered Trademark- Copperelle-TM- and EKCO-Registered Trademark-. The
Company's EKCO-Registered Trademark- brand of non-stick aluminum products are
comprised of the EKCO-Registered Trademark- Resolutions-TM- line, the
EKCO-Registered Trademark- Radiance-TM- line and the EKCO-Registered Trademark-
Generations-TM- line. The EKCO product lines are marketed through all channels
of distribution.

VISIONS-REGISTERED TRADEMARK-. Introduced in the United States in 1982,
Visions-Registered Trademark- products are made with a translucent pyro-ceram
material that allows customers to see what they are cooking. The Company manages
Visions-Registered Trademark- as a specialty line focused on promotional
programs and markets Visions-Registered Trademark- products in areas where
water-based cooking and simmering are relevant to a market's or community's
culture.

KITCHEN AND HOUSEHOLD TOOLS

EKCO-REGISTERED TRADEMARK- AND VIA-REGISTERED TRADEMARK-. The Company
markets and sells a broad line of kitchenware products which it sources from
third parties, including the following: kitchen tools and gadgets such as
spoons, spatulas, ladles and other cooking accessories, and peelers, corkscrews,
whisks, can openers and similar items, marketed under the
EKCO-Registered Trademark-, EKCO PRO-TM-, Baker's Secret-Registered Trademark-
and Via-Registered Trademark- trademarks; pantryware, such as canister sets,
spice racks and napkin and paper towel holders, under the
VIA-Registered Trademark- trademark; stainless steel and porcelain-on-steel
kettles and carafes under the EKCO-Registered Trademark- and
Via-Registered Trademark- trademarks; and cookware under the
EKCO-Registered Trademark- trademark and more than 130 tools, gadgets and
bakeware items under the

Cuisinart-Registered Trademark- brand name, which is licensed from Conair
Corporation. The Company also markets stainless steel flatware, mixing bowls and
colanders. The Company markets more than 1000 kitchenware items, including
multiple colors of the same item and various packaging combinations particularly
in its line of kitchen tools and gadgets, using what the Company believes to be
one of the most extensive merchandising and promotional programs in the
industry. The program employs a "good, better, best" strategy which the Company
feels clearly defines packaging and product design. EKCO-Registered Trademark-
products are classified as good, EKCO PRO products (including the sub-brands,
Fresh Catch and Barworks) are classified as better and Softsides-TM- products
are classified as best.

OXO-REGISTERED TRADEMARK-. WKI markets a broad line of kitchen and
household tools under the OXO Good Grips-Registered Trademark-, OXO
Softworks-TM-, OXO Touchables-TM- and OXO Basics-TM- brand names. The OXO brand
products are developed in the United States and produced by OEM manufacturers in
Asia according to WKI's specifications. WKI has been expanding its assortment of
OXO brand products from kitchen tools to household cleaning tools, gardening
tools, hand tools and automotive cleaning tools. Many of the kitchen/household
tools sold by WKI under the OXO brand utilize a proprietary handle which is
covered by patents owned by the Company that run through December 2007. OXO
brand products are distributed primarily in the United States through department
stores, gourmet and specialty outlets and mass merchants.

GRILLA GEAR-REGISTERED TRADEMARK-. Also included is a line of barbecue
tools and accessories under the Grilla Gear-TM- brand. This product line
consists of high quality, design-oriented products related to outdoor dining and
home entertainment, such as grilling tools, aprons, mitts, timers, magnets, etc.

CLEANING PRODUCTS

EKCO-REGISTERED TRADEMARK- AND CLEAN RESULTS-REGISTERED TRADEMARK-. The
Company markets a line of cleaning products for home use, including brooms,
brushes and mops, marketed under the EKCO-Registered Trademark- and Clean
Results-Registered Trademark- trademarks. The Company believes that it is a
leading marketer of cleaning brushes for household and personal use.

CUTLERY

CHICAGO CUTLERY-REGISTERED TRADEMARK-. The Company markets, under the
Chicago Cutlery-Registered Trademark- brand, six complete lines of kitchen
knives for consumers, sharpening tools and storage units. In 1997, the Company
introduced Legacy Forged-TM- to compete in the highest quality and price point
segment of the cutlery market. The Company believes Legacy Forged-TM- to be well
positioned due to the strength of the blade--which results from a drop-forged
manufacturing process and a sharper blade angle. Another advantage is the hybrid
material used to make the Legacy Forged-TM- handle. This material, consisting of
dyed birch infused with specially formulated poly resins, is produced using
strips of wood thoroughly saturated with the poly resins, creating an extremely
attractive material that is impervious to moisture.

The 440A Fine product line was introduced to complement Legacy Forged-TM-
and offer the consumer a high quality knife at a lower price point than forged
knives. The same hybrid material used for the Legacy forged is used for the 440A
Fine. The manufacturing process involves wide, heavy gauge, premium steel that
is drop-sheared so that a long, deep taper grind can be applied to the blade
resulting in an extremely sharp edge. Also in 1998, the Company introduced the
Centurion-TM- product line to complement its most popular household cutlery
line, The Walnut Tradition-Registered Trademark-. Whereas the Walnut
Tradition-Registered Trademark- features a solid American walnut handle with a
Taper Grind-Registered Trademark- edge on the blade, Centurion-TM- has the look
and feel of a forged knife with a black synthetic handle. Centurion-TM- is
sourced from Asia and shipped to a Chicago Cutlery facility where the final
taper grind is applied to ensure that each knife meets Chicago Cutlery's
demanding sharpness requirement. The Company also manufactures and sells a
popularly priced knife under the Cherrywood-TM- brand name and a similar

knife under the American Pride-Registered Trademark- brand name. The Company
believes that these lines represents some of the highest quality knives offered
through mass distribution.

REGENT SHEFFIELD-REGISTERED TRADEMARK-. Regent
Sheffield-Registered Trademark- and Wiltshire-Registered Trademark- are licensed
brand names form Richardson Sheffield LTD. for distribution in the United States
and Canada. The Company markets under the Regent Sheffield-Registered Trademark-
name in the United States and Wiltshire-Registered Trademark- and Regent
Sheffield-Registered Trademark- names in Canada. The company markets ten
complete lines of knives and storage units for consumers.

In 1999, the Company re-introduced the entire Regent
Sheffield-Registered Trademark- line in the United States with new packaging and
moved to re-position the sub-brands up-market to the Department and Specialty
Stores. The key elements behind the re-positing were new blade technology block
designs and forged cutlery.

The Laser-TM- line features wood and poly handled cutlery imported from
China and is positioned as an opening price point line. The Classic Series was
introduced to offer consumers unique block designs. The poly-handled product is
imported from China and is set in trend setting ceramic colored blocks.
StaySharp-Registered Trademark- has a unique sharpening device recessed in the
block for quick and easy knife sharpening. This line is imported from China.
SoftSides-Registered Trademark- features soft santoprene-TM- handles that
provide a safe, comfortable non-slip grip. The Titanium Edge-TM- line delivers a
patented process where the blade is infused with Titanium Nitride, a mineral
much harder than stainless steel, for a blade that stays sharp ten times longer.
Forged and Forged Commercial product lines combine exceptional ergonomic and
classic features in attractive block designs. Infinity Edge-TM- combines the
superior cutting performance of a fine edge blade with a cutting edge guaranteed
to stay sharp for a lifetime of use. The blade edge is permanently fused with
Tungsten Carbide, a substance much harder than stainless steel. Forme-TM- knives
combine the beauty of stainless steel with a sophisticated exciting new design
in cutlery. The Company feel this new product line is well positioned to compete
up-market.

The Company also sells a line of promotionally-priced cutlery. These
products compete in both the fine edge and "never needs sharpening" segments of
the cutlery industry and are purchased primarily from one supplier in Asia.
Promotionally-priced cutlery consists of six separate cutlery brands, four of
which (Premier-TM-, Basics-TM-, American Carver-Registered Trademark- and Chef's
Professional-TM-, are sold exclusively through department stores, and the
remaining two (Essentials-Registered Trademark- and Classic
Chef-Registered Trademark-) are distributed through mass merchandisers.

The Company also manufactures a full line of knives for the commercial
poultry processing market. These molded-handle knives are designed to meet the
special needs of professionals and have specialized blade shapes for specific
cutting jobs. The ergonomic handles are textured to be slip-resistant and
feature a finger guard for safety.

PRECISION CUTTING TOOLS

OLFA. The Company and Olfa Corporation of Osaka, Japan, executed a ten-year
agreement naming the Olfa Products Group as the exclusive distributor, in the
United States and Canada, of precision cutting tools and accessories
manufactured by Olfa Corporation. The Company believes that relations with Olfa
Corporation are strong and that a long-term relationship will continue. Products
of the Olfa Products Group are sold to industrial users, and through
distributors as well as directly to hobby, craft, hardware and fabric stores.

OLO. The OLO business (rolling scissors and a special carton opener). The
OLO products are manufactured domestically by a third party and are purchased as
finished goods by the Company. OLO products are sold to industrial users, and
through distributors as well as directly to hobby, craft, hardware and fabric
stores.

OTHER

ACCESSORIES. The Company's "Other" sales include selected kitchen
accessories manufactured by third parties. These products are sold primarily in
the Company--operated factory stores.

NEW PRODUCT DEVELOPMENT

New products are developed using a disciplined development process adopted
by the Company. This process is designed to reduce the risk associated with new
product development projects through the early assessment of a product's market
viability, and to compress product development cycle time through the use of the
Company's proprietary design and modeling software. This new product development
process leverages the Company's extensive qualitative and quantitative research
knowledge and has reduced development time, focused resources on projects with
high market potential and decreased large expenditures on product concepts with
low market viability.

Additional information about the Company and its products is discussed in
Item 7, Management's Discussion and Analysis of Financial Condition and Results
of Operations, appearing on pages 17 through 25, and Note 16 of the Notes to
Consolidated Financial Statements appearing on pages 56 and 57.

MARKETING AND DISTRIBUTION

The Company's products are sold in the United States and in over 30 foreign
countries. In the United States (which accounted for approximately 80% of the
Company's net sales in 1999), the Company sells both on a wholesale basis to
retailers, distributors and other accounts that resell the Company's products
and on a retail basis through Company-operated outlet stores.

DOMESTIC WHOLESALE

In the United States, the Company sells to approximately 5,000 customers
made up primarily of mass merchants, department stores, specialty retailers, as
well as through other channels, including retail food stores, hardware stores,
drug stores, catalog showrooms and direct mail.

DOMESTIC RETAIL

The Company operates a network of outlet stores in 44 states, located
primarily in outlet malls. The Company's outlet stores, which carry an extensive
range of the Company's products, enable the Company to participate in broader
distribution and to profitably sell slower-moving inventory. The Company
believes that its outlet stores, which also sell complementary kitchen
accessories, have developed marketing and pricing strategies that generate sales
which supplement, rather than compete with, its wholesale customers. The
Company-operated outlet stores also promote and strengthen the Company's brands,
enabling the Company to provide customers a broader assortment of products
beyond products that are commonly stocked by third party retailers.

INTERNATIONAL

The Company's 60-person international sales force, together with localized
distribution and marketing capabilities, have allowed the Company to become an
established marketer of bakeware and dinnerware in Canada, Korea, Australia,
Japan, Singapore, Taiwan, Hong Kong, Mexico and Brazil. The Company believes
that developing localized distribution capabilities is critical to continued
growth in international markets and, as a result, has made investments in
localized distribution facilities in Brazil, Malaysia, Canada and Australia.

The Company's subsidiary, EKCO Group, Inc. which was effectively acquired on
September 13, 1999, markets its products outside the United States through its
Canadian and United Kingdom

subsidiaries, the export division of EKCO International and distributors and
agents who provide marketing support to supermarkets, mass merchandising stores,
specialty stores and department stores.

EUROPEAN, RUSSIAN, MIDDLE EASTERN AND AFRICAN CONSUMER PRODUCTS BUSINESS

In November 1994, Corning and the Company sold to Newell all of the
outstanding stock of Corning Consumer Limited ("CC Limited"), Corning Consumer
GmbH ("CC GmbH") and Corning Consumer S.A ("CCSA"), subsidiaries of Corning and
the Company through which the Company's consumer products business was conducted
in Europe, Russia, the Middle East, and Africa (collectively, the "Territory").
Corning and the Company granted to Newell, CC Limited, CC GmbH and CCSA the
exclusive right to use certain trademarks within the Territory. Currently,
Newell serves as the exclusive distributor for certain of the Company's products
in the Territory, which represented less than 1% of the Company's net sales in
1999.

CUSTOMER SERVICE: SALES AND MARKETING SUPPORT

Management believes that service is a key part of the Company's product
offering. The close relationships and frequent contact with its large customers
provide the Company with sales opportunities and application ideas. The Company,
through its sales team, provides its customers with sales and marketing support.
In addition, as of October 1999, the Company contracted its consumer information
center responsibilities with Modern Marketing Concepts, Inc. Modern Marketing
Concepts, Inc. has a team dedicated to the Company's business that responds to
consumer complaints, product liability claims, warranty claims, rebate programs,
store referrals and special order fulfillment offers.

SALES

The Company's domestic customers are served by a combination of Company
salespeople and independent, commissioned representatives. The Company's top 100
accounts are serviced by the Company's direct sales force teams, each consisting
of four or five salespeople which are organized (i) by account, for the
Company's most significant customers and (ii) by four channel teams focusing on
department stores, specialty stores, regional mass merchandisers, and clubs,
hardware and food/ continuity, for the balance of the top 100 accounts. The
teams are directly accountable for revenues, allowances and promotional
spending. The Company's sales teams dedicate their primary focus to the largest
customers. Members of the sales teams regularly call on the Company's customers
to develop an in-depth understanding of each customer's competitive environment
and opportunities. Smaller wholesale accounts are serviced by approximately 40
independent, commissioned sales representatives. The Company's 60-person
international sales force, with personnel located in twelve countries, work with
local retailers and distributors to optimize product assortment, consumer
promotions and advertising for local preferences.

MARKETING SUPPORT

The Company provides its customers with extensive marketing support. The
Company conducts extensive research on housewares industry trends, including
consumer color and design preferences.

COMPETITION

The market for the Company's products is highly competitive and the
housewares industry is trending towards consolidation. Competition in the United
States is affected not only by domestic manufacturers but also by the large
volume of foreign imports. Recently the Company has experienced increased
competition in the United States from low-cost Far-Eastern competitors and
expects this trend to continue in the future. The market for housewares outside
the United States and Europe is relatively fragmented and differs by country and
region. Internationally, depending on the country or region, the Company
competes with other U.S. companies operating abroad, locally manufactured goods
and international companies competing in the worldwide bakeware, dinnerware and
rangetop cookware categories.

A number of factors affect competition in the sale of bakeware, dinnerware
and rangetop cookware, kitchen and household tools, cleaning products, cutlery
and precision cutting tools manufactured and/or sold by the Company, including,
but not limited to quality, price competition and price point parameters
established by the Company's various distribution channels. Shelf space is a key
factor in determining retail sales of bakeware, dinnerware and rangetop cookware
products. A competitor that is able to maintain or increase the amount of retail
space allocated to its product may gain a competitive advantage for that
product. In addition, new product introductions are an important factor in the
categories in which the Company's products compete. Other important competitive
factors are brand identification, style, design, packaging and the level of
service provided to customers.

The Company has, from time to time, experienced price and market share
pressure from certain competitors in certain product lines, particularly in the
bakeware category where metal products of competitors have created retailer
price and margin pressures, and in the rangetop cookware category where
non-stick aluminum products have increased their share of rangetop cookware
sales at the expense of stainless steel products due to the durability and ease
of cleaning of new non-stick coatings.

Other important competitive factors are brand identification, style, design,
packaging and the level of service provided to customers. The importance of
these competitive factors varies from customer to customer and from product to
product.

CUSTOMERS

In the United States, WKI sells to approximately 5,000 customers made up
primarily of mass merchants, department stores, specialty retailers, as well as
through other channels, including retail food stores, catalog showrooms, and
direct mail. In 1999, 1998 and 1997, one customer, Wal-Mart Stores, Inc.
accounted for approximately 16%, 15% and 12%, respectively of the Company's
gross sales.

MANUFACTURING AND RAW MATERIALS

Sand, soda ash, borax, limestone, lithia-containing spars, alumina, cullet,
stainless steel, plastic compounds, hardwood products, tin plate steel-copper
and corrugated packaging materials are the principal raw materials used by the
Company. The Company purchases its raw materials on the spot market and through
long-term contracts with suppliers. All of these materials are available from
various suppliers and the Company is not limited to any single supplier for any
of these materials. Management believes that adequate quantities of these
materials are and will continue to be available from various suppliers. The
Company's molded plastic products and certain components of its kitchenware and
household tools products are manufactured from plastic resin, which is produced
from petroleum-based raw materials. Plastic resin prices may fluctuate as a
result of changes in natural gas and crude oil prices and the capacity, supply
and demand for resin and the petrochemical intermediates from which it is
produced. The Company sources certain products from third party suppliers. The
Company believes that alternative sources of supply at competitive prices are
available from other manufacturers of substantially identical products.

The melting units operated by the Company require either electric or natural
gas energy input. Back-up procedures and systems to replace the primary source
of these energy inputs are in place in each of the Company's relevant
facilities. Ongoing programs exist within each of the Company's glass melting
facilities to reduce energy consumption. Furthermore, rates for electric and
natural gas energy have been fixed contractually in each of the Company's plants
to avoid the negative impact of market fluctuations in prices. The Company does
not engage in any hedging activities for commodity trading relating to its
supply of raw materials.

However, the replacement of certain raw material suppliers has in the past,
and may in the future, have an adverse effect on the Company's operations and
financial performance and significant increases in the cost of any of the
principal raw materials used by the Company could have a material adverse effect
on its results of operations.

PATENTS AND TRADEMARKS

The Company owns numerous United States and foreign trademarks and trade
names and has applications for the registration of trademarks and trade names
pending in the United States and abroad. The Company's most significant owned
trademarks and/or tradenames include Corelle-Registered Trademark-,
Revere-Registered Trademark-, Revere Ware-Registered Trademark-,
Visions-Registered Trademark-, EKCO-Registered Trademark-, Baker's
Secret-Registered Trademark-, Via-Registered Trademark-, Good
Grips-Registered Trademark- and OXO-Registered Trademark-. Other significant
trademarks used by the Company are Corningware-Registered Trademark-,
Pyrex-Registered Trademark- Chicago Cutlery-Registered Trademark-,
Faberware-Registered Trademark-, Regent Sheffield-Registered Trademark-,
Wiltshire-Registered Trademark-, OLO-Registered Trademark-, and Grilla
Gear-Registered Trademark-. Upon the consummation of the Recapitalization on
April 1, 1998, Corning granted to the Company fully paid, royalty-free licenses
to use the Corningware-Registered Trademark- trademark, servicemark and
tradename and the Pyroceram-Registered Trademark- trademark in the field of
housewares and to use the Pyrex-Registered Trademark- trademark in the field of
durable consumer products. These licenses are exclusive, worldwide licenses,
subject to the prior exclusive licenses granted to Newell and certain of its
subsidiaries and provide for renewable ten-year terms, which the Company may
renew indefinitely. In addition, in connection with the Recapitalization, the
Company entered into an agreement with Corning under which the Company is
licensed to continue to use "Corning" in connection with the Company's business
for three years after the Closing Date (or up to five years in the case of
certain molds used in the manufacturing process).

The Company also owns and has the exclusive right to use numerous United
States and foreign patents, and has patent applications pending in the United
States and abroad. In addition to its patent portfolio, the Company possesses a
wide array of unpatented proprietary technology and knowledge. The Company also
licenses certain intellectual property rights to or from third parties.

Concurrent with the Recapitalization, Corning granted to the Company a fully
paid, royalty-free license of patents and know-how (including evolutionary
improvements) owned by Corning that pertain to or have been used in the
Company's business. Furthermore, the Company and Corning entered into a
five-year technology support agreement (renewable at the option of the Company
for an additional five years), pursuant to which Corning will provide to the
Company (at the Company's option) engineering, manufacturing technology, and
research and development services, among others, at Corning's standard internal
rates.

The Company believes that its patents, trademarks, trade names, service
marks and other proprietary rights are important to the development and conduct
of its business and the marketing of its products. As such, the Company
vigorously protects its intellectual property rights.

ENVIRONMENTAL MATTERS

The Company's facilities and operation are subject to certain federal,
state, local and foreign laws and regulations relating to environmental
protection and human health and safety, including those governing wastewater
discharges, air emissions, and the use, generation, storage, treatment,
transportation and disposal of hazardous and non-hazardous materials and wastes
and the remediation

of contamination associated with such disposal. Because of the nature of its
business, the Company has incurred, and will continue to incur, capital and
operating expenditures and other costs in complying with and resolving
liabilities under such laws and regulations.

Certain of the Company's Corning facilities have lengthy manufacturing
histories and, over such time, have used or generated and disposed of substances
which are or may be considered hazardous. Pursuant to the terms and conditions
of the Recapitalization Agreement, Corning has agreed to indemnify the Company
for certain costs and expenses that may be incurred in the future by the Company
arising from pre-Recapitalization environmental events, conditions or matters
and as to which notice is provided within specified time periods. Corning has
agreed to indemnify the Company for (i) 80% of such costs and expenses up to an
aggregate of $20.0 million and (ii) 100% of such costs and expenses in excess of
$20.0 million.

The Company is also aware that at several EKCO facilities, hazardous
substances and/or oil have been detected and that additional investigation will
be and remedial action will or may be required. American Home Products, the
prior owner of two locations, has provided indemnification to EKCO for pre 1984
conditions at those sites. The Company is also aware that three former GHC
facilities are involved with private parties and state agencies in the review
and evaluation, or remediation, of identified environmental contamination
problems.

Accruals for environmental matters are recorded when it is probable that a
liability has been incurred and the amount of the liability can be reasonably
estimated. Environmental accruals are routinely reviewed on an interim basis.
The Company has accrued approximately $3.3 million at December 31, 1999, for
probable environmental remediation and restoration liabilities. This is
management's best estimate of these liabilities. Based on currently available
information and analysis, the Company believes that it is reasonably possible
that costs associated with such liabilities may exceed current reserves by
amounts that may prove insignificant, or by amounts, in the aggregate, of up to
approximately $2.2 million.

GOVERNMENTAL REGULATIONS

The Company is subject to various federal, state and local laws affecting
its business, including various environmental, health, fire and safety
standards. See "Environmental Matters." The Company is also subject to the Fair
Labor Standards Act and various state laws governing such matters as minimum
wage requirements, overtime and other working conditions and citizenship
requirements. The Company believes that its operations are in material
compliance with applicable laws and regulations.

EMPLOYEES

At December 31, 1999, the Company had approximately 5,250 employees,
approximately one-third of which were covered by collective bargaining
agreements. The collective bargaining agreements will be renegotiated over the
next 18 months.

OTHER

Additional information in response to Item 1 is found in Item 6, Five-Year
Selected Financial Data, appearing on page 16, Item, 7 Management's Discussion
and Analysis of Financial Condition and Results of Operations, appearing on
pages 17 through 25, and Note 16 of the Notes to Consolidated Financial
Statements appearing on pages 56 and 57.

FORWARD-LOOKING AND CAUTIONARY STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements. The factors discussed below,
among others, could cause actual results to differ

materially from those contained in forward-looking statements made in this
report, including without limitation, in "Management's Discussion and Analysis
of Financial Condition and Results of Operations," in the Company's related
press releases and in oral statements made by authorized officers of the
Company. When used in this report, any press release or oral statement, the
words "looking forward," "estimate," "project," "anticipate," "expect,"
"intend," "believe" and similar expressions are intended to identify a
forward-looking statement. Forward-looking statements are not guarantees of
future performance and are subject to risks, uncertainties and other factors
(many of which are beyond the Company's control) that could cause actual results
to differ materially from future results expressed or implied by such
forward-looking statements. The forward-looking statements regarding such
matters are based on certain assumptions and analyses made by the Company in
light of its experience and its perception of historical trends, current
conditions and expected future developments, as well as other factors it
believes are appropriate in the circumstances. Whether actual results and
developments will conform with the Company's expectations and predictions,
however, is subject to a number of risks and uncertainties, in addition to the
risk factors discussed above, including: integration of the Company's
acquisitions of General Housewares Corp. and EKCO Group, Inc., failure to
resolve system implementation issues, a global economic slowdown in any one, or
all, of the Company's sales categories; loss of sales as the Company streamlines
and focuses on strategic accounts; unpredictable difficulties or delays in the
development of new product programs; increasing reliance on third party
manufacturers, increased difficulties in obtaining a consistent supply of basic
raw materials such as sand, soda ash, steel or copper and energy inputs such as
electrical power or natural gas at stable pricing levels; development by the
Company of an adequate administrative infrastructure; technological shifts away
from the Company's technologies and core competencies; unforeseen interruptions
to the Company's business with its largest customers resulting from, but not
limited to, financial instabilities or inventory excesses; the effects of
extreme changes in monetary and fiscal policies in the United States and abroad,
including extreme currency fluctuations and unforeseen inflationary pressures
such as those recently experienced by certain Asian economies; drastic and
unforeseen price pressures on the Company's products or significant cost
increases that cannot be recovered through price increases or productivity
improvements; significant changes in interest rates or in the availability of
financing for the Company or certain of its customers; loss of any material
intellectual property rights; any difficulties in obtaining or retaining the
management or other human resource competencies that the Company needs to
achieve its business objectives; and other factors, many of which are beyond the
control of the Company. Consequently, all of the forward-looking statements made
in this Form 10-K are qualified by these cautionary statements, and there can be
no assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequences to or effects on the Company and its subsidiaries or their
business or operations.

ITEM 2--PROPERTIES

WKI utilizes six primary manufacturing facilities (five in the United States
and one outside of the United States) and twelve principal packaging and
distribution centers (six in the United States and six outside of the United
States).

The table below summarizes certain data for each of the Company's principal
properties, including its manufacturing and distribution facilities:

FACILITY
----------------------
LOCATION PRIMARY USE SQ. FEET OWN/LEASE
- -------- -------------------------------------- --------- ----------

DOMESTIC:
Charleroi, Pennsylvania........ Manufacturing 603,332 Own
Clinton, Illinois (1).......... Dormant 660,000 Own
Corning, New York.............. Manufacturing 375,000 Own
Elmira, New York............... Corporate Offices 60,000 Lease
Greencastle, Pennsylvania...... Distribution 1,210,000 Own
Martinsburg, West Virginia..... Manufacturing 416,000 Own
Waynesboro, Virginia........... Distribution 89,800 Own
Nashua, New Hampshire (2)...... Dormant 8,000 Lease
Franklin Park, Illinois........ Admin/Warehouse/Distribution 190,000 Lease
Massillon, Ohio................ Manufacturing/Warehousing/Distribution 244,000 Own
Bolingbrook, Illinois.......... Warehousing/Distribution 260,000 Lease
Monroe, Ohio................... Warehousing/Distribution 116,000 Lease
Wauconda, Illinois............. Manufacturing 65,000 Own
New York, New York............. Administrative 25,000 Lease
Terre Haute, Indiana........... Administrative 48,450 Lease
Indianapolis, Indiana.......... Warehouse 131,000 Lease

INTERNATIONAL:
Johor, Malaysia (3)............ Manufacturing/Distribution 64,000 Own/Lease
Johor, Malaysia................ Distribution 50,000 Lease
Singapore...................... Administrative 11,800 Lease
Taipei, Taiwan................. Administrative 1,700 Lease
Tokyo, Japan................... Administrative 1,900 Lease
Sao Paulo, Brazil.............. Distribution 2,000 Lease
Sydney, Australia.............. Distribution 66,000 Lease
Toronto, Canada................ Administrative 3,600 Lease
St. Laurent, Quebec, Canada.... Administrative/Warehouse 16,230 Lease
Niagara Falls, Ontario,
Canada....................... Administrative/Warehouse/Distribution 120,000 Own
Chepstow, Gwent, U.K........... Administrative/Warehouse/Distribution 45,000 Lease

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

(1) The Company closed this facility during 1999 and expects to sell it during
2000.

(2) The Company closed this facility during 1999.

(3) The building housing the Malaysia facility is owned by CIM, a subsidiary
that is 80% owned by the Company. The land on which the facility is located
is leased pursuant to a 60-year lease expiring in 2048.

(4) In addition to the properties listed in the table, as of December 31, 1999,
the Company owned approximately 511,000 square feet of floor space, which is
being held for sale or lease. The Company leases other real properties not
set forth above which, in the aggregate, are not deemed material. The
Company subleased its 100,000 sq. ft. facility in Hamilton, Ohio to the
purchaser of the assets of the Housewares Products segment's
Wright-Bernet, Inc. and Cleaning Specialty Co. divisions for an initial term
expiring in December 2003.

(5) In addition, the Company leases 927,846 sq. ft. of retail space in
approximately 175 factory outlet malls with Initial lease terms ranging from
3 to 7 years.

ITEM 3--LEGAL PROCEEDINGS

LITIGATION

There are no pending legal proceedings which are material in relation to the
consolidated financial statements of WKI.

WKI has been engaged in, and will continue to be engaged in, the defense of
product liability claims related to its products, particularly its bakeware and
cookware product lines. The Company maintains product liability coverage,
subject to certain deductibles and maximum coverage levels that the Company
believes is adequate and in accordance with industry standards.

In addition to product liability claims, from time to time the Company is
involved in various legal actions in the ordinary course of business. The
Company is not currently involved in any legal actions which, in the belief of
management could have a material adverse impact on the Company.

ENVIRONMENTAL MATTERS

From time to time, the Company has had claims asserted against it by
regulatory agencies or private parties for environmental matters relating to the
generation or handling of hazardous substances by the Company or its
predecessors, and the Company has incurred obligations for investigations or
remedial actions with respect to certain of these matters. The Company does not
believe that any such claims asserted or obligations incurred to date will
result in a material adverse effect upon the Company's financial position,
results of operations or liquidity. The Company has accrued approximately
$3.3 million at December 31, 1999, for probable environmental remediation and
restoration liabilities. This is management's best estimate of these
liabilities. Based on currently available information and analysis, the Company
believes that it is reasonably possible that costs associated with such
liabilities may exceed current reserves by amounts that may prove insignificant,
or by amounts, in the aggregate, of up to approximately $2.2 million. There can
be no assurance that activities at these or any other facilities or future
facilities may not result in additional environmental claims being asserted
against the Company or additional investigations or remedial actions being
required.

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

The Company's annual Shareholders Meeting was held April 23, 1999. The
Company's Board of Directors was elected in its entirety by unanimous vote of
the Company's shareholders.

On October 22, 1999, the Company's shareholders unanimously approved the
Company's Amended and Restated Certificate of Incorporation.

PART II

ITEM 5--MARKET FOR THE REGISTRANTS' COMMON STOCK AND RELATED STOCKHOLDER MATTERS

The Company's authorized common stock consists of 75,000,000 shares with a
par value of $0.01 per share, 66,857,143 of which were issued and outstanding at
December 31, 1999 and controlled by affiliates of KKR. No shares of such common
stock trade on any exchange. No dividends were declared on common stock during
1999.

ITEM 6--SELECTED FINANCIAL DATA

FIVE YEAR SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1999 1998 1997 1996 1995
----------- ---------- ---------- ---------- ----------

SUMMARY OF OPERATIONS
Net sales............................................ $ 617,578 $ 533,068 $ 572,860 $ 632,406 $ 608,720
Loss (income) from continuing operations(1)(2)....... (28,058) (33,312) 13,694 3,122 (21,745)
(Loss) income applicable to common stock(1)(2)....... (40,099) (36,094) 13,694 3,122 (21,745)
----------- ---------- ---------- ---------- ----------
Loss (income) from continuing operations per common
share.............................................. $ (0.90) $ (1.39) $ 0.57 $ 0.13 $ (0.91)
Net (loss) income per common share................... (1.29) (1.50) 0.57 0.13 (0.91)
----------- ---------- ---------- ---------- ----------
Preferred dividends per preferred share.............. $ 3.68 $ 2.32 N/A N/A N/A
----------- ---------- ---------- ---------- ----------
Average number of common shares outstanding during
the year(3)........................................ 31,142,857 24,000,000 24,000,000 24,000,000 24,000,000
----------- ---------- ---------- ---------- ----------
CASH FLOW INFORMATION
EBITDA (1)(2)(4)..................................... $ 7,434 $ 35,016 $ 70,910 $ 55,900 $ 17,519
Adjusted EBITDA(1)(5)................................ 85,575 68,654 70,910 58,046 17,519

Cash flow from operating activities.................. (32,396) 58,841 67,419 55,566 1,000
Cash flow from investing activities.................. (421,509) (23,237) (26,208) (35,629) (42,900)
Cash flow from financing activities.................. 453,216 (30,892) (44,957) (22,500) 42,700

FINANCIAL POSITION
Total assets......................................... $ 979,679 $ 495,259 $ 480,623 $ 512,768 $ 528,526
Long-term debt....................................... 669,253 433,656 8,285 13,474 13,973
----------- ---------- ---------- ---------- ----------

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

(1) (Loss) income, EBITDA; Adjusted EBITDA and per share data for 1995 through
1997 have been restated to reflect the change from the LIFO to FIFO method
of accounting for inventories. The restatement (decreased) increased
earnings by ($3,546), ($3,256), and $1,502, respectively.

(2) Includes transaction and integration related expenses of $9,157 and $28,866
in 1999 and 1998 respectively, and restructuring costs of $68,984, $4,772
and $2,146 in 1999, 1998 and 1996.

(3) Share data for 1995 through 1997 were restated for the 24,000-for-1 stock
split in March 1998.

(4) EBITDA represents operating income (loss) plus depreciation and
amortization. EBITDA is presented because management understands that such
information is considered by certain investors to be an additional basis for
evaluating the Company's ability to pay interest and repay debt. EBITDA
should not be considered an alternative to measures of operating performance
as determined in accordance with generally accepted accounting principles,
including net income, as a measure of the Company's operating results and
cash flows or as a measure of the Company's liquidity. Because EBITDA is not
calculated identically by all companies, the presentation herein may not be
comparable to other similarly titled measures of other companies.

(5) Adjusted EBITDA represents EBITDA less restructuring costs and transaction
and integration related expenses. Adjusted EBITDA is calculated for 1999
through 1995 below. EBITDA is not adjusted to add back the $8.5 million
charge relating to the enterprise-wide system described in Item 7.

1999 1998 1997 1996 1995
-------- -------- -------- -------- --------

EBITDA......................................... $ 7,434 $35,016 $70,910 $55,900 $17,519
Restructuring costs (see Note 15).............. 68,984 4,772 -- 2,146 --
Transaction and integration related expenses
(see Note 15)................................ 9,157 28,866 -- -- --
------- ------- ------- ------- -------
Adjusted EBITDA................................ $85,575 $68,654 $70,910 $58,046 $17,519
======= ======= ======= ======= =======

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

BACKGROUND

WKI Holding Company Inc. (WKI or the Company) is a leading manufacturer and
marketer of oven/bakeware, rangetop cookware, kitchen and household tools,
tabletop dinnerware, cutlery, precision cutting tools and cleaning products. The
Company has strong positions in major channels of distribution for its products
in North America and has also achieved a significant presence in certain
international markets, primarily Asia, Australia, Latin America and the United
Kingdom. In North America, the Company sells both on a wholesale basis to
retailers, distributors, and other accounts that resell the Company's products
and on a retail basis through Company-operated outlet stores. In the
international market, the Company has established its presence on a wholesale
basis through an international sales force along with localized distribution and
marketing capabilities.

Prior to April 1, 1998, the Company operated as a wholly-owned subsidiary of
Corning Inc. (Corning). During this period, Corning provided the Company with
certain process-oriented administrative services, such as benefits
administration, accounts payable, accounts receivable, treasury and tax
services. Corning has agreed pursuant to a transition services agreement to
continue to provide such services for up to two years at negotiated rates
(expiring in April 2000) calculated on the same basis as before April 1, 1998.
By December 31, 1999, the Company had developed its administrative
infrastructure and had assumed or outsourced to third parties, essentially all
of these functions previously performed by Corning.

In conjunction with the separation from Corning the Company implemented an
enterprise-wide computer system. The implementation was substantially complete
effective July 1, 1999. The Company experienced difficulties in the
implementation at its primary assembly and distribution center. Significant
inefficiencies were experienced and the volume of shipments were curtailed.
Incremental charges related to the hiring of additional shifts, duplicative
freight and warehousing expenses, cancelled orders and associated lost profits
and the absorption of significant customer sales allowances, amounting to
approximately $8.5 million.

Effective September 13, 1999 and October 21, 1999 the Company acquired the
outstanding stock of The Ekco Group Inc. (EKCO) and General Housewares
Corporation (GHC), respectively. The acquisitions are being accounted for as a
purchase business combination, and accordingly, the financial statements include
the results of EKCO's and GHC's operations from the dates of these acquisitions.

The Company acquired EKCO for approximately $229 million, including the
assumption of $3.4 million in 9 1/4 series B senior notes due in 2006,
$2.1 million of industrial revenue bonds and other debt and transaction fees.
The Company financed this acquisition through the issuance of $150 million in
common stock to the Company's parent and borrowings under the Company's existing
credit facility.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
--------- --------- --------

Net sales(1)(4)
North America............................................... $ 536,761 $ 471,987 $465,280
Asia........................................................ 45,675 28,794 66,589
Other International......................................... 35,142 32,287 40,991
--------- --------- --------
Net sales................................................. $ 617,578 $ 533,068 $572,860
========= ========= ========

Operating (loss) income(1)(2)(3)(4)
North America............................................... $ 38,313 $ 28,482 $ 8,158
Asia........................................................ 10,532 2,072 20,286
Other International......................................... 2,332 4,708 6,760
--------- --------- --------
Operating income before restructuring, transaction and
integration related expenses............................ $ 51,177 $ 35,262 $ 35,204
Restructuring expense....................................... (68,984) (4,772) --
Transaction and integration related expenses................ (9,157) (28,866) --
--------- --------- --------
Operating (loss) income................................... $ (26,964) $ 1,624 $ 35,204
========= ========= ========

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

(1) Includes net sales of $99,487 and $4,161 included in North America and Other
International, respectively for EKCO and GHC from their respective
acquisition dates of September 13, 1999 and October 21, 1999.

(2) Includes operating income of $15,916 and $730 included in North America and
Other International, respectively for EKCO and GHC from their respective
acquisition date of September 13,1999 and October 21, 1999.

(3) Includes the effect of change in accounting principle from LIFO to FIFO
inventory costing in the amount of $656 in 1997.

(4) Asia consists of Japan, Korea, China and West Asian countries. 1998 and 1997
have been reclassified to conform with 1999 presentations.

% OF NET % OF NET % OF NET
1999 SALES 1998 SALES 1997 SALES
-------- -------- -------- -------- -------- --------

Net sales.................................. $617,578 100.0% $533,068 100.0% $572,860 100.0%
Cost of sales.............................. 408,414 66.1 349,953 65.6 376,304 65.7
-------- ----- -------- ----- -------- -----
Gross profit............................... 209,164 33.9 183,115 34.4 196,556 34.3
Selling, general and administrative........ 160,857 26.0 146,927 27.6 155,723 27.2
Provisions for restructuring costs......... 68,984 11.2 4,772 0.9 -- --
Transaction and integration related
expenses................................. 9,157 1.5 28,866 5.4 -- --
Other (income) expense, net................ (2,870) (0.5) 926 0.2 5,629 0.9
-------- ----- -------- ----- -------- -----
Operating (loss) income.................... (26,964) (4.4) 1,624 0.3 35,204 6.1
Interest expense........................... 48,136 34,290 8,481
-------- -------- --------
(Loss) income before taxes on income....... (75,100) (32,666) 26,723
Income tax (benefit) expense............... (47,254) 947 12,734
-------- -------- --------
(Loss) income before min. int.............. (27,846) (33,613) 13,989
Minority interest in (losses) subsidiary... (212) 301 (295)
-------- -------- --------
Net (loss) income before extraordinary
charge................................... (28,058) (33,312) 13,694
Early extinguishment of debt............... (6,393) -- --
Net (loss) income.......................... $(34,451) $(33,312) $ 13,964
======== ======== ========
Adjusted EBITDA............................ $ 85,575 13.9% $ 68,654 12.9% $ 70,910 12.4%
======== ===== ======== ===== ======== =====

YEAR ENDED DECEMBER 31, 1999 COMPARED WITH YEAR ENDED DECEMBER 31, 1998

NET SALES

Net sales for the year ended December 31, 1999 were $617.6 million, an
increase of 15.9% over 1998 sales of $533.1 million. On a pro forma basis,
assuming that the EKCO and GHC acquisitions had occurred on January 1, 1998, pro
forma sales for 1999 were $823.7 million down 4.9% from the 1998 total of
$865.9 million. As discussed below, the decrease in sales primarily relates to
supply issues at the Company-owned factory stores, supply chain issues
experienced with the implementation of a new enterprise wide computer system,
soft retail sales in markets served by EKCO's former United Kingdom subsidiary
and export operations and the absence of sales form EKCO's former Wright-Bernet
and cleaning specialty businesses which were sold by EKCO at the end of 1998.

NORTH AMERICA

1999 net sales in North America were $536.8 million, a $64.8 million
increase over 1998. The newly acquired EKCO and GHC businesses contributed $74.5
and $25.0 million respectively. Absent the acquisitions, 1999 sales in North
America were $34.7 million lower than 1998. In July 1999 the Company implemented
an enterprise-wide computer system. The Company experienced difficulties
implementing the computer system at its Greencastle, Pennsylvania assembly and
distribution center. As a result significant inefficiencies were experienced and
the volume of shipments, across all the Company's channels of business, were
substantially curtailed in July and to a lesser degree in August. Management has
addressed the shipping issues and believes that it has re-established shipping
capabilities to pre-implementation levels. The shipping problems also resulted
in significant unplanned sales allowances in the fourth quarter of 1999.

Despite the distribution problems noted above U.S. sales to trade customers
was only down slightly when compared to 1998. Net sales to U.S. trade customers,
excluding the discontinued commercial tableware line, was $261.6 million in 1999
compared to $263.1 in 1998. A sales increase at the

Company's largest customer, Walmart, essentially offset weaknesses experienced
with other U.S. trade customers and specialty channels.

Net sales at the Company-operated factory stores were $144.8 million in
1999, down $23.7 million from the 1998 total of $168.5 million. The factory
store performance was driven by two factors. During 1999 the Company experienced
supply constraints with two product lines, Corelle, due to strong U.S wholesale
sales and a faster than anticipated recovery in international sales, and Revere,
due to transitional issues associated with transferring production to a third
party supplier. The Company also encountered difficulties in implementing a new
enterprise-wide computer system which restricted its ability to ship. As a
result of these factors the Company made a decision to prioritize shipping
capacity in favor of third party customers rather than the Company-owned factory
stores. As a result the factory stores experienced severe out of stock
conditions.

ASIA

Despite the supply constraints noted above, 1999 sales in Asia far exceeded
1998. 1999 net sales to Asia were $45.7 million, an increase of $16.9 million
over 1998 sales of $28.8 million. The significant improvement resulted primarily
from the recovery of the Asian economies. The successful introduction of new
Corelle-Registered Trademark- patterns and new distribution channels for
CorningWare-Registered Trademark-, also contributed to the increased sales.

OTHER INTERNATIONAL

1999 net sales for Other International were $35.1 million, a $2.8 million
increase over 1998. The newly acquired EKCO business contributed $4.2 million.
Absent the acquisitions, 1999 sales for Other International were $1.4 million
lower than 1998. The reduction is also attributable to supply issues noted above
and the economic weakness of the Latin America economy.

GROSS PROFIT

Gross profit for 1999 was $209.2 million or 33.9% of net sales, compared to
the 1998 gross profit of $183.1 million or 34.4% of net sales. On a pro forma
basis, gross profit in 1999 was $271.7 million or 33.0% of sales, compared to
$290.3 million in 1998, or 33.5% of sales. The decreased margin is primarily
attributable to the significant reduction in higher margin factory store sales.
As noted above, shipping and supply issues limited the amount of product
allocated to the factory stores resulting in a substantial decrease in 1999
sales when compared to 1998. Additionally the shipping issues also resulted in
service costs during the third and fourth quarters of 1999. The Company added
additional shifts in its distribution center to re-establish the Company's
ability to ship orders at pre-systems implementation levels. Unplanned sales
allowances in the fourth quarter of 1999 also depressed gross margin percentages
in 1999. The incremental costs were partially offset by improved manufacturing
efficiencies and cost reductions achieved through the manufacturing
rationalization announced in the first quarter of 1999 and discussed below.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses were $160.5 million in 1999, an
increase of $13.6 million over the 1998 selling, general and administrative
expenses of $146.9 million. The recently acquired EKCO and GHC businesses
contributed $17.2 million to this increase and year 2000 remediation and the
enterprise-wide system implementation added $3.6 million to the increase. This
increase was partially offset by approximately $7.0 million in savings from a
full year effect of the Company's independence from its prior owner,
Corning Inc. Throughout 1999 the Company operated as an independent Company
versus a wholly-owned subsidiary of Corning. In an independent state the Company
was able to perform many of the administrative tasks previously performed by
Corning at a

significantly lower cost. The remaining fluctuation is attributable to increases
in new product development costs.

RESTRUCTURING

In the first quarter of 1999, the Company initiated a plan to restructure
its manufacturing and supply organization as part of a program designed to
reduce costs through elimination of under-utilized capacity, unprofitable
product lines and increased utilization of the remaining facilities.

The restructuring includes the discontinuation of the commercial tableware
product line and closure of the related portion of the Company's manufacturing
facility in Charleroi, Pennsylvania. In order to optimize the utilization of the
Charleroi facility, the Company has moved Corelle-Registered Trademark- cup
production to its Martinsburg, West Virginia facility and third party suppliers.
In addition, the Company terminated its supply contract with Corning's
Greenville, Ohio facility and Pyrex-Registered Trademark- production was
consolidated at the Charleroi facility. Additionally, the Company has
discontinued manufacturing and distributing rangetop cookware at its facility in
Clinton, Illinois. Future supply of rangetop cookware will be sourced from third
party manufacturers.

The Company recorded a charge of $69.0 million to cover the cost of this
reorganization. The majority of the charge related to asset disposals, however,
cash charges are expected to approximate $15.2 million over the life of the
plan. In the fourth quarter of 1999 the Company reversed $7.2 million of its
original $76.2 million restructuring charge taken in the first quarter of 1999.
The reversal results from an increase in the anticipated proceeds from the idle
equipment, land and buildings, certain employee compensation arrangements and
other exit costs.

1998 restructuring reflects $4.8 million in charges relating to the
consolidation and rationalization of Asian operations and the consolidation of
U.S. and Canadian distribution facilities.

TRANSACTION AND INTEGRATION RELATED EXPENSES

Transaction and integration related expenses were $9.2 million in 1999.
These expenses primarily consist of legal fees, accounting and tax services,
employee compensation arrangements and other benefits, facility consolidation
and other integration costs.

Transaction and integration related expenses of $28.9 million recorded in
1998 were associated with the Recapitalization. These costs primarily consist of
cash and non-cash compensation, financing costs and other cash expenses.

OTHER, NET

Other operating income was $2.9 million in 1999 compared to other operating
expense of $0.9 million in 1998. The $3.8 million increase in income is
primarily a result of a $3.5 million state grant. The remaining increase is a
result of a $2.1 million increase in royalty income partially offset by the
amortization of trademarks and goodwill resulting from the business combination.

OPERATING LOSS

As a result of the factors discussed above, the company incurred an
operating loss of $27.0 million in 1999 compared to an operating profit of
$1.6 million in 1998. Excluding the impact of the restructuring, transaction and
integration related expenses operating income increased by $15.9 million to
$51.2 million in 1999 from $35.3 million in 1998. EKCO and GHC contributed
$12.8 million and $3.9 million, respectively.

NET INTEREST EXPENSE

Interest expense increased $13.8 million to $48.1 million from
$34.3 million in 1998. The increase is attributable to higher debt levels
related to the acquisitions in 1999 and the timing of the Recapitalization
related debt, which occurred on April 1, 1998.

INCOME TAX EXPENSE

The $47.3 million income tax benefit results from the pre-tax loss and the
reversal of a portion of the valuation reserve on the Company's deferred tax
assets.

ADJUSTED EBITDA (EARNINGS BEFORE NET INTEREST EXPENSE, INCOME TAXES,
DEPRECIATION AND AMORTIZATION, RESTRUCTURING EXPENSES, TRANSACTION AND
INTEGRATION RELATED EXPENSES, MINORITY INTEREST AND EXTRAORDINARY CHARGE)

Adjusted EBITDA increased by $16.9 million to $85.6 million in 1999 from
$68.7 million in 1998. EKCO and GHC contributed $17.0 million and $5.1 million,
respectively. The remaining fluctuation is explained above.

YEAR ENDED DECEMBER 31, 1998 COMPARED WITH YEAR ENDED DECEMBER 31, 1997

NET SALES

NORTH AMERICA

North American sales for 1998 increased $6.7 million compared to 1997. This
improvement was attributable to significantly higher shipments to mass merchants
and increases in same store sales of company-operated outlet stores. The
increase was partially offset by WKI's strategy of focusing on profitable
products and customers, which reduced the number of products offered, and the
number of customers serviced. The increase in shipments to mass merchants
reflects improved allocations of shelf space at key customers as a result of
stronger planograms (plan on which shelf space allocations are based) negotiated
for 1998. Sales at company-operated outlet stores benefited from WKI's inventory
reduction program in 1998 as special promotional prices on overstocks led to
higher sales during 1998. WKI's efforts to focus on profitable accounts
negatively impacted sales but improved gross profit margin.

ASIA

Economic disruptions in Asia caused material declines in sales. Asian sales
for 1998 were $37.8 million less than 1997. Although sales were materially lower
than the prior year, the gap narrowed throughout the year. Asian sales for the
first half of 1998 were 71% behind the same period in 1997, while the second
half of the year was 55% behind the same period in 1997.

OTHER INTERNATIONAL

Other international sales in 1998 were $8.7 million below 1997 levels. The
reduction in sales is primarily a result of a significant decrease in sales to
WKI's European distributor along with the currency impact of Asian economic
disruptions on other Far Eastern operations.

GROSS PROFIT

Gross profit as a percentage of net sales for 1998 was 34.4%, consistent
with the 1997 gross profit percentage of 34.3%. WKI's strategy of focusing on
profitable accounts offset (i) the decline in higher margin international sales,
(ii) the impact of an inventory reduction program implemented in 1998 and
discussed below and (iii) a gross profit percentage reduction at
company-operated outlet stores due to a reduction in prices of slower-moving
items with the objective of reducing inventories. In the third quarter of 1998,
WKI implemented an inventory reduction program by planned reduction in
production at WKI's manufacturing facilities. The reduced production levels
resulted in higher cost of sales due to the allocation of fixed costs over a
smaller base of production. The longer-term effect of the program will be to
reduce inventory carrying costs and improve cash flow. The gross profit
percentages at company-operated outlet stores were negatively impacted by WKI's
inventory reduction program. The inventory reduction program pushed a material
amount of close-out inventories, sold at lower margins, through the
company-operated outlet stores. The majority of the close-out activity occurred
in 1998 and management does not expect the same level of activity in 1999.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES AND OTHER CORPORATE ADMINISTRATIVE
EXPENSES

In 1998, selling, general, and administrative expenses and other corporate
administrative expenses decreased $8.8 million from 1997 levels. The decrease
was primarily due to WKI's separation from Corning. WKI now operates as an
independent company and performs many of the administrative tasks that were
previously handled by Corning at a significantly lower cost. The decrease was
partially offset by increases in company-operated outlet store expenses to
support close-out programs. As a percentage

of net sales, selling, general, and administrative and other corporate
administrative expenses rose to 27.6% in 1998 from 27.2% in 1997 due to the
decline in net sales.

RESTRUCTURING

WKI is continuing its efforts to further reduce manufacturing, assembly, and
distribution costs. As a result of this effort WKI recorded cash and non-cash
restructuring charges of $4.8 million related to the consolidation and
rationalization of Asian operations and the consolidation of Canadian and U.S.
distribution facilities.

TRANSACTION AND INTEGRATION RELATED EXPENSES

Transaction and integration related expenses of $28.9 million primarily
consist of cash and non-cash compensation, financing costs and other cash
expenses associated with the Recapitalization. In 1998, WKI recorded a charge of
$28.9 million for certain cash and non-cash expenses, including $17.4 million of
compensation payments reimbursed by Corning related to arrangements entered into
by Corning with certain Corning employees who accepted employment with WKI. The
remaining transaction and integration related expenses consisted of costs
incurred in 1998 for fees and services related to the Recapitalization and the
related financings.

OTHER, NET

Other operating expense was $0.9 million in 1998 compared to $5.6 million in
1997. The decrease is attributable to the absences of acquisition related
charges incurred in 1997.

OPERATING INCOME

Total WKI operating income in 1998 was $1.6 million compared to
$35.2 million in 1997, a decrease of $33.6 million. Operating income in North
America increased by $20.3 million in 1998 as compared to 1997. As noted above
the increase is due primarily to WKI's strategy of focusing its sales efforts on
higher margin products and profitable customers while continuing to actively
manage its product assortment, customer base and administrative cost savings.
Operating income in North America also increased as a result of the separation
from Corning. Prior to the Recapitalization, WKI received an allocation of
corporate expenses from Corning, which was calculated as a percentage of
budgeted sales per an agreement between both companies. Beginning April 1, 1998,
WKI no longer received the allocation of corporate expenses from Corning.
Charges for services previously performed by Corning are classified as selling,
general, and administrative expenses in 1998. Charges for services continuing to
be performed by Corning are based on WKI's transition services agreement with
Corning. WKI has been able to significantly reduce costs performing many of the
activities in house and by utilizing competitive rates in the transition
services agreement.

Asian and other international operating results for 1998 decreased
$20.3 million from 1997. Economic disruptions in Asia and throughout WKI's Far
Eastern operations have had a material adverse effect on WKI's operations.
Although WKI believes that such markets offer long term growth potential, the
disruptions in the Asian economy have resulted in greater than anticipated sales
reductions and production cut backs. Actions taken to consolidate and
rationalize Asian operations resulted in the need for restructuring expenses
that had the immediate effect of further depressing operating results. However,
these actions taken by management are expected to improve future operating
results by streamlining operations and reducing administrative expenses.

NET INTEREST EXPENSE

Interest expense increased $25.8 million to $34.3 in 1998 from a 1997 total
of $8.5 million. The increase is attributable to higher debt levels related to
the Recapitalization, which occurred on April 1, 1998.

INCOME TAX EXPENSE

WKI's effective tax rate varies between years due to certain tax
adjustments, which were made as a result of the Recapitalization. For 1998, WKI
recorded income tax expense of $0.9 million on net pretax losses of
$32.7 million. Income tax expense for 1998 reflects certain non-deductible
expenses relating to the Recapitalization and an increase to the valuation
allowance for net operating loss carry forwards. The effective tax rate for 1997
was 48%. For periods prior to the Recapitalization, WKI was included in the
consolidated federal income tax return filed by Corning and maintained a tax
sharing arrangement with Corning which required WKI to compute the provision for
income taxes on a separate return basis and pay to, or receive from, Corning the
separate U.S. federal income tax return liability or benefit, if any.

ADJUSTED EBITDA (EARNINGS BEFORE NET INTEREST EXPENSE, INCOME TAXES,
DEPRECIATION AND AMORTIZATION, RESTRUCTURING EXPENSES, TRANSACTION AND
INTEGRATION RELATED EXPENSE, MINORITY INTEREST AND EXTRAORDINARY CHARGE)

As a result of the factors discussed above, EBITDA decreased by
$2.3 million to $68.7 million from $70.9 million in 1997.

LIQUIDITY AND CAPITAL RESOURCES

RECAPITALIZATION

On March 2, 1998, Corning, Borden, the Company and CCPC Acquisition Co.
entered into the Recapitalization Agreement, pursuant to which on April 1, 1998
CCPC Acquisition Co. acquired 92.0% of the outstanding shares of Common Stock of
the Company from Corning for $110.4 million. The stock acquisition was financed
by an equity investment in CCPC Acquisition Co. by BW Holdings, an affiliate of
KKR and the parent Company of Borden and CCPC Acquisition Co. Pursuant to the
Recapitalization Agreement, on the closing date prior to the consummation of the
stock acquisition, the Company paid a cash dividend to Corning of
$472.6 million. On July 10, 1998, post-closing adjustments to the cash dividend
were agreed upon by the Company and Corning, and the Company distributed
$10.2 million to Corning. As a result of the Recapitalization, Corning continues
to hold 8.0% of the outstanding shares of common stock.

ACQUISITIONS

Effective September 13, 1999 and October 21, 1999 the Company acquired the
outstanding stock of EKCO and GHC, respectively. The financial statements
include the results of EKCO's and GHC's operations from the dates of the
acquisitions.

revolving credit facilities. The addition of GHC expanded WKI's product
offerings to include cutlery, precision cutting tools and innovative high
quality kitchen and household tools.

The acquisitions were accounted for under the purchase method of accounting.
Accordingly, the purchase price of EKCO and GHC have been allocated to the
assets acquired and liabilities assumed based on the fair values at the
effective date of acquisition. Intangible assets, including goodwill and
trademarks, associated with the purchase of EKCO and GHC are $170.4 million and
$118.8 million, respectively. Goodwill relating to the acquisitions is being
amortized over 40 years. Trademarks are being amortized over a period ranging
from 20 to 35 years. The final allocation of the purchase price to the net
assets acquired was not complete for either EKCO and GHC at December 31, 1999.

FINANCING ARRANGEMENTS

The Company incurred substantial indebtedness as a result of the
Recapitalization. On April 1, 1998, the Company entered into an interim
financing agreement with Borden and BW Holdings, an affiliate of Borden,
providing $471.6 million in financing at 9.5% maturing December 31, 1998. The
interim financing was repaid in May 1998 with the proceeds of borrowings under
senior credit facilities from a syndicate of banks and other financial
institutions and the issuance of senior subordinated notes in a private
placement. On October 23, 1998, the Company exchanged the privately placed
senior subordinated notes for 9 5/8% Series B Senior Subordinated Notes due 2008
(the "Notes") which have been registered under the Securities Act.

On October 25, 1999 the Company borrowed $71.5 million from an affiliate,
Borden Inc., to assist in the financing of the acquisitions. On November 15,
1999 the Company added a term loan of $100 million to its senior credit
facilities and used the proceeds. The proceeds of which were used to refinance
the indebtedness, including that with Borden, incurred in connection with the
acquisitions of EKCO and GHC, including indebtedness owed to Borden.

The senior credit facilities provide term loans of $298.0 million and a
revolving credit facility of up to $275.0 million of which $298.0 million and
$175.0 million (including approximately $11.0 million of letter of credit)
respectively, were outstanding at December 31, 1999. The senior credit
facilities provide for nominal annual amortization of the term loans and final
maturity in 2006 except for the additional $100.0 million term loan which
matures in 2007. The senior credit facilities contain provisions under which
interest rates on the term loans and the revolving credit loans are adjusted in
increments based on the rate of consolidated total debt to adjusted cash flow.
At December 31, 1999, the term loan rate was at 8.96% and the weighted average
interest rate for the revolving credit facility was 8.79%. The commitments for
revolving credit loans expire in 2005. The Company expects that its working
capital needs and other requirements will require it to obtain replacement
revolving credit facilities at that time. The 9 5/8% Series B Senior
Subordinated Notes carry a principal amount of $200.0 million and mature in
2008. The Notes are subordinate and junior in right of payment to all existing
and future senior indebtedness of the Company, including all indebtedness under
the senior credit facilities.

The obligations of the Company under the Notes and the indenture relating to
the Notes have not been guaranteed by subsidiaries of the Company. The credit
facilities contain numerous financial and operating covenants that will limit
the discretion of the Company's management with respect to certain business
matters. These covenants place significant restrictions on, among other things,
the ability of the Company to incur additional indebtedness, pay dividends and
other distributions, prepay subordinated indebtedness, enter into sale and
leaseback transactions, create liens or other encumbrances, make capital
expenditures, make certain investments or acquisitions, engage in certain
transactions with affiliates, sell or otherwise dispose of assets and merge or
consolidate with other entities and otherwise restrict corporate activities. In
addition, the credit facilities also require the Company to meet certain
financial ratios and tests including a ratio of debt to EBITDA and EBITDA

to cash interest expense (where EBITDA represents adjusted cash flow as
described more fully in the credit facilities). The credit facilities and the
indenture contain customary events of default. The Company was in compliance
with its covenants at December 31, 1999.

In connection with the acquisition of EKCO the Company assumed $3.4 million
in 9 1/4 series B senior notes and $2.1 million in industrial revenue bonds.
With the exception of the asset sale covenant, each of the principal covenants
in the senior notes relating to the EKCO senior notes are no longer in effect.

CASH FLOWS

1999

OPERATING ACTIVITIES

In 1999, the Company's operating activities used cash of $32.4 million
compared to a generation of $58.8 million during the same period in 1998. The
decrease is primarily associated with cash charges related to the acquisitions
including professional fees and compensation costs and cash spent on the
manufacturing consolidation and rationalization project and enterprise-wide
computer installation. In addition cash management activities deferred certain
1998 cash payments to 1999.

INVESTING ACTIVITIES

Investing activities used cash of $421.5 million in 1999 compared to
$23.2 million in 1998. The Company spent $228.0 million and $158.1 million on
the acquisition of EKCO and GHC, net of cash acquired, respectively. In addition
capital expenditures were $35.7 million, an increase of $12.5 million over the
1998 total of $23.2 million. EKCO and GHC contributed $3.8 million of capital
expenditures in 1999. The remainder of the increase is attributable to the
manufacturing consolidation and rationalization project and the implementation
of the enterprise-wide computer system.

FINANCING ACTIVITIES

Cash generated from financing activities was $453.2 million in 1999 compared
to a use of $30.9 million in 1998. The fluctuation is entirely attributable to
the acquisitions of EKCO and GHC. To finance the acquisitions the Company issued
common stock of $150.0 million to its parent and junior preferred stock of
$50.0 million to Borden. In addition the Company added a $100.0 million term
loan to its credit facilities. The remainder of the acquisition, approximately
$88 million, was funded through borrowings on the Company's revolving credit
facility. The Company had approximately $100 million of borrowing capacity on
its revolving line of credit at December, 31 1999.

1998

Cash inflows generated from tightened cash management activities and the
inventory reduction program were offset by the decline in sales and operating
income as compared to 1997. In 1998 the Company's operating activities generated
cash of $58.8 million compared to cash provided by operating activities of
$67.4 million during the same period in 1997. Investing activities used cash of
$23.2 million in 1998 compared to $26.2 million in 1997, due to lower capital
expenditures in 1998. Net cash used in financing operating totaled
$30.9 million for 1998 compared to $45.0 million for the same period in 1997,
due primarily to the transactions associated with the Recapitalization and the
subsequent reduction in borrowing under the revolving credit facility with cash
generated from operations.

The Company anticipates capital expenditures to approximate $60.0 million in
2000.

The Company may be required cash for a potential payment of up to
$15.0 million to Corning in 2001 in the event the Company achieves certain
cumulative gross margin levels for the three-year period ended December 31,
2000.

The Company currently believes that cash flow from operating activities,
together with borrowings available under the revolving credit facility, will be
sufficient to fund the Company's currently anticipated working capital
requirements, capital expenditures, interest payments and scheduled principal
payments. Any future acquisitions, joint ventures or other similar transactions
will likely require additional capital and there can be no assurance that any
such capital will be available to the Company on acceptable terms or at all.

RESTRUCTURING

In 1999 the Company initiated a plan to restructure its manufacturing and
supply organization to reduce costs through the elimination of under-utilized
capacity, unprofitable product lines and increased utilization of the remaining
facilities. Management believes that the changes will improve the Company's
ability to compete by opening up diverse sources of supply both in the United
States and internationally.

The restructuring includes the discontinuation of the commercial tableware
product line and closure of the related portion of the Company's manufacturing
facility in Charleroi, Pennsylvania. In order to improve the utilization of the
Charleroi facility the Company moved Corelle-Registered Trademark- cup
production to its Martinsburg, West Virginia facility and to third party
suppliers. The Company terminated its supply contract with Corning's Greenville,
Ohio facility and Pyrex-Registered Trademark- production was consolidated at the
Charleroi facility. Additionally, the Company discontinued manufacturing and
distributing rangetop cookware and closed its manufacturing and distribution
center in Clinton, Illinois. Future supply will be sourced from third party
manufacturers.

The cash and non-cash elements of the restructuring charge approximate
$15.2 million and $53.8 million, respectively. The Company has spent
$10.2 million in cash on the program to date. The remaining cash charges will
primarily be incurred in the first quarter of 2000.

RISK MANAGEMENT

The Company primarily has market risk in the areas of foreign currency and
fixed interest rate debt. The Company invoices most of its international sales
in US dollars, minimizing the effect of foreign exchange gains or losses on its
earnings. As a result, the Company foreign sales are affected by currency
fluctuations verses US dollar invoicing.

Currency exchange fluctuations significantly affect the Company's foreign
sales and earnings. The strength of the U.S. dollar has increased, in 1999, and
may in future periods, increase the effective price of the Company's products
sold in U.S. dollars with the result of materially adversely affecting sales.
The Company's costs are predominantly denominated in U.S. dollars. With respect
to sales conducted in foreign currencies, increased strength of the U.S. dollar
decreases the Company's reported revenues and margins in respect of such sales
to the extent WKI is unable or determines not to increase local currency prices.

At December 31, 1999, the Company had $207.8 million in fixed rate debt
outstanding. The Company realizes gains and losses on these financial
instruments as the market interest rates fluctuate. The fair value of the
Company's fixed rate debt at December 31, 1999, was $217.5 million resulting
from changes in market conditions, primarily interest rates.

A summary of all the Company's outstanding debt is as follows. Fair values
are determined from quoted market interest rates at December 31, 1999.

1999 1998
--------------------------------------------- ---------------------------------------------
WEIGHTED FAIR WEIGHTED FAIR
DEBT AVERAGE VALUE DEBT AVERAGE VALUE
YEAR (IN MILLIONS) INTEREST RATE (IN MILLIONS) (IN MILLIONS) INTEREST RATE (IN MILLIONS)
- ---- ------------- ------------- ------------- ------------- ------------- -------------

2000........................... $ 3,650 8.4% $ 3,650 $ 2,545 6.6% $ 2,618
2001........................... 3,615 9.3% 3,648 2,563 6.6% 2,636
2002........................... 3,639 8.3% 3,674 2,579 6.6% 2,652
2003........................... 3,537 8.5% 3,571 2,477 6.7% 2,550
2004........................... 3,152 9.1% 3,186 2,152 6.7% 2,215
2005 and thereafter............ 655,310 9.2% 668,451 423,794 9.5% 443,323
-------- -------- -------- --------
$672,903 686,180 436,110 455,984
Current Maturities............. (3,650) (3,650) (2,545) (2,618)
-------- -------- -------- --------
$669,253 $682,530 $433,656 $453,376
======== ======== ======== ========

IMPACT OF THE YEAR 2000 ISSUES:

The Company completed its Year 2000 preparedness program on a timely basis.
Costs to complete the program included investments in enterprise-wide
information systems of approximately $19.3 million and an approximate
$1.1 million to make the remaining systems Year 2000 compliant. Since the
rollover to January 1, 2000, the Year 2000 issue has not significantly impacted
the operations or results of the Company, its suppliers or its customers.
Although management cannot provide assurances regarding the impact of the Year
2000 issue on suppliers and customers, the potential future disruption caused by
such parties, if any, are expected to be isolated and not materially impact the
financial condition or results of the Company.

Readers are cautioned that forward-looking statements contained in the Year
2000 Update should be read in conjunction with the disclosure under the heading:
"Forward-Looking and Cautionary Statements".

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging

Activities." This standard required all derivatives be measured at fair value
and recorded on a company's balance sheet as an asset or liability, depending
upon the company's underlying rights or obligations associated with the
derivative instrument. In June 1999, the FASB issued SFAS No. 137, "Accounting
for Derivative Instruments and Hedging Activities--Deferral of the Effective
Date of FASB Statement No. 133. "This statement defers the effective date of
SFAS No. 133 to all fiscal quarters of all fiscal years beginning after
June 15, 2000. The Company continues to investigate the impact of this
pronouncement.

FORWARD-LOOKING AND CAUTIONARY STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements. The factors discussed below,
among others, could cause actual results to differ materially from those
contained in forward-looking statements made in this report, including without
limitation, in "Management's Discussion and Analysis of Financial Condition and
Results of Operations," in the Company's related press releases and in oral
statements made by authorized officers of the Company. When used in this report,
any press release or oral statement, the words "looking forward," "estimate,"
"project," "anticipate," "expect," "intend," "believe" and similar expressions
are intended to identify a forward-looking statement. Forward-looking statements
are not guarantees of future performance and are subject to risks, uncertainties
and other factors (many of which are beyond the Company's control) that could
cause actual results to differ materially from future results expressed or
implied by such forward-looking statements. The forward-looking statements
regarding such matters are based on certain assumptions and analyses made by the
Company in light of its experience and its perception of historical trends,
current conditions and expected future developments, as well as other factors it
believes are appropriate in the circumstances. Whether actual results and
developments will conform with the Company's expectations and predictions,
however, is subject to a number of risks and uncertainties, in addition to the
risk factors discussed above, including: integration of the Company's
acquisitions of General Housewares Corp. and Ekco Group, Inc., failure to
resolve system implementation issues, a global economic slowdown in any one, or
all, of the Company's sales categories; loss of sales as the Company streamlines
and focuses on strategic accounts; unpredictable difficulties or delays in the
development of new product programs; increasing reliance on third party
manufacturers, increased difficulties in obtaining a consistent supply of basic
raw materials such as sand, soda ash, steel or copper and energy inputs such as
electrical power or natural gas at stable pricing levels; development by the
Company of an adequate administrative infrastructure; technological shifts away
from the Company's technologies and core competencies; unforeseen interruptions
to the Company's business with its largest customers resulting from, but not
limited to, financial instabilities or inventory excesses; the effects of
extreme changes in monetary and fiscal policies in the United States and abroad,
including extreme currency fluctuations and unforeseen inflationary pressures
such as those recently experienced by certain Asian economies; drastic and
unforeseen price pressures on the Company's products or significant cost
increases that cannot be recovered through price increases or productivity
improvements; significant changes in interest rates or in the availability of
financing for the Company or certain of its customers; loss of any material
intellectual property rights; any difficulties in obtaining or retaining the
management or other human resource competencies that the Company needs to
achieve its business objectives; and other factors, many of which are beyond the
control of the Company. Consequently, all of the forward-looking statements made
in this Form 10-K are qualified by these cautionary statements, and there can be
no assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequences to or effects on the Company and its subsidiaries or their
business or operations.

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

Refer to the "Risk Management" section included in Item 7--Management's
Discussion and Analysis of Financial Condition and Results of Operations.

ITEM 8--FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CONSOLIDATED STATEMENTS OF OPERATIONS
WKI HOLDING COMPANY, INC. AND SUBSIDIARIES
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

YEAR ENDED DECEMBER 31,
---------------------------------------
1999 1998 1997
----------- ----------- -----------

Net sales............................................. $ 617,578 $ 533,068 $ 572,860
Cost of sales......................................... 408,414 349,953 376,304
Selling, general and administrative expenses.......... 160,857 146,927 137,315
Other corporate administrative expenses............... -- -- 18,408
Provision for restructuring costs..................... 68,984 4,772 --
Transaction and integration related expenses.......... 9,157 28,866 --
Other (income) expense, net........................... (2,870) 926 5,629
----------- ----------- -----------
Operating (loss) income............................... (26,964) 1,624 35,204
Interest expense, net................................. 48,136 34,290 8,481
----------- ----------- -----------
(Loss) income before taxes on income.................. (75,100) (32,666) 26,723
Income tax (benefit) expense.......................... (47,254) 947 12,734
----------- ----------- -----------
(Loss) income before minority interest................ (27,846) (33,613) 13,989
Minority interest in (earnings) loss of subsidiary.... (212) 301 (295)
----------- ----------- -----------
(Loss) income before extraordinary charge............. (28,058) (33,312) 13,694
Early extinguishments of debt, net of $4,298 tax
benefit............................................. (6,393) -- --
----------- ----------- -----------
Net (loss) income..................................... (34,451) (33,312) 13,694
Preferred stock dividends............................. (5,648) (2,782) --
----------- ----------- -----------
NET (LOSS) INCOME APPLICABLE TO COMMON STOCK.......... $ (40,099) $ (36,094) $ 13,694
=========== =========== ===========
BASIC AND DILUTED (LOSS) EARNINGS BEFORE EXTRAORDINARY
CHARGE PER COMMON SHARE............................. $ (1.08) $ (1.50) $ 0.57
=========== =========== ===========
BASIC AND DILUTED (LOSS) EARNINGS PER COMMON SHARE.... $ (1.29) $ (1.50) $ 0.57
=========== =========== ===========
Weighted average number of common shares outstanding
during the period................................... 31,142,857 24,000,000 24,000,000

The accompanying notes are an integral part of these statements.

CONSOLIDATED BALANCE SHEETS

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES
(IN THOUSANDS)

DECEMBER 31, 1999 DECEMBER 31, 1998
----------------- -----------------

ASSETS
CURRENT ASSETS
Cash and cash equivalents................................. $ 8,368 $ 9,057
Accounts receivable, net of allowances--$8,755 in 1999 and
$11,172 in 1998......................................... 141,308 62,511
Inventories:
Finished and in-process goods........................... 195,200 113,690
Raw materials and supplies.............................. 27,411 18,345
Deferred taxes on income.................................. 25,303 8,181
Other current assets...................................... 20,816 7,412
--------- ---------
Total current assets.................................... 418,406 219,196
--------- ---------
OTHER ASSETS
Deferred income taxes..................................... 23,583 40,867
Other assets (net of accumulated amortization of $14,499
in 1999 and $14,525 in 1998)............................ 43,495 26,721
--------- ---------
67,078 67,588
--------- ---------
PROPERTY AND EQUIPMENT
Land...................................................... 4,996 2,453
Buildings and improvements................................ 86,873 61,591
Machinery and equipment................................... 303,949 282,807
--------- ---------
395,818 346,851
Less accumulated depreciation............................. (241,788) (205,449)
--------- ---------
154,030 141,402
--------- ---------
INTANGIBLES
Trademarks (net of accumulated amortization of $3,384 in
1999 and $2,289
in 1998)................................................ 165,487 8,356
Goodwill (net of accumulated amortization of $8,740 in
1999 and $8,369 in 1998)................................ 174,678 58,717
--------- ---------
340,165 67,073
--------- ---------
TOTAL ASSETS................................................ $ 979,679 $ 495,259
========= =========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable.......................................... $ 56,346 41,925
Debt payable within one year.............................. 3,650 3,986
Other current liabilities................................. 111,800 58,413
--------- ---------
171,796 104,324
--------- ---------
OTHER LIABILITIES
Long-term debt............................................ 669,253 433,656
Non-pension post-retirement benefit obligations........... 37,113 31,432
Other long-term liabilities............................... 15,090 5,344
--------- ---------
721,456 470,432
--------- ---------
Commitments (Note 11)

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock--5,000,000 shares authorized; 3,200,000 and
1,200,000 shares issued in 1999 and 1998, respectively.... 88,430 32,782
Common Stock--$0.01 par value, 75,000,000 shares authorized;
66,857,143 and 24,000,000 shares issued and outstanding in
1999 and 1998, respectively............................... 669 240
Contributed capital......................................... 603,226 453,655
Accumulated deficit......................................... (604,112) (564,013)
Accumulated other comprehensive income...................... (1,786) (2,161)
--------- ---------
Total stockholders' equity (deficit).................... 86,427 (79,497)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)...... $ 979,679 $ 495,259
========= =========

The accompanying notes are an integral part of these statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(IN THOUSANDS)

YEAR ENDED DECEMBER 31,
------------------------------
1999 1998 1997
-------- -------- --------

CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net (loss) income........................................... $(34,451) $(33,312) $13,694
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation and amortization............................. 34,398 33,392 35,706
Amortization of deferred financing fees................... 1,744 3,214 --
Minority interest in (earnings) losses of subsidiary...... 211 (301) 295
Loss on disposition of plant and equipment................ -- 791 1,596
Deferred tax provision.................................... (49,418) 2,329 5,562
Provision for restructuring costs, net of cash paid....... 58,800 4,281 --
Provision for postretirement benefits, net of cash paid... 3,125 4,438 3,274
Change in accounting for inventories...................... -- -- (656)
Changes in operating assets and liabilities:
Accounts receivable....................................... (20,409) 9,920 12,084
Inventories............................................... 3,754 1,082 (1,843)
Prepaid expenses and other current assets................. (13,002) (2,202) 2,159
Accounts payable and accrued expenses..................... (6,019) 29,174 (4,072)
Other assets/liabilities.................................. (11,129) 6,035 (380)
-------- -------- -------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES..... (32,396) 58,841 67,419
-------- -------- -------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Additions to property and equipment and other assets...... (35,694) (23,237) (28,600)
Acquisition of businesses, net of cash acquired........... (385,815) -- --
Other, net................................................ -- -- 2,392
-------- -------- -------
NET CASH USED IN INVESTING ACTIVITIES................... (421,509) (23,237) (26,208)
-------- -------- -------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Issuance of long-term debt................................ 100,000 400,000 --
Borrowing on revolving credit facility.................... 160,344 27,177 --
Borrowing from affiliate.................................. 71,500 -- --
Payments to affiliate..................................... (71,500) -- --
Repayment of long-term debt, other than revolving credit
facility................................................ (4,031) (1,806) (5,189)
Interim financing......................................... -- 471,600 --
Repayment of interim financing............................ -- (471,600) --
Dividend to Corning Incorporated.......................... -- (482,760) --
Decrease in net amounts due to Corning Incorporated....... -- (87,142) (40,178)
Shareholder capital (distribution) contribution........... -- 100,736 410
Issuance of preferred stock............................... 50,000 30,000 --
Issuance of common stock.................................. 150,000 240 --
Deferred financing fees................................... (3,097) (17,337) --
-------- -------- -------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES..... 453,216 (30,892) (44,957)
-------- -------- -------
Net change in cash and cash equivalents..................... (689) 4,712 (3,746)
Cash and cash equivalents at beginning of year.............. 9,057 4,345 8,091
-------- -------- -------
CASH AND CASH EQUIVALENTS AT END OF YEAR.................... $ 8,368 $ 9,057 $ 4,345
======== ======== =======

The accompanying notes are an integral part of these statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(IN THOUSANDS)

YEAR ENDED DECEMBER 31,
------------------------------
1999 1998 1997
-------- -------- --------

SUPPLEMENTAL DATA:
Cash paid during the year for:
Income taxes, net......................................... $ 4,290 $ 850 $ 380
Interest.................................................. 41,099 32,860 8,283
Details of acquisition:
Fair value of assets...................................... 525,851 -- --
Liabilities............................................... 138,130 -- --
-------- -------- -------
Cash paid................................................. 387,721 -- --
Less: cash acquired....................................... 1,906 -- --
-------- -------- -------
Net cash paid for acquisitions.............................. 385,815 -- --
Non-cash activity:
Net increase to deferred taxes resulting from the
Recapitalization........................................ -- 13,471 --
Adjustment to postretirement liability for amounts assumed
by Corning.............................................. -- 31,998 --
Adjustment to pension liability for amounts assumed by
Corning................................................. -- 17,669 --
Adjustment to accounts payable for liabilities retained by
Corning................................................. -- 7,913 --
Preferred stock dividends................................. $ 5,648 $ 2,782 $ --

The accompanying notes are an integral part of these statements.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(IN THOUSANDS)

ACCUMULATED TOTAL
OTHER STOCKHOLDERS'
PREFERRED COMMON CONTRIBUTED ACCUMULATED COMPREHENSIVE (DEFICIT)
STOCK STOCK CAPITAL DEFICIT INCOME EQUITY
--------- -------- ----------- ----------- ------------- -------------

Balance, December 31, 1996........ $ -- $ -- $273,660 $ (58,853) $ (794) $214,013

Net income........................ 13,694 13,694
Foreign currency translation
adjustment, net of tax.......... (1,004) (1,004)
--------
Total comprehensive income........ 12,690
Capital contribution.............. 410 410
------- ---- -------- --------- ------- --------
Balance, December 31, 1997........ $ -- $ -- $274,070 $ (45,159) $(1,798) $227,113

Net loss.......................... (33,312) (33,312)
Foreign currency translation
adjustment, net of tax.......... (363) (363)
--------
Total comprehensive income........ (33,675)
24,000-for-one stock split........ --
Issuance of preferred stock....... 30,000 240 (240) 30,000
Preferred stock dividends......... 2,782 (2,782) --
Capital contribution.............. 179,825 179,825
Dividend to Corning
Incorporated.................... (482,760) (482,760)
------- ---- -------- --------- ------- --------
Balance, December 31, 1998........ $32,782 $240 $453,655 $(564,013) $(2,161) $(79,497)

Net loss.......................... (34,451) (34,451)
Foreign currency translation
adjustment, net of tax.......... 375 375
--------
Total comprehensive income........ (34,076)
Issuance of common stock.......... 429 149,571 150,000
Issuance of preferred stock....... 50,000 50,000
Preferred stock dividends......... 5,648 (5,648)
------- ---- -------- --------- ------- --------
Balance, December 31, 1999........ $88,430 $669 $603,226 $(604,112) $(1,786) $ 86,427
======= ==== ======== ========= ======= ========

The accompanying notes are an integral part of these statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(1) NATURE OF OPERATIONS AND BASIS OF PRESENTATION

WKI Holding Company, Inc. and subsidiaries (formerly known as CCPC Holding
Company, Inc.), (the Company or WKI) is a leading manufacturer and marketer of
housewares, including bakeware, dinnerware, rangetop cookware, kitchen and
household products, cleaning products, cutlery and precision cutting tools. The
Company believes that its brands, including Corningware-Registered Trademark-,
Pyrex-Registered Trademark-, Corelle-Registered Trademark-, Revere
Ware-Registered Trademark-, Visions-Registered Trademark-,
EKCO-Registered Trademark-, Via-Registered Trademark-, Baker's
Secret-Registered Trademark-, Chicago Cutlery-Registered Trademark-, Clean
Results-Registered Trademark-, OLO-Registered Trademark-,
OXO-Registered Trademark- and Grilla Gear-Registered Trademark- constitute one
of the broadest and best recognized collection of brands in the housewares
industry.

Effective April 1, 1998, the Company was no longer a wholly-owned subsidiary
of Corning Inc. (Corning). The consolidated balance sheet at December 31, 1999
and 1998, the consolidated statements of operations for the years ended
December 31, 1999 and 1998, and the consolidated statements of cash flows for
the years ended December 31, 1999 and 1998, reflect the Recapitalization (see
Note 3). The consolidated statement of operations and the consolidated statement
of cash flows for the year ended December 31, 1997 presents the Company as a
wholly-owned subsidiary of Corning Incorporated (Corning) prior to the
Recapitalization.

Effective September 13, 1999 and October 21, 1999 the Company acquired the
outstanding stock of The Ekco Group Inc. (EKCO) and General Housewares Corp.
(GHC), respectively. The acquisitions were accounted for under the purchase
method of accounting and the 1999 financial statements include the results of
EKCO's and GHC's operations from the date of the acquisitions (see Note 4).

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements were prepared in accordance with
generally accepted accounting principles, the most significant of which include:

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of all entities
controlled by the Company. All significant intercompany accounts and
transactions are eliminated. Certain subsidiaries of the Company were
consolidated at dates up to one month earlier than the consolidated financial
statements.

USE OF ESTIMATES

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 and
disclosure of contingent 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.

TRANSLATION OF FOREIGN CURRENCIES

Balance sheet accounts of foreign subsidiaries are translated at current
exchange rates and income statement accounts are translated at average exchange
rates for the year. Translation gains and losses are accumulated in a separate
component of stockholders' equity. Foreign currency transaction gains and losses
affecting cash flows are included in current earnings.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CASH EQUIVALENTS

Cash equivalents consist of government securities with original maturities
of three months or less.

INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out) or market.
Effective April 1, 1998, the Company changed its method of determining the cost
of inventories from the LIFO method to the FIFO method for the predominant
portion of its inventories. The Company believes that the change to the FIFO
method is preferable because of planned inventory reductions, recent historical
and forecasted low inflation, and because it better reflects current inventory
values. All previously reported results have been restated to reflect the
retroactive application of this accounting change as required by generally
accepted accounting principles. The impact of the accounting change increased
cost of sales for 1998 by $176 or $0.01 per share. Net income previously
reported for 1997 was increased by $656 or $0.03 per share.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Depreciation is calculated
using straight-line and accelerated methods based on the estimated useful lives
of the assets as follows: buildings and improvements, 8-30 years; equipment
3-25 years; and leasehold improvements, over the lease periods.

TRADEMARKS AND GOODWILL

The cost of trademarks and goodwill represents the excess of cost over
identifiable net assets of businesses acquired. Trademarks are amortized over
their estimated economic useful lives, which range from 20 to 35 years. The
amortization period assigned to goodwill is 40 years.

IMPAIRMENT ACCOUNTING

The Company reviews the recoverability of its long-lived assets, including
goodwill and other intangible assets, when events or changes in circumstances
occur that indicate that the carrying value of the asset may not be recoverable.
The assessment of possible impairment is based on the Company's ability to
recover the carrying value of the asset from the expected future pre-tax cash
flows (undiscounted and without interest charges) of the related operations. If
the expected undiscounted pre-tax cash flows are less than the carrying value of
such assets, an impairment loss is realized for the difference between estimated
fair value and carrying value. The measurement of impairment requires management
to make estimates of expected future cash flows related to long-lived assets. It
is at least reasonably possible that future events or circumstances could cause
these estimates to change.

STOCK BASED COMPENSATION

Certain employees of the Company participate in the stock compensation plans
of Corning. The Company accounts for compensation cost under these plans using
the intrinsic value method of accounting prescribed by Accounting Principles
Board Opinion No. 25 "Accounting for Stock Issued to Employees." Compensation
expense is recorded for awards of shares over the period earned. During 1996,
the Company adopted the disclosure provisions of Statement of Financial
Accounting Standards

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
No. 123 "Accounting for Stock-Based Compensation" which defines a fair
value-based method of accounting for stock-based compensation.

REVENUE RECOGNITION

Revenues are recognized when products are shipped.

ADVERTISING AND PROMOTION COSTS

Production costs of future media advertising are deferred until the
advertising first occurs. All other advertising costs are expensed when
incurred. Cooperative advertising is generally expensed ratably over the year in
relation to revenues or other performance measured. Cooperative advertising is
recorded in the financial statements as a reduction of sales because it is
viewed as part of the negotiated price of its products. All other advertising
costs are charged to selling, general and administrative expenses.

INCOME TAXES

The Company uses the asset and liability approach to account for income
taxes. Under this method, deferred tax assets and liabilities are recognized for
the expected future tax consequences of differences between the carrying amounts
of assets and liabilities and their respective tax bases using enacted tax rates
in effect for the year in which the differences are expected to reverse. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period when the change is enacted. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company primarily uses two types of derivatives: interest rate swaps
(which effectively convert a portion of the Company's variable rate obligations
to fixed) and forward exchange contracts (which reduce the Company's cash flow
exposure to changes in foreign exchanges rates). The Company enters into
interest rate swaps to lower funding costs or to alter interest rate exposures
between fixed and floating rates on long-term debt. Under interest rate swaps,
the Company agrees with other parties to exchange, at specific intervals, the
difference between fixed rate and floating rate interest amounts calculated by
reference to an agreed notional principal amount. Interest rate swaps that are
in excess of outstanding obligations are marked to market through other income
and expenses. At December 31, 1999, the Company had a $15.0 million notional
amount interest rate swap outstanding and was receiving a weighted average
variable base rate of 5.7% and paying a fixed base rate of 6.3%. 1999 interest
expense increased by less than $0.1 million as a result of the swap. A 1%
increase in market interest rates would result in $0.3 million increase in the
fair value of the interest rate swap. A 1% decline in the interest rates would
result in a $0.3 million decrease in the fair value of the interest rate swap.
The fair values of forward exchange contracts that hedge firm third party
commitments are deferred and recognized in income currently and offset gains and
losses of transaction being hedged. There were no forward exchange contracts
outstanding at December 31, 1999.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income, less dividends
on preferred stock, by the weighted average number of common shares outstanding
during each period. Diluted earnings per share is computed by dividing net
income, less dividends on preferred stock, by the weighted average number of
common shares outstanding during the period after giving effect to dilutive
stock options.

CAPITALIZED COMPUTER SOFTWARE COSTS

Capitalized computer software costs, included in other assets, consist of
costs to purchase and develop software. The Company capitalizes internally
developed software costs based on a project-by-project analysis of each
project's significance to the Company and its estimated useful life. All
capitalized software costs are amortized on a straight-line basis over a period
between three and seven years.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of financial instruments is determined by reference to
various market data and other valuation techniques, as appropriate. Unless
otherwise disclosed, the fair value of short-term instruments approximates their
recorded values due to the nature of the instruments.

RECLASSIFICATIONS

Certain 1998 and 1997 amounts have been reclassified to conform with 1999
presentation.

RECENTLY ISSUED ACCOUNTING STATEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities." This standard requires all derivatives be measured at
fair value and recorded on a company's balance sheet as an asset or liability,
depending upon the company's underlying rights or obligations associated with
the derivative instruments. The Company continues to investigate the impact of
this pronouncement. In June 1999, the Financial Accounting Standards Board
issued statement of Financial Accounting Standards No. 137, "Accounting for
Derivative Instruments and Hedging Activities--Deferral of the Effective Date of
FASB Statement No. 133." This statement defers the effective date of statement
No. 133 to all fiscal quarters of all fiscal years beginning after June 15,
2000. The Company plans to implement Statement No. 133 January 1, 2001.

Also in 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities." SOP
98-5 requires the cost of opening a new facility, introducing a new product or
service, conducting business in a new market, or similar start-up activities to
be expensed as incurred. Amounts previously capitalized should be expensed and
reported as a cumulative effect of a change in accounting principle in the year
of adoption. Adoption of SOP 98-5 had no impact on the Company.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(3) RECAPITALIZATION

On March 2, 1998, Corning, the Company, Borden Inc. (Borden), and CCPC
Acquisition Corp. entered into a Recapitalization Agreement.

On March 16, 1998, the Company's board of directors approved a 24,000-for-1
common stock split. This increased the common shares outstanding from 1,000 to
24,000,000. In addition, the Board of Directors approved an increase in the
number of authorized shares from 1,000 to 45,000,000 and established a par value
of $0.01 per share. Share amounts have been restated for all periods presented.

On April 1, 1998, pursuant to the Recapitalization Agreement, CCPC
Acquisition Corp. acquired 22,080,000, or 92%, of the outstanding shares of
common stock of the Company from Corning for $110.4 million. The Company then
borrowed $471.6 million and paid a cash dividend to Corning of $472.6 million.
Corning retained 1,920,000, or 8%, of the outstanding shares of common stock of
the Company. Also on April 1, 1998, the Company issued and sold 1,200,000 shares
of junior preferred stock to CCPC Acquisition Corp. for $30.0 million. The
Company paid an additional $10.2 million to Corning in July 1998 relating to
certain provisions of the Recapitalization Agreement.

(4) ACQUISITIONS

Effective September 13, 1999 and October 21, 1999 the company acquired the
outstanding stock of EKCO and GHC, respectively. The financial statements
include the results of EKCO's and GHC's operations from the date of the
acquisitions.

The Company acquired EKCO for approximately $229 million, including the
assumption of $3.4 million in 9 1/4 series B senior notes due in 2006,
$2.1 million of industrial revenue bonds and other debt and transaction fees.
The Company financed this acquisition through the issuance of $150 million in
common stock from the Company's parent, $71.5 million short term borrowing from
an affiliate of the Company's parent and borrowing under the Company's existing
credit facility.

The Company acquired GHC for approximately $159 million, including the
repayment of debt and transaction fees. The Company financed the acquisition
through the issuance of $50 million in Junior Preferred Stock to an affiliate of
the Company's parent and borrowings under the Company's existing revolving
credit facilities. The addition of GHC expanded WKI's product offerings to
include cutlery, precision cutting tools and innovative high quality kitchen and
household tools.

The acquisitions were accounted for under the purchase method of accounting.
Accordingly, the purchase prices have been allocated to the assets acquired and
liabilities assumed based on the fair values at the dates of acquisition.
Intangible assets including goodwill and trademarks associated with the purchase
of EKCO and GHC are $170.4 million and $118.9 million, respectively, and are
being amortized over 40 years. Trademarks associated with the purchase of EKCO
and GHC are $90.1 million and $68.7 million, respectively, and are being
amortized over periods ranging from 20 to 35 years. The final allocation of the
purchase price to the net assets acquired is not complete for both EKCO and GHC
at December 31, 1999.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(4) ACQUISITIONS (CONTINUED)
The following unaudited pro forma results of operations give effect to the
EKCO and GHC acquisitions as if they had occurred on January 1, 1998.

(IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS)
(UNAUDITED)
---------------------
1999 1998
--------- ---------

Net sales............................................... $823,674 $865,888
Loss before extraordinary losses........................ (47,897) (54,711)
Net loss applicable to common stock..................... (68,046) (65,927)
Earnings per share before extraordinary losses.......... (0.72) (0.82)
Earnings per share after extraordinary losses........... (1.02) (0.99)

The pro forma information provided does not purport to be indicative of
actual results of operations if the EKCO and GHC acquisitions had occurred on
January 1, 1998, and is not intended to be indicative of future results or
trends.

(5) SIGNIFICANT CUSTOMER

For the years ended December 31, 1999, 1998 and 1997, approximately 16%, 15%
and 12% respectively of WKI's gross sales were to one customer, Wal-Mart Stores,
Inc. The aggregate accounts receivable balance at December 31, 1999 and 1998
related to Wal-Mart was approximately $25 million and $9.5 million,
respectively.

(6) SUPPLEMENTAL BALANCE SHEET DATA

OTHER CURRENT LIABILITIES

DECEMBER 31,
-------------------
1999 1998
-------- --------

Wages and employee benefits.............................. $ 30,935 $22,954
Accrued advertising and promotion........................ 21,884 13,363
Accrued interest......................................... 10,063 3,410
Other accrued expenses................................... 48,918 18,363
-------- -------
$111,800 $58,090
======== =======

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(7) SUPPLEMENTAL INCOME STATEMENT DATA

YEAR ENDED DECEMBER 31,
------------------------------
1999 1998 1997
-------- -------- --------

Interest income.................................. $ (77) $ (291) $ (493)
Interest expense incurred........................ 48,724 35,287 9,914
Interest capitalized............................. (511) (706) (940)
------- ------- -------
Interest expense, net............................ $48,136 $34,290 $ 8,481
======= ======= =======
Advertising and promotion expenses............... $13,355 $ 9,963 $11,794
======= ======= =======
Research and development expenses................ $ 555 $ 411 $ 380
======= ======= =======

(8) RELATED PARTY TRANSACTIONS

The following transactions with Corning and Borden, Inc. (Borden) are
included in the consolidated statements of operations for the years ended
December 31, 1999, 1998, and 1997:

YEAR ENDED DECEMBER 31,
------------------------------
1999 1998 1997
-------- -------- --------

Centralized services.............................. $7,210 $14,194 $19,201
Other corporate administrative expenses........... -- -- 18,408
Interest income from Corning...................... -- -- 323
Interest expense to Corning....................... -- 1,296 7,833
Interest expense to Borden and an affiliate....... 358 2,368 --
Commission expense................................ -- 1 731
Management fees to Corning........................ -- 437 --
Management fees to Borden......................... 1,500 1,125 --

Corning provided certain administrative and operating support (reflected
above as centralized services) including financial services, information systems
support, risk management, purchasing, transportation, benefit plans
administration, and engineering services. Prior to the Recapitalization, WKI was
charged for this support using various allocation bases including number of
employees, related payroll costs, and direct efforts expended. These costs,
which are included in cost of sales and selling, general, and administrative
expenses are currently charged to WKI by Corning under a transition services
agreement using negotiated rates agreed upon by the management of WKI.
Management believes that the methodology used to allocate the costs is
reasonable, but may not necessarily be indicative of the costs that would have
been incurred had these functions been performed by WKI.

Other corporate administrative expenses related to certain corporate
oversight costs such as tax, treasury, legal, and technical support are provided
by Corning to WKI. WKI is developing its administrative infrastructure and
certain of these functions have been and will be assumed by WKI or performed by
third parties. In 1998 WKI performed many of the administrative services (which
are included in selling, general and administrative expenses following the
Recapitalization) at a lower cost than charged by Corning. The Company has
developed its administrative infrastructure and has

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(8) RELATED PARTY TRANSACTIONS (CONTINUED)
assumed or outsourced to third parties, essentially all of these functions
previously performed by Corning as of December 31, 1999.

Prior to the Recapitalization, amounts due to and from Corning resulting
from intercompany transactions carried interest at a rate based on the 30-day
London Interbank Offered Rate (LIBOR) plus 3/8%.

The 1999 interest expense due to Borden related to short term interim
financing of $71.5 million at 9.4%, which was borrowed and repaid in the fourth
quarter of 1999.

The 1998 interest expense due to Borden and affiliates related to interim
financing of $471 million at 9.5% which was borrowed and repaid during the
second quarter of 1998.

Prior to the Recapitalization, sales were made by WKI to certain Corning
subsidiaries which subsequently resold the products to third parties. WKI paid
these subsidiaries a sales commission for sales made on WKI's behalf. In
addition, Corning utilized the WKI Canada operations as a sales office and paid
commissions on Corning sales generated.

In the first quarter of 1998, prior to the Recapitalization, WKI paid
Corning $0.4 million in management fees.

The Company paid Borden a management fee at an annual rate of $1.5 million
for the period April 1, 1998 through December 31, 1999. Effective January 1,
2000 the Borden management fee increased to $2.5 million annually.

(9) STOCKHOLDERS' EQUITY (DEFICIT)

1998

On March 2, 1998, Corning, WKI, Borden, and CCPC Acquisition Corp. entered
into a Recapitalization Agreement. On March 16, 1998, the WKI board of directors
approved a 24,000-for-1 common stock split. This increased the common shares
outstanding from 1,000 to 24,000,000. In addition, the Board of Directors
approved an increase in the number of authorized shares from 1,000 to 45,000,000
and established a par value of $0.01 per share. Share amounts have been restated
for all periods presented.

On April 1, 1998, pursuant to the Recapitalization Agreement, CCPC
Acquisition Corp. acquired 22,080,000, or 92%, of the outstanding shares of
common stock of WKI from Corning for $110.4 million. Also on April 1, 1998, WKI
issued and sold 1,200,000 shares of Junior Preferred Stock to CCPC Acquisition
Corp. for $30.0 million. WKI then borrowed $471.6 million and paid a cash
dividend to Corning of $472.6 million. Corning retained 1,920,000, or 8%, of the
outstanding shares of common stock of WKI. WKI paid an additional $10.2 million
dividend to Corning in July 1998 relating to certain provisions of the
Recapitalization Agreement.

As a result of the Recapitalization, contributed capital increased by
$179.8 million. The net capital contribution consisted of the assumption of
certain indebtedness, certain post-retirement medical and life insurance
liabilities, certain pension liabilities, workers' compensation, and product
liability obligations by Corning.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(9) STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
WKI has authorized for issuance 5,000,000 shares of preferred stock with a
$25.00 par value. At December 31, 1998, 1,200,000 shares of preferred stock were
outstanding. The preferred stock has a liquidation preference of $25.00 per
share plus accumulated dividends, is senior to all common stock, and carries no
voting or conversion rights. Holders of preferred stock are entitled to receive
cumulative dividends at the rate of $0.75 per share per calendar quarter which
may be paid in cash, additional shares of preferred stock, or in a combination
thereof. WKI declared $2.8 million of preferred stock dividends in 1998. There
were no preferred dividends paid in 1998.

1999

In the fourth quarter of 1999 the WKI board of directors approved an
increase to the number of common shares authorized from 45,000,000 to
75,000,000.

To finance the acquisition of EKCO and GHC the Company issued 42,857,143
additional shares of common stock in the fourth quarter of 1999. The $0.01 par
value common shares were issued at $3.50 to CCPC Acquisition Corp., the
Company's parent, amounting to proceeds of $150 million on the issuance. At
December 31, 1999 the Company had 66,857,143 shares of common stock outstanding.

Also in the fourth quarter, the Company issued $50 million in Junior
Preferred Stock to Borden. The Junior Preferred Stock consists of two million
shares with each share having a liquidation preference of $25.00. The Junior
Preferred Stock provides for the payment of cash dividends of $1.00 per share
per quarter if declared by the Company and if certain financial ratios are
satisfied. At December 31, 1999 the Company had 3,200,000 shares of preferred
stock outstanding and had declared $5.6 million in preferred stock dividends,
none of which was paid in cash.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(10) BORROWINGS

Debt outstanding at December 31, 1999 and 1998 is as follows:

1999 1998
---------------------- ----------------------
DUE WITHIN DUE WITHIN
LONG-TERM ONE YEAR LONG-TERM ONE YEAR
--------- ---------- --------- ----------

Senior credit facility, term loans at an average
rate of 8.96% and 7.63%. $198,000 due 2006,
$100,000 due 2007................................. $295,000 $3,000 $198,000 $2,000

Senior credit facility, revolving line of credit,
at an average rate of 8.79% and 8.12% due 2005.... 164,000 -- 29,400 --

9 5/8% Series B Senior Subordinated Notes due
2008.............................................. 200,000 -- 200,000 --

9 1/4% Senior Series B Subordinated Notes due
2006.............................................. 2,962 -- -- --

Industrial Revenue Bonds (at an average rate of
5.5% and 4.0%).................................... 7,259 541 6,256 1,104

Other international debt........................... 32 109 -- 882
-------- ------ -------- ------

Total debt......................................... $669,253 $3,650 $433,656 $3,986
======== ====== ======== ======

On October 25, 1999 the Company borrowed $71.5 million from an affiliate,
Borden to assist in the financing of the acquisitions. On November 15, 1999 the
Company added a term loan of $100 million to its senior credit facilities. The
proceeds of which were used to refinance the indebtedness, including that with
Borden, incurred in connection with the acquisitions of EKCO and GHC.

The senior credit facilities provide term loans of $298.0 million and a
revolving credit facility of up to $275.0 million of which $298.0 million and
$164.0 million respectively, were outstanding at December 31, 1999. The senior
credit facilities provide for nominal annual amortization of the term loans and
final maturity in 2006 except for the additional $100.0 million loan which
matures in 2007. The senior credit facilities contain provisions under which
interest rates on the term loans and the revolving credit loans are adjusted in
increments based on the percentage of consolidated total debt to adjusted cash
flow.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(10) BORROWINGS (CONTINUED)
the Company to incur additional indebtedness, pay dividends and other
distributions, prepay subordinated indebtedness, enter into sale and leaseback
transactions, create liens or other encumbrances, make capital expenditures,
make certain investments or acquisitions, engage in certain transactions with
affiliates, sell or otherwise dispose of assets and merge or consolidate with
other entities and otherwise restrict corporate activities. The credit
facilities also require the Company to meet certain financial ratios and tests.
The credit facilities and the indenture contain customary events of default. In
addition, the credit facilities also require the Company to meet certain
financial ratios and tests including a ratio of debt to EBITDA and EBITDA to
cash interest expense (where EBITDA represents adjusted cash flow as described
more fully in the credit facilities). The Company was in compliance with its
covenants at December 31, 1999.

In connection with the acquisition of EKCO, the Company assumed
$3.4 million in 9 1/4 series B senior notes and $2.1 million in industrial
revenue bonds. At December 31, 1999 the balance of the EKCO 9 1/4 series B
senior notes and industrial revenue bonds were $3.0 million and $1.6 million,
respectively. With the exception of the asset sale covenant each of the
principal covenants in the senior notes relating to the EKCO senior notes are no
longer in effect.

Long-term debt maturing in each of the years subsequent to December 31, 1999
is as follows:

2000........................................................ $ 3,650
2001........................................................ 3,615
2002........................................................ 3,639
2003........................................................ 3,537
2004........................................................ 3,152
2005--2008.................................................. 655,310
--------
$672,903
Less: current maturities.................................... (3,650)
--------
$669,253
========

Based on borrowing rates currently available to WKI for loans with similar
terms and maturities, the fair value of loans payable beyond one year was
$682.5 million at December 31, 1999.

(11) COMMITMENTS

The Company is a defendant or plaintiff in various claims and lawsuits
arising in the normal course of business. The Company believes, based upon
information it currently possesses, and taking into account established reserves
for estimated liabilities and its insurance coverage, that the ultimate outcome
of the proceedings and actions is unlikely to have a material adverse effect on
the Company's financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(11) COMMITMENTS (CONTINUED)
WKI is a party to certain non-cancelable lease agreements, which expire at
various dates through 2009. Minimum rental commitments outstanding at
December 31, 1999 are as follows:

2000........................................................ $ 8,621
2001........................................................ 7,271
2002........................................................ 5,173
2003........................................................ 2,551
2004........................................................ 1,893
2005 and thereafter......................................... 4,454
-------
Net minimum lease commitments............................... $29,963
=======

Rental expense was $27.0 million, $25.0 million, and $24.0 million for the
years ended December 31, 1999, 1998, and 1997, respectively.

(12) EMPLOYEE RETIREMENT PLANS

Prior to the Recapitalization, the majority of the Company's U.S. workforce
participated in Corning's employee benefit plans, including Corning's North
American defined-benefit pension plan and Corning's postretirement medical and
life insurance benefit plan. As a result of the Recapitalization, all pension
liabilities and related pension plan assets at April 1, 1998, with the exception
of those related to a separate pension plan at one of the Company's
manufacturing facilities, were transferred to Corning. In addition, all
postretirement benefit liabilities for retirees and active employees that were
eligible to retire at April 1, 1998 were also transferred to Corning. Subsequent
to the Recapitalization, the Company established its own pension and
postretirement plans that provide benefits which are substantially similar in
economic value to those provided by Corning.

The Company also has defined-benefit pension plans for its employees at
certain wholly-owned subsidiaries.

Borden maintains a non-qualified Supplemental Pension Plan (the
"Supplemental Plan"), pursuant to which it will pay to certain executives,
including each of the named executive officers, amounts approximately equal to
the difference between the benefits provided for under the WKI Pension Plan and
benefits which would have been provided thereunder but for limitations on
benefits which may be provided under tax-qualified plans, as set forth in the
Internal Revenue Code.

Certain of the Company's employees also participate in a Borden sponsored
retirement savings plan. Charges to WKI's operations for matching contributions
in 1999, 1998, and 1997 amounted to $3.0 million, $2.2 million, and
$2.6 million, respectively.

The Company acquired EKCO on September 13, 1999. EKCO and certain of its
subsidiaries have various pension plans which cover certain of their employees
and provide for periodic payments to eligible employees upon retirement.
Benefits for non-union employees are generally based upon earnings and years of
service prior to 1989 and certain non-union employees receive benefits from
allocated accounts under a defined contribution plan. Benefits for certain union
employees are based upon dollar amounts attributed to each year of credited
service; certain other union employees receive benefits from allocated accounts
under a defined contribution plan and from prior contributions to a multi
employer plan. EKCO also provides supplemental retirement benefits for certain
management

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(12) EMPLOYEE RETIREMENT PLANS (CONTINUED)
personnel based on earnings and years of service. In addition, EKCO provides
defined benefit postretirement health and life insurance plans that cover
certain retired and active employees. The Company expects to continue these
benefits indefinitely, but reserves the right to amend or discontinue all or any
part of the plans at any time.

The Company acquired GHC on October 21, 1999. GHC maintains one merged
defined benefit plan which includes four previously existing plans. Three of the
plans relate to divested operations for which service cost is no longer accrued.
The other plan covers substantially all of GHC's non-union employees. Pension
benefit formulas remain distinct to the four previous plans and are related to
agreed-upon payment schedules, which in general, are based on final average pay
or fixed amount for years of service. In addition to the defined benefit plan,
GHC sponsors a 401(k) plan for all full-time employees. GHC also maintains a
non-qualified, unfunded deferred compensation plan for certain key executives,
providing payments upon retirement.

Information for the EKCO and GHC plans has been included in the tables
below.

Relative to the pension plan, the Company's funding policy is to contribute
annually an amount determined jointly by management and its consulting
actuaries. Unrecognized prior service cost and net actuarial gains and losses
from changes in actuarial assumptions are deferred and amortized to pension
expense over the remaining service life of plan participants, if they exceed
certain limits. Plan assets are comprised principally of publicly traded debt
and equity securities.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(12) EMPLOYEE RETIREMENT PLANS (CONTINUED)
Relevant data for the Company's pension and postretirement medical benefit
plans at September 30, 1999 and December 31, 1998, respectively, is as follows:

OTHER
PENSION BENEFITS POSTRETIREMENT BENEFITS
------------------- -----------------------
1999 1998 1999 1998
-------- -------- ---------- ----------

CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year................ $18,431 $58,059 $ 31,185 $ 57,675
Service cost........................................... 4,562 3,601 1,809 1,799
Interest cost.......................................... 2,633 1,814 2,148 2,634
Plan participants' contributions....................... 280 99 70 5
Actuarial loss (gain).................................. 312 619 (9) 1,315
Benefits paid.......................................... (1,338) (959) (712) (184)
Amendments............................................. -- 356 -- --
Acquisitions........................................... 28,099 -- 2,006 --
Divestitures and Settlements........................... -- (45,158) -- (31,618)
Special termination benefit............................ 2,000 -- 400 (441)
------- ------- -------- --------
Benefit obligations at end of year..................... $54,979 $18,431 $ 36,897 $ 31,185
======= ======= ======== ========
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year......... $14,156 $37,580 $ -- $ --
Actual return on plan assets........................... 2,861 (628) -- --
Employer contributions................................. 3,326 584 642 $ 179
Plan participants' contributions....................... 280 99 70 5
Benefits paid.......................................... (1,234) (959) (712) (184)
Acquisitions........................................... 39,506 -- --
Divestitures (transferred to Corning).................. -- (22,520) -- --
------- ------- -------- --------
Fair value of plan assets at end of year............... $58,895 $14,156 $ -- $ --
======= ======= ======== ========
Funded status.......................................... $ 3,916 $(4,275) (36,897) (31,185)
Unrecognized net actuarial (gain)/loss................. (9,254) (717) (256) (247)
Unrecognized prior service cost........................ 95 1,174 -- --
Unrecognized initial net benefit obligation (asset).... (297) -- -- --
Post September 30 contributions........................ 119 -- 40 --
------- ------- -------- --------
Net amount recognized.................................. $(5,421) $(3,818) $(37,113) $(31,432)
======= ======= ======== ========

WEIGHTED AVERAGE ASSUMPTIONS AT SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
RESPECTIVELY:

OTHER
POSTRETIREMENT
PENSION BENEFITS BENEFITS
----------------------- -----------------------
1999 1998 1999 1998
-------- -------- -------- --------

Discount rate................................ 7.50% 6.75% 7.50% 6.75%
Expected return on plan assets............... 8.50% 8.50% 8.50% 8.50%
Rate of compensation increase................ 4.25% 4.25% 4.25% 4.25%

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(12) EMPLOYEE RETIREMENT PLANS (CONTINUED)
COMPONENTS OF NET PERIODIC BENEFIT COST AT SEPTEMBER 30, 1999 AND
DECEMBER 31, 1998, RESPECTIVELY:

OTHER
POSTRETIREMENT
PENSION BENEFITS BENEFITS
------------------- -------------------
1999 1998 1999 1998
-------- -------- -------- --------

Service cost............................... $ 4,562 $ 3,601 $1,809 $1,799
Interest cost.............................. 2,633 1,814 2,148 2,634
Expected return on plan assets............. (4,513) (1,649) -- --
Amortization of unrecognized transition
obligation............................... 1,691 -- -- --
Amortization of prior service cost......... 55 281 -- (56)
Recognized net actuarial (gain)/loss....... -- (84) -- 1
Special termination benefits............... 2,000 -- 400 (441)
------- ------- ------ ------
Net periodic benefit cost.................. $ 6,428 $ 3,963 $4,357 $3,937
======= ======= ====== ======

The Consolidated Balance Sheet includes prepaid pension cost for plans in
which assets exceed accumulated benefits and accrued benefit costs for plans in
which accumulated benefits exceed assets. The funded status of the Company's
plans and the amounts of prepaid and accrued pension cost as of December 31,
1999 and 1998 are provided below.

PLANS IN WHICH PLANS IN WHICH
ASSETS EXCEED ACCUMULATED BENEFITS
ACCUMULATED BENEFITS EXCEED ASSETS
--------------------- ---------------------
1999 1998 1999 1998
--------- --------- --------- ---------

Accumulated benefit obligation........................ $ 22,484 $ 1,502 $ 30,441 $ 16,929
Fair value of plan assets............................. (32,812) (1,811) (24,029) (12,345)
-------- ------- -------- --------
Funded status......................................... $(10,328) $ (309) $ 6,412 $ 4,584
======== ======= ======== ========

The consolidated postretirement benefit obligation attributable to the
Company's workforce is determined by application of the terms of health care and
life insurance plans, together with relevant actuarial assumptions and health
care cost trend rates. The annual rate of medical inflation used to determine
the year-end results was assumed to be 8.17% for 1999, decreasing gradually to a
net of 5.50% per year at 2004 and remaining at that level thereafter. Assumed
health care cost trend rates have a significant effect on the amounts reported
for health care plans. A one-percentage point change in the assumed health care
cost trend rates would have the following effects:

ONE-PERCENTAGE ONE-PERCENTAGE
POINT POINT
INCREASE DECREASE
-------------- --------------

Effect on total service cost and interest cost
components of.................................. $ 900 $ (900)
Postretirement benefit expense
Effect on postretirement benefit obligation...... $7,479 $(7,479)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(13) STOCK COMPENSATION PLANS

1999 AND 1998 PLANS

Certain members of management were granted options to purchase common stock
in WKI. Fixed stock options were granted to purchase shares at a $5.00 per share
exercise price. The options' exercise price was equal to fair value at the date
of grant, and the options vest over five years and expire ten years from the
date of the grant. There are 2,532,000 options currently outstanding and 348,000
available for future grants.

WKI adopted the disclosure-only provisions of FAS 123, "Accounting for
Stock-Based Compensation." Accordingly, no compensation cost has been recognized
for the stock option plan. Had compensation cost for WKI's stock option plan
been determined based on the fair value at the grant date consistent with the
provisions of FAS 123, WKI's net loss applicable to common stock would have been
$41.5 million or $1.33 per basic and diluted share for the year ended
December 31, 1999. WKI's net loss applicable to common stock for 1998 would have
been $36.1 million or $1.50 per basic and diluted share.

1999 1998
---------------------------- ----------------------------
WEIGHTED AVERAGE WEIGHTED AVERAGE
SHARES EXERCISE PRICE SHARES EXERCISE PRICE
--------- ---------------- --------- ----------------

Options outstanding, beginning of year... 2,672,000 $5.00 -- --
Options granted........................ -- -- 2,672,000 $5.00
Options exercised...................... -- -- -- --
Options forfeited...................... (140,000) $5.00 -- --
--------- ----- --------- -----
Options outstanding, end of year......... 2,532,000 $5.00 2,672,000 $5.00
========= ===== ========= =====

The following table summarizes information about fixed-price stock options
at December 31, 1999:

WEIGHTED AVERAGE WEIGHTED AVERAGE
EXERCISE PRICE FAIR VALUE AT GRANT NUMBER OUTSTANDING REMAINING LIFE EXERCISE PRICE
- -------------- ------------------- ------------------ ---------------- ----------------

5.00....$..... $1.60 2,532,000 5.32 years $5.00

Options were granted at April 1 and October 1, 1998. There were 506,400
exercisable at December 31, 1999.

The fair value at the dates of grant were calculated using the Black-Scholes
option pricing model. The risk-free interest rates used in the model range from
4.8% to 5.7%. The expected life of the options is seven years. The volatility
factors used in the model range from 0% to 27%. WKI common stock is not publicly
traded and does not declare dividends on a regular basis.

1997 PLANS

During 1997, certain employees of WKI participated in the stock compensation
plans of Corning. Under Corning's stock option plan, non-qualified and incentive
stock options to purchase unissued Corning shares at the market price on the
date of the grant generally become exercisable in installments from one to two
years from the grant date. The maximum term of non-qualified and incentive stock
options issued by Corning is generally 10 years from the grant date.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(13) STOCK COMPENSATION PLANS (CONTINUED)
At December 31, 1997, WKI employees held options to acquire 351,000 shares
of Corning common stock at exercise prices ranging from $14.95 per share to
$54.81 per share. These outstanding options had weighted-average exercise price
of $28.50 per share and a weighted-average remaining contractual life of
7.1 years at December 31, 1997. Of these outstanding options, at December 31,
1997, 173,000 represented vested options with a weighted-average exercise price
of $27.00 per share.

Certain employees of WKI were granted 38,000 Corning options in the year
ended December 31, 1997. The weighted-average exercise price of option grants in
the year ended December 31, 1997 was $42.08. WKI employees exercised 80,400
Corning options in the year ended December 31, 1997. The weighted-average
exercise price of these exercise in the year ended December 31, 997 were $24.25.

Under Corning's incentive stock plans, stock grants are made to certain
employees of WKI, either determined by specific performance goals or issued
directly, in most instances subject to the possibility of forfeiture and without
cash consideration. In the year ended December 31, 1997, grants of 26.5 million
were made under these plans. The weighted-average fair value of options granted
was $35.32 per share in 1997. At December 31, 1997, the unamortized cost of
prior stock grants amounted to approximately $1.7 million.

The costs related to the above plans have been allocated to WKI by Corning
within the other corporate administrative expense described in Note 8.

In addition to the stock option plan and incentive stock plans, Corning has
an employee stock purchase plan ("ESPP"), in which certain employees of WKI
participated. Under the ESPP, certain employees of WKI could elect to have up to
10% of their annual wages withheld to purchase Corning common stock. The
purchase price of the stock was 85% of the lower of the beginning-of-quarter or
end-of-quarter market price.

Under FAS 123, the weighted-average fair values of options granted in the
year ended December 31, 1997, was $13.60 per share. For purposes of determining
fair value at the grant date, the Black-Scholes option pricing model was used
with the following weighted-average assumptions for grants in the year ended
December 31, 1997: risk free interest rate of 6.6%; dividend yield of 1.6%;
expected volatility of 24.5%; and expected life of 6 years.

In 1998, no compensation cost related to the stock option plans was
recorded. If WKI had accounted for compensation cost under the provisions of
FAS 123, WKI's net loss would have been $33.9 million or $1.41 per basic and
diluted share for the year ended December 31, 1998. In 1997, the pro forma net
income would have been $13.2 million or $0.55 per basic and diluted share. The
pro forma effect of accounting for such costs using the fair value method of
FAS 123 may not be representative of the effect in future years.

(14) INCOME TAXES

Prior to April 1, 1998, WKI was included in the consolidated federal income
tax return filed by Corning. WKI and its subsidiaries had a tax sharing
arrangement with Corning pursuant to which WKI was required to compute their
provision for income taxes on a separate return (i.e., subconsolidation) basis
and pay to, or receive from Corning the separate U.S. federal income tax return
liability or benefit so computed, if any.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(14) INCOME TAXES (CONTINUED)
The Company's tax accounts for 1997 have been prepared on a separate company
basis and do not necessarily reflect the Company's actual tax position as
determined on a consolidated basis with Corning. Subsequent to April 1, 1998 the
Company files the consolidated Federal tax return with its parent and certain of
its domestic subsidiaries.

YEAR ENDED DECEMBER 31,
------------------------------
1999 1998 1997
-------- -------- --------

INCOME (LOSS) BEFORE TAXES:
U.S. companies.............................................. $(77,545) $(30,124) $15,483
Non-U.S. companies.......................................... 2,445 (2,542) 11,240
-------- -------- -------
Income (loss) before taxes.................................. $(75,100) $(32,666) $26,723
======== ======== =======

The components of income tax expense consist of the following items:

YEAR ENDED DECEMBER 31,
------------------------------
1999 1998 1997
-------- -------- --------

CURRENT AND DEFERRED TAX EXPENSE:
Current:
U.S............................................ $ -- $126 $ 3,859
State and municipal............................ 1,072 -- 2,996
Foreign........................................ 1,092 969 4,122
Deferred:
U.S............................................ (37,775) -- 42
State and municipal............................ (11,895) -- 1,574
Foreign........................................ 252 (148) 141
-------- ---- -------
Net tax expense.................................. $(47,254) $947 $12,734
======== ==== =======

The income tax provision at the effective rate differs from the income tax
provision at the U.S. federal statutory tax rate in effect during the years
ended December 31, 1999, 1998, and 1997 for the following reasons:

1999 1998 1997
-------- -------- --------

EFFECTIVE TAX RATE RECONCILIATION:
Taxes at U.S. statutory tax rate @ 35%......... $(26,285) $(11,433) $ 9,353
Increase (reduction) in income taxes resulting
from:
State taxes, net of federal benefit.......... (4,481) -- 3,998
Taxes on foreign subsidiary and FSC
earnings................................... 488 947 2,775
Non-deductible transactions related
expenses................................... -- 6,464 --
Other........................................ 862 453 (3,261)
Change in the valuation allowance for
deferred tax assets........................ (17,838) 4,516 (131)
-------- -------- -------
Income tax expense (benefit)................. $(47,254) $ 947 $12,734
======== ======== =======

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(14) INCOME TAXES (CONTINUED)
For federal income tax purposes, WKI has elected to treat the
Recapitalization as an asset acquisition by making a Section 338(h)(10)
election. As a result, there is a difference between the financial reporting and
tax bases of WKI's assets. The difference results in future deductible amounts
for tax purposes which creates a deferred tax asset for financial reporting
purposes.

As discussed in Footnote 4 for financial reporting purposes, the
acquisitions of the EKCO and GHC were accounted for using the purchase method of
accounting. As a result, there is a difference between the financial reporting
and tax basis of the assets acquired in these companies.

The tax effects of temporary differences and carryforwards that give rise to
significant portions of the deferred tax assets and liabilities at December 31,
1999 and 1998 are comprised of the following:

DECEMBER 31,
-------------------
1999 1998
-------- --------

Fixed and intangible assets............................... $44,796 $99,124
Postretirement, pension and other employee benefits....... 17,756 15,805
Loss and tax credit carryforwards......................... 38,693 7,456
Inventory reserves........................................ 7,731 6,853
Other..................................................... 14,249 11,987
------- -------
Gross deferred tax assets............................... 123,225 141,225
Deferred tax assets valuation allowance................... (74,339) (92,177)
------- -------
Deferred tax assets..................................... 48,886 49,048
======= =======

The net change in the total valuation allowance for years ended
December 31, 1999 and 1998 was a decrease of $17.8 million and an increase of
$82.3 million, respectively. Management believes that the net deferred tax
assets are recoverable given the current estimates of future taxable income.

Net operating losses of approximately $90.0 million are available to offset
domestic taxable income, if any, in future years. These net operating losses
begin to expire in 2018.

WKI currently provides income taxes on the earnings of foreign subsidiaries
and associated companies to the extent they are currently taxable or expected to
be remitted. Taxes have not been provided on approximately $10.0 million of
accumulated foreign unremitted earnings, which are expected to remain invested
indefinitely. If remitted, the additional tax liability on these earnings would
be approximately $0.5 million.

(15) RESTRUCTURING, TRANSACTION AND INTEGRATION RELATED EXPENSES

1998

As a result of an effort to reduce manufacturing, assembly and distribution
costs, WKI recorded a restructuring charge of $4.8 million in 1998 related to
the consolidation and rationalization of Asian operations and the consolidation
of Canadian and U.S. distribution facilities. The restructuring plan was
complete in 1999.

Transaction and integration related expenses of $28.9 million primarily
consist of cash and non-cash compensation, financing costs and other expenses
associated with the Recapitalization. The charge included $17.4 million of
compensation payments reimbursed by Corning related to

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(15) RESTRUCTURING, TRANSACTION AND INTEGRATION RELATED EXPENSES (CONTINUED)
arrangements entered into by Corning with certain Corning employees who accepted
employment with WKI. The remaining transaction and integration related expenses
consisted of costs incurred in 1998 for fees and services related to the
Recapitalization and the related financings.

1999

The restructuring includes the discontinuation of the commercial tableware
product line and closure of the related portion of the Company's manufacturing
facility in Charleroi, Pennsylvania. In order to optimize the utilization of the
Charleroi facility, the Company has moved Corelle-Registered Trademark- cup
production to its Martinsburg, West Virginia facility and third party suppliers.
In addition, the Company terminated its supply contract with Corning's
Greenville, Ohio facility and Pyrex -Registered Trademark- production was
consolidated at the Charleroi facility. Additionally, the Company has
discontinued manufacturing and distributing rangetop cookware at its facility in
Clinton, Illinois. Future supply of rangetop cookware will be sourced from third
party manufacturers.

The cash and non-cash elements of the restructuring charge approximate
$15.2 million and $53.8 million, respectively. Details of the restructuring
charge are as follows:

ORIGINAL AS REPORTED BALANCE AT
RESTRUCTURING ADJUSTMENT RESTRUCTURING NON CASH CASH DECEMBER 31,
CHARGE REQUIRED CHARGE ACTIVITY ACTIVITY 1999
------------- ---------- ------------- -------- -------- ------------

Disposal of assets................. $53,200 $1,800 $51,400 $51,400 -- --
Employee severance & termination... 18,047 3,389 14,658 2,400 $ 7,758 $4,500
Other exit costs................... 4,953 2,027 2,926 -- 2,426 500
------- ------ ------- ------- ------- ------
$76,200 $7,216 $68,984 $53,800 $10,184 $5,000
======= ====== ======= ======= ======= ======

The tangible assets of the Clinton, Illinois facility and the commercial
tableware product line have been written off. All intangible asset carrying
values associated with the Clinton facility and the commercial tableware product
line have been eliminated. The tangible and intangible assets written off
totaled $40.9 million and $12.3 million, respectively. Management judgment is
involved in estimating the tangible assets fair value, accordingly, actual
results could vary significantly from such estimates. As part of the
restructuring initiative, approximately 600 employees have been terminated. The
termination results in a pension and post retirement benefit charge of
$2.4 million. The Company expects the restructuring plan to be completed early
in 2000.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(15) RESTRUCTURING, TRANSACTION AND INTEGRATION RELATED EXPENSES (CONTINUED)
The commercial tableware product line generated net sales of $1.9 million in
fiscal 1999 and $8.4 million of net sales in fiscal 1998. Operating income for
the product line was break even in both years

Transaction and integration related expenses were $9.2 million in 1999. The
expenses related to the integration of the EKCO and GHC businesses and primarily
consist of legal fees, accounting and tax services, employee compensation
arrangements and other benefits, facility consolidation and other integration
costs

(16) SEGMENT INFORMATION

The Company believes its operating segments have similar economic
characteristics and meet the aggregation criteria of SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information." The Company markets
its products chiefly in the United States but also has significant business in
international markets such as Canada, Asia, Australia, the United Kingdom and
Latin America. WKI is exposed to the risk of changes in social, political, and
economic conditions inherent in foreign operations and the value of its foreign
assets are affected by fluctuations in foreign currency exchange rates. Net
sales by geographic area are presented by attributing revenues from external
customers on the basis of where the products are sold. In 1999, 1998, and 1997,
one customer, Wal-Mart Stores, Inc., accounted for approximately 16%, 15%, and
12%, respectively, of the Company's gross sales.

The following information is presented in accordance with FAS 131,
"Disclosure about Segments of an Enterprise and Related Information," which the
Company has adopted in the current year:

GEOGRAPHIC AREAS:

YEAR ENDED DECEMBER 31,
------------------------------
1999 1998 1997
-------- -------- --------

NET SALES:
United States................................. $497,410 $440,110 $431,926
Canada........................................ 39,351 31,877 33,354
-------- -------- --------
North America............................... 536,761 471,987 465,280
Other International........................... 80,817 61,081 107,580
-------- -------- --------
Total....................................... $617,578 $533,068 $572,860
======== ======== ========

AS OF DECEMBER 31,
-------------------
1999 1998
-------- --------

LONG-LIVED ASSETS(1)
United States........................................... $549,830 $271,443
Canada.................................................. 5,941 736
-------- --------
North America......................................... 555,771 272,179
Other International..................................... 5,502 3,884
-------- --------
Total................................................. $561,273 $276,063
======== ========

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

WKI HOLDING COMPANY, INC. AND SUBSIDIARIES

(16) SEGMENT INFORMATION (CONTINUED)
CLASSES OF SIMILAR PRODUCTS:

YEAR ENDED DECEMBER 31,
------------------------------
1999 1998(3) 1997(3)
-------- -------- --------

NET SALES:
Bakeware...................................... $227,489 $197,378 $206,499
Dinnerware.................................... 174,940 180,338 204,597
Rangetop Cookware............................. 96,312 100,710 109,667
Kitchen/Household tools....................... 35,083 -- --
Cleaning Products............................. 5,959 -- --
Cutlery....................................... 10,051 -- --
Precision Cutlery tools....................... 3,626 -- --
Other(2)...................................... 64,118 54,642 52,097
-------- -------- --------
Total....................................... $617,578 $533,068 $572,860
======== ======== ========

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

(1) Includes property and equipment, deferred taxes on income, goodwill,
trademarks and other assets.

(2) "Other" sales include selected tabletop and kitchen accessories manufactured
by third parties which are principally sold through Company-operated factory
stores.

(3) Certain 1998 and 1997 amounts have been reclassified to conform with 1999
presentation.

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
WKI Holding Company, Inc.

We have audited the accompanying consolidated balance sheets of WKI Holding
Company, Inc. and Subsidiaries (the "Company") as of December 31, 1999 and 1998
and the related consolidated statements of operations, changes in stockholders'
equity, and cash flows for the years then ended. Our audits also include the
financial statement schedule listed in Item 14. These consolidated financial
statements and financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and 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 audits 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 consolidated financial position of the companies at
December 31, 1999 and 1998 and the results of their operations and their cash
flows for the years then ended 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.

We also audited the adjustments described in Note 2 that were applied to
restate the 1997 consolidated financial statements to give retroactive effect to
the change in the method of accounting for inventories. In our opinion, such
adjustments are appropriate and have been properly applied.

DELOITTE & TOUCHE LLP
Buffalo, New York
March 17, 2000

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
WKI Holding Company, Inc., formerly named
Corning Consumer Products Company

In our opinion, the consolidated statements of operations, of cash flows and
of changes in stockholders' equity for the year ended December 31, 1997 present
fairly, in all material respects, the results of operations and cash flows of
WKI Holding Company, Inc. for the year ended December 31, 1997, in conformity
with generally accepted accounting principles. These financial statements are
the responsibility of the Company's management; our responsibility is to express
an opinion on these financial statements based on our audit. We conducted our
audit of these statements in accordance with generally accepted auditing
standards which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above. We have not
audited the consolidated financial statements of WKI Holding Company for any
period subsequent to December 31, 1997 nor have we examined any adjustments
applied to the 1997 financial statements.

PricewaterhouseCoopers LLP
- -------------------------

New York, New York
January 19, 1998 except for the second paragraph
of Note 3, as to which the date is March 16, 1998

PART III

ITEM 10--DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information regarding the executive officers
and directors of the Company following the Recapitalization.

NAME AGE POSITION
- ---- -------- --------

C. Robert Kidder.......................... 55 Director and Chairman of the Board

Nathaniel C. Stoddard..................... 55 Director, President and Chief Executive
Officer

Peter F. Campanella....................... 54 Director

Alexander Navab........................... 34 Director

Brian F. Carroll.......................... 28 Director

William H. Carter......................... 46 Director

Nancy A. Reardon.......................... 47 Director

William F. Stoll, Jr...................... 51 Director

Kevin M. Kelley........................... 42 Director

Anthony P. Deasey......................... 50 Senior Vice President--Finance and Chief
Financial Officer

Stephen A. Morocco........................ 48 Senior Vice President--International

Clark S. Kinlin........................... 40 Senior Vice President--Sales and Marketing

Dennis E. Schneider....................... 42 Senior Vice President--Supply Chain
Management and Operations

Mark W. Levie............................. 40 Senior Vice President--Corning Revere
Factory Stores and Sourcing

C. Robert Kidder was elected a Director and Chairman of the Board of World
Kitchen, Inc. on April 1, 1998. He was elected a Director, Chairman of the Board
and Chief Executive Officer of Borden, Inc. on January 10, 1995, and continues
in those positions. Prior to that he was Chairman of the Board of Duracell
International, Inc. and Duracell, Inc. from August 1991 through October 1995;
Chairman of the Board and Chief Executive Officer of both companies from
April 1992 through September 30, 1995; Chairman of the Board, President and
Chief Executive Officer of both companies from August 1991 until April 1992; and
President and Chief Executive Officer of both companies from June 1988 until
August 1991. He is also a director of Electronic Data Systems Corporation, AEP
Industries Inc. and Morgan Stanley, Dean Witter & Co.

Nathaniel C. Stoddard was elected a Director of the Company and its
President and Chief Executive Officer on March 1, 2000. He joined World
Kitchen, Inc. from Camco Inc, a General Electric Co. holding, where he served as
Chairman, President and Chief Executive Officer from December 1995 to
December 1999. From 1989 to 1995 he served as President and Chief Operating
Officer of Garden Way, Inc., parent company of Troy-Bilt and Bolens branded
outdoor power equipment. From 1980 to 1989 he was with Black & Decker Corp,
first as director of Marketing for the Household Products Division, and later as
Vice President of Marketing for that division. He became Vice President and
General Manager of the Outdoor Products Division in 1984, Vice President of
Marketing, Sales, Service and Distribution for the U.S. Power Tools Group in
1985, and from 1987 to

1989 served as General Manager of the U.S. Service Operations. From 1976 to 1980
he was Vice President of Marketing and Sales for Leigh Products Inc. He began
his business career in 1972 with Samsonite Corp. and from 1972 to 1976 held
various business development and marketing management positions with that
company and with its parent company, Beatrice Foods Corp.

Peter F. Campanella was elected a Director of the Company on April 1, 1998,
and served as its President and Chief Executive Officer from April 1996 through
February 2000. From 1994 to 1996, he was Senior Vice President and General
Manager of Corning's Science Products Division, and from 1990 to 1994, he was
Vice President and General Manager of that division.

Alexander Navab has been a director of the Company since April 30, 1999 and
an Executive of Kohlberg Kravis Roberts & Co. since June 1993. He was employed
by James D. Wolfensohn Incorporated, an investment banking firm, from
September 1991 to June 1993. He is also a director of KSL Recreation
Corporation, Regal Cinemas, Inc. and Borden, Inc.

Brian F. Carroll has been a director of the Company since March 1, 2000 and
an Executive of Kohlberg Kravis Roberts & Co. since July 1999. From
September 1997 to June 1999 he attended the Stanford University Graduate School
of Business. From March 1995 to August 1997 he was an Executive of Kohlberg
Kravis Roberts & Co. Prior thereto, he was an investment banker with Donaldson,
Lufkin & Jenrette Securities Corporation. He is also a Director of Spalding
Holdings Corporation and Evenflo Company, Inc.

William H. Carter has been a director of the Company since April 1, 1998. He
was elected Executive Vice President and Chief Financial Officer of
Borden, Inc. effective April 3, 1995. Prior to that, since 1987, he was a
partner in Price Waterhouse LLP. Mr. Carter is a member of the Company's Finance
and Audit Committees.

Nancy A. Reardon has been a director of the Company since April 1, 1998. She
was elected Senior Vice President, Human Resources and Corporate Affairs, of
Borden, Inc. effective March 3, 1997. Previously she was Senior Vice
President-Human Resources and Communications for Duracell International, Inc.
from 1991 through February 1997.

William F. Stoll, Jr. has been a director of the Company since April 1,
1998. He was elected Senior Vice President and General Counsel of Borden, Inc.
effective July 1, 1996. Prior to joining Borden at that time, he was a Vice
President of Westinghouse Electric Corporation since 1993, and served as its
Deputy General Counsel from 1988 to 1996. Mr. Stoll is a member of the Company's
Finance and Audit Committees.

Kevin M. Kelley has been a director of the Company since April 30, 1999. He
has served as Executive Vice President, Corporate Strategy and Development of
Borden, Inc. since April 5, 1999. Prior to that, since April 1996, he was
Managing Director of Ripplewood Holding, LLC. From January 1995 to April 1996 he
was a Managing Director with Onex Investment Corporation.

Anthony P. Deasey was elected Senior Vice President--Finance and Chief
Financial Officer on June 8, 1998. Prior to joining the Company he was Senior
Vice President--Finance and Chief Financial Officer of Rollerblade, Inc. from
April 1996 to March 1998. Prior to that he was Vice President, Chief Financial
Officer of Church and Dwight Co. Inc., the manufacturer and marketer of Arm &
Hammer-Registered Trademark- brand consumer and industrial products, from 1988
to November 1995.

Stephen A. Morocco was elected Senior Vice President--International on
September 28, 1998. Prior to joining the Company, he was Vice President of
Duracell Battery Operations in the Middle East, Africa, Eastern Europe, the
former Soviet Union and India for the Gillette Company from July 1996 to
September 1998. Prior to that he was President of Duracell Canada from
March 1994 to June 1996. From 1990 through 1994 he served in Duracell
International's Asia Headquarters first as Managing Director of Asia (1990-1993)
and then, as Vice President, Greater China (1993-1994).

Clark S. Kinlin was elected Senior Vice President--Sales and Marketing of
the Company on April 1, 1998. Prior to that he was Vice President--Sales and
Marketing of the Company since September 1997, and from 1995 to 1997, he was
Vice President of Marketing. From 1993 to 1995, he was Director of Retail
Development of the Company, and from 1990 to 1993, he was Manager of Sales and
Marketing of Corning's Telecommunications Products Division. He joined Corning
in 1981.

Dennis E. Schneider was elected Senior Vice President--Supply Chain
Management and Operations on February 7, 2000. Prior to joining the company he
was Vice-President of Supply Chain of Allied Signal Aerospace from June 1998 to
February 2000. Prior to that he was Director of Supply Chain for Case
Corporation Europe, Central Asia, Africa and the Middle East, from 1989 to
June 1998

Mark W. Levie was elected Senior Vice President of Corning Revere Factory
Stores and Sourcing on January 1, 2000. Prior to that he was Vice President of
Corning Revere Factory Stores from October 1996 through December 1999. Before
that he was Business Development Manager in the Consumer Products Division of
Corning Incorporated

ITEM 11--EXECUTIVE COMPENSATION

The following tables and charts set forth information with respect to
benefits made available, and compensation paid or accrued, by the Company during
the years ended December 31, 1999, 1998 and 1997 for services by each of the
chief executive officer, the four other most highly compensated executive
officers whose total salary and bonus exceeded $100,000, and two other
executives that would have made the list had they been employed by the Company
at December 31, 1999.

LONG-TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------------------------------------------- ---------- ------------------
OTHER
ANNUAL PREQUISITE RESTRICTED SECURITIES ALL
NAME AND ALLOWANCES STOCK UNDERLYING OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS(1)($) COMPENSATION (2)($) AWARDS($) OPTIONS COMPENSATION(3)($)
- --------------------------- -------- --------- ----------- ------------------- ---------- ---------- ------------------

PETER F. CAMPANELLA(4)..... 1999 400,000 1,970,770 72,500 -- 180,000 23,880
Chief Executive Officer 1998 377,500 1,739,236 111,451 -- 180,000 16,332
1997 246,666 358,162 -- 664,313 8,000 29,430

ANTHONY P. DEASEY.......... 1999 250,000 66,172 25,000 -- 80,000 4,447
Sr. Vice President Chief 1998 135,692 100,793 14,583 -- 80,000 1,250
Financial Officer 1997 N/A N/A N/A N/A N/A N/A

CLARK S. KINLIN............ 1999 230,000 67,203 25,000 -- 80,000 11,528
Sr. Vice President Sales & 1998 219,225 599,986 18,750 -- 80,000 5,880
Marketing 1997 150,333 115,769 338 166,078 4,000 8,236

STEPHEN A. MOROCCO......... 1999 230,000 57,500 25,000 -- 60,000 6,534
Sr. Vice President 1998 60,154 93,411 -- -- 60,000 958
International 1997 N/A N/A N/A N/A N/A N/A

MARK W. LEVIE.............. 1999 180,000 36,900 -- -- 75,000 2,175
Sr. Vice President Factory 1998 152,600 542,511 -- -- 75,000 --
Stores and Sourcing 1997 131,916 25,524 -- -- -- --

GARY P. VOGT(5)............ 1999 175,267 249,335 -- -- -- 10,810
Vice President, Supply 1998 161,625 510,961 205 -- 45,000 9,880
Chain Management 1997 124,392 83,833 436 -- -- 8,647

GARY H. CARRAWAY(5)........ 1999 84,792 263,243 -- -- -- 1,927
Vice President, Human 1998 N/A N/A N/A N/A N/A N/A
Resources 1997 N/A N/A N/A N/A N/A N/A

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

(1) 1998 bonus includes retention and transition compensation arrangements for
Messrs. Campanella, and Kinlin, of $1,666,636 and $566,636 respectively.

(2) Includes tax gross-up payments for participants employed with the Company
for six months following the Closing Date in 1998 and perquisite allowances.

(3) Represents amounts contributed by the Company as matching contributions to
WKI's tax-qualified Investment Plan and amounts paid in cash for benefits
which would have been available pursuant to the terms of the Investment Plan
absent certain limitations on compensation which may be taken into account
under tax-qualified plans as imposed pursuant to the Internal Revenue Code.

(4) Mr. Campanella resigned effective in the first quarter of 2000.

(5) Mssrs. Vogt and Carraway resigned in the fourth quarter of 1999.

EMPLOYEE AGREEMENTS

The Company has in place a severance practice pursuant to which it will
provide to all salaried employees upon certain terminations of employment,
compensation in amounts ranging between eight weeks of base salary (for
employees with at least one year of service) and 104 weeks of base salary (for
employees with at least 20 years of service).

OPTION/SAR GRANTS IN LAST FISCAL YEAR(1)

POTENTIAL REALIZABLE
VALUE AT ASSUMED
RATES OF STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM (2)
----------------------------------------------- ---------------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES
OPTIONS IN FISCAL EXERCISE EXPIRATION GAIN AT GAIN AT
NAME GRANTED YEAR PRICE DATE 5% 10%
- ---- ---------- ---------- -------- ---------- -------- ----------

Peter F. Campanella.................... 180,000 18.1% $5.00 4/1/08 $566,005 $1,434,368
Anthony P. Deasey...................... 80,000 8.0% $5.00 4/1/08 $251,558 $ 637,497
Clark S. Kinlin........................ 80,000 8.0% $5.00 4/1/08 $251,558 $ 637,497
Stephen A. Morocco..................... 60,000 6.0% $5.00 4/1/08 $188,669 $ 487,123
Mark W. Levie.......................... 75,000 7.5% $5.00 4/1/08 $235,836 $ 597,653
Gary P. Vogt........................... 45,000 4.5% $5.00 4/1/08 $141,501 $ 358,592
Gary H. Carraway....................... -- -- $ -- N/A $ -- $ --

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

(1) No SARs were granted in 1998 to any of the named executive officers.

(2) The dollar amounts set forth under these columns are the result of
calculations at 5% and at 10% rates established by the Securities and
Exchange Commission and therefore are not intended to forecast future
appreciation of WKI's stock price. The Company did not use any alternative
formula for grant date valuation as it is unaware of any formula which would
determine with reasonable accuracy a present value based upon future unknown
factors.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES(1)(2)

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END
ACQUIRED VALUE --------------------------- ---------------------------------
NAME ON EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE($) UNEXERCISABLE($)
- ---- ----------- ----------- ----------- ------------- -------------- ----------------

Peter F. Campanella......... -- -- 36,000 144,000 -- --
Anthony P. Deasey........... -- -- 16,000 64,000 -- --
Clark S. Kinlin............. -- -- 16,000 64,000 -- --
Stephen A. Morocco.......... -- -- 12,000 48,000 -- --
Mark W. Levie............... -- -- 15,000 60,000 -- --
Gary P. Vogt................ -- -- 9,000 36,000 -- --
Gary H. Carraway............ -- -- -- -- -- --

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

(1) There are no SARs outstanding.

(2) In addition, certain individuals received grants under the Corning
Incorporated stock option plan. Mr. Kinlin exercised 1,198 options in 1998.
The value realized was $21,983. Messrs. Campanella and Levie have 57,780;
exercisable Corning Incorporated options, respectively, valued at $690,123,
respectively. In 1998 Messrs. Campanella, Kinlin, and Levie had 64,608;
unexercisable Corning Incorporated options, respectively, valued at
$1,199,032; $0; and $0, respectively.

CORNING INCORPORATED PERFORMANCE PLAN ACTIVITY TABLE

This Table illustrates the number of performance-based shares awarded under
the Corning Incorporated Corporate Performance Plan. The number of shares earned
or which may be earned by the named executive was determined by the achievement
of specific return on equity, earnings per share or other objective goals for
Corning Incorporated. The percentage of awards that may be earned ranged from 0%
to 150% of target.

NUMBER
NUMBER OF NUMBER
GRANT OF SHARES PERFORMANCE SHARE OF SHARES
NAME YEAR DATE GRANTED PERIOD FORFEITED EARNED
- ---- -------- -------- --------- ----------- --------- ---------

Peter F. Campanella.................... 1999 N/A -- 1999 -- --
1998 N/A -- 1998 -- --
1997 2/5/97 12,000 1997 -- 18,000
Anthony P. Deasey...................... 1999 N/A N/A N/A N/A N/A
1998 N/A N/A N/A N/A N/A
1997 N/A N/A N/A N/A N/A
Clark S. Kinlin........................ 1999 N/A -- 1999 -- --
1998 N/A -- 1998 -- --
1997 2/5/97 3,000 1997 -- 4,500
Stephen A. Morocco..................... 1999 N/A -- 1999 -- --
1998 N/A -- 1998 -- --
1997 N/A -- 1997 -- --
Mark W. Levie.......................... 1999 N/A -- 1999 -- --
1998 N/A -- 1998 -- --
1997 N/A -- 1997 -- --
Gary P. Vogt........................... 1999 N/A -- 1999 -- --
1998 N/A -- 1998 -- --
1997 N/A -- 1997 -- --
Gary H. Carraway....................... 1999 N/A N/A 1999 N/A N/A
1998 N/A N/A 1998 N/A N/A
1997 N/A N/A 1997 N/A N/A

PENSION PLAN

The Company maintains a Pension Plan, a defined benefit plan, under which
benefits are paid based upon career earnings (regular salary and cash awards
such as those paid under the Company's Variable Compensation Plans) and years of
credited service. Employees are required to contribute an amount equal to 2% of
compensation in excess of the social security wage base up to the compensation
limits imposed by the Internal Revenue Code. Salaried employees may contribute
2% of their annual earnings up to the social security wage base. The Company's
contributions to the Plan are determined by the Plan's actuaries and are not
determined on an individual basis. The amounts of benefits payable under the
Plan and attributable to the Company's contributions is subject to the
provisions of the Employee Retirement Income Security Act and limits imposed by
the Internal Revenue Code.

Borden, Inc. maintains a non-qualified Supplemental Pension Plan (the
"Supplemental Plan"), pursuant to which it will pay to certain executives,
including each of the named executive officers, amounts approximately equal to
the difference between the benefits provided for under the WKI Pension Plan and
benefits which would have been provided thereunder but for limitations on
benefits which may be provided under tax-qualified plans, as set forth in the
Internal Revenue Code.

The estimated annual benefits under the Pension Plan and the Supplemental
Plan upon retirement at normal age for each of the executive officers of the
Company named in the Summary Compensation Table are:

YEAR OF
CREDITED SERVICE TOTAL BENEFIT
---------------- -------------

Peter F. Campanella............................... 28.8 $266,984
Anthony P. Deasey................................. 1.5 $ 88,439
Clark S. Kinlin................................... 18.4 $171,598
Stephen A. Morocco................................ 1.3 $ 90,364
Mark W. Levie..................................... 10.8 $142,634
Gary P. Vogt...................................... 23.2 $122,938
Gary H. Carraway.................................. 0.4 $ --

COMPENSATION OF MEMBERS OF BOARD

Members of the Board will receive no cash compensation for their service on
the Board or its committees. Members of the Board will receive reimbursement for
traveling costs and other out-of-pocket expenses incurred in attending Board and
committee meetings.

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

The following table sets forth information with respect to the beneficial
ownership of the Company's Common Stock as of December 31, 1999 by (i) each
person who is known by the Company to beneficially own more than 5% of the
Company's Common Stock, (ii) each of the Company's directors who own Common
Stock, (iii) each of the named executive officers who own Common Stock and
(iv) all directors and executive officers as a group. Unless otherwise
indicated, the address of each person named in the table below is World
Kitchen, Inc., One Pyrex Place, P.O. Box 1555, Elmira, New York 14902.

BENEFICIAL PERCENTAGE OF
OWNERSHIP OF COMMON
COMMON STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER STOCK(1) OUTSTANDING
- ------------------------------------ ------------ -------------

KKR Associates, L.P.(2)..................................... 64,369,143 96.3%
c/o Kohlberg Kravis Roberts & Co., L.P.
9 West 57th Street
New York, New York 10019
Corning Incorporated One Riverfront Plaza Corning, NY
14831..................................................... 1,920,000 2.9%
Peter F. Campanella(3)...................................... 180,000 *
Anthony P. Deasey(3)........................................ 80,000 *
Stephen A. Morocco(3)....................................... 60,000 *
Clark S. Kinlin(3).......................................... 80,000 *
Mark W. Levie(3)............................................ 75,000 *
All Directors and Executive Officers as a group............. 475,000 *

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

* Less than 1%.

(1) The amounts and percentages of common stock beneficially owned are reported
on the basis of regulations of the Commission governing the determination of
beneficial ownership of securities. Under the rules of the Commission, a
person is deemed to be a "beneficial owner" of a security if that person has
or shares "voting power," which includes the power to vote or to direct the
voting of such security, or "investment power," which includes the power to
dispose of or to direct the

disposition of such security. A person is also deemed to be a beneficial
owner of any securities of which that person has a right to acquire
beneficial ownership within 60 days. Under these rules, more than one person
may be deemed to be a beneficial owner of securities as to which such person
has an economic interest. The percentage of class outstanding is based on
66,857,143 shares of common stock outstanding at December 31, 1999.

(2) Shares of common stock shown as owned by KKR Associates, L.P. ("KKR
Associates") are owned of record by CCPC Acquisition Corp. KKR Associates is
the sole general partner of Whitehall Associates, L.P., which is the
managing member of BW Holdings, LLC. BW Holdings, LLC owns 100% of the
outstanding capital stock of CCPC Acquisition. Messrs. Navab and Carroll,
who are directors of WKI, and Messrs. Henry R. Kravis, George R. Roberts,
James H. Greene, Jr., Paul E. Raether, Michael W. Michelson, Michael T.
Tokarz, Perry Golkin, Robert I. MacDonnell, Scott M. Stuart and Edward A.
Gilhuly as general partners of KKR Associates, may be deemed to share
beneficial ownership of any shares beneficially owned by KKR Associates, but
disclaim any such beneficial ownership. The address of KKR Associates is 9
West 57th Street, New York, New York 10019.

(3) The Company has granted Messrs. Campanella, Deasey, Morocco, Kinlin and
Levie options to purchase 540,000, 240,000, 180,000, 240,000 and 225,000
shares of common stock, respectively, of which 20% will vest each year
beginning one year after the date of grant.

ITEM 13--CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

BETWEEN CORNING AND THE COMPANY

Historically, Corning has provided the Company with certain administrative,
technical and other services, as well as providing office space and
manufacturing capacity in facilities owned or leased by Corning. Additionally,
Corning has made available to the Company certain manufacturing technology and
other intellectual property, including the Pyrex-Registered Trademark- and
Corningware-Registered Trademark- trademarks. In connection with the
Recapitalization, Corning and WKI entered into several agreements relating to
the provision by Corning of goods and services to WKI, the sharing of certain
facilities with WKI and the royalty-free license to use certain trademarks,
tradenames, service marks, patents and know-how of Corning, in each case, on
terms substantially as described below.

HEADQUARTERS LEASE AND TRANSITION SERVICES AGREEMENT. Corning has entered
into agreements with WKI pursuant to which Corning made available certain
facilities until October 1, 1999 and certain administrative services which WKI
currently obtains from or through Corning until April 1, 2000. Corning has
agreed to provide these facilities and these services on substantially the same
terms as offered by Corning during the 12-month period immediately prior to the
Recapitalization and reflected in the Company's historical financial statements.
WKI has the right to terminate the facilities' lease on 30 days' notice and the
right to terminate the receipt of specific administrative services on 90 days'
notice.

SUPPLY AGREEMENT Certain of the Company's Pyrex-Registered Trademark-
bakeware products are manufactured at a facility owned by Corning in Greenville,
Ohio. The Company and Corning entered into a supply agreement pursuant to which
Corning will supply the Company with manufacturing capacity for these products
for three years. Orders under the supply agreement will be billed at Corning's
actual cost (consisting of standard costs plus variances allocable to production
of the Company's products) determined in the same manner as during the 12-month
period immediately prior to the Recapitalization and reflected in the Company's
historical financial statements. WKI moved production from the Greenville, Ohio
facility to a Company-owned facility during 1999.

TECHNOLOGY SUPPORT AGREEMENT The Company obtains certain manufacturing
technology, engineering and research and development services from Corning. The
Company and Corning entered

into a technology support agreement pursuant to which Corning will continue to
make these manufacturing and technology services available to the Company. In
addition, the technology support agreement will provide for Corning and the
Company to conduct an annual technology review, for each other's benefit,
relating to patents and technical know-how in the field of the Company's
products. The manufacturing technology and engineering services to be provided
by Corning will be made available to the Company on the same basis as has been
made available to the Company during the 12-month period immediately prior to
the Recapitalization. The technology support agreement will have a term of five
years and will be renewable for an additional five-year term at the option of
the Company.

ADMINISTRATIVE SERVICES AGREEMENT In order to enable the Company to
continue its sales operations in Australia, Brazil, Mexico, China, Hong Kong,
India, Japan, Korea, Singapore and Taiwan, Corning or its affiliates will
provide certain administrative and distribution services and sublease space to
the Company. The administrative services agreement governing these arrangements
has a term of two years expiring on April 1, 2000 and is on terms designed to
replicate substantially the economic terms of the arrangements in effect during
the 12 months immediately prior to the Recapitalization.

SHARED FACILITY AGREEMENT The Company's Corning, New York manufacturing
facility is adjacent to, and shares certain assets and infrastructure (e.g.,
waste disposal and utility service facilities) with, Corning's Fall Brook Plant.
The Company and Corning have entered into a shared facility agreement pursuant
to which the parties have provided for the continued use and sharing of these
assets and infrastructure facilities and the allocation of the costs associated
with these items (which costs are generally allocated according to the parties'
relative use of such shared asset) until April 1, 2008, or until such earlier
time as the Company or Corning shall have terminated its obligation to accept or
provide such assets and infrastructure facilities in accordance with the
agreement.

LICENSE AGREEMENTS Corning and the Company entered into certain license
agreements pursuant to which Corning granted to the Company exclusive licenses
to use the Corningware-Registered Trademark- trademark, service mark and trade
name and Pyroceram-Registered Trademark- trademark in the field of housewares
and the Pyrex-Registered Trademark- trademark in the field of durable consumer
products (which the Company currently does not sell) for ten years (each
renewable at the option of the Company on the same terms and conditions for an
unlimited number of successive ten-year terms). In addition, Corning entered
into agreements with the Company providing for the Company's continued use of
the Corning name for up to three years (and up to five years for molds and
molded products with the Corning name embedded thereon). Corning granted to the
Company a fully paid, royalty free license of patents and know-how (including
evolutionary improvements) owned by Corning that pertain to or have been used in
the Company's business.

CORNING GLASS CENTER AND SUPPLY ARRANGEMENTS Pursuant to the
Recapitalization Agreement, the Company will maintain its commercial
arrangements with the Corning Glass Center (the Corning employee store) for a
period of ten years ending March 31, 2008 on a pricing basis of the Company's
standard costs plus 15% and will continue to sell products to Corning's
manufacturing facilities for a period of five years in substantially the same
quantities and terms as during the twelve month period prior to March 31, 1998.

BETWEEN BORDEN AND THE COMPANY

In connection with the Recapitalization, the Company and Borden entered into
an agreement pursuant to which Borden will provide management, consulting and
financial services to the Company. Services will be provided in such areas as
the preparation and evaluation of strategic, operating, financial and capital
plans and the development and implementation of compensation and other incentive
programs. In consideration for such services, Borden will be entitled to an
annual fee of $2.5 million, plus reimbursement for certain expenses and
indemnification against certain liabilities. This agreement is terminable by
either party upon 30 days written notice. The transaction and financing

fees and expenses were included in the fees and expenses incurred in connection
with the Recapitalization. In addition, Borden and its affiliates provided all
of the interim debt financing for the Recapitalization, a portion of which was
refinanced by borrowings under the Credit Facilities and the remainder was
refinanced with the proceeds of the credit facilities.

TAX SHARING AGREEMENT

The Company and certain of its subsidiaries have entered into a tax sharing
arrangement with CCPC Acquisition pursuant to which the Company and such
subsidiaries will be required to compute their provision for income taxes on a
separate return basis and pay to, or receive from, CCPC Acquisition the separate
U.S. federal and applicable state and local income tax return liability or
credit so computed, if any.

STOCKHOLDERS' AGREEMENT; REGISTRATION RIGHTS AGREEMENT

The Company, CCPC Acquisition and Corning entered into the Stockholders'
Agreement which provides for certain restrictions and rights regarding the
transfer of Common Stock, including a right of first refusal in favor of, first,
the Company and, if the Company refuses, then CCPC Acquisition with respect to
the common stock owned by Corning. In addition, the Stockholders' Agreement
provides Corning with unlimited "piggy back" registration rights and one demand
registration right.

CCPC Acquisition has the right, under certain circumstances and subject to
certain conditions, to require the Company to register under the Securities Act
shares of common stock held by it pursuant to the CCPC Acquisition Registration
Rights Agreement. Such registration rights will generally be available to CCPC
Acquisition until registration under the Securities Act is no longer required to
enable it to resell the common stock owned by it without restriction. The CCPC
Acquisition Registration Rights Agreement provides, among other things, that the
Company will pay all registration expenses in connection with the first six
demand registrations requested by CCPC Acquisition and in connection with any
registration commenced by the Company as a primary offering in which CCPC
Acquisition participates through "piggy back" registration rights granted under
the CCPC Acquisition Registration Rights Agreement.

PART IV

ITEM 14--EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

14(A) LIST OF DOCUMENTS FILED AS PART OF THIS REPORT

1. Financial Statements

All financial statements of the registrant are set forth under Item 8,
Financial Statements and Supplementary Data of this Report on Form 10-K.

2. Schedule II Valuation Accounts and Reserves.

14(B) REPORTS ON FORM 8-K

On November 4, 1999, the registrant filed a report on Form 8-K as of
October 21, 1999 to report under "Item 2 Acquisition or Disposition of Assets"
reporting the completion of the acquisitions of General Housewares Corp. and
EKCO Group, Inc. This filing was amended by form 8-K/A on January 3, 2000 to
include the required financial information.

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.

WKI HOLDING COMPANY, INC.

By /s/ Nathaniel C. Stoddard President and Chief Executive March 29, 2000
------------------------------------ Officer
(Nathaniel C. Stoddard)

By /s/Anthony P. Deasey Senior Vice President and Chief March 29, 2000
------------------------------------ Financial Officer
(Anthony P. Deasey)

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

CAPACITY DATE
-------- ----

By /s/ C. Robert Kidder Director and Chairman of the March 29, 2000
------------------------------------ Board
(C. Robert Kidder)

By /s/ Nathaniel C. Stoddard President, Chief Executive March 29, 2000
------------------------------------ Officer, and Director
(Nathaniel C. Stoddard)

By /s/ Peter F. Campanella Director March 29, 2000
------------------------------------
(Peter F. Campanella)

By /s/ Alexander Navab Director March 29, 2000
------------------------------------
(Alexander Navab)

By /s/ Brian F. Carroll Director March 29, 2000
------------------------------------
(Brian F. Carroll)

By /s/ William H. Carter Director March 29, 2000
------------------------------------
(William H. Carter)

By /s/ Nancy A. Reardon Director March 29, 2000
------------------------------------
(Nancy A. Reardon)

By /s/ William F. Stoll Director March 29, 2000
------------------------------------
(William F. Stoll)

By /s/ Kevin M. Kelley Director March 29, 2000
------------------------------------
(Kevin M. Kelley)

14(C) EXHIBITS FILED AS PART OF THIS REPORT

EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- --------------------- ------------------------------------------------------------

*2.1 Recapitalization Agreement dated as of March 2, 1998, among
Corning Consumer Products Company, Corning Incorporated,
Borden, Inc. and CCPC Acquisition Corp. which appears as
Exhibit 2.1 to the Registration Statement on Form S-4, dated
June 18, 1998, is incorporated herein by reference in this
Annual Report on Form 10-K.

*2.2 Amendment to the Recapitalization Agreement dated March 31,
1998 which appears as Exhibit 2.2 to the Registration
Statement on Form S-4, dated June 18, 1998, is incorporated
herein by reference in this Annual Report on Form 10-K.

*2.3 Assignment and Assumption Agreement dated as of April 1,
1998 between the Company and Corning, which appears as
Exhibit 2.3 to the Registration Statement on Form S-4, dated
June 18, 1998, is incorporated herein by reference in this
Annual Report on Form 10-K.

*2.4 Stock Purchase Agreement, dated as of October 25, 1999,
between CCPC Acquisition Corp. and CCPC Holding Company,
Inc., is incorporated herein by reference in this annual
report on Form 10-K.

*2.5 Agreement and Plan of Merger, dated as of August 2, 1999,
between CCPC Acquisition Corp. and General Housewares Corp.,
is incorporated herein by reference in this annual report on
Form 10-K.

*2.6 Amendment No. 1 to the Agreement and Plan of Merger, dated
as of October 20, 1999, by and among CCPC Acquisition Corp.,
GHC Acquisition Corp. and General Housewares Corp., is
incorporated herein by reference in this annual report on
Form 10-K.

*2.7 Amendment No. 2 to the Agreement and Plan of Merger, dated
as of October 20, 1999, by and among CCPC Acquisition Corp.,
GHC Acquisition Corp., and General Housewares Corp., is
incorporated herein by reference in this annual report on
Form 10-K.

*2.8 Consent and Waiver to the Agreement and Plan of Merger,
dated as of October 21, 1999, by and among CCPC Acquisition
Corp., GHC Acquisition Corp. and General Housewares Corp.,
is incorporated herein by reference in this annual report on
Form 10-K.

*2.9 Contribution Agreement, dated as of October 21, 1999,
between CCPC Acquisition Corp. and CCPC Holding Company,
Inc., is incorporated herein by reference in this annual
report on Form 10-K.

*3.1 Amended and Restated Certificate of Incorporation of the
Company which appears as Exhibit 3.1 to the Registration
Statement on Form S-4, dated June 18, 1998, is incorporated
herein by reference in this Annual Report on Form 10-K.

*3.2 By-Laws of the Company which appears as Exhibit 3.2 to the
Registration Statement on Form S-4, dated June 18, 1998, is
incorporated herein by reference in this Annual Report on
Form 10-K.

*3.3 Certificate of Amendment of Certificate of Incorporation
which appears as Exhibit 3.3 to Amendment No. 3 to the
Registration Statement on Form S-4, dated September 16,
1998, is incorporated herein by reference in this Annual
Report on Form 10-K.

*3.4 Amended and Restated Certificate of Incorporation of CCPC
Holding Company, Inc., is incorporated herein by reference
in this annual report on Form 10-K.

EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- --------------------- ------------------------------------------------------------

*4.1 Indenture dated as of May 5, 1998 between the Company and
The Bank of New York, as Trustee which appears as Exhibit
4.1 to the Registration Statement on Form S-4, dated
June 18, 1998, is incorporated herein by reference in this
Annual Report on Form 10-K.

*4.2 Form of 9 5/8% Senior Subordinated Note due 2008 (included
in Exhibit 4.1) which appears as Exhibit 4.2 to the
Registration Statement on Form S-4, dated June 18, 1998, is
incorporated herein by reference in this Annual Report on
Form 10-K.

*4.3 Form of 9 5/8% Series B Senior Subordinated Note due 2008
(included in Exhibit 4.1) which appears as Exhibit 4.3 to
the Registration Statement on Form S-4, dated June 18, 1998,
is incorporated herein by reference in this Annual Report on
Form 10-K.

*4.4 Form of 9 1/4% Senior Note due 2006 (incorporated herein by
reference to Exhibit 4.2 (b) to EKCO Group, Inc. Form 10-K
for the year ended December 31, 1995, is incorporated herein
by reference in this annual report on Form 10-K.

*10.1 Credit Facility, dated as of April 9, 1998, among the
Company, the several lenders from time to time parties
thereto, and the Chase Manhattan Bank, as administrative
agent, which appears as Exhibit 10.1 to the Registration
Statement on Form S-4, dated June 18, 1998, is incorporated
herein by reference in this Annual Report on Form 10-K.

*10.2 Stockholders' Agreement, dated as of April 1, 1998 among the
Company, CCPC Acquisition Corp. and Corning Incorporated
which appears as Exhibit 10.2 to the Registration Statement
on Form S-4, dated June 18, 1998, is incorporated herein by
reference in this Annual Report on Form 10-K.

*10.3 Form of Management Stockholder's Agreement among the
Company, CCPC Acquisition Corp. and certain officers of the
Company which appears as Exhibit 10.3 to the Registration
Statement on Form S-4, dated June 18, 1998, is incorporated
herein by reference in this Annual Report on Form 10-K.

*10.4 Non-Qualified Stock Option Agreement dated as of April 1,
1998 between the Company and certain employees of the
Company which appears as Exhibit 10.4 to the Registration
Statement on Form S-4, dated June 18, 1998, is incorporated
herein by reference in this Annual Report on Form 10-K.

*10.5 1998 Stock Purchase and Option Plan for Key Employees of the
Company and Subsidiaries which appears as Exhibit 10.5 to
the Registration Statement on Form S-4, dated June 18, 1998,
is incorporated herein by reference in this Annual Report on
Form 10-K.

*10.6 Registration Rights Agreement between the Company and CCPC
Acquisition Corp. dated as of April 1, 1998 which appears as
Exhibit 10.6 to the Registration Statement on Form S-4,
dated June 18, 1998, is incorporated herein by reference in
this Annual Report on Form 10-K.

*10.7 Tax Sharing Agreement among the Company, CCPC Acquisition
Corp. and Revere Ware Corporation, dated as of April 30,
1998 which appears as Exhibit 10.7 to the Registration
Statement on Form S-4, dated June 18, 1998, is incorporated
herein by reference in this Annual Report on Form 10-K.

*10.8 Form of Sale Participation Agreement between the Company and
certain officers of the Company which appears as Exhibit
10.8 to the Registration Statement on Form S-4, dated June
18, 1998, is incorporated herein by reference in this Annual
Report on Form 10-K.

*13.1 General Housewares Corp. 1998 financial statements,
incorporated herein by reference to the Report on Form 8-K/A
dated January 3, 2000.

EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- --------------------- ------------------------------------------------------------

*13.2 EKCO Group, Inc. 1998 financial statements, incorporated
herein by reference to the Report on Form 8-K/A dated
January 3, 2000.

*16 Letter re: change in certifying accountant which appears as
Exhibit 16 to the Registration Statement on Form S-4, dated
June 18, 1998, is incorporated herein by reference in this
Annual Report on Form 10-K.

**21 Subsidiaries of the registrant.

*23.1 Consent of KPMG LLP, independent certified public
accountants, incorporated herein by reference to the Report
on Form 8-K/A dated January 3, 2000

**27 Financial Data Schedule

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

* Previously filed and incorporated by reference

** Filed herewith

SCHEDULE II

WKI HOLDING COMPANY, INC.

VALUATION ACCOUNTS AND RESERVES

(IN THOUSANDS)

BALANCE AT BALANCE AT
YEAR ENDED DECEMBER 31, 1999 12/31/98 ADDITIONS DEDUCTIONS 12/31/99
- ---------------------------- ---------- --------- ---------- ----------

Doubtful accounts and allowances..................... $11,172 $17,352 $(19,769) $ 8,755
Deferred tax assets valuation allowance.............. 92,177 -- (17,838) 74,339
Accumulated amortization of goodwill and other
intangibles........................................ 10,658 3,219 (1,753) 12,124
Accumulated amortization of software................. 13,311 2,333 (2,889) 12,755

BALANCE AT BALANCE AT
YEAR ENDED DECEMBER 31, 1998 12/31/97 ADDITIONS DEDUCTIONS 12/31/98
- ---------------------------- ---------- --------- ---------- ----------

Doubtful accounts and allowances..................... $ 7,304 $17,950 $(14,082) $11,172
Deferred tax assets valuation allowance.............. 13,432 92,177 (13,432) 92,177
Accumulated amortization of goodwill and other
intangibles........................................ 8,625 2,033 -- 10,658
Accumulated amortization of software................. 10,771 2,856 (316) 13,311

BALANCE AT BALANCE AT
YEAR ENDED DECEMBER 31, 1997 12/31/96 ADDITIONS DEDUCTIONS 12/31/97
- ---------------------------- ---------- --------- ---------- ----------

Doubtful accounts and allowances..................... $ 7,848 $10,418 $(10,962) $ 7,304
Deferred tax assets valuation allowance.............. 8,267 5,805 (640) 13,432
Accumulated amortization of goodwill and other
intangibles........................................ 6,592 2,033 -- 8,625
Accumulated amortization of software................. 8,338 3,244 (811) 10,771