ANNUAL REPORT

Exhibit 13
is the Corporation's 2002 Annual Report to Stockholders.

This
10-K Report should be read only in conjunction with that Annual Report.

In
the event you do not already have a copy of the Annual Report, one may be obtained by contacting Ameron, attention; Corporate Secretary, Post Office Box 7007, Pasadena, California
91109-7007. The telephone number is (626) 683-4000.

Exhibit 13

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2002 FINANCIAL SECTION

|Selected Consolidated Financial Information                                           |  | 20
|------------------------------------------------------------------------------------- |  | --
|Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 21
|Consolidated Statements of Income                                                     |  | 27
|Consolidated Balance Sheets                                                           |  | 28
|Consolidated Statements of Cash Flows                                                 |  | 30
|Consolidated Statements of Stockholders' Equity                                       |  | 31
|Consolidated Statements of Comprehensive Income                                       |  | 31
|Notes to Consolidated Financial Statements                                            |  | 32
|Independent Auditors' Report                                                          |  | 44
|Management's Letter                                                                   |  | 44

AMERON INTERNATIONAL

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SELECTED CONSOLIDATED FINANCIAL INFORMATION

|                                |                                                                              | Year ended November 30, |  
|------------------------------- | ---------------------------------------------------------------------------- | ----------------------- | -
|
|
|Per Common Share Data           |                                                                              |                         |  
|                                | Net incomebasic                                                             |                         | $
|                                | Net incomediluted                                                           |                         |  
|                                | Dividends                                                                    |                         |  
|                                | Weighted average shares (basic)                                              |                         |  
|                                | Weighted average shares (diluted)                                            |                         |  
|                                | Stock pricehigh                                                             |                         |  
|                                | Stock pricelow                                                              |                         |  
|                                | Price/earnings ratio (range)                                                 |                         |  
|Operating Results               |                                                                              |                         |  
|                                | Sales                                                                        |                         | $
|                                | Gross profit                                                                 |                         |  
|                                | Interest expense, net                                                        |                         |  
|                                | Provision for income taxes                                                   |                         |  
|                                | Net income                                                                   |                         |  
|                                | Net income/sales                                                             |                         |  
|                                | Return on equity                                                             |                         |  
|Financial Condition at Year-end |                                                                              |                         |  
|                                | Working capital                                                              |                         | $
|                                | Property, plant and equipment, net                                           |                         |  
|                                | Investments, advances and equity in undistributed earnings of joint ventures |                         |  
|                                | Total assets                                                                 |                         |  
|                                | Long-term debt, less current portion                                         |                         |  
|Cash Flow                       |                                                                              |                         |  
|                                | Expenditures for property, plant and equipment                               |                         | $
|                                | Depreciation and amortization                                                |                         |  
|                                | Business acquisitions                                                        |                         |  

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND  RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management's Discussion and Analysis of Liquidity and Capital Resources and Results of Operations are based upon the Company's Consolidated Financial Statements,
which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make certain
estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities during the reporting periods.
Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

The
Company's significant accounting policies are disclosed in Note 1 of Notes to Consolidated Financial Statements in the Company's 2002 Annual Report. Management believes the following
accounting policies affect the more significant estimates used in preparing the consolidated financial statements.

The
consolidated financial statements include the accounts of Ameron International Corporation and all wholly-owned subsidiaries ("Ameron" or the "Company"). All material intercompany
accounts and transactions have been eliminated. The functional currencies for the Company's foreign operations are the applicable local currencies. The translation from the applicable foreign
currencies to U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average
exchange rate during the period. The resulting translation adjustments are recorded in accumulated other comprehensive loss. The Company advances funds to certain foreign subsidiaries that are not
expected to be repaid in the foreseeable future. Translation adjustments arising from these advances are also included in accumulated other comprehensive loss. Gains or losses resulting from foreign
currency transactions are included in other income.

Revenue
for the Performance Coatings & Finishes, Fiberglass-Composite Pipe and Infrastructure Products Groups is recognized primarily at the time goods are shipped. Revenue is recognized
for the Water Transmission Group primarily under the percentage of completion method, typically based on completed units of production, or in some cases at shipment. Revenue under the percentage of
completion method is subject to a greater level of estimation, which affects the timing of revenue, costs
and profits. Estimates are reviewed on a consistent basis and are adjusted periodically to reflect current expectations.

The
Company expenses environmental clean-up costs related to existing conditions resulting from past or current operations and from which no current or future benefit is anticipated. The
Company determines its liability on a site-by-site basis and records a liability at the time when it is probable and can be reasonably estimated. The estimated liability is not discounted or reduced
for possible recoveries from insurance carriers.

Inventories
are stated at the lower of cost or market with cost determined principally on the first-in, first-out (FIFO) method. Certain steel inventories used by the Water Transmission
Group are valued using the last-in, first-out (LIFO) method. Reserves are established for excess, obsolete and rework inventories based on age, estimates of salability and forecasted demand.
Management records an allowance for doubtful accounts receivable based on historical experience and expected trends. Property, plant and equipment is stated on the basis of cost and depreciated
principally on a straight-line method based on the estimated useful lives of the related assets, generally 3 to 40 years.

Investments
in joint ventures or affiliates ("joint ventures") over which the Company has significant influence are accounted for under the equity method of accounting, whereby the
investment is carried at the cost of acquisition, plus the Company's equity in undistributed earnings or losses since

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acquisition. Reserves are provided where management determines that a portion of the investment or earnings may not be realizable.

All
long-lived assets, including property, plant and equipment, long-term investments, goodwill and other intangible assets are reviewed by the Company for impairment whenever events or
changes in circumstances indicate that the carrying value of such assets may not be recoverable. If the estimated future, undiscounted cash flows from the use of an asset are less than its carrying
value, a write-down is recorded to reduce the related assets to estimated fair value.

The
Company is self insured for a portion of losses and liabilities primarily associated with workers compensation claims and general, product and vehicle liability. Losses are accrued
based upon the Company's estimates of the aggregate liability for claims incurred using historical experience and certain actuarial assumptions followed in the insurance industry.

Defined
benefit pension plans and postretirement health care and life insurance benefit plans require estimating the cost of benefits to be provided well into the future and attributing
that cost to the time period each covered employee works. To record these net assets and obligations, management uses estimates relating to assumed inflation, investment returns, mortality, employee
turnover, rate of
compensation increases, medical costs and discount rates. Management along with third-party actuaries review all of these assumptions on an ongoing basis.

Management
incentive compensation is accrued based on current estimates of the Company's ability to achieve short-term and long-term performance targets.

Deferred
income tax assets and liabilities are computed for differences between the financial statement and income tax bases of assets and liabilities. Such deferred income tax asset and
liability computations are based on enacted tax laws and rates applicable to periods in which the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce
deferred income tax assets to the amounts expected to be realized. Quarterly income taxes are estimated based on the mix of income by jurisdiction forecasted for the full fiscal year.

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LIQUIDITY AND CAPITAL RESOURCES

During 2002, the Company generated $54.6 million of cash from operating activities, compared to $27.7 million in 2001. The increase is primarily
attributable to a net positive change in operating assets and liabilities.

In
2002, capital expenditures totaled $14.5 million, compared to $19.3 million in 2001. Capital expenditures in 2002 were primarily for replacement and refurbishment of
machinery and equipment at existing facilities. During the fiscal year ending November 30, 2003, the Company anticipates spending approximately $15 million to $25 million for
capital expenditures, which will be funded from existing cash balances and lines of credit, as well as funds generated from operations.

Net
debt repayments totaled $38.1 million in 2002, compared to $4.6 million in 2001. Common stock dividends totaled $5.0 million in 2002 and 2001.

Cash
and cash equivalents at November 30, 2002 totaled $10.4 million, compared to $11.3 million as of November 30, 2001. At November 30, 2002, the
Company had total debt outstanding of $112.2 million and $118.1 million is unused credit lines were available to fund operating and investing activities
worldwide. In January 2003, the Company finalized a three-year, floating-rate, revolving credit facility with several banks, which permits borrowings up to $100.0 million, and issued seven-year
notes payable totaling $50.0 million to an insurance company as a fixed rate of 5.36%. The new revolving credit facility and notes payable replaced the Company's principal revolving credit
facility which permitted borrowings up to $150.0 million.

Management
believes that cash flows from operations and current cash balances, together with currently available lines of credit, will be sufficient to meet operating requirements in
2003. Cash available from operations could be affected by any general economic downturn or any downturn or adverse changes in the Company's business, such as loss of customers or significant raw
material price increases.

The
Company's contractual obligations and commercial commitments at November 30, 2002 are summarized as follows, adjusted to reflect the refinancing that occurred in January 2003 (in
thousands):

|                                 |  | Payments Due by Period
|-------------------------------- |  | ----------------------
|
|Long-Term Debt(a)                |  | $                     
|Operating Leases                 |  |                       
|                                 |  |                       
|Total Contractual Obligations(b) |  | $                     
|                                 |  |                       

|                                |  | Amount of Commitment Expiration Per Period
|------------------------------- |  | ------------------------------------------
|
|Lines of Credit(a)              |  | $                                         
|Standby Letters of Credit(c)    |  |                                           
|Guarantees(d)                   |  |                                           
|                                |  |                                           
|Total Commercial Commitments(b) |  | $                                         
|                                |  |                                           

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RESULTS OF OPERATIONS: 2002 COMPARED WITH 2001

General

Net income totaled $28.1 million, or $6.97 per diluted share, on sales of $539.5 million for the year ended November 30, 2002, compared to net income of
$27.7 million, or $6.89 per diluted share, on sales of $551.4 million for the same period in 2001. Higher segment income from the Infrastructure Products Group more than offset lower segment income
from the other three groups. The overall improvement in net income came primarily from higher operating margins, higher equity income and lower interest expense.

Sales

Sales decreased by $11.9 million in 2002 primarily due to the sluggishness in U.S. and European chemical and industrial markets, as well as, softening in
worldwide oilfield markets, that negatively impacted the Company's Fiberglass-Composite Pipe and Performance Coatings & Finishes Groups. The strong U.S. housing market and continued infrastructure
spending helped boost sales of the Water Transmission and Infrastructure Products Groups.

Performance
Coatings & Finishes' sales decreased by $5.4 million because of the decline in sales of high-performance protective coatings by the Company's U.S. and European operations.
Market demand remained weak throughout 2002. Sales of light-industrial finishes in Australia and New Zealand were higher. The near-term outlook for the Performance Coatings & Finishes Group remains
uncertain, given worldwide economic conditions. Recovery remains dependent on increased industrial, marine and oilfield demand for high-performance coatings.

Fiberglass-Composite
Pipe Group's sales decreased by $18.5 million in 2002, compared to 2001, due to sluggishness in domestic and European industrial and fuel-handling markets, as well
as softening in the worldwide oilfield market. Demand for oilfield piping remained lower throughout the year because of lower spending associated with uncertainty regarding the sustainability of oil
prices. Additionally, Ameron's U.S. industrial business completed deliveries of a large water pipeline for a project in California during 2001 that did not recur in 2002. The near-term outlook for the
Fiberglass-Composite Pipe Group remains cautious and is dependent on higher oilfield spending.

Water
Transmission Group's sales increased by $1.8 million in 2002, primarily a result of a major sewer pipe project in Southern California and demand for water piping to meet the needs
of population growth, infrastructure rehabilitation and the energy markets. Revenue is recognized in the Water
Transmission Group primarily under the percentage of completion method and is subject to a certain level of estimation, which affects the timing of revenue, costs and profit. Estimates are reviewed on
a consistent basis and are adjusted when actual results are expected to significantly differ from those estimates. The outlook for Water Transmission remains positive for the near term. During 2002,
the Water Transmission Group received a $57 million contract to provide bridge pilings for the renovation of the San Francisco / Oakland Bay Bridge. Ameron's portion of the project is expected to run
into 2004. The project did not materially impact 2002.

The
Infrastructure Products Group completed 2002 with a $9.8 million increase in sales. Ameron's Hawaiian operations benefited from the continued strength of residential, military and
road construction in Hawaii. Sales of poles increased as low interest rates continued to drive the strong U.S. housing market. The outlook for the Infrastructure Products Group remains positive.

Gross Profit

Gross profit in 2002 was $141.9 million or 26.3% of sales, compared to gross profit of $138.1 million or 25.0% of sales in 2001. Gross profit would have declined
an estimated $3.0 million due to lower sales; however, the decline was more than offset by profits associated with higher margins, totaling about $6.8 million. Gross margins increased due a to change
in product and project mix, lower raw material costs and improved plant utilization.

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Performance
Coatings & Finishes benefited from productivity enhancements, as well as favorable raw material costs. Likewise, margins of the Fiberglass-Composite Pipe Group improved as a
result of profitability enhancements, favorable product and project mix and lower raw material costs. Margins of the Water Transmission Group declined due to unfavorable product and project mix and
production delays associated with the San Francisco/Oakland Bay Bridge project. Infrastructure Products had higher margins as a result of better product mix, increased plant utilization and more
consistent production by the new concrete pole plant in Alabama.

Selling, General and Administrative Expenses

Selling, general and administrative expenses totaled $105.9 million or 19.6% of sales in 2002, compared to $101.8 million or 18.5% in 2001. The $4.1 million
increase in expenses was due primarily to higher pension costs of approximately $4.9 million, and severance and productivity enhancement costs for the U.S. and European Fiberglass-Composite Pipe
operations and the U.S. Performance Coatings & Finishes operation of $2.1 million, offset by a reduction of reserves previously established for estimated losses on the Central Arizona Project lawsuit
of $1.7 million. A settlement was finalized in early 2003.

Pension
and insurance costs are expected to increase almost $10.0 million before taxes in 2003.

Equity and Other Income

Equity in earnings of joint ventures increased to $9.2 million in 2002 from $8.0 million in 2001. Equity income improved primarily due to TAMCO, Ameron's
50%-owned mini-mill in California. Ameron's equity in TAMCO's earnings increased as TAMCO benefited from continued demand for rebar in the western U.S. and stable energy supplies.

Other
income included royalties and fees from joint ventures and licensees, currency gains and losses, and other miscellaneous income. Royalties and fees totaled $3.3 million in 2002
compared to $5.0 million in 2001.

Interest

Interest expense totaled $7.0 million in 2002, compared to $10.5 million in 2001. The decrease reflected lower rates and lower average borrowing levels in 2002.

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Provision for Income Taxes

The effective tax rate increased to 34% in 2002 from 28% in 2001. The provision for income taxes in 2002 was $14.5 million, an increase of $3.6 million from 2001.
In 2001, the Company recorded benefits from research and development credits related to the 1990 through 2000 tax years, which were $3.4 million higher than the credits taken in 2002. Credits taken in
2002 related to current year research and development activities.

RESULTS OF OPERATIONS: 2001 COMPARED WITH 2000

General

Net income per diluted share for the year ended November 30, 2001 was $6.89 on sales of $551.4 million, compared to $6.41 per share on sales of $550.7 million in
2000. The performance of consolidated operations, principally the Water Transmission and the Performance Coatings & Finishes Groups, offset the lower levels of equity income from joint-venture
companies.

Sales

Sales increased $0.7 million in 2001. Each of Ameron's four operating segments, except for the Water Transmission Group, had higher sales in 2001 than in the
prior year. Additionally, total sales from Ameron's foreign operations would have been $8 million higher in 2001 if foreign exchange rates had remained at 2000 levels.

Performance
Coatings & Finishes' sales increased by $2.0 million because of higher sales of protective coatings by the Company's U.S. and European operations. Sales of product finishes
declined, reflecting the difficult market conditions in the British and Australian manufacturing sectors. U.S. operations had slightly higher sales despite soft conditions in the chemical processing
and general industrial markets. Sales into U.S. marine and offshore markets improved, and distributor sales, principally for commercial and industrial facilities, also strengthened. European
operations benefited from higher sales of fire-protection coatings, sales into Eastern Europe and the former Soviet Union and strong demand for pipe coatings in the Middle East. Worldwide coatings
markets began to slow in the fourth quarter of 2001.

Fiberglass-Composite
Pipe Group's sales increased $3.8 million in 2001, compared to 2000, due to deliveries of water distribution piping for a large project in California. Other U.S.
markets, such as fuel handling and offshore, continued at lower levels, while industrial demand softened. Centron International, a wholly-owned subsidiary in Texas which supplies fiberglass pipe for
downhole applications and high-pressure oilfield recovery lines, benefited from increased demand due to strong oilfield markets worldwide. Operations in Europe and Asia had lower sales, reflecting
declining industrial and marine markets. The Fiberglass-Composite Pipe Group benefited in 2001 from strong demand for oilfield piping.

The
Water Transmission Group had $6.2 million lower sales in 2001 than in 2000, primarily as a result of completion of a sizable project in Colombia in 2000. U.S. sales increased
approximately $9 million in 2001, because of demand for water piping to meet the needs of population growth, infrastructure rehabilitation and the energy markets. Sales were particularly strong in
Northern California.

The
Infrastructure Products Group completed 2001 with $1.7 million higher sales. Ameron's Hawaiian operations were adversely impacted by soft construction markets on Oahu and Maui.
Residential and military construction markets were strong, but commercial building remained weak. Sales of poles increased as demand for both concrete and steel lighting poles and traffic poles grew.

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Gross Profit

Gross profit in 2001 was $138.1 million or 25.0% of sales, compared to gross profit of $139.8 million or 25.4% of sales in 2000. Gross margins declined due to
change in product and project mix, competitive pressures, and differences in plant utilization.

Performance
Coatings & Finishes' margins benefited from productivity enhancements, as well as favorable raw material costs. Likewise, margins of the Water Transmission Group improved as
a result of completion of the lower-profit project in Colombia in 2000, improved project and product mix and improved manufacturing efficiencies. Margins of the Fiberglass-Composite Pipe Group
declined due to product development costs, unfavorable product mix and uneven plant capacity utilization caused by the lagging industrial, marine and fuel-handling markets throughout the world.
Infrastructure Products also had lower margins as a result of the start-up costs of the new concrete pole plant in Alabama and higher costs in Hawaii. Profits from Hawaiian operations were lower
because of higher maintenance costs, higher labor expenses and development costs related to the expansion of Ameron's quarry on Oahu.

Selling, General and Administrative Expenses

Selling, general and administrative expenses totaled $101.8 million or 18.5% of sales in 2001, compared to $113.8 million or 20.7% in 2000. The
decline in expenses was due in part to profit enhancement programs implemented in the Performance Coatings & Finishes Group. Additionally, lower insurance and benefit costs were required throughout
the Company in 2001 due to an improved safety experience and lower costs related to product warranties and other legal claims.

Equity and Other Income

Equity in earnings of joint ventures declined to $8.0 million in 2001 from $12.7 million in 2000. Equity income of each joint venture declined, with
the largest decrease from TAMCO. Ameron's equity in
TAMCO's earnings dropped as TAMCO suffered from competitive pressures caused by imports of foreign steel into the U.S. Additionally, TAMCO was impacted by dramatic energy increases in California
during 2001.

Other
income included royalties and fees from joint ventures and licenses, currency gains and losses, and other miscellaneous income. Royalties and fees totaled $5.0 million in
2001 compared to $5.9 million in 2000. In 2000, the Company sold an idle property for a pretax gain of $0.9 million.

Interest

Interest expense totaled $10.5 million in 2001, compared to $12.8 million in 2000. The decrease reflected lower rates and lower average borrowing
levels in 2001.

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Provision for Income Taxes

The effective tax rate increased to 28% in 2001 from 25% in 2000. Income from certain foreign and joint venture operations is taxed at rates substantially lower
than U.S. statutory tax rates. The domestic-sourced income was substantially greater in 2001 than in 2000. The provisions for income taxes in 2001 was $10.9 million, an increase of
$2.4 million from 2000. The increase in the provisions for income taxes resulted primarily from: an increase of $1.7 million due to higher pretax income at statutory rates, an increase
of $4.6 million related to the mix of income from domestic and foreign operations and joint ventures and a $4.0 million benefit from research and development credits related to the 1990
through 2000 tax years and filed in 2001.

OFF-BALANCE SHEET FINANCING

The Company does not have any off-balance sheet financing arrangements, other than those listed in the liquidity and capital resources section herein. All of the
Company's subsidiaries are appropriately accounted for in the consolidated financial statements. The Company has no interests in or
relationships with special purpose entities. The Company has presented herein in tabular format its future payments required under contractual obligations and commitments.

MARKET RISKS

Foreign Currency Risk

The Company operates internationally, giving rise to exposure to market risks from changes in foreign exchange rates. From time to time, the Company borrows in
various currencies to reduce the level of net assets subject to changes in foreign exchange rates. In addition, the Company purchases foreign exchange forward and option contracts to hedge firm
commitments, such as receivables and payables, denominated in foreign currencies. The Company does not use the contracts for speculative or trading purposes. At November 30, 2002, the Company
had 16 foreign currency forward contracts expiring at various dates through April 2003, with an aggregate face value of $6.6 million.

Debt Risk

The Company has variable-rate, short-term and long-term debt as well as fixed-rate, long-term debt. The fair value of the Company's fixed-rate debt is subject to
changes in interest rates. The estimated fair value of the Company's variable-rate debt approximates the carrying value of the debt since the variable interest rates are market-based, and the Company
believes such debt could be refinanced on materially similar terms. The Company is subject to the availability of credit to support new requirements, to refinance amortizing long-term debt and to
refinance short-term debt.

As
of November 30, 2002, the estimated fair value of notes payable by the Company totaling $33.3 million, with a fixed rate of 7.92% was $35.6 million. The Company
is required to repay these notes in annual installments of $8.3 million from 2003 to 2006, inclusive. As of November 30, 2002, the Company borrowed $62.1 million under a revolving
credit facility and bank lines supported by the revolving credit facility which permitted borrowings up to $150.0 million. The average interest rate under such lines was 2.00% as of
November 30, 2002. In January 2003, the Company finalized a three-year, floating-rate, revolving credit facility with several banks, which permits borrowings up to $100.0 million, and
issued seven-year notes payable, totalling $50.0 million, to an insurance company at a fixed rate of 5.36%. The new revolving credit facility and notes payable replaced the Company's principal
revolving credit facility that was maintained on November 30, 2002. The Company had $7.2 million of variable-rate industrial development bonds at a rate of 1.25% as of
November 30, 2002, payable in 2016. The Company had $8.5 million of variable-rate industrial development bonds at a rate of 1.40% as of November 30, 2002, payable in 2021.

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CONTINGENCIES

An action was filed in 1992 in the U.S. District Court for the District of Arizona by the Central Arizona Water Conservation District ("CAWCD") seeking damages
against several parties, including the Company and the Company's customer, Peter Kiewit Sons Company ("Kiewit"), in connection with six prestressed concrete pipe siphons furnished and installed in the
1970s as part of the Central Arizona Project ("CAP"), a federal project to bring water from the Colorado River to Arizona. The CAWCD also filed separate actions against the U.S. Bureau of Reclamation
("USBR") in the U.S. Court of Claims and with the Arizona Projects Office of the USBR in connection with the CAP siphons. The CAWCD alleged that the six CAP siphons were defective and that the USBR
and the defendants in the U.S. District Court action were liable for damages for the repair or replacement of those siphons. On September 14, 1994, the U.S. District Court granted the Company's
motion to dismiss the CAWCD action and entered judgment against the CAWCD and in favor of the Company and its co-defendants.

Separately,
on September 28, 1995, the Contracting Officer for the USBR issued a final decision claiming for the USBR approximately $40 million in damages against Kiewit,
based in part on the Contracting Officer's finding that the siphons supplied by the Company were defective. That claim amount was considered by the Company to be duplicative of the damages sought by
the CAWCD for the repair or replacement of the siphon in the aforementioned action in the U.S. District Court for the District of Arizona. The Contracting Officer's final decision was appealed by
Kiewit to the U.S. Department of the Interior Board of Contract Appeals ("IBCA"). The Company actively cooperated with and assisted Kiewit in the administrative appeal of that final decision before
the IBCA. Trial on that appeal commenced in November 2000, however the proceeding was stayed with the concurrence of the parties pending efforts aimed at settlement of the entire matter. Settlement
efforts were then undertaken, during which the IBCA appeal was suspended.

As
of November 30, 2002, tentative settlements had been reached among the USBR, Kiewit, the Company and various insurance carriers. Since November 30, 2002, those
settlements have been finalized and the entire matter, including the aforementioned CAWCD claim, has been resolved on economic terms that did not result in an adverse material effect on the financial
position of the Company or its results of operations. The Company will receive sufficient reimbursement from its own and a supplier's insurance companies to fully cover the settlement.

The
Company is one of numerous defendants in various pending lawsuits involving, as of November 30, 2002, some 8,382 individuals or their representatives alleging personal injury
from exposure to asbestos-containing products. None of such lawsuits specifies any dollar amount sought

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as
damages by such individuals or their representatives, and at this time the Company is not aware of the extent of injuries allegedly suffered by the individuals or the facts supporting the claim
that such injuries were caused by the Company's products. Based upon the information available to it at this time, the Company is not in a position to evaluate its potential exposure, if any, as a
result of these claims. The Company intends to vigorously defend all asbestos-related lawsuits.

In
addition to the above, certain other claims, suits and complaints that arise in the ordinary course of business, have been filed or are pending against the Company. Management
believes that these matters are either adequately reserved, covered by insurance, or would not have a material effect on the Company's financial position or its results of operations if disposed of
unfavorably.

The
Company is subject to federal, state and local laws and regulations concerning the environment and is currently participating in administrative proceedings at several sites under
these laws. While the Company finds it difficult to estimate with any certainty the total cost of remediation at the several sites, on the basis of currently available information and reserves
provided, the Company believes that the outcome of such environmental regulatory proceedings will not have a material effect on the Company's financial position or its results of operations.

CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant
to Exchange Act Rule 13a-14. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in
timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic Securities and Exchange Commission
filings. No significant changes were made in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Any of the statements contained in this Annual Report that refer to the Company's estimated or anticipated future results are forward-looking and reflect the
Company's current analysis of existing
trends and information. Actual results may differ from current expectations based on a number of factors affecting Ameron's businesses, including competitive conditions and changing market conditions.
In addition, matters affecting the economy generally, including the state of economies worldwide, can affect the Company's results. These forward-looking statements represent the Company's judgment
only as of the date of this Annual Report. Since actual results could differ materially, the reader is cautioned not to rely on these forward-looking statements. Moreover, the Company disclaims any
intent or obligation to update these forward-looking statements.

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CONSOLIDATED STATEMENTS OF INCOME

|                                             |  | Year ended November 30, |          
|-------------------------------------------- |  | ----------------------- | ---------
|
|
|                                             |  |                         |          
|Sales                                        |  | $                       | 539,473  
|Cost of sales                                |  |                         | (397,590 
|                                             |  |                         |          
|Gross profit                                 |  |                         | 141,883  
|Selling, general and administrative expenses |  |                         | (105,898 
|Equity in earnings of joint ventures         |  |                         | 9,170    
|Other income, net                            |  |                         | 4,194    
|                                             |  |                         |          
|Income before interest and income taxes      |  |                         | 49,349   
|Interest expense, net                        |  |                         | (6,836   
|                                             |  |                         |          
|Income before income taxes                   |  |                         | 42,513   
|Provision for income taxes                   |  |                         | (14,454  
|                                             |  |                         |          
|Net income                                   |  | $                       | 28,059   
|                                             |  |                         |          
|Net income per share (basic)                 |  | $                       | 7.22     
|                                             |  |                         |          
|Net income per share (diluted)               |  | $                       | 6.97     
|                                             |  |                         |          
|Weighted average shares (basic)              |  |                         | 3,886,016
|Weighted average shares (diluted)            |  |                         | 4,026,082

The
accompanying notes are an integral part of these consolidated financial statements.

27

---

CONSOLIDATED BALANCE SHEETS

|       |                                                                                         | As of November 30,                                                |                                            
|------ | --------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | -------------------------------------------
|
|
|Assets |                                                                                         |                                                                   |                                            
|       | Current assets                                                                          |                                                                   |                                            
|       |                                                                                         | Cash and cash equivalents                                         |                                            
|       |                                                                                         | Receivables, less allowances of $6,652 in 2002 and $6,699 in 2001 |                                            
|       |                                                                                         | Inventories                                                       |                                            
|       |                                                                                         | Deferred income taxes                                             |                                            
|       |                                                                                         | Prepaid expenses and other current assets                         |                                            
|       |                                                                                         |                                                                   |                                            
|       |                                                                                         |                                                                   | Total current assets                       
|       | Investments, advances and equity in undistributed earnings of joint ventures            |                                                                   |                                            
|       | Property, plant and equipment                                                           |                                                                   |                                            
|       |                                                                                         | Land                                                              |                                            
|       |                                                                                         | Buildings                                                         |                                            
|       |                                                                                         | Machinery and equipment                                           |                                            
|       |                                                                                         | Construction in progress                                          |                                            
|       |                                                                                         |                                                                   |                                            
|       |                                                                                         |                                                                   | Total property, plant and equipment at cost
|       |                                                                                         | Accumulated depreciation                                          |                                            
|       |                                                                                         |                                                                   |                                            
|       |                                                                                         |                                                                   | Total property, plant and equipment, net   
|       | Intangible assets, net of accumulated amortization of $8,551 in 2002 and $7,623 in 2001 |                                                                   |                                            
|       | Other assets                                                                            |                                                                   |                                            
|       |                                                                                         |                                                                   |                                            
|       |                                                                                         | Total assets                                                      |                                            
|       |                                                                                         |                                                                   |                                            

The accompanying notes are an integral part of these consolidated financial statements.

28

---

|                                     |                                      | As of November 30,                                                                                                                                             |                           
|------------------------------------ | ------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------
|
|
|Liabilities and Stockholders' Equity |                                      |                                                                                                                                                                |                           
|                                     | Current liabilities                  |                                                                                                                                                                |                           
|                                     |                                      | Short-term borrowings                                                                                                                                          |                           
|                                     |                                      | Current portion of long-term debt                                                                                                                              |                           
|                                     |                                      | Trade payables                                                                                                                                                 |                           
|                                     |                                      | Accrued liabilities                                                                                                                                            |                           
|                                     |                                      | Income taxes payable                                                                                                                                           |                           
|                                     |                                      |                                                                                                                                                                |                           
|                                     |                                      |                                                                                                                                                                | Total current liabilities 
|                                     | Long-term debt, less current portion |                                                                                                                                                                |                           
|                                     | Other long-term liabilities          |                                                                                                                                                                |                           
|                                     |                                      |                                                                                                                                                                |                           
|                                     |                                      |                                                                                                                                                                | Total liabilities         
|Commitments and contingencies        |                                      |                                                                                                                                                                |                           
|Stockholders' equity                 |                                      |                                                                                                                                                                |                           
|                                     |                                      | Common stock, par value $2.50 a share, authorized 12,000,000 shares, outstanding 3,945,662 shares in 2002 and 3,873,007 shares in 2001, net of treasury shares |                           
|                                     |                                      | Additional paid-in capital                                                                                                                                     |                           
|                                     |                                      | Unearned restricted stock                                                                                                                                      |                           
|                                     |                                      | Retained earnings                                                                                                                                              |                           
|                                     |                                      | Accumulated other comprehensive loss                                                                                                                           |                           
|                                     |                                      | Treasury stock (1,333,655 shares in 2002 and in 2001)                                                                                                          |                           
|                                     |                                      |                                                                                                                                                                |                           
|                                     |                                      |                                                                                                                                                                | Total stockholders' equity
|                                     |                                      |                                                                                                                                                                |                           
|                                     |                                      | Total liabilities and stockholders' equity                                                                                                                     |                           
|                                     |                                      |                                                                                                                                                                |                           

29

---

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                     |                                                                                   | Year ended November 30,                                |  
|-------------------- | --------------------------------------------------------------------------------- | ------------------------------------------------------ | -
|
|
|Operating Activities |                                                                                   |                                                        |  
|                     | Net income                                                                        |                                                        | $
|                     | Adjustments to reconcile net income to net cash provided by operating activities: |                                                        |  
|                     |                                                                                   | Depreciation                                           |  
|                     |                                                                                   | Amortization                                           |  
|                     |                                                                                   | Provision for deferred income taxes                    |  
|                     |                                                                                   | Equity in earnings of joint ventures                   |  
|                     |                                                                                   | Dividends from joint ventures                          |  
|                     |                                                                                   | (Gain) loss from sale of property, plant and equipment |  
|                     |                                                                                   | Stock compensation expense                             |  
|                     | Changes in operating assets and liabilities:                                      |                                                        |  
|                     |                                                                                   | Receivables                                            |  
|                     |                                                                                   | Inventories                                            |  
|                     |                                                                                   | Prepaid expenses and other current assets              |  
|                     |                                                                                   | Other assets                                           |  
|                     |                                                                                   | Trade payables                                         |  
|                     |                                                                                   | Accrued liabilities and income taxes payable           |  
|                     |                                                                                   | Other long-term liabilities                            |  
|                     |                                                                                   |                                                        |  
|                     | Net cash provided by operating activities                                         |                                                        |  
|                     |                                                                                   |                                                        |  
|Investing Activities |                                                                                   |                                                        |  
|                     | Proceeds from sale of property, plant and equipment                               |                                                        |  
|                     | Additions to property, plant and equipment                                        |                                                        |  
|                     |                                                                                   |                                                        |  
|                     |                                                                                   | Net cash used in investing activities                  |  
|                     |                                                                                   |                                                        |  
|Financing Activities |                                                                                   |                                                        |  
|                     | Net change in short-term borrowings                                               |                                                        |  
|                     | Issuance of debt                                                                  |                                                        |  
|                     | Repayment of debt                                                                 |                                                        |  
|                     | Dividends on common stock                                                         |                                                        |  
|                     | Issuance of common stock                                                          |                                                        |  
|                     | Purchase of treasury stock                                                        |                                                        |  
|                     |                                                                                   |                                                        |  
|                     |                                                                                   | Net cash used in financing activities                  |  
|                     |                                                                                   |                                                        |  
|                     | Effect of exchange rate changes on cash and cash equivalents                      |                                                        |  
|                     |                                                                                   |                                                        |  
|                     |                                                                                   | Net change in cash and cash equivalents                |  
|                     | Cash and cash equivalents at beginning of year                                    |                                                        |  
|                     |                                                                                   |                                                        |  
|                     | Cash and cash equivalents at end of year                                          |                                                        | $
|                     |                                                                                   |                                                        |  

The
accompanying notes are an integral part of these consolidated financial statements.

30

---

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

|                           |                                                  | Common Stock |          |   |        |     |   |        |       |   |        |        |   |         |       
|-------------------------- | ------------------------------------------------ | ------------ | -------- | - | ------ | --- | - | ------ | ----- | - | ------ | ------ | - | ------- | ------
|
|
|
|Balance, December 1, 1999  |                                                  | 3,991,912    |          | $ | 13,007 |     | $ | 17,857 |       | $ |       |        | $ | 204,336 |       
|                           | Net income2000                                  |              |          |   |        |     |   |        |       |   |        |        |   |         | 25,345
|                           | Foreign currency translation adjustment          |              |          |   |        |     |   |        |       |   |        |        |   |         |       
|                           | Dividends on common stock of $1.28 per share     |              |          |   |        |     |   |        |       |   |        |        |   |         | (5,061
|                           | Treasury stock purchase                          |              | (122,555 | ) |        |     |   |        |       |   |        |        |   |         |       
|                           |                                                  |              |          |   |        |     |   |        |       |   |        |        |   |         |       
|Balance, November 30, 2000 |                                                  | 3,869,357    |          |   | 13,007 |     |   | 17,857 |       |   |       |        |   | 224,620 |       
|                           | Net income2001                                  |              |          |   |        |     |   |        |       |   |        |        |   |         | 27,741
|                           | Exercise of stock options                        |              | 3,650    |   |        | 10  |   |        | 120   |   |        |        |   |         |       
|                           | Foreign currency translation adjustment          |              |          |   |        |     |   |        |       |   |        |        |   |         |       
|                           | Comprehensive loss from joint venture            |              |          |   |        |     |   |        |       |   |        |        |   |         |       
|                           | Dividends on common stock of $1.28 per share     |              |          |   |        |     |   |        |       |   |        |        |   |         | (4,955
|                           | Treasury stock adjustment                        |              |          |   |        |     |   |        |       |   |        |        |   |         |       
|                           | Stock compensation expense                       |              |          |   |        |     |   |        | 1,480 |   |        |        |   |         |       
|                           |                                                  |              |          |   |        |     |   |        |       |   |        |        |   |         |       
|Balance, November 30, 2001 |                                                  | 3,873,007    |          |   | 13,017 |     |   | 19,457 |       |   |       |        |   | 247,406 |       
|                           | Net income2002                                  |              |          |   |        |     |   |        |       |   |        |        |   |         | 28,059
|                           | Exercise of stock options                        |              | 32,655   |   |        | 81  |   |        | 1,146 |   |        |        |   |         |       
|                           | Foreign currency translation adjustment          |              |          |   |        |     |   |        |       |   |        |        |   |         |       
|                           | Minimum pension liability adjustment, net of tax |              |          |   |        |     |   |        |       |   |        |        |   |         |       
|                           | Comprehensive income from joint venture          |              |          |   |        |     |   |        |       |   |        |        |   |         |       
|                           | Dividends on common stock of $1.28 per share     |              |          |   |        |     |   |        |       |   |        |        |   |         | (5,016
|                           | Stock compensation expense                       |              |          |   |        |     |   |        | 713   |   |        |        |   |         |       
|                           | Issuance of restricted stock                     |              | 40,000   |   |        | 100 |   |        | 2,634 |   |        | (2,734 | ) |         |       
|                           | Amortization of restricted stock                 |              |          |   |        |     |   |        |       |   |        | 570    |   |         |       
|                           |                                                  |              |          |   |        |     |   |        |       |   |        |        |   |         |       
|Balance, November 30, 2002 |                                                  | 3,945,662    |          | $ | 13,198 |     | $ | 23,950 |       | $ | (2,164 | )      | $ | 270,449 |       
|                           |                                                  |              |          |   |        |     |   |        |       |   |        |        |   |         |       

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

|                                                 |  | Year ended November 30, |        
|------------------------------------------------ |  | ----------------------- | -------
|
|
|Net income                                       |  | $                       | 28,059 
|Foreign currency translation adjustment          |  |                         | 7,182  
|Minimum pension liability adjustment, net of tax |  |                         | (25,171
|Comprehensive income (loss) from joint venture   |  |                         | 15     
|                                                 |  |                         |        
|Comprehensive income                             |  | $                       | 10,085 
|                                                 |  |                         |        

The
accompanying notes are an integral part of these consolidated financial statements.

31

---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Ameron International Corporation and all wholly-owned subsidiaries ("Ameron" or the "Company"). All
material intercompany accounts and transactions have been eliminated.

Reclassifications

Certain prior year balances have been reclassified to conform with the current year presentation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Significant estimates include revenue and costs recorded under percentage of completion accounting, assumptions related to benefit plans, and reserves associated with
management incentives, receivables, inventories, investments in joint ventures, income taxes, self insurance, and environmental and legal contingencies. Actual results could differ from those
estimates.

Revenue Recognition

Revenue from sales of coatings, fiberglass-composite pipe, construction products and certain other products is recorded at the time the goods are shipped. Revenue
from sales of concrete and steel pipe is primarily recognized under the percentage of completion method, typically based on completed units of production, or in certain cases at shipment.

Research and Development Costs

Research and development costs, related primarily to the development, design and testing of products, are expensed as incurred. Such costs, which are included in
selling, general and administrative expenses, were approximately $4,356,000 in 2002, $5,550,000 in 2001, and $4,996,000 in 2000.

Environmental Clean-up Costs

The Company expenses environmental clean-up costs related to existing conditions resulting from past or current operations and from which no current or future
benefit is anticipated. The Company determines its liability on a site-by-site basis and records a liability at the time when it is probable and can be reasonably estimated. The estimated liability of
the Company is not discounted or reduced for possible recoveries from insurance carriers.

Income Taxes

Deferred income tax assets and liabilities are computed for differences between the financial statement and income tax bases of assets and liabilities. Such
deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to periods in which the differences are expected to reverse. Valuation allowances are
established, when necessary, to reduce deferred income tax assets to the amounts expected to be realized.

Net Income Per Share

Basic net income per share is computed on the basis of the weighted average number of common shares outstanding during the periods presented. Diluted net income
per share is computed on the

---

basis of the weighted average number of common shares outstanding plus the effect of outstanding stock options and restricted stock, using the treasury stock method.

Cash and Cash Equivalents

Cash equivalents represent liquid investments with maturities of three months or less when purchased.

Inventory Valuation

Inventories are valued at the lower of cost or market. Cost is principally determined under the first-in, first-out method. Certain steel inventories are valued
using the last-in, first-out method.

Equity Method of Accounting

Investments in joint ventures or affiliates ("joint ventures") over which the Company has significant influence are accounted for under the equity method of
accounting, whereby the investment is carried at the cost of acquisition, plus the Company's equity in undistributed earnings or losses since acquisition. Reserves are provided when management
determines that a portion of the investment or earnings may not be realizable.

Property, Plant and Equipment

Items capitalized as property, plant and equipment, including improvements to existing facilities, are recorded at cost. Construction in progress represents
capital expenditures incurred for assets not yet placed in service. Capitalized interest was not material for the periods presented.

Depreciation
is computed principally using the straight-line method based on the estimated useful lives of the related assets, generally 3 to 40 years. Leasehold improvements are
amortized over the shorter of the life of the improvement or the term of the lease.

Amortization of Intangible Assets

Costs in excess of net assets acquired of $15,356,000 are amortized on a straight-line basis over periods ranging up to 40 years. Other intangible assets are
amortized on a straight-line basis over periods ranging from 3 to 15 years.

Long-Lived Assets

The Company reviews the recoverability of intangible and other long-lived assets for impairment whenever events or changes in circumstances indicate that the
carrying value of such assets may not be recoverable. If the estimated future, undiscounted cash flows from the use of an asset are less than its carrying value, a write-down is recorded to reduce the
related asset to estimated fair value.

Self Insurance

The Company utilizes third-party insurance subject to varying retention levels or self insurance. Such self insurance relates to losses and liabilities primarily
associated with workers compensation claims and general, product and vehicle liability. Losses are accrued based upon the Company's estimates of the aggregate liability for claims incurred using
certain actuarial assumptions followed in the insurance industry and based on the Company's experience.

Foreign Currency Translation

The functional currencies for the Company's foreign operations are the applicable local currencies. The translation from the applicable foreign currencies to U.S.
dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the
period. The resulting translation

32

---

adjustments
are recorded in accumulated other comprehensive loss. The Company advances funds to certain foreign subsidiaries that are not expected to be repaid in the foreseeable future. Translation
adjustments arising from these advances are also included in accumulated other comprehensive loss. Gains or losses resulting from foreign currency transactions are included in other income.

Derivative Financial Instruments and Risk Management

The Company operates internationally, giving rise to exposure to market risks from changes in foreign exchange rates. Derivative financial instruments, primarily
foreign exchange contracts, are used by the Company to reduce those risks. The Company does not hold or issue financial or derivative financial instruments for trading or speculative purposes. As of
November 30, 2002 and 2001 the Company had foreign currency forward contracts with an aggregate face value of approximately $6,623,000 and $4,682,000, respectively.

Fair Value of Financial Instruments

The fair value of financial instruments, other than long-term debt, approximates the carrying value because of the short-term nature of such instruments.

Concentration of Credit Risk

Financial instruments that subject the Company to credit risk consist primarily of cash equivalents, trade accounts receivable, and forward foreign exchange
contracts. Credit risk with respect to trade accounts receivable is generally distributed over a large number of entities comprising the Company's customer base and geographically dispersed. The
Company performs ongoing credit evaluations of its customers, maintains an allowance for potential credit losses and, in certain instances, maintains credit insurance. The Company actively evaluates
the creditworthiness of the financial institutions with which it conducts business.

New Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 142 requires, among other things, the discontinuance of goodwill amortization. In addition, the standard includes provisions for the reclassification of certain
existing recognized intangibles as goodwill, reassessment of the useful lives of existing recognized intangibles, reclassification of certain intangibles out of previously reported goodwill and the
identification of reporting units for purposes of assessing potential future impairments of goodwill. SFAS No. 142 is effective for the Company beginning
December 1, 2002. SFAS No. 142 requires the Company to complete a transitional goodwill impairment test six months from the date of adoption. The Company is currently evaluating the impact of adopting
SFAS No. 142. In accordance with SFAS No. 142, goodwill was amortized through November 30, 2002. Upon adoption, amortization of goodwill will cease. Amortization of goodwill was
$190,000 in 2002, $336,000 in 2001, and $305,000 in 2000.

SFAS
No. 143, "Accounting for Asset Retirement Obligations," which is effective for the Company on December 1, 2002, addresses the obligations and asset retirement costs
associated with the retirement of tangible long-lived assets. It requires that the fair value of the liability for an asset retirement obligation be recorded when incurred. The asset retirement costs
must be capitalized as part of the carrying value of the long-lived asset. If the liability is settled for an amount other than the recorded balance, either a gain or loss will be recognized at
settlement. The Company is currently assessing the impact of adopting SFAS No. 143.

---

SFAS No. 144, "Impairment or Disposal of Long-Lived Assets," is effective for the Company on December 1, 2002. SFAS No. 144 addresses financial accounting and reporting for
the impairment or disposal of long-lived assets and provides guidance on implementation issues related to SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," and addresses the accounting for a segment of a business accounted for as a discontinued operation. The Company is currently assessing the impact of adopting SFAS
No. 144.

In
April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections." SFAS No. 145 rescinds
both SFAS No. 4, "Reporting Gains and Losses from Extinguishment of Debt" and SFAS No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements." In so doing, SFAS
No. 145 eliminates the requirement that gains and losses from the extinguishment of debt be aggregated, and if material, classified as an extraordinary item, net of the related income tax
effect, unless the criteria in Accounting Principles Board Opinion No. 30, "Reporting the Results of OperationsReporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions" are met. SFAS No. 145 amends SFAS No. 13, "Accounting for Leases", to require that certain lease modifications
that have economic effects similar to sale-leaseback transactions are accounted for in the same manner as sale-leaseback transactions. SFAS No. 145 also amends other existing authoritative
pronouncements to make various technical corrections, clarify meanings or describe their applicability under changed conditions. The provisions of SFAS No. 145 related to the rescission of SFAS
No. 4 are effective for the Company beginning December 1, 2002. The provisions of SFAS No. 145 related to the amendment of SFAS No. 13 are effective for transactions occurring
after May 15, 2002. All other provisions of SFAS No. 145 are effective for financial statements issued on or after May 15, 2002. The adoption of SFAS No. 145 is not
expected to have a material impact on the Company's consolidated financial statements.

SFAS
No. 146, "Accounting for Exit or Disposal Activities," was issued in June 2002. SFAS No. 146 addresses significant issues regarding the recognition, measurement and reporting
of costs that are associated with exit and disposal activities, including restructuring activities that are currently accounted for pursuant to the guidance that the Emerging Issues Task Force has set
forth in Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." The
provisions of SFAS No. 146 are effective for exit or disposal activities that are initiated after December 31, 2002. The adoption of SFAS No. 146 is not expected to have a
material impact on the Company's consolidated financial statements.

In
November 2002, the FASB issued FASB Interpretation ("FIN") No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others." FIN No. 45 elaborates on the disclosures to be made by a guarantor about its obligations under certain guarantees. FIN No. 45 also clarifies that a guarantor is
required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. FIN No. 45 specifically identifies

33

---

certain
obligations that are excluded from the provisions related to recognizing a liability at inception, however, these guarantees are subject to the disclosure requirements of FIN No. 45.
The initial recognition and measurement provisions of FIN No. 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure
requirements are effective for the Company for the fiscal year ending November 30, 2003. The Company is currently assessing the impact of adopting FIN No. 45.

In
January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest Entities." This standard clarifies the application of Accounting Research Bulletin No. 51, "Consolidated
Financial Statements," and addresses consolidation by business enterprises of variable interest entities (more commonly known as Special Purpose Entities or SPE's). FIN No. 46 requires existing
unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risk among the parties involved. FIN No. 46 also
significantly enhances the disclosure requirements related to variable interest entities. This statement is effective to variable interest entities created or in which an enterprise obtains an
interest after January 31, 2003. It will be effective for the Company beginning September 1, 2003 for all interests in variable interest entities acquired before February 1, 2003.
The adoption of FIN No. 46 is not expected to have a material impact on the Company's consolidated financial statements.

Supplemental Cash Flow Information

2002

2001

2000(In thousands)Interest paid

$
6,996

$
10,810

$
13,778Income taxes paid


8,457


15,939


8,187


NOTE 2 OTHER INCOME

Other income was as follows for the years ended November 30:

|                                                     |  | 2002 |       | 2001 |   | 2000  |  
|---------------------------------------------------- |  | ---- | ----- | ---- | - | ----- | -
|
|Royalties, fees and other income                     |  | $    | 3,289 |      | $ | 4,972 |  
|Gain (loss) on sale of property, plant and equipment |  |      | 71    |      |   | (56   | )
|Foreign currency loss                                |  |      | (539  | )    |   | (927  | )
|Miscellaneous                                        |  |      | 1,373 |      |   | 565   |  
|                                                     |  |      |       |      |   |       |  
|                                                     |  | $    | 4,194 |      | $ | 4,554 |  
|                                                     |  |      |       |      |   |       |  

The
Company provides technical services and receives fees, royalties and other income from licensees and certain of its joint ventures which are included above. Income from joint
ventures totaled $1,582,000 in 2002, $2,498,000 in 2001, and $2,647,000 in 2000.

NOTE 3 RECEIVABLES

Receivables were as follows at November 30:

|               |  | 2002 |         | 2001 |  
|-------------- |  | ---- | ------- | ---- | -
|
|Trade          |  | $    | 127,874 |      | $
|Joint ventures |  |      | 2,653   |      |  
|Other          |  |      | 7,408   |      |  
|Allowances     |  |      | (6,652  | )    |  
|               |  |      |         |      |  
|               |  | $    | 131,283 |      | $
|               |  |      |         |      |  

---

The
Company's provision for bad debts was $1,300,000 in 2002, $1,738,000 in 2001, and $1,953,000 in 2000. Trade receivables included unbilled receivables related to percentage of
completion revenue recognition of $11,928,000 and $19,458,000 at November 30, 2002 and 2001, respectively.

NOTE 4 INVENTORIES

Inventories were as follows at November 30:

|                       |  | 2002 |        | 2001
|---------------------- |  | ---- | ------ | ----
|
|Finished products      |  | $    | 52,359 |     
|Materials and supplies |  |      | 20,373 |     
|Products in process    |  |      | 15,288 |     
|                       |  |      |        |     
|                       |  | $    | 88,020 |     
|                       |  |      |        |     

Certain
steel inventories are valued using the last-in, first-out method. These items comprised 2.7% and 4.6% of consolidated inventories at November 30, 2002 and 2001, respectively. If
such inventories had been valued using the first-in, first-out method, total inventories would have increased by $1,164,000 and $832,000 at November 30, 2002 and 2001, respectively.

NOTE 5 JOINT VENTURES

Investments, advances and equity in undistributed earnings of joint ventures were as follows at November 30:

|                          |  | 2002 |        | 2001
|------------------------- |  | ---- | ------ | ----
|
|Investmentsequity method |  | $    | 18,419 |     
|Investmentscost method   |  |      | 508    |     
|                          |  |      |        |     
|                          |  | $    | 18,927 |     
|                          |  |      |        |     

The
Company's investments which were accounted for by the equity method are summarized below:

|Products        |  | Joint Ventures                     |  | Ownership Interest
|--------------- |  | ---------------------------------- |  | ------------------
|Concrete pipe   |  | Ameron Saudi Arabia, Ltd. ("ASAL") |  | 30%               
|Steel products  |  | TAMCO                              |  | 50%               
|Fiberglass pipe |  | Bondstrand, Ltd.                   |  | 40%               
|Coatings        |  | Oasis-Ameron, Ltd.                 |  | 40%               

---

Investments
in joint ventures and the amount of undistributed earnings were as follows:

|                                                              |  | Concrete pipe |       | Steel products |   | Fiberglass pipe |   | Coatings |       | Total |  
|------------------------------------------------------------- |  | ------------- | ----- | -------------- | - | --------------- | - | -------- | ----- | ----- | -
|
|Cost                                                          |  | $             |      |                | $ | 8,482           |   | $        | 2,182 |       | $
|Comprehensive loss from joint venture                         |  |               |       |                |   | (2,672          | ) |          |       |       |  
|Accumulated equity in undistributed earnings, net of reserves |  |               |      |                |   | 7,130           |   |          | 1,602 |       |  
|                                                              |  |               |       |                |   |                 |   |          |       |       |  
|Investment, November 30, 2002                                 |  | $             |      |                | $ | 12,940          |   | $        | 3,784 |       | $
|                                                              |  |               |       |                |   |                 |   |          |       |       |  
|Dividends received in 2002                                    |  | $             | 3,310 |                | $ | 3,465           |   | $        | 2,263 |       | $
|                                                              |  |               |       |                |   |                 |   |          |       |       |  
|Cost                                                          |  | $             |      |                | $ | 8,482           |   | $        | 2,182 |       | $
|Comprehensive loss from joint venture                         |  |               |       |                |   | (2,687          | ) |          |       |       |  
|Accumulated equity in undistributed earnings, net of reserves |  |               |      |                |   | 6,998           |   |          | 1,602 |       |  
|                                                              |  |               |       |                |   |                 |   |          |       |       |  
|Investment, November 30, 2001                                 |  | $             |      |                | $ | 12,793          |   | $        | 3,784 |       | $
|                                                              |  |               |       |                |   |                 |   |          |       |       |  
|Dividends received in 2001                                    |  | $             | 3,325 |                | $ | 2,585           |   | $        | 2,070 |       | $
|                                                              |  |               |       |                |   |                 |   |          |       |       |  

During
1998, the Company recorded an impairment charge of $10,505,000 to adjust its net investment in ASAL to zero.

The
Company has provided for income taxes on the undistributed earnings of its joint ventures, to the extent such earnings have been included in the consolidated statements of income.

The
Company's investments in ASAL, Bondstrand, Ltd. and Oasis-Ameron, Ltd. were recorded based on audited financial statements as of December 31, 2001, and unaudited financial
statements as of

34

---

September
30, 2002. The investment in TAMCO was recorded based on audited financial statements as of November 30, 2002.

Summarized
and combined financial information for joint ventures follows:

|Financial Condition    |  | 2002 |         | 2001
|---------------------- |  | ---- | ------- | ----
|
|Current assets         |  | $    | 168,345 |     
|Noncurrent assets      |  |      | 73,563  |     
|                       |  |      |         |     
|                       |  | $    | 241,908 |     
|                       |  |      |         |     
|Current liabilities    |  | $    | 105,862 |     
|Noncurrent liabilities |  |      | 20,496  |     
|Stockholders equity    |  |      | 115,550 |     
|                       |  |      |         |     
|                       |  | $    | 241,908 |     
|                       |  |      |         |     

|Results of Operations |  | 2002 |         | 2001 |   | 2000   
|--------------------- |  | ---- | ------- | ---- | - | -------
|
|Net sales             |  | $    | 208,361 |      | $ | 219,864
|Gross profit          |  |      | 47,382  |      |   | 51,968 
|Net income            |  |      | 21,937  |      |   | 24,525 

In
2001, TAMCO entered into a swap agreement intended to hedge expected cash flows related to the purchase of natural gas used in its manufacturing process. The Company has recognized
$2,672,000 and $2,687,000 in accumulated other comprehensive loss at November 30, 2002 and 2001, respectively, which represents its proportionate share of amounts recognized by TAMCO to record the
fair value of the swap agreement.

The
amount of investments and accumulated equity in the undistributed earnings net of reserves in the Middle Eastern joint ventures was $5,479,000 at November 30, 2002 and 2001.

Sales
to joint ventures totaled $4,848,000 in 2002, $7,747,000 in 2001 and $7,487,000 in 2000.

The
Company has 25% ownership in Amercoat Mexicana, which has been accounted for by the cost method since the Company does not have the ability to exert significant influence over the
investee's operating and financing activities.

The
Company guaranteed a $1,707,000 bank credit facility for Bondstrand, Ltd. at November 30, 2002.

NOTE 6 OTHER ASSETS

Other assets were as follows at November 30:

|                                           |  | 2002 |        | 2001
|------------------------------------------ |  | ---- | ------ | ----
|
|Cash surrender value of insurance policies |  | $    | 26,415 |     
|Prepaid pension cost                       |  |      |       |     
|Other                                      |  |      | 6,483  |     
|                                           |  |      |        |     
|                                           |  | $    | 32,898 |     
|                                           |  |      |        |     

---

NOTE 7 ACCRUED LIABILITIES

Accrued liabilities were as follows at November 30:

|                                           |  | 2002 |        | 2001
|------------------------------------------ |  | ---- | ------ | ----
|
|Compensation and benefits                  |  | $    | 18,907 |     
|Self insurance reserves                    |  |      | 14,222 |     
|Reserves for pending claims and litigation |  |      | 5,308  |     
|Taxes (other than income taxes)            |  |      | 2,450  |     
|Commissions and royalties                  |  |      | 1,250  |     
|Interest                                   |  |      | 826    |     
|Advances from customers                    |  |      | 464    |     
|Other                                      |  |      | 2,567  |     
|                                           |  |      |        |     
|                                           |  | $    | 45,994 |     
|                                           |  |      |        |     

NOTE 8 OTHER LONG-TERM LIABILITIES

Other long-term liabilities were as follows at November 30:

2002

2001(In thousands)Accrued pension cost

$
39,128

$
7,191Compensation and benefits


4,422


11,970Deferred income tax liabilities


662


13,690Other


424


433$
44,636

$
33,284


NOTE 9 INCOME TAXES

The provision for income taxes included the following for the years ended November 30:

|         |         | 2002 |        | 2001  |   | 2000  
|-------- | ------- | ---- | ------ | ----- | - | ------
|
|Current  |         |      |        |       |   |       
|         | Federal |      | $      | 4,587 |   | $     
|         | Foreign |      |        | 3,508 |   |       
|         | State   |      |        | 399   |   |       
|         |         |      |        |       |   |       
|         |         |      |        | 8,494 |   |       
|         |         |      |        |       |   |       
|Deferred |         |      |        |       |   |       
|         | Federal |      |        | 5,104 |   |       
|         | Foreign |      |        | (99   | ) |       
|         | State   |      |        | 955   |   |       
|         |         |      |        |       |   |       
|         |         |      | 5,960  |       |   | 8,865 
|         |         |      |        |       |   |       
|         |         | $    | 14,454 |       | $ | 10,850
|         |         |      |        |       |   |       

---

Deferred income tax assets consisted of the following as of November 30:

2002

2001(In thousands)Noncurrent deferred income taxesNet operating loss carryovers

$
11,293

$
7,418Accrued (prepaid) pension cost


10,415


(5,836
)Employee benefits


4,382


6,536Investments


3,220


3,243Valuation allowance


(12,101
)

(8,107
)Property, plant and equipment


(17,572
)

(16,373
)Other


(299
)

(571
)Net noncurrent deferred income tax liabilities


(662
)

(13,690
)Current deferred income taxesSelf-insurance/claims reserves


10,377


11,373Inventories


4,784


4,432Employee benefits


2,554


2,969Accounts receivable


1,722


1,762Valuation allowance


(1,359
)

(1,261
)Other


(1,550
)

(33
)Net current deferred income tax assets


16,528


19,242Net deferred income tax assets

$
15,866

$
5,552


As
of November 30, 2002, the Company had foreign net operating loss carryovers of approximately $34,400,000. The valuation allowance for deferred income tax assets, which relates
primarily to foreign net operating loss carryovers and net deductible temporary differences, increased by $4,092,000 in 2002 and by $3,884,000 in 2001.

35

---

The
tax provision represents effective tax rates of 34%, 28% and 25% of income before income taxes for the years ended November 30, 2002, 2001 and 2000, respectively. A
reconciliation of income taxes provided at the effective income tax rate and the amount computed at the federal statutory income tax rate of 35% is as follows for the years ended November 30:

|                                         |  | 2002 |        | 2001 |   | 2000   |  
|---------------------------------------- |  | ---- | ------ | ---- | - | ------ | -
|
|Domestic pretax income                   |  | $    | 37,708 |      | $ | 39,146 |  
|Foreign pretax income                    |  |      | 4,805  |      |   | (555   | )
|                                         |  |      |        |      |   |        |  
|                                         |  | $    | 42,513 |      | $ | 38,591 |  
|                                         |  |      |        |      |   |        |  
|Taxes at federal statutory rate          |  | $    | 14,880 |      | $ | 13,507 |  
|State taxes (net of federal tax benefit) |  |      | 1,335  |      |   | 1,701  |  
|Foreign losses with no federal benefit   |  |      | 3,306  |      |   | 3,669  |  
|Foreign income taxed at lower rates      |  |      | (2,414 | )    |   | (1,575 | )
|Foreign tax credit                       |  |      | (1,432 | )    |   | (2,004 | )
|Foreign branch and withholding taxes     |  |      | 833    |      |   | 999    |  
|Equity in earnings of joint ventures     |  |      | (996   | )    |   | (638   | )
|Percentage depletion                     |  |      | (364   | )    |   | (382   | )
|Research and development credits         |  |      | (598   | )    |   | (4,008 | )
|Other, net                               |  |      | (96    | )    |   | (419   | )
|                                         |  |      |        |      |   |        |  
|                                         |  | $    | 14,454 |      | $ | 10,850 |  
|                                         |  |      |        |      |   |        |  

In
2001, the IRS completed the examination of the Company's 1993 through 1995 federal income tax returns and issued an assessment. The Company agreed with the IRS regarding the
assessment. The assessment was not material to the Company's financial statements and was paid in 2002.

The
1996 through 1998 federal income tax returns are currently under examination by the IRS. No assessments have been issued to date. Although it cannot predict with certainty the
ultimate outcome of this examination, the Company believes it has adequately provided for any potential liabilities that may result.

In
2001, the Company filed federal and state income tax claims for research and development credits for tax years 1990 through 2000. The claims are currently under IRS examination.

NOTE 10 DEBT

Short-term borrowings consisted of loans payable under bank credit lines totaling $1,009,000 and $4,080,000 as of November 30, 2002 and 2001, respectively.
At November 30, 2002, the equivalent of $13,599,000 was available under these short-term credit lines. The effective interest rate on these loans was approximately 5.90% at November 30,
2002 and 13.35% at November 30, 2001. The higher interest rate in 2001 related to borrowings by the Company's Colombian subsidiary.

Domestically,
as of November 30, 2002, the Company maintained a $150,000,000 revolving credit facility. At November 30, 2002, $58,000,000 was borrowed under this facility.
In January 2003, the Company finalized a three-year, $100,000,000 revolving credit facility with six banks (the "Revolver"). Under the Revolver, the Company may, at its option, borrow at floating
interest rates based on specified margins over money market rates, at anytime until January 2006, when all borrowings under the Revolver must be repaid. Also in January 2003, the Company issued
$50,000,000 of notes payable to an insurance company at a fixed rate of 5.36%. These fixed-rate notes payable amortize $10,000,000 per year beginning in November 2005, with a final maturity in
November 2009. The Revolver and the 5.36% notes payable replace the $150,000,000 revolving credit facility that was maintained at November 30, 2002.

The
Company and its foreign subsidiaries also maintain unsecured revolving credit facilities and short-term facilities with banks. The Company and its foreign subsidiaries may borrow in
various currencies, at interest rates based upon specified margins over money market rates. The equivalent of

---

$6,000,000 may be borrowed at any time through March 2005 under one facility. Other short-term lines permit borrowings up to $10,690,000. At November 30, 2002, $4,123,000 was borrowed under
these facilities.

Borrowings
under certain bank facilities by the Company and its foreign subsidiaries are supported by the Revolver and, accordingly, have been classified as long-term debt and are
considered payable when the Revolver is due.

Long-term
debt consisted of the following as of November 30:

2002

2001(In thousands)Fixed-rate notes payable:7.92%, payable in annual principal installments of $8,333

$
33,333

$
41,666Variable-rate industrial development bonds,payable in 2016 (1.25% at November 30, 2002)


7,200


7,200payable in 2021 (1.40% at November 30, 2002)


8,500


8,500Variable-rate bank revolving credit facilities (2.00% at November 30, 2002)


62,123


84,910Variable-rate bank loan, paid in 2002





3,254Variable-rate bank loan, payable in Dutch guilders, paid in 2002





264111,156


145,794Less current portion


(8,333
)

(8,597
)$
102,823

$
137,197


Future
maturities of long-term debt are as follows as of November 30, 2002, adjusted to reflect the refinancing in January 2003:

Year ending
November 30,

Amount(In thousands)2003

$
8,3332004


8,3332005


18,3332006


30,4572007


10,000Thereafter


35,700$
111,156


The
lending agreements contain various restrictive covenants, including the requirement to maintain specified amounts of net worth and restrictions on cash dividends, borrowings, liens,
investments and guarantees. Under the most restrictive provisions of the Company's lending agreements, approximately $8,734,000 of retained earnings was not restricted as of November 30, 2002,
as to the declaration of cash dividends or the repurchase of Company stock. At November 30, 2002, the Company was in compliance with all covenants.

The
Revolver, the 5.36% notes payable and the 7.92% notes payable, beginning in January 2003, are secured by substantially all of the assets of the Company. The industrial revenue bonds
are supported by standby letters of credit that are issued under the Revolver. Certain note agreements contain provisions regarding the Company's ability to grant additional security interests or
liens in association with other debt instruments. If the Company grants such a security interest or lien, then such notes will be secured equally and ratably as long as such other debt shall be
secured.

36

---

Interest
income and expense were as follows for the years ended November 30:

|                      |  | 2002 |       | 2001 |   | 2000   |  
|--------------------- |  | ---- | ----- | ---- | - | ------ | -
|
|Interest expense      |  | $    | 7,024 |      | $ | 10,471 |  
|Interest income       |  |      | (188  | )    |   | (258   | )
|                      |  |      |       |      |   |        |  
|Interest expense, net |  | $    | 6,836 |      | $ | 10,213 |  
|                      |  |      |       |      |   |        |  

The
following disclosure of the estimated fair value of the Company's debt is made in accordance with the requirements of SFAS No. 107, "Disclosures about Fair Value of Financial
Instruments." The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required to
develop the estimated fair value, thus the estimates provided herein are not necessarily indicative of the amounts that could be realized in a current market exchange.

Carrying
Amount

Fair
Value(In thousands)November 30, 2002Short-term borrowings

$
1,009

$
1,009Fixed-rate, long-term debt


33,333


35,577Variable-rate, long-term debt


77,823


77,823November 30, 2001Short-term borrowings


4,080


4,080Fixed-rate, long-term debt


41,666


43,656Variable-rate, long-term debt


104,128


104,128


The
estimated fair value of the Company's variable-rate debt approximates the carrying value of the debt since the variable interest rates are market-based, and the Company believes such
debt could be refinanced on materially similar terms. The estimated fair value of the Company's fixed-rate, long-term debt is based on U.S. government notes at November 30, 2002 plus an
estimated spread for similar securities with similar remaining maturities.

NOTE 11 LEASE COMMITMENTS

The Company leases facilities and equipment under non-cancelable operating leases. Rental expense under long-term operating leases of real property, vehicles and
other equipment was $5,071,000 in 2002, $5,687,000 in 2001 and $5,635,000 in 2000. At November 30, 2002, future rental commitments under these leases totaled $39,050,000. Future rental
commitments were as follows as of November 30, 2002:

Year ending
November 30,

Amount(In thousands)2003

$
4,6452004


3,7442005


3,1012006


1,9842007


1,978Thereafter


23,598$
39,050


Future
rental commitments for leases are not reduced by minimum non-cancelable sublease rentals aggregating $2,613,000 at November 30, 2002.

---

NOTE 12 INCENTIVE STOCK COMPENSATION PLANS

The Company applies Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations in accounting for
its various stock option plans. The Company has adopted the disclosure only provisions of SFAS No. 123, "Accounting for Stock-Based Compensation."

In
2001, the 2001 Stock Incentive Plan ("2001 Plan") was approved by the stockholders of the Company. The 2001 Plan serves as the successor to both the 1992 Incentive Stock Compensation
Plan and the 1994 Non-Employee Director Stock Option Plan and superceded those plans. Under the terms of the 2001 Plan, 190,000 new shares of common stock were made available for awards both to
non-employee directors and to key employees of the Company. Awards to key employees may include, but are not limited to, stock options, restricted stock, performance shares or performance unit awards;
however, no more than 40,000 of such shares were made available for issuance as either restricted stock, performance stock, performance shares or performance units. Restrictions may limit the sale,
transfer, voting rights and dividends on these shares. At November 30, 2002, 40,000 restricted shares were outstanding. With respect to non-employee directors, on the first business day
following the date of the annual meeting of stockholders of the Company, each non-employee director will receive an option to purchase 1,500 shares of common stock.

At
November 30, 2002, the Company had 575,104 non-qualified stock options outstanding with terms of from 10 to 15 years from the date of grant, and 129,000 shares available for
future grants under the 2001 plan. The exercise price for such outstanding stock options is generally the fair market value of the Company's stock on the date of the original grant. Such options vest
in equal annual installments over four years. Certain options have a cashless exercise feature and are subject to variable plan accounting. In 2002, the Company recognized stock compensation expense
of $1,283,000, including $570,000 related to restricted stock and $713,000 related to an extension of the life of certain options and to options with a cashless exercise feature. In 2001, the Company
recognized stock compensation expense of $1,480,000, including $843,000 related to options with the cashless exercise feature and $637,000 related to an extension of the life of certain stock options.

SFAS
No. 123 requires pro forma information regarding net income and earnings per share as if compensation cost for stock options had been determined based on the fair value of
the options on the grant date. The Company estimates the fair value of stock options at the grant date by using the Black Scholes option pricing model with the following weighted average assumptions
used for grants in 2000, 2001 and 2002, respectively: dividend yields of 3.02%, 3.47% and 2.01%; an expected volatility of 30.2%, 25.5% and 35.08%; risk-free rates of 6.61%, 4.90% and 4.84% and an
expected life of five years for all years.

Under
the accounting provisions of SFAS No. 123, the Company's net income and earnings per share would have been as indicated below for the years ended November 30:

2002

2001

2000(in thousands except per share data)Net incomeAs reported

$
28,059

$
27,741

$
25,345Pro forma


27,981


27,520


24,684Earnings per share (diluted)As reported


6.97


6.89


6.41Pro forma


6.95


6.84


6.25


37

---

A
summary of the Company's stock options as of November 30, 2000, 2001 and 2002, and changes during the years then ended, follows:

|                                                           |           | Number of Options |         | Weighted Average Exercise Price
|---------------------------------------------------------- | --------- | ----------------- | ------- | -------------------------------
|Outstanding at December 1, 1999                            |           | 420,409           |         | $                              
|                                                           | Granted   |                   | 84,500  |                                
|                                                           | Forfeited |                   | (1,000  | )                              
|                                                           |           |                   |         |                                
|Outstanding at November 30, 2000                           |           | 503,909           |         |                                
|                                                           |           |                   |         |                                
|Options exercisable at November 30, 2000                   |           | 325,784           |         |                                
|                                                           |           |                   |         |                                
|Weighted average fair value of options granted during 2000 |           |                   |         |                                
|Outstanding at November 30, 2000                           |           | 503,909           |         |                                
|                                                           | Granted   |                   | 102,500 |                                
|                                                           | Exercised |                   | (3,650  | )                              
|                                                           | Forfeited |                   | (5,500  | )                              
|                                                           |           |                   |         |                                
|Outstanding at November 30, 2001                           |           | 597,259           |         |                                
|                                                           |           |                   |         |                                
|Options exercisable at November 30, 2001                   |           | 385,009           |         |                                
|                                                           |           |                   |         |                                
|Weighted average fair value of options granted during 2001 |           |                   |         |                                
|Outstanding at November 30, 2001                           |           | 597,259           |         |                                
|                                                           | Granted   |                   | 10,500  |                                
|                                                           | Exercised |                   | (32,655 | )                              
|                                                           |           |                   |         |                                
|Outstanding at November 30, 2002                           |           | 575,104           |         |                                
|                                                           |           |                   |         |                                
|Options exercisable at November 30, 2002                   |           | 431,854           |         |                                
|                                                           |           |                   |         |                                
|Weighted average fair value of options granted during 2002 |           |                   |         |                                

The
following summarizes information about stock options outstanding as of November 30, 2002:

|Range of Exercise Prices |    | Options Outstanding at November 30, 2002 |  | Weighted Average Remaining Contractual Life (in years) |  | Weighted Average Exercise Price
|------------------------ | -- | ---------------------------------------- |  | ------------------------------------------------------ |  | -------------------------------
|$30.00                   | to | $40.00                                   |  | 334,734                                                |  | 8.84                           
|40.00                    | to | 50.00                                    |  | 156,370                                                |  | 8.01                           
|50.00                    | to | 60.00                                    |  | 73,500                                                 |  | 10.02                          
|60.00                    | to | 75.00                                    |  | 10,500                                                 |  | 9.30                           
|                         |    |                                          |  |                                                        |  |                                
|30.00                    | to | 75.00                                    |  | 575,104                                                |  | 8.77                           
|                         |    |                                          |  |                                                        |  |                                

|Range of Exercise Prices |    | Options Exercisable at November 30, 2002 |  | Weighted Average Exercise Price
|------------------------ | -- | ---------------------------------------- |  | -------------------------------
|$30.00                   | to | $40.00                                   |  | 278,859                        
|40.00                    | to | 50.00                                    |  | 79,495                         
|50.00                    | to | 60.00                                    |  | 73,500                         
|60.00                    | to | 75.00                                    |  |                               
|                         |    |                                          |  |                                
|30.00                    | to | 75.00                                    |  | 431,854                        
|                         |    |                                          |  |                                

38

---

NOTE 13 COMMITMENTS AND CONTINGENCIES

An action was filed in 1992 in the U.S. District Court for the District of Arizona by the Central Arizona Water Conservation District ("CAWCD") seeking damages
against several parties, including the Company and the Company's customer, Peter Kiewit Sons Company ("Kiewit"), in connection with six prestressed concrete pipe siphons furnished and installed in the
1970's as part of the Central Arizona Project ("CAP"), a federal project to bring water from the Colorado River to Arizona. The CAWCD also filed separate actions against the U.S. Bureau of Reclamation
("USBR") in the U.S. Court of Claims and with the Arizona Projects Office of the USBR in connection with the CAP siphons. The CAWCD alleged that the six CAP siphons were defective and that the USBR
and the defendants in the U.S. District Court action were liable for damages for the repair or replacement of those siphons. On September 14, 1994, the U.S. District Court granted the Company's
motion to dismiss the CAWCD action and entered judgment against the CAWCD and in favor of the Company and its co-defendants.

Separately,
on September 28, 1995, the Contracting Officer for the USBR issued a final decision claiming for the USBR approximately $40 million in damages against Kiewit,
based in part on the Contracting Officer's finding that the siphons supplied by the Company were defective. That claim amount was considered by the Company to be duplicative of the damages sought by
the CAWCD for the repair or replacement of the siphons in the aforementioned action in the U.S. District Court for the District of Arizona. The Contracting Officer's final decision was appealed by
Kiewit to the U.S. Department of the Interior Board of Contract Appeals ("IBCA"). The Company actively cooperated with and assisted Kiewit in the administrative appeal of that final decision before
the IBCA. Trial on that appeal commenced in November 2000, however the proceeding was stayed with the concurrence of the parties pending efforts aimed at settlement of the entire matter. Settlement
efforts were then undertaken, during which the IBCA appeal was suspended.

As
of November 30, 2002, tentative settlements had been reached among the USBR, Kiewit, the Company and various insurance carriers. Since November 30, 2002, those
settlements have been finalized and the entire matter, including the aforementioned CAWCD claim, has been resolved on economic terms that did not result in an adverse material effect on the financial
position of the Company or its results of operations. The Company will receive sufficient reimbursement from its own and a supplier's insurance companies to fully cover the settlement.

The
Company is one of numerous defendants in various pending lawsuits involving, as of November 30, 2002, some 8,382 individuals or their representatives alleging personal injury
from exposure to asbestos-containing products. None of such lawsuits specifies any dollar amount sought as damages by such individuals or their representatives, and at this time the Company is not
aware of the extent of injuries allegedly suffered by the individuals or the facts supporting the claim that such injuries were caused by the Company's products. Based upon the information available
to it at this time, the Company is not in a position to evaluate its potential exposure, if any, as a result of these claims. The Company intends to vigorously defend all asbestos-related lawsuits.

In
addition to the above, certain other claims, suits and complaints that arise in the ordinary course of business, have been filed or are pending against the Company. Management
believes that these matters are either adequately reserved, covered by insurance, or would not have a material effect on the Company's financial position or its results of operations if disposed of
unfavorably.

The
Company is subject to federal, state and local laws and regulations concerning the environment and is currently participating in administrative proceedings at several sites under
these laws. While the Company finds it difficult to estimate with any certainty the total cost of remediation at the several sites, on the basis of currently available information and reserves
provided, the Company believes that the outcome of such environmental regulatory proceedings will not have a material effect on the Company's financial position or its results of operations.

39

---

NOTE 14 EMPLOYEE BENEFIT PLANS

The Company has a qualified, defined benefit, noncontributory pension plan for U.S. employees not covered by union pension plans. Benefits paid to retirees are
based upon age at retirement, years of credited service and average compensation or negotiated benefit rates. The Company's funding policy is to make contributions to the plan sufficient to meet the
minimum funding requirements of applicable laws and regulations, plus such additional amounts, if any, as the Company's actuarial consultants recommend.

Assets
of the Company's U.S. defined benefit plan are invested in a directed trust. Assets in the trust are invested in domestic and foreign equity securities of corporations (including
$4,623,000 of the Company's common stock at November 30, 2002), U.S. government obligations, derivative securities, corporate bonds and money market funds.

The
Company has a supplemental non-qualified, non-funded retirement plan for certain U.S. executives, for which the Company has purchased cost recovery life insurance on the lives of the
participants. The Company is the sole owner and beneficiary of such policies. As of November 30, 2002 and 2001, the cash surrender value of these policies was $8,510,000 and $8,339,000,
respectively. The Company also provides health and life insurance to a limited number of eligible retirees and eligible survivors of retirees.

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The
following sets forth the change in benefit obligations, change in plan assets, funded status and amounts recognized in the balance sheet as of November 30, 2002 and 2001 for
the Company's defined benefit retirement plans and postretirement health care and life insurance benefits:

|                                               |  | Defined Benefit Retirement Plans |         | Other Postretirement Benefits |  
|---------------------------------------------- |  | -------------------------------- | ------- | ----------------------------- | -
|
|
|Change in Benefit Obligation                   |  |                                  |         |                               |  
|Projected benefit obligationbeginning of year |  | $                                | 146,174 |                               | $
|Service cost                                   |  |                                  | 2,506   |                               |  
|Interest cost                                  |  |                                  | 10,353  |                               |  
|Benefit adjustments                            |  |                                  | 393     |                               |  
|Actuarial loss (gain)                          |  |                                  | 9,127   |                               |  
|Benefit payments                               |  |                                  | (9,845  | )                             |  
|                                               |  |                                  |         |                               |  
|Projected benefit obligationend of year       |  | $                                | 158,708 |                               | $
|                                               |  |                                  |         |                               |  
|Change in Plan Assets                          |  |                                  |         |                               |  
|Plan assets at fair valuebeginning of year    |  | $                                | 135,171 |                               | $
|Actual return on plan assets                   |  |                                  | (11,834 | )                             |  
|Employer contribution                          |  |                                  | 246     |                               |  
|Benefit payments                               |  |                                  | (9,845  | )                             |  
|                                               |  |                                  |         |                               |  
|Plan assets at fair valueend of year          |  | $                                | 113,738 |                               | $
|                                               |  |                                  |         |                               |  
|Funded Status                                  |  |                                  |         |                               |  
|Funded status                                  |  | $                                | (44,970 | )                             | $
|Unrecognized actuarial loss                    |  |                                  | 51,081  |                               |  
|Unrecognized transition (asset) obligation     |  |                                  |        |                               |  
|Unrecognized prior service cost                |  |                                  | 1,540   |                               |  
|                                               |  |                                  |         |                               |  
|Net amount recognized                          |  | $                                | 7,651   |                               | $
|                                               |  |                                  |         |                               |  
|Balance Sheet Amounts                          |  |                                  |         |                               |  
|Prepaid cost                                   |  | $                                |        |                               | $
|Accrued cost                                   |  |                                  | (34,855 | )                             |  
|Intangible asset                               |  |                                  | 1,242   |                               |  
|Accumulated other comprehensive loss, pretax   |  |                                  | 41,264  |                               |  
|                                               |  |                                  |         |                               |  
|Net amount recognized                          |  | $                                | 7,651   |                               | $
|                                               |  |                                  |         |                               |  

40

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Net
periodic benefit costs for the Company's defined benefit retirement plans and postretirement health care and life insurance benefits for 2002, 2001 and 2000 included the following
components:

|                                                               |  | Defined Benefit Retirement Plans |         | Other Postretirement Benefits
|-------------------------------------------------------------- |  | -------------------------------- | ------- | -----------------------------
|
|
|Service cost                                                   |  | $                                | 2,506   |                              
|Interest cost                                                  |  |                                  | 10,353  |                              
|Expected return on plan assets                                 |  |                                  | (12,711 | )                            
|Amortization of unrecognized prior service cost                |  |                                  | 520     |                              
|Amortization of unrecognized net transition (asset) obligation |  |                                  | (35     | )                            
|Amortization of accumulated loss (gain)                        |  |                                  | 671     |                              
|                                                               |  |                                  |         |                              
|Net periodic cost (benefit)                                    |  | $                                | 1,304   |                              
|                                                               |  |                                  |         |                              

The
following table provides the weighted average assumptions used to compute the actuarial present value of projected benefit obligations:

|                                                 |  | Defined Benefit Retirement Plans |   | Other Postretirement Benefits |  
|------------------------------------------------ |  | -------------------------------- | - | ----------------------------- | -
|
|Weighted average discount rate                   |  | 6.75                             | % | 7.25                          | %
|Expected long-term rate of return on plan assets |  | 9.75                             | % | 9.75                          | %
|Rate of increase in compensation levels          |  | 4.25                             | % | 4.75                          | %

Approximately
18% of the Company's employees are covered by union-sponsored, collectively bargained, multi-employer pension plans. Related to these plans, the Company contributed and
charged to expense $2,242,000, $4,009,000 and $2,800,000 in 2002, 2001 and 2000, respectively. These contributions are determined in accordance with the provisions of negotiated labor contracts and
generally are based on the number of hours worked. The Company has no intention of withdrawing from any of these plans, nor is there any intention to terminate such plans.

The
assumed health care cost trend was 9% in 2002; it is assumed that the rate will decline gradually to 5% by 2006. The effect of a one-percentage-point change in the
assumed health care cost trend would have altered the amounts of the benefit obligation and the sum of the service cost and interest cost components of postretirement benefit expense for 2002, as
follows:

|                                                                                |  | Increase |  | Decrease |  
|------------------------------------------------------------------------------- |  | -------- |  | -------- | -
|
|Effect on total of service and interest cost components of net periodic expense |  | $  16    |  | $(13     | )
|Effect on postretirement benefit obligation                                     |  | 111      |  | (96      | )

The
Company's subsidiary in the Netherlands provides retirement benefits to employees. The projected benefit obligation and plan assets at November 30, 2002 were $24,428,000 and
$18,123,000, respectively. Accrued pension cost of $4,723,000 was recorded at November 30, 2002 related to this plan. Net periodic costs for this plan were not material for the periods
presented.

The
Company has a deferred compensation plan providing eligible executives with the opportunity to participate in an unfunded, deferred compensation program. Under the program,
participants may defer base compensation and bonuses and earn interest on their deferred amounts. The program is not qualified under Section 401 of the Internal Revenue Code. The total of
participant deferrals and earnings thereon was $2,331,000 at November 30, 2002 and $8,776,000 at November 30, 2001.

---

The
participant deferrals earn interest at a rate based on U.S. government rates. The interest expense related to this plan was $302,000 in 2002, $667,000 in 2001 and $616,000 in 2000.

The
Company has a life insurance plan which provides eligible executives with life insurance protection equal to three times base salary. Upon retirement, the executive is provided with
life insurance protection equal to final base salary. Benefits may be paid as a lump sum or as an annual income to the identified survivor over ten years. The expense related to this plan was $148,000
in 2002, $230,000 in 2001 and $287,000 in 2000.

In
connection with the above two plans, whole life insurance contracts were purchased on the related participants. At November 30, 2002 and 2001, the cash surrender value of these
policies was $17,905,000 and $16,395,000, respectively net of loans of $1,000,000 each year.

The
Company has severance agreements with certain key employees that could provide benefits upon termination of up to 3.5 times total annual compensation of such employees.

The
Company provides to certain employees a savings plan under Section 401(k) of the Internal Revenue Code. The savings plan allows for deferral of income up to a certain
percentage through contributions to the plan and within certain restrictions. Company matching contributions are in the form of cash. In 2002, 2001 and 2000, the Company recorded expense for matching
contributions of $602,000, $883,000 and $833,000, respectively.

41

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NOTE 15 CAPITAL STOCK

The Company is incorporated in Delaware. The articles of incorporation authorize 12,000,000 shares of $2.50 par value common stock, 1,000,000 shares of $1.00 par
value preferred stock and 100,000 shares of $1.00 par value series A junior participating cumulative preferred stock. The preferred stock may be issued in series, with the rights and
preferences of each series to be established by the Board of
Directors. As of November 30, 2002, no shares of preferred stock or series A junior participating cumulative preferred stock were outstanding.

As
of November 30, 2002, 3,945,662 shares of common stock were issued and outstanding, including 40,000 restricted shares which were granted on January 23, 2002.
Restrictions limit the sale and transfer on these shares. On each of the first four anniversaries of the grant date, 25% of the shares become unrestricted.

The
Company also has a Stockholders' Rights Plan, which, among other things, entitles stockholders to purchase common stock at a significant discount if a party acquires 15% or more of
the Company's common stock or announces a tender offer for at least 15% of its common stock outstanding.

NOTE 16 QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly financial data for the years ended November 30, 2002 and 2001, follow:

|                             |  | First
Quarter |         | Second
Quarter |   | Third
Quarter |  | Fourth
Quarter
|---------------------------- |  | ------------- | ------- | -------------- | - | ------------- |  | --------------
|
|2002                         |  |               |         |                |   |               |  |               
|Sales                        |  | $             | 120,702 |                | $ | 138,099       |  | $             
|Gross profit                 |  |               | 30,439  |                |   | 35,564        |  |               
|Net income                   |  |               | 1,771   |                |   | 7,562         |  |               
|Diluted net income per share |  |               | 0.43    |                |   | 1.82          |  |               
|Stock price per share-high   |  |               | 71.57   |                |   | 77.47         |  |               
|Stock price per share-low    |  |               | 62.60   |                |   | 67.05         |  |               
|Dividends per share          |  |               | 0.32    |                |   | 0.32          |  |               
|2001                         |  |               |         |                |   |               |  |               
|Sales                        |  | $             | 121,605 |                | $ | 143,670       |  | $             
|Gross profit                 |  |               | 29,899  |                |   | 34,766        |  |               
|Net income                   |  |               | 1,580   |                |   | 7,074         |  |               
|Diluted net income per share |  |               | 0.41    |                |   | 1.78          |  |               
|Stock price per share-high   |  |               | 46.85   |                |   | 73.49         |  |               
|Stock price per share-low    |  |               | 34.06   |                |   | 45.85         |  |               
|Dividends per share          |  |               | 0.32    |                |   | 0.32          |  |               

The
Company traditionally experiences lower sales during the first fiscal quarter because of seasonal patterns associated with weather and contractor schedules.

NOTE 17 SEGMENT INFORMATION

SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information," requires disclosure of certain information about operating segments,
geographic areas in which the Company operates, major customers, and products and services. In accordance with SFAS No. 131, the Company has determined it has four operating segments. The
Performance Coatings & Finishes Group manufactures and markets high-performance industrial and marine coatings. The Fiberglass-Composite Pipe Group manufactures and markets
filament-wound and molded composite fiberglass pipe, tubing, fittings and well screens. The Water Transmission Group manufactures and supplies concrete and steel pressure pipe, concrete
non-pressure pipe, protective linings for pipe, and fabricated products. The Infrastructure Products Group manufactures and sells ready-mix concrete, sand and aggregates,

---

concrete pipe and culverts, and concrete and steel lighting and traffic poles. Each of these segments has a dedicated management team and is managed separately, primarily because of differences in
products, technology, and markets.

The
markets served by the Performance Coatings & Finishes Group and the Fiberglass-Composite Pipe Group are worldwide in scope. The Water Transmission Group serves primarily the
western United States. The Infrastructure Products Group operates exclusively in the State of Hawaii and the continental United States. Sales for export or to any individual customer did not exceed
10% of consolidated sales in 2002, 2001, or 2000.

In
accordance with SFAS No. 131, the following table presents information related to each operating segment included in, and in a manner consistent with, internal management
reports. The Company allocates certain selling, general and administrative expenses to operating segments utilizing assumptions believed to be appropriate in the circumstances.

Inter-segment
sales were not significant. Income from reportable segments is exclusive of certain unallocated income and expenses, interest expense and income taxes. Total assets by
segment are those assets that are used exclusively by such segment. Unallocated assets are principally cash, corporate
property and equipment, and investments. Long-lived assets consist of all long-term assets, excluding investments.

42

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|     |                                                                              | Segment Information
|---- | ---------------------------------------------------------------------------- | -------------------
|
|
|2002 |                                                                              |                    
|     | Sales                                                                        |                    
|     | Income before interest and income taxes                                      |                    
|     | Equity in earnings of joint ventures                                         |                    
|     | Investments, advances and equity in undistributed earnings of joint ventures |                    
|     | Long-lived assets                                                            |                    
|     | Total assets                                                                 |                    
|     | Capital expenditures                                                         |                    
|     | Depreciation and amortization                                                |                    
|2001 |                                                                              |                    
|     | Sales                                                                        |                    
|     | Income before interest and
income taxes                                      |                    
|     | Equity in earnings of joint ventures                                         |                    
|     | Investments, advances and
equity in
undistributed
earnings of joint
ventures |                    
|     | Long-lived assets                                                            |                    
|     | Total assets                                                                 |                    
|     | Capital expenditures                                                         |                    
|     | Depreciation and amortization                                                |                    
|2000 |                                                                              |                    
|     | Sales                                                                        |                    
|     | Income before interest and
income taxes                                      |                    
|     | Equity in earnings of joint ventures                                         |                    
|     | Investments, advances and
equity in
undistributed
earnings of joint
ventures |                    
|     | Long-lived assets                                                            |                    
|     | Total assets                                                                 |                    
|     | Capital expenditures                                                         |                    
|     | Depreciation and amortization                                                |                    

---

|     |                             | Geographic Areas
|---- | --------------------------- | ----------------
|
|
|2002 |                             |                 
|     | Sales to external customers |                 
|     | Long-lived assets           |                 
|     | Total assets                |                 
|2001 |                             |                 
|     | Sales to external customers |                 
|     | Long-lived assets           |                 
|     | Total assets                |                 
|2000 |                             |                 
|     | Sales to external customers |                 
|     | Long-lived assets           |                 
|     | Total assets                |                 

43

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INDEPENDENT AUDITORS' REPORT

To
the Board of Directors and Stockholders of Ameron International Corporation:

We
have audited the accompanying consolidated balance sheets of Ameron International Corporation and subsidiaries (the "Company") as of November 30, 2002 and 2001, and the related consolidated
statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended November 30, 2002. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our 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, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of November 30, 2002 and 2001, and the results of its
operations and its cash flows for each of the three years in the period ended November 30, 2002, in conformity with accounting principles generally accepted in the United States of America.



Los
Angeles, California
February 3, 2003

---

MANAGEMENT'S LETTER

We
have prepared the accompanying consolidated financial statements and related financial information of Ameron International Corporation and subsidiaries in conformity with accounting principles
generally accepted in the United States of America. Management is responsible for the integrity of the financial information included in this Annual Report. In preparing the financial statements,
management makes estimates as necessary based upon currently available information and judgments of current conditions and circumstances.

Ameron
maintains a system of internal controls supported by documentation to provide reasonable assurance that assets are safeguarded and the accounting records reflect the authorized transactions of
the Company. We believe the Company's system provides this appropriate balance in accordance with established policies and procedures as implemented by qualified personnel.

The
independent auditors, Deloitte & Touche LLP, appointed by the Board of Directors, are responsible for expressing their opinion as to whether the consolidated financial statements present
fairly, in all material respects, the financial position, operating results and cash flows of the Company. In this process, they consider the system of internal control, in order to determine their
auditing procedures for the purpose of expressing an opinion on the financial statements. Their opinion appears on this page.

The
Audit Committee of the Board of Directors is composed of three directors who are not officers or employees of the Company. They meet periodically with management, Deloitte & Touche LLP and
the internal auditors to review the audit scope and results, discuss internal controls and financial reporting subjects, and review management actions on these matters. Deloitte & Touche LLP
and the internal auditors have full and free access to the members of the Audit Committee.

|/s/JAMES S. MARLENJames S. Marlen
Chairman of the Board, President & Chief Executive Officer |  | /s/GARY WAGNERGary Wagner
Senior Vice President, Chief Financial Officer
|-------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------

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