content: SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C. 20549
  
  
  
                                      FORM 10-Q
  
                  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
  
                  For the quarterly period ended September 28, 1997
  
                      Commission file numbers 1-11432; 1-11436
  
  
                                     FOAMEX L.P.
                             FOAMEX CAPITAL CORPORATION
               (Exact name of registrant as specified in its charter)
  
  
            Delaware                                      05-0475617
            Delaware                                      22-3182164
  (State or other jurisdiction of                   (I.R.S. Employer
  incorporation or organization)                     Identification Number)
  
  
  1000 Columbia Avenue
  Linwood, PA                                               19061
  (Address of principal                                   (Zip Code)
  executive offices)
  
  Registrant's telephone number, including area code:  (610) 859-3000
  
  Indicate  by check mark  whether  the  registrants  (1) have  filed all  reports
  required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
  1934  during  the  preceding  12 months  (or for such  shorter  period  that the
  registrant  was required to file such reports) and (2) have been subject to such
  filing requirements for the past 90 days. YES X NO
  
  Foamex Capital Corporation meets the conditions set forth in General Instruction
  H (1) (a) and (b) of Form  10-Q  and is  therefore  filing  this  form  with the
  reduced disclosure format.
  
  The number of shares of Foamex Capital Corporation's common stock outstanding as
  of November 3, 1997 was 1,000.
  
                                    Page 1 of 30
                            Exhibit List on Page 24 of 30
  
  <PAGE>
  
                                     FOAMEX L.P.
                             FOAMEX CAPITAL CORPORATION
  
                                        INDEX
                                                                              Page
  Part I.   Financial Information:
  
            Item 1. Financial Statements
  
              Foamex L.P.
  
               Condensed Consolidated Statements of Operations -
                 Thirteen Week and Thirty-Nine Week Periods Ended
                 September 28, 1997 and September 29, 1996                       3
  
               Condensed Consolidated Balance Sheets as of September 28,
                 1997 and December 29, 1996                                      4
  
               Condensed Consolidated Statements of Cash Flows -
                 Thirty-Nine Week Periods Ended September 28, 1997 and
                 September 29, 1996                                              5
  
               Notes to Condensed Consolidated Financial Statements              6
  
               Foamex Capital Corporation
  
               Balance Sheets as of September 28, 1997 and December 29,
                 1996                                                           15
  
               Notes to Balance Sheets                                          16
  
            Item 2. Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                         18
  
  Part II.  Other Information                                                   24
  
            Exhibit List                                                        24
  
            Signatures                                                          30
  
                                         2
  
  <PAGE>
  
  
  PART I.  FINANCIAL INFORMATION
  ITEM 1.  FINANCIAL STATEMENTS
  
                            FOAMEX L.P. AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
  
  <TABLE>
  <CAPTION>
                                                  13 Week Periods Ended             39 Week Periods Ended
                                             September 28,    September 29,    September 28,     September 29,
                                                 1997             1996              1997              1996
                                                                               (thousands)
  <S>                                         <C>              <C>               <C>               <C>      
  NET SALES                                   $ 233,434        $ 236,766         $ 702,441         $ 696,344
  
  COST OF GOODS SOLD                            195,395          196,806           576,825           582,186
                                              ---------        ---------         ---------         ---------
  
  GROSS PROFIT                                   38,039           39,960           125,616           114,158
  
  SELLING, GENERAL AND
     ADMINISTRATIVE EXPENSES                     15,562           15,057            46,893            42,184
                                              ---------        ---------         ---------         ---------
  
  INCOME FROM OPERATIONS                         22,477           24,903            78,723            71,974
  
  INTEREST AND DEBT ISSUANCE EXPENSE             11,846           11,131            33,355            31,855
  
  OTHER INCOME, NET                                 281              539             1,403             1,076
                                              ---------        ---------         ---------         ---------
  
  INCOME FROM CONTINUING OPERATIONS
     BEFORE PROVISION FOR INCOME TAXES           10,912           14,311            46,771            41,195
  
  PROVISION FOR INCOME TAXES                      1,359            2,866             4,618             6,584
                                              ---------        ---------         ---------         ---------
  
  INCOME FROM CONTINUING OPERATIONS               9,553           11,445            42,153            34,611
  
  LOSS FROM DISCONTINUED OPERATIONS                  --           (1,989)               --           (41,516)
  
  EXTRAORDINARY LOSS ON EARLY
     EXTINGUISHMENT OF DEBT                          --             (672)          (45,538)             (672)
                                              ---------        ---------         ---------         ---------
  
  NET INCOME (LOSS)                           $   9,553        $   8,784         $  (3,385)        $  (7,577)
                                              =========        =========         =========         =========
  </TABLE>
  
  
            The accompanying notes are an integral part of the condensed
                         consolidated financial statements.
  
                                         3
  <PAGE>
                            FOAMEX L.P. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
  <TABLE>
  <CAPTION>
                                                         September 28,     December 29,
  ASSETS                                                    1997               1996
  CURRENT ASSETS:                                                 (thousands)
  <S>                                                     <C>               <C>      
       Cash and cash equivalents                          $   1,078         $  20,968
       Accounts receivable, net                             141,609           125,847
       Inventories                                           94,301           102,610
       Other current assets                                  48,584            39,495
                                                          ---------         ---------
          Total current assets                              285,572           288,920
  
  PROPERTY, PLANT AND EQUIPMENT, NET                        195,178           182,427
  
  COST IN EXCESS OF ASSETS ACQUIRED, NET                     82,114            83,991
  
  DEBT ISSUANCE COSTS, NET                                   17,771            14,902
  
  OTHER ASSETS                                               20,364            15,917
                                                          ---------         ---------
  
  TOTAL ASSETS                                            $ 600,999         $ 586,157
                                                          =========         =========
  
  LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
  CURRENT LIABILITIES:
       Short-term borrowings                              $   4,871         $   3,692
       Current portion of long-term debt                      8,664            13,735
       Accounts payable                                      71,952            75,621
       Accounts payable to related parties                   16,556             8,803
       Accrued interest                                       7,220             8,871
       Other accrued liabilities                             48,590            41,108
                                                          ---------         ---------
          Total current liabilities                         157,853           151,830
                                                          ---------         ---------
  
  LONG-TERM DEBT                                            519,668           392,617
                                                          ---------         ---------
  
  OTHER LIABILITIES                                          27,074            28,878
                                                          ---------         ---------
  
  COMMITMENTS AND CONTINGENCIES                                  --                --
                                                          ---------         ---------
  
  PARTNERS' EQUITY (DEFICIT):
       Partners' capital accounts                           (87,670)           58,286
       Note receivable from partner                              --           (33,180)
       Other                                                (15,926)          (12,274)
                                                          ---------         ---------
          Total partners' equity (deficit)                 (103,596)           12,832
                                                          ---------         ---------
  
  TOTAL LIABILITIES AND PARTNERS' EQUITY (DEFICIT)        $ 600,999         $ 586,157
                                                          =========         =========
  </TABLE>
  
            The accompanying notes are an integral part of the condensed
                         consolidated financial statements.
  
                                         4
  <PAGE>
                            FOAMEX L.P. AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
  
  <TABLE>
  <CAPTION>
                                                                             39 Week Periods Ended
                                                                        September 28,     September 29,
                                                                            1997              1996
  OPERATING ACTIVITIES:                                                          (thousands)
  <S>                                                                   <C>               <C>       
     Net income (loss)                                                  $  (3,385)        $  (7,577)
     Adjustments to reconcile  net income (loss) to net cash
       provided by operating activities:
         Depreciation and amortization                                     15,570            15,945
         Amortization of debt issuance costs and debt discount              1,903             2,124
         Extraordinary loss on extinguishment of debt                      45,538               672
         Loss from discontinued operations                                     --            41,516
         Other operating activities                                        (1,696)           (4,126)
         Changes in operating assets and liabilities                      (26,200)          (14,025)
                                                                        ---------         ---------
  
            Net cash provided by continuing operations                     31,730            34,529
            Net cash used for discontinued operations                          --              (486)
                                                                        ---------         ---------
            Net cash provided by operating activities                      31,730            34,043
                                                                        ---------         ---------
  
  INVESTING ACTIVITIES:
     Capital expenditures                                                 (25,444)          (14,536)
     Purchase of FJPS senior secured discount debentures                 (105,829)               --
     Decrease (increase) in restricted cash                                12,143           (33,149)
     Loan to partner                                                       (5,000)               --
     Proceeds from sale of discontinued operations                             --            45,425
     Other investing activities                                              (930)            1,745
     Discontinued operations investing activities                              --              (919)
                                                                        ---------         ---------
  
            Net cash used for investing activities                       (125,060)           (1,434)
                                                                        ---------         ---------
  
  FINANCING ACTIVITIES:
     Net proceeds from short-term borrowings                                1,179             2,970
     Net proceeds from revolving loans                                     31,000                --
     Proceeds from long-term debt                                         453,500                --
     Repayment of long-term debt                                         (363,443)          (18,392)
     Premiums and payments associated with debt extinguishment            (22,921)               --
     Debt issuance costs                                                  (15,617)               --
     Distributions to partners                                            (10,283)           (3,478)
     Other financing activities                                                25                (8)
                                                                        ---------         ---------
  
            Net cash provided by (used for) financing activities           73,440           (18,908)
                                                                        ---------         ---------
  
  NET INCREASE (DECREASE) IN CASH
     AND CASH EQUIVALENTS                                                 (19,890)           13,701
  
  CASH AND CASH EQUIVALENTS
     AT BEGINNING OF PERIOD                                                20,968               638
                                                                        ---------         ---------
  
  CASH AND CASH EQUIVALENTS
     AT END OF PERIOD                                                   $   1,078         $  14,339
                                                                        =========         =========
  </TABLE>
  
            The accompanying notes are an integral part of the condensed
                         consolidated financial statements.
  
                                         5
  <PAGE>
                            FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  1.   ORGANIZATION AND BASIS OF PRESENTATION
  
       Foamex L.P.'s condensed  consolidated balance sheet as of December 29, 1996
  has been condensed from the audited consolidated balance sheet at that date. The
  condensed  consolidated balance sheet as of September 28, 1997 and the condensed
  consolidated statements of operations for the thirteen week and thirty-nine week
  periods  ended  September  28, 1997 and  September  29,  1996 and the  condensed
  consolidated  statements  of cash flows for the  thirty-nine  week periods ended
  September  28, 1997 and September 29, 1996 have been prepared by Foamex L.P. and
  subsidiaries and have not been audited by Foamex L.P.'s independent accountants.
  In the  opinion  of  management,  all  adjustments,  consisting  only of  normal
  recurring  adjustments,  considered  necessary  for a fair  presentation  of the
  consolidated financial position,  results of operations and cash flows have been
  included.
  
       Upon  consummation  of the Refinancing  Plan, as defined,  on June 12, 1997
  (see Note 4 below for further discussion),  Foamex-JPS  Automotive L.P. ("FJPS")
  was merged into Foamex International Inc. ("Foamex  International"),  which thus
  became a 98% limited partner of Foamex L.P. FMXI, Inc. ("FMXI") is a 1% managing
  general partner of Foamex L.P. and Trace Foam Company,  Inc. ("Trace Foam") is a
  1% non-managing general partner of Foamex L.P. FMXI is a wholly-owned subsidiary
  of Foamex International.
  
       Certain information and note disclosures normally included in the financial
  statements prepared in accordance with generally accepted accounting  principles
  have been condensed or omitted in accordance  with the rules and  regulations of
  the Securities and Exchange Commission.  These condensed  consolidated financial
  statements  should be read in conjunction  with Foamex L.P.'s 1996  consolidated
  financial  statements  and notes  thereto as set forth in Foamex  L.P.'s  Annual
  Report on Form 10-K for the fiscal year ended December 29, 1996.
  
  2.   DISCONTINUED OPERATIONS
  
       During 1996,  Foamex L.P. sold the outstanding  common stock of Perfect Fit
  Industries,  Inc.  ("Perfect Fit"), a wholly-owned  subsidiary,  for an adjusted
  sale price of approximately  $44.2 million.  The sale included the net assets of
  Foamex L.P.'s home comfort products business segment.
  
       Foamex  L.P.'s  condensed  consolidated  financial  statements  reflect the
  discontinuation of the home comfort products business segment. Interest and debt
  issuance expense was allocated to discontinued operations based on the estimated
  debt to be  retired  with the net  proceeds  from the  sale.  A  summary  of the
  operating results for the discontinued operations is as follows:
  
  <TABLE>
  <CAPTION>
                                                            13 Week Period Ended  39 Week Period Ended
                                                              September 29, 1996  September 29, 1996
                                                                          (thousands)
  <S>                                                             <C>                <C>     
  Net sales                                                       $     --           $ 50,097
  Gross profit                                                          --              8,065
  Income from operations                                                --              1,123
  Interest and debt issuance expense                                    --              2,384
  Other expense -                                                      348
  Loss on disposal of discontinued operations                       (1,989)           (41,286)
  Loss from discontinued operations
  before benefit from income taxes                                  (1,989)           (42,895)
  Benefit for income taxes                                              --             (1,379)
  Loss from discontinued operations, net of income taxes            (1,989)           (41,516)
  </TABLE>
  
                                         6
  <PAGE>
                            FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  3.   INVENTORIES
  
       The components of inventories consist of:
  <TABLE>
  <CAPTION>
                                         September 28,      December 29,
                                             1997              1996
                                                   (thousands)
  <S>                                      <C>               <C>     
       Raw materials and supplies          $ 49,067          $ 61,559
       Work-in-process                       17,568            13,453
       Finished goods                        27,666            27,598
                                           --------          --------
           Total                           $ 94,301          $102,610
                                           ========          ========
  </TABLE>
  
  4.   LONG-TERM DEBT
  
       Long-term debt consists of:
  
  <TABLE>
  <CAPTION>
                                                                              September 28,     December 29,
                                                                                  1997              1996
                                                                                       (thousands)
  <S>                                                                          <C>               <C>    
       9 7/8% senior subordinated notes due 2007 (1)                            $150,000          $     --
       Foamex L.P. term loan facilities (7.83% interest rate
           at September 28, 1997) (2)                                            298,000                --
       Foamex L.P. revolving loan (7.62% interest rate
           at September 28, 1997) (3)                                             31,000                --
       9 1/2% senior secured notes due 2000 (4)                                    4,523           106,793
       11 1/4% senior notes due 2002 (4)                                           5,825           141,400
       11 7/8% senior subordinated debentures due 2004 (net of
           unamortized debt discount of $116 and $769) (4)                        20,227           125,056
       11 7/8% senior subordinated debentures due 2004, Series B (5)                  45             7,000
       Industrial revenue bonds (6)                                                7,000             7,000
       Foamex L.P. term loan (8.54% interest rate as of
           December 29, 1996) (6)                                                     --            11,000
       Subordinated note (net of debt discount of $969 and $1,198) (6)             6,046             5,817
       Other                                                                       5,666             2,286
                                                                                --------          --------
                                                                                 528,332           406,352
       Less current portion                                                        8,664            13,735
                                                                                --------          --------
       Long-term debt                                                           $519,668          $392,617
                                                                                ========          ========
  </TABLE>
  
  (1)  Debt of Foamex L.P. and Foamex Capital  Corporation  ("FCC")  (together the
       "Issuers"),  guaranteed by General Felt Industries,  Inc. ("General Felt"),
       Foamex  Fibers,   Inc.   ("Foamex  Fibers")  and  certain  future  domestic
       subsidiaries of the Issuers.
  
  (2)  Debt of Foamex L.P., guaranteed by Foamex  International,  General Felt and
       Foamex Fibers.
  
  (3)  Debt of Foamex L.P. and General Felt,  guaranteed  by Foamex  International
       and Foamex Fibers.
  
  (4)  Debt of the Issuers, guaranteed by Foamex International and General Felt.
  
  (5)  Debt of the Issuers, guaranteed by General Felt.
  
  (6)  Debt of Foamex L.P.
  
  
  <PAGE>
                            FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  4.   LONG-TERM DEBT (continued)
  
       Refinancing Plan
  
       On  June  12,  1997,  Foamex   International   substantially   completed  a
  refinancing  plan (the  "Refinancing  Plan") that  included the  refinancing  of
  certain long-term indebtedness to reduce Foamex International's interest expense
  and improve  financing  flexibility.  In connection with the  Refinancing  Plan,
  Foamex L.P. purchased approximately $342.3 million of aggregate principal amount
  of its public  debt and  approximately  $116.7  million of  aggregate  principal
  amount of FJPS's senior  secured  discount  debentures  due 2004 (the  "Discount
  Debentures")  and  repaid  $5.2  million of term loan  borrowings  under its old
  credit  facility.  Foamex  L.P.  incurred  an  extraordinary  loss on the  early
  extinguishment  of debt associated with the  Refinancing  Plan of  approximately
  $44.5 million.  The Refinancing  Plan was funded by $347.0 million of borrowings
  under a new $480.0 million credit  facility (the "New Credit  Facility") and the
  net proceeds from the issuance of $150.0  million of 9 7/8% senior  subordinated
  notes due 2007.
  
       In  addition,  on  October  1,  1997,  Foamex  L.P.  redeemed  all  of  the
  outstanding: (i) 11 1/4% senior notes due 2002, (ii) 11 7/8% senior subordinated
  debentures  due 2004 and (iii) the 11 7/8% senior  subordinated  debentures  due
  2004,  Series B, constituting  approximately  $26.0 million of the approximately
  $30.0  million of its  outstanding  public debt that was not tendered as part of
  the Refinancing Plan. The redemption was funded from the New Credit Facility. In
  connection with this  redemption,  Foamex L.P. expects to incur an extraordinary
  loss on the early  extinguishment  of debt of approximately  $2.6 million in the
  fourth quarter of 1997.
  
       Term Loans and Revolving Loan
  
       On June 12, 1997,  Foamex L.P.  entered into the New Credit Facility with a
  group of banks that provides for term loans of up to $330.0 million which expire
  from June  2003 to June 2006 and  borrowings  of up to  $150.0  million  under a
  revolving  line of credit which  expires in June 2003.  In  connection  with the
  Refinancing  Plan,  Foamex L.P.  entered  into term loans of $298.0  million and
  borrowed $49.0 million under the revolving line of credit.
  
       The term loans are comprised of a (i) term A loan ("Term A") which provides
  up to $120.0  million of borrowings of which Foamex L.P.  borrowed $88.0 million
  in connection with the  Refinancing  Plan, (ii) term B loan ("Term B") of $110.0
  million and (iii) term C loan ("Term C") of $100.0 million.  The remaining $32.0
  million  available under the Term A is restricted and can only be used by Foamex
  L.P. to retire its public debt not tendered in connection  with the  Refinancing
  Plan with such  unused  availability  terminating  June 15,  1998.  Foamex  L.P.
  borrowed  $29.0 million under the Term A in connection  with the October 1, 1997
  redemption.
  
       Borrowings   under  the  New  Credit   Facility   are   collateralized   by
  substantially  all of the assets of Foamex L.P.,  General Felt and Foamex Fibers
  on a pari passu  basis  with the 9 1/2%  senior  secured  notes due 2000 and the
  industrial revenue bonds (collectively, the "Notes"); however, the rights of the
  holders of the applicable issue of Notes to receive payment upon the disposition
  of the collateral securing such issue of Notes has been preserved.
  
       Pursuant to the terms of the New Credit Facility,  borrowed funds will bear
  interest at a floating rate equal to an applicable margin, as defined,  plus the
  higher of (i) the base rate of The Bank of Nova  Scotia,  in effect from time to
  time, or (ii) a rate that is equal to 0.5% per annum plus the federal funds rate
  in effect from time to time.  The applicable  margin is determined  based on the
  total net debt to EBDAIT ratio,  as defined,  and can range from no margin up to
  1.125% per annum for Term A and revolving loans, from 0.875% per annum to 1.375%
  per annum for Term B and from  1.125%  per annum to 1.625% per annum for Term C.
  At the option of Foamex L.P.,  portions of the  outstanding  loans under the New
  Credit Facility are convertible into LIBOR based loans
  
                                         8
  <PAGE>
                            FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  
  4.   LONG-TERM DEBT (continued)
  
  which bear interest at a floating  rate equal to an applicable  margin for LIBOR
  based loans,  as defined,  plus the average  LIBOR,  as defined.  The applicable
  margin for LIBOR based loans is a rate that will generally  equal the applicable
  margin (discussed above) plus 1.0% per annum.
  
       9 7/8% Senior Subordinated Notes due 2007 ("Senior Subordinated Notes")
  
       The Senior  Subordinated  Notes  were  issued by Foamex  L.P.  and FCC in a
  private placement under Rule 144A of the Securities Act of 1933, as amended,  on
  June 12, 1997 in connection with the Refinancing  Plan. The Senior  Subordinated
  Notes bear interest at the rate of 9 7/8% per annum payable semiannually on each
  June 15 and December 15, commencing  December 15, 1997. The Senior  Subordinated
  Notes mature on June 15, 2007. The Senior  Subordinated Notes may be redeemed at
  the option of Foamex L.P., in whole or in part, at any time on or after June 15,
  2002, initially at 104.938% of their principal amount, plus accrued interest and
  liquidated  damages,  as defined,  if any, thereon to the date of redemption and
  declining to 100.0% on or after June 15, 2005. In addition, at any time prior to
  June 15, 2000,  Foamex L.P. may on one or more  occasions  redeem up to 35.0% of
  the initially outstanding principal amount of the Senior Subordinated Notes at a
  redemption  price  equal to  109.875%  of the  principal  amount,  plus  accrued
  interest and liquidated  damages, if any, thereon to the date of redemption with
  the cash proceeds of one or more Public Equity Offerings,  as defined.  Upon the
  occurrence  of  a  change  of  control,  as  defined,   each  holder  of  Senior
  Subordinated  Notes will have the right to require Foamex L.P. to repurchase the
  Senior  Subordinated  Notes at a price equal to 101.0% of the principal  amount,
  plus accrued interest and liquidated damages, if any, to the date of repurchase.
  The Senior Subordinated Notes are subordinated in right of payment to all senior
  indebtedness  and are pari passu in right of payment to the  subordinated  note.
  The Senior  Subordinated Notes contain certain covenants that limit, among other
  things,  the  ability  of  Foamex  L.P.  (i)  to  pay  distributions  or  redeem
  partnership interests, (ii) to make certain restrictive payments or investments,
  (iii) to incur additional  indebtedness or issue Preferred  Equity Interest,  as
  defined,  (iv) to merge,  consolidate  or sell all or  substantially  all of its
  assets,  or (vi) to enter into certain  transactions  with affiliates or related
  persons. The Senior Subordinated Notes are guaranteed by General Felt and Foamex
  Fibers and certain future domestic subsidiaries of the Issuers.
  
       The Issuers  have filed a  registration  statement  relating to an exchange
  offer in which the Issuers will offer to exchange the Senior  Subordinated Notes
  issued in the private  placement for new notes.  The terms of the new notes will
  be substantially identical in all respects (including principal amount, interest
  rate,  maturity  and  ranking)  to the terms of the Senior  Subordinated  Notes,
  except  that the new notes  will be  transferable  by  holders  thereof  without
  further registration under the Securities Act of 1933, as amended (except in the
  case of Senior  Subordinated  Notes held by  affiliates  of the  Issuers and for
  certain  other  holders),   and  are  not  subject  to  any  covenant  regarding
  registration under the Securities Act of 1933, as amended. The exchange offer is
  expected to be consummated during November 1997.
  
       Principal  payments on Foamex  L.P.'s  long-term  debt for the remainder of
  1997 and for the next five years are as  follows:  1997 - $4.1  million;  1998 -
  $11.9 million; 1999 - $20.9 million; 2000 - $31.3 million; 2001 - $31.3 million;
  2002 - $32.7 million; and thereafter - $397.2 million.
  
       Early Extinguishment of Debt - Refinancing Plan
  
       In  connection  with  the  Refinancing   Plan,   Foamex  L.P.  incurred  an
  extraordinary  loss on the early  extinguishment of debt of approximately  $44.5
  million.  The extraordinary loss is comprised of approximately $20.2 million for
  premium and consent fee payments,  approximately $12.6 million for the write-off
  of debt issuance  costs and debt  discount,  approximately  $8.2 million for the
  loss associated with the effective termination
  
                                         9
  <PAGE>
                            FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  4.   LONG-TERM DEBT (continued)
  
  and  amendment of the  interest  rate swap  agreements  and  approximately  $3.5
  million of professional fees and other costs. In connection with the Refinancing
  Plan,  Foamex L.P.  repaid $5.2  million in term loan  borrowings  under its old
  credit  facility  and  purchased   approximately  $459.0  million  of  aggregate
  principal amount of public debt comprised of:
  
  o    $99.8 million of aggregate  principal  amount of its 9 1/2% senior  secured
       notes due 2000 for an aggregate consideration of 104.193% of principal plus
       accrued interest, comprised of a tender price of 102.193% and a consent fee
       of 2.0%;
  
  o    $130.1  million of aggregate  principal  amount of its 11 1/4% senior notes
       due 2002 for an  aggregate  consideration  of  105.709% of  principal  plus
       accrued interest, comprised of a tender price of 103.709% and a consent fee
       of 2.0%;
  
  o    $105.5  million  of  aggregate  principal  amount  of  its 11  7/8%  senior
       subordinated debentures due 2004 for an aggregate consideration of 107.586%
       of principal plus accrued interest, comprised of a tender price of 105.586%
       and a consent fee of 2.0%;
  
  o    $6.9  million  of  aggregate   principal  amount  of  its  11  7/8%  senior
       subordinated  debentures,  series B due 2004 for an aggregate consideration
       of 107.586% of principal plus accrued interest, comprised of a tender price
       of 105.586% and a consent fee of 2.0%; and
  
  o    $116.7 million of aggregate principal amount of the Discount Debentures for
       an aggregate  consideration of 90.0% of principal amount,  which represents
       approximately  121.9%  of the  accreted  book  value as of June  12,  1997,
       comprised of a tender price of 88.0% of principal  amount and a consent fee
       of 2.0%.
  
       Early Extinguishment of Debt - Other
  
       In  addition,  during  1997 Foamex L.P.  incurred  extraordinary  losses of
  approximately  $1.0  million   associated  with  the  early   extinguishment  of
  approximately  $11.8 million of long-term debt funded with  approximately  $12.1
  million  of the  remaining  net  proceeds  from the  sale of  Perfect  Fit.  The
  extraordinary  loss is  comprised  of  approximately  $0.4  million  of  premium
  payments  and  approximately  $0.6 million for the  write-off  of debt  issuance
  costs. The long-term debt was comprised of:
  
  o    $2.5 million of  aggregate  principal  amount of its 9 1/2% senior  secured
       notes due 2000.
  
  o    $5.5 million of aggregate  principal amount of its 11 1/4% senior notes due
       2002.
  
  o    Bank term loan  borrowings  of $3.8 million  under Foamex L.P.'s old credit
       facility.
  
       Interest Rate Swaps
  
       Foamex  L.P.  uses  derivative  financial  instruments  to manage  interest
  expense.  All  derivative  financial  instruments  are  classified  as "held for
  purposes  other  than  trading".  Foamex  L.P.  does  not  use  derivatives  for
  speculative purposes.
  
       Interest  rate swap  agreements  are used to  manage  interest  expense  by
  changing the  interest  rate  characteristics  of certain  debt  instruments  to
  approximate current market conditions. The amended interest rate
  
                                         10
  <PAGE>
                            FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  
  4.   LONG-TERM DEBT (continued)
  
  swap  agreement  matures in June 2007 which is  consistent  with the  underlying
  debt.  The  differential  paid or received on interest  rate swap  agreements is
  recognized  on an accrual  basis as an  adjustment to interest and debt issuance
  expense.  
  
       In connection with the Refinancing  Plan,  Foamex L.P.'s existing  interest
  rate swap agreements with a notional amount of $300.0 million were considered to
  be effectively  terminated  since the underlying  debt was  extinguished.  These
  interest  rate swap  agreements  had an estimated  fair value  liability of $8.2
  million  at  the  date  of  the  Refinancing  Plan  which  is  included  in  the
  extraordinary  loss  on the  early  extinguishment  of  debt.  In lieu of a cash
  payment  for the  estimated  fair  value  of the  existing  interest  rate  swap
  agreements,  Foamex L.P. entered into an amendment of the existing interest rate
  swap  agreements  resulting in one interest rate swap  agreement with a notional
  amount of $150.0 million through June 2007.  Accordingly,  the $8.2 million fair
  value  liability has been recorded as a deferred  credit which will be amortized
  as a reduction in interest and debt issuance  expense on a  straight-line  basis
  over the life of the amended  interest  rate swap  agreement.  Under the amended
  interest rate swap agreement, Foamex L.P. is obligated to make fixed payments of
  5.75% per annum through December 1997 and variable  payments based on the higher
  of  LIBOR  at the  beginning  of the  period  or the end of the  period  for the
  remainder of the  agreement,  in exchange for fixed payments by the swap partner
  at 6.44%  per  annum  for the life of the  agreement,  payable  semiannually  in
  arrears.  The amended  interest rate swap  agreement can be terminated by either
  party in June 2002, and annually thereafter,  for a cash settlement based on the
  fair market value of the amended interest rate swap agreement. Interest and debt
  issuance expense is subject to fluctuations in LIBOR during the term of the swap
  agreement except during 1997. Foamex L.P. is exposed to credit loss in the event
  of nonperformance by the swap partner;  however, the occurrence of this event is
  not  anticipated.  The effect of the interest rate swaps  described  above was a
  favorable  adjustment to interest and debt issuance  expense of $0.5 million and
  $0.9  million  for the  thirteen  week  periods  ended  September  28,  1997 and
  September  29,  1996,  respectively,  and $2.2  million and $2.8 million for the
  thirty-nine  week  periods  ended  September  28, 1997 and  September  29, 1996,
  respectively.
  
  5.   RELATED PARTY TRANSACTIONS
  
       On July 1,  1997,  Trace  Holdings  borrowed  $5.0  million  pursuant  to a
  promissory  note with an aggregate  principal  amount of $5.0 million  issued to
  Foamex L.P. on June 12, 1997. The  promissory  note is due and payable on demand
  or, if no demand is made,  on July 7, 2001,  and bears  interest  at 2 3/8% plus
  three-month LIBOR, as defined, per annum payable quarterly in arrears commencing
  October 1, 1997.  The  promissory  note is  included in the other  component  of
  partners' equity (deficit).
  
       In  connection   with  the   Refinancing   Plan,   Foamex  L.P.   purchased
  approximately   $116.7  million  of  aggregate   principal  amount  of  Discount
  Debentures for  approximately  $105.8  million  including  transaction  costs of
  approximately $0.8 million.  Foamex L.P.  subsequently  distributed the Discount
  Debentures to FJPS and FMXI.
  
       On June 12,  1997,  Foamex  L.P.  distributed  its $2.0  million  aggregate
  principal amount promissory note due from Foamex International to FJPS and FMXI.
  
       Also on June 12, 1997, Foamex L.P.  distributed its $56.2 million aggregate
  principal amount note, as amended,  due 2006 (the "FJPS Note") from FJPS with an
  accreted  value  as of June 12,  1997 of $35.6  million  to FJPS and  FMXI.  The
  accretion  of the original  issue  discount of $2.4 million and $4.7 million for
  the period from December 30, 1996 to June 12, 1997 and for the thirty-nine  week
  period ended September 29, 1996, respectively,
  
                                         11
  <PAGE>
                            FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  
  5.   RELATED PARTY TRANSACTIONS (continued)
  
  was  reflected  as a direct  increase  in the FJPS  Note and  partners'  capital
  account,  and thereby  excluded  from the condensed  consolidated  statements of
  operations.
  
       In  connection  with  the  Refinancing   Plan,  Foamex  L.P.  made  a  cash
  distribution of  approximately  $1.5 million to Trace Foam as a result of Foamex
  L.P.'s distribution to FJPS and FMXI of the Discount  Debentures,  the FJPS Note
  and the $2.0 million aggregate  principal amount promissory note due from Foamex
  International.
  
       On June 12,  1997,  a  promissory  note  issued  to  Foamex  L.P.  by Trace
  International  Holdings,  Inc.  ("Trace  Holdings")  was  amended.  The  amended
  promissory  note is an extension of a promissory note of Trace Holdings that was
  due in July 1997. The aggregate  principal amount of the amended promissory note
  was increased to  approximately  $4.8 million and the maturity of the promissory
  note was extended.  The  promissory  note is due and payable on demand or, if no
  demand is made, on July 7, 2001, and bears  interest at 2 3/8% plus  three-month
  LIBOR, as defined,  per annum payable quarterly in arrears.  The promissory note
  is included in the other component of partners' equity (deficit).
  
       During  June 1997,  Foamex L.P.  and Trace Foam  amended  their  management
  services  agreement  to  increase  the  annual  fee from  $1.75  million to $3.0
  million, plus reimbursement of expenses incurred.
  
       Foamex L.P. has a supply  agreement  (the "Supply  Agreement")  with Foamex
  International   pursuant  to  which,  at  the  option  of  Foamex  L.P.,  Foamex
  International  will purchase certain raw materials,  which are necessary for the
  manufacture of Foamex L.P.'s products,  and resell such materials to Foamex L.P.
  at a price equal to net cost plus reasonable out of pocket expenses.  Management
  believes that the terms of the Supply Agreement are no less favorable than those
  which Foamex L.P. could have obtained from an unaffiliated  third party.  During
  the thirteen  week periods  ended  September  28, 1997 and  September  29, 1996,
  Foamex  L.P.   purchased   approximately   $31.4  million  and  $30.2   million,
  respectively,   of  raw  materials  under  the  Supply  Agreement.   During  the
  thirty-nine week periods ended September 28, 1997 and September 29, 1996, Foamex
  L.P. purchased approximately $94.4 million and $84.3 million,  respectively,  of
  raw materials under the Supply Agreement.  As of September 28, 1997 and December
  29,  1996,  Foamex  L.P.  had  accounts  payable  to  Foamex   International  of
  approximately $16.6 million and $8.8 million, respectively,  associated with the
  Supply Agreement.
  
       Foamex  L.P.  chartered  an  aircraft  (which  is owned  by a  wholly-owned
  subsidiary of Foamex International)  through a third party and incurred costs of
  approximately  $0.3  million and $0.4 million  during the thirteen  week periods
  ended September 28, 1997 and September 29, 1996, respectively,  and $0.9 million
  for each of the thirty-nine  week periods ended September 28, 1997 and September
  29, 1996.
  
  6.   ENVIRONMENTAL MATTERS
  
       As of September 28, 1997,  Foamex L.P. has accruals of  approximately  $3.8
  million for environmental matters. In addition, as of September 28, 1997, Foamex
  L.P.  has  net   receivables   of   approximately   $1.0  million   relating  to
  indemnification   for  environmental   liabilities,   net  of  an  allowance  of
  approximately  $1.0 million  relating to potential  disagreements  regarding the
  scope of the  indemnification.  Foamex L.P. believes that realization of the net
  receivables established for indemnification is probable.
  
       On May 5, 1997,  there was an  accidental  chemical  spill at one of Foamex
  L.P.'s  manufacturing  facilities that was contained on site.  Foamex L.P. is in
  the process of  disposing  of the  contaminated  soil which is estimated to cost
  approximately  $0.6  million.  As of September  28, 1997,  Foamex L.P. has spent
  approximately $0.5
  
                                         12
  <PAGE>
                            FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  
  6.   ENVIRONMENTAL MATTERS (continued)
  
  million for remediation  costs related to this chemical  spill.  The actual cost
  and the  timetable  for the  clean-up of the site cannot be  predicted  with any
  degree of certainty at this time; therefore,  there can be no assurance that the
  clean-up  of the  site  will  not  result  in a more  significant  environmental
  liability in the future.
  
       Foamex L.P. has reported to appropriate state authorities that it has found
  soil  and  groundwater  contamination  in  excess  of  state  standards  at four
  additional  facilities and soil  contamination  in excess of state  standards at
  three other  facilities.  Foamex L.P. has begun  remediation  and is  conducting
  further  investigations into the extent of the contamination at these facilities
  and, accordingly, the extent of the remediation that may ultimately be required.
  The actual cost and the  timetable of any such  remediation  cannot be predicted
  with any degree of certainty at this time. As of September 28, 1997, Foamex L.P.
  has  environmental  accruals of  approximately  $2.9  million for the  remaining
  potential remediation costs for these facilities based on engineering estimates.
  
       Federal  regulations  require that by 1998 all  underground  storage  tanks
  ("USTs") be removed or upgraded  in most  states to meet  applicable  standards.
  Foamex L.P. has six USTs that will require removal or permanent in-place closure
  by the end of 1998.  Due to the age of these  tanks,  leakage may have  occurred
  resulting  in soil and  possibly  groundwater  contamination.  Foamex  L.P.  has
  accrued approximately $0.3 million for the estimated removal and remediation, if
  any,  associated with the USTs.  However,  the full extent of contamination and,
  accordingly,  the actual cost of such  remediation  cannot be predicted with any
  degree of certainty at this time. Foamex L.P. believes that its USTs do not pose
  a  significant  risk  of  environmental   liability  because  of  Foamex  L.P.'s
  monitoring  practices for USTs and conditional  approval for permanent  in-place
  closure for certain USTs. However, there can be no assurance that such USTs will
  not result in significant environmental liability in the future.
  
       Foamex L.P. has been designated as a Potentially  Responsible Party ("PRP")
  by the United States Environmental Protection Agency (the "EPA") with respect to
  thirteen  sites,  with an  estimated  total  liability  to Foamex  L.P.  for the
  thirteen  sites of less than  approximately  $0.5  million.  Estimates  of total
  clean-up costs and fractional allocations of liability are generally provided by
  the EPA or the  committee of PRP's with respect to the  specified  site. In each
  case, the participation of Foamex L.P. is considered to be immaterial.
  
       Although it is possible that new information or future  developments  could
  require Foamex L.P. to reassess its potential  exposure  relating to all pending
  environmental  matters,  management  believes  that,  based  upon all  currently
  available  information,  the resolution of such  environmental  matters will not
  have a material adverse effect on Foamex L.P.'s operations,  financial position,
  capital expenditures or competitive position.  The possibility exists,  however,
  that new  environmental  legislation  and/or  environmental  regulations  may be
  adopted,  or other  environmental  conditions  may be found to  exist,  that may
  require expenditures not currently anticipated and that may be material.
  
  7.   LITIGATION
  
       As of November 3, 1997, Foamex L.P. and Trace Holdings were two of multiple
  defendants in actions filed on behalf of approximately  5,500 persons in various
  United  States  federal and state  courts and one Canadian  provincial  court by
  recipients of breast implants,  some of which allege  substantial  damages,  but
  most of which allege unspecified damages for personal injuries of various types.
  Three of these  cases  seek to allege  claims on  behalf of all  breast  implant
  recipients  or other  allegedly  affected  parties,  but only one class has been
  approved  or  certified  by a court,  and that is a class  limited to  Louisiana
  residents  or persons who received  their  implants in  Louisiana.  In addition,
  three  cases  have been filed  alleging  claims on behalf of  approximately  725
  residents of
  
                                         13
  <PAGE>
                            FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  
  7.   LITIGATION (continued)
  
  Australia  and New Zealand.  During 1995,  Foamex L.P. and Trace  Holdings  were
  granted  summary  judgments and  dismissed as  defendants  from all cases in the
  federal courts of the United States and the state courts of California.  Appeals
  for these decisions were withdrawn and the decisions are final.  Although breast
  implants do not contain foam,  certain silicone gel implants were produced using
  a  polyurethane  foam  covering   fabricated  by  independent   distributors  or
  fabricators from bulk foam purchased from Foamex L.P. or Trace Holdings. Neither
  Foamex L.P. nor Trace  Holdings  recommended,  authorized or approved the use of
  its foam for these purposes.  Foamex L.P.  believes that the number of suits and
  claimants  may  increase,  but not  significantly.  While it is not  feasible to
  predict or determine the outcome of these actions, based on management's present
  assessment of the merits of pending claims,  after consultation with the general
  counsel of Trace Holdings,  management  believes that the disposition of matters
  that are pending or that may reasonably be anticipated to be asserted should not
  have a  material  adverse  effect on  either  Foamex  L.P.'s or Trace  Holdings'
  consolidated  financial position or results of operations.  In addition,  Foamex
  L.P. is also indemnified by Trace Holdings for any such liabilities  relating to
  foam  manufactured  prior to the  capitalization of Foamex L.P. in October 1990.
  Although Trace Holdings has paid Foamex L.P.'s  litigation  expenses pursuant to
  such  indemnification,  and  management  believes  Trace  Holdings  will be in a
  position to continue to pay such expenses,  there can be no assurance that Trace
  Holdings  will be able to continue  to provide  such  indemnification.  Based on
  information  available  at this time with  respect to the  potential  liability,
  Foamex L.P.  believes that the proceedings  should not ultimately  result in any
  liability that would have a material adverse effect on the financial position or
  results of operations of Foamex L.P. If management's assessment of Foamex L.P.'s
  liability with respect to these actions is incorrect,  such actions could have a
  material adverse effect on Foamex L.P.
  
       Foamex L.P.  is party to various  other  lawsuits,  both as  defendant  and
  plaintiff,  arising  in the  normal  course of  business.  It is the  opinion of
  management  that the  disposition of these lawsuits will not  individually or in
  the  aggregate,  have a material  adverse  effect on the  financial  position or
  results of operations of Foamex L.P. If management's assessment of Foamex L.P.'s
  liability with respect to these actions is incorrect,  such actions could have a
  material adverse effect on Foamex L.P.'s consolidated financial position.
  
  8.   SUBSEQUENT EVENT
  
       On October 6, 1997, Foamex L.P. sold substantially all of the net assets of
  its  needlepunch  carpeting,  tufted  carpeting and  artificial  grass  products
  business  located at its facilities in Dalton,  Georgia to Bretlin,  Inc. for an
  aggregate sale price of  approximately  $41.2 million,  subject to  post-closing
  adjustments.  Foamex L.P. expects to realize an immaterial gain on the sale, net
  of income taxes,  in the fourth quarter of 1997.  Foamex L.P. used $38.8 million
  of the net sale proceeds to repay outstanding term loan borrowings under the New
  Credit  Facility.  In connection  with this repayment,  Foamex L.P.,  expects to
  incur an extraordinary loss on the early extinguishment of debt of approximately
  $0.9 million during the fourth quarter of 1997.
  
                                         14
  <PAGE>
                             FOAMEX CAPITAL CORPORATION
                     (A Wholly-Owned Subsidiary of Foamex L.P.)
                             BALANCE SHEETS (unaudited)
  
  
  <TABLE>
  <CAPTION>
                                                            September 28,   December 29,
                                                               1997             1996
  ASSETS                                                           (thousands)
  
  <S>                                                           <C>              <C>
  CASH                                                          $ 1              $ 1
                                                                ===              ===
  
  LIABILITIES AND STOCKHOLDER'S EQUITY
  
  COMMITMENTS AND CONTINGENCIES                                 $ -              $ -
                                                                ---              ---
  
  STOCKHOLDER'S EQUITY:
       Common stock, par value $.01 per share;
       1,000 shares authorized, issued and outstanding            -                -
       Additional paid-in capital                                 1                1
                                                                ---              ---
  
          TOTAL STOCKHOLDER'S EQUITY                            $ 1              $ 1
                                                                ===              ===
  </TABLE>
  
  
  
  
                 The accompanying notes are an integral part of the
                                  balance sheets.
  
                                         15
  <PAGE>
                             FOAMEX CAPITAL CORPORATION
                     (A Wholly-Owned Subsidiary of Foamex L.P.)
                         NOTES TO BALANCE SHEETS (unaudited)
  
  1.   ORGANIZATION
  
       Foamex Capital  Corporation  ("FCC"),  a wholly-owned  subsidiary of Foamex
  L.P.,  was formed for the sole  purpose of  obtaining  financing  from  external
  sources.
  
  2.   COMMITMENTS AND CONTINGENCIES
  
       FCC is a joint obligor on the following borrowings of Foamex L.P.:
  
       9 7/8% Senior Subordinated Notes due 2007 ("Senior Subordinated Notes")
  
       The Senior  Subordinated  Notes  were  issued by Foamex  L.P.  and FCC in a
  private placement under Rule 144A of the Securities Act of 1933, as amended,  on
  June 12, 1997 in connection with the Refinancing  Plan. The Senior  Subordinated
  Notes bear interest at the rate of 9 7/8% per annum payable semiannually on each
  June 15 and December 15, commencing  December 15, 1997. The Senior  Subordinated
  Notes mature on June 15, 2007. The Senior  Subordinated Notes may be redeemed at
  the option of Foamex L.P., in whole or in part, at any time on or after June 15,
  2002, initially at 104.938% of their principal amount, plus accrued interest and
  liquidated  damages,  as defined,  if any, thereon to the date of redemption and
  declining to 100.0% on or after June 15, 2005. In addition, at any time prior to
  June 15, 2000,  Foamex L.P. may on one or more  occasions  redeem up to 35.0% of
  the initially outstanding principal amount of the Senior Subordinated Notes at a
  redemption  price  equal to  109.875%  of the  principal  amount,  plus  accrued
  interest and liquidated  damages, if any, thereon to the date of redemption with
  the cash proceeds of one or more Public Equity Offerings,  as defined.  Upon the
  occurrence  of  a  change  of  control,  as  defined,   each  holder  of  Senior
  Subordinated  Notes will have the right to require Foamex L.P. to repurchase the
  Senior  Subordinated  Notes at a price equal to 101.0% of the principal  amount,
  plus accrued interest and liquidated damages, if any, to the date of repurchase.
  The Senior Subordinated Notes are subordinated in right of payment to all senior
  indebtedness  and are pari passu in right of payment to the  subordinated  note.
  The Senior  Subordinated Notes contain certain covenants that limit, among other
  things,  the  ability  of  Foamex  L.P.  (i)  to  pay  distributions  or  redeem
  partnership interests, (ii) to make certain restrictive payments or investments,
  (iii) to incur additional  indebtedness or issue Preferred  Equity Interest,  as
  defined,  (iv) to merge,  consolidate  or sell all or  substantially  all of its
  assets,  or (vi) to enter into certain  transactions  with affiliates or related
  persons. The Senior Subordinated Notes are guaranteed by General Felt and Foamex
  Fibers and certain future domestic subsidiaries of the Issuers.
  
       The Issuers  have filed a  registration  statement  relating to an exchange
  offer in which the Issuers will offer to exchange the Senior  Subordinated Notes
  issued in the private  placement for new notes.  The terms of the new notes will
  be substantially identical in all respects (including principal amount, interest
  rate,  maturity  and  ranking)  to the terms of the Senior  Subordinated  Notes,
  except  that the new notes  will be  transferable  by  holders  thereof  without
  further registration under the Securities Act of 1933, as amended (except in the
  case of Senior  Subordinated  Notes held by  affiliates  of the  Issuers and for
  certain  other  holders),   and  are  not  subject  to  any  covenant  regarding
  registration under the Securities Act of 1933, as amended. The exchange offer is
  expected to be consummated during November 1997.
  
       9 1/2% Senior Secured Notes due 2000 ("Senior Secured Notes")
  
       The Senior  Secured  Notes were issued on June 3, 1993 and bear interest at
  the rate of 9 1/2% per annum payable semiannually on each June 1 and December 1.
  The Senior Secured Notes mature on June 1, 2000. The
  
                                         16
  <PAGE>
                             FOAMEX CAPITAL CORPORATION
                     (A Wholly-Owned Subsidiary of Foamex L.P.)
                         NOTES TO BALANCE SHEETS (unaudited)
  
  2.   COMMITMENTS AND CONTINGENCIES (continued)
  
  Senior  Secured  Notes  are   collateralized   by  a   first-priority   lien  on
  substantially  all of the assets of Foamex  L.P.  except for  receivables,  real
  estate and fixtures.  The Senior  Secured Notes may be redeemed at the option of
  Foamex  L.P.,  in  whole  or in part,  at any  time on or  after  June 1,  1998,
  initially at 101.583% of their  principal  amount,  plus accrued  interest,  and
  declining to 100.0% on or after June 1, 1999. The Senior Secured Notes have been
  guaranteed,  on a senior secured basis by General Felt and on a senior unsecured
  basis by Foamex  International.  During 1997 and 1996,  Foamex L.P.  repurchased
  $102.3 million and $9.9 million,  respectively,  aggregate  principal  amount of
  Senior Secured Notes.
  
       11 1/4% Senior Notes due 2002 ("Senior Notes")
  
       The Senior  Notes bear  interest  at the rate of 11 1/4% per annum  payable
  semiannually  on each April 1 and October 1. The Senior  Notes mature on October
  1, 2002. The Senior Notes may be redeemed at the option of Foamex L.P., in whole
  or in part,  at any time on or after  October 1, 1997,  initially at 104.219% of
  their principal  amount,  plus accrued  interest,  and declining to 100.0% on or
  after  October 1, 2000.  In October  1994,  Foamex L.P.  provided  certain  real
  property  as  collateral  for the Senior  Notes,  with a net book value of $37.8
  million at December 29, 1996. The Senior Notes have been guaranteed, on a senior
  basis, by General Felt.  During 1997 and 1996,  Foamex L.P.  repurchased  $135.6
  million and $8.6 million,  respectively,  aggregate  principal  amount of Senior
  Notes.  Foamex L.P.  redeemed all of the outstanding  Senior Notes on October 1,
  1997.
  
       11 7/8% Senior Subordinated Debentures ("Subordinated Debentures")
  
       The Subordinated  Debentures bear interest at the rate of 11 7/8% per annum
  payable semiannually on each April 1 and October 1. The Subordinated  Debentures
  mature on October 1, 2004.  The  Subordinated  Debentures may be redeemed at the
  option of Foamex L.P.,  in whole or in part,  at any time on or after October 1,
  1997,  initially at 105.938% of their principal  amount,  plus accrued interest,
  and declining to 100.0% on or after October 1, 2002. The Subordinated Debentures
  are subordinated in right of payment to all senior  indebtedness,  including the
  Senior Secured Notes and the Senior Notes. The Subordinated Debentures have been
  guaranteed,  on a senior subordinated basis, by General Felt and rank pari passu
  in right of payment  to the Senior  Subordinated  Notes.  During  1997 and 1996,
  Foamex L.P. repurchased $104.9 million and $0.1 million, respectively, aggregate
  principal  amount of Subordinated  Debentures.  Foamex L.P.  redeemed all of the
  outstanding Subordinated Debentures on October 1, 1997.
  
       11 7/8% Senior Subordinated Debentures, Series B ("Series B Debentures")
  
       The Series B  Debentures  were issued July 30,  1993,  by Foamex L.P. in an
  exchange offer to holders of senior subordinated debentures issued in connection
  with the  acquisition of General Felt on March 23, 1993. The Series B Debentures
  have terms  substantially  similar to the Subordinated  Debentures,  except that
  holders of the Series B  Debentures  are  entitled to receive  proceeds  from an
  asset sale only if any  proceeds  remain after an offer to  repurchase  has been
  made to the holders of the Subordinated Debentures. The Series B Debentures have
  been  guaranteed on a senior  subordinated  basis by General Felt.  During 1997,
  Foamex  L.P.  repurchased  $6.9  million  of Series B  Debentures.  Foamex  L.P.
  redeemed all of the outstanding Series B Debentures on October 1, 1997.
  
                                         17
  <PAGE>
  ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALAYSIS OF FINANCIAL CONDITION AND 
            RESULTS OF OPERATIONS
  
       Foamex L.P. operates in the flexible polyurethane and advanced polymer foam
  products industry,  together with its wholly-owned  subsidiaries,  General Felt,
  Foamex Fibers, Foamex Canada Inc., Foamex Latin America,  Inc., and Foamex Asia,
  Inc. The following  discussion  should be read in conjunction with the condensed
  consolidated  financial  statements  and  related  notes  thereto of Foamex L.P.
  included  in  this  report.   Certain   information  in  this  report   contains
  forward-looking statements and should be read in conjunction with the discussion
  regarding forward-looking statements set forth on pages 3 and 4 of Foamex L.P.'s
  1996 Annual Report on Form 10-K.
  
       On  June  12,  1997,  Foamex  International   substantially  completed  the
  Refinancing  Plan which  included the  repurchase of $342.3 million of aggregate
  principal  amount of Foamex L.P.'s  public debt and $116.7  million of aggregate
  principal  amount of the Discount  Debentures and the payment of $5.2 million of
  Foamex L.P.  term loan  borrowings  under its old credit  facility.  Foamex L.P.
  incurred an extraordinary  loss on the early  extinguishment  of debt associated
  with the Refinancing Plan of approximately  $44.5 million.  The Refinancing Plan
  was funded by $347.0 million of borrowings under the New Credit Facility and the
  net proceeds from the issuance of the Senior  Subordinated  Notes. See Note 4 to
  the condensed  consolidated  financial  statements for further discussion.  As a
  result of the  Refinancing  Plan,  Foamex L.P.'s total  long-term debt increased
  $150.1 million to $546.3 million.  Foamex L.P.  expects the Refinancing  Plan to
  result in increased interest expense of approximately $2.5 million in the second
  half of 1997 as compared  to the first half of 1997,  and  annualized  increased
  interest  expense  of  approximately  $5.0  million,  as  compared  to the  debt
  structure  prior to the  Refinancing  Plan,  assuming  no  material  changes  in
  interest  rates.  Foamex  L.P.'s  future  interest  expense will vary based on a
  variety of factors,  including  fluctuation in interest  rates in general.  As a
  result of the Refinancing Plan, variable rate debt comprises a larger percentage
  of Foamex L.P.'s overall indebtedness than in the past, and as a result,  future
  fluctuations  in  interest  rates  will have a greater  impact on Foamex  L.P.'s
  interest expense than in the past.
  
       In  addition,  on  October  1,  1997,  Foamex  L.P.  redeemed  all  of  the
  outstanding: (i) 11 1/4% senior notes due 2002, (ii) 11 7/8% senior subordinated
  debentures  due 2004 and (iii) the 11 7/8% senior  subordinated  debentures  due
  2004,  Series B, constituting  approximately  $26.0 million of the approximately
  $30.0  million of its  outstanding  public debt that was not tendered as part of
  the Refinancing Plan. The redemption was funded from the New Credit Facility. In
  connection with this  redemption,  Foamex L.P. expects to incur an extraordinary
  loss on the early  extinguishment  of debt of approximately  $2.6 million in the
  fourth quarter of 1997.
  
       Also,  on October 6, 1997,  Foamex L.P. sold  substantially  all of the net
  assets of its  needlepunch  carpeting,  tufted  carpeting and  artificial  grass
  products  business  located at its facilities in Dalton,  Georgia  ("Dalton") to
  Bretlin,  Inc.  for an  aggregate  sale price of  approximately  $41.2  million,
  subject  to  post-closing  adjustments.   Foamex  L.P.  expects  to  realize  an
  immaterial gain on the sale, net of income taxes, in the fourth quarter of 1997.
  Dalton's  revenues  were $10.7  million and $9.3 million for the  thirteen  week
  periods ended September 28, 1997 and September 29, 1996, respectively, and $35.1
  million and $32.1 million for the  thirty-nine  week periods ended September 28,
  1997 and September 29,1996,  respectively.  As of September 28, 1997, Dalton had
  $7.5 million, $14.8 million, $12.3 million and $2.0 million of inventories,  net
  plant,  property and  equipment,  net goodwill and other  assets,  respectively.
  Foamex L.P.  used $38.8  million of the net sale  proceeds to repay  outstanding
  term loan  borrowings  under the New Credit  Facility.  In connection  with this
  repayment,  Foamex  L.P.  expects  to incur an  extraordinary  loss on the early
  extinguishment  of debt of  approximately  $0.9 million in the fourth quarter of
  1997.
  
       During July 1997,  Foamex  International  announced  the  creation of a new
  senior management  operating  committee to simplify Foamex L.P.'s management and
  reporting  structure and to position  Foamex L.P. to achieve its strategic goals
  which include: (i) to focus on its core flexible polyurethane  operations in the
  automotive,   carpet  cushion,  technical,   cushioning  and  furniture  markets
  (furniture  sales were  previously  combined  with  cushioning  
  
                                         18
  
  <PAGE>
  ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALAYSIS OF FINANCIAL CONDITION AND 
            RESULTS OF OPERATIONS
  
  sales),  (ii) to maximize revenue growth by increasing  market share in existing
  markets,  introducing  new and enhanced foam  products  with higher  margins and
  pursuing  international  opportunities  and (iii) to  continue to lower its cost
  structure.
  
       The principal  suppliers to the foam  industry  announced raw material cost
  increases  effective  April 1997.  The impact of the raw material cost increases
  were not  significant  during the second quarter of 1997.  However,  Foamex L.P.
  estimates  the raw  material  cost  increases,  net of sale price  increases  to
  customers,  had an unfavorable  impact of approximately  $2.0 million during the
  third quarter of 1997.  There can be no assurance  that chemical  suppliers will
  not increase raw material  costs in the future or that Foamex L.P.  will be able
  to  implement  selling  price  increases  to offset any such raw  material  cost
  increases.
  
       During 1996,  Foamex L.P. sold Perfect Fit which comprised the home comfort
  products business segment of Foamex L.P. Accordingly, the accompanying condensed
  consolidated statements of operations for the thirteen week and thirty-nine week
  periods ended  September 29, 1996 and the  condensed  consolidated  statement of
  cash flows for the thirty-nine  week period ended September 29, 1996 reflect the
  home comfort products business segment as discontinued operations. See Note 2 to
  the condensed consolidated financial statements for further discussion.
  
       Operating  results  for 1997  are  expected  to be  influenced  by  various
  internal and external factors.  These factors include,  among other things,  (i)
  continued implementation of the continuous improvement program to improve Foamex
  L.P.'s  profitability,  (ii) additional raw material cost increases,  if any, by
  Foamex L.P.'s chemical  suppliers,  (iii) Foamex L.P.'s success in passing on to
  its  customers  selling  price  increases  to  recover  such raw  material  cost
  increases and (iv) fluctuations in interest rates.
  
  13 Week  Period  Ended  September  28, 1997  Compared  to 13 Week  Period  Ended
  September 29, 1996
  
  Results of Operations
  
       Net sales for the third quarter of 1997 were $233.4  million as compared to
  $236.8 million in the third quarter of 1996, a decrease of $3.4 million or 1.4%.
  Carpet  cushion  products net sales for the third quarter of 1997 decreased 6.4%
  to $72.0 million from $77.0  million in the third quarter of 1996  primarily due
  to a change in product mix and competitive  pricing  pressure  resulting from an
  excess  supply of foam trim,  the primary  component of rebond  carpet  cushion.
  Cushioning  products net sales for the third quarter of 1997  increased  5.7% to
  $60.2 million from $57.0  million in the third quarter of 1996  primarily due to
  an increase in net sales from both new and existing customers of bedding related
  products.  Furniture  products net sales for the third  quarter of 1997 of $29.6
  million were  consistent as compared to net sales of $29.0 million for the third
  quarter of 1996.  Automotive  products  net sales for the third  quarter of 1997
  decreased  6.4% to $52.3 million from $55.9 million in the third quarter of 1996
  primarily due to decreased net sales volume resulting from reduced car and light
  truck builds due to temporary production shut-downs at several Chrysler and Ford
  facilities  for new model  conversions  and slower  than  expected  start-up  of
  several new platforms during the third quarter of 1997.  Technical  products net
  sales for the third quarter of 1997  increased  8.0% to $19.3 million from $17.9
  million  in the third  quarter  of 1996  primarily  due to  increased  net sales
  volume.
  
       Gross profit as a percentage of net sales  decreased to 16.3% for the third
  quarter of 1997 from 16.9% in the third  quarter  of 1996  primarily  due to the
  unfavorable   impact  of  the   unrecovered   raw  material  cost  increases  of
  approximately  $2.0 million  during the third quarter of 1997 offset by improved
  material and production  
  
                                         19
  
  <PAGE>
  ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALAYSIS OF FINANCIAL CONDITION AND 
            RESULTS OF OPERATIONS
  
  efficiencies and  manufacturing  cost containment  which includes  favorable raw
  material  efficiencies  and an increased  impact of the 1995  restructuring  and
  operational plan in 1997 as compared to 1996.
  
       Income from operations  decreased to $22.5 million for the third quarter of
  1997 from  $24.9  million  in the third  quarter  of 1996  primarily  due to the
  reasons discussed above and an increase in selling,  general and  administrative
  expenses of $0.5 million for the third  quarter of 1997 as compared to the third
  quarter of 1996. The increase in selling, general and administrative expenses is
  primarily  due to increases in research and  development  costs,  and travel and
  promotion costs associated with the launching of new products and  international
  expansion offset by a decrease in employee compensation and incentives.
  
       Income from continuing  operations  decreased to $9.6 million for the third
  quarter of 1997 as compared to $11.4 million for the third quarter of 1996.  The
  decrease is primarily due to the reasons cited above and an increase in interest
  and debt  issuance  expense of $0.7  million.  The increase in interest and debt
  issuance expense is primarily due to a decrease in the favorable impact from the
  interest  rate swap  agreements  in the third quarter of 1997 as compared to the
  third quarter of 1996 and due to the higher level of outstanding indebtedness in
  the third  quarter of 1997 as compared to the third  quarter of 1996 as a result
  of the Refinancing Plan. Loss from discontinued  operations in the third quarter
  of 1996  represents  the loss on disposal and the operating  loss of Perfect Fit
  which was sold during 1996. See Note 2 to the condensed  consolidated  financial
  statements for further discussion. The decrease in the effective income tax rate
  for continuing operations for the third quarter of 1997 as compared to the third
  quarter of 1996 is  primarily  due to a decrease  in  pre-tax  earnings  and the
  related tax provision of a subsidiary that files federal income tax returns.
  
       The  extraordinary  loss on early  extinguishment  of debt of approximately
  $0.7 million during the third quarter of 1996 primarily relates to the write-off
  of debt issuance costs associated with the early extinguishment of $12.0 million
  of bank term loan borrowings.
  
  39 Week  Period  Ended  September  28, 1997  Compared  to 39 Week  Period  Ended
  September 29, 1996
  
  Results of Operations
  
       Net sales for 1997 were $702.4  million as  compared  to $696.3  million in
  1996, an increase of $6.1 million or 0.9%. Carpet cushion products net sales for
  1997  decreased 1.0% to $214.9 million from $217.2 million in 1996 primarily due
  to a change in product mix and competitive  pricing  pressure  resulting from an
  excess  supply of foam trim,  the primary  component of rebond  carpet  cushion.
  Cushioning  products net sales for 1997  increased  4.4% to $167.6  million from
  $160.5  million in 1996  primarily due to an increase in net sales from both new
  and existing customers of bedding related products. Furniture products net sales
  for 1997 of $92.1  million  were  consistent  as  compared to net sales of $91.5
  million  for 1996.  Automotive  products  net sales for 1997  decreased  2.2% to
  $171.4  million for 1997 from $175.2 million for 1996 primarily due to increased
  selling  prices  implemented  during the first quarter of 1996 offset by reduced
  net sales  volume in 1997 as compared  to 1996  resulting  from  reduced car and
  light truck builds due to temporary  production  shut-downs at several  Chrysler
  and Ford facilities,  slower than expected start-up of several new platforms and
  labor  strikes at both  Chrysler  and General  Motors  plants  during the second
  quarter of 1997.  Technical  products net sales for 1997 increased 8.8% to $56.4
  million from $51.9 million in 1996 primarily due to increased net sales volume.
  
       Gross profit as a percentage of net sales  increased to 17.9% for 1997 from
  16.4% in 1996 primarily due to selling price  increases,  improved  material and
  production efficiencies and manufacturing cost containment which include (i) the
  impact during 1997 of the selling  prices  initiated in 1996 to offset  previous
  raw material cost increases,  (ii) favorable raw material efficiencies and (iii)
  an increased  favorable impact of the 1995 restructuring 
  
                                         20
  
  <PAGE>
  ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALAYSIS OF FINANCIAL CONDITION AND 
            RESULTS OF OPERATIONS
  
  and operational plan in 1997 as compared to 1996. These increases were offset by
  approximately  $2.0 million of  unrecovered  raw material costs during the third
  quarter of 1997.
  
       Income  from  operations  increased  to $78.7  million  for 1997 from $72.0
  million in 1996  primarily  due to improved  gross  profit  margins as discussed
  above, offset by a $4.7 million increase in selling,  general and administrative
  expenses during 1997 as compared to the comparable period for 1996. The increase
  in selling, general and administrative expenses is primarily due to increases in
  employee compensation and incentives, research and development costs, and travel
  and  promotion  costs   associated  with  the  launching  of  new  products  and
  international expansion.
  
       Income from  continuing  operations  increased to $42.2 million for 1997 as
  compared to $34.6 million in 1996.  The increase is primarily due to the reasons
  cited above offset by an increase in interest and debt issuance  expense of $1.5
  million.  The increase in interest and debt issuance expense is primarily due to
  a decrease in the favorable impact from the interest rate swap agreements in the
  third  quarter of 1997 as compared to the third  quarter of 1996 and is also due
  to the higher level of outstanding indebtedness in 1997 as compared to 1996 as a
  result of the  Refinancing  Plan.  Loss from  discontinued  operations  for 1996
  represents  the loss on disposal and the operating loss of Perfect Fit which was
  sold during 1996. See Note 2 to the condensed  consolidated financial statements
  for  further  discussion.  The  decrease  in the  effective  income tax rate for
  continuing  operations  for  1997 as  compared  to 1996  is  primarily  due to a
  decrease in pre-tax  earnings and the related tax provision of a subsidiary that
  files federal income tax returns.
  
       The  extraordinary  loss on early  extinguishment  of debt of approximately
  $45.5  million  during 1997  relates to premium and  consent fee  payments,  the
  write-off of debt  issuance  costs and other charges  associated  with the early
  extinguishment of approximately  $359.3 million of aggregate principal amount of
  debt in  connection  with the  Refinancing  Plan and other  debt  extinguishment
  during 1997. See Note 4 to the condensed  consolidated  financial statements for
  further  discussion.  The extraordinary loss on early  extinguishment of debt of
  approximately  $0.7 million  during 1996  primarily  relates to the write-off of
  debt issuance costs associated with the early extinguishment of $12.0 million of
  bank term loan borrowings.
  
  Foamex Capital Corporation ("FCC")
  
       FCC is solely a co-issuer  of certain  indebtedness  of Foamex L.P.  has no
  other material operations.
  
  Liquidity and Capital Resources
  
       Foamex L.P.'s operating cash  requirements  consist  principally of working
  capital   requirements,   scheduled   payments  of  principal  and  interest  on
  outstanding  indebtedness and capital  expenditures.  Foamex L.P.  believes that
  cash flow from operating activities,  cash on hand and periodic borrowings under
  revolving  credit  agreements,  if  necessary,  will be  adequate  to  meet  its
  operating cash  requirements.  The ability to meet  operating cash  requirements
  could  be  impaired  if  Foamex  L.P.  were to fail to  comply  with  any of the
  covenants   contained  in  its  credit   agreements  or   indentures   and  such
  noncompliance was not cured or waived by the lenders or bondholders. Foamex L.P.
  was in compliance with such covenants as of September 28, 1997 and expects to be
  in compliance with such covenants for the foreseeable future.
  
       Cash and cash  equivalents  decreased  $19.9  million  during  1997 to $1.1
  million at  September  28, 1997 from $21.0  million at December  29,  1996.  The
  decrease in cash and cash equivalents was primarily due to: (i) $25.4 million of
  cash  used  for  capital  expenditures,  (ii)  $15.3  million  of cash  used for
  distributions  and a loan to  partners,  (iii)  $9.9  million  of cash  used for
  financing  activities after  considering the decrease in restricted cash and the
  purchase  of the  Discount  Debentures  offset  by (iv)  $31.7  million  of cash
  provided from operating activities.  
  
                                         21
  <PAGE>
  ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALAYSIS OF FINANCIAL CONDITION AND 
            RESULTS OF OPERATIONS
  
  The $9.9 million of cash used for financing  activities reflects the: (a) $363.4
  million  repayment of long-term  debt,  (b) $105.8  million of cash used for the
  purchase of the  Discount  Debentures,  (c) $15.6  million of cash used for debt
  issuance  costs,  (d) $22.9  million of cash used for  premium  and  consent fee
  payments and other cash charges  associated with the Refinancing  Plan and other
  debt extinguishment offset by (e) $485.7 million of cash proceeds from long-term
  debt,  revolving  loans  and  short-term  borrowings  and  (f) the  decrease  of
  restricted cash of $12.1 million. Cash flow from continuing operations decreased
  $2.8  million to $31.7  million for 1997 as compared to $34.5  million for 1996.
  Cash flow from  continuing  operations  decreased  for 1997 as  compared to 1996
  primarily due to an increase in the use of cash for  operating  assets offset by
  an increase in income from continuing operations.
  
       Working  capital  decreased  $9.4  million  for 1997 to $127.7  million  at
  September  28, 1997 from $137.1  million at December 29,  1996.  The decrease in
  working  capital is  primarily  due to the $19.9  million  decrease in cash,  as
  previously discussed,  offset by a $3.4 million increase in net operating assets
  and  liabilities,  as  discussed  below,  a $3.3  million net  increase in other
  current assets, and a $3.9 million decrease in short-term borrowings and current
  portion of long-term debt. The net operating  assets and liabilities  (comprised
  of accounts receivable, inventories and accounts payable) increased $3.4 million
  to $147.4 million at September 28, 1997 from $144.0 million at December 29, 1996
  primarily  due to an increase in  accounts  receivable  offset by an increase in
  accounts  payable  and a decrease  in  inventories.  The  increase  in  accounts
  receivable is primarily  due to an increase in net sales for  September  1997 as
  compared to December 1996. The increase in accounts  payable is primarily due to
  the timing of payments.  The decrease in inventories is due to reduced levels of
  major chemicals and foam trim  inventories  offset by increased  work-in-process
  inventories  which is the result of increased  production  in September  1997 as
  compared to December 1996.
  
       During  1997,  Foamex L.P.  spent  approximately  $25.4  million on capital
  expenditures and expects to maintain or reduce spending for capital expenditures
  for the  foreseeable  future since  significant  capital  projects (e.g. the new
  Mexico City facility) are expected to be completed during 1997.
  
       As of  September  28,  1997,  there  was  approximately  $31.0  million  of
  outstanding  revolving  credit  borrowings  under the New Credit  Facility  with
  unused availability of approximately $102.6 million. Borrowings by Foamex Canada
  Inc. as of September 28, 1997 were  approximately $2.9 million under a revolving
  credit  agreement  with  unused  availability  of  approximately  $1.4  million.
  Borrowings  by  Foamex  Latin  America,  Inc.  as of  September  28,  1997  were
  approximately   $2.0  million  under  a  revolving   credit  agreement  with  no
  availability.
  
       Interest Rate Swaps
  
       In connection with the Refinancing  Plan,  Foamex L.P.'s existing  interest
  rate swap agreements with a notional amount of $300.0 million were considered to
  be effectively  terminated  since the underlying  debt was  extinguished.  These
  interest  rate swap  agreements  had an estimated  fair value  liability of $8.2
  million  at  the  date  of  the  Refinancing  Plan  which  is  included  in  the
  extraordinary  loss  on the  early  extinguishment  of  debt.  In lieu of a cash
  payment  for the  estimated  fair  value  of the  existing  interest  rate  swap
  agreements,  Foamex L.P. entered into an amendment of the existing interest rate
  swap  agreements  resulting in one interest rate swap  agreement with a notional
  amount of $150.0 million through June 2007.  Accordingly,  the $8.2 million fair
  value  liability has been recorded as a deferred  credit which will be amortized
  as a reduction in interest and debt issuance  expense on a  straight-line  basis
  over the life of the amended  interest  rate swap  agreement.  Under the amended
  interest rate swap agreement, Foamex L.P. is obligated to make fixed payments of
  5.75% per annum through December 1997 and variable  payments based on the higher
  of  LIBOR  at the  beginning  of the  period  or the end of the  period  for the
  remainder of the  agreement,  in exchange for fixed payments by the swap partner
  at 6.44%  per  annum  for the life of the  agreement,  payable  semiannually  in
  arrears.  The amended  interest rate swap  agreement can be terminated by either
  party in June 2002, and annually thereafter,  for a cash settlement based on the
  fair market 
  
                                         22
  <PAGE>
  ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALAYSIS OF FINANCIAL CONDITION AND 
            RESULTS OF OPERATIONS
  
  value of the amended  interest rate swap  agreement.  Interest and debt issuance
  expense  is  subject  to  fluctuations  in  LIBOR  during  the  term of the swap
  agreement except during 1997. Foamex L.P. is exposed to credit loss in the event
  of nonperformance by the swap partner;  however, the occurrence of this event is
  not  anticipated.  The effect of the interest rate swaps  described  above was a
  favorable  adjustment to interest and debt issuance  expense of $0.5 million and
  $0.9  million  for the  thirteen  week  periods  ended  September  28,  1997 and
  September  29,  1996,  respectively,  and $2.2  million and $2.8 million for the
  thirty-nine  week  periods  ended  September  28, 1997 and  September  29, 1996,
  respectively.
  
       Environmental Matters
  
       Foamex L.P. is subject to  extensive  and changing  environmental  laws and
  regulations.  Expenditures to date in connection  with Foamex L.P.'s  compliance
  with such laws and  regulations  have not had a material  adverse  effect on its
  operations,  financial position,  capital expenditures or competitive  position.
  The  amount  of  liabilities   recorded  by  Foamex  L.P.  in  connection   with
  environmental  matters as of September 28, 1997 was approximately  $3.8 million.
  In addition,  as of  September  28, 1997,  Foamex L.P.  has net  receivables  of
  approximately $1.0 million for indemnification of environmental liabilities from
  former  owners,   net  of  a  $1.0  million  allowance   relating  to  potential
  disagreements  regarding  the  scope  of  the  indemnification.  Although  it is
  possible that new information or future  developments  could require Foamex L.P.
  to  reassess  its  potential  exposure  to all  pending  environmental  matters,
  including  those   described  in  the  footnotes  to  Foamex  L.P.'s   condensed
  consolidated  financial  statements,  management  believes that,  based upon all
  currently   available   information,   the   resolution   of  all  such  pending
  environmental  matters will not have a material  adverse effect on Foamex L.P.'s
  operations, financial position, capital expenditures or competitive position.
  
       The possibility exists, however, that new environmental  legislation and/or
  environmental  regulations may be adopted, or other environmental conditions may
  be found to exist, that may require  expenditures not currently  anticipated and
  that may be material.
  
  Inflation and Other Matters
  
       There was no significant  impact on Foamex L.P.'s operations as a result of
  inflation for the periods presented. In some circumstances, market conditions or
  customer  expectations  may prevent Foamex L.P. from increasing the price of its
  products to offset the inflationary pressures that may increase its costs in the
  future.  Effective in January 1997,  Foamex  L.P.'s  operations in Mexico became
  subject to highly  inflationary  accounting  for financial  reporting  purposes.
  Translation adjustments resulting from fluctuations in the exchange rate between
  the Mexican Peso and the U.S. dollar are included in Foamex L.P.'s  consolidated
  statement of operations as compared to partners' equity (deficit). The effect of
  translation  adjustments  on the  1997  results  of  operations  have  not  been
  material.
  
       Foamex L.P.'s automotive  products  customers are predominantly  automotive
  original  equipment  manufacturers or other automotive  suppliers.  As such, the
  sales of these  product  lines are  directly  related  to the  overall  level of
  passenger car and light truck production in North America.  Also,  Foamex L.P.'s
  sales are  sensitive  to sales of new and  existing  homes,  changes in personal
  disposable  income  and  seasonality.  Foamex  L.P.  typically  experiences  two
  seasonally  slow periods  during each year, in early July and in late  December,
  due to scheduled plant shutdowns and holidays.
  
                                         23
  <PAGE>
  
  PART II - OTHER INFORMATION
  
  Item 1.   Legal Proceedings.
  
            Reference  is  made  to  the  description  of  the  legal  proceedings
            contained in the Foamex L.P. Annual Report on Form 10-K for the fiscal
            year ended December 29, 1996 and in Foamex L.P.'s Quarterly Reports on
            Form 10-Q for the fiscal  quarters  ended  March 30, 1997 and June 29,
            1997.
  
            The  information  from  Notes  6 and 7 of the  condensed  consolidated
            financial  statements of Foamex L.P. and  subsidiaries as of September
            28, 1997 (unaudited) is incorporated herein by reference.
  
  Item 2.   Changes in Securities.
  
            None.
  
  Item 3.   Defaults Upon Senior Securities.
  
            None.
  
  Item 4.   Submission of Matters to a Vote of Securities Holders.
  
            None.
  
  Item 5.   Other Information.
  
            None.
  
  Item 6.   Exhibits and Financial Statement Schedules.
  
            (a)  Exhibits
  
  3.1(a)        - Certificate of Limited Partnership of Foamex L.P.
  3.2.1(a)      - Fourth Amended and Restated Agreement of Limited  Partnership of
                Foamex L.P.,  dated as of December  14,  1993,  by and among FMXI,
                Inc.  ("FMXI") and Trace Foam Company,  Inc.  ("Trace  Foam"),  as
                general   partners,   and  Foamex   International   Inc.  ("Foamex
                International"),   as  a   limited   partner   (the   "Partnership
                Agreement").
  3.2.2(b)      - First  Amendment to the  Partnership  Agreement,  dated June 28,
                1994.
  3.2.3(c)      - Second  Amendment to the Partnership  Agreement,  dated June 12,
                1997.
  3.3(a)        - Certificate of Incorporation of FMXI.
  3.4(a)        - By-laws of FMXI.
  3.5(k)        -  Certificate  of  Incorporation  of Foamex  Capital  Corporation
                ("FCC").
  3.6(k)        - By-laws of FCC.
  3.7(g)        - Certificate of Incorporation  of General Felt  Industries,  Inc.
                ("General Felt").
  3.8(g)        - By-laws of General Felt.
  3.9(p)        - Certificate of  Incorporation  of Foamex Fibers,  Inc.  ("Foamex
                Fibers")
  3.10(p)       - By-laws of Foamex Fibers.
  4.1.1(d)      - Indenture,  dated as of June 12, 1997, by and among Foamex L.P.,
                FCC,  the  Subsidiary  Guarantors  and The  Bank of New  York,  as
                Trustee,  relating  to  $150,000,000  principal  amount  of 9 7/8%
                Senior  Subordinated Notes due 2007,  including the form of Senior
                Subordinated Note and Subsidiary Guarantee.
  
                                         24
  
  <PAGE>
  
  4.1.2(d)      - Registration Rights Agreement, dated as of June 12, 1997, by and
                among Foamex L.P.,  FCC,  General  Felt,  Foamex  Fibers,  and all
                future direct or indirect domestic  subsidiaries of Foamex L.P. or
                FCC,  and  Donaldson,  Lufkin & Jenrette  Securities  Corporation,
                Salomon  Brothers  Inc.  and Scotia  Capital  Markets,  as Initial
                Purchasers.
  4.2.1(e)      - Indenture,  dated as of June 3, 1993, among Foamex L.P. and FCC,
                as joint and several  obligors,  General Felt,  as Guarantor,  and
                Shawmut  Bank,  National  Association  ("Shawmut"),   as  trustee,
                relating to $160,000,000 principal amount of 9 1/2% Senior Secured
                Notes due 2000, including the form of Senior Secured Note.
  4.2.2(a)      - First  Supplemental  Indenture,  dated as of November  18, 1993,
                among  Foamex L.P.  and FCC, as Issuers,  General Felt and Perfect
                Fit Industries,  Inc.  ("Perfect Fit"), as Guarantors and Shawmut,
                as trustee, relating to the Senior Secured Notes.
  4.2.3(a)      - Second  Supplemental  Indenture,  dated as of December 14, 1993,
                among Foamex L.P. and FCC, as Issuers,  Foamex L.P.,  General Felt
                and Perfect Fit, as Guarantors and Shawmut,  as trustee,  relating
                to the Senior Secured Notes.
  4.2.4(f)      - Third Supplemental Indenture, dated as of August 1, 1996, by and
                among  Foamex L.P.  and FCC, as Issuers,  Foamex  L.P.,  as parent
                guarantor, General Felt, as guarantor, Perfect Fit, as withdrawing
                guarantor,  and Fleet National Bank ("Fleet"), as trustee relating
                to the Senior Secured Notes.
  4.2.5(c)      - Fourth Supplemental Indenture,  dated as of May 28, 1997, by and
                among  Foamex L.P.  and FCC, as Issuers,  Foamex  L.P.,  as Parent
                Guarantor, General Felt, as Guarantor, and Fleet, as Trustee.
  4.2.6(e)      - Company  Pledge  Agreement,  dated as of June 3, 1993, by Foamex
                L.P. in favor of Shawmut, as trustee for the holders of the Senior
                Secured Notes.
  4.2.7(p)      - Amendment No. 1 to Company (Foamex L.P.) Pledge Agreement, dated
                June 12, 1997.
  4.2.8(e)      - Company  Pledge  Agreement,  dated as of June 3, 1993, by FCC in
                favor of Shawmut, as trustee for the holders of the Senior Secured
                Notes.
  4.2.9(p)      - Amendment  No. 1 to Company (FCC) Pledge  Agreement,  dated June
                12, 1997.
  4.2.10(e)     -  Subsidiary  Pledge  Agreement,  dated  as of June 3,  1993,  by
                General  Felt in favor of  Shawmut,  as trustee for the holders of
                the Senior Secured Notes.
  4.2.11(p)     - Amendment No. 1 to Subsidiary  (General Felt) Pledge  Agreement,
                dated June 12, 1997.
  4.2.12(e)     - Company Security Agreement,  dated as of June 3, 1993, by Foamex
                L.P.  and FCC in favor of  Shawmut,  as trustee for the holders of
                the Senior Secured Notes.
  4.2.13(p)     -  Amendment  No.  1 to  Company,  Foamex  L.P.  and FCC  Security
                Agreement, dated June 12, 1997.
  4.2.14(e)     -  Subsidiary  Security  Agreement,  dated as of June 3, 1993,  by
                General  Felt in favor of  Shawmut,  as trustee for the holders of
                the Senior Secured Notes.
  4.2.15(p)     - Amendment No. 1 to Subsidiary Security Agreement (General Felt),
                dated June 12, 1997.
  4.2.16(e)     - Collateral  Assignment  of Patents and  Trademarks,  dated as of
                June 3, 1993,  by Foamex L.P. in favor of Shawmut,  as trustee for
                the holders of the Senior Secured Notes.
  4.2.17(p)     -  Amendment  No.  1  to  Collateral  Assignment  of  Patents  and
                Trademarks (Foamex L.P.), dated June 12, 1997.
  4.2.18(e)     - Collateral  Assignment  of Patents and  Trademarks,  dated as of
                June 3,  1993,  by FCC in favor of  Shawmut,  as  trustee  for the
                holders of the Senior Secured Notes.
  4.2.19(p)     -  Amendment  No.  1  to  Collateral  Assignment  of  Patents  and
                Trademarks (FCC), dated June 12, 1997.
  4.2.20(e)     - Collateral  Assignment  of Patents and  Trademarks,  dated as of
                June 3, 1993, by General Felt in favor of Shawmut,  as trustee for
                the holders of the Senior Secured Notes.
  4.2.21(p)     -  Amendment   No.1  to  Collateral   Assignment  of  Patents  and
                Trademarks (General Felt), dated June 12, 1997.
  4.2.22(p)     - Amended and  Restated  Receivables  Security  Agreement,  by and
                among Fleet National Bank, Citicorp USA, Inc. and The Bank of Nova
                Scotia, dated as of June 12, 1997.
  
                                         25
  
  <PAGE>
  
  4.2.23(p)     - Intercreditor  Agreement by and among Fleet, Citicorp USA, Inc.,
                and The Bank of Nova Scotia, dated as of June 12, 1997 (re: Senior
                Secured Notes).
  4.3           - Intentionally omitted.
  4.4           - Intentionally omitted.
  4.5.1(d)      - Credit Agreement, dated as of June 12, 1997, by and among Foamex
                L.P.,  General Felt, Trace Foam, FMXI, the institutions  from time
                to time party thereto as lenders,  the  institutions  from time to
                time party  thereto as issuing  banks,  and Citicorp USA, Inc. and
                The Bank of Nova Scotia, as Administrative Agents.
  4.5.2(p)      - Foamex  International  Guaranty,  dated as of June 12, 1997,  in
                favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.3(p)      - Partnership  Guaranty,  dated as of June 12, 1997, made by Trace
                Foam and FMXI in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.4(p)      - Foamex Guaranty,  dated as of June 12, 1997, made by Foamex L.P.
                in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.5(p)      - GFI Guaranty, dated as of June 12, 1997, made by General Felt in
                favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.6(p)      - Subsidiary  Guaranty,  dated as of June 12, 1997, made by Foamex
                Fibers in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.7(p)      - Subsidiary  Guaranty,  dated as of June 12, 1997, made by Foamex
                Latin America,  Inc. in favor of Citicorp USA, Inc., as Collateral
                Agent.
  4.5.8(p)      - Subsidiary  Guaranty,  dated as of June 12, 1997, made by Foamex
                Mexico, Inc. in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.9(p)      - Subsidiary  Guaranty,  dated as of June 12, 1997, made by FCC in
                favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.10(p)     - Subsidiary  Guaranty,  dated as of June 12, 1997, made by Foamex
                Mexico II, Inc.  in favor of Citicorp  USA,  Inc.,  as  Collateral
                Agent.
  4.5.11(p)     - Subsidiary  Guaranty,  dated as of June 12, 1997, made by Foamex
                Asia, Inc. in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.12(p)     - Partnership Pledge Agreement, dated as of June 12, 1997, made by
                Trace Foam Company,  Inc., FMXI, and Foamex International in favor
                of Citicorp USA, Inc., as Collateral Agent.
  4.5.13(p)     - Foamex  Pledge  Agreement,  dated as of June 12,  1997,  made by
                Foamex L.P. in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.14(p)     - GFI Pledge Agreement, dated as of June 12, 1997, made by General
                Felt in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.15(p)     - Subsidiary Pledge Agreement,  dated as of June 12, 1997, made by
                FCC in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.16(p)     - Subsidiary Pledge Agreement,  dated as of June 12, 1997, made by
                Foamex Fibers in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.17(p)     - Subsidiary Pledge Agreement,  dated as of June 12, 1997, made by
                Foamex Latin  America,  Inc. in favor of Citicorp  USA,  Inc.,  as
                Collateral Agent.
  4.5.18(p)     - Subsidiary Pledge Agreement,  dated as of June 12, 1997, made by
                Foamex Asia,  Inc. in favor of Citicorp  USA,  Inc., as Collateral
                Agent.
  4.5.19(p)     - Subsidiary Pledge Agreement,  dated as of June 12, 1997, made by
                Foamex Mexico,  Inc. in favor of Citicorp USA, Inc., as Collateral
                Agent.
  4.5.20(p)     - Subsidiary Pledge Agreement,  dated as of June 12, 1997, made by
                Foamex  Mexico  II,  Inc.  in  favor of  Citicorp  USA,  Inc.,  as
                Collateral Agent.
  4.5.21(p)     - Foamex  Security  Agreement,  dated as of June 12, 1997, made by
                Foamex L.P. in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.22(p)     - GFI  Security  Agreement,  dated  as of June 12,  1997,  made by
                General Felt in favor of Citicorp USA, Inc., as Collateral Agent.
  
                                         26
  
  <PAGE>
  
  4.5.23(p)     - Subsidiary Security  Agreement,  dated as of June 12, 1997, made
                by Foamex  Fibers in favor of Citicorp  USA,  Inc.,  as Collateral
                Agent.
  4.5.24(p)     - Subsidiary Security  Agreement,  dated as of June 12, 1997, made
                by Foamex Latin  America,  Inc. in favor of Citicorp USA, Inc., as
                Collateral Agent.
  4.5.25(p)     - Subsidiary Security  Agreement,  dated as of June 12, 1997, made
                by  Foamex  Mexico,  Inc.  in  favor of  Citicorp  USA,  Inc.,  as
                Collateral Agent.
  4.5.26(p)     - Subsidiary Security  Agreement,  dated as of June 12, 1997, made
                by Foamex  Mexico II,  Inc.  in favor of Citicorp  USA,  Inc.,  as
                Collateral Agent.
  4.5.27(p)     - Subsidiary Security  Agreement,  dated as of June 12, 1997, made
                by Foamex Asia, Inc. in favor of Citicorp USA, Inc., as Collateral
                Agent.
  4.5.28(p)     - Subsidiary Security  Agreement,  dated as of June 12, 1997, made
                by FCC in favor of Citicorp USA, Inc., as Collateral Agent.
  4.6           - Commitment  letter,  dated July 17, 1997,  from The Bank of Nova
                Scotia to Foamex Canada Inc.
  4.7(a)        - Subordinated  Promissory  Note,  dated as of May 6, 1993, in the
                original principal amount of $7,014,864 executed by Foamex L.P. to
                John Rallis ("Rallis").
  4.8(a)        - Marely Loan Commitment Agreement, dated as of December 14, 1993,
                by and between Foamex L.P. and Marely s.a. ("Marely").
  4.9(a)        - DLJ Loan Commitment Agreement, dated as of December 14, 1993, by
                and between Foamex L.P. and DLJ Funding, Inc. ("DLJ Funding").
  4.10.1(p)     - Promissory Note, dated June 12, 1997, in the aggregate principal
                amount of $5,000,000, executed by Trace Holdings to Foamex L.P.
  4.10.2(p)     - Promissory Note, dated June 12, 1997, in the aggregate principal
                amount of $4,794,828, executed by Trace Holdings to Foamex L.P.
  10.1.1(p)     - Amendment to Master Agreement, dated as of June 5, 1997, between
                Citibank, N.A. and Foamex L.P.
  10.1.2(p)     -  Amended  confirmation,  dated  as of  June  13,  1997,  between
                Citibank, N.A. and Foamex L.P.
  10.2(h)       -  Reimbursement  Agreement,  dated as of March 23, 1993,  between
                Trace Holdings and General Felt.
  10.3(h)       - Shareholder Agreement,  dated December 31, 1992, among Recticel,
                s.a.  ("Recticel"),  Recticel  Holding  Noord B.V.,  Foamex  L.P.,
                Beamech Group Limited,  LME-Beamech,  Inc., James Brian Blackwell,
                and Prefoam AG relating to foam technology sharing arrangement.
  10.4.1(k)     - Asset Transfer  Agreement,  dated as of October 2, 1990, between
                Trace Holdings and Foamex L.P. (the "Trace Holdings Asset Transfer
                Agreement").
  10.4.2(k)     - First  Amendment,  dated as of December 19,  1991,  to the Trace
                Holdings Asset Transfer Agreement.
  10.4.3(k)     - Amended and  Restated  Guaranty,  dated as of December 19, 1991,
                made by Trace Foam in favor of Foamex L.P.
  10.5.1(k)     - Asset Transfer  Agreement,  dated as of October 2, 1990, between
                Recticel Foam Corporation  ("RFC") and Foamex L.P. (the "RFC Asset
                Transfer Agreement").
  10.5.2(k)     - First Amendment, dated as of December 19, 1991, to the RFC Asset
                Transfer Agreement.
  10.5.3(k)     - Schedule  5.03 to the RFC Asset  Transfer  Agreement  (the "5.03
                Protocol").
  10.5.4(h)     - The 5.03 Protocol Assumption Agreement,  dated as of October 13,
                1992, between RFC and Foamex L.P.
  10.5.5(h)     - Letter Agreement  between Trace Holdings and Recticel  regarding
                the Recticel Guaranty, dated as of July 22, 1992.
  10.6(l)       - Supply Agreement,  dated June 28, 1994,  between Foamex L.P. and
                Foamex International.
  10.7.1(l)     - First  Amended and Restated Tax Sharing  Agreement,  dated as of
                December 14, 1993,  among Foamex L.P., Trace Foam, FMXI and Foamex
                International.
  10.7.2(d)     - First Amendment to Amended and Restated Tax Sharing Agreement of
                Foamex L.P.,  dated as of June 12, 1997, by and among Foamex L.P.,
                Foamex International, FMXI and Trace Foam.
  
                                         27
  
  <PAGE>
  
  10.8.1(m)     - Tax  Distribution  Advance  Agreement,  dated as of December 11,
                1996, by and between Foamex L.P. and Foamex-JPS Automotive.
  10.8.2(d)     - Amendment No. 1 to Tax Distribution Advance Agreement,  dated as
                of  June  12,  1997,  by  and  between   Foamex  L.P.  and  Foamex
                International.
  10.9.1(h)     - Trace Foam  Management  Agreement  between Foamex L.P. and Trace
                Foam, dated as of October 13, 1992.
  10.9.2(l)     - Affirmation  Agreement  re:  Management  Agreement,  dated as of
                December 14, 1993, between Foamex L.P. and Trace Foam.
  10.9.3(d)     - First  Amendment to Management  Agreement,  dated as of June 12,
                1997, by and between Foamex L.P. and Trace Foam.
  10.10.1(k)    - Salaried Incentive Plan of Foamex L.P. and Subsidiaries.
  10.10.2(k)    - Trace Holdings 1987 Nonqualified Stock Option Plan.
  10.10.3(k)    - Equity Growth Participation Program.
  10.10.4(o)    - The Foamex L.P. Salaried Pension Plan (formerly the General Felt
                Industries,   Inc.   Retirement  Plan  for  Salaried   Employees),
                effective as of January 1, 1995.
  10.10.5       - The Foamex  L.P.  Hourly  Pension  Plan  (formerly  "The  Foamex
                Products  Inc.  Hourly  Employee   Retirement  Plan),  as  amended
                December 31, 1995.
  10.10.6       - Foamex L.P. 401(k) Savings Plan effective October 1, 1997.
  10.10.7(a)    - Foamex L.P.'s 1993 Stock Option Plan.
  10.10.8(a)    - Foamex L.P.'s Non-Employee Director Compensation Plan.
  10.11.1(o)    -  Employment  Agreement,  dated as of  February  1, 1994,  by and
                between Foamex L.P. and William H. Bundy.
  10.11.2(q)    - Employment Agreement,  dated as of July 26, 1995, by and between
                Foamex L.P. and Salvatore J. Bonanno.
  10.12(a)      - Warrant  Exchange  Agreement,  dated as of December 14, 1993, by
                and between Foamex L.P. and Marely.
  10.13(a)      - Warrant  Exchange  Agreement,  dated as of December 14, 1993, by
                and between Foamex L.P. and DLJ Funding.
  10.14(o)      - Stock Purchase Agreement,  dated as of December 23, 1993, by and
                between   Transformacion   de  Espumas  u  Fieltros,   S.A.,   the
                stockholders which are parties thereto, and Foamex L.P.
  10.15(r)      - Asset  Purchase  Agreement,  dated as of August 29, 1997, by and
                among  General  Felt,  Foamex  L.P.,  Bretlin,  Inc. and The Dixie
                Group.
  10.15.1(s)    - Addendum  to Asset  Purchase  Agreement,  dated as of October 1,
                1997, by and among General Felt,  Foamex L.P.,  Bretlin,  Inc. and
                The Dixie Group.
  27            - Financial Data Schedule.
  
  ----------------------------
  
  (a)  Incorporated   herein  by  reference  to  the  Exhibit  to  Foamex   L.P.'s
       Registration Statement on Form S-1, Registration No. 33-69606.
  
  (b)  Incorporated  herein by reference to the Exhibit to the Form 10-K of Foamex
       for the fiscal year ended January 1, 1995.
  
  (c)  Incorporated  herein by reference  to the Exhibit to the Current  Report on
       Form 8-K of Foamex reporting an event that occurred May 28, 1997.
  
  (d)  Incorporated  herein by reference  to the Exhibit to the Current  Report on
       Form 8-K of Foamex reporting an event that occurred June 12, 1997.
  
  (e)  Incorporated  herein  by  reference  to the  Exhibit  to  the  Registration
       Statement of Foamex and FCC on Form S-4, Registration No. 33-65158.
  
                                         28
  
  <PAGE>
  
  (f)  Incorporated  herein by reference to the Exhibit to the Form 10-Q of Foamex
       for the quarterly period ended June 30, 1996.
  
  (g)  Incorporated  herein  by  reference  to the  Exhibit  to  the  Registration
       Statement of Foamex,  FCC and General Felt on Form S-1,  Registration  Nos.
       33-60888, 33-60888-01, and 33-60888-02.
  
  (h)  Incorporated  herein by reference to the Exhibit to the Form 10-K Statement
       of Foamex and FCC for fiscal 1992.
  
  (i)  Incorporated  herein by reference to the Exhibit to the Form 10-K of Foamex
       L.P. for fiscal 1994.
  
  (j)  Incorporated  herein by reference to the Exhibit to the Form 10-Q of Foamex
       for the quarterly period ended September 30, 1996.
  
  (k)  Incorporated  herein  by  reference  to the  Exhibit  to  the  Registration
       Statement  of Foamex and FCC on Form S-1,  Registration  Nos.  33-49976 and
       33-49976-01.
  
  (l)  Incorporated  herein  by  reference  to the  Exhibit  to  the  Registration
       Statement  of FJPS,  FJCC and Foamex  L.P.  on Form S-4,  Registration  No.
       33-82028.
  
  (m)  Incorporated  herein by  reference  to the Exhibit to the Annual  Report on
       Form 10-K of Foamex for the fiscal year ended December 29, 1996.
  
  (n)  Incorporated  herein by reference to the Exhibit to the Form 10-Q of Foamex
       for the quarterly period ended July 2, 1995.
  
  (o)  Incorporated  herein by reference to the Exhibit to the Form 10-K of Foamex
       L.P. for fiscal 1993.
  
  (p)  Incorporated  herein  by  reference  to the  Exhibit  in  the  Registration
       Statement of Foamex on Form S-4, Registration No. 333-30291.
  
  (q)  Incorporated  herein by reference to the Exhibit to the Form 10-K of Foamex
       L.P. for the fiscal year ended December 31, 1995.
  
  (r)  Incorporated  herein  by  reference  to the  Current  Report on Form 8-K of
       Foamex L.P. reporting an event that occurred on August 29, 1997.
  
  (s)  Incorporated  herein  by  reference  to the  Current  Report on Form 8-K of
       Foamex L.P. reporting an event that occurred on October 6, 1997.
  
       Certain  instruments  defining  the rights of  security  holders  have been
  excluded herefrom in accordance with Item  601(b)(4)(iii) of Regulation S-K. The
  registrant  hereby  agrees  to  furnish  a copy of any  such  instrument  to the
  Commission upon request.
  
       (b) Foamex L.P. filed the following Current Reports on Form 8-K:
  
           Form 8-K reporting an event that occurred on August 29, 1997.
  
           Form 8-K reporting an event that occurred on October 6, 1997.
  
  
                                         29
  
  <PAGE>
                                     SIGNATURES
  
  
       Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
  registrants  have duly caused  this  report to be signed on their  behalf by the
  undersigned thereunto duly authorized.
  
  
  
                                                FOAMEX L.P.
  
                                                By:  FMXI, INC.
                                                General Partner
  
  
  Date: November 12, 1997                       By: /s/ Kenneth R. Fuette
                                                   Kenneth R. Fuette
                                                   Chief Financial Officer
  
                                                FOAMEX CAPITAL CORPORATION
  
  
  
  Date: November 12, 1997                       By: /s/ Kenneth R. Fuette
                                                    Kenneth R. Fuette
                                                    Chief Financial Officer
  
  
  
                                         30
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text: SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C. 20549
  
                                      FORM 10-Q
  
                  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
  
                  For the quarterly period ended September 28, 1997
  
                      Commission file numbers 1-11432; 1-11436
  
                                     FOAMEX L.P.
                             FOAMEX CAPITAL CORPORATION
               (Exact name of registrant as specified in its charter)
  
            Delaware                                      05-0475617
            Delaware                                      22-3182164
  (State or other jurisdiction of                   (I.R.S. Employer
  incorporation or organization)                     Identification Number)
  
  1000 Columbia Avenue
  Linwood, PA                                               19061
  (Address of principal                                   (Zip Code)
  executive offices)
  
  Registrant's telephone number, including area code:  (610) 859-3000
  
  Indicate  by check mark  whether  the  registrants  (1) have  filed all  reports
  required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
  1934  during  the  preceding  12 months  (or for such  shorter  period  that the
  registrant  was required to file such reports) and (2) have been subject to such
  filing requirements for the past 90 days. YES X NO
  
  Foamex Capital Corporation meets the conditions set forth in General Instruction
  H (1) (a) and (b) of Form  10-Q  and is  therefore  filing  this  form  with the
  reduced disclosure format.
  
  The number of shares of Foamex Capital Corporation's common stock outstanding as
  of November 3, 1997 was 1,000.
  
                                    Page 1 of 30
                            Exhibit List on Page 24 of 30
  FOAMEX L.P.
                             FOAMEX CAPITAL CORPORATION
  
                                        INDEX
                                                                              Page
  Part I.   Financial Information:
  
            Item 1. Financial Statements
  
              Foamex L.P.
  
               Condensed Consolidated Statements of Operations -
                 Thirteen Week and Thirty-Nine Week Periods Ended
                 September 28, 1997 and September 29, 1996                       3
  
               Condensed Consolidated Balance Sheets as of September 28,
                 1997 and December 29, 1996                                      4
  
               Condensed Consolidated Statements of Cash Flows -
                 Thirty-Nine Week Periods Ended September 28, 1997 and
                 September 29, 1996                                              5
  
               Notes to Condensed Consolidated Financial Statements              6
  
               Foamex Capital Corporation
  
               Balance Sheets as of September 28, 1997 and December 29,
                 1996                                                           15
  
               Notes to Balance Sheets                                          16
  
            Item 2. Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                         18
  
  Part II.  Other Information                                                   24
  
            Exhibit List                                                        24
  
            Signatures                                                          30
  
                                         2
  PART I.  FINANCIAL INFORMATION
  ITEM 1.  FINANCIAL STATEMENTS
  
                            FOAMEX L.P. AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
  13 Week Periods Ended             39 Week Periods Ended
                                             September 28,    September 29,    September 28,     September 29,
                                                 1997             1996              1997              1996
                                                                               (thousands)
  NET SALES                                   $ 233,434        $ 236,766         $ 702,441         $ 696,344
  
  COST OF GOODS SOLD                            195,395          196,806           576,825           582,186
                                              ---------        ---------         ---------         ---------
  
  GROSS PROFIT                                   38,039           39,960           125,616           114,158
  
  SELLING, GENERAL AND
     ADMINISTRATIVE EXPENSES                     15,562           15,057            46,893            42,184
                                              ---------        ---------         ---------         ---------
  
  INCOME FROM OPERATIONS                         22,477           24,903            78,723            71,974
  
  INTEREST AND DEBT ISSUANCE EXPENSE             11,846           11,131            33,355            31,855
  
  OTHER INCOME, NET                                 281              539             1,403             1,076
                                              ---------        ---------         ---------         ---------
  
  INCOME FROM CONTINUING OPERATIONS
     BEFORE PROVISION FOR INCOME TAXES           10,912           14,311            46,771            41,195
  
  PROVISION FOR INCOME TAXES                      1,359            2,866             4,618             6,584
                                              ---------        ---------         ---------         ---------
  
  INCOME FROM CONTINUING OPERATIONS               9,553           11,445            42,153            34,611
  
  LOSS FROM DISCONTINUED OPERATIONS                  --           (1,989)               --           (41,516)
  
  EXTRAORDINARY LOSS ON EARLY
     EXTINGUISHMENT OF DEBT                          --             (672)          (45,538)             (672)
                                              ---------        ---------         ---------         ---------
  
  NET INCOME (LOSS)                           $   9,553        $   8,784         $  (3,385)        $  (7,577)
                                              =========        =========         =========         =========
  The accompanying notes are an integral part of the condensed
                         consolidated financial statements.
  
                                         3
  FOAMEX L.P. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
  September 28,     December 29,
  ASSETS                                                    1997               1996
  CURRENT ASSETS:                                                 (thousands)
  Cash and cash equivalents                          $   1,078         $  20,968
       Accounts receivable, net                             141,609           125,847
       Inventories                                           94,301           102,610
       Other current assets                                  48,584            39,495
                                                          ---------         ---------
          Total current assets                              285,572           288,920
  
  PROPERTY, PLANT AND EQUIPMENT, NET                        195,178           182,427
  
  COST IN EXCESS OF ASSETS ACQUIRED, NET                     82,114            83,991
  
  DEBT ISSUANCE COSTS, NET                                   17,771            14,902
  
  OTHER ASSETS                                               20,364            15,917
                                                          ---------         ---------
  
  TOTAL ASSETS                                            $ 600,999         $ 586,157
                                                          =========         =========
  
  LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
  CURRENT LIABILITIES:
       Short-term borrowings                              $   4,871         $   3,692
       Current portion of long-term debt                      8,664            13,735
       Accounts payable                                      71,952            75,621
       Accounts payable to related parties                   16,556             8,803
       Accrued interest                                       7,220             8,871
       Other accrued liabilities                             48,590            41,108
                                                          ---------         ---------
          Total current liabilities                         157,853           151,830
                                                          ---------         ---------
  
  LONG-TERM DEBT                                            519,668           392,617
                                                          ---------         ---------
  
  OTHER LIABILITIES                                          27,074            28,878
                                                          ---------         ---------
  
  COMMITMENTS AND CONTINGENCIES                                  --                --
                                                          ---------         ---------
  
  PARTNERS' EQUITY (DEFICIT):
       Partners' capital accounts                           (87,670)           58,286
       Note receivable from partner                              --           (33,180)
       Other                                                (15,926)          (12,274)
                                                          ---------         ---------
          Total partners' equity (deficit)                 (103,596)           12,832
                                                          ---------         ---------
  
  TOTAL LIABILITIES AND PARTNERS' EQUITY (DEFICIT)        $ 600,999         $ 586,157
                                                          =========         =========
  The accompanying notes are an integral part of the condensed
                         consolidated financial statements.
  
                                         4
  FOAMEX L.P. AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
  39 Week Periods Ended
                                                                        September 28,     September 29,
                                                                            1997              1996
  OPERATING ACTIVITIES:                                                          (thousands)
  Net income (loss)                                                  $  (3,385)        $  (7,577)
     Adjustments to reconcile  net income (loss) to net cash
       provided by operating activities:
         Depreciation and amortization                                     15,570            15,945
         Amortization of debt issuance costs and debt discount              1,903             2,124
         Extraordinary loss on extinguishment of debt                      45,538               672
         Loss from discontinued operations                                     --            41,516
         Other operating activities                                        (1,696)           (4,126)
         Changes in operating assets and liabilities                      (26,200)          (14,025)
                                                                        ---------         ---------
  
            Net cash provided by continuing operations                     31,730            34,529
            Net cash used for discontinued operations                          --              (486)
                                                                        ---------         ---------
            Net cash provided by operating activities                      31,730            34,043
                                                                        ---------         ---------
  
  INVESTING ACTIVITIES:
     Capital expenditures                                                 (25,444)          (14,536)
     Purchase of FJPS senior secured discount debentures                 (105,829)               --
     Decrease (increase) in restricted cash                                12,143           (33,149)
     Loan to partner                                                       (5,000)               --
     Proceeds from sale of discontinued operations                             --            45,425
     Other investing activities                                              (930)            1,745
     Discontinued operations investing activities                              --              (919)
                                                                        ---------         ---------
  
            Net cash used for investing activities                       (125,060)           (1,434)
                                                                        ---------         ---------
  
  FINANCING ACTIVITIES:
     Net proceeds from short-term borrowings                                1,179             2,970
     Net proceeds from revolving loans                                     31,000                --
     Proceeds from long-term debt                                         453,500                --
     Repayment of long-term debt                                         (363,443)          (18,392)
     Premiums and payments associated with debt extinguishment            (22,921)               --
     Debt issuance costs                                                  (15,617)               --
     Distributions to partners                                            (10,283)           (3,478)
     Other financing activities                                                25                (8)
                                                                        ---------         ---------
  
            Net cash provided by (used for) financing activities           73,440           (18,908)
                                                                        ---------         ---------
  
  NET INCREASE (DECREASE) IN CASH
     AND CASH EQUIVALENTS                                                 (19,890)           13,701
  
  CASH AND CASH EQUIVALENTS
     AT BEGINNING OF PERIOD                                                20,968               638
                                                                        ---------         ---------
  
  CASH AND CASH EQUIVALENTS
     AT END OF PERIOD                                                   $   1,078         $  14,339
                                                                        =========         =========
  The accompanying notes are an integral part of the condensed
                         consolidated financial statements.
  
                                         5
  FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  1.   ORGANIZATION AND BASIS OF PRESENTATION
  
       Foamex L.P.'s condensed  consolidated balance sheet as of December 29, 1996
  has been condensed from the audited consolidated balance sheet at that date. The
  condensed  consolidated balance sheet as of September 28, 1997 and the condensed
  consolidated statements of operations for the thirteen week and thirty-nine week
  periods  ended  September  28, 1997 and  September  29,  1996 and the  condensed
  consolidated  statements  of cash flows for the  thirty-nine  week periods ended
  September  28, 1997 and September 29, 1996 have been prepared by Foamex L.P. and
  subsidiaries and have not been audited by Foamex L.P.'s independent accountants.
  In the  opinion  of  management,  all  adjustments,  consisting  only of  normal
  recurring  adjustments,  considered  necessary  for a fair  presentation  of the
  consolidated financial position,  results of operations and cash flows have been
  included.
  
       Upon  consummation  of the Refinancing  Plan, as defined,  on June 12, 1997
  (see Note 4 below for further discussion),  Foamex-JPS  Automotive L.P. ("FJPS")
  was merged into Foamex International Inc. ("Foamex  International"),  which thus
  became a 98% limited partner of Foamex L.P. FMXI, Inc. ("FMXI") is a 1% managing
  general partner of Foamex L.P. and Trace Foam Company,  Inc. ("Trace Foam") is a
  1% non-managing general partner of Foamex L.P. FMXI is a wholly-owned subsidiary
  of Foamex International.
  
       Certain information and note disclosures normally included in the financial
  statements prepared in accordance with generally accepted accounting  principles
  have been condensed or omitted in accordance  with the rules and  regulations of
  the Securities and Exchange Commission.  These condensed  consolidated financial
  statements  should be read in conjunction  with Foamex L.P.'s 1996  consolidated
  financial  statements  and notes  thereto as set forth in Foamex  L.P.'s  Annual
  Report on Form 10-K for the fiscal year ended December 29, 1996.
  
  2.   DISCONTINUED OPERATIONS
  
       During 1996,  Foamex L.P. sold the outstanding  common stock of Perfect Fit
  Industries,  Inc.  ("Perfect Fit"), a wholly-owned  subsidiary,  for an adjusted
  sale price of approximately  $44.2 million.  The sale included the net assets of
  Foamex L.P.'s home comfort products business segment.
  
       Foamex  L.P.'s  condensed  consolidated  financial  statements  reflect the
  discontinuation of the home comfort products business segment. Interest and debt
  issuance expense was allocated to discontinued operations based on the estimated
  debt to be  retired  with the net  proceeds  from the  sale.  A  summary  of the
  operating results for the discontinued operations is as follows:
  13 Week Period Ended  39 Week Period Ended
                                                              September 29, 1996  September 29, 1996
                                                                          (thousands)
  Net sales                                                       $     --           $ 50,097
  Gross profit                                                          --              8,065
  Income from operations                                                --              1,123
  Interest and debt issuance expense                                    --              2,384
  Other expense -                                                      348
  Loss on disposal of discontinued operations                       (1,989)           (41,286)
  Loss from discontinued operations
  before benefit from income taxes                                  (1,989)           (42,895)
  Benefit for income taxes                                              --             (1,379)
  Loss from discontinued operations, net of income taxes            (1,989)           (41,516)
  6
  FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  3.   INVENTORIES
  
       The components of inventories consist of:
  September 28,      December 29,
                                             1997              1996
                                                   (thousands)
  Raw materials and supplies          $ 49,067          $ 61,559
       Work-in-process                       17,568            13,453
       Finished goods                        27,666            27,598
                                           --------          --------
           Total                           $ 94,301          $102,610
                                           ========          ========
  4.   LONG-TERM DEBT
  
       Long-term debt consists of:
  September 28,     December 29,
                                                                                  1997              1996
                                                                                       (thousands)
  9 7/8% senior subordinated notes due 2007 (1)                            $150,000          $     --
       Foamex L.P. term loan facilities (7.83% interest rate
           at September 28, 1997) (2)                                            298,000                --
       Foamex L.P. revolving loan (7.62% interest rate
           at September 28, 1997) (3)                                             31,000                --
       9 1/2% senior secured notes due 2000 (4)                                    4,523           106,793
       11 1/4% senior notes due 2002 (4)                                           5,825           141,400
       11 7/8% senior subordinated debentures due 2004 (net of
           unamortized debt discount of $116 and $769) (4)                        20,227           125,056
       11 7/8% senior subordinated debentures due 2004, Series B (5)                  45             7,000
       Industrial revenue bonds (6)                                                7,000             7,000
       Foamex L.P. term loan (8.54% interest rate as of
           December 29, 1996) (6)                                                     --            11,000
       Subordinated note (net of debt discount of $969 and $1,198) (6)             6,046             5,817
       Other                                                                       5,666             2,286
                                                                                --------          --------
                                                                                 528,332           406,352
       Less current portion                                                        8,664            13,735
                                                                                --------          --------
       Long-term debt                                                           $519,668          $392,617
                                                                                ========          ========
  (1)  Debt of Foamex L.P. and Foamex Capital  Corporation  ("FCC")  (together the
       "Issuers"),  guaranteed by General Felt Industries,  Inc. ("General Felt"),
       Foamex  Fibers,   Inc.   ("Foamex  Fibers")  and  certain  future  domestic
       subsidiaries of the Issuers.
  
  (2)  Debt of Foamex L.P., guaranteed by Foamex  International,  General Felt and
       Foamex Fibers.
  
  (3)  Debt of Foamex L.P. and General Felt,  guaranteed  by Foamex  International
       and Foamex Fibers.
  
  (4)  Debt of the Issuers, guaranteed by Foamex International and General Felt.
  
  (5)  Debt of the Issuers, guaranteed by General Felt.
  
  (6)  Debt of Foamex L.P.
  FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  4.   LONG-TERM DEBT (continued)
  
       Refinancing Plan
  
       On  June  12,  1997,  Foamex   International   substantially   completed  a
  refinancing  plan (the  "Refinancing  Plan") that  included the  refinancing  of
  certain long-term indebtedness to reduce Foamex International's interest expense
  and improve  financing  flexibility.  In connection with the  Refinancing  Plan,
  Foamex L.P. purchased approximately $342.3 million of aggregate principal amount
  of its public  debt and  approximately  $116.7  million of  aggregate  principal
  amount of FJPS's senior  secured  discount  debentures  due 2004 (the  "Discount
  Debentures")  and  repaid  $5.2  million of term loan  borrowings  under its old
  credit  facility.  Foamex  L.P.  incurred  an  extraordinary  loss on the  early
  extinguishment  of debt associated with the  Refinancing  Plan of  approximately
  $44.5 million.  The Refinancing  Plan was funded by $347.0 million of borrowings
  under a new $480.0 million credit  facility (the "New Credit  Facility") and the
  net proceeds from the issuance of $150.0  million of 9 7/8% senior  subordinated
  notes due 2007.
  
       In  addition,  on  October  1,  1997,  Foamex  L.P.  redeemed  all  of  the
  outstanding: (i) 11 1/4% senior notes due 2002, (ii) 11 7/8% senior subordinated
  debentures  due 2004 and (iii) the 11 7/8% senior  subordinated  debentures  due
  2004,  Series B, constituting  approximately  $26.0 million of the approximately
  $30.0  million of its  outstanding  public debt that was not tendered as part of
  the Refinancing Plan. The redemption was funded from the New Credit Facility. In
  connection with this  redemption,  Foamex L.P. expects to incur an extraordinary
  loss on the early  extinguishment  of debt of approximately  $2.6 million in the
  fourth quarter of 1997.
  
       Term Loans and Revolving Loan
  
       On June 12, 1997,  Foamex L.P.  entered into the New Credit Facility with a
  group of banks that provides for term loans of up to $330.0 million which expire
  from June  2003 to June 2006 and  borrowings  of up to  $150.0  million  under a
  revolving  line of credit which  expires in June 2003.  In  connection  with the
  Refinancing  Plan,  Foamex L.P.  entered  into term loans of $298.0  million and
  borrowed $49.0 million under the revolving line of credit.
  
       The term loans are comprised of a (i) term A loan ("Term A") which provides
  up to $120.0  million of borrowings of which Foamex L.P.  borrowed $88.0 million
  in connection with the  Refinancing  Plan, (ii) term B loan ("Term B") of $110.0
  million and (iii) term C loan ("Term C") of $100.0 million.  The remaining $32.0
  million  available under the Term A is restricted and can only be used by Foamex
  L.P. to retire its public debt not tendered in connection  with the  Refinancing
  Plan with such  unused  availability  terminating  June 15,  1998.  Foamex  L.P.
  borrowed  $29.0 million under the Term A in connection  with the October 1, 1997
  redemption.
  
       Borrowings   under  the  New  Credit   Facility   are   collateralized   by
  substantially  all of the assets of Foamex L.P.,  General Felt and Foamex Fibers
  on a pari passu  basis  with the 9 1/2%  senior  secured  notes due 2000 and the
  industrial revenue bonds (collectively, the "Notes"); however, the rights of the
  holders of the applicable issue of Notes to receive payment upon the disposition
  of the collateral securing such issue of Notes has been preserved.
  
       Pursuant to the terms of the New Credit Facility,  borrowed funds will bear
  interest at a floating rate equal to an applicable margin, as defined,  plus the
  higher of (i) the base rate of The Bank of Nova  Scotia,  in effect from time to
  time, or (ii) a rate that is equal to 0.5% per annum plus the federal funds rate
  in effect from time to time.  The applicable  margin is determined  based on the
  total net debt to EBDAIT ratio,  as defined,  and can range from no margin up to
  1.125% per annum for Term A and revolving loans, from 0.875% per annum to 1.375%
  per annum for Term B and from  1.125%  per annum to 1.625% per annum for Term C.
  At the option of Foamex L.P.,  portions of the  outstanding  loans under the New
  Credit Facility are convertible into LIBOR based loans
  
                                         8
  FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  4.   LONG-TERM DEBT (continued)
  
  which bear interest at a floating  rate equal to an applicable  margin for LIBOR
  based loans,  as defined,  plus the average  LIBOR,  as defined.  The applicable
  margin for LIBOR based loans is a rate that will generally  equal the applicable
  margin (discussed above) plus 1.0% per annum.
  
       9 7/8% Senior Subordinated Notes due 2007 ("Senior Subordinated Notes")
  
       The Senior  Subordinated  Notes  were  issued by Foamex  L.P.  and FCC in a
  private placement under Rule 144A of the Securities Act of 1933, as amended,  on
  June 12, 1997 in connection with the Refinancing  Plan. The Senior  Subordinated
  Notes bear interest at the rate of 9 7/8% per annum payable semiannually on each
  June 15 and December 15, commencing  December 15, 1997. The Senior  Subordinated
  Notes mature on June 15, 2007. The Senior  Subordinated Notes may be redeemed at
  the option of Foamex L.P., in whole or in part, at any time on or after June 15,
  2002, initially at 104.938% of their principal amount, plus accrued interest and
  liquidated  damages,  as defined,  if any, thereon to the date of redemption and
  declining to 100.0% on or after June 15, 2005. In addition, at any time prior to
  June 15, 2000,  Foamex L.P. may on one or more  occasions  redeem up to 35.0% of
  the initially outstanding principal amount of the Senior Subordinated Notes at a
  redemption  price  equal to  109.875%  of the  principal  amount,  plus  accrued
  interest and liquidated  damages, if any, thereon to the date of redemption with
  the cash proceeds of one or more Public Equity Offerings,  as defined.  Upon the
  occurrence  of  a  change  of  control,  as  defined,   each  holder  of  Senior
  Subordinated  Notes will have the right to require Foamex L.P. to repurchase the
  Senior  Subordinated  Notes at a price equal to 101.0% of the principal  amount,
  plus accrued interest and liquidated damages, if any, to the date of repurchase.
  The Senior Subordinated Notes are subordinated in right of payment to all senior
  indebtedness  and are pari passu in right of payment to the  subordinated  note.
  The Senior  Subordinated Notes contain certain covenants that limit, among other
  things,  the  ability  of  Foamex  L.P.  (i)  to  pay  distributions  or  redeem
  partnership interests, (ii) to make certain restrictive payments or investments,
  (iii) to incur additional  indebtedness or issue Preferred  Equity Interest,  as
  defined,  (iv) to merge,  consolidate  or sell all or  substantially  all of its
  assets,  or (vi) to enter into certain  transactions  with affiliates or related
  persons. The Senior Subordinated Notes are guaranteed by General Felt and Foamex
  Fibers and certain future domestic subsidiaries of the Issuers.
  
       The Issuers  have filed a  registration  statement  relating to an exchange
  offer in which the Issuers will offer to exchange the Senior  Subordinated Notes
  issued in the private  placement for new notes.  The terms of the new notes will
  be substantially identical in all respects (including principal amount, interest
  rate,  maturity  and  ranking)  to the terms of the Senior  Subordinated  Notes,
  except  that the new notes  will be  transferable  by  holders  thereof  without
  further registration under the Securities Act of 1933, as amended (except in the
  case of Senior  Subordinated  Notes held by  affiliates  of the  Issuers and for
  certain  other  holders),   and  are  not  subject  to  any  covenant  regarding
  registration under the Securities Act of 1933, as amended. The exchange offer is
  expected to be consummated during November 1997.
  
       Principal  payments on Foamex  L.P.'s  long-term  debt for the remainder of
  1997 and for the next five years are as  follows:  1997 - $4.1  million;  1998 -
  $11.9 million; 1999 - $20.9 million; 2000 - $31.3 million; 2001 - $31.3 million;
  2002 - $32.7 million; and thereafter - $397.2 million.
  
       Early Extinguishment of Debt - Refinancing Plan
  
       In  connection  with  the  Refinancing   Plan,   Foamex  L.P.  incurred  an
  extraordinary  loss on the early  extinguishment of debt of approximately  $44.5
  million.  The extraordinary loss is comprised of approximately $20.2 million for
  premium and consent fee payments,  approximately $12.6 million for the write-off
  of debt issuance  costs and debt  discount,  approximately  $8.2 million for the
  loss associated with the effective termination
  
                                         9
  FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  4.   LONG-TERM DEBT (continued)
  
  and  amendment of the  interest  rate swap  agreements  and  approximately  $3.5
  million of professional fees and other costs. In connection with the Refinancing
  Plan,  Foamex L.P.  repaid $5.2  million in term loan  borrowings  under its old
  credit  facility  and  purchased   approximately  $459.0  million  of  aggregate
  principal amount of public debt comprised of:
  
  o    $99.8 million of aggregate  principal  amount of its 9 1/2% senior  secured
       notes due 2000 for an aggregate consideration of 104.193% of principal plus
       accrued interest, comprised of a tender price of 102.193% and a consent fee
       of 2.0%;
  
  o    $130.1  million of aggregate  principal  amount of its 11 1/4% senior notes
       due 2002 for an  aggregate  consideration  of  105.709% of  principal  plus
       accrued interest, comprised of a tender price of 103.709% and a consent fee
       of 2.0%;
  
  o    $105.5  million  of  aggregate  principal  amount  of  its 11  7/8%  senior
       subordinated debentures due 2004 for an aggregate consideration of 107.586%
       of principal plus accrued interest, comprised of a tender price of 105.586%
       and a consent fee of 2.0%;
  
  o    $6.9  million  of  aggregate   principal  amount  of  its  11  7/8%  senior
       subordinated  debentures,  series B due 2004 for an aggregate consideration
       of 107.586% of principal plus accrued interest, comprised of a tender price
       of 105.586% and a consent fee of 2.0%; and
  
  o    $116.7 million of aggregate principal amount of the Discount Debentures for
       an aggregate  consideration of 90.0% of principal amount,  which represents
       approximately  121.9%  of the  accreted  book  value as of June  12,  1997,
       comprised of a tender price of 88.0% of principal  amount and a consent fee
       of 2.0%.
  
       Early Extinguishment of Debt - Other
  
       In  addition,  during  1997 Foamex L.P.  incurred  extraordinary  losses of
  approximately  $1.0  million   associated  with  the  early   extinguishment  of
  approximately  $11.8 million of long-term debt funded with  approximately  $12.1
  million  of the  remaining  net  proceeds  from the  sale of  Perfect  Fit.  The
  extraordinary  loss is  comprised  of  approximately  $0.4  million  of  premium
  payments  and  approximately  $0.6 million for the  write-off  of debt  issuance
  costs. The long-term debt was comprised of:
  
  o    $2.5 million of  aggregate  principal  amount of its 9 1/2% senior  secured
       notes due 2000.
  
  o    $5.5 million of aggregate  principal amount of its 11 1/4% senior notes due
       2002.
  
  o    Bank term loan  borrowings  of $3.8 million  under Foamex L.P.'s old credit
       facility.
  
       Interest Rate Swaps
  
       Foamex  L.P.  uses  derivative  financial  instruments  to manage  interest
  expense.  All  derivative  financial  instruments  are  classified  as "held for
  purposes  other  than  trading".  Foamex  L.P.  does  not  use  derivatives  for
  speculative purposes.
  
       Interest  rate swap  agreements  are used to  manage  interest  expense  by
  changing the  interest  rate  characteristics  of certain  debt  instruments  to
  approximate current market conditions. The amended interest rate
  
                                         10
  FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  4.   LONG-TERM DEBT (continued)
  
  swap  agreement  matures in June 2007 which is  consistent  with the  underlying
  debt.  The  differential  paid or received on interest  rate swap  agreements is
  recognized  on an accrual  basis as an  adjustment to interest and debt issuance
  expense.  
  
       In connection with the Refinancing  Plan,  Foamex L.P.'s existing  interest
  rate swap agreements with a notional amount of $300.0 million were considered to
  be effectively  terminated  since the underlying  debt was  extinguished.  These
  interest  rate swap  agreements  had an estimated  fair value  liability of $8.2
  million  at  the  date  of  the  Refinancing  Plan  which  is  included  in  the
  extraordinary  loss  on the  early  extinguishment  of  debt.  In lieu of a cash
  payment  for the  estimated  fair  value  of the  existing  interest  rate  swap
  agreements,  Foamex L.P. entered into an amendment of the existing interest rate
  swap  agreements  resulting in one interest rate swap  agreement with a notional
  amount of $150.0 million through June 2007.  Accordingly,  the $8.2 million fair
  value  liability has been recorded as a deferred  credit which will be amortized
  as a reduction in interest and debt issuance  expense on a  straight-line  basis
  over the life of the amended  interest  rate swap  agreement.  Under the amended
  interest rate swap agreement, Foamex L.P. is obligated to make fixed payments of
  5.75% per annum through December 1997 and variable  payments based on the higher
  of  LIBOR  at the  beginning  of the  period  or the end of the  period  for the
  remainder of the  agreement,  in exchange for fixed payments by the swap partner
  at 6.44%  per  annum  for the life of the  agreement,  payable  semiannually  in
  arrears.  The amended  interest rate swap  agreement can be terminated by either
  party in June 2002, and annually thereafter,  for a cash settlement based on the
  fair market value of the amended interest rate swap agreement. Interest and debt
  issuance expense is subject to fluctuations in LIBOR during the term of the swap
  agreement except during 1997. Foamex L.P. is exposed to credit loss in the event
  of nonperformance by the swap partner;  however, the occurrence of this event is
  not  anticipated.  The effect of the interest rate swaps  described  above was a
  favorable  adjustment to interest and debt issuance  expense of $0.5 million and
  $0.9  million  for the  thirteen  week  periods  ended  September  28,  1997 and
  September  29,  1996,  respectively,  and $2.2  million and $2.8 million for the
  thirty-nine  week  periods  ended  September  28, 1997 and  September  29, 1996,
  respectively.
  
  5.   RELATED PARTY TRANSACTIONS
  
       On July 1,  1997,  Trace  Holdings  borrowed  $5.0  million  pursuant  to a
  promissory  note with an aggregate  principal  amount of $5.0 million  issued to
  Foamex L.P. on June 12, 1997. The  promissory  note is due and payable on demand
  or, if no demand is made,  on July 7, 2001,  and bears  interest  at 2 3/8% plus
  three-month LIBOR, as defined, per annum payable quarterly in arrears commencing
  October 1, 1997.  The  promissory  note is  included in the other  component  of
  partners' equity (deficit).
  
       In  connection   with  the   Refinancing   Plan,   Foamex  L.P.   purchased
  approximately   $116.7  million  of  aggregate   principal  amount  of  Discount
  Debentures for  approximately  $105.8  million  including  transaction  costs of
  approximately $0.8 million.  Foamex L.P.  subsequently  distributed the Discount
  Debentures to FJPS and FMXI.
  
       On June 12,  1997,  Foamex  L.P.  distributed  its $2.0  million  aggregate
  principal amount promissory note due from Foamex International to FJPS and FMXI.
  
       Also on June 12, 1997, Foamex L.P.  distributed its $56.2 million aggregate
  principal amount note, as amended,  due 2006 (the "FJPS Note") from FJPS with an
  accreted  value  as of June 12,  1997 of $35.6  million  to FJPS and  FMXI.  The
  accretion  of the original  issue  discount of $2.4 million and $4.7 million for
  the period from December 30, 1996 to June 12, 1997 and for the thirty-nine  week
  period ended September 29, 1996, respectively,
  
                                         11
  FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  5.   RELATED PARTY TRANSACTIONS (continued)
  
  was  reflected  as a direct  increase  in the FJPS  Note and  partners'  capital
  account,  and thereby  excluded  from the condensed  consolidated  statements of
  operations.
  
       In  connection  with  the  Refinancing   Plan,  Foamex  L.P.  made  a  cash
  distribution of  approximately  $1.5 million to Trace Foam as a result of Foamex
  L.P.'s distribution to FJPS and FMXI of the Discount  Debentures,  the FJPS Note
  and the $2.0 million aggregate  principal amount promissory note due from Foamex
  International.
  
       On June 12,  1997,  a  promissory  note  issued  to  Foamex  L.P.  by Trace
  International  Holdings,  Inc.  ("Trace  Holdings")  was  amended.  The  amended
  promissory  note is an extension of a promissory note of Trace Holdings that was
  due in July 1997. The aggregate  principal amount of the amended promissory note
  was increased to  approximately  $4.8 million and the maturity of the promissory
  note was extended.  The  promissory  note is due and payable on demand or, if no
  demand is made, on July 7, 2001, and bears  interest at 2 3/8% plus  three-month
  LIBOR, as defined,  per annum payable quarterly in arrears.  The promissory note
  is included in the other component of partners' equity (deficit).
  
       During  June 1997,  Foamex L.P.  and Trace Foam  amended  their  management
  services  agreement  to  increase  the  annual  fee from  $1.75  million to $3.0
  million, plus reimbursement of expenses incurred.
  
       Foamex L.P. has a supply  agreement  (the "Supply  Agreement")  with Foamex
  International   pursuant  to  which,  at  the  option  of  Foamex  L.P.,  Foamex
  International  will purchase certain raw materials,  which are necessary for the
  manufacture of Foamex L.P.'s products,  and resell such materials to Foamex L.P.
  at a price equal to net cost plus reasonable out of pocket expenses.  Management
  believes that the terms of the Supply Agreement are no less favorable than those
  which Foamex L.P. could have obtained from an unaffiliated  third party.  During
  the thirteen  week periods  ended  September  28, 1997 and  September  29, 1996,
  Foamex  L.P.   purchased   approximately   $31.4  million  and  $30.2   million,
  respectively,   of  raw  materials  under  the  Supply  Agreement.   During  the
  thirty-nine week periods ended September 28, 1997 and September 29, 1996, Foamex
  L.P. purchased approximately $94.4 million and $84.3 million,  respectively,  of
  raw materials under the Supply Agreement.  As of September 28, 1997 and December
  29,  1996,  Foamex  L.P.  had  accounts  payable  to  Foamex   International  of
  approximately $16.6 million and $8.8 million, respectively,  associated with the
  Supply Agreement.
  
       Foamex  L.P.  chartered  an  aircraft  (which  is owned  by a  wholly-owned
  subsidiary of Foamex International)  through a third party and incurred costs of
  approximately  $0.3  million and $0.4 million  during the thirteen  week periods
  ended September 28, 1997 and September 29, 1996, respectively,  and $0.9 million
  for each of the thirty-nine  week periods ended September 28, 1997 and September
  29, 1996.
  
  6.   ENVIRONMENTAL MATTERS
  
       As of September 28, 1997,  Foamex L.P. has accruals of  approximately  $3.8
  million for environmental matters. In addition, as of September 28, 1997, Foamex
  L.P.  has  net   receivables   of   approximately   $1.0  million   relating  to
  indemnification   for  environmental   liabilities,   net  of  an  allowance  of
  approximately  $1.0 million  relating to potential  disagreements  regarding the
  scope of the  indemnification.  Foamex L.P. believes that realization of the net
  receivables established for indemnification is probable.
  
       On May 5, 1997,  there was an  accidental  chemical  spill at one of Foamex
  L.P.'s  manufacturing  facilities that was contained on site.  Foamex L.P. is in
  the process of  disposing  of the  contaminated  soil which is estimated to cost
  approximately  $0.6  million.  As of September  28, 1997,  Foamex L.P. has spent
  approximately $0.5
  
                                         12
  FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  6.   ENVIRONMENTAL MATTERS (continued)
  
  million for remediation  costs related to this chemical  spill.  The actual cost
  and the  timetable  for the  clean-up of the site cannot be  predicted  with any
  degree of certainty at this time; therefore,  there can be no assurance that the
  clean-up  of the  site  will  not  result  in a more  significant  environmental
  liability in the future.
  
       Foamex L.P. has reported to appropriate state authorities that it has found
  soil  and  groundwater  contamination  in  excess  of  state  standards  at four
  additional  facilities and soil  contamination  in excess of state  standards at
  three other  facilities.  Foamex L.P. has begun  remediation  and is  conducting
  further  investigations into the extent of the contamination at these facilities
  and, accordingly, the extent of the remediation that may ultimately be required.
  The actual cost and the  timetable of any such  remediation  cannot be predicted
  with any degree of certainty at this time. As of September 28, 1997, Foamex L.P.
  has  environmental  accruals of  approximately  $2.9  million for the  remaining
  potential remediation costs for these facilities based on engineering estimates.
  
       Federal  regulations  require that by 1998 all  underground  storage  tanks
  ("USTs") be removed or upgraded  in most  states to meet  applicable  standards.
  Foamex L.P. has six USTs that will require removal or permanent in-place closure
  by the end of 1998.  Due to the age of these  tanks,  leakage may have  occurred
  resulting  in soil and  possibly  groundwater  contamination.  Foamex  L.P.  has
  accrued approximately $0.3 million for the estimated removal and remediation, if
  any,  associated with the USTs.  However,  the full extent of contamination and,
  accordingly,  the actual cost of such  remediation  cannot be predicted with any
  degree of certainty at this time. Foamex L.P. believes that its USTs do not pose
  a  significant  risk  of  environmental   liability  because  of  Foamex  L.P.'s
  monitoring  practices for USTs and conditional  approval for permanent  in-place
  closure for certain USTs. However, there can be no assurance that such USTs will
  not result in significant environmental liability in the future.
  
       Foamex L.P. has been designated as a Potentially  Responsible Party ("PRP")
  by the United States Environmental Protection Agency (the "EPA") with respect to
  thirteen  sites,  with an  estimated  total  liability  to Foamex  L.P.  for the
  thirteen  sites of less than  approximately  $0.5  million.  Estimates  of total
  clean-up costs and fractional allocations of liability are generally provided by
  the EPA or the  committee of PRP's with respect to the  specified  site. In each
  case, the participation of Foamex L.P. is considered to be immaterial.
  
       Although it is possible that new information or future  developments  could
  require Foamex L.P. to reassess its potential  exposure  relating to all pending
  environmental  matters,  management  believes  that,  based  upon all  currently
  available  information,  the resolution of such  environmental  matters will not
  have a material adverse effect on Foamex L.P.'s operations,  financial position,
  capital expenditures or competitive position.  The possibility exists,  however,
  that new  environmental  legislation  and/or  environmental  regulations  may be
  adopted,  or other  environmental  conditions  may be found to  exist,  that may
  require expenditures not currently anticipated and that may be material.
  
  7.   LITIGATION
  
       As of November 3, 1997, Foamex L.P. and Trace Holdings were two of multiple
  defendants in actions filed on behalf of approximately  5,500 persons in various
  United  States  federal and state  courts and one Canadian  provincial  court by
  recipients of breast implants,  some of which allege  substantial  damages,  but
  most of which allege unspecified damages for personal injuries of various types.
  Three of these  cases  seek to allege  claims on  behalf of all  breast  implant
  recipients  or other  allegedly  affected  parties,  but only one class has been
  approved  or  certified  by a court,  and that is a class  limited to  Louisiana
  residents  or persons who received  their  implants in  Louisiana.  In addition,
  three  cases  have been filed  alleging  claims on behalf of  approximately  725
  residents of
  
                                         13
  FOAMEX L.P. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
  
  7.   LITIGATION (continued)
  
  Australia  and New Zealand.  During 1995,  Foamex L.P. and Trace  Holdings  were
  granted  summary  judgments and  dismissed as  defendants  from all cases in the
  federal courts of the United States and the state courts of California.  Appeals
  for these decisions were withdrawn and the decisions are final.  Although breast
  implants do not contain foam,  certain silicone gel implants were produced using
  a  polyurethane  foam  covering   fabricated  by  independent   distributors  or
  fabricators from bulk foam purchased from Foamex L.P. or Trace Holdings. Neither
  Foamex L.P. nor Trace  Holdings  recommended,  authorized or approved the use of
  its foam for these purposes.  Foamex L.P.  believes that the number of suits and
  claimants  may  increase,  but not  significantly.  While it is not  feasible to
  predict or determine the outcome of these actions, based on management's present
  assessment of the merits of pending claims,  after consultation with the general
  counsel of Trace Holdings,  management  believes that the disposition of matters
  that are pending or that may reasonably be anticipated to be asserted should not
  have a  material  adverse  effect on  either  Foamex  L.P.'s or Trace  Holdings'
  consolidated  financial position or results of operations.  In addition,  Foamex
  L.P. is also indemnified by Trace Holdings for any such liabilities  relating to
  foam  manufactured  prior to the  capitalization of Foamex L.P. in October 1990.
  Although Trace Holdings has paid Foamex L.P.'s  litigation  expenses pursuant to
  such  indemnification,  and  management  believes  Trace  Holdings  will be in a
  position to continue to pay such expenses,  there can be no assurance that Trace
  Holdings  will be able to continue  to provide  such  indemnification.  Based on
  information  available  at this time with  respect to the  potential  liability,
  Foamex L.P.  believes that the proceedings  should not ultimately  result in any
  liability that would have a material adverse effect on the financial position or
  results of operations of Foamex L.P. If management's assessment of Foamex L.P.'s
  liability with respect to these actions is incorrect,  such actions could have a
  material adverse effect on Foamex L.P.
  
       Foamex L.P.  is party to various  other  lawsuits,  both as  defendant  and
  plaintiff,  arising  in the  normal  course of  business.  It is the  opinion of
  management  that the  disposition of these lawsuits will not  individually or in
  the  aggregate,  have a material  adverse  effect on the  financial  position or
  results of operations of Foamex L.P. If management's assessment of Foamex L.P.'s
  liability with respect to these actions is incorrect,  such actions could have a
  material adverse effect on Foamex L.P.'s consolidated financial position.
  
  8.   SUBSEQUENT EVENT
  
       On October 6, 1997, Foamex L.P. sold substantially all of the net assets of
  its  needlepunch  carpeting,  tufted  carpeting and  artificial  grass  products
  business  located at its facilities in Dalton,  Georgia to Bretlin,  Inc. for an
  aggregate sale price of  approximately  $41.2 million,  subject to  post-closing
  adjustments.  Foamex L.P. expects to realize an immaterial gain on the sale, net
  of income taxes,  in the fourth quarter of 1997.  Foamex L.P. used $38.8 million
  of the net sale proceeds to repay outstanding term loan borrowings under the New
  Credit  Facility.  In connection  with this repayment,  Foamex L.P.,  expects to
  incur an extraordinary loss on the early extinguishment of debt of approximately
  $0.9 million during the fourth quarter of 1997.
  
                                         14
  FOAMEX CAPITAL CORPORATION
                     (A Wholly-Owned Subsidiary of Foamex L.P.)
                             BALANCE SHEETS (unaudited)
  September 28,   December 29,
                                                               1997             1996
  ASSETS                                                           (thousands)
  CASH                                                          $ 1              $ 1
                                                                ===              ===
  
  LIABILITIES AND STOCKHOLDER'S EQUITY
  
  COMMITMENTS AND CONTINGENCIES                                 $ -              $ -
                                                                ---              ---
  
  STOCKHOLDER'S EQUITY:
       Common stock, par value $.01 per share;
       1,000 shares authorized, issued and outstanding            -                -
       Additional paid-in capital                                 1                1
                                                                ---              ---
  
          TOTAL STOCKHOLDER'S EQUITY                            $ 1              $ 1
                                                                ===              ===
  The accompanying notes are an integral part of the
                                  balance sheets.
  
                                         15
  FOAMEX CAPITAL CORPORATION
                     (A Wholly-Owned Subsidiary of Foamex L.P.)
                         NOTES TO BALANCE SHEETS (unaudited)
  
  1.   ORGANIZATION
  
       Foamex Capital  Corporation  ("FCC"),  a wholly-owned  subsidiary of Foamex
  L.P.,  was formed for the sole  purpose of  obtaining  financing  from  external
  sources.
  
  2.   COMMITMENTS AND CONTINGENCIES
  
       FCC is a joint obligor on the following borrowings of Foamex L.P.:
  
       9 7/8% Senior Subordinated Notes due 2007 ("Senior Subordinated Notes")
  
       The Senior  Subordinated  Notes  were  issued by Foamex  L.P.  and FCC in a
  private placement under Rule 144A of the Securities Act of 1933, as amended,  on
  June 12, 1997 in connection with the Refinancing  Plan. The Senior  Subordinated
  Notes bear interest at the rate of 9 7/8% per annum payable semiannually on each
  June 15 and December 15, commencing  December 15, 1997. The Senior  Subordinated
  Notes mature on June 15, 2007. The Senior  Subordinated Notes may be redeemed at
  the option of Foamex L.P., in whole or in part, at any time on or after June 15,
  2002, initially at 104.938% of their principal amount, plus accrued interest and
  liquidated  damages,  as defined,  if any, thereon to the date of redemption and
  declining to 100.0% on or after June 15, 2005. In addition, at any time prior to
  June 15, 2000,  Foamex L.P. may on one or more  occasions  redeem up to 35.0% of
  the initially outstanding principal amount of the Senior Subordinated Notes at a
  redemption  price  equal to  109.875%  of the  principal  amount,  plus  accrued
  interest and liquidated  damages, if any, thereon to the date of redemption with
  the cash proceeds of one or more Public Equity Offerings,  as defined.  Upon the
  occurrence  of  a  change  of  control,  as  defined,   each  holder  of  Senior
  Subordinated  Notes will have the right to require Foamex L.P. to repurchase the
  Senior  Subordinated  Notes at a price equal to 101.0% of the principal  amount,
  plus accrued interest and liquidated damages, if any, to the date of repurchase.
  The Senior Subordinated Notes are subordinated in right of payment to all senior
  indebtedness  and are pari passu in right of payment to the  subordinated  note.
  The Senior  Subordinated Notes contain certain covenants that limit, among other
  things,  the  ability  of  Foamex  L.P.  (i)  to  pay  distributions  or  redeem
  partnership interests, (ii) to make certain restrictive payments or investments,
  (iii) to incur additional  indebtedness or issue Preferred  Equity Interest,  as
  defined,  (iv) to merge,  consolidate  or sell all or  substantially  all of its
  assets,  or (vi) to enter into certain  transactions  with affiliates or related
  persons. The Senior Subordinated Notes are guaranteed by General Felt and Foamex
  Fibers and certain future domestic subsidiaries of the Issuers.
  
       The Issuers  have filed a  registration  statement  relating to an exchange
  offer in which the Issuers will offer to exchange the Senior  Subordinated Notes
  issued in the private  placement for new notes.  The terms of the new notes will
  be substantially identical in all respects (including principal amount, interest
  rate,  maturity  and  ranking)  to the terms of the Senior  Subordinated  Notes,
  except  that the new notes  will be  transferable  by  holders  thereof  without
  further registration under the Securities Act of 1933, as amended (except in the
  case of Senior  Subordinated  Notes held by  affiliates  of the  Issuers and for
  certain  other  holders),   and  are  not  subject  to  any  covenant  regarding
  registration under the Securities Act of 1933, as amended. The exchange offer is
  expected to be consummated during November 1997.
  
       9 1/2% Senior Secured Notes due 2000 ("Senior Secured Notes")
  
       The Senior  Secured  Notes were issued on June 3, 1993 and bear interest at
  the rate of 9 1/2% per annum payable semiannually on each June 1 and December 1.
  The Senior Secured Notes mature on June 1, 2000. The
  
                                         16
  FOAMEX CAPITAL CORPORATION
                     (A Wholly-Owned Subsidiary of Foamex L.P.)
                         NOTES TO BALANCE SHEETS (unaudited)
  
  2.   COMMITMENTS AND CONTINGENCIES (continued)
  
  Senior  Secured  Notes  are   collateralized   by  a   first-priority   lien  on
  substantially  all of the assets of Foamex  L.P.  except for  receivables,  real
  estate and fixtures.  The Senior  Secured Notes may be redeemed at the option of
  Foamex  L.P.,  in  whole  or in part,  at any  time on or  after  June 1,  1998,
  initially at 101.583% of their  principal  amount,  plus accrued  interest,  and
  declining to 100.0% on or after June 1, 1999. The Senior Secured Notes have been
  guaranteed,  on a senior secured basis by General Felt and on a senior unsecured
  basis by Foamex  International.  During 1997 and 1996,  Foamex L.P.  repurchased
  $102.3 million and $9.9 million,  respectively,  aggregate  principal  amount of
  Senior Secured Notes.
  
       11 1/4% Senior Notes due 2002 ("Senior Notes")
  
       The Senior  Notes bear  interest  at the rate of 11 1/4% per annum  payable
  semiannually  on each April 1 and October 1. The Senior  Notes mature on October
  1, 2002. The Senior Notes may be redeemed at the option of Foamex L.P., in whole
  or in part,  at any time on or after  October 1, 1997,  initially at 104.219% of
  their principal  amount,  plus accrued  interest,  and declining to 100.0% on or
  after  October 1, 2000.  In October  1994,  Foamex L.P.  provided  certain  real
  property  as  collateral  for the Senior  Notes,  with a net book value of $37.8
  million at December 29, 1996. The Senior Notes have been guaranteed, on a senior
  basis, by General Felt.  During 1997 and 1996,  Foamex L.P.  repurchased  $135.6
  million and $8.6 million,  respectively,  aggregate  principal  amount of Senior
  Notes.  Foamex L.P.  redeemed all of the outstanding  Senior Notes on October 1,
  1997.
  
       11 7/8% Senior Subordinated Debentures ("Subordinated Debentures")
  
       The Subordinated  Debentures bear interest at the rate of 11 7/8% per annum
  payable semiannually on each April 1 and October 1. The Subordinated  Debentures
  mature on October 1, 2004.  The  Subordinated  Debentures may be redeemed at the
  option of Foamex L.P.,  in whole or in part,  at any time on or after October 1,
  1997,  initially at 105.938% of their principal  amount,  plus accrued interest,
  and declining to 100.0% on or after October 1, 2002. The Subordinated Debentures
  are subordinated in right of payment to all senior  indebtedness,  including the
  Senior Secured Notes and the Senior Notes. The Subordinated Debentures have been
  guaranteed,  on a senior subordinated basis, by General Felt and rank pari passu
  in right of payment  to the Senior  Subordinated  Notes.  During  1997 and 1996,
  Foamex L.P. repurchased $104.9 million and $0.1 million, respectively, aggregate
  principal  amount of Subordinated  Debentures.  Foamex L.P.  redeemed all of the
  outstanding Subordinated Debentures on October 1, 1997.
  
       11 7/8% Senior Subordinated Debentures, Series B ("Series B Debentures")
  
       The Series B  Debentures  were issued July 30,  1993,  by Foamex L.P. in an
  exchange offer to holders of senior subordinated debentures issued in connection
  with the  acquisition of General Felt on March 23, 1993. The Series B Debentures
  have terms  substantially  similar to the Subordinated  Debentures,  except that
  holders of the Series B  Debentures  are  entitled to receive  proceeds  from an
  asset sale only if any  proceeds  remain after an offer to  repurchase  has been
  made to the holders of the Subordinated Debentures. The Series B Debentures have
  been  guaranteed on a senior  subordinated  basis by General Felt.  During 1997,
  Foamex  L.P.  repurchased  $6.9  million  of Series B  Debentures.  Foamex  L.P.
  redeemed all of the outstanding Series B Debentures on October 1, 1997.
  
                                         17
  ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALAYSIS OF FINANCIAL CONDITION AND 
            RESULTS OF OPERATIONS
  
       Foamex L.P. operates in the flexible polyurethane and advanced polymer foam
  products industry,  together with its wholly-owned  subsidiaries,  General Felt,
  Foamex Fibers, Foamex Canada Inc., Foamex Latin America,  Inc., and Foamex Asia,
  Inc. The following  discussion  should be read in conjunction with the condensed
  consolidated  financial  statements  and  related  notes  thereto of Foamex L.P.
  included  in  this  report.   Certain   information  in  this  report   contains
  forward-looking statements and should be read in conjunction with the discussion
  regarding forward-looking statements set forth on pages 3 and 4 of Foamex L.P.'s
  1996 Annual Report on Form 10-K.
  
       On  June  12,  1997,  Foamex  International   substantially  completed  the
  Refinancing  Plan which  included the  repurchase of $342.3 million of aggregate
  principal  amount of Foamex L.P.'s  public debt and $116.7  million of aggregate
  principal  amount of the Discount  Debentures and the payment of $5.2 million of
  Foamex L.P.  term loan  borrowings  under its old credit  facility.  Foamex L.P.
  incurred an extraordinary  loss on the early  extinguishment  of debt associated
  with the Refinancing Plan of approximately  $44.5 million.  The Refinancing Plan
  was funded by $347.0 million of borrowings under the New Credit Facility and the
  net proceeds from the issuance of the Senior  Subordinated  Notes. See Note 4 to
  the condensed  consolidated  financial  statements for further discussion.  As a
  result of the  Refinancing  Plan,  Foamex L.P.'s total  long-term debt increased
  $150.1 million to $546.3 million.  Foamex L.P.  expects the Refinancing  Plan to
  result in increased interest expense of approximately $2.5 million in the second
  half of 1997 as compared  to the first half of 1997,  and  annualized  increased
  interest  expense  of  approximately  $5.0  million,  as  compared  to the  debt
  structure  prior to the  Refinancing  Plan,  assuming  no  material  changes  in
  interest  rates.  Foamex  L.P.'s  future  interest  expense will vary based on a
  variety of factors,  including  fluctuation in interest  rates in general.  As a
  result of the Refinancing Plan, variable rate debt comprises a larger percentage
  of Foamex L.P.'s overall indebtedness than in the past, and as a result,  future
  fluctuations  in  interest  rates  will have a greater  impact on Foamex  L.P.'s
  interest expense than in the past.
  
       In  addition,  on  October  1,  1997,  Foamex  L.P.  redeemed  all  of  the
  outstanding: (i) 11 1/4% senior notes due 2002, (ii) 11 7/8% senior subordinated
  debentures  due 2004 and (iii) the 11 7/8% senior  subordinated  debentures  due
  2004,  Series B, constituting  approximately  $26.0 million of the approximately
  $30.0  million of its  outstanding  public debt that was not tendered as part of
  the Refinancing Plan. The redemption was funded from the New Credit Facility. In
  connection with this  redemption,  Foamex L.P. expects to incur an extraordinary
  loss on the early  extinguishment  of debt of approximately  $2.6 million in the
  fourth quarter of 1997.
  
       Also,  on October 6, 1997,  Foamex L.P. sold  substantially  all of the net
  assets of its  needlepunch  carpeting,  tufted  carpeting and  artificial  grass
  products  business  located at its facilities in Dalton,  Georgia  ("Dalton") to
  Bretlin,  Inc.  for an  aggregate  sale price of  approximately  $41.2  million,
  subject  to  post-closing  adjustments.   Foamex  L.P.  expects  to  realize  an
  immaterial gain on the sale, net of income taxes, in the fourth quarter of 1997.
  Dalton's  revenues  were $10.7  million and $9.3 million for the  thirteen  week
  periods ended September 28, 1997 and September 29, 1996, respectively, and $35.1
  million and $32.1 million for the  thirty-nine  week periods ended September 28,
  1997 and September 29,1996,  respectively.  As of September 28, 1997, Dalton had
  $7.5 million, $14.8 million, $12.3 million and $2.0 million of inventories,  net
  plant,  property and  equipment,  net goodwill and other  assets,  respectively.
  Foamex L.P.  used $38.8  million of the net sale  proceeds to repay  outstanding
  term loan  borrowings  under the New Credit  Facility.  In connection  with this
  repayment,  Foamex  L.P.  expects  to incur an  extraordinary  loss on the early
  extinguishment  of debt of  approximately  $0.9 million in the fourth quarter of
  1997.
  
       During July 1997,  Foamex  International  announced  the  creation of a new
  senior management  operating  committee to simplify Foamex L.P.'s management and
  reporting  structure and to position  Foamex L.P. to achieve its strategic goals
  which include: (i) to focus on its core flexible polyurethane  operations in the
  automotive,   carpet  cushion,  technical,   cushioning  and  furniture  markets
  (furniture  sales were  previously  combined  with  cushioning  
  
                                         18
  ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALAYSIS OF FINANCIAL CONDITION AND 
            RESULTS OF OPERATIONS
  
  sales),  (ii) to maximize revenue growth by increasing  market share in existing
  markets,  introducing  new and enhanced foam  products  with higher  margins and
  pursuing  international  opportunities  and (iii) to  continue to lower its cost
  structure.
  
       The principal  suppliers to the foam  industry  announced raw material cost
  increases  effective  April 1997.  The impact of the raw material cost increases
  were not  significant  during the second quarter of 1997.  However,  Foamex L.P.
  estimates  the raw  material  cost  increases,  net of sale price  increases  to
  customers,  had an unfavorable  impact of approximately  $2.0 million during the
  third quarter of 1997.  There can be no assurance  that chemical  suppliers will
  not increase raw material  costs in the future or that Foamex L.P.  will be able
  to  implement  selling  price  increases  to offset any such raw  material  cost
  increases.
  
       During 1996,  Foamex L.P. sold Perfect Fit which comprised the home comfort
  products business segment of Foamex L.P. Accordingly, the accompanying condensed
  consolidated statements of operations for the thirteen week and thirty-nine week
  periods ended  September 29, 1996 and the  condensed  consolidated  statement of
  cash flows for the thirty-nine  week period ended September 29, 1996 reflect the
  home comfort products business segment as discontinued operations. See Note 2 to
  the condensed consolidated financial statements for further discussion.
  
       Operating  results  for 1997  are  expected  to be  influenced  by  various
  internal and external factors.  These factors include,  among other things,  (i)
  continued implementation of the continuous improvement program to improve Foamex
  L.P.'s  profitability,  (ii) additional raw material cost increases,  if any, by
  Foamex L.P.'s chemical  suppliers,  (iii) Foamex L.P.'s success in passing on to
  its  customers  selling  price  increases  to  recover  such raw  material  cost
  increases and (iv) fluctuations in interest rates.
  
  13 Week  Period  Ended  September  28, 1997  Compared  to 13 Week  Period  Ended
  September 29, 1996
  
  Results of Operations
  
       Net sales for the third quarter of 1997 were $233.4  million as compared to
  $236.8 million in the third quarter of 1996, a decrease of $3.4 million or 1.4%.
  Carpet  cushion  products net sales for the third quarter of 1997 decreased 6.4%
  to $72.0 million from $77.0  million in the third quarter of 1996  primarily due
  to a change in product mix and competitive  pricing  pressure  resulting from an
  excess  supply of foam trim,  the primary  component of rebond  carpet  cushion.
  Cushioning  products net sales for the third quarter of 1997  increased  5.7% to
  $60.2 million from $57.0  million in the third quarter of 1996  primarily due to
  an increase in net sales from both new and existing customers of bedding related
  products.  Furniture  products net sales for the third  quarter of 1997 of $29.6
  million were  consistent as compared to net sales of $29.0 million for the third
  quarter of 1996.  Automotive  products  net sales for the third  quarter of 1997
  decreased  6.4% to $52.3 million from $55.9 million in the third quarter of 1996
  primarily due to decreased net sales volume resulting from reduced car and light
  truck builds due to temporary production shut-downs at several Chrysler and Ford
  facilities  for new model  conversions  and slower  than  expected  start-up  of
  several new platforms during the third quarter of 1997.  Technical  products net
  sales for the third quarter of 1997  increased  8.0% to $19.3 million from $17.9
  million  in the third  quarter  of 1996  primarily  due to  increased  net sales
  volume.
  
       Gross profit as a percentage of net sales  decreased to 16.3% for the third
  quarter of 1997 from 16.9% in the third  quarter  of 1996  primarily  due to the
  unfavorable   impact  of  the   unrecovered   raw  material  cost  increases  of
  approximately  $2.0 million  during the third quarter of 1997 offset by improved
  material and production  
  
                                         19
  ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALAYSIS OF FINANCIAL CONDITION AND 
            RESULTS OF OPERATIONS
  
  efficiencies and  manufacturing  cost containment  which includes  favorable raw
  material  efficiencies  and an increased  impact of the 1995  restructuring  and
  operational plan in 1997 as compared to 1996.
  
       Income from operations  decreased to $22.5 million for the third quarter of
  1997 from  $24.9  million  in the third  quarter  of 1996  primarily  due to the
  reasons discussed above and an increase in selling,  general and  administrative
  expenses of $0.5 million for the third  quarter of 1997 as compared to the third
  quarter of 1996. The increase in selling, general and administrative expenses is
  primarily  due to increases in research and  development  costs,  and travel and
  promotion costs associated with the launching of new products and  international
  expansion offset by a decrease in employee compensation and incentives.
  
       Income from continuing  operations  decreased to $9.6 million for the third
  quarter of 1997 as compared to $11.4 million for the third quarter of 1996.  The
  decrease is primarily due to the reasons cited above and an increase in interest
  and debt  issuance  expense of $0.7  million.  The increase in interest and debt
  issuance expense is primarily due to a decrease in the favorable impact from the
  interest  rate swap  agreements  in the third quarter of 1997 as compared to the
  third quarter of 1996 and due to the higher level of outstanding indebtedness in
  the third  quarter of 1997 as compared to the third  quarter of 1996 as a result
  of the Refinancing Plan. Loss from discontinued  operations in the third quarter
  of 1996  represents  the loss on disposal and the operating  loss of Perfect Fit
  which was sold during 1996. See Note 2 to the condensed  consolidated  financial
  statements for further discussion. The decrease in the effective income tax rate
  for continuing operations for the third quarter of 1997 as compared to the third
  quarter of 1996 is  primarily  due to a decrease  in  pre-tax  earnings  and the
  related tax provision of a subsidiary that files federal income tax returns.
  
       The  extraordinary  loss on early  extinguishment  of debt of approximately
  $0.7 million during the third quarter of 1996 primarily relates to the write-off
  of debt issuance costs associated with the early extinguishment of $12.0 million
  of bank term loan borrowings.
  
  39 Week  Period  Ended  September  28, 1997  Compared  to 39 Week  Period  Ended
  September 29, 1996
  
  Results of Operations
  
       Net sales for 1997 were $702.4  million as  compared  to $696.3  million in
  1996, an increase of $6.1 million or 0.9%. Carpet cushion products net sales for
  1997  decreased 1.0% to $214.9 million from $217.2 million in 1996 primarily due
  to a change in product mix and competitive  pricing  pressure  resulting from an
  excess  supply of foam trim,  the primary  component of rebond  carpet  cushion.
  Cushioning  products net sales for 1997  increased  4.4% to $167.6  million from
  $160.5  million in 1996  primarily due to an increase in net sales from both new
  and existing customers of bedding related products. Furniture products net sales
  for 1997 of $92.1  million  were  consistent  as  compared to net sales of $91.5
  million  for 1996.  Automotive  products  net sales for 1997  decreased  2.2% to
  $171.4  million for 1997 from $175.2 million for 1996 primarily due to increased
  selling  prices  implemented  during the first quarter of 1996 offset by reduced
  net sales  volume in 1997 as compared  to 1996  resulting  from  reduced car and
  light truck builds due to temporary  production  shut-downs at several  Chrysler
  and Ford facilities,  slower than expected start-up of several new platforms and
  labor  strikes at both  Chrysler  and General  Motors  plants  during the second
  quarter of 1997.  Technical  products net sales for 1997 increased 8.8% to $56.4
  million from $51.9 million in 1996 primarily due to increased net sales volume.
  
       Gross profit as a percentage of net sales  increased to 17.9% for 1997 from
  16.4% in 1996 primarily due to selling price  increases,  improved  material and
  production efficiencies and manufacturing cost containment which include (i) the
  impact during 1997 of the selling  prices  initiated in 1996 to offset  previous
  raw material cost increases,  (ii) favorable raw material efficiencies and (iii)
  an increased  favorable impact of the 1995 restructuring 
  
                                         20
  ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALAYSIS OF FINANCIAL CONDITION AND 
            RESULTS OF OPERATIONS
  
  and operational plan in 1997 as compared to 1996. These increases were offset by
  approximately  $2.0 million of  unrecovered  raw material costs during the third
  quarter of 1997.
  
       Income  from  operations  increased  to $78.7  million  for 1997 from $72.0
  million in 1996  primarily  due to improved  gross  profit  margins as discussed
  above, offset by a $4.7 million increase in selling,  general and administrative
  expenses during 1997 as compared to the comparable period for 1996. The increase
  in selling, general and administrative expenses is primarily due to increases in
  employee compensation and incentives, research and development costs, and travel
  and  promotion  costs   associated  with  the  launching  of  new  products  and
  international expansion.
  
       Income from  continuing  operations  increased to $42.2 million for 1997 as
  compared to $34.6 million in 1996.  The increase is primarily due to the reasons
  cited above offset by an increase in interest and debt issuance  expense of $1.5
  million.  The increase in interest and debt issuance expense is primarily due to
  a decrease in the favorable impact from the interest rate swap agreements in the
  third  quarter of 1997 as compared to the third  quarter of 1996 and is also due
  to the higher level of outstanding indebtedness in 1997 as compared to 1996 as a
  result of the  Refinancing  Plan.  Loss from  discontinued  operations  for 1996
  represents  the loss on disposal and the operating loss of Perfect Fit which was
  sold during 1996. See Note 2 to the condensed  consolidated financial statements
  for  further  discussion.  The  decrease  in the  effective  income tax rate for
  continuing  operations  for  1997 as  compared  to 1996  is  primarily  due to a
  decrease in pre-tax  earnings and the related tax provision of a subsidiary that
  files federal income tax returns.
  
       The  extraordinary  loss on early  extinguishment  of debt of approximately
  $45.5  million  during 1997  relates to premium and  consent fee  payments,  the
  write-off of debt  issuance  costs and other charges  associated  with the early
  extinguishment of approximately  $359.3 million of aggregate principal amount of
  debt in  connection  with the  Refinancing  Plan and other  debt  extinguishment
  during 1997. See Note 4 to the condensed  consolidated  financial statements for
  further  discussion.  The extraordinary loss on early  extinguishment of debt of
  approximately  $0.7 million  during 1996  primarily  relates to the write-off of
  debt issuance costs associated with the early extinguishment of $12.0 million of
  bank term loan borrowings.
  
  Foamex Capital Corporation ("FCC")
  
       FCC is solely a co-issuer  of certain  indebtedness  of Foamex L.P.  has no
  other material operations.
  
  Liquidity and Capital Resources
  
       Foamex L.P.'s operating cash  requirements  consist  principally of working
  capital   requirements,   scheduled   payments  of  principal  and  interest  on
  outstanding  indebtedness and capital  expenditures.  Foamex L.P.  believes that
  cash flow from operating activities,  cash on hand and periodic borrowings under
  revolving  credit  agreements,  if  necessary,  will be  adequate  to  meet  its
  operating cash  requirements.  The ability to meet  operating cash  requirements
  could  be  impaired  if  Foamex  L.P.  were to fail to  comply  with  any of the
  covenants   contained  in  its  credit   agreements  or   indentures   and  such
  noncompliance was not cured or waived by the lenders or bondholders. Foamex L.P.
  was in compliance with such covenants as of September 28, 1997 and expects to be
  in compliance with such covenants for the foreseeable future.
  
       Cash and cash  equivalents  decreased  $19.9  million  during  1997 to $1.1
  million at  September  28, 1997 from $21.0  million at December  29,  1996.  The
  decrease in cash and cash equivalents was primarily due to: (i) $25.4 million of
  cash  used  for  capital  expenditures,  (ii)  $15.3  million  of cash  used for
  distributions  and a loan to  partners,  (iii)  $9.9  million  of cash  used for
  financing  activities after  considering the decrease in restricted cash and the
  purchase  of the  Discount  Debentures  offset  by (iv)  $31.7  million  of cash
  provided from operating activities.  
  
                                         21
  ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALAYSIS OF FINANCIAL CONDITION AND 
            RESULTS OF OPERATIONS
  
  The $9.9 million of cash used for financing  activities reflects the: (a) $363.4
  million  repayment of long-term  debt,  (b) $105.8  million of cash used for the
  purchase of the  Discount  Debentures,  (c) $15.6  million of cash used for debt
  issuance  costs,  (d) $22.9  million of cash used for  premium  and  consent fee
  payments and other cash charges  associated with the Refinancing  Plan and other
  debt extinguishment offset by (e) $485.7 million of cash proceeds from long-term
  debt,  revolving  loans  and  short-term  borrowings  and  (f) the  decrease  of
  restricted cash of $12.1 million. Cash flow from continuing operations decreased
  $2.8  million to $31.7  million for 1997 as compared to $34.5  million for 1996.
  Cash flow from  continuing  operations  decreased  for 1997 as  compared to 1996
  primarily due to an increase in the use of cash for  operating  assets offset by
  an increase in income from continuing operations.
  
       Working  capital  decreased  $9.4  million  for 1997 to $127.7  million  at
  September  28, 1997 from $137.1  million at December 29,  1996.  The decrease in
  working  capital is  primarily  due to the $19.9  million  decrease in cash,  as
  previously discussed,  offset by a $3.4 million increase in net operating assets
  and  liabilities,  as  discussed  below,  a $3.3  million net  increase in other
  current assets, and a $3.9 million decrease in short-term borrowings and current
  portion of long-term debt. The net operating  assets and liabilities  (comprised
  of accounts receivable, inventories and accounts payable) increased $3.4 million
  to $147.4 million at September 28, 1997 from $144.0 million at December 29, 1996
  primarily  due to an increase in  accounts  receivable  offset by an increase in
  accounts  payable  and a decrease  in  inventories.  The  increase  in  accounts
  receivable is primarily  due to an increase in net sales for  September  1997 as
  compared to December 1996. The increase in accounts  payable is primarily due to
  the timing of payments.  The decrease in inventories is due to reduced levels of
  major chemicals and foam trim  inventories  offset by increased  work-in-process
  inventories  which is the result of increased  production  in September  1997 as
  compared to December 1996.
  
       During  1997,  Foamex L.P.  spent  approximately  $25.4  million on capital
  expenditures and expects to maintain or reduce spending for capital expenditures
  for the  foreseeable  future since  significant  capital  projects (e.g. the new
  Mexico City facility) are expected to be completed during 1997.
  
       As of  September  28,  1997,  there  was  approximately  $31.0  million  of
  outstanding  revolving  credit  borrowings  under the New Credit  Facility  with
  unused availability of approximately $102.6 million. Borrowings by Foamex Canada
  Inc. as of September 28, 1997 were  approximately $2.9 million under a revolving
  credit  agreement  with  unused  availability  of  approximately  $1.4  million.
  Borrowings  by  Foamex  Latin  America,  Inc.  as of  September  28,  1997  were
  approximately   $2.0  million  under  a  revolving   credit  agreement  with  no
  availability.
  
       Interest Rate Swaps
  
       In connection with the Refinancing  Plan,  Foamex L.P.'s existing  interest
  rate swap agreements with a notional amount of $300.0 million were considered to
  be effectively  terminated  since the underlying  debt was  extinguished.  These
  interest  rate swap  agreements  had an estimated  fair value  liability of $8.2
  million  at  the  date  of  the  Refinancing  Plan  which  is  included  in  the
  extraordinary  loss  on the  early  extinguishment  of  debt.  In lieu of a cash
  payment  for the  estimated  fair  value  of the  existing  interest  rate  swap
  agreements,  Foamex L.P. entered into an amendment of the existing interest rate
  swap  agreements  resulting in one interest rate swap  agreement with a notional
  amount of $150.0 million through June 2007.  Accordingly,  the $8.2 million fair
  value  liability has been recorded as a deferred  credit which will be amortized
  as a reduction in interest and debt issuance  expense on a  straight-line  basis
  over the life of the amended  interest  rate swap  agreement.  Under the amended
  interest rate swap agreement, Foamex L.P. is obligated to make fixed payments of
  5.75% per annum through December 1997 and variable  payments based on the higher
  of  LIBOR  at the  beginning  of the  period  or the end of the  period  for the
  remainder of the  agreement,  in exchange for fixed payments by the swap partner
  at 6.44%  per  annum  for the life of the  agreement,  payable  semiannually  in
  arrears.  The amended  interest rate swap  agreement can be terminated by either
  party in June 2002, and annually thereafter,  for a cash settlement based on the
  fair market 
  
                                         22
  ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALAYSIS OF FINANCIAL CONDITION AND 
            RESULTS OF OPERATIONS
  
  value of the amended  interest rate swap  agreement.  Interest and debt issuance
  expense  is  subject  to  fluctuations  in  LIBOR  during  the  term of the swap
  agreement except during 1997. Foamex L.P. is exposed to credit loss in the event
  of nonperformance by the swap partner;  however, the occurrence of this event is
  not  anticipated.  The effect of the interest rate swaps  described  above was a
  favorable  adjustment to interest and debt issuance  expense of $0.5 million and
  $0.9  million  for the  thirteen  week  periods  ended  September  28,  1997 and
  September  29,  1996,  respectively,  and $2.2  million and $2.8 million for the
  thirty-nine  week  periods  ended  September  28, 1997 and  September  29, 1996,
  respectively.
  
       Environmental Matters
  
       Foamex L.P. is subject to  extensive  and changing  environmental  laws and
  regulations.  Expenditures to date in connection  with Foamex L.P.'s  compliance
  with such laws and  regulations  have not had a material  adverse  effect on its
  operations,  financial position,  capital expenditures or competitive  position.
  The  amount  of  liabilities   recorded  by  Foamex  L.P.  in  connection   with
  environmental  matters as of September 28, 1997 was approximately  $3.8 million.
  In addition,  as of  September  28, 1997,  Foamex L.P.  has net  receivables  of
  approximately $1.0 million for indemnification of environmental liabilities from
  former  owners,   net  of  a  $1.0  million  allowance   relating  to  potential
  disagreements  regarding  the  scope  of  the  indemnification.  Although  it is
  possible that new information or future  developments  could require Foamex L.P.
  to  reassess  its  potential  exposure  to all  pending  environmental  matters,
  including  those   described  in  the  footnotes  to  Foamex  L.P.'s   condensed
  consolidated  financial  statements,  management  believes that,  based upon all
  currently   available   information,   the   resolution   of  all  such  pending
  environmental  matters will not have a material  adverse effect on Foamex L.P.'s
  operations, financial position, capital expenditures or competitive position.
  
       The possibility exists, however, that new environmental  legislation and/or
  environmental  regulations may be adopted, or other environmental conditions may
  be found to exist, that may require  expenditures not currently  anticipated and
  that may be material.
  
  Inflation and Other Matters
  
       There was no significant  impact on Foamex L.P.'s operations as a result of
  inflation for the periods presented. In some circumstances, market conditions or
  customer  expectations  may prevent Foamex L.P. from increasing the price of its
  products to offset the inflationary pressures that may increase its costs in the
  future.  Effective in January 1997,  Foamex  L.P.'s  operations in Mexico became
  subject to highly  inflationary  accounting  for financial  reporting  purposes.
  Translation adjustments resulting from fluctuations in the exchange rate between
  the Mexican Peso and the U.S. dollar are included in Foamex L.P.'s  consolidated
  statement of operations as compared to partners' equity (deficit). The effect of
  translation  adjustments  on the  1997  results  of  operations  have  not  been
  material.
  
       Foamex L.P.'s automotive  products  customers are predominantly  automotive
  original  equipment  manufacturers or other automotive  suppliers.  As such, the
  sales of these  product  lines are  directly  related  to the  overall  level of
  passenger car and light truck production in North America.  Also,  Foamex L.P.'s
  sales are  sensitive  to sales of new and  existing  homes,  changes in personal
  disposable  income  and  seasonality.  Foamex  L.P.  typically  experiences  two
  seasonally  slow periods  during each year, in early July and in late  December,
  due to scheduled plant shutdowns and holidays.
  
                                         23
  PART II - OTHER INFORMATION
  
  Item 1.   Legal Proceedings.
  
            Reference  is  made  to  the  description  of  the  legal  proceedings
            contained in the Foamex L.P. Annual Report on Form 10-K for the fiscal
            year ended December 29, 1996 and in Foamex L.P.'s Quarterly Reports on
            Form 10-Q for the fiscal  quarters  ended  March 30, 1997 and June 29,
            1997.
  
            The  information  from  Notes  6 and 7 of the  condensed  consolidated
            financial  statements of Foamex L.P. and  subsidiaries as of September
            28, 1997 (unaudited) is incorporated herein by reference.
  
  Item 2.   Changes in Securities.
  
            None.
  
  Item 3.   Defaults Upon Senior Securities.
  
            None.
  
  Item 4.   Submission of Matters to a Vote of Securities Holders.
  
            None.
  
  Item 5.   Other Information.
  
            None.
  
  Item 6.   Exhibits and Financial Statement Schedules.
  
            (a)  Exhibits
  
  3.1(a)        - Certificate of Limited Partnership of Foamex L.P.
  3.2.1(a)      - Fourth Amended and Restated Agreement of Limited  Partnership of
                Foamex L.P.,  dated as of December  14,  1993,  by and among FMXI,
                Inc.  ("FMXI") and Trace Foam Company,  Inc.  ("Trace  Foam"),  as
                general   partners,   and  Foamex   International   Inc.  ("Foamex
                International"),   as  a   limited   partner   (the   "Partnership
                Agreement").
  3.2.2(b)      - First  Amendment to the  Partnership  Agreement,  dated June 28,
                1994.
  3.2.3(c)      - Second  Amendment to the Partnership  Agreement,  dated June 12,
                1997.
  3.3(a)        - Certificate of Incorporation of FMXI.
  3.4(a)        - By-laws of FMXI.
  3.5(k)        -  Certificate  of  Incorporation  of Foamex  Capital  Corporation
                ("FCC").
  3.6(k)        - By-laws of FCC.
  3.7(g)        - Certificate of Incorporation  of General Felt  Industries,  Inc.
                ("General Felt").
  3.8(g)        - By-laws of General Felt.
  3.9(p)        - Certificate of  Incorporation  of Foamex Fibers,  Inc.  ("Foamex
                Fibers")
  3.10(p)       - By-laws of Foamex Fibers.
  4.1.1(d)      - Indenture,  dated as of June 12, 1997, by and among Foamex L.P.,
                FCC,  the  Subsidiary  Guarantors  and The  Bank of New  York,  as
                Trustee,  relating  to  $150,000,000  principal  amount  of 9 7/8%
                Senior  Subordinated Notes due 2007,  including the form of Senior
                Subordinated Note and Subsidiary Guarantee.
  
                                         24
  4.1.2(d)      - Registration Rights Agreement, dated as of June 12, 1997, by and
                among Foamex L.P.,  FCC,  General  Felt,  Foamex  Fibers,  and all
                future direct or indirect domestic  subsidiaries of Foamex L.P. or
                FCC,  and  Donaldson,  Lufkin & Jenrette  Securities  Corporation,
                Salomon  Brothers  Inc.  and Scotia  Capital  Markets,  as Initial
                Purchasers.
  4.2.1(e)      - Indenture,  dated as of June 3, 1993, among Foamex L.P. and FCC,
                as joint and several  obligors,  General Felt,  as Guarantor,  and
                Shawmut  Bank,  National  Association  ("Shawmut"),   as  trustee,
                relating to $160,000,000 principal amount of 9 1/2% Senior Secured
                Notes due 2000, including the form of Senior Secured Note.
  4.2.2(a)      - First  Supplemental  Indenture,  dated as of November  18, 1993,
                among  Foamex L.P.  and FCC, as Issuers,  General Felt and Perfect
                Fit Industries,  Inc.  ("Perfect Fit"), as Guarantors and Shawmut,
                as trustee, relating to the Senior Secured Notes.
  4.2.3(a)      - Second  Supplemental  Indenture,  dated as of December 14, 1993,
                among Foamex L.P. and FCC, as Issuers,  Foamex L.P.,  General Felt
                and Perfect Fit, as Guarantors and Shawmut,  as trustee,  relating
                to the Senior Secured Notes.
  4.2.4(f)      - Third Supplemental Indenture, dated as of August 1, 1996, by and
                among  Foamex L.P.  and FCC, as Issuers,  Foamex  L.P.,  as parent
                guarantor, General Felt, as guarantor, Perfect Fit, as withdrawing
                guarantor,  and Fleet National Bank ("Fleet"), as trustee relating
                to the Senior Secured Notes.
  4.2.5(c)      - Fourth Supplemental Indenture,  dated as of May 28, 1997, by and
                among  Foamex L.P.  and FCC, as Issuers,  Foamex  L.P.,  as Parent
                Guarantor, General Felt, as Guarantor, and Fleet, as Trustee.
  4.2.6(e)      - Company  Pledge  Agreement,  dated as of June 3, 1993, by Foamex
                L.P. in favor of Shawmut, as trustee for the holders of the Senior
                Secured Notes.
  4.2.7(p)      - Amendment No. 1 to Company (Foamex L.P.) Pledge Agreement, dated
                June 12, 1997.
  4.2.8(e)      - Company  Pledge  Agreement,  dated as of June 3, 1993, by FCC in
                favor of Shawmut, as trustee for the holders of the Senior Secured
                Notes.
  4.2.9(p)      - Amendment  No. 1 to Company (FCC) Pledge  Agreement,  dated June
                12, 1997.
  4.2.10(e)     -  Subsidiary  Pledge  Agreement,  dated  as of June 3,  1993,  by
                General  Felt in favor of  Shawmut,  as trustee for the holders of
                the Senior Secured Notes.
  4.2.11(p)     - Amendment No. 1 to Subsidiary  (General Felt) Pledge  Agreement,
                dated June 12, 1997.
  4.2.12(e)     - Company Security Agreement,  dated as of June 3, 1993, by Foamex
                L.P.  and FCC in favor of  Shawmut,  as trustee for the holders of
                the Senior Secured Notes.
  4.2.13(p)     -  Amendment  No.  1 to  Company,  Foamex  L.P.  and FCC  Security
                Agreement, dated June 12, 1997.
  4.2.14(e)     -  Subsidiary  Security  Agreement,  dated as of June 3, 1993,  by
                General  Felt in favor of  Shawmut,  as trustee for the holders of
                the Senior Secured Notes.
  4.2.15(p)     - Amendment No. 1 to Subsidiary Security Agreement (General Felt),
                dated June 12, 1997.
  4.2.16(e)     - Collateral  Assignment  of Patents and  Trademarks,  dated as of
                June 3, 1993,  by Foamex L.P. in favor of Shawmut,  as trustee for
                the holders of the Senior Secured Notes.
  4.2.17(p)     -  Amendment  No.  1  to  Collateral  Assignment  of  Patents  and
                Trademarks (Foamex L.P.), dated June 12, 1997.
  4.2.18(e)     - Collateral  Assignment  of Patents and  Trademarks,  dated as of
                June 3,  1993,  by FCC in favor of  Shawmut,  as  trustee  for the
                holders of the Senior Secured Notes.
  4.2.19(p)     -  Amendment  No.  1  to  Collateral  Assignment  of  Patents  and
                Trademarks (FCC), dated June 12, 1997.
  4.2.20(e)     - Collateral  Assignment  of Patents and  Trademarks,  dated as of
                June 3, 1993, by General Felt in favor of Shawmut,  as trustee for
                the holders of the Senior Secured Notes.
  4.2.21(p)     -  Amendment   No.1  to  Collateral   Assignment  of  Patents  and
                Trademarks (General Felt), dated June 12, 1997.
  4.2.22(p)     - Amended and  Restated  Receivables  Security  Agreement,  by and
                among Fleet National Bank, Citicorp USA, Inc. and The Bank of Nova
                Scotia, dated as of June 12, 1997.
  
                                         25
  4.2.23(p)     - Intercreditor  Agreement by and among Fleet, Citicorp USA, Inc.,
                and The Bank of Nova Scotia, dated as of June 12, 1997 (re: Senior
                Secured Notes).
  4.3           - Intentionally omitted.
  4.4           - Intentionally omitted.
  4.5.1(d)      - Credit Agreement, dated as of June 12, 1997, by and among Foamex
                L.P.,  General Felt, Trace Foam, FMXI, the institutions  from time
                to time party thereto as lenders,  the  institutions  from time to
                time party  thereto as issuing  banks,  and Citicorp USA, Inc. and
                The Bank of Nova Scotia, as Administrative Agents.
  4.5.2(p)      - Foamex  International  Guaranty,  dated as of June 12, 1997,  in
                favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.3(p)      - Partnership  Guaranty,  dated as of June 12, 1997, made by Trace
                Foam and FMXI in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.4(p)      - Foamex Guaranty,  dated as of June 12, 1997, made by Foamex L.P.
                in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.5(p)      - GFI Guaranty, dated as of June 12, 1997, made by General Felt in
                favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.6(p)      - Subsidiary  Guaranty,  dated as of June 12, 1997, made by Foamex
                Fibers in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.7(p)      - Subsidiary  Guaranty,  dated as of June 12, 1997, made by Foamex
                Latin America,  Inc. in favor of Citicorp USA, Inc., as Collateral
                Agent.
  4.5.8(p)      - Subsidiary  Guaranty,  dated as of June 12, 1997, made by Foamex
                Mexico, Inc. in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.9(p)      - Subsidiary  Guaranty,  dated as of June 12, 1997, made by FCC in
                favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.10(p)     - Subsidiary  Guaranty,  dated as of June 12, 1997, made by Foamex
                Mexico II, Inc.  in favor of Citicorp  USA,  Inc.,  as  Collateral
                Agent.
  4.5.11(p)     - Subsidiary  Guaranty,  dated as of June 12, 1997, made by Foamex
                Asia, Inc. in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.12(p)     - Partnership Pledge Agreement, dated as of June 12, 1997, made by
                Trace Foam Company,  Inc., FMXI, and Foamex International in favor
                of Citicorp USA, Inc., as Collateral Agent.
  4.5.13(p)     - Foamex  Pledge  Agreement,  dated as of June 12,  1997,  made by
                Foamex L.P. in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.14(p)     - GFI Pledge Agreement, dated as of June 12, 1997, made by General
                Felt in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.15(p)     - Subsidiary Pledge Agreement,  dated as of June 12, 1997, made by
                FCC in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.16(p)     - Subsidiary Pledge Agreement,  dated as of June 12, 1997, made by
                Foamex Fibers in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.17(p)     - Subsidiary Pledge Agreement,  dated as of June 12, 1997, made by
                Foamex Latin  America,  Inc. in favor of Citicorp  USA,  Inc.,  as
                Collateral Agent.
  4.5.18(p)     - Subsidiary Pledge Agreement,  dated as of June 12, 1997, made by
                Foamex Asia,  Inc. in favor of Citicorp  USA,  Inc., as Collateral
                Agent.
  4.5.19(p)     - Subsidiary Pledge Agreement,  dated as of June 12, 1997, made by
                Foamex Mexico,  Inc. in favor of Citicorp USA, Inc., as Collateral
                Agent.
  4.5.20(p)     - Subsidiary Pledge Agreement,  dated as of June 12, 1997, made by
                Foamex  Mexico  II,  Inc.  in  favor of  Citicorp  USA,  Inc.,  as
                Collateral Agent.
  4.5.21(p)     - Foamex  Security  Agreement,  dated as of June 12, 1997, made by
                Foamex L.P. in favor of Citicorp USA, Inc., as Collateral Agent.
  4.5.22(p)     - GFI  Security  Agreement,  dated  as of June 12,  1997,  made by
                General Felt in favor of Citicorp USA, Inc., as Collateral Agent.
  
                                         26
  4.5.23(p)     - Subsidiary Security  Agreement,  dated as of June 12, 1997, made
                by Foamex  Fibers in favor of Citicorp  USA,  Inc.,  as Collateral
                Agent.
  4.5.24(p)     - Subsidiary Security  Agreement,  dated as of June 12, 1997, made
                by Foamex Latin  America,  Inc. in favor of Citicorp USA, Inc., as
                Collateral Agent.
  4.5.25(p)     - Subsidiary Security  Agreement,  dated as of June 12, 1997, made
                by  Foamex  Mexico,  Inc.  in  favor of  Citicorp  USA,  Inc.,  as
                Collateral Agent.
  4.5.26(p)     - Subsidiary Security  Agreement,  dated as of June 12, 1997, made
                by Foamex  Mexico II,  Inc.  in favor of Citicorp  USA,  Inc.,  as
                Collateral Agent.
  4.5.27(p)     - Subsidiary Security  Agreement,  dated as of June 12, 1997, made
                by Foamex Asia, Inc. in favor of Citicorp USA, Inc., as Collateral
                Agent.
  4.5.28(p)     - Subsidiary Security  Agreement,  dated as of June 12, 1997, made
                by FCC in favor of Citicorp USA, Inc., as Collateral Agent.
  4.6           - Commitment  letter,  dated July 17, 1997,  from The Bank of Nova
                Scotia to Foamex Canada Inc.
  4.7(a)        - Subordinated  Promissory  Note,  dated as of May 6, 1993, in the
                original principal amount of $7,014,864 executed by Foamex L.P. to
                John Rallis ("Rallis").
  4.8(a)        - Marely Loan Commitment Agreement, dated as of December 14, 1993,
                by and between Foamex L.P. and Marely s.a. ("Marely").
  4.9(a)        - DLJ Loan Commitment Agreement, dated as of December 14, 1993, by
                and between Foamex L.P. and DLJ Funding, Inc. ("DLJ Funding").
  4.10.1(p)     - Promissory Note, dated June 12, 1997, in the aggregate principal
                amount of $5,000,000, executed by Trace Holdings to Foamex L.P.
  4.10.2(p)     - Promissory Note, dated June 12, 1997, in the aggregate principal
                amount of $4,794,828, executed by Trace Holdings to Foamex L.P.
  10.1.1(p)     - Amendment to Master Agreement, dated as of June 5, 1997, between
                Citibank, N.A. and Foamex L.P.
  10.1.2(p)     -  Amended  confirmation,  dated  as of  June  13,  1997,  between
                Citibank, N.A. and Foamex L.P.
  10.2(h)       -  Reimbursement  Agreement,  dated as of March 23, 1993,  between
                Trace Holdings and General Felt.
  10.3(h)       - Shareholder Agreement,  dated December 31, 1992, among Recticel,
                s.a.  ("Recticel"),  Recticel  Holding  Noord B.V.,  Foamex  L.P.,
                Beamech Group Limited,  LME-Beamech,  Inc., James Brian Blackwell,
                and Prefoam AG relating to foam technology sharing arrangement.
  10.4.1(k)     - Asset Transfer  Agreement,  dated as of October 2, 1990, between
                Trace Holdings and Foamex L.P. (the "Trace Holdings Asset Transfer
                Agreement").
  10.4.2(k)     - First  Amendment,  dated as of December 19,  1991,  to the Trace
                Holdings Asset Transfer Agreement.
  10.4.3(k)     - Amended and  Restated  Guaranty,  dated as of December 19, 1991,
                made by Trace Foam in favor of Foamex L.P.
  10.5.1(k)     - Asset Transfer  Agreement,  dated as of October 2, 1990, between
                Recticel Foam Corporation  ("RFC") and Foamex L.P. (the "RFC Asset
                Transfer Agreement").
  10.5.2(k)     - First Amendment, dated as of December 19, 1991, to the RFC Asset
                Transfer Agreement.
  10.5.3(k)     - Schedule  5.03 to the RFC Asset  Transfer  Agreement  (the "5.03
                Protocol").
  10.5.4(h)     - The 5.03 Protocol Assumption Agreement,  dated as of October 13,
                1992, between RFC and Foamex L.P.
  10.5.5(h)     - Letter Agreement  between Trace Holdings and Recticel  regarding
                the Recticel Guaranty, dated as of July 22, 1992.
  10.6(l)       - Supply Agreement,  dated June 28, 1994,  between Foamex L.P. and
                Foamex International.
  10.7.1(l)     - First  Amended and Restated Tax Sharing  Agreement,  dated as of
                December 14, 1993,  among Foamex L.P., Trace Foam, FMXI and Foamex
                International.
  10.7.2(d)     - First Amendment to Amended and Restated Tax Sharing Agreement of
                Foamex L.P.,  dated as of June 12, 1997, by and among Foamex L.P.,
                Foamex International, FMXI and Trace Foam.
  
                                         27
  10.8.1(m)     - Tax  Distribution  Advance  Agreement,  dated as of December 11,
                1996, by and between Foamex L.P. and Foamex-JPS Automotive.
  10.8.2(d)     - Amendment No. 1 to Tax Distribution Advance Agreement,  dated as
                of  June  12,  1997,  by  and  between   Foamex  L.P.  and  Foamex
                International.
  10.9.1(h)     - Trace Foam  Management  Agreement  between Foamex L.P. and Trace
                Foam, dated as of October 13, 1992.
  10.9.2(l)     - Affirmation  Agreement  re:  Management  Agreement,  dated as of
                December 14, 1993, between Foamex L.P. and Trace Foam.
  10.9.3(d)     - First  Amendment to Management  Agreement,  dated as of June 12,
                1997, by and between Foamex L.P. and Trace Foam.
  10.10.1(k)    - Salaried Incentive Plan of Foamex L.P. and Subsidiaries.
  10.10.2(k)    - Trace Holdings 1987 Nonqualified Stock Option Plan.
  10.10.3(k)    - Equity Growth Participation Program.
  10.10.4(o)    - The Foamex L.P. Salaried Pension Plan (formerly the General Felt
                Industries,   Inc.   Retirement  Plan  for  Salaried   Employees),
                effective as of January 1, 1995.
  10.10.5       - The Foamex  L.P.  Hourly  Pension  Plan  (formerly  "The  Foamex
                Products  Inc.  Hourly  Employee   Retirement  Plan),  as  amended
                December 31, 1995.
  10.10.6       - Foamex L.P. 401(k) Savings Plan effective October 1, 1997.
  10.10.7(a)    - Foamex L.P.'s 1993 Stock Option Plan.
  10.10.8(a)    - Foamex L.P.'s Non-Employee Director Compensation Plan.
  10.11.1(o)    -  Employment  Agreement,  dated as of  February  1, 1994,  by and
                between Foamex L.P. and William H. Bundy.
  10.11.2(q)    - Employment Agreement,  dated as of July 26, 1995, by and between
                Foamex L.P. and Salvatore J. Bonanno.
  10.12(a)      - Warrant  Exchange  Agreement,  dated as of December 14, 1993, by
                and between Foamex L.P. and Marely.
  10.13(a)      - Warrant  Exchange  Agreement,  dated as of December 14, 1993, by
                and between Foamex L.P. and DLJ Funding.
  10.14(o)      - Stock Purchase Agreement,  dated as of December 23, 1993, by and
                between   Transformacion   de  Espumas  u  Fieltros,   S.A.,   the
                stockholders which are parties thereto, and Foamex L.P.
  10.15(r)      - Asset  Purchase  Agreement,  dated as of August 29, 1997, by and
                among  General  Felt,  Foamex  L.P.,  Bretlin,  Inc. and The Dixie
                Group.
  10.15.1(s)    - Addendum  to Asset  Purchase  Agreement,  dated as of October 1,
                1997, by and among General Felt,  Foamex L.P.,  Bretlin,  Inc. and
                The Dixie Group.
  27            - Financial Data Schedule.
  
  ----------------------------
  
  (a)  Incorporated   herein  by  reference  to  the  Exhibit  to  Foamex   L.P.'s
       Registration Statement on Form S-1, Registration No. 33-69606.
  
  (b)  Incorporated  herein by reference to the Exhibit to the Form 10-K of Foamex
       for the fiscal year ended January 1, 1995.
  
  (c)  Incorporated  herein by reference  to the Exhibit to the Current  Report on
       Form 8-K of Foamex reporting an event that occurred May 28, 1997.
  
  (d)  Incorporated  herein by reference  to the Exhibit to the Current  Report on
       Form 8-K of Foamex reporting an event that occurred June 12, 1997.
  
  (e)  Incorporated  herein  by  reference  to the  Exhibit  to  the  Registration
       Statement of Foamex and FCC on Form S-4, Registration No. 33-65158.
  
                                         28
  (f)  Incorporated  herein by reference to the Exhibit to the Form 10-Q of Foamex
       for the quarterly period ended June 30, 1996.
  
  (g)  Incorporated  herein  by  reference  to the  Exhibit  to  the  Registration
       Statement of Foamex,  FCC and General Felt on Form S-1,  Registration  Nos.
       33-60888, 33-60888-01, and 33-60888-02.
  
  (h)  Incorporated  herein by reference to the Exhibit to the Form 10-K Statement
       of Foamex and FCC for fiscal 1992.
  
  (i)  Incorporated  herein by reference to the Exhibit to the Form 10-K of Foamex
       L.P. for fiscal 1994.
  
  (j)  Incorporated  herein by reference to the Exhibit to the Form 10-Q of Foamex
       for the quarterly period ended September 30, 1996.
  
  (k)  Incorporated  herein  by  reference  to the  Exhibit  to  the  Registration
       Statement  of Foamex and FCC on Form S-1,  Registration  Nos.  33-49976 and
       33-49976-01.
  
  (l)  Incorporated  herein  by  reference  to the  Exhibit  to  the  Registration
       Statement  of FJPS,  FJCC and Foamex  L.P.  on Form S-4,  Registration  No.
       33-82028.
  
  (m)  Incorporated  herein by  reference  to the Exhibit to the Annual  Report on
       Form 10-K of Foamex for the fiscal year ended December 29, 1996.
  
  (n)  Incorporated  herein by reference to the Exhibit to the Form 10-Q of Foamex
       for the quarterly period ended July 2, 1995.
  
  (o)  Incorporated  herein by reference to the Exhibit to the Form 10-K of Foamex
       L.P. for fiscal 1993.
  
  (p)  Incorporated  herein  by  reference  to the  Exhibit  in  the  Registration
       Statement of Foamex on Form S-4, Registration No. 333-30291.
  
  (q)  Incorporated  herein by reference to the Exhibit to the Form 10-K of Foamex
       L.P. for the fiscal year ended December 31, 1995.
  
  (r)  Incorporated  herein  by  reference  to the  Current  Report on Form 8-K of
       Foamex L.P. reporting an event that occurred on August 29, 1997.
  
  (s)  Incorporated  herein  by  reference  to the  Current  Report on Form 8-K of
       Foamex L.P. reporting an event that occurred on October 6, 1997.
  
       Certain  instruments  defining  the rights of  security  holders  have been
  excluded herefrom in accordance with Item  601(b)(4)(iii) of Regulation S-K. The
  registrant  hereby  agrees  to  furnish  a copy of any  such  instrument  to the
  Commission upon request.
  
       (b) Foamex L.P. filed the following Current Reports on Form 8-K:
  
           Form 8-K reporting an event that occurred on August 29, 1997.
  
           Form 8-K reporting an event that occurred on October 6, 1997.
  
                                         29
  SIGNATURES
  
       Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
  registrants  have duly caused  this  report to be signed on their  behalf by the
  undersigned thereunto duly authorized.
  
                                                FOAMEX L.P.
  
                                                By:  FMXI, INC.
                                                General Partner
  
  Date: November 12, 1997                       By: /s/ Kenneth R. Fuette
                                                   Kenneth R. Fuette
                                                   Chief Financial Officer
  
                                                FOAMEX CAPITAL CORPORATION
  
  Date: November 12, 1997                       By: /s/ Kenneth R. Fuette
                                                    Kenneth R. Fuette
                                                    Chief Financial Officer
  
                                         30