Common use of REPORT OF INDEPENDENT ACCOUNTANTS Clause in Contracts

REPORT OF INDEPENDENT ACCOUNTANTS. In our opinion, the accompanying statement of net assets and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of The Brazilian Investment Fund, Inc. (the "Fund") at December 31, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the four years in the period then ended and for the period June 4, 1991 (commencement of operations) through December 31, 1991, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial 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 audits, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx, Xxx Xxxx 00000 February 9, 1996 FINANCIAL STATEMENTS --------- STATEMENT OF NET ASSETS --------- DECEMBER 31, 1994 VALUE SHARES (000) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND (98.7%) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS (96.8%) (Unless otherwise noted) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES (9.2%) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES (4.3%) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING (11.3%) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional (Common) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO (1.0%) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS (2.9%) Rhodia-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES (9.1%) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS (2.5%) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS (1.0%) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------

REPORT OF INDEPENDENT ACCOUNTANTS. ON CONSOLIDATED FINANCIAL STATEMENT SCHEDULE To the Board of Directors of Xxxxxx Corporation: Our audits of the consolidated financial statements referred to in our report dated March 8, 2002 appearing in this Form 10-K, also included an audit of the consolidated financial statement schedule listed in Item 14(c) of this Form 10-K. In our opinion, the accompanying this consolidated financial statement of net assets and the related statements of operations and of changes in net assets and the financial highlights present schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial position of The Brazilian Investment Fundstatements. PRICEWATERHOUSECOOPERS LLP Rochester, Inc. (the "Fund") at New York March 8, 2002 SCHEDULE II XXXXXX CORPORATION VALUATION AND QUALIFYING ACCOUNTS DESCRIPTION BALANCE AT BEGINNING OF PERIOD CHARGED IN COSTS AND EXPENSES CHANGE IN ESTIMATE DEDUCTIONS BALANCE AT END OF PERIOD ----------- ---------- ---------- --------- ---------- ---------- December 31, 1995, the results of its operations 1999: Allowance for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the four years in the period then ended and for the period June 4, 1991 doubtful accounts....... $ 192 $ 30 $ -- $(commencement of operations34) through $ 188 Deferred tax asset valuation account............................ 14,679 -- (3,852) -- 10,827 December 31, 19912000: Allowance for doubtful accounts....... $ 188 $ 30 $ -- $ -- $ 218 Deferred tax asset valuation account............................ 10,827 -- 3,716 -- 14,543 December 31, 2001: Allowance for doubtful accounts....... $ 218 $1,473 $ -- $(76) $ 1,615 Deferred tax asset valuation account............................ 14,543 -- (14,543) -- -- 61 EXHIBIT 21.1‌ SUBSIDIARIES OF THE REGISTRANT XXXXXX CORPORATION SUBSIDIARIES NAME PLACE OF INCORPORATION ---- ---------------------- Charged Productions, Inc.................................... Nevada Omega Protein............................................... Nevada Xxx.Xxx Corporation......................................... Nevada EXHIBIT 23‌ CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in conformity with generally accepted accounting principlesthe Registration Statements on Form S-8 (Nos. These 333-43223 and 333-45568) of Xxxxxx Corporation of our reports dated March 8, 2002 relating to the consolidated financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial 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 consolidated financial statement presentation. We believe that our auditsschedule, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxxappear in this Form 00-X. XXXXXXXXXXXXXXXXXXXXXX XXX Xxxxxxxxx, Xxx Xxxx 00000 February 9March 28, 1996 FINANCIAL STATEMENTS --------- STATEMENT 2002 EXHIBIT 24‌ POWER OF NET ASSETS --------- DECEMBER 31, 1994 VALUE SHARES (000) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND (98.7%) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS (96.8%) (Unless otherwise noted) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES (9.2%) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES (4.3%) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING (11.3%) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional (Common) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO (1.0%) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS (2.9%) Rhodia-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES (9.1%) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS (2.5%) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS (1.0%) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------ATTORNEY

REPORT OF INDEPENDENT ACCOUNTANTS. In our opinion, the accompanying statement of net assets consolidated balance sheets and the related consolidated statements of operations operations, of stockholders' equity and of changes in net assets and the financial highlights cash flows present fairly, in all material respects, the financial position of The Brazilian Investment Fund, Harmonic Inc. (the "Fund") and its subsidiaries at December 31, 19951999 and 1998, and the results of its their operations for the year then ended, the changes in its net assets and their cash flows for each of the two three years in the period then ended and the financial highlights for each of the four years in the period then ended and for the period June 4, 1991 (commencement of operations) through December 31, 1991, 1999 in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the FundCompany's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial 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 audits, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, audits provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE /s/ PRICEWATERHOUSECOOPERS LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx-------------------------------------- PRICEWATERHOUSECOOPERS LLP San Jose, Xxx Xxxx 00000 February 9CA January 18, 1996 FINANCIAL STATEMENTS --------- STATEMENT OF NET 2000 30 HARMONIC INC. CONSOLIDATED BALANCE SHEETS ASSETS --------- DECEMBER 31, 1994 VALUE SHARES ---------------------- 1999 1998 --------- --------- (000IN THOUSANDS, EXCEPT SHARE DATA) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND Current assets: Cash and cash equivalents................................. $ 24,822 $ 9,178 Short-term investments.................................... 64,877 -- Accounts receivable, net.................................. 35,421 17,646 Inventories............................................... 35,310 22,385 Deferred income taxes..................................... 5,478 -- Prepaid expenses and other assets......................... 3,792 1,175 -------- -------- Total current assets.............................. 169,700 50,384 Property and equipment, net................................. 14,931 10,726 Intangibles and other assets................................ 1,062 1,314 -------- -------- $185,693 $ 62,424 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable.......................................... $ 18,946 $ 7,534 Income taxes payable...................................... 2,265 151 Accrued liabilities....................................... 19,073 10,204 Current portion of long-term debt......................... -- 177 -------- -------- Total current liabilities......................... 40,284 18,066 Long-term debt, less current portion........................ -- 400 Other non-current liabilities............................... 521 484 Commitments and contingencies (98.7%Note 14) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS Stockholders' equity: Preferred Stock, $.001 par value, 5,000,000 shares authorized; no shares issued or outstanding............ -- -- Common Stock, $.001 par value, 50,000,000 shares authorized; 30,501,766 and 23,451,688 shares issued and outstanding............................................ 31 23 Capital in excess of par value............................ 148,551 70,913 Accumulated deficit....................................... (96.8%3,792) (Unless otherwise noted27,472) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES Accumulated other comprehensive income.................... 98 10 -------- -------- Total stockholders' equity........................ 144,888 43,474 -------- -------- $185,693 $ 62,424 ======== ======== The accompanying notes are an integral part of these consolidated financial statements. HARMONIC INC. CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, ---------------------------------- 1999 1998 --------- --------- (9.2%IN THOUSANDS, EXCEPT 1997-------- SHARE DATA) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES (4.3%) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING (11.3%) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional (Common) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO (1.0%) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS (2.9%) Rhodia-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES (9.1%) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS (2.5%) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS (1.0%) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------Net sales................................................... $184,075 $ 83,857 $74,442

REPORT OF INDEPENDENT ACCOUNTANTS. In our opinion, the accompanying statement of net assets consolidated balance sheets and the related consolidated statements of operations and stockholders' equity and of changes in net assets and the financial highlights cash flows present fairly, in all material respects, the financial position of The Brazilian Investment Fund, Harmonic Inc. (the "Fund") and its subsidiaries at December 31, 19951998 and 1997, and the results of its their operations for the year then ended, the changes in its net assets and their cash flows for each of the two three years in the period then ended and the financial highlights for each of the four years in the period then ended and for the period June 4, 1991 (commencement of operations) through December 31, 1991, 1998 in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the FundCompany's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial 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 audits, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, audits provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE /s/ PRICEWATERHOUSECOOPERS LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx-------------------------------------- PRICEWATERHOUSECOOPERS LLP San Jose, Xxx Xxxx 00000 February 9CA January 20, 1996 FINANCIAL STATEMENTS --------- STATEMENT OF NET ASSETS --------- 1999, except as to Note 14, which is as of March 15, 1999 31 CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1994 VALUE SHARES --------------------- 1998 1997 --------- -------- (000IN THOUSANDS, EXCEPT SHARE DATA) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND ASSETS Current assets: Cash and cash equivalents................................. $ 9,178 $13,670 Accounts receivable, net.................................. 17,646 16,458 Inventories............................................... 22,385 15,474 Prepaid expenses and other assets......................... Total current assets.............................. 1,175 -------- 50,384 1,774 ------- 47,376 Notes receivable............................................ -- 1,300 Property and equipment, net................................. 10,726 10,077 Intangibles and other assets................................ LIABILITIES AND STOCKHOLDERS' EQUITY 1,314 -------- $ 62,424 ======== 134 ------- $58,887 ======= Current liabilities: Accounts payable.......................................... $ 7,534 $ 3,708 Accrued liabilities....................................... 10,355 4,896 Current portion of long-term debt......................... 177 -- -------- ------- Total current liabilities......................... 18,066 8,604 Long-term debt, less current portion........................ 400 -- Other non-current liabilities............................... 484 352 Commitments and Contingencies (98.7%Notes 11 and 13) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS Stockholders' equity: Preferred Stock, $.001 par value, 5,000,000 shares authorized; no shares issued or outstanding............ -- -- Common Stock, $.001 par value, 50,000,000 shares authorized; 11,725,844 and 10,414,297 shares issued and outstanding............................................ 12 10 Capital in excess of par value............................ 70,924 55,917 Accumulated deficit....................................... (96.8%27,472) (Unless otherwise noted6,019) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES Accumulated other comprehensive income.................... 10 23 -------- ------- Total stockholders' equity........................ 43,474 49,931 -------- ------- $ 62,424 $58,887 ======== ======= The accompanying notes are an integral part of these consolidated financial statements. CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, --------------------------------------- 1998 ----------- (9.2%IN THOUSANDS, 1997 1996 ---------- ---------- EXCEPT PER SHARE DATA) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES Net sales................................................... $ 83,857 $74,442 $60,894 Cost of sales............................................... Gross profit................................................ Operating expenses: 53,302 -------- 30,555 -------- 39,837 ------- 34,605 ------- 33,163 ------- 27,731 ------- Research and development.................................. 13,524 11,676 9,237 Sales and marketing....................................... 18,162 13,599 9,827 General and administrative................................ 6,812 4,824 3,463 Acquired in-process technology............................ Total operating expenses............................... Income (4.3%loss) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'Bfrom operations............................... 14,000 -------- 52,498 -------- (21,943) -- ------- 30,099 ------- 4,506 -- ------- 22,527 ------- 5,204 Interest and other income, net.............................. Income (loss) before income taxes........................... 490 -------- (21,453) 682 ------- 5,188 1,025 ------- 6,229 Provision for income taxes.................................. Net income (loss)........................................... Net income (loss) per share: -- -------- $(21,453) ======== 259 ------- $ 4,929 ======= 311 ------- $ 5,918 ======= Basic.................................................. Diluted................................................ Weighted average shares: $ (1.85) ======== $ (1.85) ======== $ 0.48 ======= $ 0.43 ======= $ 0.59 ======= $ 0.52 ======= Basic.................................................. Diluted................................................ 11,622 ======== 11,622 ======== 10,345 ======= 11,523 ======= 10,106 ======= 11,474 ======= The accompanying notes are an integral part of these consolidated financial statements. CONSOLIDATED STATEMENT OF STOCKHOLDERS' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING EQUITY ACCUMULATED COMMON STOCK CAPITAL IN OTHER --------------- EXCESS OF ACCUMULATED COMPREHENSIVE STOCKHOLDERS' COMPREHENSIVE SHARES AMOUNT PAR VALUE DEFICIT INCOME EQUITY INCOME(LOSS) (11.3%IN THOUSANDS) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional Balance at December 31, 1995..................... 9,904 $10 $53,865 $(Common16,866) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO $ -- $ 37,009 Net income................. -- -- -- 5,918 -- 5,918 $ 5,918 Other comprehensive income................... $ 5,918 ======== Exercise of stock options.................. 208 -- 240 -- -- 240 Issuance of Common Stock under Stock Purchase Plan..................... 49 -- 474 -- -- 474 Balance at December 31, 1996..................... 10,161 10 54,579 (1.0%10,948) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS -- 43,641 Net income................. -- -- -- 4,929 -- 4,929 $ 4,929 Currency translation....... -- -- -- -- 23 23 23 Other comprehensive income................... $ 4,952 ======== Exercise of stock options.................. 185 -- 612 -- -- 612 Issuance of Common Stock under Stock Purchase Plan..................... 68 -- 726 -- -- 726 Balance at December 31, 1997..................... 10,414 10 55,917 (2.9%6,019) Rhodia23 49,931 Net loss................... -- -- -- (21,453) -- (21,453) $(21,453) Currency translation....... -- -- -- -- (13) (13) (13) Other comprehensive loss... Exercise of stock $(21,466)======== options.................. 187 -- 784 -- -- 784 Issuance of Common Stock under Stock Purchase Plan..................... 87 -- 830 -- -- 830 Acquisition of New Media Communication Ltd........ 1,038 2 13,393 -- -- 13,395 1998..................... 11,726 $12 $70,924 $(27,472) $ 10 $ 43,474 ====== === ======= ======== ==== ======== Balance at December 31, The accompanying notes are an integral part of these consolidated financial statements. CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 1998 1997 1996 (IN THOUSANDS) Cash flows from operating activities: Net income (loss)......................................... $(21,453) $ 4,929 $ 5,918 Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: Depreciation and amortization............................. 4,283 3,441 2,506 Acquired in-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES process technology............................ Changes in assets and liabilities, net of effects of acquisition: Accounts receivable.................................... 14,000 (9.1%1,040) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS -- (2.5%3,815) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS -- (1.0%6,841) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------Inventories............................................ (6,393) (692) (5,606) Prepaid expenses and other assets...................... 1,697 139 (1,848) Accounts payable....................................... 3,187 (1,896) 3,403 Accrued and other liabilities.......................... 3,694 (140) 2,781 Net cash (used in) provided by operating activities........................................ (2,025) 1,966 313 Cash flows used in investing activities: Acquisition of property and equipment..................... Acquisition of New Media Communication Ltd., net of cash received............................................... (4,384) (280) (4,767) -- (6,743) -- Long-term advances........................................ -- (1,300) -- Net cash used in investing activities................ Cash flows from financing activities: (4,664) (6,067) (6,743) Proceeds from issuance of Common Stock.................... 1,614 1,338 714 Borrowings under bank line and term loan.................. 1,377 -- -- Repayments under bank line and term loan.................. (800) -- -- Net cash provided by financing activities............ Effect of exchange rate changes on cash and cash equivalents............................................... 2,191 6 1,338 23 714 -- Net decrease in cash and cash equivalents................... (4,492) (2,740) (5,716) Cash and cash equivalents at beginning of period............ 13,670 16,410 22,126 Cash and cash equivalents at end of period.................. Supplemental disclosure of cash flow information: $ 9,178======== $13,670======= $16,410======= Interest paid during the period........................... $ 80 $ -- $ 21 Income taxes paid during the period....................... $ 146 $ 323 $ 285 The accompanying notes are an integral part of these consolidated financial statements. 35 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Harmonic Inc. ("Harmonic" or the "Company") designs, manufactures and markets digital and fiber optic systems for delivering video, voice and data services over cable, satellite and wireless networks. Our advanced solutions enable cable television and other network operators to provide a range of broadcast and interactive broadband services that include high-speed Internet access, telephony and video on demand. We offer a broad range of fiber optic transmission and digital headend products for hybrid fiber coax, satellite and wireless networks, and our acquisition of New Media Communication Ltd. in January 1998 has allowed us to develop and expand our product offerings to include high-speed data delivery software and hardware.

REPORT OF INDEPENDENT ACCOUNTANTS. To the Stockholders and Board of Directors of Cypress Semiconductor Corporation: In our opinion, the accompanying statement of net assets consolidated balance sheets and the related consolidated statements of operations operations, stockholders' equity and of changes in net assets and the financial highlights cash flows present fairly, in all material respects, the financial position of The Brazilian Investment FundCypress Semiconductor Corporation and its subsidiaries at January 3, Inc. (the "Fund") at 1994 and December 3128, 19951992, and the results of its their operations for the year then ended, the changes in its net assets and their cash flows for each of the two three years in the period then ended and the financial highlights for each of the four years in the period then ended and for the period June 4January 3, 1991 (commencement of operations) through December 31, 19911994, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the FundCompany's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial 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 audits, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, audits provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx XxxxSan Jose, Xxx Xxxx 00000 February 9California January 25, 1996 1994 28 QUARTERLY FINANCIAL STATEMENTS DATA THREE MONTHS ENDED ------------------------------------------------------- JANUARY 3, SEPTEMBER 27, JUNE 28, MARCH 29, 1994 1993 1993 1993 ---------- (IN THOUSANDS, ------------- EXCEPT PER SHARE -------- DATA) --------- STATEMENT OF NET ASSETS Revenues...................... $ 83,012 $77,037 $ 74,753 $69,710 Gross margin.................. 35,352 31,686 29,526 28,127 Net income (loss)............. (4,088) 6,077 3,605 2,449 Net income (loss) per share... $ (0.11) ---------- ---------- $ 0.16 ------------- ------------- $ 0.10 -------- -------- $ 0.07 --------- --------- DECEMBER 3128, 1994 VALUE SHARES SEPTEMBER 28, JUNE 29, MARCH 30, 1992 1992 1992 1992 ------------ ------------- -------- --------- (000IN THOUSANDS, EXCEPT PER SHARE DATA) --------------------------------------------------------- Revenues.................... $ 67,386 $65,254 $ 65,793 $73,809 Gross margin................ 25,993 26,787 26,420 34,883 Net income (loss)........... (23,735) 472 (1,663) 3,916 Net income (loss) per share..................... $ (0.66) $ 0.01 $ (0.04) $ 0.10 ------------ BRAZILIAN INVESTMENT FUND (98.7%) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS (96.8%) (Unless otherwise noted) --------------------------------------------------------- ------------ ------------- APPLIANCES & HOUSEHOLD DURABLES (9.2%) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES (4.3%) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING (11.3%) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional (Common) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO (1.0%) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS (2.9%) Rhodia-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES (9.1%) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS (2.5%) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS (1.0%) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- --------------------- -------- --------- ---------

REPORT OF INDEPENDENT ACCOUNTANTS. In our opinion, the accompanying statement of net assets and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of The Brazilian Investment Fund, Inc. (the "Fund") at December 31, 19951996, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the four five years in the period then ended and for the period June 4, 1991 (commencement of operations) through December 31, 1991ended, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial 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 audits, which included confirmation of securities at December 31, 1995 1996 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx, Xxx Xxxx 00000 February 910, 1996 FINANCIAL STATEMENTS --------- STATEMENT 1997 The Brazilian Investment Fund, Inc. Investment Summary as of December 31, 1995 ----------------------------------------------------------------- ------------ ----------------------------------------------------------------- ------------ HISTORICAL INFORMATION TOTAL RETURN (%) --------------------------------------- ----------- NET ASSET VALUE (2) INDEX (1)(3)** ----------------------- -------------- ----------- AVERAGE AVERAGE CUMULATIVE ANNUAL CUMULATIVE ANNUAL ----------------------- -------------- ----------- ONE YEAR -26.61% -26.61% -20.24% -20.24% SINCE INCEPTION* 135.61 20.59 180.44 25.20 PAST PERFORMANCE IS NOT PREDICTIVE OF NET ASSETS --------- FUTURE PERFORMANCE. ----------------------------------------------------------------- ------------ RETURNS AND PER SHARE INFORMATION XXXXX REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC YEARS ENDED DECEMBER 31, : 1991* 1992 1993 1994 VALUE SHARES 1995 Net Asset Value Per Share $ 63.31 $ 55.28 $ 83.58 $ 129.97 $ 64.14 Income Dividends - - - $ 1.80 - Capital Gains Distributions - - $ 7.06 $ 6.65 $ 37.73 Total Return (0002) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND 26.62% (98.712.68%) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS 72.52% 68.32% (96.826.61%) Index Total Return (Unless otherwise noted3) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES ** 3.48% 0.32% 99.45% 69.83% (9.220.24%) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES (4.3%) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING (11.3%) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional (Common) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO (1.0%) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS (2.9%) Rhodia-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES (9.1%) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS (2.5%) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS (1.0%) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------)

REPORT OF INDEPENDENT ACCOUNTANTS. To the Directors and Stockholders of Cabot Corporation: Our report on the consolidated financial statements of Cabot Corporation is incorporated by reference in this Form 10-K from page 40 of the 1994 Annual Report to Stockholders of Cabot Corporation. In connection with our audits of such financial statements, we have also audited the related financial statement schedules listed in the Index on page 17 of this Form 10-K. In our opinion, the accompanying financial statement of net assets and schedules referred to above, when considered in relation to the related basic financial statements of operations and of changes in net assets and the financial highlights taken as a whole, present fairly, in all material respects, the financial position of The Brazilian Investment Fundinformation required to be included therein. COOPERS & XXXXXXX L.L.P. Boston, Inc. (Massachusetts November 1, 1994 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the "Fund") at December 31, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the two years incorporation by reference in the period then ended registration statements of Cabot Corporation on Form S-3 (File No. 33-48686) and the financial highlights for each of the four years in the period then ended and for the period June 4on Forms COOPERS & XXXXXXX L.L.P. Boston, 1991 (commencement of operations) through Massachusetts December 31, 1991, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial 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 audits, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx, Xxx Xxxx 00000 February 9, 1996 FINANCIAL STATEMENTS --------- STATEMENT OF NET ASSETS --------- DECEMBER 3120, 1994 VALUE SHARES CABOT CORPORATION CONSOLIDATED - -------------------------------------------------------------------------------- SCHEDULE V PROPERTY, PLANT AND EQUIPMENT YEAR ENDED SEPTEMBER 30, 1994 (DOLLARS IN 000'S) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F - ----------------------------------------------------------------------------------------------- OTHER CHANGES/ ADD (98.7%DEDUCT) -------------------------------------------------- ----------------------- BALANCE FOREIGN BALANCE AT CURRENCY AT BEGINNING ADDITIONS TRANSLATION END OF CLASSIFICATION OF PERIOD AT COST RETIREMENTS ADJUSTMENT OTHER PERIOD - ----------------------------------------------------------------------------------------------- Specialty Chemicals and Materials $1,156,692 $70,628 $(18,720) $34,522 $45,525(a) $1,288,647 Energy................... 91,566 2,923 (3,194) 91,295 General corporate........ 1,970 --------- 4 ------- (340) -------- ------- ------- 1,634 ---------- BRAZILIAN PREFERRED STOCKS Total $1,250,228 $73,555 $(96.8%22,254) $34,522 $45,525 $1,381,576 ========== ======= ======== ======= ======= ========== YEAR ENDED SEPTEMBER 30, 1993 (Unless otherwise notedDOLLARS IN 000'S) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F - ----------------------------------------------------------------------------------------------- OTHER CHANGES/ ADD (9.2%DEDUCT) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES ----------------------- BALANCE FOREIGN BALANCE AT CURRENCY AT BEGINNING ADDITIONS TRANSLATION END OF CLASSIFICATION OF PERIOD AT COST RETIREMENTS ADJUSTMENT OTHER PERIOD - ----------------------------------------------------------------------------------------------- Specialty Chemicals and Materials $1,182,186 $63,943 $(4.3%7,938) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING $ (11.3%87,114) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional $5,615(b) $1,156,692 Energy.................... 90,860 706 91,566 General corporate......... 1,610 --------- 360 ------- -------- ---------- ------ 1,970 ---------- Total $1,274,656 $65,009 $(Common7,938) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO $ (1.0%87,114) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS $5,615 $1,250,228 ========== ======= ======= ========= ====== ========== YEAR ENDED SEPTEMBER 30, 1992 (2.9%DOLLARS IN 000'S) Rhodia-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F - ----------------------------------------------------------------------------------------------- OTHER CHANGES/ ADD (9.1%DEDUCT) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS ----------------------- BALANCE FOREIGN BALANCE AT CURRENCY AT BEGINNING ADDITIONS TRANSLATION END OF CLASSIFICATION OF PERIOD AT COST RETIREMENTS ADJUSTMENT OTHER PERIOD - ----------------------------------------------------------------------------------------------- Specialty Chemicals and Materials.............. $1,042,090 $76,519 $(2.5%8,542) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS $42,680 $29,439(c) $1,182,186 Energy................... 89,581 1,279 90,860 General corporate........ 5,162 ---------- 272 ------- (1.0%3,824) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- --------------------- ------- ------- 1,610 ---------- Total.......... $1,136,833 $78,070 $(12,366) $42,680 $29,439 $1,274,656 ========== ======= ======== ======== ======= ========== <FN> - ---------------

REPORT OF INDEPENDENT ACCOUNTANTS. To the Board of Directors and Stockholders of Total Renal Care Holdings, Inc. In our opinion, the accompanying statement of net assets consolidated balance sheets and the related consolidated statements of operations income, of stockholders' equity, and of changes in net assets and the financial highlights cash flows present fairly, in all material respects, the financial position of The Brazilian Investment FundTotal Renal Care Holdings, Inc. (the "Fund") and its subsidiaries at December 31, 1996 and 1997, and the results of their operations and their cash flows for the year ended May 31, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then seven months ended and the financial highlights for each of the four years in the period then ended and for the period June 4, 1991 (commencement of operations) through December 31, 19911995 and the years ended December 31, 1996 and 1997 in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the FundCompany's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial 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 audits, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, audits provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx XxxxSeattle, Xxx Xxxx 00000 Washington February 916, 1998, except as to Note 17 which is as of March 30, 1998 TOTAL RENAL CARE HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS DECEMBER 1996 FINANCIAL STATEMENTS --------- STATEMENT OF NET ASSETS --------- 31, DECEMBER 31, 1994 VALUE SHARES (000) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND (98.7%) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS (96.8%) (Unless otherwise noted) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES (9.2%) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES (4.3%) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING (11.3%) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional (Common) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO (1.0%) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS (2.9%) Rhodia-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES (9.1%) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS (2.5%) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS (1.0%) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------1997 ASSETS Cash and cash equivalents.......................... $ 19,881,000 $ 5,400,000 Patient accounts receivable, less allowance for doubtful accounts of $7,911,000 and $11,892,000, respectively...................................... 91,009,000 152,481,000 Receivable from Xxxxx.............................. 347,000 534,000 Inventories........................................ 6,045,000 8,743,000 Deferred income taxes.............................. 3,233,000 6,146,000

REPORT OF INDEPENDENT ACCOUNTANTS. To the Board of Directors and Stockholders of Total Renal Care Holdings, Inc. In our opinion, the accompanying statement of net assets consolidated balance sheets and the related consolidated statements of operations income, of stockholders' equity, and of changes in net assets and the financial highlights cash flows present fairly, in all material respects, the financial position of The Brazilian Investment FundTotal Renal Care Holdings, Inc. (the "Fund") and its subsidiaries at December 31, 19951997 and 1998, and the results of its their operations for the year then ended, the changes in its net assets and their cash flows for each of the two three years in the period then ended and the financial highlights for each of the four years in the period then ended and for the period June 4, 1991 (commencement of operations) through December 31, 1991, 1998 in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the FundCompany's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial 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 audits, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, audits provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE PricewaterhouseCoopers LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx XxxxSeattle, Xxx Xxxx 00000 February 9Washington March 29, 1996 FINANCIAL STATEMENTS --------- STATEMENT OF NET ASSETS --------- DECEMBER 1999 TOTAL RENAL CARE HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS December 31, 1994 VALUE SHARES (000) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND (98.7%) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS (96.8%) (Unless otherwise noted) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES (9.2%) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES (4.3%) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING (11.3%) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional (Common) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO (1.0%) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS (2.9%) Rhodia-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES (9.1%) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS (2.5%) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS (1.0%) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------December 31, 1997 1998 Assets Cash and cash equivalents...................... $ 6,143,000 $ 41,487,000 Patient accounts receivable, less allowance for doubtful accounts of $30,695,000 and $61,848,000, respectively..................... 248,408,000 416,472,000 Receivable from Xxxxx.......................... 534,000 350,000 Inventories.................................... 15,766,000 23,470,000 Deferred income taxes.......................... 9,853,000 31,917,000

REPORT OF INDEPENDENT ACCOUNTANTS. To the Shareholders of Avalon Cable of Michigan, Inc. In our opinion, the accompanying statement of net assets consolidated balance sheets and the related consolidated statements of operations and of changes in net assets shareholders' deficit and the financial highlights of cash flows present fairly, in all material respects, the financial position of The Brazilian Investment FundCable Michigan, Inc. and subsidiaries (collectively, the "FundCompany") at December 31, 19951996 and 1997 and November 5, 1998, and the results of its their operations for the year then ended, the changes in its net assets and their cash flows for each of the two years in the period then ended and the financial highlights for each of the four years in the period then ended and for the period June 4, 1991 (commencement of operations) through December 31, 19911996 and 1997 and the period from January 1, 1998 to November 5, 1998, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the FundCompany's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, audits provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE /s/ PRICEWATERHOUSECOOPERS LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx XxxxNew York, Xxx Xxxx 00000 February 9New York March 30, 1996 FINANCIAL STATEMENTS --------- STATEMENT OF NET ASSETS --------- 1999 65 CABLE MICHIGAN, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1994 VALUE SHARES NOVEMBER 5, 1997 1998 ASSETS (000DOLLARS IN THOUSANDS) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND Cash and temporary cash investments......................... $ 17,219 $ 6,093 Accounts receivable, net of reserve for doubtful accounts of $541 at December 31, 1997 and $873 at November 5, 1998.... 3,644 4,232 Prepayments and other....................................... 663 821 Accounts receivable from related parties.................... 166 396 Deferred income taxes....................................... 1,006 541 Total current assets........................................ 22,698 12,083 Property, plant and equipment, net.......................... 73,836 77,565 Intangible assets, net...................................... 45,260 32,130 Deferred charges and other assets........................... 803 9,442 Total assets................................................ $142,597 $131,220 ======== ======== LIABILITIES AND SHAREHOLDERS' DEFICIT Current portion of long-term debt........................... $ -- $ 15,000 Accounts payable............................................ 5,564 8,370 Advance xxxxxxxx and customer deposits...................... 2,242 1,486 Accrued taxes............................................... 167 1,035 Accrued cable programming expense........................... 2,720 5,098 Accrued expenses............................................ 4,378 2,052 Accounts payable to related parties......................... 1,560 343 Total current liabilities................................... 16,631 33,384 Long-term debt.............................................. 143,000 120,000 Deferred income taxes....................................... 22,197 27,011 Total liabilities........................................... 181,828 180,395 Minority interest........................................... 14,643 14,690 Commitments and contingencies (98.7%) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS Note 11)..................... -- -- Preferred Stock............................................. -- -- Common stock................................................ -- -- Common shareholders' deficit................................ (96.8%53,874) (Unless otherwise noted63,865) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES (9.2%) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES (4.3%) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'BTotal Liabilities and Shareholders' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING (11.3%) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional (Common) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO (1.0%) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS (2.9%) Rhodia-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES (9.1%) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS (2.5%) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS (1.0%) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------Deficit................. $142,597======== $131,220======== The accompanying notes are an integral part of these consolidated financial statements. 66 CABLE MICHIGAN, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, FOR THE PERIOD FROM ------------------------ JANUARY 1, 1998 TO 1996 1997 NOVEMBER 5, 1998 ---------- ---------- -------------------

REPORT OF INDEPENDENT ACCOUNTANTS. To the Board of Directors and Shareholders of Harmonic Inc. In our opinion, the consolidated financial statements listed in the accompanying statement of net assets and the related statements of operations and of changes in net assets and the financial highlights index present fairly, in all material respects, the financial position of The Brazilian Investment Fund, Harmonic Inc. (the "Fund") and its subsidiaries at December 31, 19952000 and 1999, and the results of its their operations for the year then ended, the changes in its net assets and their cash flows for each of the two three years in the period then ended and the financial highlights for each of the four years in the period then ended and for the period June 4, 1991 (commencement of operations) through December 31, 1991, 2000 in conformity with accounting principles generally accepted accounting principlesin the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the FundCompany's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted auditing standards in the United States of America, 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 audits, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, audits provide a reasonable basis for the opinion expressed aboveour opinion. PRICE WATERHOUSE /s/ PRICEWATERHOUSECOOPERS LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx------------------------------------------------------ PRICEWATERHOUSECOOPERS LLP San Jose, Xxx Xxxx 00000 February 9CA March 30, 1996 FINANCIAL STATEMENTS --------- STATEMENT OF NET 2001 37 38 HARMONIC INC. CONSOLIDATED BALANCE SHEETS ASSETS --------- DECEMBER 31, 1994 2000 1999 (IN THOUSANDS, EXCEPT PAR VALUE SHARES AMOUNTS) Current assets: Cash and cash equivalents................................. $ 13,505 $ 24,822 Short-term investments.................................... 86,164 64,877 Accounts receivable, net.................................. 67,726 35,421 Inventories............................................... 80,191 35,310 Deferred income taxes..................................... 30,506 5,478 Prepaid expenses and other assets......................... 10,961 3,792 Total current assets.............................. 289,053 169,700 Property and equipment, net................................. 47,366 14,931 Intangibles and other assets................................ 89,525 1,062 $ 425,944 $185,693 =========== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable.......................................... $ 32,783 $ 18,946 Income taxes payable...................................... 1,109 2,265 Accrued liabilities....................................... 60,543 19,073 Total current liabilities......................... 94,435 40,284 Deferred income taxes....................................... 35,215 -- Other non-current liabilities............................... 592 521 Commitments and contingencies (000Notes 12 and 13) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND Stockholders' equity: Preferred Stock, $.001 par value, 5,000 shares authorized; no shares issued or outstanding........................ -- -- Common Stock, $.001 par value, 150,000 shares authorized; 57,891 and 30,502 shares issued and outstanding........ 58 31 Capital in excess of par value............................ 1,952,784 148,551 Accumulated deficit....................................... (98.7%) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS (96.8%1,657,800) (Unless otherwise noted3,792) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES Accumulated other comprehensive income.................... 660 98 Total stockholders' equity........................ 295,702 144,888 $ 425,944 $185,693 =========== ======== The accompanying notes are an integral part of these consolidated financial statements. 39 HARMONIC INC. CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2000 1999 1998 (9.2%) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES (4.3%) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING (11.3%) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional (Common) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO (1.0%) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS (2.9%) Rhodia-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES (9.1%) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS (2.5%) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS (1.0%) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------IN THOUSANDS, EXCEPT PER SHARE DATA)

REPORT OF INDEPENDENT ACCOUNTANTS. To the Members of Deepwater Holdings, L.L.C. In our opinion, the accompanying statement of net assets consolidated balance sheets and the related consolidated statements of operations operations, of cash flows and of changes in net assets and the financial highlights members' equity present fairly, in all material respects, the financial position of The Brazilian Investment FundDeepwater Holdings, Inc. L.L.C. (a Delaware Limited Liability Company) and its subsidiaries (the "FundCompany") at December 31, 19952000 and 1999, and the results of its their operations and their cash flows for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the four years in the period then ended and for the period June 4, 1991 (commencement of operations) through December 31, 19912000 and the period from inception (September 30, 1999) to December 31, 1999, in conformity with accounting principles generally accepted accounting principlesin the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the FundCompany's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted auditing standards in the United States of America, 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 audits, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, audits provide a reasonable basis for the opinion expressed aboveour opinion. PRICE WATERHOUSE /s/ PricewaterhouseCoopers LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx XxxxHouston, Xxx Xxxx 00000 February 9Texas March 28, 1996 FINANCIAL STATEMENTS --------- STATEMENT 2001 73 76 DEEPWATER HOLDINGS, L.L.C. AND SUBSIDIARIES (A LIMITED LIABILITY COMPANY) CONSOLIDATED BALANCE SHEETS AS OF NET ASSETS --------- DECEMBER 31, 1994 VALUE SHARES 2000 AND 1999 (000IN THOUSANDS) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND 2000 1999 ASSETS Current assets Cash and cash equivalents................................. $ 11,481 $ 9,166 Net accounts receivable, trade............................ 21,385 5,666 Advances to affiliates.................................... 303 526 Gas imbalances............................................ 9,300 18,545 Gas imbalance cashout..................................... 1,962 -- Other current assets...................................... 1,697 1,449 Total current assets.............................. 46,128 35,352 Property, plant and equipment Property, plant and equipment............................. 929,211 890,833 Less: accumulated depreciation and amortization........... (98.7%) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS (96.8%695,976) (Unless otherwise noted677,839) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES Property, plant and equipment, net................ 233,235 212,994 Other noncurrent assets..................................... 4,181 5,679 Total assets...................................... $ 283,544 $ 254,025 ========= ========= LIABILITIES AND MEMBERS' EQUITY Current liabilities Accounts payable, trade................................... $ 9,139 $ 3,477 Advances from affiliates.................................. 4,357 -- Gas imbalances............................................ 8,446 23,105 Current obligation under capital lease.................... 1,073 1,073 Regulatory reserve........................................ 7,531 3,587 Accrued expenses and other current liabilities............ 9,416 1,704 Total current liabilities......................... 39,962 32,946 Obligations under capital lease, less current portion....... 8,302 8,676 Deferred credits............................................ 1,146 -- Long-term debt 157,000 122,000 Other noncurrent liabilities................................ 69 41 Commitments and contingencies Members' equity............................................. 77,065 90,362 Total liabilities and members' equity............. $ 283,544 $ 254,025 ========= ========= See accompanying notes. 74 77 DEEPWATER HOLDINGS, L.L.C. AND SUBSIDIARIES (9.2%A LIMITED LIABILITY COMPANY) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2000 AND THE PERIOD FROM INCEPTION (4.3%SEPTEMBER 30, 1999) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING TO DECEMBER 31, 1999 (11.3%IN THOUSANDS) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional 2000 -------- 1999 ------- Revenues Transportation services................................... $ 62,327 $13,461 Liquid transportation services and other.................. 2,339 1,907 Dehydration services...................................... Expenses 2,456 -------- 67,122 -------- 493 ------- 15,861 ------- Operations and maintenance................................ 25,377 8,185 Depreciation and amortization............................. 18,138 4,112 Taxes, other than income taxes............................ (Common143) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO (1.0%) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS (2.9%) Rhodia-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES (9.1%) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS (2.5%) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS (1.0%) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------51

REPORT OF INDEPENDENT ACCOUNTANTS. In our opinion, the accompanying statement of net assets consolidated balance sheets and the related consolidated statements of operations and stockholders' equity and of changes in net assets and the financial highlights cash flows present fairly, in all material respects, the financial position of The Brazilian Investment Fund, Harmonic Inc. (the "Fund") and its subsidiaries at December 31, 19951998 and 1997, and the results of its their operations for the year then ended, the changes in its net assets and their cash flows for each of the two three years in the period then ended and the financial highlights for each of the four years in the period then ended and for the period June 4, 1991 (commencement of operations) through December 31, 1991, 1998 in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the FundCompany's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial 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 audits, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, audits provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE /s/ PRICEWATERHOUSECOOPERS LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx-------------------------------------- PRICEWATERHOUSECOOPERS LLP San Jose, Xxx Xxxx 00000 February 9CA January 20, 1996 FINANCIAL STATEMENTS --------- STATEMENT OF NET ASSETS --------- 1999, except as to Note 14, which is as of March 15, 1999 and Note 5, which is as of October 14, 1999 31 CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1994 VALUE SHARES --------------------- 1998 1997 --------- -------- (000IN THOUSANDS, EXCEPT SHARE DATA) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND ASSETS Current assets: Cash and cash equivalents................................. $ 9,178 $13,670 Accounts receivable, net.................................. 17,646 16,458 Inventories............................................... 22,385 15,474 Prepaid expenses and other assets......................... 1,175 1,774 -------- ------- Total current assets.............................. 50,384 47,376 Notes receivable............................................ -- 1,300 Property and equipment, net................................. 10,726 10,077 Intangibles and other assets................................ 1,314 134 -------- ------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: $ 62,424 $58,887 ======== ======= Accounts payable.......................................... $ 7,534 $ 3,708 Accrued liabilities....................................... 10,355 4,896 Current portion of long-term debt......................... 177 -- -------- ------- Total current liabilities......................... 18,066 8,604 Long-term debt, less current portion........................ 400 -- Other non-current liabilities............................... 484 352 Commitments and Contingencies (98.7%Notes 11 and 13) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS Stockholders' equity: Preferred Stock, $.001 par value, 5,000,000 shares authorized; no shares issued or outstanding............ -- -- Common Stock, $.001 par value, 50,000,000 shares authorized; 23,451,688 and 20,828,594 shares issued and outstanding............................................ 23 21 Capital in excess of par value............................ 70,913 55,906 Accumulated deficit....................................... (96.8%27,472) (Unless otherwise noted6,019) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES Accumulated other comprehensive income.................... 10 23 -------- ------- Total stockholders' equity........................ 43,474 49,931 -------- ------- $ 62,424 $58,887 ======== ======= The accompanying notes are an integral part of these consolidated financial statements. CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, --------------------------------------- 1998 1997 1996 ----------- ---------- ---------- (9.2%) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES (4.3%) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING (11.3%) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional (Common) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO (1.0%) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS (2.9%) Rhodia-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES (9.1%) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS (2.5%) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS (1.0%) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------IN THOUSANDS, EXCEPT PER SHARE DATA)

REPORT OF INDEPENDENT ACCOUNTANTS. To the Board of Directors and Stockholder of El Paso Energy Partners Company: In our opinion, the accompanying consolidated balance sheet presents fairly, in all material respects, the financial position of El Paso Energy Partners Company (the "Company") and its subsidiary at December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. This financial statement is the responsibility of net assets the Company's management; our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit of this statement in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheet, assessing the accounting principles used and significant estimates made by management, and evaluating the overall balance sheet presentation. We believe that our audit of the balance sheet provides a reasonable basis for our opinion. /s/ PRICEWATERHOUSECOOPERS LLP Houston, Texas April 18, 2002 EL PASO ENERGY PARTNERS FINANCE CORPORATION BALANCE SHEETS WITH REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 2001 AND 2000 EL PASO ENERGY PARTNERS FINANCE CORPORATION (A WHOLLY OWNED SUBSIDIARY OF EL PASO ENERGY PARTNERS, L.P.) BALANCE SHEETS DECEMBER 31, 2001 2000 ASSETS Total assets...................................... $ -- $ -- ======= ======= STOCKHOLDER'S EQUITY Common stock, $1.00 par value, 1,000 shares authorized, issued and outstanding.................................... $ 1,000 $ 1,000 Contribution receivable from parent......................... (1,000) (1,000) Total stockholder's equity........................ $ -- $ -- ======= ======= See accompanying note. EL PASO ENERGY PARTNERS FINANCE CORPORATION (A WHOLLY OWNED SUBSIDIARY OF EL PASO ENERGY PARTNERS, L.P.) NOTE TO BALANCE SHEETS NOTE 1 -- ORGANIZATION El Paso Energy Partners Finance Corporation, a Delaware corporation and wholly owned subsidiary of El Paso Energy Partners, L.P., was formed on April 30, 1999 for the sole purpose of co-issuing debt securities with El Paso Energy Partners, L.P. (the Partnership), a publicly held Delaware master limited partnership. The Partnership provides gathering, transportation, processing, fractionation, storage and other related statements activities for producers of natural gas, natural gas liquids and oil. The Partnership owns or has interests in natural gas and oil pipeline systems, offshore platforms, natural gas storage facilities, producing oil and natural gas properties, natural gas liquids gathering and transportation pipelines, fractionation plants and a natural gas processing plant. Our contribution receivable was generated from the initial capitalization of us. We have not conducted any operations and all activities have related to the co-issuance of changes in net assets the Partnership's senior subordinated notes. REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholder of El Paso Energy Partners Finance Corporation: In our opinion, the financial highlights accompanying balance sheets present fairly, in all material respects, the financial position of The Brazilian Investment Fund, Inc. El Paso Energy Partners Finance Corporation (the "FundCompany") at December 31, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended 2001 and the financial highlights for each of the four years in the period then ended and for the period June 4, 1991 (commencement of operations) through December 31, 1991, 2000 in conformity with accounting principles generally accepted accounting principlesin the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the FundCompany's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted auditing standards in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements balance sheets are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statementsbalance sheets, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement balance sheet presentation. We believe that our audits, which included confirmation audits of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, balance sheets provide a reasonable basis for the opinion expressed aboveour opinion. PRICE WATERHOUSE /s/ PRICEWATERHOUSECOOPERS LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx XxxxHouston, Xxx Xxxx 00000 February 9Texas April 15, 1996 FINANCIAL STATEMENTS --------- STATEMENT OF NET ASSETS --------- DECEMBER 312002 EL PASO ENERGY PARTNERS, 1994 VALUE SHARES (000) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND (98.7%) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS (96.8%) (Unless otherwise noted) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES (9.2%) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES (4.3%) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING (11.3%) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional (Common) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO (1.0%) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS (2.9%) Rhodia-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES (9.1%) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS (2.5%) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS (1.0%) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------L.P. EXHIBIT LIST Each exhibit identified below is filed as part of this report. EXHIBIT NUMBER DESCRIPTION -------------- -----------

REPORT OF INDEPENDENT ACCOUNTANTS. To the Board of Directors and Stockholders of NN Ball and Roller, Inc. In our opinion, the financial statements listed in the accompanying statement of net assets and the related statements of operations and of changes in net assets and the financial highlights index present fairly, in all material respects, the financial position of The Brazilian Investment FundNN Ball and Roller, Inc. (the "Fund") at December 31, 1996 and 1995, and the results of its operations for the year then ended, the changes in and its net assets cash flows for each of the two three years in the period then ended and the financial highlights for each of the four years in the period then ended and for the period June 4, 1991 (commencement of operations) through December 31, 19911996, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the FundCompany's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial 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 audits, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, audits provide a reasonable basis for the opinion expressed above. /s/ Price Waterhouse LLP - ------------------------ PRICE WATERHOUSE LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx XxxxWinston-Salem, Xxx Xxxx 00000 February 9North Carolina January 17, 1996 FINANCIAL STATEMENTS --------- STATEMENT OF NET ASSETS --------- 1997 NN BALL AND ROLLER, INC. BALANCE SHEETS (IN THOUSANDS, EXCEPT PER SHARE DATA) - ----------------------------------------------------------------------------- DECEMBER 31, -------------------- 1996 1995 Assets Current assets: --------- --------- Accounts receivable, net.............................................. $ 15,754 $ 16,915 Inventories, net...................................................... 10,408 9,813 Other current assets.................................................. 565 -- --------- --------- Total current assets................................................ 26,727 26,728 Property, plant and equipment, net...................................... 32,419 27,367 Other................................................................... 146 146 --------- --------- Total assets........................................................ $ 59,292 $ 54,241 Liabilities and Stockholders' Equity[el] Current liabilities: --------- --------- --------- --------- Revolving credit facility.............................................. $ 2,308 $ 3,590 Accounts payable--trade................................................ 4,054 8,201 Accrued vacation expense............................................... 370 369 Income taxes payable................................................... 96 208 Accrued sales rebate................................................... 755 243 Other liabilities...................................................... 791 692 --------- --------- Total current liabilities........................................... 8,374 13,303 Deferred income taxes................................................... 2,208 1,720 --------- --------- Total liabilities................................................... 10,582 15,023 Stockholders' equity: Common stock--$0.01 par value, authorized--45,000 (1996) and 20,000 (1995) shares, issued and outstanding--14,629 (1996) and 14,473 --------- --------- (1995) shares........................................................ 146 144 Additional paid-in capital............................................ 26,983 25,289 Retained earnings..................................................... 21,581 13,785 --------- --------- Total stockholders' equity.......................................... 48,710 39,218 --------- --------- Total liabilities and stockholders' equity.......................... $ 59,292 $ 54,241 --------- --------- --------- --------- The accompanying notes are an integral part of these financial statements. NN BALL AND ROLLER, INC. BALANCE SHEETS (IN THOUSANDS, EXCEPT PER SHARE DATA) - ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 1996 1995 1994 Net sales........................................................................ $ 84,539 $ 77,786 $ 60,487 Cost of products sold............................................................ 56,695 53,912 40,110 Gross profit..................................................................... 27,844 23,874 20,377 Selling, general and administrative expenses..................................... 4,890 4,249 3,439 Depreciation..................................................................... 3,358 2,364 1,996 Income from operations........................................................... 19,596 17,261 14,942 Interest expense................................................................. 296 42 354 Income before provision for income taxes and extraordinary item.................. 19,300 17,219 14,588 Provision for income taxes....................................................... 6,835 5,708 5,704 Income before extraordinary item................................................. Extraordinary loss from early extinguishment of debt (net of income tax benefit of $710)............................................................... 12,465 -- 11,511 -- 8,884 (1,160) Net income....................................................................... $ 12,465 $ 11,511 $ 7,724 Net income per share (primary):.................................................. $ .83 $ .79 Weighted average number of shares outstanding.................................... 15,042 14,583 Unaudited pro forma data: (Notes 2 and 3) Income before provision for income taxes and extraordinary item.................. $ 14,588 Provision for income taxes....................................................... 5,543 Income before extraordinary item................................................. 9,045 Extraordinary item, net.......................................................... (1,160) Net income....................................................................... $ 7,885 Net income per share (primary): Income before extraordinary item................................................. $ .66 Extraordinary item, net.......................................................... (.09) Net income per share............................................................. $ .57 Weighted average number of shares outstanding.................................... 13,716 The accompanying notes are an integral part of these financial statements. NN BALL AND ROLLER, INC. STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (IN THOUSANDS) - ----------------------------------------------------------------------------- COMMON STOCK ADDITIONAL NUMBER PAR PAID-IN RETAINED OF SHARES VALUE SHARES CAPITAL EARNINGS TOTAL Balance, December 31, 1993..................................... 4,432 $ 44 $ 417 $ 7,723 $ 8,184 Net income................................................... -- -- -- 7,724 7,724 Dividends paid............................................... -- -- -- (000) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND (98.7%) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS (96.8%1,030) (Unless otherwise noted1,030) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES Proceeds from IPO (9.2%net)...................................... 2,000 20 24,872 -- 24,892 Sub S-corporation distribution............................... -- -- -- (9,233) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES (4.3%9,233) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING Balance, December 31, 1994..................................... 6,432 64 25,289 5,184 30,537 Net income................................................... -- -- -- 11,511 11,511 Dividends paid............................................... -- -- -- (11.3%2,830) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional (Common2,830) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO Three-for-two stock split.................................... 3,216 32 -- (1.0%32) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS -- Three-for-two stock split.................................... 4,825 48 -- (2.9%48) Rhodia-- Balance, December 31, 1995..................................... 14,473 144 25,289 13,785 39,218 Net income................................................... 12,465 12,465 Dividends paid............................................... -- -- -- (4,669) (4,669) Stock options exercised...................................... 156 2 1,694 -- 1,696 Balance, December 31, 1996..................................... 14,629 $ 146 $ 26,983 $ 21,581 $ 48,710 The accompanying notes are an integral part of these financial statements. NN BALL AND ROLLER, INC. STATEMENTS OF CASH FLOWS (IN THOUSANDS) - ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 1996 1995 1994 Cash flows from operating activities: Net income................................................................. $ 12,465 $ 11,511 $ 7,724 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation............................................................. 3,358 2,364 1,996 Amortization of bond issue costs......................................... -- -- 150 Deferred income taxes.................................................... 488 166 1,382 Changes in operating assets and liabilities: Accounts receivable.................................................... 1,161 (5,898) (2,910) Inventories............................................................ (595) (3,563) (917) Other current assets................................................... (565) 30 490 Accounts payable--trade................................................ (4,147) 4,748 (1,346) Income taxes payable................................................... (112) (287) 471 Accrued sales rebate................................................... 512 79 -- Other liabilities...................................................... 100 328 (139) Net cash provided by operations...................................... 12,665 9,478 6,901 Cash flows from investing activities: Acquisition of property, plant and equipment............................... (8,410) (14,509) (5,231) Other assets............................................................... -- (23) (16) Net cash used for investing activities............................... (8,410) (14,532) (5,247) Cash flows from financing activities: Net receipts (payments) under revolving line of credit..................... (1,282) 3,590 -- Principal payment on long-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES term debt...................................... -- -- (9.1%12,000) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS Proceeds from Initial Public Offering--net................................. -- -- 24,892 Sub S-corporation distribution............................................. -- -- (2.5%9,233) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS Cash dividends............................................................. (1.0%4,669) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------(2,830) (1,030) Stock options exercised.................................................... 1,696 -- -- Net cash provided (used) by financing activities..................... (4,255) 760 2,629 Net increase (decrease) in cash and cash equivalents......................... -- (4,294) 4,283 Cash and cash equivalents at beginning of period............................. -- 4,294 11 Cash and cash equivalents at end of period................................... $ -- $ -- $ 4,294 The accompanying notes are an integral part of these financial statements. NN BALL AND ROLLER, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996, 1995, AND 1994 - ----------------------------------------------------------------------------- NOTE 1--THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES NN Ball and Roller, Inc. (the "Company") is a manufacturer of balls and rollers used primarily in the bearing industry. The Company has two manufacturing facilities in Tennessee and one manufacturing facility in South Carolina. The Company sells to both foreign and domestic customers (See Note 10). CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.

REPORT OF INDEPENDENT ACCOUNTANTS. To the Board of Directors and Shareholders of XXXX.xxx In our opinion, the accompanying statement of net assets consolidated balance sheets and the related consolidated statements of operations operations, of shareholders' equity (deficit) and of changes cash flows expressed in net assets and the financial highlights U.S. dollars present fairly, in all material respects, the financial position of The Brazilian Investment FundXXXX.xxx and its subsidiaries at June 30, Inc. (the "Fund") at December 312000 and 1999, 1995, and the results of its their operations for the year then ended, the changes in its net assets and their cash flows for each of the two three years in the period then ended and the financial highlights for each of the four years in the period then ended and for the period June 430, 1991 (commencement of operations) through December 31, 19912000, in conformity with accounting principles generally accepted accounting principlesin the United States. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the FundCompany's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted auditing standards in the United States, 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 audits, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, audits provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE /s/ PRICEWATERHOUSECOOPERS LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx XxxxSan Jose, Xxx Xxxx 00000 February 9California July 17, 1996 FINANCIAL STATEMENTS --------- 2000 38 XXXX.XXX CONSOLIDATED BALANCE SHEET JUNE 30, 2000 1999 (IN U.S. DOLLARS) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) ASSETS Current assets: Cash and cash equivalents................................. $ 99,149 $20,571 Short-term investments.................................... 30,484 4,037 Accounts receivable, net.................................. 3,921 1,241 Inventories............................................... 156 171 Prepaid expenses and other current assets................. 1,378 382 Total current assets.............................. 135,088 26,402 Property and equipment, net................................. 7,737 2,194 Intangible assets, net...................................... 11,828 18,635 Investments in joint venture................................ 894 -- Receivable from related parties............................. 268 -- Other assets................................................ 223 351 $156,038 $47,582 ======== ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable.......................................... $ 1,203 $ 828 Accrued liabilities....................................... 8,018 1,517 Total current liabilities......................... 9,221 2,345 Minority interests.......................................... -- 119 9,221 2,464 Commitments and contingencies (Note 11) Mandatorily Redeemable Convertible Preference Shares........ -- 37,295 Mandatorily Redeemable Convertible Preference Share Warrants.................................................. -- 120 -- 37,415 Shareholders' equity: Preference Shares: $1.00 par value; 3,750 and no shares authorized; no shares issued or outstanding............ -- -- Ordinary Shares: $0.133 par value; 75,000 and 45,000 shares authorized; 40,764 and 7,102 shares issued and outstanding............................................ 5,425 947 Additional paid-in capital................................ 221,399 38,055 Notes receivables from shareholders....................... (2,067) -- Deferred stock compensation............................... (15,057) (19,453) Accumulated deficit....................................... (62,950) (11,883) Accumulated other comprehensive income: Cumulative translation adjustment...................... 67 37 Total shareholders' equity........................ 146,817 7,703 $156,038======== $47,582======= The accompanying notes are an integral part of these consolidated financial statements. 37 XXXX.XXX CONSOLIDATED STATEMENT OF NET ASSETS OPERATIONS YEAR ENDED JUNE 30, ---------------------------------------- 2000 1999 1998 ----------- ---------- (IN U.S. DOLLARS) --------- DECEMBER 31(IN THOUSANDS, 1994 VALUE SHARES EXCEPT PER SHARE AMOUNTS) Net revenues: Advertising............................................... $ 11,013 $ 561 $ -- Software products......................................... 2,943 2,248 2,499 E-commerce................................................ 214 18 -- -------- ------- ------ 14,170 2,827 2,499 -------- ------- ------ Cost of revenues: Advertising(a)............................................ 8,950 1,156 -- Software products(a)...................................... 1,640 1,285 674 E-commerce................................................ 325 32 -- Stock-based compensation.................................. 605 32 -- -------- ------- ------ 11,520 2,505 674 -------- ------- ------ Gross profit................................................ 2,650 322 1,825 -------- ------- ------ Operating expenses: Sales and marketing(a).................................... 17,476 1,405 622 Product development(a).................................... 7,358 1,512 452 General and administrative(a)............................. 6,951 2,085 941 Stock-based compensation.................................. 18,460 3,360 -- Amortization of intangible assets......................... 6,807 1,745 43 -------- ------- ------ Total operating expenses.......................... 57,052 10,107 2,058 -------- ------- ------ Loss from operations........................................ (000) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND (98.7%) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS (96.8%54,402) (Unless otherwise noted9,785) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES (9.2%233) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES Interest income, net........................................ 3,801 442 40 -------- ------- ------ Loss before loss in equity investment and minority interest.................................................. (4.3%50,601) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING (11.3%9,343) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional (Common193) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO Loss on equity investment................................... (1.0%501) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS -- -- Minority interest in loss................................... 119 47 11 -------- ------- ------ Net loss (2.9%50,983) Rhodia(9,296) (182) Accretion on Mandatorily Redeemable Convertible Preference Shares.................................................... (84) (98) (71) -------- ------- ------ Net loss attributable to ordinary shareholders $(51,067) $(9,394) $ (253) ======== ======= ====== Basic and diluted net loss per share attributable to ordinary shareholders..................................... $ (3.44) $ (1.72) $(0.05) ======== ======= ====== Shares used in computing basic and diluted net loss per share..................................................... 14,836 5,466 4,962 ======== ======= ====== Basic and diluted pro forma net loss per share (unaudited)............................................... $ (1.58) ======== Shares used in computing pro forma basic and diluted net loss per share (unaudited)................................ 32,281 ======== --------------- (a) Excludes stock-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES (9.1%) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS (2.5%) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS (1.0%) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------based compensation. See Note 9. The accompanying notes are an integral part of these consolidated financial statements. 38

REPORT OF INDEPENDENT ACCOUNTANTS. In our opinion, the accompanying statement of net assets consolidated balance sheet and the related consolidated statements of operations and operations, of changes in net assets shareholders' equity and the financial highlights of cash flows present fairly, in all material respects, the financial position of The Brazilian Investment FundWorld Carpets, Inc. and its subsidiary (the "FundCompany") at December 31June 28, 19951998, and the results of its their operations and their cash flows for the year then endedended June 28, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the four years in the period then ended and for the period June 4, 1991 (commencement of operations) through December 31, 19911998, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the FundCompany's management; our responsibility is to express an opinion on these financial statements based on our auditsaudit. We conducted our audits audit of these financial 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 audits, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, provide audit provides a reasonable basis for the opinion expressed above. PRICE WATERHOUSE /s/ PricewaterhouseCoopers LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx XxxxAtlanta, Xxx Xxxx 00000 February 9GA September 21, 1996 FINANCIAL STATEMENTS --------- 1998 WORLD CARPETS, INC. CONSOLIDATED BALANCE SHEET (IN THOUSANDS OF DOLLARS EXCEPT FOR SHARE AMOUNTS) JUNE 28, 1998 ASSETS Current assets Cash and restricted cash........................................... $ 145 Accounts receivable, less allowance for doubtful accounts of $1,777............................................................ 53,918 Inventories 75,770 Prepaid expenses................................................... 355 Deferred income taxes 10,890 -------- Total current assets............................................. 141,078 Property, plant and equipment, net 71,283 Other assets......................................................... 8,867 -------- $221,228 ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Book overdraft..................................................... $ 6,712 Current maturities of long-term debt............................... 5,570 Accounts payable 36,078 Accrued liabilities 15,133 Estimated product claims........................................... 4,658 -------- Total current liabilities 68,151 Long-term debt, less current maturities 78,971 Estimated product claims............................................. 968 Deferred income taxes................................................ 1,920 -------- 150,010 SHAREHOLDERS' EQUITY Class A Preferred Stock, voting, 8% cumulative, $100 par value, 1,000,000 shares authorized; 3,000 shares issued and outstanding.... 300 Class B Preferred Stock, nonvoting, 10% noncumulative, $100 par val- ue, 100,000,000 shares authorized; 190,080 shares issued; 151,280 shares outstanding 19,008 Class C Common Stock, nonvoting, no par value, $100 stated value, 100,000,000 shares authorized; 126,920 shares issued and outstand- ing 12,692 Retained earnings 43,098 -------- 75,098 Less treasury stock, 38,800 shares of Class B Preferred Stock, at cost (3,880) -------- 71,218 -------- Commitments and contingencies........................................ -- -------- $221,228 ======== The accompanying notes are an integral part of these financial statements. WORLD CARPETS, INC. CONSOLIDATED STATEMENT OF NET ASSETS --------- DECEMBER 31OPERATIONS (IN THOUSANDS OF DOLLARS) YEAR ENDED JUNE 28, 1994 VALUE 1998 ---------- Net sales $430,932 -------- Costs and expenses Cost of goods sold 337,849 Selling, warehousing and distribution expenses..................... 60,562 General and administrative expenses................................ 17,504 -------- 415,915 -------- Income from operations............................................... 15,017 Interest expense..................................................... (8,094) Other income, net.................................................... 2,209 -------- Income before income taxes........................................... 9,132 Benefit from income taxes............................................ 2,155 -------- Net income........................................................... $ 11,287 ======== The accompanying notes are an integral part of these financial statements. WORLD CARPETS, INC. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (IN THOUSANDS OF DOLLARS EXCEPT FOR SHARE AMOUNTS) CLASS A CLASS B CLASS C PREFERRED STOCK PREFERRED STOCK COMMON STOCK ----------------- --------------- --------------- RETAINED TREASURY SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT EARNINGS STOCK TOTAL -------- ------- ------- ------- ------- ------- -------- -------- ------ Balance at June 29, 1997.................. 3,000 $ 300 190,080 $19,008 126,920 $12,692 31,835 (0003,880) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND 59,955 -------- ------- ------- ------- ------- ------- ------ ------ ------ Dividends paid......... (98.7%) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS (96.8%24) (Unless otherwise noted24) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES Net income............. Balance at June 28, -------- ------- ------- ------- ------- ------- 11,287 ------ ------ 11,287 ------ 1998.................. 3,000 $ 300 190,080 $19,008 126,920 $12,692 43,098 (9.2%3,880) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES 71,218 ======== ======= ======= ======= ======= ======= ====== ====== ====== The accompanying notes are an integral part of these financial statements. WORLD CARPETS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (4.3%IN THOUSANDS OF DOLLARS) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING YEAR ENDED JUNE 28, 1998 ---------- Cash flows from operating activities Net income $11,287 Adjustments to reconcile net income to net cash provided by operating activities Depreciation..................................................... 8,059 Amortization..................................................... 1,030 Deferred income taxes............................................ (11.3%2,395) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional Gain on disposal of property, plant and equipment................ (Common662) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO Changes in operating assets and liabilities Accounts receivable............................................. 2,165 Inventories..................................................... 2,291 Other assets.................................................... (1.0%1,633) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS Cash overdraft.................................................. (2.9%984) RhodiaAccounts payable................................................ (6,758) Accrued liabilities and estimated product claims................ 2,045 ------- Net cash provided by operating activities..................... 14,445 ------- Cash flows from investing activities Collections on note receivable from shareholder................... 895 Refund from business acquisition.................................. 1,859 Proceeds from sale of property, plant and equipment............... 1,109 Purchases of property, plant and equipment........................ (11,217) ------- Net cash used in investing activities......................... (7,354) ------- Cash flows from financing activities Proceeds from issuance of long-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES term debt.......................... 1,311 Payments of long-term debt........................................ (9.1%9,131) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS Dividends paid.................................................... (2.5%24) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS ------- Net cash used in financing activities (1.0%7,844) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------------- Net decrease in cash................................................ (753) Cash and restricted cash, beginning of year......................... 898 ------- Cash and restricted cash, end of year............................... $ 145 ======= Cash paid for interest............................................ $ 8,287 ======= Cash paid for taxes............................................... $ 956 ======= The accompanying notes are an integral part of these financial statements. 8 WORLD CARPET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT ACCOUNTANTS. In our opinion, the accompanying statement of net assets consolidated balance sheets and the related consolidated statements of operations operations, of stockholders' equity and of changes in net assets and the financial highlights cash flows present fairly, in all material respects, the financial position of The Brazilian Investment Fund, Harmonic Inc. (the "Fund") and its subsidiaries at December 31, 19951999 and 1998, and the results of its their operations for the year then ended, the changes in its net assets and their cash flows for each of the two three years in the period then ended and the financial highlights for each of the four years in the period then ended and for the period June 4, 1991 (commencement of operations) through December 31, 1991, 1999 in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the FundCompany's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial 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 audits, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, audits provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE /s/ PRICEWATERHOUSECOOPERS LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx-------------------------------------- PRICEWATERHOUSECOOPERS LLP San Jose, Xxx Xxxx 00000 February 9CA January 18, 1996 FINANCIAL STATEMENTS --------- STATEMENT OF NET 2000 30 HARMONIC INC. CONSOLIDATED BALANCE SHEETS ASSETS --------- DECEMBER 31, 1994 VALUE SHARES ---------------------- 1999 1998 --------- --------- (000IN THOUSANDS, EXCEPT SHARE DATA) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND Current assets: Cash and cash equivalents................................. $ 24,822 $ 9,178 Short-term investments.................................... 64,877 -- Accounts receivable, net.................................. 35,421 17,646 Inventories............................................... 35,310 22,385 Deferred income taxes..................................... 5,478 -- Prepaid expenses and other assets......................... 3,792 1,175 -------- -------- Total current assets.............................. 169,700 50,384 Property and equipment, net................................. 14,931 10,726 Intangibles and other assets................................ 1,062 1,314 -------- -------- $185,693 $ 62,424 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable.......................................... $ 18,946 $ 7,534 Income taxes payable...................................... 2,265 151 Accrued liabilities....................................... 19,073 10,204 Current portion of long-term debt......................... -- 177 -------- -------- Total current liabilities......................... 40,284 18,066 Long-term debt, less current portion........................ -- 400 Other non-current liabilities............................... 521 484 Commitments and contingencies (98.7%Note 14) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS Stockholders' equity: Preferred Stock, $.001 par value, 5,000,000 shares authorized; no shares issued or outstanding............ -- -- Common Stock, $.001 par value, 50,000,000 shares authorized; 30,501,766 and 23,451,688 shares issued and outstanding............................................ 31 23 Capital in excess of par value............................ 148,551 70,913 Accumulated deficit....................................... (96.8%3,792) (Unless otherwise noted27,472) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES Accumulated other comprehensive income.................... 98 10 -------- -------- Total stockholders' equity........................ 144,888 43,474 -------- -------- $185,693 $ 62,424 ======== ======== The accompanying notes are an integral part of these consolidated financial statements. HARMONIC INC. CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, ---------------------------------- 1999 1998 1997 --------- --------- -------- (9.2%IN THOUSANDS, EXCEPT SHARE DATA) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES (4.3%) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING (11.3%) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional (Common) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO (1.0%) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS (2.9%) Rhodia-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES (9.1%) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS (2.5%) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS (1.0%) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------Net sales................................................... $184,075 $ 83,857 $74,442

REPORT OF INDEPENDENT ACCOUNTANTS. To the Board of Directors and Stockholders of Cabot Corporation: In our opinion, the accompanying statement of net assets consolidated balance sheets and the related consolidated statements of operations income, of cash flows and of changes in net assets and the financial highlights stockholders' equity present fairly, in all material respects, the financial position of The Brazilian Investment FundCabot Corporation and its subsidiaries at September 30, Inc. (the "Fund") at December 312000 and 1999, 1995, and the results of its their operations for the year then ended, the changes in its net assets and their cash flows for each of the two three years in the period then ended and the financial highlights for each of the four years in the period then ended and for the period June 4September 30, 1991 (commencement of operations) through December 31, 1991, 2000 in conformity with accounting principles generally accepted accounting principlesin the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the FundCompany's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted auditing standards in the United States of America, 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 audits, which included confirmation of securities at December 31, 1995 by correspondence with the custodians and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, audits provide a reasonable basis for the opinion expressed aboveour opinion. PRICE WATERHOUSE PricewaterhouseCoopers LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx XxxxBoston, Xxx Xxxx 00000 February 9Massachusetts October 24, 2000 55 57 SELECTED FINANCIAL DATA -- FIVE YEAR SUMMARY YEARS ENDED SEPTEMBER 30, ------------------------------------------ (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND OTHER DATA) 2000 ------ 1999 ------ 1998 ------ 1997 ------ 1996 FINANCIAL STATEMENTS --------- STATEMENT OF NET ASSETS --------- DECEMBER 31, 1994 VALUE SHARES ------ CONSOLIDATED INCOME Revenues: Net sales and other operating revenues....................... $1,517 $1,354 $1,392 $1,400 $1,694 Interest and dividend income................................. Total revenues...................................... Costs and expenses: 6 ------ 1,523 ------ 4 ------ 1,358 ------ 5 ------ 1,397 ------ 7 ------ 1,407 ------ 9 ------ 1,703 ------ Cost of sales................................................ 1,102 940 934 961 1,174 Selling and administrative expenses.......................... 178 186 187 192 197 Research and technical service............................... 43 58 70 72 72 Interest expense............................................. 33 39 36 37 36 Special items(a)............................................. 10 26 85 18 - Gain on sale of assets....................................... - (000) --------------------------------------------------------- ------------ BRAZILIAN INVESTMENT FUND (98.7%) -------------------------------------------------- ---------- BRAZILIAN PREFERRED STOCKS (96.8%10) (Unless otherwise noted90) --------------------------------------------------------- ------------- APPLIANCES & HOUSEHOLD DURABLES - (9.2%67) Brasmotor 4,441,800 U.S.$ 1,799 Continental 2001 7,600,000 205 Multibras 1,274,500 1,670 Refripar 1,143,557,920 3,780 ----------- 7,454 ----------- --------------------------------------------------------- ------------- AUTOMOBILES Other charges, net........................................... Total costs and expenses............................ Income before income taxes................................... - ------ 1,366 ------ 157 6 ------ 1,245 ------ 113 16 ------ 1,238 ------ 159 15 ------ 1,295 ------ 112 14 ------ 1,426 ------ 277 Provision for income taxes................................... (4.3%57) Iochpe Maxion 4,850,000 3,378 Xxxxxxxxx 'B(41) (57) (40) (97) Equity in net income of affiliated companies................. 13 13 17 20 18 Minority interest............................................ Income from continuing operations............................ (5) ------ 108 (3) ------ 82 (3) ------ 116 (2) ------ 90 (6) ------ 192 Discontinued operations:(b) Income from operations of discontinued businesses.......... 36 15 6 3 2 Gain on sale of business................................... 309 - - - - ------ ------ ------ ------ ------ Net income.......................................... $ 453 $ 97 $ 122 $ 93 $ 194 ------ ------ ------ ------ ------ COMMON SHARE DATA Diluted Net Income: Continuing operations.................................. $ 1.46 $ 1.11 $ 1.53 $ 1.15 $ 2.40 Discontinued operations: Income from operations of discontinued businesses...... 0.49 0.20 0.08 0.04 0.02 Gain on sale of business............................... 4.25 - - - - ------ ------ ------ ------ ------ Net Income................................................... $ 6.20 $ 1.31 $ 1.61 $ 1.19 $ 2.42 ------ ------ ------ ------ ------ Dividends.................................................... $ 0.44 $ 0.44 $ 0.42 $ 0.40 $ 0.36 Stock prices -- High......................................... 38.44 31.69 39.94 29.38 31.38 Low........................................... 17.94 19.75 21.75 21.50 22.88 Close......................................... 31.69 23.75 24.94 26.94 27.88 Average diluted shares outstanding -- millions............... 73 73 75 77 79 Diluted shares outstanding at year end -- millions........... 68 67 67 69 72 CONSOLIDATED FINANCIAL POSITION Total current assets......................................... $1,190 $ 659 $ 619 $ 613 $ 710 Net property, plant and equipment............................ 806 1,024 978 922 903 Other assets................................................. 138 159 208 291 244 ------ ------ ------ ------ ------ Total assets........................................ $2,134 $1,842 $1,805 $1,826 $1,857 ------ ------ ------ ------ ------ Total current liabilities.................................... $ 494 $ 450 $ 536 $ 543 $ 528 Long-term debt............................................... 329 419 316 286 322 Other long-term liabilities and minority interest............ 264 267 247 269 262 Stockholders' 500,000 134 ----------- 3,512 ----------- --------------------------------------------------------- ------------- BANKING equity......................................... 1,047 706 706 728 745 ------ ------ ------ ------ ------ Total liabilities and stockholders' equity.......... $2,134 $1,842 $1,805 $1,826 $1,857 ------ ------ ------ ------ ------ Working capital.............................................. $ 696 $ 209 $ 83 $ 70 $ 182 ------ ------ ------ ------ ------ SELECTED FINANCIAL RATIOS Income from continuing operations as a percentage of sales... 7% 6% 8% 6% 11% Return on average stockholders' equity....................... 58% 13% 16% 12% 28% Net debt to capitalization ratio............................. (11.3%29)% 44% 43% 43% 40% --------------- (a) Banco Bradesco 360,509,400 3,065 Banco do Brasil 115,000,000 2,267 Banco Nacional 45,653,664 1,159 Banco Nacional (Common) 11,801,600 311 Itaubanco 8,639,000 2,417 ----------- 9,219 ----------- --------------------------------------------------------- ------------- BEVERAGES & TOBACCO (1.0%) Brahma 2,385,700 785 ----------- --------------------------------------------------------- ------------- CHEMICALS (2.9%) RhodiaSpecial items for 2000 include $18 million in plant closure costs and a $2 million environmental reserve charge offset by a $10 million insurance litigation settlement. Special items in 1999 include a $26 million charge for cost reduction initiatives and capacity utilization and a $10 million gain from the sale of 1 million shares of K N Energy, Inc. Special items for 1998 include a $60 million asset impairment charge in the Chemical Businesses, a $25 million write-Ster GDR 165,000 2,372 ----------- --------------------------------------------------------- ------------- ENERGY SOURCES (9.1%) Petrobras 58,477,320 7,387 ----------- --------------------------------------------------------- ------------- FOOD & HOUSEHOLD PRODUCTS (2.5%) Ceval Alimentos 12,000,000 177 +Xxxxx Lalekla 1,811,290 1,818 ----------- 1,995 ----------- --------------------------------------------------------- ------------- INDUSTRIAL COMPONENTS (1.0%) SECTIONS Xxxxxx 'B' 18,000,000 850 ----------- --------------------------------------------------------- -------------off of a tantalum ore recovery project in the Performance Materials segment, and a $90 million gain from the sale of 2 million shares of K N Energy, Inc. Special items for 1997 include an $18 million charge related to a cost reduction program in the Chemical Businesses and the Performance Materials segments. Special items for 1996 include a $39 million gain on the sale of TUCO, Inc., and a $28 million gain on the sale of 2 million shares of K N Energy, Inc.