SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 8-K

                                 CURRENT REPORT


                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934



 Date of Report (date of earliest event reported): June 25, 2002 (June 25, 2002)

                      Furniture Brands International, Inc.
                      ------------------------------------
               (Exact name of Registrant as specified in charter)


        Delaware                       I-91                    43-0337683
--------------------------        --------------         ---------------------
(State of Incorporation)          (Commission               (IRS Employer
                                   File Number)          Identification Number)




                101 South Hanley Road, St. Louis, Missouri 63105
                ------------------------------------------------
                    (Address of principal executive offices)




                                 (314) 863-1100
                                 --------------
                         (Registrant's telephone number)


<PAGE>


Item 5. Other Matters

     On January 1, 2002 the Company  adopted  Statement of Financial  Accounting
Standards No. 142 (FAS #142),  "Goodwill and Other Intangible Assets".  FAS #142
required  that goodwill and other  intangible  assets with  indefinite  lives no
longer  be  amortized,  but  instead  be tested  annually  for  impairment.  The
Company's intangible assets, consisting of trademarks,  trade names and goodwill
all have indefinite lives. Note 6 in the attached financial  statements presents
net income after adjusting for the amortization of goodwill and other intangible
assets for each of the years in the three-year period ended December 31, 2001.


Item 7. Financial Statements and Exhibits

     (a)  List of financial statements filed as a part of this report:

          Consolidated balance sheets, December 31, 2001 and 2000

          Consolidated  statements  of  operations  for each of the years in the
          three-year period ended December 31, 2001

          Consolidated  statements  of cash  flows  for each of the years in the
          three-year period ended December 31, 2001

          Consolidated  statements of shareholders' equity for each of the years
          in the three-year period ended December 31, 2001

          Notes to consolidated financial statements

          Independent Auditors' Report

     (c)  Exhibit 23 Consent of KPMG LLP





<PAGE>

<TABLE>
<CAPTION>

CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------------------- -------------------- ---------------------
<S>                                                                                                   <C>                   <C>
(Dollars in thousands)                                                                       December 31,          December 31,
                                                                                                    2001                  2000
------------------------------------------------------------------------------------- -------------------- ---------------------
Assets
Current assets:
  Cash and cash equivalents                                                                   $   15,707            $   14,606
  Receivables, less allowances of $18,841
    ($23,075 at December 31, 2000)                                                               359,493               351,804
  Inventories (Note 5)                                                                           369,773               294,454
  Deferred income taxes                                                                           26,160                23,555
  Prepaid expenses and other current assets                                                        7,582                 7,162
--------------------------------------------------------------------------------------------------------------------------------
    Total current assets                                                                         778,715               691,581
Property, plant and equipment:
  Land                                                                                            18,090                19,206
  Buildings and improvements                                                                     240,554               226,096
  Machinery and equipment                                                                        346,460               345,040
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                 605,104               590,342
  Less accumulated depreciation                                                                  283,464               287,107
--------------------------------------------------------------------------------------------------------------------------------
    Net property, plant and equipment                                                            321,640               303,235
Goodwill (Note 6)                                                                                156,435               166,066
Other Intangible Assets (Note 6)                                                                 210,870               123,829
Other assets                                                                                      35,829                20,127
--------------------------------------------------------------------------------------------------------------------------------
                                                                                              $1,503,489            $1,304,838
================================================================================================================================
Liabilities and Shareholders' Equity
Current liabilities:
  Accounts payable                                                                              $ 83,508              $ 65,483
  Accrued employee compensation                                                                   23,815                24,822
  Accrued interest expense                                                                         2,805                 7,646
  Other accrued expenses                                                                          65,167                45,167
--------------------------------------------------------------------------------------------------------------------------------
    Total current liabilities                                                                    175,295               143,118
Long-term debt (Note 7)                                                                          454,400               462,000
Deferred income taxes                                                                             69,032                77,533
Other long-term liabilities                                                                       45,103                38,282

Shareholders' equity:
  Preferred stock, authorized 10,000,000 shares,
    No par value - issued, none                                                                      -                     -
  Common stock, authorized 100,000,000 shares,
    $1.00 stated value - issued 56,277,066 shares at December 31, 2001
    and 52,277,066 shares at December 31, 2000 (Note 8)                                           56,277                52,277
  Paid-in capital                                                                                219,469               118,360
  Retained earnings                                                                              520,503               462,473
  Accumulated other comprehensive income                                                          (5,108)                  -
  Treasury stock at cost
    (1,664,666 shares at December 31, 2001 and
     2,601,759 shares at December 31, 2000)                                                      (31,482)              (49,205)
--------------------------------------------------------------------------------------------------------------------------------
  Total shareholders' equity                                                                     759,659               583,905
--------------------------------------------------------------------------------------------------------------------------------
                                                                                              $1,503,489            $1,304,838
================================================================================================================================
                See accompanying notes to consolidated financial statements.


</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                      CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands except per share data)
                                                                                           Year Ended December 31,
                                                                           --------------------------------------------------------
                                                                                    2001                2000               1999
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>                 <C>                 <C>
Net sales                                                                        $1,891,313          $2,116,239          $2,088,112

Costs and expenses:
  Cost of operations                                                              1,387,632           1,529,874           1,498,622

  Selling, general and administrative expenses                                      330,835             335,596             321,205

  Depreciation and amortization                                                      55,767              58,155              56,528

  Asset impairment charges                                                           18,000                 -                   -
-----------------------------------------------------------------------------------------------------------------------------------

Earnings from operations                                                             99,079             192,614             211,757

Interest expense                                                                     21,984              36,389              37,577

Other income, net                                                                    10,599               9,772               2,584
-----------------------------------------------------------------------------------------------------------------------------------

Earnings before income tax expense and
  extraordinary item                                                                 87,694             165,997             176,764

Income tax expense (Note 9)                                                          29,664              57,574              64,854
-----------------------------------------------------------------------------------------------------------------------------------

Earnings before extraordinary item                                                   58,030             108,423             111,910
Extraordinary item - early extinguishment
  of debt, net of income tax benefit (Note 11)                                          -                (2,522)                -
-----------------------------------------------------------------------------------------------------------------------------------
Net earnings                                                                     $   58,030          $  105,901          $  111,910
===================================================================================================================================
Net earnings per common share - basic (Note 8):
   Earnings before extraordinary item                                            $     1.15          $     2.19          $     2.20
  Extraordinary item - early extinguishment of debt                                      -                (0.05)                 -
-----------------------------------------------------------------------------------------------------------------------------------
Net earnings per common share - basic                                            $     1.15          $     2.14          $     2.20
===================================================================================================================================
Net earnings per common share - diluted (Note 8):
  Earnings before extraordinary item                                             $     1.13          $     2.15          $     2.14
  Extraordinary item - early extinguishment of  debt                                     -                (0.05)                 -
-----------------------------------------------------------------------------------------------------------------------------------
Net earnings per common share - diluted                                          $     1.13          $     2.10          $     2.14
===================================================================================================================================
          See accompanying notes to consolidated financial statements.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                      CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
                                                                                             Year Ended December 31,
                                                                                ---------------------------------------------------
                                                                                          2001              2000             1999
-----------------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
<S>                                                                                    <C>               <C>              <C>
  Net earnings                                                                         $  58,030         $ 105,901        $ 111,910
  Adjustments to reconcile net earnings
    to net cash provided by operating activities:
    Net loss on early extinguishment of debt                                                 -               2,522              -
    Depreciation of property, plant and equipment                                         43,707            46,095           44,468
    Amortization of intangible and other assets                                           12,060            12,060           12,060
    Asset impairment charges                                                              18,000               -                -
    Other, net (includes gains on sale of  investments)                                  (11,586)            1,602            2,172
    (Increase) decrease in receivables                                                    41,502            (6,419)         (21,221)
    (Increase) decrease in inventories                                                    33,070            (9,059)          21,987
    Increase in prepaid expenses and
      intangible and other assets                                                         (6,789)           (7,737)          (2,872)
    Increase (decrease) in accounts payable,  accrued interest expense
       and other accrued  expenses                                                         7,224            (9,226)         (12,861)
   Decrease in net deferred tax liabilities                                               (8,356)           (2,788)          (5,390)
    Decrease in other long-term liabilities                                               (2,156)             (807)          (1,687)
-----------------------------------------------------------------------------------------------------------------------------------
  Net cash provided by operating activities                                              184,706           132,144          148,566
-----------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
  Acquisition of business, net of cash acquired                                         (176,235)              -                -
  Proceeds from the disposal of assets                                                    18,197               316              451
  Additions to property, plant and equipment                                             (22,991)          (53,310)         (48,951)
-----------------------------------------------------------------------------------------------------------------------------------
  Net cash used by investing activities                                                 (181,029)          (52,994)         (48,500)
-----------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
  Payments for debt issuance costs                                                           -              (2,090)             -
  Additions to long-term debt                                                            140,000           486,500              -
  Payments of long-term debt                                                            (147,600)         (559,600)         (54,100)
  Proceeds from the issuance of treasury stock                                             5,024             3,237            7,943
  Purchase of treasury stock                                                                 -                 -            (59,720)
-----------------------------------------------------------------------------------------------------------------------------------
  Net cash used by financing activities                                                   (2,576)          (71,953)        (105,877)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase(decrease) in cash and cash equivalents                                        1,101             7,197           (5,811)
Cash and cash equivalents at beginning of period                                          14,606             7,409           13,220
-----------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                             $  15,707         $  14,606         $  7,409
===================================================================================================================================
Supplemental Disclosure:
  Cash payments for income taxes, net                                                  $  26,083         $  63,120         $ 68,100
===================================================================================================================================
  Cash payments for interest                                                           $  28,940         $  30,873         $ 40,070
===================================================================================================================================
  Issuance of common stock for acquisition                                             $ 110,640         $     -           $    -
===================================================================================================================================


See accompanying notes to consolidated financial statements.


</TABLE>


<PAGE>


<TABLE>
<CAPTION>


                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
------------------------------------------------------------------------ -------------------------------------------------------
(Dollars in thousands)                                                                      Year Ended December 31,
                                                                         -------------------------------------------------------
                                                                                      2001             2000               1999
------------------------------------------------------------------------ ------------------- ---------------- ------------------
Common Stock:
<S>                                                                               <C>              <C>                <C>
  Beginning balance                                                               $ 52,277         $ 52,277           $ 52,277
  Stock issued for acquisition of business                                           4,000              -                  -
------------------------------------------------------------------------ ------------------- ---------------- ------------------
  Ending balance                                                                  $ 56,277         $ 52,277           $ 52,277
------------------------------------------------------------------------ ------------------- ---------------- ------------------

Paid-In Capital:
  Beginning balance                                                               $118,360         $120,326           $127,513
  Stock plans activity (Note 8)                                                     (5,531)          (1,966)            (7,187)
  Stock issued for acquisition of business                                         106,640              -                  -
------------------------------------------------------------------------ ------------------- ---------------- ------------------
  Ending balance                                                                  $219,469         $118,360           $120,326
------------------------------------------------------------------------ ------------------- ---------------- ------------------

Retained Earnings:
  Beginning balance                                                               $462,473         $356,572           $244,662
  Net earnings                                                                      58,030          105,901            111,910
------------------------------------------------------------------------ ------------------- ---------------- ------------------
  Ending balance                                                                  $520,503         $462,473           $356,572
------------------------------------------------------------------------ ------------------- ---------------- ------------------

Accumulated Other Comprehensive Income:
  Beginning balance                                                          $         -      $         -         $        -
  Cumulative effect of adopting SFAS No. 133                                         2,960              -                  -
  Effect of financial instruments accounted for as hedges                           (8,068)             -                  -
------------------------------------------------------------------------ ------------------- ---------------- ------------------
  Ending balance                                                                  $ (5,108)   $         -        $         -
------------------------------------------------------------------------ ------------------- ---------------- ------------------

Treasury Stock:
  Beginning balance                                                               $(49,205)        $(54,978)          $(10,943)
  Stock plans activity (Note 8)                                                     17,723            5,773             15,685
  Purchase of treasury shares
    (3,123,200 shares)                                                                 -                -              (59,720)
------------------------------------------------------------------------ ------------------- ---------------- ------------------
  Ending balance                                                                  $(31,482)        $(49,205)          $(54,978)
------------------------------------------------------------------------ ------------------- ---------------- ------------------

Total Shareholders' Equity                                                        $759,659         $583,905           $474,197
======================================================================== =================== ================ ==================
Comprehensive Income:
  Net earnings                                                                    $ 58,030         $105,901           $111,910
  Cumulative effect of adopting SFAS No. 133                                         2,960              -                  -
  Effect of financial instruments accounted for as hedges                           (8,068)             -                  -
------------------------------------------------------------------------ ------------------- ---------------- ------------------
                                                                                  $ 52,922         $105,901           $111,910
======================================================================== =================== ================ ==================



See accompanying notes to consolidated financial statements.

</TABLE>


<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                  (Dollars in thousands except per share data)

1.   The Company

     Furniture Brands International,  Inc. (referred to herein as the "Company")
is one of the largest home furniture  manufacturers in the United States. During
the year ended  December  31,  2001,  the  Company had three  primary  operating
subsidiaries:  Broyhill Furniture  Industries,  Inc.; Lane Furniture Industries,
Inc.;  and  Thomasville  Furniture  Industries,  Inc. On December 28, 2001,  the
Company  acquired  substantially  all of the assets and  liabilities of Henredon
Furniture Industries, Drexel Heritage Furnishings and Maitland-Smith.

     Substantially all of the Company's sales are made to unaffiliated furniture
retailers.  The Company has a  diversified  customer  base with no one  customer
accounting  for  10% or  more  of  consolidated  net  sales  and  no  particular
concentration of credit risk in one economic sector.  Foreign operations and net
sales are not material.

2.   Significant Accounting Policies

     The significant accounting policies of the Company are set forth below.

Use of Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the reported  period.  Actual results are likely to differ from
those estimates but management believes such differences are not significant.

Principles of Consolidation

     The consolidated  financial  statements include the accounts of the Company
and  all  of  its  subsidiaries.  All  material  intercompany  transactions  are
eliminated in consolidation.  The Company's fiscal year ends on December 31. The
operating  companies  included in the consolidated  financial  statements report
their  results  of  operations  as of  the  Saturday  closest  to  December  31.
Accordingly,  the  results of  operations  will  periodically  include a 53-week
fiscal year. Fiscal years 2001, 2000, and 1999 were 52-week years.

Cash and Cash Equivalents

     The Company considers all short-term  investments with an original maturity
of three  months  or less to be cash  equivalents.  Short-term  investments  are
recorded at amortized cost, which approximates market.

Inventories

     Inventories  are  stated  at the  lower of cost  (first-in,  first-out)  or
market.

Property, Plant and Equipment

     Property,   plant  and  equipment  are  recorded  at  cost  when  acquired.
Depreciation  is calculated  using both  accelerated and  straight-line  methods
based on the estimated  useful lives of the respective  assets,  which generally
range from 3 to 45 years for buildings and  improvements  and from 3 to 12 years
for machinery and equipment.

Intangible Assets

     Intangible  assets  consist  of  goodwill  and  trademarks  and  have  been
amortized on a straight-line basis over 20 to 40 - year periods.  Effective with
the  Company's  adoption  of SFAS No.  142 on  January  1,  2002,  goodwill  and
intangible assets with indefinite lives will no longer be amortized, but instead
tested  for  impairment.  Intangible  assets  will be  reviewed  for  impairment
annually or whenever  events or changes in business  circumstances  indicate the
carrying  value of the  assets  may not be  recoverable.  Impairment  losses are
recognized  if expected  future  cash flows of the related  assets are less than
their carrying values.

Fair Value of Financial Instruments

     The Company  considers the carrying  amounts of cash and cash  equivalents,
receivables, and accounts payable to approximate fair value because of the short
maturity of these financial instruments.

     Amounts  outstanding  under  long-term debt agreements are considered to be
carried on the financial  statements at their estimated fair values because they
were entered  into  recently  and/or  accrue  interest at rates which  generally
fluctuate with interest rate trends.

     The Company  periodically  uses interest rate swap  agreements  (derivative
financial instruments) to hedge risk associated with its floating rate long-term
debt.  Effective  January 1, 2001 the Company  adopted  Statement  of  Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities",  which requires that all derivative  instruments be recorded on the
balance  sheet as an  asset or  liability  with any gain or loss  recorded  as a
component  of  accumulated  other  comprehensive   income  until  recognized  in
earnings.  The fair value of the swap  agreements  is based upon  quoted  market
prices.  The net  amount to be paid or  received  under the  interest  rate swap
agreements is recorded as a component of interest expense.

Revenue Recognition

     The Company  recognizes  revenue  when  finished  goods are  shipped,  with
appropriate provisions for returns and uncollectible accounts.

Advertising Costs

     Advertising costs are expensed when first aired or distributed. Advertising
costs for 2001, 2000 and 1999 were $57,453, $57,111 and $58,039 respectively.

Income Taxes

     Deferred tax assets and liabilities are recognized for the estimated future
tax  consequences  attributable to differences  between the financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
basis.  Deferred tax assets and liabilities are measured using enacted tax rates
in effect for the year in which those  temporary  differences are expected to be
recovered or settled. The effect of a change in tax rates on deferred tax assets
and  liabilities  is  recognized  in  income in the  period  that  includes  the
enactment date.

Stock-Based Compensation

     The Company accounts for stock-based compensation using the intrinsic value
method.

3.   Restructuring and Asset Impairment Charges

     During 2001,  the Company  implemented  a plan to reduce its domestic  case
goods manufacturing capacity. This plan included the closing of 12 manufacturing
facilities and a permanent reduction of approximately 20% of the company's total
employment.  Pretax  restructuring  and impairment  charges of $26,352 have been
recorded during 2001 of which $18,000 relates to a fixed asset impairment charge
for properties and machinery and equipment of the closed facilities. The balance
consisting  of $5,913  charged  to cost of  operations  and  $2,439  charged  to
selling,  general and administrative  expenses relates to employee severance and
benefits costs and plant shutdown costs.

     As of December 31, 2001, $1,000 of the restructuring  charges were included
as an accrued expense in current liabilities.

4.   Acquisition of Business

     On December 28, 2001, the Company acquired  substantially all of the assets
and liabilities of Henredon Furniture  Industries,  Drexel Heritage  Furnishings
and Maitland-Smith for $287,140. The acquisition  establishes the Company as the
furniture  industry's  only  full-line  resource  in all middle and upper  price
categories.  The purchase price, including capitalized expenses of approximately
$1,500,  consisted  of  $176,500  paid in cash and four  million  shares  of the
Company's common stock valued at $110,640.  The value of the common stock issued
was determined  based on the average market price over the two-day period before
and after the terms of the acquisition  were agreed to and announced.  Since the
acquisition  occurred near the last business day of 2001, it is reflected in the
Company's  consolidated  balance  sheet as of December  31, 2001;  however,  the
Company's  consolidated results of operations for 2001 do not include any of the
operations of the acquired companies.


     The estimated fair value of the assets acquired and liabilities  assumed at
the date of the acquisition are as follows:


    Accounts receivable                                              $ 49,191
    Inventories                                                       108,389
    Other current assets                                                6,262
    Property plant and equipment                                       68,095
    Intangible assets                                                  90,962
    Other long-term assets                                              1,289
 -------------------------------------------------------------------------------
      Total assets acquired                                          $324,188
 -------------------------------------------------------------------------------

    Current liabilities                                              $ 30,481
    Other long-term liabilities                                         6,567
 -------------------------------------------------------------------------------
     Total liabilities assumed                                         37,048
 -------------------------------------------------------------------------------

     Net assets acquired                                             $287,140
  ==============================================================================

     The Company is in the process of obtaining  third-party  valuations  of the
assets; thus, the allocation of the purchase price is subject to change.

     The following  unaudited summary,  prepared on a pro forma basis,  combines
the  consolidated  results of  operations  of the Company for 2001 and 2000 with
those of the  acquired  companies  as if the  transaction  had  occurred  at the
beginning of each year presented.
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------------------
                                                                                          Year Ended December 31,
                                                                                  2001                              2000
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                               <C>
Net sales                                                                   $2,311,647                        $2,620,151
Earnings before extraordinary item                                              68,260                           127,507
Net earnings                                                                $   68,260                        $  127,507

Net earnings per common share - diluted:
  Earnings before extraordinary item                                        $     1.23                        $     2.34
  Net earnings                                                              $     1.23                        $     2.34
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

     Such pro  forma  amounts  are not  necessarily  indicative  of what  actual
consolidated  results of operations  might have been if the acquisition had been
effective at the beginning of each year presented.



<TABLE>
<CAPTION>

5.       Inventories

         Inventories are summarized as follows:
--------------------------------------------------------------------------------------------------------------------------
                                                                                December 31,                 December 31,
                                                                                       2001                         2000
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>                          <C>
Finished products                                                                  $187,523                     $125,491
Work-in-process                                                                      69,507                       61,932
Raw materials                                                                       112,743                      107,031
--------------------------------------------------------------------------------------------------------------------------
                                                                                   $369,773                     $294,454
==========================================================================================================================

6.       Intangible Assets

         Intangible assets include the following:

--------------------------------------------------------------------------------------------------------------------------
                                                                                December 31,                 December 31,
                                                                                       2001                         2000
--------------------------------------------------------------------------------------------------------------------------
Goodwill                                                                           $239,173                     $239,173
Less accumulated amortization                                                        82,738                       73,107
--------------------------------------------------------------------------------------------------------------------------
      Goodwill                                                                     $156,435                     $166,066
==========================================================================================================================

Trademarks and trade names                                                         $156,828                     $156,828
Intangible assets from acquisition                                                   90,962                         -
--------------------------------------------------------------------------------------------------------------------------
                                                                                    247,790                      156,828
Less accumulated amortization                                                        36,920                       32,999
--------------------------------------------------------------------------------------------------------------------------
      Other intangible assets                                                      $210,870                     $123,829
==========================================================================================================================
</TABLE>


     The Company is in the process of  obtaining  third-party  valuation  of the
acquired assets, including the intangible assets. The allocation of the purchase
price is subject to change.

     On January 1, 2002 the Company  adopted  Statement of Financial  Accounting
Standards No. 142 (FAS #142),  "Goodwill and Other Intangible Assets".  FAS #142
required  that goodwill and other  intangible  assets with  indefinite  lives no
longer  be  amortized,  but  instead  be tested  annually  for  impairment.  The
Company's intangible assets, consisting of trademarks,  trade names and goodwill
all have  indefinite  lives.  The  following  table  presents  net income  after
adjusting to exclude the amortization of goodwill and other intangible assets:

<TABLE>
<CAPTION>



-----------------------------------------------------------------------------------------------------------------------------
                                                                                       Year Ended December 31,
                                                                      2001                    2000                      1999
-----------------------------------------------------------------------------------------------------------------------------
Earnings before extraordinary item -
<S>                                                                <C>                    <C>                       <C>
  as reported                                                      $58,030                $108,423                  $111,910
Exclude amortization of goodwill and
  other intangible assets, net of income
  tax benefits                                                      11,162                  11,162                    11,162
-----------------------------------------------------------------------------------------------------------------------------
Earnings before extraordinary item -
  as adjusted                                                       69,192                  119,585                  123,072
Extraordinary item - early
  extinguishment of debt, net of income
  tax benefit                                                         -                     (2,522)                     -
-----------------------------------------------------------------------------------------------------------------------------
Net earnings - as adjusted                                         $69,192                $117,063                  $123,072
=============================================================================================================================
Net earnings per common share - basic:
  Earnings before extraordinary item -
    as reported                                                      $1.15                   $2.19                     $2.20
  Exclude amortization of goodwill and
     other intangible assets                                          0.22                    0.22                      0.21
  Extraordinary item                                                   -                     (0.05)                      -
-----------------------------------------------------------------------------------------------------------------------------
  Net earnings - as adjusted                                         $1.37                   $2.36                     $2.41
=============================================================================================================================

Net earnings per common share  - diluted:
  Earnings before extraordinary item -
    as reported                                                       1.13                    2.15                      2.14
  Exclude amortization of goodwill and
    Other intangible assets                                           0.22                    0.22                      0.21
  Extraordinary item                                                   -                     (0.05)                      -
-----------------------------------------------------------------------------------------------------------------------------
  Net earnings - as adjusted                                         $1.35                   $2.32                     $2.35
=============================================================================================================================


</TABLE>

<PAGE>


<TABLE>
<CAPTION>

7. Long-Term Debt

         Long-term debt consists of the following:

--------------------------------------------------------------------------------------------------------------------------
                                                                                December 31,                 December 31,
                                                                                       2001                         2000
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>                          <C>
Revolving credit facility (unsecured)                                             $ 440,000                    $ 446,000
Other                                                                                14,400                       16,000
--------------------------------------------------------------------------------------------------------------------------
                                                                                  $ 454,400                    $ 462,000
==========================================================================================================================
</TABLE>

     The following  discussion  summarizes  certain  provisions of the long-term
debt.

Revolving Credit Facility

     The revolving  credit facility is an unsecured,  five-year  facility with a
commitment  of $630,000.  The facility  allows for issuance of letters of credit
and cash borrowings.  Letter of credit  outstandings are limited to no more than
$150,000,   with  cash  borrowings   limited  only  by  the  facility's  maximum
availability less letters of credit outstanding.

     Currently,  for  letter  of  credit  issuances,  a fee of 0.75%  per  annum
(subject to  increase/decrease  based upon the Company  achieving certain credit
ratings  from  Standard & Poor's and Moody's) is assessed for the account of the
lenders  ratably.  A further  fee of 0.125% is  assessed  on standby  letters of
credit  representing  a  facing  fee.  A  customary  administrative  charge  for
processing  letters of credit is also  payable  to the  relevant  issuing  bank.
Letter of credit fees are payable quarterly in arrears.

     Cash borrowings under the revolving credit facility bear interest at a base
rate or at an adjusted  Eurodollar rate plus an applicable  margin which varies,
depending upon the type of loan the Company executes. The applicable margin over
the base rate and adjusted  Eurodollar rate is subject to adjustment  based upon
achieving certain credit ratings.  At December 31, 2001, loans outstanding under
the  revolving  credit  facility  consisted  of $300,000  based on the  adjusted
Eurodollar rate and $140,000 based on the base rate,  which in conjunction  with
the interest rate swaps have a weighted average interest rate of 4.87%.

     At December 31, 2001, there were $440,000 of cash borrowings and $32,464 in
letters of credit  outstanding  under the revolving credit facility,  leaving an
excess of $157,536 available under the facility.

     The revolving credit facility has no mandatory principal payments; however,
the  commitment  matures on June 7, 2005.  The facility  requires the Company to
meet certain financial covenants including a minimum  consolidated net worth and
maximum leverage ratio. In addition,  the facility  requires  repayment upon the
occurrence of a change of control of the Company.




Other

     Other  long-term  debt  consists of various  industrial  revenue bonds with
interest rates ranging from approximately 4.0% to 9.0%.

Interest Rate Swap Agreements

     In May 2001, in order to reduce the impact of changes in interest  rates on
its floating rate long-term  debt, the Company  entered into three interest rate
swap  agreements  each  having  a  notional  amount  of  $100.0  million  and  a
termination  date in May 2004.  The Company  pays the  counterparties  a blended
fixed  rate of 4.93% per annum and  receives  payment  based  upon the  floating
three-month LIBOR rate.

Other Information

     The Company has no mandatory  long-term  debt payments until 2005, at which
time $448,000 matures.

8.   Common Stock

     The Company's restated certificate of incorporation  includes authorization
to issue up to 100 million  shares of common stock with a $1.00 per share stated
value. As of December 31, 2001,  56,277,066  shares of common stock were issued.
It is not presently  anticipated  that dividends will be paid on common stock in
the foreseeable future.

     The Company has been authorized by its Board of Directors to repurchase its
common  stock  from  time  to  time  in  open  market  or  privately  negotiated
transactions. Common stock repurchases are recorded as treasury stock and may be
used for general corporate purposes.  In 1999, the Company repurchased 3,123,200
shares for $59,720. As of December 31, 2001, the Company has Board of Directors'
authorization for the repurchase of an additional $100,000 of its common stock.

     Shares of common stock were reserved for the following purposes at December
31, 2001:

                                                             Number of Shares
------------------------------------------------------------------------------
Common stock options:
  Granted                                                           4,298,916
  Available for grant                                                 816,740
------------------------------------------------------------------------------
                                                                    5,115,656
==============================================================================




     On April 29, 1999, stockholders approved the 1999 Long-Term Incentive Plan.
The plan  provided for a total of  2,250,000  shares plus all  remaining  shares
available  for grant or which  become  available  for grant due to  cancellation
under the 1992 Stock  Option Plan.  The plan is  administered  by the  Executive
Compensation  and Stock Option  Committee of the Board of Directors  and permits
certain key  employees  to be granted  nonqualified  options,  performance-based
options,  restricted stock, or combinations  thereof.  Options must be issued at
market value on the date of grant and expire in a maximum of ten years.

     In 1999,  the  Company  issued  79,000  shares  of  restricted  stock.  The
restricted  shares vest over  various  periods  from 2 to 5 years.  The deferred
compensation  expense  is  amortized  to  expense  over the  period  of time the
restrictions  are in  place  and the  unamortized  portion  is  classified  as a
reduction of paid-in-capital in the Company's consolidated balance sheets.

<TABLE>
<CAPTION>

     Changes in options granted and outstanding are summarized as follows:

-------------------------------------------------------------------------------------------------------------------------
                                                                   Year Ended December 31,
                                     ------------------------------------------------------------------------------------
                                                 2001                          2000                      1999
                                     ---------------------------- --------------------------- ---------------------------
                                                         Average                     Average                     Average
                                            Shares         Price         Shares        Price       Shares          Price
                                     --------------- ------------ --------------- ----------- ------------- -------------
<S>                                      <C>              <C>         <C>             <C>       <C>               <C>
Beginning of period                      4,345,634        $13.61      4,027,063       $12.67    4,018,581         $ 9.37
Granted                                    954,900         24.00        734,600        16.70      772,600          23.49
Exercised                                 (937,093)         5.36       (305,300)        6.83     (662,141)          6.02
Cancelled                                  (64,525)        24.48       (110,729)       18.60     (101,977)          7.91
------------------------------------ --------------- ------------ --------------- ----------- ------------- -------------
End of period                            4,298,916        $17.55      4,345,634       $13.61    4,027,063         $12.67
==================================== =============== ============ =============== =========== ============= =============
Exercisable at
   end of period                         2,324,391                    2,591,726                 2,342,822
==================================== =============== ============ =============== =========== ============= =============
Weighted average fair
   value of options granted                               $12.40                      $ 9.52                      $13.03
==================================== =============== ============ =============== =========== ============= =============
</TABLE>



<PAGE>
<TABLE>
<CAPTION>


     Had compensation cost for the Company's stock-based  compensation plan been
determined  consistent  with SFAS No. 123,  the  Company's  net earnings and net
earnings per share would have been as follows:

--------------------------------------------------------------------------------------------------------------------------
                                                                           Year Ended December 31,
                                                     ---------------------------------------------------------------------
                                                                       2001                   2000                   1999
---------------------------------------------------- ----------------------- ---------------------- ----------------------
Net earnings
<S>                                                                 <C>                   <C>                    <C>
 As reported                                                        $58,030               $105,901               $111,910
 Pro forma                                                           52,648                101,819                108,600

Net earnings per share - basic
 As reported                                                        $  1.15               $   2.14               $   2.20
 Pro forma                                                             1.05                   2.06                   2.13

Net earnings per share - diluted
 As reported                                                        $  1.13               $   2.10               $   2.14
 Pro forma                                                             1.04                   2.05                   2.10
==================================================== ======================= ====================== ======================
</TABLE>

     The weighted  average fair value of options  granted is estimated as of the
date of grant using the  Black-Scholes  option  pricing model with the following
weighted average assumptions: risk free interest rate of 4.9%, 5.7%, and 5.0% in
2001, 2000, and 1999, respectively; expected dividend yield of 0% for all years;
expected life of 7 years for all years and expected  volatility of 47%, 47%, and
46% for 2001, 2000, and 1999, respectively.
<TABLE>
<CAPTION>

     Summarized  information regarding stock options outstanding and exercisable
at December 31, 2001 follows:

-------------------------------------------------------------------------------------------------------------------------
                                                 Outstanding                                       Exercisable
                        ---------------------------------------------------------        --------------------------------
Range of                                                Average
Exercise                                            Contractual          Average                                 Average
Prices                                Shares               Life            Price                  Shares           Price
-------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                    <C>           <C>                    <C>              <C>
Up to $10                            796,441                2.1           $ 6.97                 796,441          $ 6.97
$10 - $20                          1,512,075                5.5            14.64                 972,050           13.64
Over $20                           1,990,400                6.9            24.00                 555,900           24.04
-------------------------------------------------------------------------------------------------------------------------
                                   4,298,916                5.5           $17.55               2,324,391          $13.84
=========================================================================================================================
</TABLE>

     Weighted  average  shares used in the  computation of basic and diluted net
earnings per common share for 2001, 2000, and 1999 are as follows:
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------------
                                                                                 Year Ended December 31,
                                                                ----------------------------------------------------------
                                                                              2001                2000               1999
                                                                ----------------------------------------------------------
Weighted average shares used for
<S>                                                                     <C>                 <C>                <C>
 basic net earnings per common share                                    50,356,763          49,531,931         50,967,973
Effect of dilutive securities:
 Stock options                                                             968,227             910,805          1,366,611
--------------------------------------------------------------------------------------------------------------------------
Weighted average shares used for
 diluted net earnings per common share                                  51,324,990          50,442,736         52,334,584
==========================================================================================================================

</TABLE>


     Excluded from the computation of diluted net earnings per common share were
options to purchase  79,000 and 1,163,700  shares at an average price of $30.84,
and $23.81 per share during 2001 and 2000, respectively. These options have been
excluded from the diluted earnings per share  calculation  since their impact is
anti-dilutive.

9. Income Taxes
<TABLE>
<CAPTION>

         Income tax expense was comprised of the following:

-------------------------------------------------------------------------------------------------------------------------
                                                                  Year Ended December 31,
                                   --------------------------------------------------------------------------------------
                                                         2001                         2000                         1999
-------------------------------------------------------------------------------------------------------------------------
Current:
<S>                                                   <C>                          <C>                          <C>
 Federal                                              $34,672                      $55,191                      $62,108
 State and local                                          562                        5,171                        8,136
-------------------------------------------------------------------------------------------------------------------------
                                                       35,234                       60,362                       70,244
Deferred                                               (5,570)                      (2,788)                      (5,390)
-------------------------------------------------------------------------------------------------------------------------
                                                      $29,664                      $57,574                      $64,854
=========================================================================================================================
</TABLE>

     The  following  table  reconciles  the  differences   between  the  federal
corporate statutory rate and the Company's effective income tax rate:
<TABLE>
<CAPTION>

==========================================================================================================================
                                                                                   Year Ended December 31,
                                                                     -----------------------------------------------------
                                                                               2001               2000              1999
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>                <C>               <C>
Federal corporate statutory rate                                               35.0%              35.0%             35.0%
State and local income taxes, net of
  federal tax benefit                                                           0.4                1.7               2.5
Nondeductible amortization of intangible assets                                 2.9                1.5               1.5
Dividend exclusion                                                               -                (1.1)               -
Adjustments to income tax reserves                                             (4.3)                -                0.3
Other                                                                          (0.2)              (2.4)             (2.6)
--------------------------------------------------------------------------------------------------------------------------
Effective income tax rate                                                      33.8%              34.7%             36.7%
==========================================================================================================================
</TABLE>



<PAGE>



<TABLE>
<CAPTION>
     The sources of the tax effects for temporary  differences that give rise to
the deferred tax assets and liabilities were as follows:

------------------------------------------------------------------------ ------------------------ -----------------------
                                                                                    December 31,            December 31,
                                                                                           2001                    2000
------------------------------------------------------------------------ ------------------------ -----------------------
Deferred tax assets attributable to:
<S>                                                                                    <C>                     <C>
 Expense accruals                                                                      $ 16,579                $ 15,293
 Valuation reserves                                                                      16,858                  11,811
 Asset impairment charges                                                                 6,193                     -
 Employee pension and other benefit plans                                                 1,375                   3,605
 Fair market value adjustments -
  account receivable                                                                      1,453                     -
 Inventory costs capitalized                                                                201                   1,560
 Other                                                                                    2,366                   2,805
------------------------------------------------------------------------ ------------------------ -----------------------
  Total deferred tax assets                                                              45,025                  35,074
------------------------------------------------------------------------ ------------------------ -----------------------
Deferred tax liabilities attributable to:
 Fair value adjustments                                                                 (73,109)                (68,744)
 Depreciation                                                                            (7,828)                 (8,099)
 Fair market value adjustments -
  accounts receivable                                                                       -                    (2,530)
 Other                                                                                   (6,960)                 (9,679)
------------------------------------------------------------------------ ------------------------ -----------------------
  Total deferred tax liabilities                                                        (87,897)                (89,052)
------------------------------------------------------------------------ ------------------------ -----------------------
  Net deferred tax liabilities                                                         $(42,872)               $(53,978)
======================================================================== ======================== =======================
</TABLE>

10.Employee Benefits

     The  Company   sponsors  or  contributes   to  retirement   plans  covering
substantially  all  employees.  The total cost of all plans for 2001,  2000, and
1999 was $1,425, $2,090, and $5,649, respectively.

Company-Sponsored Defined Benefit Plans

     Annual cost for defined  benefit  plans is  determined  using the projected
unit credit actuarial method. Prior service cost is amortized on a straight-line
basis over the average remaining service period of employees expected to receive
benefits.

     It is the Company's  practice to fund pension costs to the extent that such
costs are tax deductible and in accordance with ERISA. The assets of the various
plans  include  corporate  equities,   government  securities,   corporate  debt
securities and insurance contracts. The table below summarizes the funded status
of the Company-sponsored defined benefit plans.






<TABLE>
<CAPTION>

--------------------------------------------------------------------------------- --------------------- ----------------------
                                                                                          December 31,           December 31,
                                                                                                 2001                   2000
--------------------------------------------------------------------------------- --------------------- ----------------------

Change in projected benefit obligation:
<S>                                                                                          <C>                    <C>
 Projected benefit obligation - beginning of year                                            $323,511               $313,756
 Service cost                                                                                   9,372                  8,665
 Interest cost                                                                                 23,315                 22,522
 Actuarial gain                                                                                (4,759)                (3,298)
 Benefits paid                                                                                (19,258)               (18,134)
--------------------------------------------------------------------------------- --------------------- ----------------------
   Projected benefit obligation - end of year                                                $332,181               $323,511
--------------------------------------------------------------------------------- --------------------- ----------------------

Change in plan assets:
 Fair value of plan assets - beginning of year                                               $354,356               $361,890
 Actual return on plan assets                                                                 (16,284)                 9,402
 Employer contributions                                                                         1,319                  1,198
 Benefits paid                                                                                (19,258)               (18,134)
--------------------------------------------------------------------------------- --------------------- ----------------------
   Fair value of plan assets - end of year                                                   $320,133               $354,356
--------------------------------------------------------------------------------- --------------------- ----------------------

 Funded status                                                                               $(12,048)              $ 30,845
 Unrecognized net (gain) loss                                                                  20,177                (26,807)
 Unrecognized prior service cost                                                                  824                  1,336
--------------------------------------------------------------------------------- --------------------- ----------------------
   Prepaid pension cost                                                                      $  8,953               $  5,374
================================================================================= ===================== ======================
</TABLE>
<TABLE>
<CAPTION>

     Net periodic  pension cost for 2001,  2000, and 1999 included the following
components:

----------------------------------------------------------------------------------------------------------------------------
                                                                                              Year Ended December 31,
                                                                            ------------------------------------------------
                                                                                      2001            2000            1999
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>             <C>              <C>
Service cost-benefits earned during the period                                    $  9,372        $  8,665         $ 8,379
Interest cost on the projected benefit obligation                                   23,315          22,522          21,905
Expected return on plan assets                                                     (32,655)        (31,840)        (29,193)
Net amortization and deferral                                                       (2,291)         (2,914)         (1,230)
----------------------------------------------------------------------------------------------------------------------------
Net periodic pension (income) expense                                             $ (2,259)       $ (3,567)        $  (139)
============================================================================================================================
</TABLE>

     Employees are covered primarily by noncontributory plans, funded by Company
contributions to trust funds,  which are held for the sole benefit of employees.
Monthly  retirement  benefits  are based  upon  service  and pay with  employees
becoming vested upon completion of five years of service.

     The expected  long-term rate of return on plan assets was 9.0% in all years
presented.  Measurement  of the projected  benefit  obligation  was based upon a
weighted  average  discount rate of 7.25% and a long-term  rate of  compensation
increase of 4.5% for all years presented.

Other Retirement Plans and Benefits

     In addition to defined benefit plans,  the Company makes  contributions  to
defined  contribution  plans and sponsors  employee  savings plans.  The cost of
these plans is included in the total cost for all plans reflected above.

11.Extraordinary Item - Early Extinguishment of Debt

     In conjunction  with the June 7, 2000,  refinancing of an existing  secured
credit agreement,  the Company charged to results of operations  $2,522,  net of
income tax  benefit of $1,520,  representing  the  deferred  financing  fees and
expenses  pertaining to the refinanced  facility.  The charge was recorded as an
extraordinary item.

12.Commitments and Contingent Liabilities

     Certain of the Company's  real  properties and equipment are operated under
lease  agreements.  Rental  expense  under  operating  leases  totaled  $18,900,
$18,514,  and $17,417 for 2001,  2000,  and 1999,  respectively.  Annual minimum
payments under operating  leases  (including the companies  acquired on December
28, 2001) are $19,538,  $16,525,  $13,609,  $8,848,  and $6,487 for 2002 through
2006,  respectively.  Future  minimum lease  payments  under  operating  leases,
reduced by minimum  rentals  from  subleases  of $1,250 at  December  31,  2001,
aggregate $94,220.

     The Company has  provided  guarantees  related to store  leases for certain
independent  dealers opening  Thomasville  Home  Furnishings  Stores.  The total
future lease payments guaranteed at December 31, 2001 were $54,329.  The Company
believes the risk of significant loss from these lease guarantees is remote.

     The  Company  is or may  become a  defendant  in a  number  of  pending  or
threatened legal proceedings in the ordinary course of business.  In the opinion
of  management,  the  ultimate  liability,  if any, of the Company from all such
proceedings  will not  have a  material  adverse  effect  upon the  consolidated
financial position or results of operations of the Company and its subsidiaries.

13.Other Income, Net

     Other income, net for 2001 totaled $10,599 compared to $9,772 for 2000. For
2001,  other income  consisted of interest on  short-term  investments  of $844,
other  miscellaneous  income and expense items totaling $1,755 and non-operating
income  of  $8,000.  The  non-operating  income  results  from  the  sale of the
Company's investment in a company which leases exhibition space to furniture and
accessory  manufacturers,  partially  offset by additions to reserves related to
certain discontinued operations.

     For 2000, other income  consisted of interest on short-term  investments of
$538, a cash dividend  (nonrecurring) of $7,642 received by the Company relating
to its  minority  investment  in a  company  which  leases  exhibition  space to
furniture  and  accessory  manufacturers,  and other  miscellaneous  income  and
expense items totaling $1,592.

     Other income for 1999  consisted of interest on short-term  investments  of
$388 and other miscellaneous income and expense items totaling $2,196.



<TABLE>
<CAPTION>


14.Quarterly Financial Information (Unaudited)

     Following is a summary of unaudited quarterly information:

--------------------------------------------------------------------------------------------------------------------------
                                                                Fourth           Third           Second             First
                                                               Quarter         Quarter          Quarter           Quarter
==========================================================================================================================
Year ended December 31, 2001:
<S>                                                           <C>             <C>              <C>               <C>
  Net sales                                                   $476,801        $448,682         $459,648          $506,182
  Gross profit                                                 114,417         112,321          114,725           125,331
  Net earnings                                                $ 22,831        $ 13,871         $  1,647          $ 19,681

  Net earnings per common share:
    Basic                                                     $   0.45        $   0.27         $   0.03          $   0.39
    Diluted                                                   $   0.44        $   0.27         $   0.03          $   0.39

  Common stock price range:
    High                                                      $  32.41          $29.17           $28.00          $  26.76
    Low                                                       $  18.91          $18.25         $  22.55          $  20.44
==========================================================================================================================
Year ended December 31, 2000:
  Net sales                                                  $519,467         $499,746         $533,079          $563,947
  Gross profit                                                130,066          126,812          141,547           148,434
  Net earnings:
    Earnings before extraordinary item                         24,307           23,373           30,143            30,600
    Extraordinary item                                            -                -             (2,522)              -
    Total                                                    $ 24,307         $ 23,373         $ 27,621          $ 30,600

  Net earnings per common share -    basic:
    Earnings before extraordinary item                       $   0.49         $   0.47            $0.61          $   0.62
    Extraordinary item                                            -                -              (0.05)              -
    Total                                                    $   0.49         $   0.47         $   0.56          $   0.62

  Net earnings per common share-     diluted:
    Earnings before extraordinary item                       $   0.48         $   0.46         $   0.60          $   0.61
    Extraordinary item                                            -                -              (0.05)              -
    Total                                                    $   0.48         $   0.46         $   0.55          $   0.61

  Common stock price range:
    High                                                     $  21.69         $  18.56         $  21.69          $  19.69
    Low                                                      $  14.94         $  14.06         $  14.25          $  14.56
---------------------------------------------------------------------------------------------------------------------------
</TABLE>


     The  Company has not paid cash  dividends  on its common  stock  during the
three years ended  December 31, 2001.  The closing market price of the Company's
common stock on December 31, 2001 was $32.02 per share.


<PAGE>





                          INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
Furniture Brands International, Inc.:

     We have audited the accompanying  consolidated  balance sheets of Furniture
Brands  International,  Inc. and  subsidiaries as of December 31, 2001 and 2000,
and the related consolidated statements of operations, shareholders' equity, and
cash flows for each of the years in the  three-year  period  ended  December 31,
2001. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

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

     In our opinion,  the consolidated  financial  statements  referred to above
present fairly, in all material  respects,  the financial  position of Furniture
Brands  International,  Inc. and  subsidiaries as of December 31, 2001 and 2000,
and the results of their  operations  and their cash flows for each of the years
in the three-year  period ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States of America.










St. Louis, Missouri
January 24, 2002


<PAGE>


                                    SIGNATURE




     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.




                                      Furniture Brands International, Inc.




                                By:   /s/ Steven W. Alstadt
                                      ------------------------------
                                      Steven W. Alstadt
                                      Controller and Chief Accounting Officer





Dated: June 25, 2002



<PAGE>


                                                                  Exhibit 23











                               Consent of KPMG LLP

The Board of Directors
Furniture Brands International, Inc.:

We consent to incorporation  by reference in the  registration  statements (Nos.
33-65714,  333-6990,  333-39355,  333-80189)  on Form  S-8 of  Furniture  Brands
International,  Inc.  of our report  dated  January  24,  2002,  relating to the
consolidated  balance  sheets  of  Furniture  Brands  International,   Inc.  and
subsidiaries  as of  December  31, 2001 and 2000,  and the related  consolidated
statements of operations,  shareholders'  equity, and cash flows and the related
schedule for each of the years in the three-year period ended December 31, 2001,
which  report  appears in the current  report on Form 8-K dated June 25, 2002 of
Furniture Brands International, Inc.


                                            /s/  KPMG LLP



St. Louis, Missouri
June 25, 2002
[{"type": "8-K", "sequence": "1", "filename": "form8k062502.txt", "description": "FORM 8-K (06/26/02)", "secsgml_size_bytes": 85151}]
{"company-data": {"conformed-name": "FURNITURE BRANDS INTERNATIONAL INC", "cik": "0000050957", "assigned-sic": "2510", "irs-number": "430337683", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-00091", "film-number": "02687672"}, "business-address": {"street1": "101 S HANLEY RD STE 1900", "city": "ST LOUIS", "state": "MO", "zip": "63105", "phone": "3148631100"}, "mail-address": {"street1": "101 SOUTH HANLEY RD", "city": "ST LOUIS", "state": "MO", "zip": "63105"}, "former-company": {"former-conformed-name": "INTERNATIONAL SHOE CO", "date-changed": "19690313"}}
SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

 Date of Report (date of earliest event reported): June 25, 2002 (June 25, 2002)

                      Furniture Brands International, Inc.
                      ------------------------------------
               (Exact name of Registrant as specified in charter)

        Delaware                       I-91                    43-0337683
--------------------------        --------------         ---------------------
(State of Incorporation)          (Commission               (IRS Employer
                                   File Number)          Identification Number)

                101 South Hanley Road, St. Louis, Missouri 63105
                ------------------------------------------------
                    (Address of principal executive offices)

                                 (314) 863-1100
                                 --------------
                         (Registrant's telephone number)
Item 5. Other Matters

     On January 1, 2002 the Company  adopted  Statement of Financial  Accounting
Standards No. 142 (FAS #142),  "Goodwill and Other Intangible Assets".  FAS #142
required  that goodwill and other  intangible  assets with  indefinite  lives no
longer  be  amortized,  but  instead  be tested  annually  for  impairment.  The
Company's intangible assets, consisting of trademarks,  trade names and goodwill
all have indefinite lives. Note 6 in the attached financial  statements presents
net income after adjusting for the amortization of goodwill and other intangible
assets for each of the years in the three-year period ended December 31, 2001.

Item 7. Financial Statements and Exhibits

     (a)  List of financial statements filed as a part of this report:

          Consolidated balance sheets, December 31, 2001 and 2000

          Consolidated  statements  of  operations  for each of the years in the
          three-year period ended December 31, 2001

          Consolidated  statements  of cash  flows  for each of the years in the
          three-year period ended December 31, 2001

          Consolidated  statements of shareholders' equity for each of the years
          in the three-year period ended December 31, 2001

          Notes to consolidated financial statements

          Independent Auditors' Report

     (c)  Exhibit 23 Consent of KPMG LLP
CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------------------- -------------------- ---------------------
(Dollars in thousands)                                                                       December 31,          December 31,
                                                                                                    2001                  2000
------------------------------------------------------------------------------------- -------------------- ---------------------
Assets
Current assets:
  Cash and cash equivalents                                                                   $   15,707            $   14,606
  Receivables, less allowances of $18,841
    ($23,075 at December 31, 2000)                                                               359,493               351,804
  Inventories (Note 5)                                                                           369,773               294,454
  Deferred income taxes                                                                           26,160                23,555
  Prepaid expenses and other current assets                                                        7,582                 7,162
--------------------------------------------------------------------------------------------------------------------------------
    Total current assets                                                                         778,715               691,581
Property, plant and equipment:
  Land                                                                                            18,090                19,206
  Buildings and improvements                                                                     240,554               226,096
  Machinery and equipment                                                                        346,460               345,040
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                 605,104               590,342
  Less accumulated depreciation                                                                  283,464               287,107
--------------------------------------------------------------------------------------------------------------------------------
    Net property, plant and equipment                                                            321,640               303,235
Goodwill (Note 6)                                                                                156,435               166,066
Other Intangible Assets (Note 6)                                                                 210,870               123,829
Other assets                                                                                      35,829                20,127
--------------------------------------------------------------------------------------------------------------------------------
                                                                                              $1,503,489            $1,304,838
================================================================================================================================
Liabilities and Shareholders' Equity
Current liabilities:
  Accounts payable                                                                              $ 83,508              $ 65,483
  Accrued employee compensation                                                                   23,815                24,822
  Accrued interest expense                                                                         2,805                 7,646
  Other accrued expenses                                                                          65,167                45,167
--------------------------------------------------------------------------------------------------------------------------------
    Total current liabilities                                                                    175,295               143,118
Long-term debt (Note 7)                                                                          454,400               462,000
Deferred income taxes                                                                             69,032                77,533
Other long-term liabilities                                                                       45,103                38,282

Shareholders' equity:
  Preferred stock, authorized 10,000,000 shares,
    No par value - issued, none                                                                      -                     -
  Common stock, authorized 100,000,000 shares,
    $1.00 stated value - issued 56,277,066 shares at December 31, 2001
    and 52,277,066 shares at December 31, 2000 (Note 8)                                           56,277                52,277
  Paid-in capital                                                                                219,469               118,360
  Retained earnings                                                                              520,503               462,473
  Accumulated other comprehensive income                                                          (5,108)                  -
  Treasury stock at cost
    (1,664,666 shares at December 31, 2001 and
     2,601,759 shares at December 31, 2000)                                                      (31,482)              (49,205)
--------------------------------------------------------------------------------------------------------------------------------
  Total shareholders' equity                                                                     759,659               583,905
--------------------------------------------------------------------------------------------------------------------------------
                                                                                              $1,503,489            $1,304,838
================================================================================================================================
                See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands except per share data)
                                                                                           Year Ended December 31,
                                                                           --------------------------------------------------------
                                                                                    2001                2000               1999
-----------------------------------------------------------------------------------------------------------------------------------
Net sales                                                                        $1,891,313          $2,116,239          $2,088,112

Costs and expenses:
  Cost of operations                                                              1,387,632           1,529,874           1,498,622

  Selling, general and administrative expenses                                      330,835             335,596             321,205

  Depreciation and amortization                                                      55,767              58,155              56,528

  Asset impairment charges                                                           18,000                 -                   -
-----------------------------------------------------------------------------------------------------------------------------------

Earnings from operations                                                             99,079             192,614             211,757

Interest expense                                                                     21,984              36,389              37,577

Other income, net                                                                    10,599               9,772               2,584
-----------------------------------------------------------------------------------------------------------------------------------

Earnings before income tax expense and
  extraordinary item                                                                 87,694             165,997             176,764

Income tax expense (Note 9)                                                          29,664              57,574              64,854
-----------------------------------------------------------------------------------------------------------------------------------

Earnings before extraordinary item                                                   58,030             108,423             111,910
Extraordinary item - early extinguishment
  of debt, net of income tax benefit (Note 11)                                          -                (2,522)                -
-----------------------------------------------------------------------------------------------------------------------------------
Net earnings                                                                     $   58,030          $  105,901          $  111,910
===================================================================================================================================
Net earnings per common share - basic (Note 8):
   Earnings before extraordinary item                                            $     1.15          $     2.19          $     2.20
  Extraordinary item - early extinguishment of debt                                      -                (0.05)                 -
-----------------------------------------------------------------------------------------------------------------------------------
Net earnings per common share - basic                                            $     1.15          $     2.14          $     2.20
===================================================================================================================================
Net earnings per common share - diluted (Note 8):
  Earnings before extraordinary item                                             $     1.13          $     2.15          $     2.14
  Extraordinary item - early extinguishment of  debt                                     -                (0.05)                 -
-----------------------------------------------------------------------------------------------------------------------------------
Net earnings per common share - diluted                                          $     1.13          $     2.10          $     2.14
===================================================================================================================================
          See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
                                                                                             Year Ended December 31,
                                                                                ---------------------------------------------------
                                                                                          2001              2000             1999
-----------------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Net earnings                                                                         $  58,030         $ 105,901        $ 111,910
  Adjustments to reconcile net earnings
    to net cash provided by operating activities:
    Net loss on early extinguishment of debt                                                 -               2,522              -
    Depreciation of property, plant and equipment                                         43,707            46,095           44,468
    Amortization of intangible and other assets                                           12,060            12,060           12,060
    Asset impairment charges                                                              18,000               -                -
    Other, net (includes gains on sale of  investments)                                  (11,586)            1,602            2,172
    (Increase) decrease in receivables                                                    41,502            (6,419)         (21,221)
    (Increase) decrease in inventories                                                    33,070            (9,059)          21,987
    Increase in prepaid expenses and
      intangible and other assets                                                         (6,789)           (7,737)          (2,872)
    Increase (decrease) in accounts payable,  accrued interest expense
       and other accrued  expenses                                                         7,224            (9,226)         (12,861)
   Decrease in net deferred tax liabilities                                               (8,356)           (2,788)          (5,390)
    Decrease in other long-term liabilities                                               (2,156)             (807)          (1,687)
-----------------------------------------------------------------------------------------------------------------------------------
  Net cash provided by operating activities                                              184,706           132,144          148,566
-----------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
  Acquisition of business, net of cash acquired                                         (176,235)              -                -
  Proceeds from the disposal of assets                                                    18,197               316              451
  Additions to property, plant and equipment                                             (22,991)          (53,310)         (48,951)
-----------------------------------------------------------------------------------------------------------------------------------
  Net cash used by investing activities                                                 (181,029)          (52,994)         (48,500)
-----------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
  Payments for debt issuance costs                                                           -              (2,090)             -
  Additions to long-term debt                                                            140,000           486,500              -
  Payments of long-term debt                                                            (147,600)         (559,600)         (54,100)
  Proceeds from the issuance of treasury stock                                             5,024             3,237            7,943
  Purchase of treasury stock                                                                 -                 -            (59,720)
-----------------------------------------------------------------------------------------------------------------------------------
  Net cash used by financing activities                                                   (2,576)          (71,953)        (105,877)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase(decrease) in cash and cash equivalents                                        1,101             7,197           (5,811)
Cash and cash equivalents at beginning of period                                          14,606             7,409           13,220
-----------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                             $  15,707         $  14,606         $  7,409
===================================================================================================================================
Supplemental Disclosure:
  Cash payments for income taxes, net                                                  $  26,083         $  63,120         $ 68,100
===================================================================================================================================
  Cash payments for interest                                                           $  28,940         $  30,873         $ 40,070
===================================================================================================================================
  Issuance of common stock for acquisition                                             $ 110,640         $     -           $    -
===================================================================================================================================

See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
------------------------------------------------------------------------ -------------------------------------------------------
(Dollars in thousands)                                                                      Year Ended December 31,
                                                                         -------------------------------------------------------
                                                                                      2001             2000               1999
------------------------------------------------------------------------ ------------------- ---------------- ------------------
Common Stock:
Beginning balance                                                               $ 52,277         $ 52,277           $ 52,277
  Stock issued for acquisition of business                                           4,000              -                  -
------------------------------------------------------------------------ ------------------- ---------------- ------------------
  Ending balance                                                                  $ 56,277         $ 52,277           $ 52,277
------------------------------------------------------------------------ ------------------- ---------------- ------------------

Paid-In Capital:
  Beginning balance                                                               $118,360         $120,326           $127,513
  Stock plans activity (Note 8)                                                     (5,531)          (1,966)            (7,187)
  Stock issued for acquisition of business                                         106,640              -                  -
------------------------------------------------------------------------ ------------------- ---------------- ------------------
  Ending balance                                                                  $219,469         $118,360           $120,326
------------------------------------------------------------------------ ------------------- ---------------- ------------------

Retained Earnings:
  Beginning balance                                                               $462,473         $356,572           $244,662
  Net earnings                                                                      58,030          105,901            111,910
------------------------------------------------------------------------ ------------------- ---------------- ------------------
  Ending balance                                                                  $520,503         $462,473           $356,572
------------------------------------------------------------------------ ------------------- ---------------- ------------------

Accumulated Other Comprehensive Income:
  Beginning balance                                                          $         -      $         -         $        -
  Cumulative effect of adopting SFAS No. 133                                         2,960              -                  -
  Effect of financial instruments accounted for as hedges                           (8,068)             -                  -
------------------------------------------------------------------------ ------------------- ---------------- ------------------
  Ending balance                                                                  $ (5,108)   $         -        $         -
------------------------------------------------------------------------ ------------------- ---------------- ------------------

Treasury Stock:
  Beginning balance                                                               $(49,205)        $(54,978)          $(10,943)
  Stock plans activity (Note 8)                                                     17,723            5,773             15,685
  Purchase of treasury shares
    (3,123,200 shares)                                                                 -                -              (59,720)
------------------------------------------------------------------------ ------------------- ---------------- ------------------
  Ending balance                                                                  $(31,482)        $(49,205)          $(54,978)
------------------------------------------------------------------------ ------------------- ---------------- ------------------

Total Shareholders' Equity                                                        $759,659         $583,905           $474,197
======================================================================== =================== ================ ==================
Comprehensive Income:
  Net earnings                                                                    $ 58,030         $105,901           $111,910
  Cumulative effect of adopting SFAS No. 133                                         2,960              -                  -
  Effect of financial instruments accounted for as hedges                           (8,068)             -                  -
------------------------------------------------------------------------ ------------------- ---------------- ------------------
                                                                                  $ 52,922         $105,901           $111,910
======================================================================== =================== ================ ==================

See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                  (Dollars in thousands except per share data)

1.   The Company

     Furniture Brands International,  Inc. (referred to herein as the "Company")
is one of the largest home furniture  manufacturers in the United States. During
the year ended  December  31,  2001,  the  Company had three  primary  operating
subsidiaries:  Broyhill Furniture  Industries,  Inc.; Lane Furniture Industries,
Inc.;  and  Thomasville  Furniture  Industries,  Inc. On December 28, 2001,  the
Company  acquired  substantially  all of the assets and  liabilities of Henredon
Furniture Industries, Drexel Heritage Furnishings and Maitland-Smith.

     Substantially all of the Company's sales are made to unaffiliated furniture
retailers.  The Company has a  diversified  customer  base with no one  customer
accounting  for  10% or  more  of  consolidated  net  sales  and  no  particular
concentration of credit risk in one economic sector.  Foreign operations and net
sales are not material.

2.   Significant Accounting Policies

     The significant accounting policies of the Company are set forth below.

Use of Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the reported  period.  Actual results are likely to differ from
those estimates but management believes such differences are not significant.

Principles of Consolidation

     The consolidated  financial  statements include the accounts of the Company
and  all  of  its  subsidiaries.  All  material  intercompany  transactions  are
eliminated in consolidation.  The Company's fiscal year ends on December 31. The
operating  companies  included in the consolidated  financial  statements report
their  results  of  operations  as of  the  Saturday  closest  to  December  31.
Accordingly,  the  results of  operations  will  periodically  include a 53-week
fiscal year. Fiscal years 2001, 2000, and 1999 were 52-week years.

Cash and Cash Equivalents

     The Company considers all short-term  investments with an original maturity
of three  months  or less to be cash  equivalents.  Short-term  investments  are
recorded at amortized cost, which approximates market.

Inventories

     Inventories  are  stated  at the  lower of cost  (first-in,  first-out)  or
market.

Property, Plant and Equipment

     Property,   plant  and  equipment  are  recorded  at  cost  when  acquired.
Depreciation  is calculated  using both  accelerated and  straight-line  methods
based on the estimated  useful lives of the respective  assets,  which generally
range from 3 to 45 years for buildings and  improvements  and from 3 to 12 years
for machinery and equipment.

Intangible Assets

     Intangible  assets  consist  of  goodwill  and  trademarks  and  have  been
amortized on a straight-line basis over 20 to 40 - year periods.  Effective with
the  Company's  adoption  of SFAS No.  142 on  January  1,  2002,  goodwill  and
intangible assets with indefinite lives will no longer be amortized, but instead
tested  for  impairment.  Intangible  assets  will be  reviewed  for  impairment
annually or whenever  events or changes in business  circumstances  indicate the
carrying  value of the  assets  may not be  recoverable.  Impairment  losses are
recognized  if expected  future  cash flows of the related  assets are less than
their carrying values.

Fair Value of Financial Instruments

     The Company  considers the carrying  amounts of cash and cash  equivalents,
receivables, and accounts payable to approximate fair value because of the short
maturity of these financial instruments.

     Amounts  outstanding  under  long-term debt agreements are considered to be
carried on the financial  statements at their estimated fair values because they
were entered  into  recently  and/or  accrue  interest at rates which  generally
fluctuate with interest rate trends.

     The Company  periodically  uses interest rate swap  agreements  (derivative
financial instruments) to hedge risk associated with its floating rate long-term
debt.  Effective  January 1, 2001 the Company  adopted  Statement  of  Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities",  which requires that all derivative  instruments be recorded on the
balance  sheet as an  asset or  liability  with any gain or loss  recorded  as a
component  of  accumulated  other  comprehensive   income  until  recognized  in
earnings.  The fair value of the swap  agreements  is based upon  quoted  market
prices.  The net  amount to be paid or  received  under the  interest  rate swap
agreements is recorded as a component of interest expense.

Revenue Recognition

     The Company  recognizes  revenue  when  finished  goods are  shipped,  with
appropriate provisions for returns and uncollectible accounts.

Advertising Costs

     Advertising costs are expensed when first aired or distributed. Advertising
costs for 2001, 2000 and 1999 were $57,453, $57,111 and $58,039 respectively.

Income Taxes

     Deferred tax assets and liabilities are recognized for the estimated future
tax  consequences  attributable to differences  between the financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
basis.  Deferred tax assets and liabilities are measured using enacted tax rates
in effect for the year in which those  temporary  differences are expected to be
recovered or settled. The effect of a change in tax rates on deferred tax assets
and  liabilities  is  recognized  in  income in the  period  that  includes  the
enactment date.

Stock-Based Compensation

     The Company accounts for stock-based compensation using the intrinsic value
method.

3.   Restructuring and Asset Impairment Charges

     During 2001,  the Company  implemented  a plan to reduce its domestic  case
goods manufacturing capacity. This plan included the closing of 12 manufacturing
facilities and a permanent reduction of approximately 20% of the company's total
employment.  Pretax  restructuring  and impairment  charges of $26,352 have been
recorded during 2001 of which $18,000 relates to a fixed asset impairment charge
for properties and machinery and equipment of the closed facilities. The balance
consisting  of $5,913  charged  to cost of  operations  and  $2,439  charged  to
selling,  general and administrative  expenses relates to employee severance and
benefits costs and plant shutdown costs.

     As of December 31, 2001, $1,000 of the restructuring  charges were included
as an accrued expense in current liabilities.

4.   Acquisition of Business

     On December 28, 2001, the Company acquired  substantially all of the assets
and liabilities of Henredon Furniture  Industries,  Drexel Heritage  Furnishings
and Maitland-Smith for $287,140. The acquisition  establishes the Company as the
furniture  industry's  only  full-line  resource  in all middle and upper  price
categories.  The purchase price, including capitalized expenses of approximately
$1,500,  consisted  of  $176,500  paid in cash and four  million  shares  of the
Company's common stock valued at $110,640.  The value of the common stock issued
was determined  based on the average market price over the two-day period before
and after the terms of the acquisition  were agreed to and announced.  Since the
acquisition  occurred near the last business day of 2001, it is reflected in the
Company's  consolidated  balance  sheet as of December  31, 2001;  however,  the
Company's  consolidated results of operations for 2001 do not include any of the
operations of the acquired companies.

     The estimated fair value of the assets acquired and liabilities  assumed at
the date of the acquisition are as follows:

    Accounts receivable                                              $ 49,191
    Inventories                                                       108,389
    Other current assets                                                6,262
    Property plant and equipment                                       68,095
    Intangible assets                                                  90,962
    Other long-term assets                                              1,289
 -------------------------------------------------------------------------------
      Total assets acquired                                          $324,188
 -------------------------------------------------------------------------------

    Current liabilities                                              $ 30,481
    Other long-term liabilities                                         6,567
 -------------------------------------------------------------------------------
     Total liabilities assumed                                         37,048
 -------------------------------------------------------------------------------

     Net assets acquired                                             $287,140
  ==============================================================================

     The Company is in the process of obtaining  third-party  valuations  of the
assets; thus, the allocation of the purchase price is subject to change.

     The following  unaudited summary,  prepared on a pro forma basis,  combines
the  consolidated  results of  operations  of the Company for 2001 and 2000 with
those of the  acquired  companies  as if the  transaction  had  occurred  at the
beginning of each year presented.
-------------------------------------------------------------------------------------------------------------------------
                                                                                          Year Ended December 31,
                                                                                  2001                              2000
-------------------------------------------------------------------------------------------------------------------------
Net sales                                                                   $2,311,647                        $2,620,151
Earnings before extraordinary item                                              68,260                           127,507
Net earnings                                                                $   68,260                        $  127,507

Net earnings per common share - diluted:
  Earnings before extraordinary item                                        $     1.23                        $     2.34
  Net earnings                                                              $     1.23                        $     2.34
-------------------------------------------------------------------------------------------------------------------------
Such pro  forma  amounts  are not  necessarily  indicative  of what  actual
consolidated  results of operations  might have been if the acquisition had been
effective at the beginning of each year presented.
5.       Inventories

         Inventories are summarized as follows:
--------------------------------------------------------------------------------------------------------------------------
                                                                                December 31,                 December 31,
                                                                                       2001                         2000
--------------------------------------------------------------------------------------------------------------------------
Finished products                                                                  $187,523                     $125,491
Work-in-process                                                                      69,507                       61,932
Raw materials                                                                       112,743                      107,031
--------------------------------------------------------------------------------------------------------------------------
                                                                                   $369,773                     $294,454
==========================================================================================================================

6.       Intangible Assets

         Intangible assets include the following:

--------------------------------------------------------------------------------------------------------------------------
                                                                                December 31,                 December 31,
                                                                                       2001                         2000
--------------------------------------------------------------------------------------------------------------------------
Goodwill                                                                           $239,173                     $239,173
Less accumulated amortization                                                        82,738                       73,107
--------------------------------------------------------------------------------------------------------------------------
      Goodwill                                                                     $156,435                     $166,066
==========================================================================================================================

Trademarks and trade names                                                         $156,828                     $156,828
Intangible assets from acquisition                                                   90,962                         -
--------------------------------------------------------------------------------------------------------------------------
                                                                                    247,790                      156,828
Less accumulated amortization                                                        36,920                       32,999
--------------------------------------------------------------------------------------------------------------------------
      Other intangible assets                                                      $210,870                     $123,829
==========================================================================================================================
The Company is in the process of  obtaining  third-party  valuation  of the
acquired assets, including the intangible assets. The allocation of the purchase
price is subject to change.

     On January 1, 2002 the Company  adopted  Statement of Financial  Accounting
Standards No. 142 (FAS #142),  "Goodwill and Other Intangible Assets".  FAS #142
required  that goodwill and other  intangible  assets with  indefinite  lives no
longer  be  amortized,  but  instead  be tested  annually  for  impairment.  The
Company's intangible assets, consisting of trademarks,  trade names and goodwill
all have  indefinite  lives.  The  following  table  presents  net income  after
adjusting to exclude the amortization of goodwill and other intangible assets:
-----------------------------------------------------------------------------------------------------------------------------
                                                                                       Year Ended December 31,
                                                                      2001                    2000                      1999
-----------------------------------------------------------------------------------------------------------------------------
Earnings before extraordinary item -
as reported                                                      $58,030                $108,423                  $111,910
Exclude amortization of goodwill and
  other intangible assets, net of income
  tax benefits                                                      11,162                  11,162                    11,162
-----------------------------------------------------------------------------------------------------------------------------
Earnings before extraordinary item -
  as adjusted                                                       69,192                  119,585                  123,072
Extraordinary item - early
  extinguishment of debt, net of income
  tax benefit                                                         -                     (2,522)                     -
-----------------------------------------------------------------------------------------------------------------------------
Net earnings - as adjusted                                         $69,192                $117,063                  $123,072
=============================================================================================================================
Net earnings per common share - basic:
  Earnings before extraordinary item -
    as reported                                                      $1.15                   $2.19                     $2.20
  Exclude amortization of goodwill and
     other intangible assets                                          0.22                    0.22                      0.21
  Extraordinary item                                                   -                     (0.05)                      -
-----------------------------------------------------------------------------------------------------------------------------
  Net earnings - as adjusted                                         $1.37                   $2.36                     $2.41
=============================================================================================================================

Net earnings per common share  - diluted:
  Earnings before extraordinary item -
    as reported                                                       1.13                    2.15                      2.14
  Exclude amortization of goodwill and
    Other intangible assets                                           0.22                    0.22                      0.21
  Extraordinary item                                                   -                     (0.05)                      -
-----------------------------------------------------------------------------------------------------------------------------
  Net earnings - as adjusted                                         $1.35                   $2.32                     $2.35
=============================================================================================================================
7. Long-Term Debt

         Long-term debt consists of the following:

--------------------------------------------------------------------------------------------------------------------------
                                                                                December 31,                 December 31,
                                                                                       2001                         2000
--------------------------------------------------------------------------------------------------------------------------
Revolving credit facility (unsecured)                                             $ 440,000                    $ 446,000
Other                                                                                14,400                       16,000
--------------------------------------------------------------------------------------------------------------------------
                                                                                  $ 454,400                    $ 462,000
==========================================================================================================================
The following  discussion  summarizes  certain  provisions of the long-term
debt.

Revolving Credit Facility

     The revolving  credit facility is an unsecured,  five-year  facility with a
commitment  of $630,000.  The facility  allows for issuance of letters of credit
and cash borrowings.  Letter of credit  outstandings are limited to no more than
$150,000,   with  cash  borrowings   limited  only  by  the  facility's  maximum
availability less letters of credit outstanding.

     Currently,  for  letter  of  credit  issuances,  a fee of 0.75%  per  annum
(subject to  increase/decrease  based upon the Company  achieving certain credit
ratings  from  Standard & Poor's and Moody's) is assessed for the account of the
lenders  ratably.  A further  fee of 0.125% is  assessed  on standby  letters of
credit  representing  a  facing  fee.  A  customary  administrative  charge  for
processing  letters of credit is also  payable  to the  relevant  issuing  bank.
Letter of credit fees are payable quarterly in arrears.

     Cash borrowings under the revolving credit facility bear interest at a base
rate or at an adjusted  Eurodollar rate plus an applicable  margin which varies,
depending upon the type of loan the Company executes. The applicable margin over
the base rate and adjusted  Eurodollar rate is subject to adjustment  based upon
achieving certain credit ratings.  At December 31, 2001, loans outstanding under
the  revolving  credit  facility  consisted  of $300,000  based on the  adjusted
Eurodollar rate and $140,000 based on the base rate,  which in conjunction  with
the interest rate swaps have a weighted average interest rate of 4.87%.

     At December 31, 2001, there were $440,000 of cash borrowings and $32,464 in
letters of credit  outstanding  under the revolving credit facility,  leaving an
excess of $157,536 available under the facility.

     The revolving credit facility has no mandatory principal payments; however,
the  commitment  matures on June 7, 2005.  The facility  requires the Company to
meet certain financial covenants including a minimum  consolidated net worth and
maximum leverage ratio. In addition,  the facility  requires  repayment upon the
occurrence of a change of control of the Company.

Other

     Other  long-term  debt  consists of various  industrial  revenue bonds with
interest rates ranging from approximately 4.0% to 9.0%.

Interest Rate Swap Agreements

     In May 2001, in order to reduce the impact of changes in interest  rates on
its floating rate long-term  debt, the Company  entered into three interest rate
swap  agreements  each  having  a  notional  amount  of  $100.0  million  and  a
termination  date in May 2004.  The Company  pays the  counterparties  a blended
fixed  rate of 4.93% per annum and  receives  payment  based  upon the  floating
three-month LIBOR rate.

Other Information

     The Company has no mandatory  long-term  debt payments until 2005, at which
time $448,000 matures.

8.   Common Stock

     The Company's restated certificate of incorporation  includes authorization
to issue up to 100 million  shares of common stock with a $1.00 per share stated
value. As of December 31, 2001,  56,277,066  shares of common stock were issued.
It is not presently  anticipated  that dividends will be paid on common stock in
the foreseeable future.

     The Company has been authorized by its Board of Directors to repurchase its
common  stock  from  time  to  time  in  open  market  or  privately  negotiated
transactions. Common stock repurchases are recorded as treasury stock and may be
used for general corporate purposes.  In 1999, the Company repurchased 3,123,200
shares for $59,720. As of December 31, 2001, the Company has Board of Directors'
authorization for the repurchase of an additional $100,000 of its common stock.

     Shares of common stock were reserved for the following purposes at December
31, 2001:

                                                             Number of Shares
------------------------------------------------------------------------------
Common stock options:
  Granted                                                           4,298,916
  Available for grant                                                 816,740
------------------------------------------------------------------------------
                                                                    5,115,656
==============================================================================

     On April 29, 1999, stockholders approved the 1999 Long-Term Incentive Plan.
The plan  provided for a total of  2,250,000  shares plus all  remaining  shares
available  for grant or which  become  available  for grant due to  cancellation
under the 1992 Stock  Option Plan.  The plan is  administered  by the  Executive
Compensation  and Stock Option  Committee of the Board of Directors  and permits
certain key  employees  to be granted  nonqualified  options,  performance-based
options,  restricted stock, or combinations  thereof.  Options must be issued at
market value on the date of grant and expire in a maximum of ten years.

     In 1999,  the  Company  issued  79,000  shares  of  restricted  stock.  The
restricted  shares vest over  various  periods  from 2 to 5 years.  The deferred
compensation  expense  is  amortized  to  expense  over the  period  of time the
restrictions  are in  place  and the  unamortized  portion  is  classified  as a
reduction of paid-in-capital in the Company's consolidated balance sheets.
Changes in options granted and outstanding are summarized as follows:

-------------------------------------------------------------------------------------------------------------------------
                                                                   Year Ended December 31,
                                     ------------------------------------------------------------------------------------
                                                 2001                          2000                      1999
                                     ---------------------------- --------------------------- ---------------------------
                                                         Average                     Average                     Average
                                            Shares         Price         Shares        Price       Shares          Price
                                     --------------- ------------ --------------- ----------- ------------- -------------
Beginning of period                      4,345,634        $13.61      4,027,063       $12.67    4,018,581         $ 9.37
Granted                                    954,900         24.00        734,600        16.70      772,600          23.49
Exercised                                 (937,093)         5.36       (305,300)        6.83     (662,141)          6.02
Cancelled                                  (64,525)        24.48       (110,729)       18.60     (101,977)          7.91
------------------------------------ --------------- ------------ --------------- ----------- ------------- -------------
End of period                            4,298,916        $17.55      4,345,634       $13.61    4,027,063         $12.67
==================================== =============== ============ =============== =========== ============= =============
Exercisable at
   end of period                         2,324,391                    2,591,726                 2,342,822
==================================== =============== ============ =============== =========== ============= =============
Weighted average fair
   value of options granted                               $12.40                      $ 9.52                      $13.03
==================================== =============== ============ =============== =========== ============= =============
Had compensation cost for the Company's stock-based  compensation plan been
determined  consistent  with SFAS No. 123,  the  Company's  net earnings and net
earnings per share would have been as follows:

--------------------------------------------------------------------------------------------------------------------------
                                                                           Year Ended December 31,
                                                     ---------------------------------------------------------------------
                                                                       2001                   2000                   1999
---------------------------------------------------- ----------------------- ---------------------- ----------------------
Net earnings
As reported                                                        $58,030               $105,901               $111,910
 Pro forma                                                           52,648                101,819                108,600

Net earnings per share - basic
 As reported                                                        $  1.15               $   2.14               $   2.20
 Pro forma                                                             1.05                   2.06                   2.13

Net earnings per share - diluted
 As reported                                                        $  1.13               $   2.10               $   2.14
 Pro forma                                                             1.04                   2.05                   2.10
==================================================== ======================= ====================== ======================
The weighted  average fair value of options  granted is estimated as of the
date of grant using the  Black-Scholes  option  pricing model with the following
weighted average assumptions: risk free interest rate of 4.9%, 5.7%, and 5.0% in
2001, 2000, and 1999, respectively; expected dividend yield of 0% for all years;
expected life of 7 years for all years and expected  volatility of 47%, 47%, and
46% for 2001, 2000, and 1999, respectively.
Summarized  information regarding stock options outstanding and exercisable
at December 31, 2001 follows:

-------------------------------------------------------------------------------------------------------------------------
                                                 Outstanding                                       Exercisable
                        ---------------------------------------------------------        --------------------------------
Range of                                                Average
Exercise                                            Contractual          Average                                 Average
Prices                                Shares               Life            Price                  Shares           Price
-------------------------------------------------------------------------------------------------------------------------
Up to $10                            796,441                2.1           $ 6.97                 796,441          $ 6.97
$10 - $20                          1,512,075                5.5            14.64                 972,050           13.64
Over $20                           1,990,400                6.9            24.00                 555,900           24.04
-------------------------------------------------------------------------------------------------------------------------
                                   4,298,916                5.5           $17.55               2,324,391          $13.84
=========================================================================================================================
Weighted  average  shares used in the  computation of basic and diluted net
earnings per common share for 2001, 2000, and 1999 are as follows:
--------------------------------------------------------------------------------------------------------------------------
                                                                                 Year Ended December 31,
                                                                ----------------------------------------------------------
                                                                              2001                2000               1999
                                                                ----------------------------------------------------------
Weighted average shares used for
basic net earnings per common share                                    50,356,763          49,531,931         50,967,973
Effect of dilutive securities:
 Stock options                                                             968,227             910,805          1,366,611
--------------------------------------------------------------------------------------------------------------------------
Weighted average shares used for
 diluted net earnings per common share                                  51,324,990          50,442,736         52,334,584
==========================================================================================================================
Excluded from the computation of diluted net earnings per common share were
options to purchase  79,000 and 1,163,700  shares at an average price of $30.84,
and $23.81 per share during 2001 and 2000, respectively. These options have been
excluded from the diluted earnings per share  calculation  since their impact is
anti-dilutive.

9. Income Taxes
Income tax expense was comprised of the following:

-------------------------------------------------------------------------------------------------------------------------
                                                                  Year Ended December 31,
                                   --------------------------------------------------------------------------------------
                                                         2001                         2000                         1999
-------------------------------------------------------------------------------------------------------------------------
Current:
Federal                                              $34,672                      $55,191                      $62,108
 State and local                                          562                        5,171                        8,136
-------------------------------------------------------------------------------------------------------------------------
                                                       35,234                       60,362                       70,244
Deferred                                               (5,570)                      (2,788)                      (5,390)
-------------------------------------------------------------------------------------------------------------------------
                                                      $29,664                      $57,574                      $64,854
=========================================================================================================================
The  following  table  reconciles  the  differences   between  the  federal
corporate statutory rate and the Company's effective income tax rate:
==========================================================================================================================
                                                                                   Year Ended December 31,
                                                                     -----------------------------------------------------
                                                                               2001               2000              1999
--------------------------------------------------------------------------------------------------------------------------
Federal corporate statutory rate                                               35.0%              35.0%             35.0%
State and local income taxes, net of
  federal tax benefit                                                           0.4                1.7               2.5
Nondeductible amortization of intangible assets                                 2.9                1.5               1.5
Dividend exclusion                                                               -                (1.1)               -
Adjustments to income tax reserves                                             (4.3)                -                0.3
Other                                                                          (0.2)              (2.4)             (2.6)
--------------------------------------------------------------------------------------------------------------------------
Effective income tax rate                                                      33.8%              34.7%             36.7%
==========================================================================================================================
The sources of the tax effects for temporary  differences that give rise to
the deferred tax assets and liabilities were as follows:

------------------------------------------------------------------------ ------------------------ -----------------------
                                                                                    December 31,            December 31,
                                                                                           2001                    2000
------------------------------------------------------------------------ ------------------------ -----------------------
Deferred tax assets attributable to:
Expense accruals                                                                      $ 16,579                $ 15,293
 Valuation reserves                                                                      16,858                  11,811
 Asset impairment charges                                                                 6,193                     -
 Employee pension and other benefit plans                                                 1,375                   3,605
 Fair market value adjustments -
  account receivable                                                                      1,453                     -
 Inventory costs capitalized                                                                201                   1,560
 Other                                                                                    2,366                   2,805
------------------------------------------------------------------------ ------------------------ -----------------------
  Total deferred tax assets                                                              45,025                  35,074
------------------------------------------------------------------------ ------------------------ -----------------------
Deferred tax liabilities attributable to:
 Fair value adjustments                                                                 (73,109)                (68,744)
 Depreciation                                                                            (7,828)                 (8,099)
 Fair market value adjustments -
  accounts receivable                                                                       -                    (2,530)
 Other                                                                                   (6,960)                 (9,679)
------------------------------------------------------------------------ ------------------------ -----------------------
  Total deferred tax liabilities                                                        (87,897)                (89,052)
------------------------------------------------------------------------ ------------------------ -----------------------
  Net deferred tax liabilities                                                         $(42,872)               $(53,978)
======================================================================== ======================== =======================
10.Employee Benefits

     The  Company   sponsors  or  contributes   to  retirement   plans  covering
substantially  all  employees.  The total cost of all plans for 2001,  2000, and
1999 was $1,425, $2,090, and $5,649, respectively.

Company-Sponsored Defined Benefit Plans

     Annual cost for defined  benefit  plans is  determined  using the projected
unit credit actuarial method. Prior service cost is amortized on a straight-line
basis over the average remaining service period of employees expected to receive
benefits.

     It is the Company's  practice to fund pension costs to the extent that such
costs are tax deductible and in accordance with ERISA. The assets of the various
plans  include  corporate  equities,   government  securities,   corporate  debt
securities and insurance contracts. The table below summarizes the funded status
of the Company-sponsored defined benefit plans.
--------------------------------------------------------------------------------- --------------------- ----------------------
                                                                                          December 31,           December 31,
                                                                                                 2001                   2000
--------------------------------------------------------------------------------- --------------------- ----------------------

Change in projected benefit obligation:
Projected benefit obligation - beginning of year                                            $323,511               $313,756
 Service cost                                                                                   9,372                  8,665
 Interest cost                                                                                 23,315                 22,522
 Actuarial gain                                                                                (4,759)                (3,298)
 Benefits paid                                                                                (19,258)               (18,134)
--------------------------------------------------------------------------------- --------------------- ----------------------
   Projected benefit obligation - end of year                                                $332,181               $323,511
--------------------------------------------------------------------------------- --------------------- ----------------------

Change in plan assets:
 Fair value of plan assets - beginning of year                                               $354,356               $361,890
 Actual return on plan assets                                                                 (16,284)                 9,402
 Employer contributions                                                                         1,319                  1,198
 Benefits paid                                                                                (19,258)               (18,134)
--------------------------------------------------------------------------------- --------------------- ----------------------
   Fair value of plan assets - end of year                                                   $320,133               $354,356
--------------------------------------------------------------------------------- --------------------- ----------------------

 Funded status                                                                               $(12,048)              $ 30,845
 Unrecognized net (gain) loss                                                                  20,177                (26,807)
 Unrecognized prior service cost                                                                  824                  1,336
--------------------------------------------------------------------------------- --------------------- ----------------------
   Prepaid pension cost                                                                      $  8,953               $  5,374
================================================================================= ===================== ======================
Net periodic  pension cost for 2001,  2000, and 1999 included the following
components:

----------------------------------------------------------------------------------------------------------------------------
                                                                                              Year Ended December 31,
                                                                            ------------------------------------------------
                                                                                      2001            2000            1999
----------------------------------------------------------------------------------------------------------------------------
Service cost-benefits earned during the period                                    $  9,372        $  8,665         $ 8,379
Interest cost on the projected benefit obligation                                   23,315          22,522          21,905
Expected return on plan assets                                                     (32,655)        (31,840)        (29,193)
Net amortization and deferral                                                       (2,291)         (2,914)         (1,230)
----------------------------------------------------------------------------------------------------------------------------
Net periodic pension (income) expense                                             $ (2,259)       $ (3,567)        $  (139)
============================================================================================================================
Employees are covered primarily by noncontributory plans, funded by Company
contributions to trust funds,  which are held for the sole benefit of employees.
Monthly  retirement  benefits  are based  upon  service  and pay with  employees
becoming vested upon completion of five years of service.

     The expected  long-term rate of return on plan assets was 9.0% in all years
presented.  Measurement  of the projected  benefit  obligation  was based upon a
weighted  average  discount rate of 7.25% and a long-term  rate of  compensation
increase of 4.5% for all years presented.

Other Retirement Plans and Benefits

     In addition to defined benefit plans,  the Company makes  contributions  to
defined  contribution  plans and sponsors  employee  savings plans.  The cost of
these plans is included in the total cost for all plans reflected above.

11.Extraordinary Item - Early Extinguishment of Debt

     In conjunction  with the June 7, 2000,  refinancing of an existing  secured
credit agreement,  the Company charged to results of operations  $2,522,  net of
income tax  benefit of $1,520,  representing  the  deferred  financing  fees and
expenses  pertaining to the refinanced  facility.  The charge was recorded as an
extraordinary item.

12.Commitments and Contingent Liabilities

     Certain of the Company's  real  properties and equipment are operated under
lease  agreements.  Rental  expense  under  operating  leases  totaled  $18,900,
$18,514,  and $17,417 for 2001,  2000,  and 1999,  respectively.  Annual minimum
payments under operating  leases  (including the companies  acquired on December
28, 2001) are $19,538,  $16,525,  $13,609,  $8,848,  and $6,487 for 2002 through
2006,  respectively.  Future  minimum lease  payments  under  operating  leases,
reduced by minimum  rentals  from  subleases  of $1,250 at  December  31,  2001,
aggregate $94,220.

     The Company has  provided  guarantees  related to store  leases for certain
independent  dealers opening  Thomasville  Home  Furnishings  Stores.  The total
future lease payments guaranteed at December 31, 2001 were $54,329.  The Company
believes the risk of significant loss from these lease guarantees is remote.

     The  Company  is or may  become a  defendant  in a  number  of  pending  or
threatened legal proceedings in the ordinary course of business.  In the opinion
of  management,  the  ultimate  liability,  if any, of the Company from all such
proceedings  will not  have a  material  adverse  effect  upon the  consolidated
financial position or results of operations of the Company and its subsidiaries.

13.Other Income, Net

     Other income, net for 2001 totaled $10,599 compared to $9,772 for 2000. For
2001,  other income  consisted of interest on  short-term  investments  of $844,
other  miscellaneous  income and expense items totaling $1,755 and non-operating
income  of  $8,000.  The  non-operating  income  results  from  the  sale of the
Company's investment in a company which leases exhibition space to furniture and
accessory  manufacturers,  partially  offset by additions to reserves related to
certain discontinued operations.

     For 2000, other income  consisted of interest on short-term  investments of
$538, a cash dividend  (nonrecurring) of $7,642 received by the Company relating
to its  minority  investment  in a  company  which  leases  exhibition  space to
furniture  and  accessory  manufacturers,  and other  miscellaneous  income  and
expense items totaling $1,592.

     Other income for 1999  consisted of interest on short-term  investments  of
$388 and other miscellaneous income and expense items totaling $2,196.
14.Quarterly Financial Information (Unaudited)

     Following is a summary of unaudited quarterly information:

--------------------------------------------------------------------------------------------------------------------------
                                                                Fourth           Third           Second             First
                                                               Quarter         Quarter          Quarter           Quarter
==========================================================================================================================
Year ended December 31, 2001:
Net sales                                                   $476,801        $448,682         $459,648          $506,182
  Gross profit                                                 114,417         112,321          114,725           125,331
  Net earnings                                                $ 22,831        $ 13,871         $  1,647          $ 19,681

  Net earnings per common share:
    Basic                                                     $   0.45        $   0.27         $   0.03          $   0.39
    Diluted                                                   $   0.44        $   0.27         $   0.03          $   0.39

  Common stock price range:
    High                                                      $  32.41          $29.17           $28.00          $  26.76
    Low                                                       $  18.91          $18.25         $  22.55          $  20.44
==========================================================================================================================
Year ended December 31, 2000:
  Net sales                                                  $519,467         $499,746         $533,079          $563,947
  Gross profit                                                130,066          126,812          141,547           148,434
  Net earnings:
    Earnings before extraordinary item                         24,307           23,373           30,143            30,600
    Extraordinary item                                            -                -             (2,522)              -
    Total                                                    $ 24,307         $ 23,373         $ 27,621          $ 30,600

  Net earnings per common share -    basic:
    Earnings before extraordinary item                       $   0.49         $   0.47            $0.61          $   0.62
    Extraordinary item                                            -                -              (0.05)              -
    Total                                                    $   0.49         $   0.47         $   0.56          $   0.62

  Net earnings per common share-     diluted:
    Earnings before extraordinary item                       $   0.48         $   0.46         $   0.60          $   0.61
    Extraordinary item                                            -                -              (0.05)              -
    Total                                                    $   0.48         $   0.46         $   0.55          $   0.61

  Common stock price range:
    High                                                     $  21.69         $  18.56         $  21.69          $  19.69
    Low                                                      $  14.94         $  14.06         $  14.25          $  14.56
---------------------------------------------------------------------------------------------------------------------------
The  Company has not paid cash  dividends  on its common  stock  during the
three years ended  December 31, 2001.  The closing market price of the Company's
common stock on December 31, 2001 was $32.02 per share.
INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
Furniture Brands International, Inc.:

     We have audited the accompanying  consolidated  balance sheets of Furniture
Brands  International,  Inc. and  subsidiaries as of December 31, 2001 and 2000,
and the related consolidated statements of operations, shareholders' equity, and
cash flows for each of the years in the  three-year  period  ended  December 31,
2001. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

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

     In our opinion,  the consolidated  financial  statements  referred to above
present fairly, in all material  respects,  the financial  position of Furniture
Brands  International,  Inc. and  subsidiaries as of December 31, 2001 and 2000,
and the results of their  operations  and their cash flows for each of the years
in the three-year  period ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States of America.

St. Louis, Missouri
January 24, 2002
SIGNATURE

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                      Furniture Brands International, Inc.

                                By:   /s/ Steven W. Alstadt
                                      ------------------------------
                                      Steven W. Alstadt
                                      Controller and Chief Accounting Officer

Dated: June 25, 2002
Exhibit 23

                               Consent of KPMG LLP

The Board of Directors
Furniture Brands International, Inc.:

We consent to incorporation  by reference in the  registration  statements (Nos.
33-65714,  333-6990,  333-39355,  333-80189)  on Form  S-8 of  Furniture  Brands
International,  Inc.  of our report  dated  January  24,  2002,  relating to the
consolidated  balance  sheets  of  Furniture  Brands  International,   Inc.  and
subsidiaries  as of  December  31, 2001 and 2000,  and the related  consolidated
statements of operations,  shareholders'  equity, and cash flows and the related
schedule for each of the years in the three-year period ended December 31, 2001,
which  report  appears in the current  report on Form 8-K dated June 25, 2002 of
Furniture Brands International, Inc.

                                            /s/  KPMG LLP

St. Louis, Missouri
June 25, 2002