Financial Statements [2000/Q3]

MANVILLE PERSONAL INJURY SETTLEMENT TRUST
Special-Purpose Unaudited Consolidated Financial Statements
For the Quarter Ended September 30, 2000

MANVILLE PERSONAL INJURY SETTLEMENT TRUST

The consolidated financial statements included herein are unaudited. In the opinion of the management of the Trust, the accompanying consolidated financial statements present fairly, subject to normal year-end adjustments, the consolidated net claimants’ equity as of September 30, 2000 and 1999 and the consolidated changes in net claimants’ equity and cash flows for the three and nine months ended September 30, 2000 presented on the special-purpose basis of accounting described in Note 2, which accounting methods have been applied on a consistent basis.

/s/ Mark E. Lederer
Mark E. Lederer
Chief Financial Officer

MANVILLE PERSONAL INJURY SETTLEMENT TRUST
CONSOLIDATED STATEMENTS OF NET CLAIMANTS’ EQUITY
AS OF SEPTEMBER 30, 2000 and 1999

	2000	1999
ASSETS:
Cash equivalents and investments (Notes 1 & 2)
Available-for-sale non-JM
Restricted (Note 8)	$43,292,810	$49,572,826
Unrestricted non-JM	789,318,278	1,034,160,222
Total	832,611,088	1,083,733,048
Other available-for-sale
JM common stock	1,275,267,424	1,479,591,999
Total cash equivalents and investments	2,107,878,512	2,563,325,047

Accrued interest and dividend receivables	14,229,492	15,217,423

Deposits and other assets	181,831	151,618

Total assets	2,122,289,835	2,578,694,088

LIABILITIES:
Accrued expenses	5,489,478	5,314,188
Unpaid claims (Notes 4, 6 & Exh. III)
Settled Pre-Class Action complaint	1,370,673	1,839,995
Outstanding Offers – Post Class Action complaint	64,849,298	178,474,685
Contribution and indemnity claims payable
(Notes 4, 8 and Exh. III)	256,441	6,573,039
Lease commitments payable (Note 5)	2,045,258	2,699,761

Total liabilities	74,011,148	194,901,668

NET CLAIMANTS’ EQUITY (Note 6)	$2,048,278,687	$2,383,792,420

The accompanying notes are an integral part of these statements.

MANVILLE PERSONAL INJURY SETTLEMENT TRUST
CONSOLIDATED STATEMENTS OF CHANGES IN NET CLAIMANTS’ EQUITY
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

	Three Months Ended 9/30/00	Nine Months Ended 9/30/00

NET CLAIMANTS’ EQUITY,
BEGINNING OF PERIOD	$2,329,952,803	$2,472,661,095

ADDITIONS TO NET CLAIMANTS’ EQUITY:
JM dividend (Notes 1 and 2)	6,763,849	20,291,547
Reimbursement by JM of prior years foreign income taxes		108,666
Non-JM investment income (Exh. I)	23,070,577	58,929,321
Net reduction in outstanding claim offers	3,756,834	28,434,404
Decrease in lease commitments payable	148,791	506,461
Total additions	33,740,051	108,270,399

DEDUCTIONS FROM NET CLAIMANTS’ EQUITY:
Operating expenses (Exh. II)	5,902,436	17,853,231
Management expenses for investments in JM	209,744	564,114
Net unrealized losses on non-JM available-for-sale securities	13,217,776	27,932,208
Claims settled	55,995,685	187,198,105
Unrealized loss of JM stock	239,552,970	295,918,366
Contribution and indemnity claim settled	535,556	3,186,783
Total deductions	315,414,167	532,652,807

NET CLAIMANTS’ EQUITY,
END OF PERIOD	$2,048,278,687	$2,048,278,687

The accompanying notes are an integral part of these statements.

MANVILLE PERSONAL INJURY SETTLEMENT TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

	Three Months Ended 9/30/00	Nine Months Ended 9/30/00

CASH INFLOWS
JM dividends (Notes 1 and 2)	$6,763,849	$20,291,548
Reimbursement by JM of prior years foreign income taxes		108,666
Investment receipts	23,762,221	59,909,831
Investment receipts on escrow accounts (Note 8)	3,226	90,548
Total cash inflows	30,529,296	80,400,593

CASH OUTFLOWS
Claim payments made	56,045,685	187,350,105
Contribution and indemnity claim payments	535,556	9,651,727
Total cash claim payments	56,581,241	197,001,832

Disbursements for Trust operating and asset
management expenses	6,265,918	17,686,437

Total cash outflows	62,847,159	214,688,269

NET CASH OUTFLOWS	(32,317,863)	(134,287,676)

NON-CASH CHANGES
Net unrealized gains (losses) on non-JM
available-for-sale securities	(13,217,776)	(27,932,208)
Change in deposits and other assets	54,502	(193)

NET INCREASE (DECREASE) IN CASH EQUIVALENTS AND
NON-JM INVESTMENTS AVAILABLE-FOR-SALE	(45,481,137)	(162,220,077)

CASH EQUIVALENTS AND NON-JM INVESTMENTS
AVAILABLE-FOR-SALE, BEGINNING OF PERIOD	878,092,225	994,831,165

CASH EQUIVALENTS AND NON-JM INVESTMENTS
AVAILABLE-FOR-SALE, END OF PERIOD	$832,611,088	$832,611,088

The accompanying notes are an integral part of these statements.

MANVILLE PERSONAL INJURY SETTLEMENT TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2000

(1) DESCRIPTION OF THE TRUST

The Manville Personal Injury Settlement Trust (the Trust), organized pursuant to the laws of the state of New York with its office in Katonah, New York, was established pursuant to the Manville Corporation (Manville) Second Amended and Restated Plan of Reorganization (the Plan). The Trust was formed to assume Manville’s liabilities resulting from pending and potential litigation involving (i) individuals exposed to asbestos who have manifested asbestos-related diseases or conditions, (ii) individuals exposed to asbestos who have not yet manifested asbestos-related diseases or conditions and (iii) third-party asbestos-related claims against Manville for indemnification or contribution. Upon consummation of the Plan, the Trust assumed liability for existing and future asbestos health claims. The Trust had initial funding and will receive ongoing fixed and contingent funding as described below under “Funding of the Trust.” The Trust’s funding is dedicated solely to the settlement of asbestos health claims and the related costs thereto, as defined in the Plan. The Trust was consummated on November 28, 1988.

In December 1998, the Trust formed a wholly-owned corporation, the Claims Resolution Management Corporation (CRMC), to provide the Trust with claim processing and settlement services. Prior to January 1, 1999, the Trust provided its own claim processing and settlement services. CRMC began operations on January 1, 1999 in Fairfax, Virginia. The accounts of the Trust and CRMC have been consolidated for financial reporting purposes. All significant balances and transactions between the Trust and CRMC have been eliminated in consolidation.

Funding of the Trust

The Trust was initially funded from the following sources:

Manville provided $150 million in cash plus $5.4 million in accrued interest. At consummation, the Trust was required to transfer approximately $27.5 million to the Manville Property Damage Settlement Trust.
Insurance settlement proceeds totaling $695 million, which included $72 million in interest thereon.
24,000,000 shares of Manville Common Stock (50% of Manville Common Stock outstanding at consummation).
7,200,000 shares of a new Series A Convertible Preferred Stock of Manville. In December 1992, these shares were converted into 72,000,000 shares of Manville Common Stock.
A $50 million interest-bearing note receivable (the Trust Note) payable in equal installments in 1990 and 1991. In December 1989, Manville prepaid the Trust Note. The payment included the $50 million in principal and $8.1 million in accrued interest.
Up to $1.65 billion pursuant to the terms of a bond (the Trust Bond). The Trust Bond initially provided for semi-annual installments of $37.5 million commencing in 1991 and ending in 2012. In 1994, the Trust Bond was prepaid.
Up to $150 million pursuant to the terms of a second bond (the Trust Second Bond). The Trust Second Bond required Manville to pay the Trust $37.5 million semi-annually in the years 2013 and 2014. On June 30, 1999 the Trust Second Bond was prepaid.
Up to 20% of Manville’s profits as defined in the Plan, payable beginning in 1992 with respect to the prior year’s profits (the Profit Sharing Rights). In April 1996, the Profit Sharing Rights were exchanged for an additional 32,527,110 shares of Manville Common Stock.

Manville Stock Interests

On July 7, 1999 Johns Manville Corporation (JM) purchased approximately 12.2 million shares of its common stock from the Trust for approximately $166.8 million. Based on an agreement reached between the Trust and JM on June 7, 1999, the shares were purchased at the average closing price of $13.675, JM’s common stock for the 20 business days beginning June 8, 1999 and ending July 6, 1999. After giving effect to the transaction, the Trust owns 112,730,819 shares of JM common stock or approximately 76% of outstanding shares.

On June 22, 2000, JM entered into a definitive merger agreement with an investor group led by affiliates of Hicks, Muse, Tate & Furst Inc. and Bears Stearns Merchant Fund Corp. Under the terms of the agreement, JM’s public shareholders (including the Trust) will receive, for each share of JM stock held, $13.625 in cash and 13 percent pay-in-kind preferred stock (PIK Preferred). However, as a condition of the transaction, the Trust is obligated to re-invest $50 million in the new common equity and equivalents of the post-merger company. Therefore, based on the 112,730,819 shares of JM common stock held by the Trust, the Trust will receive approximately $1.5 billion in cash and about $219 million in liquidation preference of PIK Preferred stock along with approximately 8.4 percent of the ongoing company’s common stock and equivalents. In addition, contingent upon the transaction, JM has agreed to pay the Trust $90 million in settlement of JM’s obligation for future income taxes of the Trust. The transaction is expected to close at the end of the year, subject to various conditions, including receipt of financing, bankruptcy court, shareholder and regulatory approvals. Transaction costs for legal and investment banking will be netted against the proceeds received assuming the transactions is consummated.

In connection with the merger agreement, the Trust entered into a voting agreement with the company merging with and into JM. Pursuant to this voting agreement, the Trust agreed that, except under certain circumstances, it will vote all its shares of JM stock in favor of the merger and not offer for sale, sell or otherwise dispose of its JM stock, except as contemplated in the merger transaction.

On October 19, 2000, JM announced it did not believe that the transaction will be completed on the terms contained in the previously announced definitive merger agreement with the investor group and that JM was currently engaged in discussions with the investor group regarding possible changes in the transaction. The Trust also believes the transaction will not be completed on the previously agreed to terms and the Trust is participating in discussions with the investor group.

(2) SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation

The Trust’s financial statements are prepared using special-purpose accounting methods that differ from generally accepted accounting principles (GAAP). The special-purpose accounting methods were adopted in order to better communicate to the beneficiaries of the Trust the amount of equity available for payment of current and future claims. These special-purpose accounting methods are enumerated as follows:

The financial statements are prepared using the accrual basis of accounting.
The funding received from JM and its liability insurers has been recorded directly to net claimants’
equity. These funds do not represent income of the Trust. Settlement offers for asbestos health
claims are reported as deductions in net claimants’ equity and do not represent expenses of the
Trust.
Costs of non-income producing assets, which will be exhausted during the life of the Trust and
are not available for satisfying claims, are expensed as they are incurred. These costs include
acquisition costs of computer hardware, software, software development, office furniture and
leasehold improvements.
Future fixed liabilities and contractual obligations entered into by the Trust are recorded directly
against net claimants’ equity. Accordingly, the future minimum rental commitments outstanding
at period end for non-cancelable operating leases, net of any sublease agreements, have been
recorded as deductions to net claimants’ equity.
The liability for unpaid claims reflected in the statements of net claimants’ equity represents settled
but unpaid claims and outstanding settlement offers. Post-Class Action complaint claims’ liability
is recorded once a settlement offer is made to the claimant (Note 4) at the amount equal to the
expected pro rata payment. No liability is recorded for future claim filings and filed claims on
which no settlement offer has been made. Net claimants’ equity represents funding available to
pay present and future claims on which no fixed liability has been recorded.
Available-for-sale securities are recorded at market. Held-to-maturity securities are recorded at
amortized cost. All interest and dividend income, as well as net realized gains/losses, on non-JM
available-for-sale securities are included in non-JM investment income on the statements of changes
in net claimants’ equity. Realized gains on JM common stock and unrealized gains and losses on
non-JM available-for-sale securities are recorded as separate components on the statements of
changes in net claimants’ equity.

The preparation of financial statements in conformity with the special-purpose accounting methods
described above requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and the reported amounts of
additions and deductions to net claimants’ equity during the reporting period. Actual results could
differ from those estimates. The most significant estimates with regard to these financial statements
relate to unpaid claims, as discussed in Notes 4 and 6.

(b) JM Common Stock Interest

The Trust’s stock interests represent a majority stock interest in JM. The accounts of JM have not
been consolidated in the accompanying financial statements because: (i) JM stock interests are held
by the Trust in order to pay asbestos health claims, and as such, the investment is likely to be
temporary; and (ii) the objective of the financial statements is to communicate the equity available
over the life of the Trust to current and future claimants. Thus, the Trust believes that recording
these stock interests at current market value is appropriate.

At consummation, the Trust’s stock interests were recorded at market value. Subsequent changes in their market values are shown separately as unrealized appreciation/depreciation in the carrying value of JM common stock in the statements of changes in net claimants’ equity. The market value of the JM common stock held by the Trust is recorded by using the closing price of JM common stock on the New York Stock Exchange composite transactions on the last day of the appropriate reporting period. As of September 30, 2000 and 1999, that price was $11.3125 and $13.125 per share, respectively. Nevertheless, the Trust may not realize this value as a result of potential illiquidity in the public sale of a major position in JM common stock without disruption to the public market. Further, any premium that might be obtained upon a private sale of a controlling interest in JM may also impact this value.

(c) Trust Second Bond

On June 30, 1999 JM prepaid the Trust Second Bond resulting in the payment to the Trust of $33,215,716, using an agreed-upon discount rate of 10.6% as part of the June 7, 1999 agreement between the Trust and JM (Note 1).

(d) Cash Equivalents and Non-JM Investments

At September 30, 2000 and 1999 the Trust has recorded all its non-JM investment securities at market value, as follow

2000 1999
	Cost	Market	Cost	Market
Restricted
Cash equivalents	$453,367	$453,367	$3,249,633	$3,249,633
U.S. Govt. oblig.	11,504,440	11,462,278	12,611,611	12,488,721
Corporate and other debt	4,415,162	7,413,496	4,387,451	4,347,221
Equities – U.S.	13,716,258	23,963,669	23,591,671	29,487,251

Total	$33,089,227	$43,292,810	$43,840,366	$49,572,826

Unrestricted
Cash equivalents	$87,944,784	$87,944,784	$324,670,649	$324,670,649
U.S. govt. obligations	201,661,231	201,704,190	195,933,959	191,482,268
Foreign govt. obligations	94,835,796	92,241,334	104,933,111	103,524,003
Corporate and other debt	218,021,418	214,469,092	212,913,720	207,704,097
Equities – U.S.	76,289,762	120,058,519	89,639,524	131,244,365
Equities – International	60,964,082	72,900,359	59,073,183	75,534,840

Total	$739,717,073	$789,318,278	$987,164,146	$1,034,160,222

The maturities of the Trust’s non-JM available-for-sale securities at market value (excluding cash
equivalents) are as follows:

	Less Than 1 Year	After 1 Year Through 5 Years	After 5 Years Through 10 years	After 10 Yrs

U.S. govt. obligations	$5,655,989	$46,741,358	$40,062,927	$120,706,193
Foreign govt. obligations	7,998,145	38,661,057	24,404,610	21,177,522
Corporate and other debt	17,377,319	139,871,447	31,689,516	32,944,306
Total	$31,031,453	$225,273,862	$96,157,053	$174,828,021

The Trust invests in two types of derivative financial instruments. Equity index futures are used as
strategic substitutions to cost effectively replicate the underlying index of its domestic equity
investment fund. At September 30, 2000, the fair value of these instruments was approximately
$1.4 million and was included in non-JM investments available-for-sale on the statement of net
claimants’ equity. Foreign currency forwards are utilized for both currency translation purposes
and to hedge against the currency risk inherent in foreign bond issues. At September 30, 2000,
the Trust held at market value approximately $137.2 million in sell currency forward contracts
offset by approximately $135.3 million in buy currency forward contracts. The unrealized gains
on these outstanding currency forward contracts of approximately $1.9 million is principally offset
by corresponding unrealized losses due to currency exchange on the underlying securities being
hedged. These amounts are recorded in the statement of net claimants’ equity at September 30, 2000.

(e) Fixed Assets

The cost of non-income producing assets that will be exhausted during the life of the Trust and are
not available for satisfying claims are expensed as incurred. Since inception, these costs, net of
disposals, include:

Acquisition of furniture and equipment                                 $ 757,371
Acquisition of computer hardware and software                     1,524,588
Leasehold improvements                                                          42,965
                    Total                                                                              $2,324,924

These items have not been recorded as assets, but rather as direct deductions to net claimants’ equity in
the accompanying financial statements. The cost of fixed assets, net of proceeds on disposals, that were
expensed during the three months and nine months ended September 30, 2000 was approximately
$10,448 and $106,300 respectively.

Depreciation expense related to asset acquisitions using generally accepted accounting principles
would have been approximately $54,600 and $162,800 for the three months and nine months
ended September 30, 2000, respectively.

(f) JM Dividends

Beginning in August 1996, the JM Board of Directors declared regular quarterly dividends of $.03
per share, the first time such dividends were declared since 1982. In August 1997 the dividend was
increased to $.04 per share and in August 1998 to $.06 per share. Such dividends are reported as
additions to net claimants’ equity.

(3) LITIGATION

During 1997 the Trust filed a complaint in the U.S. District Court for the Eastern District of New York
(the Court) on behalf of the Trustees against seven tobacco manufacturers (“Falise I”), pursuant to which
the Trust sought contribution and indemnification for claims paid and to be paid in which a portion of
the claimant’s injury was caused by smoking. In November 1999, the Court dismissed Falise I on
jurisdictional grounds and during the same month, the Trust filed a second complaint (“Falise II”)
which alleged the same causes of action as in Falise I and, in addition, violations of the Federal
RICO Act. Pursuant to an order of the Court, all discovery taken by both sides in Falise I are
considered to be a part of Falise II. A trial date in Falise II is scheduled to November 27, 2000.

(4) UNPAID CLAIMS

The Trust distinguishes between claims that were resolved prior to the filing of the class action
complaint on November 19, 1990 and claims resolved after the filing of that complaint. Claims resolved
prior to the complaint (Pre-Class Action Claims) were resolved under various payment plans, all of
which called for 100% payment of the full liquidated amount without interest over some period of time.
However, between July 1990 and February 1995, payments on all claims except qualified exigent
health and hardship claims were stayed by the courts. By court order on July 22, 1993 (which
became final on January 11, 1994), a plan submitted by the Trust was approved to immediately pay,
subject to claimant approval, a discounted amount on Pre-Class Action Claims, in full satisfaction of
these claims. The discount amount taken, based on the claimants who accepted the Trust’s discounted
offer, was approximately $135 million.

The unpaid liability for the Post-Class Action claims represents outstanding offers made in First-in,
First-out (FIFO) order to claimants eligible for settlement after November 19, 1990. Under the TDP
(Note 6), claimants receive an initial pro rata payment equal to 10% of the liquidated value of their
claim. The Trust remains liable for the unpaid portion of the liquidated amount only to the extent that
assets will be available after paying all claimants the established pro rata share of their claims. The
Trust makes these offers in the form of a check made payable to the claimant and/or claimant’s
counsel. If the offer is accepted, the check is deposited, a Trust release is completed and the claim
is recorded as settled. An unpaid claim liability is recorded once an offer is made. The unpaid claim
liability remains on the Trust’s books until accepted or expiration of the offer after 180 days. A
claimant may request that an offer be extended for an additional 180 days.

Pursuant to the Stipulation of Settlement, the Trust is obligated to pay approximately $63 million plus
investment earnings on funds set aside for contribution and indemnity claims occurring before
July 25, 1994. As of September 30, 2000, approximately $256,000 remains to be paid.

(5) COMMITMENTS AND CONTINGENCIES

Operating Leases

In September 1993, the Trust executed a 5-year lease through December 1998 for its offices in
Fairfax, Virginia. The lease was extended for an additional 5 years beginning at the expiration of the
initial lease. Effective January 1, 1999, the Trust assigned its rights under the lease to CRMC
conditioned upon the Trust’s guarantee of future lease payments.

Future minimum rental commitments under this operating lease, as of September 30, 2000 are as follows:

Calendar Year Amount

2000               $148,787
2001                 613,122
2002                 631,969
2003                 651,381

Total $2,045,258

This obligation has been recorded as a liability at face value in the accompanying financial statements.

(6) NET CLAIMANTS’ EQUITY

A class action complaint was filed on behalf of all Trust beneficiaries on November 19, 1990, seeking to
restructure the methods by which the Trust administers and pays claims. On July 25, 1994, the parties
signed a Stipulation of Settlement that included a revised Trust Distribution Process (the TDP).
The TDP prescribes certain procedures for distributing the Trust’s limited assets, including pro rata
payments and initial determination of claim value based on scheduled diseases and values. The
Court approved the settlement in an order dated January 19, 1995. Though six appeals were filed
with the Court of Appeals, no stay was granted and the Trust implemented the TDP payment
procedures effective February 21, 1995. On February 21, 1996, the Court of Appeals affirmed
the decision.

Prior to the commencement of the class action in 1990, the Trust filed a motion for a determination
that its assets constitute a “limited fund” for purposes of Federal Rules of Civil Procedure 23(b)(1)(B).
The Courts adopted the findings of the Special Master that the Trust is a “limited fund”. In part,
the limited fund finding concludes that there is a substantial probability that estimated future assets
of the Trust are and will be insufficient to pay in full all claims that have been and will be asserted
against the Trust.

The TDP contains certain procedures for the distribution of the Trust’s limited assets. Under the TDP,
the Trust forecasts its anticipated annual sources and uses of cash until the last projected future claim
has been paid. A pro rata payment percentage is calculated such that the Trust will have no remaining
assets or liabilities after the last future claimant receives his/her pro rata share.

The Trust has conducted its own research and monitored studies prepared by the Courts’ appointee
regarding the valuation of Trust assets and liabilities. Based on this valuation, the TDP provides for
an initial 10% payment of the liquidated value of current and future claims. Accordingly, the Trust
has reported Post-Class Action Claims at 10% of their liquidated value. The 10% pro rata payment
represents the Trust’s best estimate of funds available over the life of the Trust to pay claims settled
under the TDP. The Trust will continue to monitor this estimate based on changes in settlement practices
and changes in future projected values of Trust assets and liabilities and make any necessary changes
in the pro rata payment percentage as required under the TDP.

(7) EMPLOYEE BENEFIT PLANS

The Trust established a tax-deferred employee savings plan under Section 401(k) of the Internal
Revenue Code, with an effective date of January 1, 1988. The plan allows employees to defer a
percentage of their salaries within limits set by the Internal Revenue Code with the Trust matching
contributions by employees of up to 6% of their salaries. The total employer contributions and
expenses under the plan were approximately $69,500 and $211,800 for the three months and
nine months ended September 30, 2000.

(8) RESTRICTED ASSETS

In order to avoid the high costs of director and officer liability insurance and with the approval
of the United States Bankruptcy Court for the Southern District of New York, the Trust established
a segregated security fund of $30,000,000 and, with the additional approval of the United States
District Court for the Southern and Eastern Districts of New York, an escrow fund of $3,000,000
from the assets of the Trust, which are devoted exclusively to securing the obligations of the
Trust to indemnify the former and current Trustees and officers, employees, agents and representatives
of the Trust. In addition, a $15,000,000 escrow and security fund was established to secure the
obligations of the Trust to exclusively indemnify the current Trustees, whose access to the other
security funds is subordinated to the former Trustees. Upon the final order in the Class Action
litigation (Note 4), the $15,000,000 escrow and security fund was reduced by $5,000,000.
Pursuant to Section 5.07 of the plan, Trustees are entitled to a lien on the segregated security
and escrow funds to secure the payment of any amounts payable to them through such indemnification.
Accordingly, in total $43 million has been transferred from the Trust’s bank accounts to separate
escrow accounts and pledge and security agreements have been executed perfecting those interests.
The investment earnings on these escrow accounts accrue to the benefit of the Trust and are
recorded as unrestricted investments.

Pursuant to the Stipulation of Settlement, the Trust funded separate investment accounts for two
of the sub-class beneficiaries. During 1996, one of these accounts was fully disbursed and the
remaining balance for the other account at September 30, 2000 is $0.29 million. This balance
and the $43 million of self-insurance funds described above, have been reported as restricted
investments.

(9) INCOME TAXES

For Federal income tax purposes, JM has elected for the qualified assets of the Trust to be taxed as a
Designated Settlement Fund (DSF). Income and expenses associated with the DSF are taxed in
accordance with Section 468B of the Internal Revenue Code, which obligates JM to pay for any
federal income tax liability imposed upon the DSF. In addition, pursuant to an agreement between
JM and the Trust, JM is obligated to pay for any income tax liability. Accordingly, no liability or
income tax provision has been recorded for the Trust. However, contingent upon consummation
of the merger transaction, JM will pay the Trust $90 million. In return, the Trust will terminate
JM’s contractual liability for income taxes of the Trust and agree to indemnify JM in respect for
all future income taxes of the Trust.

JM however, is not obligated to pay the federal and state income taxes of CRMC and the provision for
income taxes on Exhibit II is the responsibility of CRMC. The Trust accounts for CRMC’s income
taxes in accordance with the Statement of Financial Accounting (SFAS) No. 109, “Accounting for
Income Taxes.” SFAS No. 109 requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of temporary differences between the book and tax basis of assets
and liabilities. As of September 30, 2000, the Trust has recorded a net deferred tax asset of $32,000,
representing temporary timing differences primarily for CRMC’s accrued vacation and deferred
compensation. The deferred asset is included in deposits and other assets in the accompanying
consolidated statement of net claimants’ equity.

The income and expenses attributable to Trust assets not in the DSF are taxed as if these assets
were in a “Grantor Trust.” Consequently, income and expenses associated with these assets are
included in the income tax return of JM (the Grantor) and are not part of the DSF.

(10) PROOF OF CLAIMS FILED

Proof of claim forms have been filed with the Trust as follows:

	As of 9/30/00	As of 9/30/99
Claims filed	467,963	419,509
Voided claims ⁽¹⁾	(37,290)	(36,351)
Currently disqualified ⁽²⁾	(1,419)	(1,080)
Expired offers ⁽³⁾	(39,921)	(30,556)
Active claims	389,333	351,522
Settled claims	(323,654)	(240,923)
Claims currently eligible for settlement	65,679	110,599

(1) Claim filings that are permanently ineligible due to duplication of filing, withdrawal or missing
critical information.

(2) Claim filings on hold until representation or content problems are resolved.

(3) Claims that received a Trust offer, but failed to respond within the offer acceptance period.
A claim may be reactivated upon written request and is eligible for a new offer at the end of
the FIFO queue.

The following exhibits are provided in accordance with Article 3.02 (d) (iii) of
the Manville Personal Injury Settlement Trust Agreement.

Exhibit I Consolidated Non-JM Investment Income for the Three Months
and Nine Months Ended September 30, 2000

Exhibit II Consolidated Operating Expenses for the Three and Nine Months
Ended September 30, 2000

Exhibit III, Page 1 – Schedule of Liquidated Claims Since Consummation
(November 28, 1988) Through June 30, 2000

Exhibit III, Page 2 – Schedule of Liquidated Claims for the Three Months
Ended September 30, 2000

EXHIBIT I

MANVILLE PERSONAL INJURY SETTLEMENT TRUST
CONSOLIDATED NON-JM INVESTMENT INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000

	Three Months Ended 9/30/00	Nine Months Ended 9/30/00
NON-JM INVESTMENT INCOME

Interest	$9,712,610	$29,717,703
Dividends	745,959	2,677,519
Net realized gains	13,079,464	27,688,218
Total non-JM investment income	23,538,033	60,083,440

Investment expenses	(467,456)	(1,154,119)

TOTAL	$23,070,577	$58,929,321

The accompanying notes are an integral part of this exhibit.

EXHIBIT II

MANVILLE PERSONAL INJURY SETTLEMENT TRUST
CONSOLIDATED OPERATING EXPENSES
FOR THE THREE AND NINE MONTHS ENDED SEPTEBMER 30, 2000

	Three Months Ended 9/30/00	Nine Months Ended 9/30/00
OPERATING EXPENSES:
Personnel costs	$1,470,910	$4,659,198
Office general and administrative	290,022	992,238
Travel and meetings	89,880	280,322
Board of Trustees	144,373	413,521
Professional fees	3,912,883	11,265,112
Net fixed asset purchases	10,448	106,300
Computer and other EDP costs	27,911	72,989
Dispute resolution expenses	13,709	20,351
CRMC income taxes (benefits)	(57,700)	43,200
TOTAL OPERATING EXPENSES	$5,902,436	$17,853,231

The accompanying notes are an integral part of this exhibit.

EXHIBIT III, Page 1 of 2

MANVILLE PERSONAL INJURY SETTLEMENT TRUST
SCHEDULE OF LIQUIDATED CLAIMS
SINCE CONSUMMATION (NOVEMBER 28, 1988)
THROUGH SEPTEMBER 30, 2000

	Number	Amount	Average Payment Amount
Trust Liquidated Claims
Pre-Class Action Complaint
November 19, 1990 and Before-
Liquidated Claim Value	27,610	$1,188,264,972
Present Value Discount (1)	______	(135,306,535)
Net Settlements	27,610	1,052,958,437
Payments	(27,550)	(1,051,587,764)		$38,170
Unpaid Balance	60	$1,370,673

Post-Class Action Complaint
After November 19, 1990-
Offers Made at Full Liquidated Amount	314,288	$13,594,048,580
Reduction in Claim Value (2)	______	(12,234,365,757)
Net Offer Amount	314,288	1,359,682,823
Payments	(296,044)	(1,294,833,525)		$4,374
Offers Outstanding	18,244	$64,849,298

Manville Liquidated Claims (3)
Liquidated Claim Value	158	$24,946,620
Payments	(158)	(24,946,620)
Unpaid Balance	0	$0

Co-Defendant Liquidated Claims (4)
Liquidated Claim Value		$90,990,801
Investment Receipts (5)		2,603,520
Payments		(93,337,880)
Unpaid Balance		$256,441

(1) The unpaid liability for Pre-Class Action Complaint claims has been reduced based upon a plan approved by the Courts in
January, 1994 which requires the Trust to offer to pay a discounted amount in full satisfaction of the unpaid claim amount.

(2) Under the TDP, Post Class Action Complaint claims have been reported at 10% of their liquidated value.

(3) Manville Liquidated Claims refers to Liquidated AH Claims (as defined in the Plan) which the Trust has paid or accrued as
payable pursuant to an order of the United States Bankruptcy Court for the Southern District of New York dated January 27, 1987.

(4) Number of personal injury claimants not identifiable.

(5) Investment receipts of separate investment escrow account established for the sub-class beneficiaries per the Stipulation of
Settlement, net of income taxes.

The accompanying notes are an integral part of this exhibit.

EXHIBIT III, Page 2 of 2

MANVILLE PERSONAL INJURY SETTLEMENT TRUST
SCHEDULE OF LIQUIDATED CLAIMS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000

	Number	Amount	Average Payment Amount
Trust Liquidated Claims
Pre-Class Action Complaint
November 19, 1990 and Before-
Payable as of June 30, 2000	61	$1,420,673
Rejected settlement
Present Value Discount
Paid (1)	1	(50,000)
Payable as of September 30, 2000	60	$1,370,673

Post-Class Action Complaint
After November 19, 1990- (2)
Offers Outstanding as of June 30, 2000	21,325	$68,606,132
Net Offers Made (3)	10,803	52,238,851
Offers Accepted	(13,884)	(55,995,685)	$4,033
Offers Outstanding as of September 30, 2000	18,244	$64,849,298

Co-Defendant Liquidated Claims
Payable as of June 30, 2000		$253,215
Settled		535,556
Investment Receipts (4)		3,226
Paid		(535,556)
Payable as of September 30, 2000		$256,441

(1) During the period the dollar amount of paid claims includes fully and partially paid claims. The number of paid
claims represents only fully paid claims.

(2) Under the TDP, Post Class Action Complaint claims have been reported at 10% of their liquidated value.

(3) Represents payment offers made during the period net of rejected and expired offers.

(4) Investment receipts of separate investment escrow account established for the sub-class beneficiaries per the
Stipulation of Settlement, net of income taxes.