##### Table of Contents



UNITED
    STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
   Form 10-K
   þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES ACT OF 1934For the fiscal year ended
    October 28, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF
    THE SECURITIES ACT OF 1934For the transition period
    from          to          .    Commission file number:
    333-38223
   ARGO-TECH CORPORATION
 (Exact name of registrant as
    specified in its charter)
   Delaware

31-1521125(State or Other Jurisdiction
    of

(I.R.S. EmployerIncorporation or
    Organization)

Identification No.)23555 Euclid Avenue, Cleveland,
    Ohio

44117(Address of Principal Executive
    Offices)

(Zip
    Code)    Registrants telephone number, including area code:
 (216)
    692-6000
   Securities registered pursuant to Section 12(b) of the
    Act:
 None
   Securities registered pursuant to Section 12(g) of the
    Act:
 None
   o þ
  þ o
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
   o o þ
  Rule 12b-2 o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE None




---



##### 



INDEX TO
    ANNUAL REPORT ON
    FORM 10-K
  Table of
    Contents
  
  PagePART I:Item 1.


Business


1Item 1A.


Risk
    Factors


7Item 1B.


Unresolved Staff
    Comments


13Item 2.


Properties


13Item 3.


Legal
    Proceedings


14Item 4.


Submission of
    Matters to a Vote of Security Holders


14PART II:Item 5.


Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


14Item 6.


Selected Financial
    Data


14Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


18Item 7A.


Quantitative and
    Qualitative Disclosures About Market Risk


29Item 8.


Financial
    Statements and Supplementary Data


29Item 9.


Changes in and
    Disagreements With Accountants on Accounting and Financial
    Disclosure


29Item 9A.


Controls and
    Procedures


29PART III:Item 10.


Directors and
    Executive Officers of the Registrant


30Item 11.


Executive
    Compensation


31Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


37Item 13.


Certain
    Relationships and Related Transactions


38Item 14.


Principal
    Accountant Fees and Services


39PART IV:Item 15.


Exhibits and
    Financial Statement Schedules


40EX-12.1EX-31.1EX-31.2EX-32




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##### Table of Contents



ARGO-TECH
    CORPORATION
 PART I  Item 1.
    Business.    (216) 692-6000.
  Recent
    Developments
    1 4
      Aerospace
    segment
    30-year
 1




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##### Table of Contents



Industrial
    segment
      Products
  Aerospace
  Main Engine Fuel Pumps.
  A-318, A-319, A-320, A-321 A-340 A-350 747-8
    Airframe Products.
  Aerial Refueling Systems.
  Industrial
  Ground Fueling Products.
 2




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##### Table of Contents



-
  Cryogenic Products.
  Aftermarket
    sales
    Customers
  Aerospace
    Industrial
        Sales and
    Marketing
     3




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##### Table of Contents



Suppliers
    and Raw Materials
        Manufacturing,
    Repair and Overhaul
    
    a 150 acre business park in Cleveland, Ohio;
    a 9.2 acre facility in Costa Mesa, California;
    an 85,000 square foot facility in Tucson, Arizona; and
    a 6,000 square foot facility in Inglewood, California.         4




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##### Table of Contents



Intellectual
    Property
    Government
    Regulations
      Competition
    Backlog
   5




---



##### Table of Contents



period-to-period
  Development
    Expense Trends
    Employees
    Environmental
    Matters
          
    costs associated with third party environmental claims relating
    to environmental conditions arising from activities conducted by
    TRW during its operation of its Power Accessories Division that
    have not been conducted by us after our purchase of the assets
    of the division in 1986; and
    until October 19, 2006, a portion of the costs associated
    with third party environmental claims arising from activities
    conducted by both TRW and us, the portion of the costs to be
    paid by each party being determined based on the length of time
    each party conducted the activity giving rise to the claim.
    After that date, we are responsible for all such costs.   6




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##### Table of Contents



Item 1A.
    Risk
    Factors.      Our
    sales and earnings are dependent on conditions in the airline
    industry, and a significant or prolonged downturn in the airline
    industry or a future terrorist attack would decrease the airline
    industrys demand for our products and reduce our
    sales.
  Argo-Techs
   7




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##### Table of Contents



The
    aerospace industry is subject to significant government
    regulation and oversight and failure to comply with these
    regulations could increase the cost of operating our
    business.
    We
    compete with a number of established companies, virtually all of
    which have significantly greater financial, technological and
    marketing resources than we do. We may not be able to compete
    effectively with these companies, which could adversely affect
    our business and financial condition.
    If we
    are unable to meet future capital requirements or to continue
    our research and development activities, or recoup some of our
    capital and research and development expenditures, our
    competitive position may suffer.
     8




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##### Table of Contents



There
    are a limited number of customers for certain products, and the
    loss of a significant customer would reduce demand for our
    products and reduce our sales and cash flows.
      We
    have fixed-price contracts with some of our customers, and we
    bear the risk of costs in excess of our estimates.
      A
    significant portion of our sales is, and is expected to continue
    to be, from government contracts that are subject to reductions
    in defense spending, government regulation and risks particular
    to government contracts. The termination of any of our
    government contracts would reduce demand for our products and
    reduce our sales.
    
    suspend us from receiving new contracts pending resolution of
    alleged violations of procurement laws or regulations;
    terminate existing contracts, with or without cause, at any time;
    reduce the value of existing contracts;
    audit our contract-related costs and fees, including allocated
    indirect costs; and
    control or potentially prohibit the export of our products,
    technology or other data.   9




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##### Table of Contents



A
    large and growing portion of our revenue is derived from
    international sources, which exposes us to additional
    uncertainty.
    
    governmental embargoes or foreign trade restrictions on
    anti-dumping duties;
    changes in U.S. and foreign governmental regulations;
    tariffs;
    other trade barriers;
    the potential for nationalization of enterprises;
    economic downturns;
    inflation;
    environmental laws and regulations;
    political, economic and social instability; and
    difficulties in receivable collections and dependence on foreign
    personnel and foreign unions.  Our
    level of indebtedness could adversely affect our ability to
    raise additional capital to fund our operations, limit our
    ability to react to changes in the economy or our
    industry.
  1 4
  
    it may limit our ability to obtain additional debt or equity
    financing for working capital, capital expenditures, product
    development, debt service requirements, acquisitions and general
    corporate or other purposes;
    a substantial portion of our cash flows from operations will be
    dedicated to payments on our indebtedness and will not be
    available for other purposes, including our operations, capital
    expenditures and future business opportunities;
    the debt service requirements of our indebtedness could make it
    more difficult for us to satisfy our financial obligations,
    including those related to the notes;
    certain of our borrowings, including borrowings under the credit
    facility, are, and are expected to continue to be, at variable
    rates of interest, exposing us to the risk of increased interest
    rates;
    it may limit our ability to adjust to changing market conditions
    and place us at a competitive disadvantage compared to our
    competitors that have less debt; and
    it may increase our vulnerability to a downturn in general
    economic conditions or in our business, and may make us unable
    to carry out capital spending and research and development
    activities that are important to our growth.  Two
    majority holders control our parent company.
   10




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##### Table of Contents



We
    depend on the skill and experience of our senior
    management.
  and/or and/or
  Our
    operations depend on maintaining a skilled work force and any
    interruption in the work force at our facilities or those of
    OEMs and their suppliers could have a material adverse effect on
    our results of operations and financial condition.
        Our
    business and profitability is affected by the price and
    continuity of supply of certain necessary raw materials and
    component parts.
   11




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##### Table of Contents



We
    depend on our Cleveland, Ohio and Costa Mesa, California
    facilities.
  day-to-day
  We
    have potential exposure resulting from environmental
    matters.
        We
    have a potential risk of product liability and warranty
    claims.
    and/or
 12




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We
    have only a limited ability to protect our intellectual property
    rights, which are important to our success.
    The
    proposed acquisition of Argo-Tech by Eaton Corporation is
    subject to certain closing conditions that, if not satisfied or
    waived, will result in the transaction not being
    completed.
      Whether
    or not the transaction with Eaton Corporation is completed, the
    announcement and pendency of the transaction could cause
    disruptions in our business, which could have an adverse effect
    on our business and financial results.
    
    current and prospective employees may experience uncertainty
    about their future roles with Argo-Tech, which might adversely
    affect our ability to retain key managers and other employees or
    hire new employees; and
    the attention of management may be directed toward the
    completion of the transaction, rather than toward the execution
    of existing business plans.  Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.  150-acre
 13




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##### Table of Contents



9.2-acre (See Item 1. Business  Recent
    Developments).
      Item 3.
    Legal
    Proceedings.    Item 4.
    Submission
    of Matters to a Vote of Security Holders.   PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.    1 4
    Item 6.
    Selected
    Financial Data.  53-week 52-week
   14




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##### Table of Contents



Fiscal Year EndedPredecessor


Predecessor


Predecessor


PredecessorOctober 28,


October 29,


October 30,


October 25,


October 26,2006


2005


2004


2003


2002(Dollars in thousands)Operating resultsNet revenues

$
230,862


$
212,595


$
187,328


$
160,726


$
155,303Gross profit(1)


50,453



87,740



78,125



66,191



66,634Selling, general and administrative


33,928



35,514



31,166



26,417



23,359Research and development


10,623



12,814



11,934



9,525



11,722Amortization of intangibles


13,422



3,414



3,414



3,414



3,721Merger expense






24,473











(Loss) income from operations


(7,520
)


11,525



31,611



26,835



27,832Interest expense


23,652



25,601



22,705



21,257



21,434Debt extinguishment expense










12,961







Other, net


(75
)


(109
)


(95
)


(529
)


(97
)Income tax provision (benefit)


(14,261
)


(7,768
)


(3,499
)


1,579



569Net (loss) income

$
(16,836
)

$
(6,199
)

$
(461
)

$
4,528


$
5,926Balance sheet data (at end of
    period):Cash and cash equivalents

$
23,580


$
13,889


$
15,857


$
14,057


$
17,769Total assets


581,174



588,506



254,262



255,797



260,333Working capital


60,786



73,324



41,963



34,934



33,352Total debt


268,312



269,062



264,813



219,349



235,045Debt fair market value adjustment(2)


8,209



10,000











Redeemable ESOP stock, net(3)










40,957



14,612



8,835Stockholders
    equity/(deficiency)(4)


139,752



160,796



(110,976
)


(29,928
)


(31,633
)Other data:Adjusted EBITDA(5)

$
56,228


$
51,567


$
44,893


$
36,867


$
38,447Adjusted EBITDA margin(6)


24.4
%


24.3
%


24.0
%


22.9
%


24.8
%Net cash flows provided by
    operating activities

$
19,264


$
193


$
33,230


$
15,673


$
30,724Net cash flows used in investing
    activities


(4,567
)


(4,376
)


(3,056
)


(1,939
)


(1,785
)Net cash flows provided by (used
    in) financing activities


(5,006
)


2,215



(28,374
)


(17,446
)


(19,227
)Depreciation and amortization of
    intangibles and deferred financing fees


23,682



8,224



9,175



10,053



10,387Capital expenditures


4,567



4,376



3,056



1,939



1,785Ratio of earnings to fixed
    charges(7)














1.3
x


1.3
x     (1)
    
    Gross profit for fiscal 2006 includes $40.3 million of
    amortization of the
    step-up of
    inventory to fair market value.(2)
    
    Represents the estimated amount to adjust the $250,000,000 of
    the
    91/4%
    Senior Notes to fair market value as of the closing date of the
    Merger, which will be amortized over the remaining life of the
    91/4% Senior
    Notes. The unamortized amount of the fair market value
    adjustment has been added to the principal amount of the
    91/4% Senior
    Notes for presentation in our financial statements.(3)
    
    Redeemable ESOP Stock has been excluded from stockholders
    equity/(deficiency) due to the ability of holders of the ESOP
    Stock to put, subject to certain restrictions, the
    shares of ESOP Stock to Argo-Tech at the most recent valuation
    of our independent consulting firm. As a result of the Merger
    this requirement no longer exists. 15




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##### Table of Contents



(4)
    
    Includes a dividend of $57.6 million to Holdings made in
    the third quarter of fiscal 2004 from the proceeds of our
    91/4% senior
    notes.(5)
    
    EBITDA is net income plus interest, taxes,
    depreciation and amortization. Adjusted EBITDA is
    defined as EBITDA further adjusted to exclude ESOP compensation
    expense, amortization of purchase accounting, non-cash
    compensation/benefit cost, debt extinguishment expense, non-cash
    compensation expense related to granting of SARs on
    March 1, 2005, and non-recurring Merger expense. EBITDA and
    Adjusted EBITDA do not represent, and should not be considered
    as alternatives to, net income or cash flows provided by
    operating activities, as determined by Generally Accepted
    Accounting Principles (GAAP), and our calculations
    thereof may not be comparable to that reported by other
    companies. EBITDA and Adjusted EBITDA are included in this
    report because they are a basis upon which we assess our
    liquidity position and because certain covenants in our
    borrowing arrangements are tied to similar measures. We also
    believe that it is widely accepted that EBITDA and Adjusted
    EBITDA provide useful information regarding a companys
    ability to service
    and/or incur
    indebtedness. This belief is based on our negotiations with our
    lenders who have indicated that the amount of indebtedness we
    will be permitted to incur will be based, in part, on our EBITDA
    and our Adjusted EBITDA. EBITDA and Adjusted EBITDA do not take
    into account our working capital requirements, debt service
    requirements, tax payments, capital expenditures and other
    commitments and, accordingly, are not necessarily indicative of
    amounts that may be available for discretionary use. We believe
    that inclusion of supplementary adjustments to EBITDA applied in
    presenting Adjusted EBITDA are appropriate to provide additional
    information to investors.  Fiscal Year EndedPredecessor


Predecessor


Predecessor


PredecessorOctober 28,


October 29,


October 30,


October 25,


October 26,2006


2005


2004


2003


2002(Dollars in thousands)Net income (loss)

$
(16,836
)

$
(6,199
)

$
(461
)

$
4,528


$
5,926Add:Depreciation and amortization


23,376



7,069



7,213



7,601



8,329Interest expense(a)


23,652



25,601



22,705



21,257



21,434Income tax provision (benefit)


(14,261
)


(7,768
)


(3,499
)


1,579



569EBITDA


15,931



18,703



25,958



34,965



36,258Add:ESOP compensation expense(b)






5,040



4,851



1,874



1,344Amortization of purchase
    accounting(c)


40,297











28



259Non-cash compensation/benefit
    cost(d)






3,351



1,123







586Debt extinguishment expense(e)










12,961







Merger expense(f)






24,473











Adjusted EBITDA

$
56,228


$
51,567


$
44,893


$
36,867


$
38,447     (a)
    
    Interest expense includes the amortization of deferred financing
    fees.(b)
    
    Represents the value of the shares committed to be released by
    the ESOP trustee under the ESOPs provisions for allocation
    to participants and recognized as a non-cash compensation
    expense, excluding ESOP compensation expense of $3,413 recorded
    in connection with the Merger and included in Merger expense.(c)
    
    Represents the incremental depreciation in fiscal 2002 and 2003
    relating to plant and equipment written up to its fair market
    value under purchase accounting applied to the acquisition of
    Argo-Tech Corporation Costa Mesa (formerly J.C. Carter Company,
    Inc.). Such amortization is included in cost of sales. In fiscal
    2006 represents the amortization of the
    step-up of
    inventory to fair market value as a result of the Merger in
    fiscal 2005. 16




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(d)
    
    In fiscal year 2002, this represents the non-cash expense
    related to a salary early retirement program. In fiscal year
    2004, this represents the non-cash compensation expense related
    to our ESOP Excess Benefit Plan. In fiscal year 2005, this
    represents $404 of non-cash compensation expense related to our
    ESOP Excess Benefit Plan, $2,521 of non-cash compensation
    expense related to the granting of SARs and $426 of non-cash
    expense related to the hourly employee early retirement program.(e)
    
    Represents the write-off of deferred financing fees associated
    with the refinancing of our
    85/8% senior
    subordinated notes and the amendment and restatement of our
    credit agreement in June 2004, amounts paid for the tender,
    consent and redemption of our senior subordinated notes and the
    recognition of the remaining accretion on a portion of our
    senior subordinated notes that were issued at a discount.(f)
    
    Represents non-recurring expense associated with the Merger
    consisting of stock compensation cost, ESOP Excess Benefit Plan
    cost, and severance and stay payments.The following table reconciles Adjusted EBITDA to net cash flow
    from operating activities:  Predecessor


Predecessor


Predecessor


PredecessorOctober 28,


October 29,


October 30,


October 25,


October 26,2006


2005


2004


2003


2002(Dollars in thousands)Adjusted EBITDA

$
56,228


$
51,567


$
44,893


$
36,867


$
38,447Change in operating assets and
    liabilities


(9,618
)


(4,427
)


8,424



(590
)


14,973Interest expense


(23,652
)


(25,601
)


(22,705
)


(21,257
)


(21,434
)Merger expense






(24,473
)All other adjustments


(3,694
)


3,127



2,618



653



(1,262
)Net cash provided by operating
    activities

$
19,264


$
193


$
33,230


$
15,673


$
30,724    (6)
    
    Adjusted EBITDA margin is computed as Adjusted EBITDA as a
    percentage of net revenues.(7)
    
    For purposes of determining the ratio of earnings available to
    cover fixed charges, earnings consist of income before taxes
    plus fixed charges. Fixed charges consist of interest on
    indebtedness including amortization of deferred financing fees
    and fixed loan guarantee fees. No ratio is presented for the
    fiscal years ended October 28, 2006, October 29, 2005
    and October 30, 2004 as the earnings for those periods were
    $31,097,000, $13,967,000 and $3,960,000 less than the fixed
    charges, respectively 17




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Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  The following discussion of financial condition and results
    of operations should be read together with Selected
    Financial Data, Argo-Techs consolidated financial
    statements and the notes to those statements and other financial
    information included elsewhere in this report. In this section
    references to Argo-Tech, the Company,
    we, us, or our are to
    Argo-Tech Corporation, together with its subsidiaries.
    References to Holdings are to AT Holdings
    Corporation, which holds all of the outstanding capital stock of
    Argo-Tech. Operating results or cash flow information presented
    for the fiscal periods ended October 29, 2005 and
    October 20, 2004 is considered Predecessor
    financial information. The balance sheet information as of
    October 28, 2006 and October 29, 2005 reflects a new
    basis of accounting incorporating the fair value adjustments
    made in recording the Merger while prior periods are presented
    using the historical cost basis of the Company. This report
    contains forward-looking statements that involve risks and
    uncertainties. Our actual results may differ materially from
    those indicated in the forward-looking statements. See Risk
    Factors in Item 1A for more information regarding
    forward-looking statements.
  Overview
      30-year
    step-up
 18




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##### Table of Contents



Recent
    Developments
  Sales
    Agreements
    1 4
    Merger
        AssetsCurrent assets

$
130,794Property, plant and equipment


48,008Goodwill


110,178Intangible assets


327,869Other assets


2Total assets


616,851LiabilitiesCurrent liabilities


56,313Long-term debt


264,063Other noncurrent liabilities


122,026Total liabilities


442,402Purchase price allocated to Company

$
174,449  19




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##### Table of Contents



Year Ended


Year EndedOctober 29,


October 30,2005


2004Net sales

$
212,595


$
187,328Loss from operations


(18,662
)


(23,391
)Net loss


(23,034
)


(26,636
)   write-up write-up
    ESOP
    Stock
    Appreciation Rights (SARs)
  1 3
 20




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##### Table of Contents



Argo
    Tracker
  1 4
    Critical
    Accounting Policies
    Revenue Recognition.
  Valuation of Accounts Receivable and Allowance for Doubtful
    Accounts.
  Valuation of Inventories.
 21




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##### Table of Contents



first-in,
  Valuation of Goodwill and Intangible
    Assets.
  Pensions and Post-retirement Plan
    Assumptions.
  Purchase Accounting.
 22




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##### Table of Contents



Results
    of Operations
    Fiscal Year EndedPredecessor


PredecessorOctober 28,


October 29,


October 30,2006


2005


2004Net revenues


100
%


100
%


100
%Gross profit


21.8



41.2



41.7Selling, general and administrative


14.7



16.7



16.6Research and development


4.6



6.0



6.4Amortization of intangible assets


5.8



1.6



1.8Merger expense






11.5



(Loss) income from operations


(3.3
)


5.4



16.9Interest expense


10.2



12.0



12.1Debt extinguishment expense










6.9Loss before income taxes


(13.4
)


(6.6
)


(2.1
)Income tax benefit


(6.2
)


(3.7
)


(1.9
)Net loss


(7.3
)


(2.9
)


(0.2
)   Fiscal
    2006 Compared with Fiscal 2005
    step-up step-up step-up step-up
 23




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##### Table of Contents



step-up
  1 4
      Fiscal
    2005 Compared with Fiscal 2004
     24




---



##### Table of Contents



1 4
  5 8 5 8 5 8
      Export
    Sales
   25




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##### Table of Contents



Liquidity
    and Capital Resources
      1 4 1 4
      PredecessorFiscal Year


Fiscal Year


Fiscal YearEnded


Ended


EndedOctober 28,


October 29,


October 30,2006


2005


2004Cash Flows Provided By (Used
    In)Operating Activities

$
19,264


$
193


$
33,230Investing Activities


(4,567
)


(4,376
)


(3,056
)Financing Activities


(5,006
)


2,215



(28,374
)Increase (decrease) in cash and
    cash equivalents

$
9,691


$
(1,968
)

$
1,800  26




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##### Table of Contents



Cash Flows from Operating Activities.
  Cash Used In Investing Activities.
  Cash Flows from Financing Activities. 5 8
  Capital Expenditures.
    Contractual Cash Obligations.
  Payment Due By Period2012 and2007


2008


2009


2010


2011


Thereafter


Total(Dollars in millions)Term Loans

$
0.8


$
3.6


$
13.9


$



$



$



$
18.391/4% Senior
    Notes


















250.0







250.0Operating leases


0.7



0.7



0.4















1.8Other long-term obligations*


26.4



26.5



25.9



25.2



25.6



14.5



144.1Total contractual and other
    long-term cash obligations

$
27.9


$
30.8


$
40.2


$
25.2


$
275.6


$
14.5


$
414.2  27




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##### Table of Contents



*
    
    Represents interest payments on the Term Loans (at an assumed
    average interest rate of 6.5%) and the
    91/4% Senior
    Notes, estimated funding for retirement and other
    post-employment benefits and other long-term commitments.    Off-Balance Sheet Arrangements.
  New
    Accounting Standards
  Recently
    Issued Accounting Pronouncements
         28




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##### Table of Contents



Recently
    Adopted Accounting Pronouncements
      Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk.  1 4
  Item 8.
    Financial
    Statements and Supplementary Data.    Item 9.
    Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosure.    Item 9A.
    Controls
    and Procedures.  Disclosure Controls and Procedures.
  Rules 13a-15(e) 15d-15(e)
 29




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##### Table of Contents



Change in Internal Controls.
    Sarbanes-Oxley Act  Section 404
    Compliance.
  1 4
 PART III  Item 10.
    Directors
    and Executive Officers of the Registrant.    Name

Age

PositionMichael S. Lipscomb


60


Chairman, President, Chief
    Executive Officer and DirectorPaul R. Keen


57


Executive Vice President, General
    Counsel and SecretaryJohn S. Glover


58


Vice President and Chief Financial
    OfficerJohn Daileader


42


DirectorReginald L. Jones, III


47


DirectorJeffrey W. Long


50


DirectorKathleen Moran


40


DirectorDaniel S. OConnell


52


Director   Michael S. Lipscomb
  Paul R. Keen
  John S. Glover
 30




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##### Table of Contents



John Daileader
  Reginald L. Jones, III
  Jeffrey W. Long
  Kathleen Moran
  Daniel S. OConnell
  Board
    Committees
  Regulation S-K.
  Code
    of Ethics for the Chief Executive Officer, Chief Financial
    Officer and Senior Financial Officers
  Form 8-K
  Item 11.
    Executive
    Compensation.  Board
    Compensation
  out-of-pocket
 31




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##### Table of Contents



Employment
    Agreements
    
    an initial term of three years with automatic renewals for
    one-year terms unless Argo-Tech or the executive gives written
    notice of election not to renew at least 90 days prior to
    the expiration of the applicable employment period;
    an annual base salary of $543,828 (Mr. Lipscomb) and
    $279,926 (Mr. Keen), which will be increased annually by no
    less than a percentage equal to the percentage increase, if any,
    in the Consumer Price Index in the prior twelve-month period;
    participation in (i) bonus arrangements, as determined by
    the Compensation Committee of the Argo-Tech Board of Directors,
    and (ii) employee benefit plans that are provided or made
    available by Argo-Tech to its senior executive officers;
    four weeks of paid vacation per calendar year, prorated in the
    case of a partial year;
    upon termination because of death or disability, the executive
    (or the executives estate) will receive an amount equal to
    (i) the executives salary through the date of
    termination plus (ii) a pro rata portion of the
    executives bonus for such year;
    upon termination by Argo-Tech without cause (as defined in the
    agreement) or by the executive for good reason (as defined in
    the agreement) and subject to the executives compliance
    with the non-competition, non-solicitation and ownership of
    intellectual property provisions of the agreements, the
    executive will receive an amount equal to his current annual
    salary and bonus for the preceding fiscal year payable over the
    one-year period following termination as well as continuing
    health care coverage until the earlier of (i) one year
    following his departure and (ii) the date he becomes
    eligible for comparable coverage under health plans of any
    successor employer;
    prohibitions against Mr. Lipscomb and Mr. Keen from
    competing with Argo-Tech or its subsidiaries or soliciting
    employees of Argo-Tech or its subsidiaries (both during
    employment and for a period of two years thereafter); and
    payments intended to make them whole for any excise tax
    liability they incur due to their receipt of certain payments
    treated as being contingent upon a change in control in
    connection with the Merger under Section 280G of the Code.    Incentive
    Compensation
  Incentive
    Units
   32




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##### Table of Contents



cash-on-cash
    Benefit
    Plans
  Salaried Pension Plan.
   33




---



##### Table of Contents



MonthlyName

BenefitMichael S. Lipscomb

$
1,799.32Paul R. Keen


1,188.83         Salaried Savings Plan. catch-up
     34




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##### Table of Contents



1 2
  Executive Life Insurance Plan.
  Management Incentive Plan.
  Historical
    director and executive compensation
    All OtherAnnual Compensation


CompensationName and Principal Position

Fiscal Year


Salary


Bonus


(1)(2)(3)Michael S. Lipscomb(4)


2006


$
543,816


$
353,480


$
14,456Chairman, President
    and


2005



522,906



458,583



1,132,011
(5)Chief Executive
    Officer


2004



484,170



346,181



38,426Paul R. Keen(4)


2006



279,936



139,968



9,129Executive Vice
    President,


2005



269,160



141,982



648,314
(6)General Counsel and
    Secretary


2004



258,804



142,342



29,074John S. Glover(7)


2006



193,336



90,002



37,178Vice President and 
    Chief Financial Officer     (1)
    
    Other annual compensation did not exceed the lesser of $50,000
    or 10% of salary plus bonus of any of the Named Executives in
    fiscal 2004, 2005 or 2006 except as noted in footnotes 5, 6
    and 8.(2)
    
    The amounts listed consist of the value of life insurance
    provided by us for the benefit of the Named Executives in excess
    of the value of life insurance provided by us for the benefit of
    all other salaried employees. For Mr. Lipscomb, the amounts
    listed also include $26,000 for fiscal 2005 and $32,000 for
    fiscal 2004 paid as Holdings directors fees. For
    Mr. Keen, the amounts listed also include $25,000 for
    fiscal 2004 paid as Holdings directors fees. For
    Mr. Glover, the amounts listed also include relocation
    expense of $16,000.(3)
    
    The amounts listed do not reflect payments received as
    stockholders
    and/or
    derivative holders of Holdings on account of the Merger .(4)
    
    Upon the completion of the Merger, Mr. Lipscomb and
    Mr. Keen entered into new employment agreements with
    Argo-Tech, which replaced all existing employment agreements.(5)
    
    This amount includes $869,094 Mr. Lipscomb received under
    his 1986 employment agreement and $217,274 he received under his
    stay pay and severance agreement because the Merger constituted
    a change in control under those agreements.(6)
    
    This amount includes $538,320 Mr. Keen received under his
    1989 employment agreement and $102,876 he received under his
    stay pay and severance agreement because the Merger constituted
    a change in control under those agreements.(7)
    
    Mr. Glover was elected Vice President and Chief Financial
    Officer in December 2005. 35




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##### Table of Contents



Nonqualified Deferred Compensation
    Agreement.
  Compensation
    Committee Interlocks and Insider Participation
     36




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##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    
    each person known to Argo-Tech to be the beneficial owner of
    more than 5% of VGATs units;
    each director of Argo-Tech;
    each of the Named Executives; and
    all of the Argo-Tech directors and executive officers as a group.    ImmediatelyExercisableOptions toNumber of

Purchase



Percent ofName of Beneficial Owner

Class

Units

Units(1)

Total

TotalGreenbriar Equity Group LLC


Class A



269,743







269,743



45.4
%555 Theodore Fremd Avenue
    Rye, NY 10580Vestar Capital Partners IV,
    L.P.


Class A



269,743







269,743



45.4
%245 Park Avenue
    41st Floor
    New York, NY 10167Michael S. Lipscomb


Class A



37,221







37,221



6.3
%Class B



1,534







1,534



22.5
%Paul R. Keen


Class A



4,039



5,000



9,039



1.5
%Class B



341







341



5.0
%John S. Glover


Class A







2,600



2,600



*Class B



341







341



5.0
%John Daileader(2)


Class A



269,743







269,743



45.4
%Reginald L.
    Jones, III(3)


Class A



269,743







269,743



45.4
%Jeffrey W. Long(4)


Class A



269,743







269,743



45.4
%Kathleen Moran(5)


Class A



269,743







269,743



45.4
%Daniel S. OConnell(6)


Class A



269,743







269,743



45.4
%Directors and Executive


Class A



580,746



7,600



588,346



97.7
%Officers as a Group


Class B



2,216







2,216



32.5
%     *
    
    Less than 1%
    
    Director of Argo-Tech(1)
    
    Includes options to purchase VGAT Class A Units exercisable
    within 60 days of January 26, 2007.(2)
    
    Mr. Daileader may be deemed to beneficially own the units
    beneficially owned by Greenbriar and its affiliated entities
    because of his relationship with Greenbriar and its affiliated
    entities and because Mr. Daileader was appointed to
    Argo-Techs Board of Directors at the request of
    Greenbriar. Mr. Daileader disclaims any beneficial
    ownership of the units owned by Greenbriar and its affiliates.(3)
    
    Mr. Jones may be deemed to beneficially own the units
    beneficially owned by Greenbriar and its affiliated entities
    because of his relationship with Greenbriar and its affiliated
    entities and because Mr. Jones was 37




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##### Table of Contents



appointed to Argo-Techs Board of Directors at the request
    of Greenbriar. Mr. Jones disclaims any beneficial ownership
    of the units owned by Greenbriar and its affiliates.(4)
    
    Mr. Long may be deemed to beneficially own the units
    beneficially owned by Vestar and its affiliated entities because
    of his relationship with Vestar and its affiliated entities and
    because Mr. Long was appointed to Argo-Techs Board of
    Directors at the request of Vestar. Mr. Long disclaims any
    beneficial ownership of the units owned by Vestar and its
    affiliates.(5)
    
    Ms. Moran may be deemed to beneficially own the units
    beneficially owned by Greenbriar and its affiliated entities
    because of her relationship with Greenbriar and its affiliated
    entities and because Ms. Moran was appointed to
    Argo-Techs Board of Directors at the request of
    Greenbriar. Ms. Moran disclaims any beneficial ownership of
    the units owned by Greenbriar and its affiliates.(6)
    
    Mr. OConnell may be deemed to beneficially own the
    units beneficially owned by Vestar and its affiliated entities
    because of his relationship with Vestar and its affiliated
    entities and because Mr. OConnell was appointed to
    Argo-Techs Board of Directors at the request of Vestar.
    Mr. OConnell disclaims any beneficial ownership of
    the units owned by Vestar and its affiliates.  Item 13.
    Certain
    Relationships and Related Transactions.  Transactions
    with Officers
    Securityholders
    Agreement
      Form S-1 Form S-2 S-3
   38




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##### Table of Contents



Professional
    Services Agreements
  out-of-pocket
  Interests
    of Certain Argo-Tech Directors and Officers in the
    Merger
  Indemnification of Directors and
    Officers.
  Item 14.
    Principal
    Accountant Fees and Services.  Audit
    Fees
    Audit-Related
    Fees
    Tax
    Fees
    All Other
    Fees
    Audit
    Committee Pre-Approval Policy
   39




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##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules.  Financial Statements
                Financial Statement Schedules
      Exhibits
  ExhibitNumber

Description of Exhibit (and document from which
    incorporated by reference, if applicable)2
.1

Agreement and Plan of Merger,
    dated September 13, 2005, by and among AT Holdings
    Corporation, Argo-Tech, GreatBanc Trust Company, as Trustee for
    the Argo-Tech Corporation Employee Stock Ownership Plan,
    V.G.A.T. Investors, LLC and Vaughn Merger Sub, Inc.
    (incorporated herein by reference to Exhibit 2.1 of
    Argo-Techs annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005, SEC File
    No. 333-38223)2
.2

Amendment No. 1 to Agreement
    and Plan of Merger, dated as of October 26, 2005, by and
    among AT Holdings Corporation, Argo-Tech, Great Banc Trust
    Company, as Trustee for the Argo-Tech Corporation Employee Stock
    Ownership Plan, V.G.A.T. Investors, LLC and Vaughn Merger Sub,
    Inc. (incorporated herein by reference to Exhibit 2.2 of
    Argo-Techs annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005, SEC File No.
    333-38223)3
.1

Restated Certificate of
    Incorporation of Argo-Tech, dated April 16, 1999
    (incorporated herein by reference to Exhibit 3.1 of
    Argo-Techs registration statement on form S-4/ A filed
    April 23, 1999, SEC File No.
    333-73179)3
.2

Restated By-Laws of Argo-Tech
    dated April 16, 1999 (incorporated herein by reference to
    Exhibit 3.2 of Argo-Techs registration statement on
    Form S-4/A
    filed April 23, 1999, SEC File
    No. 333-73179)4
.1

Indenture dated June 23,
    2004, between Argo-Tech, the Subsidiary Guarantors signatory
    thereto and BNY Midwest Trust Company, as Trustee, relating to
    the
    91/4%
    Senior Notes due 2010 (the form of which is included in such
    Indenture) (incorporated herein by reference to Exhibit 4.1
    of Argo-Techs quarterly report on
    Form 10-Q
    for the quarter ended July 31, 2004, SEC File
    No. 333-38223) 40




---



##### Table of Contents



ExhibitNumber

Description of Exhibit (and document from which
    incorporated by reference, if applicable)4
.2

First Supplemental Indenture,
    dated October 25, 2005, to the Indenture, dated
    June 23, 2004, between Argo-Tech, the Subsidiary Guarantors
    signatory thereto and BNY Midwest Trust Company, as Trustee,
    relating to the
    91/4% Senior
    Notes due 2010 (incorporated herein by reference to
    Exhibit 4.2 of Argo-Techs annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005, SEC File
    No. 333-38223)10
.1

Form of Stay Pay and Severance
    Agreement dated June 6, 1996, between Argo-Tech and certain
    Executive Officers of Argo-Tech (Michael S. Lipscomb, Frances S.
    St. Clair, and Paul R. Keen) (incorporated herein by reference
    to Exhibit 10.1 of Argo-Techs Registration Statement
    on
    Form S-1,
    filed October 17, 1997, SEC File
    No. 333-38223)
    (superceded by Exhibits 10.6, 10.52 and 10.7, respectively)10
.2

Employment Agreement dated
    October 15, 1986 between Argo-Tech and Michael S. Lipscomb
    (incorporated herein by reference to Exhibit 10.3 of
    Argo-Techs Registration Statement on
    Form S-1,
    filed October 17, 1997, SEC File
    No. 333-38223)
    (superceded by Exhibit 10.6)10
.3

Employment Agreement dated
    February 13, 1989 between Argo-Tech and Paul R. Keen
    (incorporated herein by reference to Exhibit 10.2 of
    Argo-Techs Registration Statement on
    Form S-1,
    filed October 17, 1997, SEC File
    No. 333-38223
    (superceded by Exhibit 10.7)10
.4

Amendment, dated May 1, 2005,
    to Employment Agreement, dated October 15, 1986, between
    Argo-Tech and Michael S. Lipscomb (incorporated herein by
    reference to Exhibit 10.1 of Argo-Techs quarterly report
    on
    Form 10-Q
    for the quarter ended July 30, 2005, SEC File
    No. 333-38223)
    (superceded by Exhibit 10.6)10
.5

Amendment, dated May 1, 2005,
    to Employment Agreement dated February 13, 1989 between
    Argo-Tech and Paul R. Keen (incorporated herein by reference to
    Exhibit 10.2 of Argo-Techs quarterly report on
    Form 10-Q
    for the quarter ended July 30, 2005, SEC File
    No. 333-38223)
    (superceded by Exhibit 10.7)10
.6

Employment Agreement, dated
    October 28, 2005, between Argo-Tech and Michael S. Lipscomb
    (incorporated herein by reference to Exhibit 10.6 of
    Argo-Techs annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005, SEC File
    No. 333-38223)10
.7

Employment Agreement, dated
    October 28, 2005, between Argo-Tech and Paul R. Keen
    (incorporated herein by reference to Exhibit 10.7 of
    Argo-Techs annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005, SEC File
    No. 333-38223)10
.8

Argo-Tech Corporation Trust
    Agreement dated October 28, 1994 between Argo-Tech and
    Society National Bank, as Trustee, relating to the Employment
    Agreement dated October 15, 1986 between Argo-Tech and
    Michael S. Lipscomb (incorporated herein by reference to
    Exhibit 10.4 of Argo-Techs Registration Statement on
    Form S-1,
    filed October 17, 1997, SEC File
    No. 333-38223)10
.9

Rabbi Trust Amendment, dated
    October 25, 2005, to the Argo-Tech Corporation Trust
    Agreement dated October 28, 1994 between Argo-Tech and
    National City Bank, N.A. (as successor to Society National
    Bank), as Trustee, relating to the Employment Agreement dated
    October 15, 1986 between Argo-Tech and Michael S. Lipscomb
    (incorporated herein by reference to Exhibit 10.9 of
    Argo-Techs annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005, SEC File
    No. 333-38223)10
.10

Argo-Tech Corporation Salaried
    Pension Plan, dated November 1, 1995 (incorporated herein
    by reference to Exhibit 10.5 of Argo-Techs
    Registration Statement on
    Form S-1,
    filed October 17, 1997, SEC File
    No. 333-38223)10
.11

First Amendment to Argo-Tech
    Corporation Salaried Pension Plan (incorporated herein by
    reference to Exhibit 10.6 of Argo-Techs Registration
    Statement on
    Form S-1,
    filed October 17, 1997, SEC File
    No. 333-38223)10
.12

Argo-Tech Corporation Employee
    Stock Ownership Plan and Trust Agreement, dated May 17,
    1994 (incorporated herein by reference to Exhibit 10.7 of
    Argo-Techs Registration Statement on
    Form S-1,
    filed October 17, 1997, SEC File
    No. 333-38223)10
.13

First Amendment to the Argo-Tech
    Corporation Employee Stock Ownership Plan and Trust Agreement,
    dated October 26, 1994 (incorporated herein by reference to
    Exhibit 10.8 of Argo-Techs Registration Statement on
    Form S-1,
    filed October 17, 1997, SEC File
    No. 333-38223) 41




---



##### Table of Contents



ExhibitNumber

Description of Exhibit (and document from which
    incorporated by reference, if applicable)10
.14

Second Amendment to the Argo-Tech
    Corporation Employee Stock Ownership Plan and Trust Agreement,
    dated May 9, 1996 (incorporated herein by reference to
    Exhibit 10.9 of Argo-Techs Registration Statement on
    Form S-1,
    filed October 17, 1997, SEC File
    No. 333-38223)10
.15

Third Amendment to the Argo-Tech
    Corporation Employee Stock Ownership Plan and Trust Agreement,
    dated July 18, 1997 (incorporated herein by reference to
    Exhibit 10.10 of Argo-Techs Registration Statement on
    Form S-1,
    filed October 17, 1997, SEC File No.
    333-38223)10
.16

Fourth Amendment to the Argo-Tech
    Corporation Employee Stock Ownership Plan and Trust Agreement,
    dated as of September 15, 2005 (incorporated herein by
    reference to Exhibit 10.16 of Argo-Techs annual
    report on
    Form 10-K
    for the fiscal year ended October 29, 2005, SEC File No.
    333-38223)10
.17

Fifth Amendment to the Argo-Tech
    Corporation Employee Stock Ownership Plan and Trust Agreement,
    dated as of October 25, 2005 (incorporated herein by
    reference to Exhibit 10.17 of Argo-Techs annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005, SEC File
    No. 333-38223)10
.18

Argo-Tech Corporation Employee
    Stock Ownership Plan Excess Benefit Plan, dated May 17,
    1994 (incorporated herein by reference to Exhibit 10.11 of
    Argo-Techs Registration Statement on
    Form S-1,
    filed October 17, 1997, SEC File
    No. 333-38223)10
.19

First Amendment to the Argo-Tech
    Corporation Employee Stock Ownership Plan Excess Benefit Plan
    (incorporated herein by reference to Exhibit 10.34 of
    Argo-Techs registration statement on
    Form S-4
    filed March 2, 1999, SEC File
    No. 333-73179)10
.20

Second Amendment to the Argo-Tech
    Corporation Employee Stock Ownership Plan Excess Benefit Plan
    (incorporated herein by reference to Exhibit 10.20 of
    Argo-Techs annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005, SEC File No.
    333-38223)10
.21

AT Holdings Corporation
    Stockholders Agreement, dated December 17, 1998
    (incorporated herein by reference to Exhibit 10.12 of
    Argo-Techs Annual Report on
    Form 10-K
    for the year ended October 30, 1999, SEC File
    No. 333-38223)10
.22

AT Holdings Corporation 1998
    Supplemental Stockholders Agreement, dated
    December 17, 1998 (incorporated herein by reference to
    Exhibit 10.13 of Argo-Techs Annual Report on
    Form 10-K
    for the year ended October 30, 1999, SEC File
    No. 333-38223)10
.23

Form of Management Incentive
    Compensation Plan for key employees of Argo-Tech (incorporated
    herein by reference to Exhibit 10.19 of Argo-Techs
    Registration Statement on
    Form S-1,
    filed October 17, 1997, SEC File
    No. 333-38223)10
.24

1991 Management Incentive Stock
    Option Plan, as amended, dated May 16, 1994 (incorporated
    herein by reference to Exhibit 10.20 of Argo-Techs
    Registration Statement on
    Form S-1,
    filed October 17, 1997, SEC File No.
    333-38223)10
.25

Amendment to the 1991 Management
    Incentive Stock Option Plan, as amended, dated June 12,
    2001 (incorporated herein by reference to Exhibit 10.3 of
    Argo-Techs Quarterly Report on
    Form 10-Q
    for the quarter ended July 28, 2001, SEC File
    No. 333-38223)10
.26

Form of Stock Option Agreement in
    connection with the Management Incentive Stock Option Plan, as
    amended, between Argo-Tech and each member of Argo-Techs
    Executive Staff (incorporated herein by reference to Exhibit
    10.21 of Argo-Techs Registration Statement on
    Form S-1,
    filed October 17, 1997, SEC File
    No. 333-38223)10
.27

1991 Performance Stock Option
    Plan, as amended, dated May 16, 1997 (incorporated herein
    by reference to Exhibit 10.22 of Argo-Techs
    Registration Statement on
    Form S-1,
    filed October 17, 1997, SEC File No.
    333-38223)10
.28

Third Amended and Restated Credit
    Facility, dated June 23, 2004, by and among Argo-Tech
    Corporation, the Guarantors party thereto, the Lenders party
    thereto and National City Bank, as administrative agent
    (incorporated herein by reference to Exhibit 10.1 of
    Argo-Techs quarterly report on
    Form 10-Q
    for the quarter ended July 31, 2004, SEC File
    No. 333-38223)
    (superceded by Exhibit 10.30) 42




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##### Table of Contents



ExhibitNumber

Description of Exhibit (and document from which
    incorporated by reference, if applicable)10
.29

First Amendment, dated as of
    January 19, 2005, to Third Amended and Restated Credit
    Agreement, dated as of June 23, 2004, by and among
    Argo-Tech Corporation, AT Holdings Corporation, National City
    Bank, as administrative agent and an issuing bank, JPMorgan
    Chase Bank, as an issuing bank with respect to existing letters
    of credit issued thereunder and the other lenders signatory
    thereto. (incorporated herein by reference to Exhibit 10.1
    of Argo-Techs current report on
    Form 8-K
    filed January 21, 2005, SEC File
    No. 333-38223)
    (superceded by Exhibit 10.30)10
.30

Fourth Amended and Restated Credit
    Agreement, dated September 13, 2005, by and among Argo-Tech
    Corporation, the Guarantors party thereto, the Lenders party
    thereto and National City Bank, as administrative agent
    (incorporated herein by reference to Exhibit 10.30 of
    Argo-Techs annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005, SEC File
    No. 333-38223)10
.31

Distributorship Agreement, dated
    December 24, 1990, between Argo-Tech, Yamada Corporation
    and Vestar Capital Partners, Inc. (incorporated herein by
    reference to Exhibit 10.25 of Argo-Techs Registration
    Statement on
    Form S-1,
    filed October 17, 1997, SEC File
    No. 333-38223)10
.32

Japan Distributorship Agreement,
    dated December 24, 1990, between Argo-Tech, Aerotech World
    Trade Corporation, Yamada Corporation, Yamada International
    Corporation and Vestar Capital Partners, Inc. (incorporated
    herein by reference to Exhibit 10.26 of Argo-Techs
    Registration Statement on
    Form S-1,
    filed October 17, 1997, SEC File
    No. 333-38223)10
.33

Stock Purchase Agreement, dated
    August 1, 1997, between Argo-Tech, J.C. Carter Company,
    Inc., Robert L. Veloz, Individually and as Trustee, Marlene J.
    Veloz, Individually and as Trustee,
    Edith T. Derbyshire, Individually and as Trustee,
    Harry S. Derbyshire, Individually and as Trustee, Michael Veloz,
    Katherine Canfield and Maureen Partch, as Trustee (incorporated
    herein by reference to Exhibit 10.27 of Argo-Techs
    Registration Statement on
    Form S-1/A,
    filed November 26, 1997, SEC File No.
    333-38223)10
.34

Prism Prototype Retirement
    Plan & Trust & 401(k) Profit Sharing Plan
    Adoption Agreement, dated November 1, 1994 (incorporated
    herein by reference to Exhibit 10.28 of Argo-Techs
    Registration Statement on
    Form S-1/A,
    filed November 26, 1997, SEC File
    No. 333-38223)10
.35

Prism Prototype Retirement Plan
    and Trust (incorporated herein by reference to Exhibit 10.29 of
    Argo-Techs Registration Statement on
    Form S-1/A,
    filed November 26, 1997, SEC File
    No. 333-38223)10
.36

Agreement of Purchase and Sale
    between Agnem Holdings, Inc. and TRW Inc. dated as of
    August 5, 1986 (incorporated herein by reference to
    Exhibit 10.30 of Argo-Techs Registration Statement on
    Form S-1/A,
    filed November 26, 1997, SEC File
    No. 333-38223)10
.37

AT Holdings Corporation/Argo-Tech
    Corporation 1998 Equity Replacement Stock Option Plan
    (incorporated herein by reference to Exhibit 10.32 of
    Argo-Techs registration statement on
    Form S-4
    filed March 2, 1999, SEC File
    No. 333-73179)10
.38

Amendment to the AT Holdings
    Corporation/Argo-Tech Corporation 1998 Equity Replacement Stock
    Option Plan dated June 12, 2001 (incorporated herein by
    reference to Exhibit 10.2 of Argo-Techs Quarterly
    Report on
    Form 10-Q
    for the quarter ended July 28, 2001, SEC File No.
    333-38223)10
.39

Form of Stock Option Agreement in
    connection with the AT Holdings Corporation/Argo-Tech
    Corporation 1998 Equity Replacement Stock Option Plan
    (incorporated herein by reference to Exhibit 10.33 of
    Argo-Techs registration statement on
    Form S-4
    filed March 2, 1999, SEC File
    No. 333-73179)10
.40

Amendment, dated November 22,
    2002, to Argo-Tech Corporation Trust Agreement, dated
    October 28, 1994 (incorporated herein by reference to
    Exhibit 10.36 of Argo-Techs annual report on
    Form 10-K
    for the year ended October 26, 2002, SEC File No.
    333-38223)10
.41

Distribution Agreement, dated
    April 1, 2003, between Argo-Tech Corporation and Yamada
    Corporation (incorporated herein by reference to
    Exhibit 10.34 of Argo-Techs registration statement on
    Form S-4
    filed September 23, 2004, SEC File
    No. 333-119227)10
.42

Form of Professional Services
    Agreement, dated October 28, 2005, between AT Holdings
    Corporation and Vestar Capital Partners/Greenbriar Equity Group
    LLC (incorporated herein by reference to Exhibit 10.42 of
    Argo-Techs annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005, SEC File
    No. 333-38223) 43




---



##### Table of Contents



ExhibitNumber

Description of Exhibit (and document from which
    incorporated by reference, if applicable)10
.43

Collateral Assignment Split Dollar
    Insurance Agreement, dated January 1, 1996, between
    Argo-Tech and Michael S. Lipscomb (incorporated herein by
    reference to Exhibit 10.3 of Argo-Techs quarterly report
    on
    Form 10-Q
    for the quarter ended July 30, 2005, SEC File
    No. 333-38223)10
.44

Collateral Assignment Split Dollar
    Insurance Agreement, dated January 1, 1996, between
    Argo-Tech and Paul R. Keen (incorporated herein by reference to
    Exhibit 10.4 of Argo-Techs quarterly report on
    Form 10-Q
    for the quarter ended July 30, 2005, SEC File
    No. 333-38223)10
.45

Collateral Assignment Split Dollar
    Insurance Agreement, dated January 1, 1996, between
    Argo-Tech and Frances S. St. Clair (incorporated herein by
    reference to Exhibit 10.5 of Argo-Techs quarterly report
    on
    Form 10-Q
    for the quarter ended July 30, 2005, SEC File
    No. 333-38223)10
.46

Nonqualified Deferred Compensation
    Agreement, dated December 28, 1995, between Argo-Tech and
    Frances S. St. Clair (incorporated herein by reference to
    Exhibit 10.6 of Argo-Techs quarterly report on
    Form 10-Q
    for the quarter ended July 30, 2005, SEC File
    No. 333-38223)10
.47

Form of Incentive Unit Grant
    Agreement, dated October 28, 2005 (incorporated herein by
    reference to Exhibit 10.47 of Argo-Techs annual
    report on
    Form 10-K
    for the fiscal year ended October 29, 2005, SEC File No.
    333-38223)10
.48

Form of Amendment of Rollover
    Options and Waiver of Merger Consideration (incorporated herein
    by reference to Exhibit 10.48 of Argo-Techs annual
    report on
    Form 10-K
    for the fiscal year ended October 29, 2005, SEC File
    No. 333-38223)10
.49

Change in Control Agreement, dated
    October 28, 2005, between Argo-Tech and John S. Glover
    (incorporated herein by reference to Exhibit 10.49 of
    Argo-Techs annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005, SEC File
    No. 333-38223)10
.50

Non-Solicitation and
    Confidentiality Agreement, dated as of October 28, 2005,
    between AT Holdings Corporation and Frances S. St. Clair
    (incorporated herein by reference to Exhibit 10.50 of
    Argo-Techs annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005, SEC File No.
    333-38223)12
.1*

Statement Regarding Computation of
    Ratios21
.1

List of Subsidiaries (incorporated
    herein by reference to Exhibit 21.1 of Argo-Techs
    registration statement on
    Form S-4
    filed September 23, 2004, SEC File
    No. 333-119227)31
.1*

Certification by Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.31
.2*

Certification by Chief Financial
    Officers pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.32
*

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002     
    
    Denotes management contract or other compensatory arrangement
    required to be filed as an exhibit pursuant to Item 14(c)
    of this report.*
    
    Filed herewith. 44




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##### Table of Contents



SIGNATURES
  Form 10-K
    By:
    /s/  Paul
    R. Keen   Title:
    Executive Vice President, General Counsel and Secretary    /s/  Michael
    S. LipscombMichael
    S. Lipscomb

Director, Chairman, President
    and
    Chief Executive Officer
    (Principal Executive Officer)

January 26, 2007/s/  John
    S. GloverJohn
    S. Glover

Vice President and
    Chief Financial Officer
    (Principal Financial Officer)

January 26, 2007/s/  Rita
    A. KorolukRita
    A. Koroluk

Corporate Controller
    (Principal Accounting Officer)

January 26, 2007/s/  John
    DaileaderJohn
    Daileader

Director

January 26, 2007/s/  Reginald
    L.
    Jones, IIIReginald
    L. Jones, III

Director

January 26, 2007/s/  Jeffrey
    W. LongJeffrey
    W. Long

Director

January 26, 2007/s/  Kathleen
    MoranKathleen
    Moran

Director

January 26, 2007/s/  Daniel
    S.
    OConnellDaniel
    S. OConnell

Director

January 26, 2007  45




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##### Table of Contents



Supplemental
    Information to be Furnished With Reports Filed Pursuant to
    Section 15(d)
    of the Act by Registrants
    Which Have Not Registered Securities Pursuant to Section 12
    of the Act
   46




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##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
  ANNUAL
    REPORT ON
    FORM 10-K:
    FISCAL YEAR ENDED OCTOBER 28, 2006
    ITEM 8 AND ITEM 15(a)(1)
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    INDEX
  PageFINANCIAL STATEMENTS:REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


F-2CONSOLIDATED
    BALANCE SHEETS AS OF OCTOBER 28, 2006 AND OCTOBER 29,
    2005


F-3CONSOLIDATED
    STATEMENTS OF OPERATIONS FOR THE FISCAL YEARS ENDED
    OCTOBER 28, 2006, OCTOBER 29, 2005 (PREDECESSOR), AND
    OCTOBER 30, 2004 (PREDECESSOR)


F-4CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY/(DEFICIENCY) FOR THE
    FISCAL Years Ended OCTOBER 28, 2006, OCTOBER 29, 2005
    (PREDECESSOR), AND OCTOBER 30, 2004 (PREDECESSOR)


F-5CONSOLIDATED
    STATEMENTS OF CASH FLOWS FOR THE FISCAL YEARS ENDED
    OCTOBER 28, 2006, OCTOBER 29, 2005 (PREDECESSOR), AND
    OCTOBER 30, 2004 (PREDECESSOR)


F-6NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEARS ENDED
    OCTOBER 28, 2006, OCTOBER 29, 2005 (PREDECESSOR), AND
    OCTOBER 30, 2004 (PREDECESSOR)


F-7  F-28SUPPLEMENTARY DATA:VALUATION AND
    QUALIFYING ACCOUNTS FOR THE FISCAL YEARS ENDED OCTOBER 28,
    2006, OCTOBER 29, 2005 (PREDECESSOR), AND OCTOBER 30,
    2004 (PREDECESSOR)


F-29  F-1




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM             
    F-2




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##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)CONSOLIDATED BALANCE SHEETS
 October 28, 2006 and October 29, 2005
   2006


2005(In thousands, except share data)ASSETSCURRENT ASSETS:Cash and cash equivalents

$
23,580


$
13,889Receivables, net


44,504



40,319Income tax receivable






3,630Inventories, net


36,612



70,965Prepaid expenses


1,653



1,688Deferred income taxes


5,769



Total current assets


112,118



130,491PROPERTY AND EQUIPMENT, net of
    accumulated depreciation


42,664



41,970GOODWILL


110,178



200,152INTANGIBLE ASSETS, net of
    accumulated amortization


315,048



214,440OTHER ASSETS


1,166



1,453Total Assets

$
581,174


$
588,506LIABILITIES AND
    SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt

$
750


$
750Accounts payable


11,391



8,736Accrued liabilities


39,191



47,681Total current liabilities


51,332



57,167LONG-TERM DEBT, net of current
    maturities


275,771



278,312DEFERRED INCOME TAXES


96,565



75,120OTHER NONCURRENT LIABILITIES


17,754



17,111Total liabilities


441,422



427,710SHAREHOLDERS EQUITY:Common Stock, $.01 par value,
    authorized 3,000 shares; 1 share issued and outstanding






Paid-in capital


156,612



160,796Accumulated other comprehensive
    loss


(24
)


Accumulated deficit


(16,836
)


Total shareholders equity


139,752



160,796Total Liabilities and
    Shareholders Equity

$
581,174


$
588,506    F-3




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##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Fiscal Years Ended October 28, 2006,
    October 29, 2005, and October 30, 2004
  Predecessor2006


2005


2004(In thousands)Net revenues

$
230,862


$
212,595


$
187,328Cost of revenues (including
    inventory purchase accounting charges of $40,297 in fiscal 2006)


180,409



124,855



109,203Gross profit


50,453



87,740



78,125Selling, general and administrative


33,928



35,514



31,166Research and development


10,623



12,814



11,934Amortization of intangible assets


13,422



3,414



3,414Merger expense






24,473



Operating expenses


57,973



76,215



46,514(Loss) income from operations


(7,520
)


11,525



31,611Interest expense


23,652



25,601



22,705Debt extinguishment expense










12,961Other, net


(75
)


(109
)


(95
)Loss before income taxes


(31,097
)


(13,967
)


(3,960
)Income tax benefit


(14,261
)


(7,768
)


(3,499
)Net loss

$
(16,836
)

$
(6,199
)

$
(461
)    F-4




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##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)CONSOLIDATED STATEMENTS OF SHAREHOLDERS
    EQUITY/(DEFICIENCY)
 For the Fiscal Years Ending October 28, 2006,
    October 29, 2005 and October 30, 2004
  AccumulatedCommon


Paid-In


Comprehensive


AccumulatedStock


Capital


Income/(Loss)


Deficit


TotalBALANCE, OCTOBER 25, 2003
    (Predecessor)

$



$



$
(2,143
)

$
(27,785
)

$
(29,928
)Net loss














(461
)


(461
)Additional minimum pension
    liability










(1,179
)






(1,179
)Accretion of redeemable ESOP stock














(23,918
)


(23,918
)Contributed redeemable ESOP stock














2,425



2,425Dividend to AT Holdings














(59,046
)


(59,046
)Change in ESOP excess benefit plan














1,123



1,123Foreign currency translation
    adjustment










7







7Other, net














1



1BALANCE, OCTOBER 30, 2004
    (Predecessor)

$



$



$
(3,315
)

$
(107,661
)

$
(110,976
)Net loss














(6,199
)


(6,199
)Additional minimum pension
    liability










(125
)






(125
)Accretion of redeemable ESOP stock














(32,255
)


(32,255
)Contributed redeemable ESOP stock














8,453



8,453Tax benefit on exercise of
    non-qualified stock options






938











938Dividend to AT Holdings














(7,019
)


(7,019
)Change in ESOP excess benefit plan














404



404Foreign currency translation
    adjustment










(68
)






(68
)Other, net














(11
)


(11
)BALANCE, OCTOBER 28, 2005
    (Predecessor)

$



$
938


$
(3,508
)

$
(144,288
)

$
(146,858
)Elimination of historical
    shareholders deficiency






(938
)


3,508



144,288



146,858Investment from AT Holdings






160,796











160,796BALANCE, OCTOBER 29, 2005

$



$
160,796


$



$



$
160,796Net loss














(16,836
)


(16,836
)Dividend to AT Holdings






(4,184
)










(4,184
)Foreign currency translation
    adjustment










(24
)






(24
)BALANCE, OCTOBER 28, 2006

$



$
156,612


$
(24
)

$
(16,836
)

$
139,752    F-5




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##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Fiscal Years Ended October 28, 2006,
    October 29, 2005, and October 30, 2004
  Predecessor2006


2005


2004(In thousands)CASH FLOWS FROM OPERATING
    ACTIVITIES:Net loss

$
(16,836
)

$
(6,199
)

$
(461
)Adjustments to reconcile net loss
    to net cash provided by operating activities:Depreciation


9,954



3,655



3,799Amortization of intangible assets
    and deferred financing costs


13,728



4,569



5,375Amortization of inventory fair
    value step-up


40,297Amortization of senior note fair
    value step-up


(1,791
)Accretion of bond discount










219Debt extinguishment expense










12,961Non-cash stock option expense






841



Compensation expense recognized in
    connection with employee stock ownership plan (ESOP)






8,453



4,851Compensation expense recognized in
    connection with ESOP excess benefit plan










1,123Deferred pension cost










(912
)Deferred income taxes


(20,673
)


(4,750
)


(2,150
)Changes in operating assets and
    liabilities:Receivables


(4,185
)


(11,306
)


1,619Inventories


(6,263
)


(2,111
)


(2,856
)Prepaid expenses


35



(430
)


(135
)Accounts payable


2,703



(700
)


2,142Income tax receivable


3,477



(2,426
)Accrued liabilities


(1,908
)


10,672



7,640Other, net


726



(75
)


15Net cash provided by operating
    activities


19,264



193



33,230CASH FLOWS FROM INVESTING
    ACTIVITIES:Capital expenditures


(4,567
)


(4,376
)


(3,056
)Net cash used in investing
    activities


(4,567
)


(4,376
)


(3,056
)CASH FLOWS FROM FINANCING
    ACTIVITIES:Sale of senior notes










250,000Purchase of senior subordinated
    notes










(200,571
)Borrowing of long-term debt


18,000



5,000



15,000Repayment of long-term debt


(18,750
)


(750
)


(26,038
)Payment of financing related fees


(48
)


(1,390
)


(7,719
)Transaction related cash received
    from AT Holdings






6,374



Purchase of AT Holdings stock from
    former ESOP participants






(3,886
)


(567
)Dividend to AT Holdings


(4,184
)


(3,133
)


(58,479
)Other, net


(24
)






Net cash (used in ) provided by
    financing activities


(5,006
)


2,215



(28,374
)CASH AND CASH EQUIVALENTS:Net increase (decrease) for the
    period


9,691



(1,968
)


1,800Balance, beginning of period


13,889



15,857



14,057Balance, end of period

$
23,580


$
13,889


$
15,857    F-6




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##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
 For the Fiscal Years Ended October 28, 2006,
    October 29, 2005, and October 30, 2004
  1.
    BASIS OF
    PRESENTATION      2.
    SUBSEQUENT
    EVENTS    1 4
    3.
    MERGER     F-7




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##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     AssetsCurrent assets

$
130,794Property, plant and equipment


48,008Goodwill


110,178Intangible assets


327,869Other assets


2Total assets


616,851LiabilitiesCurrent liabilities


56,313Long-term debt


264,063Other noncurrent liabilities


122,026Total liabilities


442,402Purchase price allocated to Company

$
174,449     Year Ended


Year EndedOctober 29,


October 30,2005


2004Net sales

$
212,595


$
187,328Loss from operations


(18,662
)


(23,391
)Net loss


(23,034
)


(26,636
)   write-up write-up
    4.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Principles of Consolidation
 F-8




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##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Use of Estimates
  Cash Equivalents 
  Receivables
  Inventories first-in,
  Long-Lived Assets
     F-9




---



##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Recently Adopted Accounting Pronouncements
  Depreciation
  Buildings and improvements


7 to 30 yearsEquipment


3 to 10 years   Goodwill and Intangible Assets
    Technology


3 to 25 YearsCustomer relationships


20 to 25 YearsNon-compete agreements


8 Years     Deferred Financing Costs
  Foreign Currency Translation
  Revenue Recognition
 F-10




---



##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Stock-Based Compensation
  PredecessorYear Ended


Year Ended


Year EndedOctober 28,


October 29,


October 30,2006


2005


2004Net loss  As reported

$
(16,836
)

$
(6,199
)

$
(461
)Compensation cost based on the
    fair value method (after tax)










(76
)Net loss  Pro forma

$
(16,836
)

$
(6,199
)

$
(537
)   Income Taxes
  Recently
    Issued Accounting Pronouncements
       F-11




---



##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Recently
    Adopted Accounting Pronouncements
    Long-Lived Assets.
 F-12




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##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5.
    OTHER
    BALANCE SHEET INFORMATION    October 28,


October 29,2006


2005Accrued liabilities:Salaries and accrued compensation

$
10,954


$
11,961Payroll taxes


257



7,638Accrued interest


9,635



9,635Accrued warranty


2,220



2,073Deferred and other income taxes


5,378



7,052Other


10,747



9,322Total

$
39,191


$
47,681Other noncurrent liabilities:Accrued postretirement benefits

$
15,777


$
14,852Other


1,977



2,259Total

$
17,754


$
17,111   6.
    RECEIVABLES    October 28,


October 29,2006


2005Amounts billed  net of
    allowance for uncollectible amounts of $660 and $459

$
43,378


$
39,193Amounts unbilled (principally
    commercial customers):Net reimbursable costs incurred on
    uncompleted contracts


6,323



1,776Billings to date


(5,197
)


(650
)Total unbilled  net


1,126



1,126Net receivables

$
44,504


$
40,319   7.
    INVENTORIES    October 28,


October 29,2006


2005Finished goods

$
3,027


$
5,401Work-in-process
    and purchased parts


36,507



68,895Raw materials and supplies


753



706Total


40,287



75,002Reserve for excess and obsolete
    inventory


(3,675
)


(4,037
)Inventories  net

$
36,612


$
70,965  F-13




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##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  8.
    INTANGIBLE
    ASSETS    October 28, 2006


October 29, 2005Gross


Accumulated


Gross


AccumulatedAmount


Amortization


Amount


AmortizationIntangible Assets:Tradenames

$
24,300


$



$



$
Technology


48,470



(3,039
)


21,050



Customer relationships


253,600



(10,120
)


193,390Non-compete agreement


2,100



(263
)






Total

$
328,470


$
(13,422
)

$
214,440


$
     2007

$
13,4222008


13,4222009


13,4222010


13,1682011


13,168     9.
    PROPERTY
    AND EQUIPMENT  Owned Property
  October 28,


October 29,2006


2005(In thousands)Land and land improvements

$
15,820


$
7,071Buildings and building equipment


14,300



25,205Machinery and equipment


17,620



7,214Office and automotive equipment


2,389



1,187Construction-in-progress


2,579



1,293Total


52,708



41,970Accumulated depreciation


(10,044
)


Total  net

$
42,664


$
41,970   Property Leased to Others
 F-14




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##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Predecessor2006


2005


2004Minimum contractual amounts under
    property leases

$
2,718


$
3,811


$
4,126Service contracts revenue based on
    usage


380



687



828Total

$
3,098


$
4,498


$
4,954     10.
    PRODUCT
    WARRANTY      PredecessorOctober 28,


October 29,2006


2005Beginning balance

$
2,073


$
2,084Accruals for warranties issued


358



20Accruals for pre-existing
    warranties (including changes in estimate)


991



756Warranty claims settled


(1,202
)


(787
)Ending balance

$
2,220


$
2,073   11.
    EMPLOYEE
    BENEFIT PLANS  Employee Stock Ownership Plan
 F-15




---



##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     October 29,2005Allocated shares


441,000Shares released for allocation(a)


42,000Total ESOP shares


483,000Repurchased shares received as
    distributions


(121,971
)Repurchased shares in connection
    with the Merger


(361,029
)Total available ESOP shares


Fair market value of unearned ESOP
    shares

$
     (a)
    
     Includes contributed shares    Pension and Savings Plans
    Predecessor2006


2005


2004Service cost  benefits
    earned during the period

$
384


$
371


$
279Interest cost on projected benefit
    obligation


1,467



1,383



1,324Expected return on plan assets


(1,964
)


(1,868
)


(1,756
)Net amortization and deferral






410



348Net periodic pension (benefit) cost


(113
)


296



195Curtailment loss






369



Special termination benefits






57



Net periodic pension (benefit)
    cost after settlements

$
(113
)

$
722


$
195  F-16




---



##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006


2005Benefit obligation at beginning of
    year

$
25,132


$
22,977Service cost


384



371Interest cost


1,467



1,383Benefits paid


(1,034
)


(1,002
)Actuarial gain


(125
)


(251
)Change in plan provisions






542Change due to assumptions






686Curtailment loss






369Special termination benefits






57Benefit obligation at end of year

$
25,824


$
25,132     2006


2005Fair value of plan assets at
    beginning of year

$
22,070


$
21,112Actual return on plan assets


2,774



1,828Employer contributions


1,030



132Benefits paid


(1,034
)


(1,002
)Fair value of plan assets at end
    of yer

$
24,840


$
22,070     2006


2005Funded status

$
(984
)

$
(3,062
)Unrecognized net gain


(811
)


Net amount recognized

$
(1,795
)

$
(3,062
)    2006


2005(Accrued) prepaid pension benefit
    (cost) at the beginning of year

$
(3,062
)

$
4,027Net periodic pension benefit (cost)


113



(722
)Employer contributions


1,030



132Purchase accounting adjustment






(6,499
)Other


124



Accrued pension cost at the end of
    year

$
(1,795
)

$
(3,062
)     October 28,


October 29,2006


2005Accumulated benefit obligation at
    the end of the year

$
25,824


$
25,132Increase in minimum liability
    included in other comprehensive income






209  F-17




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##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Predecessor2006


2005


2004Discount rate


6.00
%


6.00
%


6.00
%Expected long-term rate of return
    on plan assets


9.00
%


9.00
%


9.00
%     Assets atTarget


October 28,


October 29,Asset Category

Allocation


2006


2005Equity securities


60% - 70%



64.3%



62.0%Debt securities


30% - 40%



34.7%



36.7%Cash


0% - 10%



1.0%



1.3%Total






100.0%



100.0%           October 31, 2007

$
1,128October 31, 2008


1,156October 31, 2009


1,207October 31, 2010


1,243October 31, 2011


1,355October 31, 2012 to
    October 31, 2016


8,711   Other Postretirement Benefits
 F-18




---



##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Predecessor2006


2005


2004Service cost

$
523


$
241


$
179Interest cost


1,156



883



881Net amortization and deferral






139



135Net postretirement benefit cost

$
1,679


$
1,263


$
1,195     2006


2005Benefit obligation at beginning of
    year

$
15,352


$
14,476Service cost


523



241Interest cost


1,156



883Benefits paid


(783
)


(552
)Plan participant contributions


179



150Actuarial loss


1,682



399Change due to assumptions


2,553



(245
)Benefit obligation at end of year

$
20,662


$
15,352     2006


2005Fair value of plan assets at
    beginning of year

$



$
Employer contributions


604



402Benefits paid


(783
)


(552
)Plan participant contributions


179



150Fair value of plan assets at end
    of year

$



$
     2006


2005Benefit obligation

$
(20,662
)

$
(15,352
)Unrecognized net loss


4,235



Accrued benefit cost

$
(16,427
)

$
(15,352
)     2006


2005Accrued postretirement benefit
    cost at the beginning of the year

$
(15,352
)

$
(11,797
)Net periodic postretirement
    benefit cost


(1,679
)


(1,263
)Employer contributions


604



402Purchase accounting adjustment






(2,694
)Accrued postretirement benefit
    cost at the end of the year

$
(16,427
)

$
(15,352
)  F-19




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##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Predecessor2006


2005


2004Discount rate


6.00
%


6.00
%


6.00
%     Predecessor2006


2005


2004Health care cost trend rate
    assumed for next year:Pre 65


10.0
%


7.5
%


8.0
%Post 65


12.0
%


7.5
%


8.0
%Ultimate ratePre 65


4.5
%


5.0
%


5.0
%Post 65


5.0
%


5.0
%


5.0
%Year ultimate rate is valued


2013



2011



2011     Expected employer contributions

$
649Expected plan participant
    contributions

$
216     October 31, 2007

$
649October 31, 2008


738October 31, 2009


821October 31, 2010


904October 31, 2011


1,062October 31, 2012 to
    October 31, 2016


5,752     1% point


1% pointIncrease


DecreaseEffect on service and interest cost

$
282


$
(226
)Effect on postretirement benefit
    obligation

$
3,542


$
(2,879
)  F-20




---



##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  12.
    INCOME
    TAXES    Predecessor2006


2005


2004Current tax provision/(benefit):Federal

$
5,926


$
(3,039
)

$
(1,273
)State and local


486



21



(76
)Total


6,412



(3,018
)


(1,349
)Deferred tax benefit:Federal


(19,621
)


(4,508
)


(2,040
)State and local


(1,052
)


(242
)


(110
)Total


(20,673
)


(4,750
)


(2,150
)Income tax provision/(benefit)

$
(14,261
)

$
(7,768
)

$
(3,499
)     Predecessor2006


2005


2004Income tax provision at statutory
    rate

$
(10,884
)

$
(4,889
)

$
(1,346
)State tax provision 
    net of federal benefits


(2,002
)


(468
)


80Extraterritorial income


(1,500
)


(1,490
)


(1,403
)R & D credit


(773
)


(748
)


(590
)ESOP










539Settlement of tax examination and
    reserve adjustment






(451
)


(720
)Other  net


898



278



(59
)Income tax provision (benefit)

$
(14,261
)

$
(7,768
)

$
(3,499
)    F-21




---



##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     October 28,


October 29,2006


2005Current:Deferred revenue

$
1,239


$
426Inventory


955



(13,784
)Employee benefits


1,408



1,496Warranty


848



798Engineering reserves


799



273Net operating loss carryforward






3,727Other reserves


520



201Total current


5,769



(6,863
)Long-term:Hourly retiree medical


5,129



5,534Accrued pension benefit


396



689Property and equipment


(7,007
)


(7,696
)Intangible assets


(101,263
)


(79,332
)Senior notes


2,955



3,600R&D tax credit carryforward


2,332



1,721Other  net


893



364Total long-term


(96,565
)


(75,120
)Net deferred tax liability

$
(90,796
)

$
(81,983
)     13.
    DEBT  Summary
  October 28,


October 29,2006


2005Term loans

$
18,312


$
19,062Revolving credit facility






Senior notes


258,209



260,000Total borrowings


276,521



279,062Current maturities


(750
)


(750
)Long-term portion

$
275,771


$
278,312   Credit Facility and Term Loans
 F-22




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##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Senior Notes 1 4
  1 4
    Annual Maturities and Interest Payments
  Fiscal Year

Amount2007

$
7502008


3,5622009


14,0002010


2011


250,000Total

$
268,312     14.
    SEGMENT
    INFORMATION   F-23




---



##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       2006Aerospace


Industrial


Corporate


ConsolidatedNet revenues

$
175,788


$
55,074


$



$
230,862Operating profit (loss)


49,713



2,963



(6,477
)


46,199Amortization of fair value
    inventory
    step-up














40,297Amortization of intangible assets














13,422Loss from operations














(7,520
)Interest expense














23,652Other, net














(75
)Loss before income taxes













$
(31,097
)Capital expenditures


2,648



1,919







4,567Depreciation


2,023



1,477



6,454



9,954   2005 PredecessorAerospace


Industrial


Corporate


ConsolidatedCustomer revenues

$
154,842


$
57,753


$



$
212,595Operating profit (loss)


38,501



4,138



(3,227
)


39,412Amortization of intangible assets














3,414Merger expenses














24,473Income from operations














11,525Interest expense














25,601Other, net














(109
)Loss before tax













$
(13,967
)Capital expenditures


2,661



1,715







4,376Depreciation


2,043



1,245



367



3,655Compensation expense recognized in
    connection with employee stock ownership plan


7,821



632







8,453   F-24




---



##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2004 PredecessorAerospace


Industrial


Corporate


ConsolidatedCustomer revenues

$
138,177


$
49,151


$



$
187,328Operating profit (loss)


34,584



761



(320
)


35,025Amortization of intangible assets














3,414Income from operations














31,611Interest expense














22,705Debt extinguishment expense














12,961Other, net














(95
)Loss before tax













$
(3,960
)Capital expenditures


1,789



1,267







3,056Depreciation


2,168



1,231



400



3,799Compensation expense recognized in
    connection with employee stock ownership plan


4,270



581







4,851   Major
    Customers and Export Sales
    Predecessor2006


2005


2004Upsilon International Corporation

$
22,881


$
23,478


$
20,326     Predecessor2006


2005


2004Europe

$
45,154


$
42,238


$
32,823Pacific Rim


34,804



35,430



26,003All others (individually less than
    10%)


24,701



17,702



21,379Total

$
104,659


$
95,370


$
80,205   15.
    FAIR
    VALUE OF FINANCIAL INSTRUMENTS   F-25




---



##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   16.
    STOCK
    BASED COMPENSATION    1991 Performance Stock Option Plan 
  1991 Management Incentive Stock Option Plan 
  1998 Equity Replacement Stock Option Plan 
  1998 Incentive Plan  1 3
  Stock
    Appreciation Rights (SARs)
  1 3
   F-26




---



##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       2005 PredecessorWeighted AverageShares


Exercise PriceOutstanding at beginning of year


127,923


$
49.91Granted


37,160



201.25Exercised


(37,721
)


44.39Cancelled


(90,202
)


52.22Outstanding at end of year


37,160



201.25Options exercisable at year-end






Weighted average fair value of
    options granted during the year

$
75.96   2004 PredecessorWeighted AverageShares


Exercise PriceOutstanding at beginning of year


133,713


$
50.20Granted






Exercised


(4,000
)


49.79Cancelled


(1,790
)


71.77Outstanding at end of year


127,923



49.91Options exercisable at year-end


127,923



49.91Weighted average fair value of
    options granted during the year

$
     Incentive Units
   F-27




---



##### Table of Contents



ARGO-TECH
    CORPORATION AND SUBSIDIARIES
    (A Wholly-Owned Subsidiary of AT Holdings Corporation)
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      17.
    CONTINGENCIES  Environmental Matters and/or
  Other Matters
    18.
    OTHER
    COMPREHENSIVE INCOME/(LOSS)    Predecessor2006


2005


2004Net loss

$
(16,836
)

$
(6,199
)

$
(461
)Other comprehensive income (loss):Foreign currency translation
    adjustment


(24
)


(68
)


7Deferred pension expense






(208
)


(1,966
)Other comprehensive loss before tax


(24
)


(276
)


(1,959
)Income tax benefit related to
    other comprehensive income (loss)






83



787Other comprehensive loss, net of
    tax


(24
)


(193
)


(1,172
)Comprehensive loss

$
(16,860
)

$
(6,392
)

$
(1,633
)  F-28




---



##### Table of Contents



ARGO-TECH
    CORPORATION
  VALUATION
    AND QUALIFYING ACCOUNTS
 FOR THE FISCAL YEARS ENDED OCTOBER 28, 2006,
    OCTOBER 29, 2005 AND
 OCTOBER 30, 2004
  Balance at


Charged to





Balance atBeginning


Costs and


Deduction from


End ofDescription

of Period


Expenses


Reseve(1)


Period(Amounts in thousands)Allowance for doubtful
    accounts:Year ended October 28, 2006

$
459



609



408


$
660Year ended October 29, 2005

$
310



547



398


$
459Year ended October 30, 2004

$
266



416



372


$
310     (1)
    
    The amounts in this column represent charge-offs net of
    recoveries. F-29