TABLE OF CONTENTS




|                              |                                                                                                |  |  |  |  |  |  | 
|----------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                       
|                              | Item 1. Business.                                                                             
|                              | Item 2. Properties.                                                                           
|                              | Item 3. Legal Proceedings.                                                                    
|                              | Item 4. Submission of Matters to a Vote of Security Holders.                                  
|PART II                      
|                              | Item 5. Market for Our Common Equity and Related Stockholder Matters.                         
|                              | Item 6. Selected Financial Data.                                                              
|                              | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
|                              | Item 7A. Quantitative and Qualitative Disclosures About Market Risk.                          
|                              | Item 8. Financial Statements and Supplementary Data.                                          
|                              | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 
|PART III                     
|                              | Item 10. Directors and Executive Officers of Argo-Tech.                                       
|                              | Item 11. Executive Compensation.                                                              
|                              | Item 12. Security Ownership of Certain Beneficial Owners and Management.                      
|                              | Item 13. Certain Relationships and Related Transactions.                                      
|PART IV                      
|                              | Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.                    
|INDEX TO FINANCIAL STATEMENTS
|                              | INDEPENDENT AUDITORS REPORT                                                                  
|                              | CONSOLIDATED BALANCE SHEETS                                                                   
|                              | October 27, 2001 and October 28, 2000                                                         
|                              | CONSOLIDATED STATEMENTS OF NET INCOME                                                         
|                              | For the Fiscal Years Ended October 27, 2001, October 28, 2000 and October 30, 1999            
|                              | CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY/(DEFICIENCY)                                  
|                              | For the Fiscal Years Ended October 27, 2001, October 28, 2000 and October 30, 1999            
|                              | CONSOLIDATED STATEMENTS OF CASH FLOWS                                                         
|                              | For the Fiscal Years Ended October 27, 2001, October 28, 2000 and October 30, 1999            
|                              | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                    
|                              | For the Fiscal Years Ended October 27, 2001, October 28, 2000 and October 30, 1999            
|EXHIBIT INDEX                
|EX-12 Computation of Ratios  



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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-K

ANNUAL REPORT PURSUANT TO THE

SECURITIES EXCHANGE ACT OF 1934




|                                           |                              
|------------------------------------------ | -----------------------------
|For the Fiscal Year Ended October 27, 2001 | Commission File No. 333-38223

ARGO-TECH CORPORATION

(Exact Name of Registrant as Specified in Its
Charter)


|                                                                             |  |                                                
|---------------------------------------------------------------------------- |  | -----------------------------------------------
|Delaware(State or Other Jurisdiction of
	Incorporation or Organization)      |  | 31-1521125(I.R.S. Employer
	Identification No.)
|                                                                            
|23555 Euclid Avenue, Cleveland, Ohio(Address of Principal Executive Offices) |  | 44117(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

Indicate by checkmark whether the registrant:
(1) has filed all reports to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has
been subject to such filing requirement for the past
90 days.  Yes x  No o

Indicate by checkmark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not
contained herein and will not be contained, to the best of
registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Annual
Report on Form 10-K or any amendment to this
Form 10-K.  x

All of the outstanding capital stock of the
registrant is held by AT Holdings Corporation.

As of January 23, 2002, one share of the
Registrants Common Stock, $.01 par value per share, was
outstanding.

Documents incorporated by reference: None



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##### Table of Contents






PART I






Item 1.  Business.


We are a leading designer, manufacturer and
servicer of high performance fuel flow devices for the aerospace
industry. We provide a broad range of products and services to
substantially all commercial and domestic military engine and
airframe manufacturers, to airlines worldwide and to the U.S.
and certain foreign militaries. We are the worlds leading
supplier of main engine fuel pumps to the commercial aircraft
industry and a leading supplier of airframe products and aerial
refueling systems. Since 1991, our business has focused on the
manufacture of main engine fuel pumps. In September 1997, we
expanded our product lines through the acquisition of the
outstanding capital stock of J.C. Carter Company, Inc., a
California corporation located in Costa Mesa, California.
Carter, which has been re-named Argo-Tech Corporation Costa
Mesa, operates as a subsidiary of Argo-Tech. Argo-Tech Costa
Mesas product lines include airframe pumps and
accessories, military aerial refueling systems and other fuel
system components such as valves and ground fueling components,
as well as the production and service of liquid natural gas
pumps. In August 1999, we acquired the outstanding capital stock
of Durodyne, Inc., an Arizona corporation. Durodyne is a
manufacturer of specialty industrial hose for aerospace,
chemical transfer and marine applications. Durodyne is operated
as a subsidiary of Argo-Tech Costa Mesa. We also operate a
materials laboratory and a business park in Cleveland, Ohio,
where we maintain our headquarters and primary production
facilities.

Main engine fuel pumps are precision mechanical
pumps, mounted to the aircrafts engines that maintain the
flow of fuel to the engine at a precise rate and pressure.
Airframe fuel pumps and airframe accessories are used to
transfer fuel to the engine systems and to shift and control
fuel between tanks in order to maintain aircraft balance. Aerial
refueling systems permit military aerial tankers to refuel
fighter, bomber and other military aircraft while in flight.
Ground fueling systems transfer fuel from fueling trucks and
underground tanks to the underwing fuel receptacle of the
aircraft.

Products

Aerospace
OEM

Main Engine Fuel
Pumps.All Argo-Tech main engine fuel
pumps are designed at our Cleveland facility. These pumps
consist of an aluminum body which is cast by certified
subcontractors. We then machine the casting, add a variety of
gears and other components, and perform rigorous testing at our
Cleveland facility.

We are the sole source supplier of main engine
fuel pumps for all CFM56 series engines, one of the most popular
series of large commercial aircraft engines used today. The
CFM56 series engines power the Airbus A-319, A-320, A-321 and
A-340 and the Boeing 737 aircraft. We are also the sole source
supplier of main engine fuel pumps for all engines used on the
Boeing 777 aircraft, including the new longer range Boeing 777.

Our products also include large regional and
business jet applications, including the main engine fuel pumps
used on the BR710 engine, which is used on the high-end
Bombardier Canadair Aerospace Global Express and the Gulfstream
Aerospace Corp. V aircraft. We supply main engine fuel pumps for
the GE CF34-8 engine, which is used on the Canadair RJ700
regional and business aircraft, the Embraer ERJ-170 70 passenger
regional jet and the Dornier 528Jet and 728Jet regional
aircraft. We also supply main engine fuel pumps for the GE
CF34-10 engine which is used on the Embraer ERJ-190 and Dornier
928Jet regional aircraft.

Airframe
Products.Fuel pumps and other
airframe fuel transfer control systems in the airframe are
necessary to transfer fuel to the engine systems and to maintain
aircraft balance by shifting fuel between tanks. We design and
manufacture fuel systems and components consisting of boost and
transfer fuel pumps and fuel transfer control components,
including fuel flow proportioners, fuel system gate assemblies,
and a variety of airframe valves, adapters, nozzles and caps.
These systems are used to manage storage, fueling, transfer and
engine feed functions during ground and flight operations.
Argo-Tech is the fuel system supplier for the Eclipse 500, a new
generation of business jet.

Aerial Refueling
Systems.We are a major supplier
of components for aerial refueling systems, which are produced
only for military applications. Aerial refueling components we
manufacture, including pumps and

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couplers, are installed in the refueling systems
of 100% of U.S. designed military aircraft equipped with such
capability.


Ground
Fueling Products

Ground fueling systems are used to transfer fuel
from underground fuel tanks and ground fueling trucks to the
underwing fuel receptacle of the aircraft. We manufacture
various ground fueling hydrants, couplers and nozzles for
commercial and military airports around the world. In addition
to nozzles, couplers and hydrants, we sell pressure control
valves and fuel management systems. Argo-Tech developed the
AVR2000 Aviation Refueling Management System which is used at
over 200 sites worldwide. We believe it is the leading hardware
and software system for customized fuel utilization management,
data collection and billing in the industry.

We also manufacture digital pressure control
valves. These valves incorporate a microprocessor to enhance
fuel flow control and allow for accurate measurement of pressure
into fuel tanks. In addition, we have identified new potential
product applications for our ground fueling technology: railroad
fuel transfers and fueling of off-road construction and mining
equipment.

Cryogenic
Pump Products

We have been widely recognized as a leading
designer and supplier of high performance submerged motor pumps
for liquefied gas. In January 2000, we re-entered the OEM
business for industrial liquid natural gas pumps outside North
America, which we had exited in 1987. The sale of OEM pumps has
added to our business of providing spare parts, testing, and
performing upgrade and repair services on our existing installed
base of pumps.

We recently introduced liquified natural gas
nozzles and receptacles for use on alternative fuel vehicles. We
believe these products position us favorably in this emerging
market.

Industrial
Gas Turbine Products

As a result of our established record of
performance with our Aerospace engine products, we have gained
entry into the Industrial & Marine Gas Turbine (IMGT)
market. Our current IMGT products are utilized in all three IMGT
market sectors (power generation, mechanical drive, and marine),
and include designed to specification lubrication and scavenge
pumps, liquid fuel delivery pumps, and precision liquid fuel
flow dividers. The lubrication and scavenge pumps supply
lubricating oil to the engine bearings and return the oil to the
lubrication circuit reservoir. The fuel supply pumps are used in
single liquid fuel and dual fuel systems and supply pressurized
liquid fuel to the engine fuel metering system and combustors.
Our flow divider products are utilized in single fuel and dual
fuel systems and provide precise fuel metering to individual
fuel injectors of the engine combustors.

Aftermarket Sales

Aftermarket sales comprise the largest component
of our business. Aftermarket sales consist of spare parts sales
and overhaul, retrofit, repair and technical support services to
commercial and military customers worldwide. We perform overhaul
and repair services for our products as well as products
manufactured by third parties.

Customers

Aerospace

OEM customers for our aerospace products include
the worlds major aircraft engine manufacturers: Allison
Engine, GE, Pratt and Whitney (including Pratt and Whitney
Canada), Rolls-Royce, SNECMA/GE (CFMI) and Williams
International Corp. Customers for our airframe pumps and valves
include Airbus, Boeing, Cessna, Gulfstream, Lockheed Martin,
Raytheon and various U.S. government agencies. Orders for
military components also come through customers such as Lockheed
Martin, Boeing and Pratt and Whitney. Our aftermarket

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customers include all major aircraft and engine
repair facilities and all major airlines worldwide. Currently,
the total number of airline and third party customers for our
spare parts and overhaul services exceeds 200.


Upsilon International Corporation, in its
capacity as distributor of certain of our products to foreign
customers, accounted for approximately 15% of our net revenues
for the fiscal year ended October 27, 2001. No other
customer accounted for more than 10% of our revenues during this
period.

Ground
Fueling

Most ground fueling products are sold to
customers through independent distributors. Customers in the
domestic markets include a variety of airlines, airports and
various fixed base operators. In international markets, our
ground fueling products are purchased by several oil companies,
including several state-run oil companies and airport
authorities.

Cryogenic
Pump

Our cryogenic pump customer base includes
shipping vessels operated by domestic and foreign carriers,
liquefied gas ship loading terminal owners, liquefied gas
receiving terminals, petrochemical plants, large architectural
and engineering companies worldwide and electric power
generation companies.

Industrial
Gas Turbine

Our current industrial gas turbine products are
utilized in three market sectors: power generation, mechanical
drive and marine. Customers for these products include Rolls
Royce Power Engineering, Rolls Royce Energy Systems, Siemens
Westinghouse and Pratt Whitney Power Systems.

Sales and Marketing

Engine and airframe OEMs select suppliers of
aerospace components primarily on the basis of custom design
capabilities, product quality and performance, prompt delivery,
price and aftermarket service. We believe that we meet these
requirements in a timely, responsive manner which has resulted
in an extensive installed base of components and substantial
aftermarket sales.

We market and sell our aerospace and ground
fueling products and services through a combination of direct
marketing, sales personnel, independent manufacturing
representatives and U.S. and international distributors. We
supply spare parts directly to domestic airlines and third-party
overhaul shops. Foreign customers that purchase main engine and
boost and transfer fuel pump products receive their spare parts
through Upsilon International, which operates a distribution
facility in Torrance, California. Foreign customers receive
spare parts for airframe products (other than boost and transfer
pumps) directly from our Costa Mesa facility.

Suppliers and Raw Materials

We use a certified supplier program that demands
a commitment to 100% quality and on-time deliveries. Supplier
performance is measured by our comprehensive supplier rating
system. Currently, our supplier base includes approximately 600
companies.

Our largest expenditure for products developed by
Argo-Tech Costa Mesa relates to outsourcing of component
machining. We have derived significant savings by taking
advantage of advances in machining technologies and by
coordinating engineering with our suppliers. Three long term
suppliers provide most of the component machining for Argo-Tech
Costa Mesa products.

Aluminum castings are the highest volume raw
material supplied to us for the manufacture of main engine fuel
pumps. Five certified suppliers provide these castings under
long-term arrangements. We also buy quantities of steel bar
stock to produce gears and shafts from multiple producers.
However, CPM-10V, a powdered metal essential for the manufacture
of certain of our main engine fuel pumps, is a proprietary
product available only from Crucible Specialty Metals. We do not
have a contractual arrangement with Crucible Specialty Metals; we

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purchase CPM-10V pursuant to standard purchase
orders. Another material has been identified as an alternative
to CPM-10V, but that material has not yet been certified by our
customers.


Manufacturing

Most of the products at our Cleveland facility
are manufactured internally. This facility houses our senior
management and the majority of our aerospace engineering and
design staff, sales team, and production and main distribution
facilities. This facility is organized around four manufacturing
cells that operate bearing, gear, housing and shaft
productions. By creating cells, the necessary people, machinery,
materials and methods are organized into four distinct business
teams. Within each manufacturing cell are members from each of
the Manufacturing, Quality, Production Control, Statistical
Process Control, and Manufacturing Engineering disciplines. Our
design engineering staff is also organized into cells which
correspond to and complement the manufacturing cells. The
manufacturing and engineering cells work together to meet our
integrated operating plan and to ensure timely production of our
products.

In contrast to our substantial reliance on
internal manufacturing of Cleveland products, we outsource most
of the machining and pre-assembly production of Costa Mesa
products to external providers. However, we do maintain internal
equipment capacity at our Costa Mesa facility, which enables us
to produce small quantity, quick turn components, to reduce
setup/breakdown times on smaller jobs and for the manufacturing
control of key parts. We have lowered the cost of airframe,
ground fueling and industrial products developed by Argo-Tech
Costa Mesa by outsourcing capital intensive tasks such as
casting and machining, while completing final assembly and
testing on the premises.

In addition to our manufacturing facilities, we
maintain sophisticated testing facilities at our Ohio and
California locations. These testing facilities allow for
simulation of typical conditions and stresses that will be
experienced by our products during use. Our products are also
thoroughly tested for design compliance, performance and
durability. To facilitate quality control and product
development, we maintain a sophisticated chemistry and
metallurgy laboratory at our Cleveland facility. The equipment
at this laboratory includes a scanning electron microscope.

We have obtained and preserved our ISO
certifications, which are becoming a prerequisite for selling to
customers located in Europe. ISO-9001 certifications are
recognized by most of our customers, as well as by the FAA and
U.S. government supply organizations, as the most widely
accepted replacement for the Military Standards formerly used in
the aerospace industry.

Environmental Matters

Our operations are subject to federal, state and
local environmental laws and to regulation by government
agencies, including the EPA. Among other matters, these
regulatory authorities impose requirements that regulate the
emission, discharge, generation, management, transportation and
disposal of pollutants and hazardous substances. These
authorities govern response actions to hazardous substances
which may be or have been released to the environment, and
require us to obtain and maintain permits in connection with our
operations. This extensive regulatory framework imposes
significant compliance burdens and risks.

Although we believe that our operations and
facilities are currently in compliance in all material respects
with applicable environmental laws, there can be no assurance
that future changes in such laws, regulations or interpretations
of such laws or the nature of our operations will not require us
to make significant additional expenditures to ensure compliance
in the future. Currently, we do not believe that we will have to
make material capital expenditures for environmental remediation
for the 2002 fiscal year.

Our Cleveland facility is currently the subject
of environmental remediation activities. The cost of these
activities is the responsibility of TRW under the terms of the
purchase agreement by which we acquired TRWs Power
Accessories Division in 1986. Remediation has been underway
since 1989 and is expected to continue for the foreseeable
future. We have not paid for any material portion of the cost of
the remediation and do not expect to do so in the future. TRW
has funded all necessary remediation costs and we expect that
TRW will continue to

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do so in the future. We estimate that TRW has
spent in excess of $10 million for environmental
remediation at our Cleveland facility.


The TRW purchase agreement also requires TRW, for
a period of 20 years from the date of the 1986 Purchase
Agreement, to indemnify us for:



| |   |                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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
|
| |  | a portion of the costs associated with third
	party environmental claims arising from activities conducted by
	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.         

To date, there have been no third party
environmental claims relating to us or to the Cleveland facility.

In March 1986, a two thousand gallon spent
underground storage tank was removed from our Costa Mesa
facility. Petroleum hydrocarbon soil contamination was
discovered during the removal of the tank, prompting the Orange
County Health Care Agency to require a site assessment.
Subsequent site investigations revealed that groundwater
underlying the site is impacted by trichloroethene and
perchloroethylene. In 1990, the Regional Water Quality Control
Board issued a Cleanup and Abatement Order to J.C. Carter
Company, Inc. (now named Argo-Tech Corporation Costa Mesa)
relating to the investigation and remediation of groundwater
contamination. To date, the full extent of the groundwater
contamination has not been ascertained. By virtue of our
acquisition of Argo-Tech Costa Mesa, we have assumed
responsibility for satisfying the cleanup order. However, we
have obtained indemnification from Argo-Tech Costa Mesas
selling stockholders for, among other things, all costs and
expenses related to satisfaction of the order. However, there
can be no assurance that such indemnification obligations with
respect to the cleanup order will be satisfied. See Risk
FactorsPotential Exposure to Environmental
Liabilities.

Patents and Trademarks

We have a number of patents and trademarks and
pending patent applications related to our products. While in
the aggregate our patents and trademarks are of material
importance to our business, we believe no single patent or
trademark or group of patents or trademarks is of material
importance to our business as a whole.

Government Regulations

The commercial aerospace industry is highly
regulated by both the FAA in the United States and by the Joint
Aviation Authorities in Europe, while the military aerospace
industry is governed by military quality (ISO-9000)
specifications. We are required to be certified by one or more
of these entities, and, in some cases, by individual OEMs, in
order to engineer and service parts and components used in
specific aircraft models. We must also satisfy the requirements
of our customers, including OEMs and airlines, that are subject
to FAA regulations, and provide these customers with products
and services that comply with the government regulations
applicable to commercial flight operations. In addition, the FAA
requires that various maintenance routines be performed on
aircraft components. We currently satisfy or exceed these
maintenance standards in our repair and overhaul services.
Several of our operating divisions include FAA-approved repair
stations.

Our aviation and metals operations are also
subject to a variety of worker and community safety laws. The
Occupational Safety and Health Act of 1970 (OSHA)
mandates general requirements for safe workplaces for all
employees. In addition, OSHA provides special procedures and
measures for the handling of certain hazardous and toxic
substances. We believe that our operations are in material
compliance with OSHAs health and safety requirements.

Competition

Competition among aerospace component
manufacturers is based on product quality, reliability and
on-time delivery. Our primary main engine fuel pump competitors
are Hamilton Sundstrand, Goodrich Corporation and TRW. Hamilton
Sundstrand is our closest competitor in the main engine fuel
pump market.

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Competitors in our other product lines range in
size from divisions of large corporations to small privately
held entities, with only one or two components in their entire
product line. Our primary airframe pump competitors are
FR-HiTemp Limited, Crane-Hydroaire and Intertechnique, S.A.; our
primary airframe valve competitors are Parker-Hannifin
Corporation, ITT Aerospace Controls and Whittaker Controls; our
primary ground fueling competitor is Whittaker; and our primary
aerial refueling competitor is Parker-Hannifin.

Backlog

We believe that unfilled orders are not
necessarily an indicator of future shipment levels of our
products. As customers demand shorter lead times and flexibility
in delivery schedules, they have also revised their purchasing
practices. As a result, notification of firm orders may occur
only within thirty to sixty days of delivery. In addition, due
to the government funding process, backlog can vary on a period
to period basis depending on the stage of completion of the
contracts represented by such backlog. Therefore, we believe
that the backlog of unfilled orders at fiscal year end cannot be
relied upon as a valid indication of our sales or profitability
in a subsequent year.

Employees

As of October 27, 2001, we had 696 full-time
employees of which 424 are salaried and 272 are hourly. The 190
hourly employees located at our Cleveland facility are
represented by the UAW under a collective bargaining agreement
expiring on March 31, 2004.






Item 2.  Properties.


We own and operate a 150-acre business park in
Cleveland, Ohio, which includes 1.8 million square feet of
engineering, manufacturing and office space. We occupy
approximately 475,000 square feet for our main engine fuel pump
business and lease almost one million square feet of the
facility to third parties. We believe that this facilitys
machinery, plants and offices are in satisfactory operating
condition. We also believe that it has sufficient capacity to
meet our foreseeable future needs without significant additional
capital expenditures.

We also own a 9.2 acre facility in Costa Mesa,
California, which encompasses 165,000 covered square feet. We
manufacture certain of our airframe products and accessories,
ground fueling and aerial refueling equipment at this facility.
We believe that our Costa Mesa facility has sufficient capacity
to permit further growth in those product lines without
significant additional capital expenditures.

Durodynes leased facility in Tucson,
Arizona encompasses 85,000 square feet and includes available
space for expansion. We manufacture specialty industrial hose
for aerospace, chemical transfer and marine applications at this
facility. We believe this facility has sufficient capital and
capacity to permit further growth in those product lines without
significant additional capital expenditures.

Our Inglewood, California leased facility
occupies approximately 10,000 square feet and includes available
space for expansion. Its primary purpose is to repair and
overhaul main engine fuel pumps owned by airline customers.
Inglewoods assets include test stands for testing fuel
pumps after overhaul and a small machine shop for simple rework
of pump components.

A leased facility at Henley-on-Thames, England
occupies approximately 4,500 square feet. Its primary activities
are the design, development and support of aviation refueling
management systems.






Item 3.  Legal
Proceedings.


While we are not presently involved in any
material legal proceedings, during the ordinary course of
business, we are, from time to time, threatened with, or may
become a party to, legal actions and other proceedings.




Item 4.  Submission of Matters to a
Vote of Security Holders.

No matter was submitted during the fourth quarter
of the fiscal year covered by this report to a vote of our
security holders.

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PART II




Item 5.  Market for Our Common
Equity and Related Stockholder Matters.

We are a wholly owned subsidiary of AT Holdings
Corporation. We have no equity securities that trade.




Item 6.  Selected Financial
Data.

Selected Historical Financial and Other Data
of Argo-Tech Corporation

The following table sets forth selected
historical financial and other data of Argo-Tech for the fiscal
years 1997 through 2001, which have been derived from our
audited consolidated financial statements for those years. Our
fiscal year ends on the last Saturday in October and is
identified according to the calendar year in which it ends. For
example, the fiscal year ended October 27, 2001 is referred
to as fiscal 2001. The fiscal year ended
October 27, 2001 consisted of 52 weeks, the fiscal
year ended October 31, 1998 consisted of 53 weeks and the
remaining fiscal years presented consisted of 52 weeks. The
information presented below should be read together with
Managements Discussion and Analysis of Financial
Condition and Results of Operations and the consolidated
financial statements and related notes included elsewhere herein.

|                                        |                                                            |                        |   |             |   |             |   |             |   |             |   |         |   |  |   |         |   |  |   |          |  
|--------------------------------------- | ---------------------------------------------------------- | ---------------------- | - | ----------- | - | ----------- | - | ----------- | - | ----------- | - | ------- | - |  | - | ------- | - |  | - | -------- | -
|                                        |                                                            |                       
|                                        |                                                            | Fiscal Year Ended     
|                                        |                                                            |                       
|                                        |                                                            | October 27,            |   | October 28, |   | October 30, |   | October 31, |   | October 25,
|                                        |                                                            | 2001                   |   | 2000        |   | 1999        |   | 1998        |   | 1997       
|                                        |                                                            |                        |   |             |   |             |   |             |   |            
|                                        |                                                            |                       
|                                        |                                                            | (Dollars in Thousands)
|Statement of Operations Data:           |                                                            |                        |   |             |   |             |   |             |   |             |   |         |   |  |   |         |   |  |   |         
|                                        | Net revenues                                               |                        | $ | 173,208     |   |             | $ | 159,353     |   |             | $ | 176,178 |   |  | $ | 174,035 |   |  | $ | 117,086  |  
|                                        |                                                            |                        |   |             |   |             |   |             |   |             |   |         |   |  |   |         |   |  |   |         
|                                        | Gross profit                                               |                        |   | 79,033      |   |             |   | 66,870      |   |             |   | 79,396  |   |  |   | 66,832  |   |  |   | 46,132   |  
|                                        | Operating expenses                                         |                        |   | 40,874      |   |             |   | 41,518      |   |             |   | 45,550  |   |  |   | 38,773  |   |  |   | 19,482   |  
|                                        |                                                            |                        |   |             |   |             |   |             |   |             |   |         |   |  |   |         |   |  |   |         
|                                        | Income from operations                                     |                        |   | 38,159      |   |             |   | 25,352      |   |             |   | 33,846  |   |  |   | 28,059  |   |  |   | 26,650   |  
|                                        | Interest expense                                           |                        |   | 24,534      |   |             |   | 25,644      |   |             |   | 25,003  |   |  |   | 21,030  |   |  |   | 12,827   |  
|                                        | Other, net                                                 |                        |   | (51         | ) |             |   | (402        | ) |             |   | (516    | ) |  |   | (268    | ) |  |   | (404     | )
|                                        | Income tax provision (benefit)                             |                        |   | 2,876       |   |             |   | (642        | ) |             |   | 4,021   |   |  |   | 3,400   |   |  |   | 4,841    |  
|                                        | Extraordinary loss(a)                                      |                        |   |            |   |             |   |            |   |             |   |        |   |  |   |        |   |  |   | 1,529    |  
|                                        |                                                            |                        |   |             |   |             |   |             |   |             |   |         |   |  |   |         |   |  |   |         
|                                        | Net income                                                 |                        | $ | 10,800      |   |             | $ | 752         |   |             | $ | 5,338   |   |  | $ | 3,897   |   |  | $ | 7,857    |  
|                                        |                                                            |                        |   |             |   |             |   |             |   |             |   |         |   |  |   |         |   |  |   |         
|Balance Sheet Data
	(at end of period): |                                                            |                        |   |             |   |             |   |             |   |             |   |         |   |  |   |         |   |  |   |         
|                                        | Total assets                                               |                        | $ | 273,574     |   |             | $ | 277,334     |   |             | $ | 294,745 |   |  | $ | 288,195 |   |  | $ | 300,960  |  
|                                        | Working capital                                            |                        |   | 35,904      |   |             |   | 33,277      |   |             |   | 35,378  |   |  |   | 36,917  |   |  |   | 42,647   |  
|                                        | Long-term debt (including current maturities)              |                        |   | 253,380     |   |             |   | 264,762     |   |             |   | 276,987 |   |  |   | 227,386 |   |  |   | 248,862  |  
|                                        | Redeemable common stock                                    |                        |   |            |   |             |   |            |   |             |   |        |   |  |   | 6,713   |   |  |   | 4,813    |  
|                                        | Redeemable ESOP stock, net                                 |                        |   | 13,994      |   |             |   | 20,983      |   |             |   | 43,212  |   |  |   | 32,235  |   |  |   | 18,906   |  
|                                        | Shareholders equity/(deficiency)(b)                       |                        |   | (42,119     | ) |             |   | (58,842     | ) |             |   | (78,955 | ) |  |   | (36,286 | ) |  |   | (27,941  | )
|Other Data:                             |                                                            |                        |   |             |   |             |   |             |   |             |   |         |   |  |   |         |   |  |   |         
|                                        | Gross margin                                               |                        |   | 45,6%       |   |             |   | 42.0%       |   |             |   | 45.1%   |   |  |   | 38.4%   |   |  |   | 39.4%    |  
|                                        | Adjusted EBITDA(c)                                         |                        | $ | 53,324      |   |             | $ | 41,973      |   |             | $ | 52,284  |   |  | $ | 56,940  |   |  | $ | 38,591   |  
|                                        | Adjusted EBITDA margin(d)                                  |                        |   | 30.8%       |   |             |   | 26.3%       |   |             |   | 29.7%   |   |  |   | 32.7%   |   |  |   | 33.0%    |  
|                                        | Net cash flows provided by operating activities            |                        | $ | 18,063      |   |             | $ | 22,427      |   |             | $ | 15,298  |   |  | $ | 29,771  |   |  | $ | 17,597   |  
|                                        | Net cash flows used in investing activities                |                        |   | (1,885      | ) |             |   | (3,025      | ) |             |   | (8,637  | ) |  |   | (5,610  | ) |  |   | (110,252 | )
|                                        | Net cash flows provided by (used in) financing
	activities |                        |   | (13,295     | ) |             |   | (18,101     | ) |             |   | (14,366 | ) |  |   | (21,994 | ) |  |   | 88,460   |  

7



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##### Table of Contents



|                                                                                        |  |                        |        |             |  |             |        |             |  |             |        |  |  |  |        |  |  |  |        | 
|--------------------------------------------------------------------------------------- |  | ---------------------- | ------ | ----------- |  | ----------- | ------ | ----------- |  | ----------- | ------ |  |  |  | ------ |  |  |  | ------ | 
|                                                                                        |  |                       
|                                                                                        |  | Fiscal Year Ended     
|                                                                                        |  |                       
|                                                                                        |  | October 27,            |        | October 28, |  | October 30, |        | October 31, |  | October 25,
|                                                                                        |  | 2001                   |        | 2000        |  | 1999        |        | 1998        |  | 1997       
|                                                                                        |  |                        |        |             |  |             |        |             |  |            
|                                                                                        |  |                       
|                                                                                        |  | (Dollars in Thousands)
|Depreciation, goodwill, identified intangibles
	and deferred financing fee amortization |  |                        | 15,214 |             |  |             | 15,635 |             |  |             | 15,973 |  |  |  | 15,279 |  |  |  | 10,960 | 
|Capital expenditures                                                                    |  |                        | 1,885  |             |  |             | 3,025  |             |  |             | 6,050  |  |  |  | 5,610  |  |  |  | 2,690  | 
|Cash interest expense(e)                                                                |  |                        | 22,394 |             |  |             | 23,503 |             |  |             | 23,069 |  |  |  | 20,040 |  |  |  | 11,940 | 
|Ratio of Adjusted EBITDA to cash interest expense                                       |  |                        | 2.4x   |             |  |             | 1.8x   |             |  |             | 2.3x   |  |  |  | 2.8x   |  |  |  | 3.2x   | 
|Ratio of earnings to fixed charges(f)                                                   |  |                        | 1.6x   |             |  |             | 1.0x   |             |  |             | 1.4x   |  |  |  | 1.3x   |  |  |  | 2.1x   | 



---



|    |                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The extraordinary loss, net of federal income tax
	benefits of $1,019, relates to the write-off of unamortized debt
	issuance costs of a credit facility that was refinanced on
	July 18, 1997.



|    |                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Includes a dividend of $50.0 million to AT
	Holdings in fiscal 1999. These funds came from the issuance of
	$55.0 million in principal amount of 8 5/8% senior
	subordinate notes, issued at a 5% discount, due 2007.



|    |                                                                                     
|--- | ------------------------------------------------------------------------------------
|(c) | Adjusted EBITDA represents income from operations
	plus non-cash charges as follows:

|                                                   |  |                        |        |             |  |             |        |             |  |             |        |  |  |   |        |  |  |   |        | 
|-------------------------------------------------- |  | ---------------------- | ------ | ----------- |  | ----------- | ------ | ----------- |  | ----------- | ------ |  |  | - | ------ |  |  | - | ------ | 
|                                                   |  |                       
|                                                   |  | Fiscal Year Ended     
|                                                   |  |                       
|                                                   |  | October 27,            |        | October 28, |  | October 30, |        | October 31, |  | October 25,
|                                                   |  | 2001                   |        | 2000        |  | 1999        |        | 1998        |  | 1997       
|                                                   |  |                        |        |             |  |             |        |             |  |            
|                                                   |  |                       
|                                                   |  | (Dollars in Thousands)
|Income from operations                             |  | $                      | 38,159 |             |  | $           | 25,352 |             |  | $           | 33,846 |  |  | $ | 28,059 |  |  | $ | 26,650 | 
|Depreciation, goodwill and intangible amortization |  |                        | 13,074 |             |  |             | 13,494 |             |  |             | 14,039 |  |  |   | 14,289 |  |  |   | 7,525  | 
|Compensation expense  ESOP                        |  |                        | 2,091  |             |  |             | 2,972  |             |  |             | 4,322  |  |  |   | 3,911  |  |  |   | 2,920  | 
|Write-off of inventory acquisition
	step-up        |  |                        |       |             |  |             | 155    |             |  |             | 77     |  |  |   | 10,681 |  |  |   | 1,496  | 
|                                                   |  |                        |        |             |  |             |        |             |  |             |        |  |  |   |        |  |  |   |        | 
|Adjusted EBITDA                                    |  | $                      | 53,324 |             |  | $           | 41,973 |             |  | $           | 52,284 |  |  | $ | 56,940 |  |  | $ | 38,591 | 
|                                                   |  |                        |        |             |  |             |        |             |  |             |        |  |  |   |        |  |  |   |        | 



---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our Adjusted EBITDA is not intended to represent
	cash flow from operations as defined by generally accepted
	accounting principles and should not be considered as an
	alternative to net income as an indicator of operating
	performance or to cash flow as a measure of liquidity. We have
	included information concerning Adjusted EBITDA because we
	understand that it is used by certain investors as one measure
	of a borrowers historical ability to service its debt.
	Adjusted EBITDA, as presented, may not be comparable to
	similarly titled measures reported by other companies, since not
	all companies necessarily calculate Adjusted EBITDA in an
	identical manner, and therefore is not necessarily an accurate
	means of comparison between companies.



|    |                                                                                        
|--- | ---------------------------------------------------------------------------------------
|(d) | Adjusted EBITDA margin is computed as Adjusted
	EBITDA as a percentage of net revenues.



|    |                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(e) | Cash interest expense represents interest expense
	less amortization of deferred financing fees of $2,140,000,
	$2,141,000, $1,934,000, $990,000 and $887,000, in the fiscal
	years ended October 27, 2001, October 28, 2000, October 30,
	1999, October 31, 1998 and October 25, 1997,
	respectively.



|    |                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(f) | For purposes of determining the ratio of earnings
	available to cover fixed charges, earnings consist of income
	before taxes and the extraordinary loss plus fixed charges.
	Fixed charges consist of interest on indebtedness including
	amortization of deferred financing fees and fixed loan guarantee
	fees.

8



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##### Table of Contents








|        |                                                                                        
|------- | ---------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of
	Financial Condition and Results of Operations.

Overview

In fiscal 2001, the aerospace business generated
approximately 82% of our net revenues. The balance of our net
revenues were generated from sales of ground fueling equipment,
certain industrial products and revenues from the operation of
Heritage Business Park. Approximately 82% of the aerospace
revenues were derived from sales to commercial OEMs and
commercial aftermarket customers, while military revenues
represented approximately 18% of our aerospace revenues.

In fiscal 2001, sales to commercial OEMs
represented approximately 27% of our commercial aerospace
revenues. As is customary in the commercial aerospace industry,
we incur substantial costs, for which we are generally not
reimbursed, to design, test and qualify original equipment for
OEMs. Once qualified, OEM products generally are sold at or
below cost of production in anticipation of receiving orders for
commercial spare parts and overhaul services at significantly
higher margins. Over the approximately 25 year life cycle of an
aircraft program, commercial spare parts and overhaul services
for products we manufacture often generate six or more times the
aggregate net revenues of the OEM program.

In contrast to the practice in the commercial
aerospace industry, we are generally reimbursed for the design,
test and qualification costs of equipment used on military
aircraft. Military original equipment shipments generally are
sold at cost plus a reasonable profit. Due to lower aircraft
utilization, military aftermarket sales are less significant
than commercial aftermarket sales. Aftermarket margins for
military products are at a level higher than original equipment
shipments.

General

The following should be read together with
Selected Historical Financial and Other Data of Argo-Tech
Corporation and our Financial Statements and the related
notes included elsewhere in this report. Our fiscal year ends on
the last Saturday of October and is identified according to the
calendar year in which it ends. For example, the fiscal year
ended October 27, 2001 is referred to as fiscal
2001. The fiscal years ended October 27, 2001,
October 28, 2000 and October 30, 1999 consisted of 52 weeks.

Our historical financial results are affected by
a variety of factors which impact the aerospace industry, in
general, or Argo-Tech, in particular. Significant factors are:



| |                                                                                
| | -------------------------------------------------------------------------------
| |  the cyclicality of the commercial
	aerospace industry,                       
|
| |  the funding of new aerospace product
	development programs,                  
|
| |  the formation of our Employee Stock
	Ownership Plan (the ESOP) in 1994, and
|
| |  our ownership of Heritage Business
	Park.                                    

During the period 1993 to 1995, the aerospace
industry experienced a significant downturn in its business
cycle. In fiscal 2000, the industry experienced another, but
less significant, downturn in the build rates of new commercial
aircraft. Following the September 11, 2001 terrorist
attacks, the aerospace industry is experiencing another
significant downturn in both the OEM and aftermarket sectors.
The major commercial airlines have reduced their flying capacity
up to 20% by retiring older aircraft in their fleet, parking
underutilized aircraft and canceling or delaying the delivery of
new aircraft. The OEM build rates of new commercial aircraft
have been reduced due to the airlines cancellation or
delay of delivery of new aircraft. The reduction of flying
capacity and the retirement of older aircraft has reduced the
need for aftermarket services. It is anticipated that OEM build
rates will continue to decline into 2003 before increasing,
which is estimated to occur in 2004. We anticipate aftermarket
services will recover in 2003, but not after a significant
decline has occurred in 2002. Due to increased military
activity, we anticipate demand for military aerospace products
will increase in late 2002.

Our fiscal year 2002 revenues and cash flows are
forecasted to be substantially lower than fiscal year 2001,
however, management believes that we will be able to maintain
our liquidity and remain in compliance with our debt covenants.

9



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##### Table of Contents



Development Expense Trends

In connection with new aerospace product
development programs, we incur significant research and
development expenditures to design, test and qualify main engine
fuel pumps and accessories for engine and airframe OEMs. Prior
to 1990, these engine and airframe OEMs reimbursed us for a
majority of these research and development expenditures. Since
1990, commercial OEMs have significantly reduced, and in many
cases eliminated, the reimbursement of these development
programs. This has resulted in an increase in the level of
research and development expenditures we fund. Research and
development expenditures are expensed as incurred, and such
expenses are expected to continue at historical levels.

ESOP

We established our ESOP in 1994 by purchasing
420,000 shares of common stock of our parent company, AT
Holdings Corporation, with the proceeds of a $16.8 million
ten-year loan funded through a credit facility which was
refinanced on July 18, 1997. The ESOP, which includes
approximately 270 of our salaried employees, represents an
ownership interest in AT Holdings of approximately 57%. GAAP
requires that non-cash ESOP compensation expense and a
corresponding increase in stockholders equity be recorded
annually as shares held by the ESOP are allocated to
participants and the loan made to the ESOP is repaid. GAAP also
requires that this non-cash ESOP compensation expense be added
back to net income in the determination of cash flow from
operations. The aggregate amount of such non-cash ESOP
compensation expense was $2.1 million, $3.0 million
and $4.3 million for the fiscal years ended 2001, 2000 and
1999, respectively. We believe that our ESOP has been successful
in motivating and compensating our salaried employees on a
cost-efficient basis.



Business Park

We own and operate Heritage Business Park, a 150
acre, 1.8 million square foot business park in Cleveland,
Ohio. We lease space in Heritage Business Park to other
manufacturers and are working to increase our rental and other
income from the business park.

Acquisitions

On September 26, 1997 we acquired all of the
outstanding shares of J.C. Carter Company, Inc. (now known as
Argo-Tech Corporation Costa Mesa), a manufacturer of aircraft
fluid control component parts, industrial marine cryogenic
pumps, and ground fueling components for $107.6 million,
including acquisition costs. The acquisition was funded by the
issuance of $140 million in principal amount of our
8 5/8% senior subordinated notes.

On August 19, 1999, we purchased all of the
outstanding stock of Durodyne, Inc., a manufacturer of specialty
industrial hose for aerospace, chemical transfer and marine
applications for $3.4 million, including acquisition costs.
The acquisition was funded with $2.3 million of cash and a
note payable for $1.1 million. Durodyne operates as a
subsidiary of Argo-Tech Costa Mesa. The acquisition was
accounted for using the purchase method of accounting and
accordingly, an allocation of the purchase price has been made
using estimated fair market values of the assets acquired and
liabilities assumed as of the acquisition date. The results of
its operations have been included since the date of acquisition.
The purchase price of $3.4 million exceeded the net assets
of Durodyne at the date of acquisition by $1.6 million.
This amount was considered goodwill that is being amortized on a
straight-line basis over 40 years.

Export Sales

Substantially all of our export sales are all
denominated in U.S. dollars. Export sales for fiscal years 2001,
2000 and 1999 were $80.8 million, $70.5 million and
$80.7 million, respectively. Sales to Europe were
$35.0 million, $31.1 million and $30.5 million.
Export sales to all other regions, individually less than 10%,
were $45.8 million, $39.4 million and
$50.2 million for fiscal years 2001, 2000 and 1999,
respectively.

10



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##### Table of Contents



Results of Operations

The following table presents, for the periods
indicated, selected items in our consolidated statements of
income as a percentage of net revenues.

|                               |  |                   |       |                  |  |                  |       |   |  |  |       |   
|------------------------------ |  | ----------------- | ----- | ---------------- |  | ---------------- | ----- | - |  |  | ----- | --
|                               |  |                  
|                               |  | Fiscal Year Ended
|                               |  |                  
|                               |  | October 27, 2001  |       | October 28, 2000 |  | October 30, 1999
|                               |  |                   |       |                  |  |                 
|Net revenues                   |  |                   | 100.0 | %                |  |                  | 100.0 | % |  |  | 100.0 | % 
|Gross profit                   |  |                   | 45.6  | %                |  |                  | 42.0  | % |  |  | 45.1  | % 
|Operating expenses             |  |                   | 23.6  | %                |  |                  | 26.1  | % |  |  | 25.9  | % 
|Income from operations         |  |                   | 22.0  | %                |  |                  | 15.9  | % |  |  | 19.2  | % 
|Interest expense               |  |                   | 14.1  | %                |  |                  | 16.1  | % |  |  | 14.2  | % 
|Other, net                     |  |                   |      |                  |  |                  | (0.3) | % |  |  | (0.3  | )%
|Income before income taxes     |  |                   | 7.9   | %                |  |                  | 0.1   | % |  |  | 5.3   | % 
|Income tax provision (benefit) |  |                   | 1.7   | %                |  |                  | (0.3) | % |  |  | 2.3   | % 
|Net income                     |  |                   | 6.2   | %                |  |                  | 0.4   | % |  |  | 3.0   | % 

Fiscal 2001 Compared with Fiscal
2000

Net revenues for fiscal 2001 increased
$13.9 million, or 8.7%, to $173.2 million from
$159.3 million for fiscal 2000. This change was due to an
increase in aerospace revenues of $12.6 million and a
$1.3 million increase in industrial and other revenues. The
increase in aerospace revenues was attributable to an increase
of $10.9 million in commercial revenue and an increase of
$1.7 million in military revenues. Commercial OEM revenues
decreased $0.8 million, or 2.5%, to $30.7 million and
commercial aftermarket revenues increased $11.7 million, or
15.9%, to $85.2 million. Commercial OEM revenues declined
as a result of lower overall engine requirements from our
customers, while commercial aftermarket revenues were higher
primarily due to an increase in spare parts and overhaul
services for the JT8, JT9 and CFM56 engine programs. Military
revenues increased primarily due to revenue related to increased
sales of F-15, F-16 and F-22 airframe components. Industrial
revenues increased $1.3 million, primarily due to increased
industrial gas turbine revenues offset by a decrease in
cryogenic pump revenues. Approximately 46.6% of fiscal 2001 net
revenues were attributable to export sales to foreign customers
compared to 44.2% in fiscal 2000. Substantially all such sales
were denominated in U.S. dollars.

Gross profit for fiscal 2001 increased
$12.2 million, or 18.3%, to $79.0 million from
$66.8 million for fiscal 2000. Gross margin increased to
45.6% for fiscal 2001 from 42.0% in fiscal 2000. The increase in
gross profit and gross margin is primarily attributable to the
increased sales of higher margin aerospace products.

Operating expenses for fiscal 2001 decreased
$0.6 million, or 1.4% to $40.9 million from
$41.5 million in fiscal 2000. This decrease is primarily
attributable to the non-recurrence of $2.0 million in new
business development investments which were made in fiscal 2000
offset by a non-cash charge to compensation expense of
$0.5 million resulting from an extension of the termination
date for certain stock option plans and an increase of
$0.7 million in research and development expense. Operating
expenses as a percent of revenues decreased to 23.6% for fiscal
2001 from 26.1% in fiscal 2000.

Income from operations for fiscal 2001 increased
$12.8 million, or 50.6%, to $38.1 million from
$25.3 million for fiscal 2000 and increased as a percentage
of net revenue to 22.0% in fiscal 2001 from 15.9% in fiscal
2000. These increases were due to the increased sales of higher
margin aerospace products and the decrease in operating expenses
discussed above.

Interest expense for fiscal 2001 decreased
$1.1 million, or 4.3%, to $24.5 million from
$25.6 million for fiscal 2000 due to lower outstanding
borrowings and slightly lower interest rates on the term loans.

The income tax provision for fiscal 2001
increased $3.5 million to an expense of $2.9 million
from a benefit of $0.6 million in fiscal 2000. This
increase is due to a higher pre-tax income of $13.7 million
for fiscal 2001 as

11



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##### Table of Contents



compared to $0.1 million for fiscal 2000 and
the non-recurrence of a favorable adjustment of prior years tax
accrual primarily due to an increased benefit of the foreign
sales corporation offset by the recognition of the benefit
realized in the current year of research and development tax
credit claims related to prior years.


Net income for fiscal 2001 increased
$10.1 million to $10.8 million from $0.7 million
for fiscal 2000 primarily due to the revenue and expense factors
discussed above.

Fiscal 2000 Compared with Fiscal
1999

Net revenues for fiscal 2000 decreased
$16.9 million, or 9.6%, to $159.3 million from
$176.2 million for fiscal 1999. This change was primarily
due to a decrease in aerospace revenues of $18.2 million
offset by a $1.3 million increase in industrial and other
revenues. The decrease in aerospace revenues was attributable to
a decrease of $12.5 million in commercial revenues and a
decrease of $5.7 million in military revenues. Commercial
OEM revenues decreased $6.5 million, or 16.5%, to
$33.0 million and commercial aftermarket revenues decreased
$6.0 million, or 7.6%, to $73.4 million. The decrease
in commercial OEM revenues was attributable to lower aircraft
build rates and lower exchange pump sales while commercial
aftermarket revenues were lower primarily due to a decrease in
the demand from an international distributor and a decrease in
repair and overhaul services. The distributor reduced its demand
to adjust inventories that had accumulated as a result of lower
orders for JT8 and JT9 spare parts and lower demand by airlines
for spare parts during the last half of fiscal year 1999, as
well as lower demand by airlines for spare pumps used for
initial provisioning purposes. Military revenues decreased
$5.7 million, or 18.9%, to $24.4 million primarily due
to reductions in F-15 foreign military sales and the AE2100 main
engine program along with lower engineering revenues primarily
related to the F-18E/F 480 gallon fuel tank and the F-22 and JSF
programs, which were partially offset by an increase in sales of
KC-135 aerial refueling components. Industrial revenues
increased $1.3 million, primarily due to increased ground
fueling revenues offset by a decrease in cryogenic pump
revenues. Approximately 44.2% of fiscal 2000 net revenues were
attributable to export sales to foreign customers compared to
45.8% in fiscal 1999. Substantially all such sales were
denominated in U.S. dollars.

Gross profit for fiscal 2000 decreased $12.6
million, or 15.9%, to $66.8 million from $79.4 million for
fiscal 1999. Gross margin decreased to 42.0% for fiscal 2000
from 45.1% in fiscal 1999. The decrease in gross profit is
primarily due to the decrease in aerospace revenues, while the
decrease in gross margin is attributable to an unfavorable sales
mix of aerospace products.

Operating expenses for fiscal 2000 decreased $4.1
million, or 9.0% to $41.5 million from $45.6 million in fiscal
1999. This decrease is primarily attributable to the
non-recurrence of the $2.8 million non-cash compensation expense
associated with the vesting of stock options and stock
appreciation rights in connection with the repurchase of common
stock from AT Holdings largest shareholder on January 4,
1999, $1.0 million associated with severance and non-compete
agreements and an $0.8 million industrial product liability
settlement agreement. Additionally, there has been a decrease of
general and administrative expenses of $1.8 million related to
cost reduction efforts, which was offset by $2.0 million in new
business development investments and a $0.3 million increase in
research and development expense. Operating expenses as a
percent of revenues increased to 26.1% for fiscal 2000 from
25.9% in fiscal 1999.

Income from operations for fiscal 2000 decreased
$8.5 million, or 25.1%, to $25.3 million from $33.8 million for
fiscal 1999 and decreased as a percentage of net revenues to
15.9% in fiscal 2000 from 19.2% in fiscal 1999. These decreases
were due to lower aerospace revenues and an unfavorable sales
mix of aerospace products partially offset by the decrease in
operating expenses discussed above.

Interest expense for fiscal 2000 increased $0.6
million, or 2.4%, to $25.6 million from $25.0 million for fiscal
1999 primarily due to the full year impact of the issuance of
$55.0 million of senior subordinated notes in connection with
the repurchase of stock from our majority shareholder on January
4, 1999 and higher interest rates on the term loans, partially
offset by lower term loan borrowings.

The income tax provision for fiscal 2000
decreased $4.6 million to a benefit of $0.6 million from an
expense of $4.0 million in fiscal 1999. This decrease is due to
a lower pre-tax income of $0.1 million for fiscal 2000 as
compared to $9.3 million for fiscal 1999 due to an increased
benefit of the foreign sales corporation and the effect

12



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##### Table of Contents



of the non-deductible compensation expense
associated with the Employee Stock Ownership Plan and the
vesting of stock options and stock appreciation rights.


Net income for fiscal 2000 decreased $4.6
million, or 86.8%, to $0.7 million from $5.3 million for fiscal
1999 primarily due to the revenue and expense factors discussed
above.

Liquidity and Capital Resources

We are a holding company and receive all of our
operating income from our subsidiaries. As a result, our primary
source of liquidity for conducting business activities and
servicing our indebtedness has been cash flows from our
subsidiaries operating activities.

In September 1997, we amended our credit
facility to allow for the acquisition of Argo-Tech Corporation
Costa Mesa and the issuance of $140.0 million of
8 5/8% senior subordinated notes. The amended credit
facility consists of a seven-year $110.0 million term loan
and a seven-year $20.0 million revolving credit facility.
As of October 27, 2001, we have $60.5 million
principal amount of term loans outstanding under this amended
credit facility. We also have available, after $1.0 million
of letters of credit, $19.0 million of the seven-year
$20.0 million revolving credit facility. The unused balance
of the revolving credit facility is subject to a .50% commitment
fee. Our credit facility contains a number of covenants that,
among other things, limit our ability to incur additional
indebtedness, pay dividends, prepay subordinate indebtedness,
dispose of certain assets, create liens, make capital
expenditures, make certain investments or acquisitions and
otherwise restrict corporate activities. It also requires us to
comply with certain financial ratios and tests, under which we
will be required to achieve certain financial and operating
results. On June 9, 2000, certain financial ratios and
tests for the remainder of the credit facility were amended,
primarily to adjust for the additional interest expense and debt
associated with the $55.0 million of 8 5/8% senior
subordinated notes that were issued on December 17, 1998.
In addition, the supplemental percentage of interest applied to
an Alternate Base Rate (ABR) or LIBOR, as chosen by
the company, was increased .25% when the leverage ratio, as
defined by the ratio of total debt to EBITDA, exceeds a multiple
of 5.0 times and .50% when the leverage ratio exceeds a multiple
of 5.5 times. We were in compliance with all financial ratios
and tests at October 27, 2001. The credit facility contains
no restrictions on the ability of our subsidiaries to make
distributions to us. Interest is calculated, at our choice,
using an Alternate Base Rate (ABR) or LIBOR, plus a
supplemental percentage determined by the ratio of total debt to
EBITDA. The interest rate for fiscal year 2001 ranged from 1.25%
to 1.50% plus ABR or 2.25% to 2.50% plus LIBOR.

In September 1997 we issued $140 million of
senior subordinated notes, together with a portion of the
borrowings under our credit facility, to finance the acquisition
of Argo-Tech Costa Mesa, repay in full $46.1 million in
notes payable and subordinated notes, and to pay related fees
and expenses. The senior subordinated notes bear interest at a
rate of 8 5/8% per year, payable on each April 1 and
October 1. Interest payments commenced on April 1,
1998. These notes have been jointly, severally, fully and
unconditionally guaranteed by all of our wholly owned
subsidiaries, with the exception of one inconsequential direct,
and two inconsequential indirect, wholly owned subsidiaries. The
indenture under which these senior subordinated notes were
issued contains certain optional and mandatory redemption
features and other customary financial covenants and
restrictions.

On December 17, 1998, we issued
$55.0 million in principal amount of 8 5/8% senior
subordinated notes, issued at a 5% discount, due 2007,
$50.0 million of which was dividended to AT Holdings. The
proceeds from the offering, along with the proceeds of the
issuance by AT Holdings of 30,000 shares of its preferred stock
to Chase Venture Capital Associates, L.P. and cash on hand, were
used to repurchase 639,510 shares of stock from AT Holdings,
LLC, the Companys largest shareholder, for
$79.4 million plus transaction expenses. At
October 27, 2001 the accreted value of this offering was
$52.9 million.

In order to reduce variable interest rate
exposure on borrowings under our existing credit facility, we
had two interest rate swap agreements which fixed the rate on
the notional amounts of $10.0 million at 5.60% and
terminated on October 26, 2001. The gains/losses on the
swap agreements were recognized as interest expense and amounted
to a $0.1 million loss in fiscal year 2001, a
$0.3 million gain in fiscal year 2000 and a
$0.4 million

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loss in fiscal year 1999. We do not enter into
derivative contracts for trading or speculative purposes. We
have no other derivative financial instruments.


Cash Flows from Operating Activities.Cash provided by operating activities
for fiscal 2001 decreased $4.3 million to
$18.1 million primarily as a result of an increase in
receivables offset by improved operating results. The increase
in receivables includes a $3.9 million income tax
receivable as a result of amending previous years tax
returns for additional research and development tax credits.
Cash provided by operating activities for fiscal 2000 increased
$7.1 million to $22.4 million primarily as a result of
a decrease in accounts receivable and inventory offset by a
decrease in operating results and accounts payable. Cash
provided by operating activities for fiscal 1999 decreased
$14.5 million to $15.3 million primarily as a result
of an increase in accounts receivable and inventory and a
decrease in accounts payable and accrued liabilities.

Cash Flows from Investing Activities.Net cash used in investing activities
for fiscal 2001 was $1.9 million for the purchase of
property, plant and equipment. Net cash used in investing
activities for fiscal 2000 was $3.0 million for the
purchase of property, plant and equipment. Net cash used in
investing activities for fiscal 1999 was $8.6 million which
included the acquisition of Durodyne, net of cash acquired, of
$2.6 million and the purchase of property, plant and
equipment of $6.0 million. Expenditures for property, plant
and equipment were $1.9 million, $3.0 million and
$6.0 million for fiscal years 2001, 2000 and 1999,
respectively. These expenditures reflect a normal amount of
capital investments necessary to maintain our efficiency and
manufacturing capabilities.

Cash Flows from Financing Activities.Cash used in financing activities for
fiscal 2001 was $13.3 million, which was primarily used to
make scheduled repayments of long-term debt and for AT
Holdings repurchase of common stock from various former
employees. Cash used in financing activities for fiscal 2000 was
$18.1 million, which was primarily used to make scheduled
and voluntary repayments of long-term debt and for AT
Holdings repurchase of common stock from various former
employees. Cash used in financing activities for fiscal 1999 was
$14.4 million which was primarily due to the payment of
fees associated with the repurchase of common stock from AT
Holdings largest shareholder and scheduled repayments, as
well as voluntary payments, of long-term debt, offset by a
borrowing on the revolving credit facility.

Capital Expenditures.Our capital expenditures for fiscal
2001 totalled $1.9 million, which were related to
maintaining existing facilities and equipment and systems to
support current operating activities. For fiscal 2002, we
estimate that capital expenditures will total $2.8 million.
The majority of these projects will be for continued maintenance
of facilities and equipment in support of our current operating
activities. Capital expenditures are financed with cash
generated from operations. We currently have no material
commitments for capital expenditures.

We believe that cash flow from operations will
provide adequate funds for our working capital needs, planned
capital expenditures and debt service obligations. Our ability
to fund our operations, make planned capital expenditures, and
to make scheduled payments on our indebtedness depends on our
future operating performance and cash flow. These items are
subject to prevailing conditions and to financial, business, and
other factors, some of which are beyond our control.

Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 141,
Business Combinations. This pronouncement
establishes new standards for accounting and reporting
requirements for business combinations and will require that the
purchase method of accounting be used for all business
combinations initiated after June 30, 2001. Management does
not believe that SFAS No. 141 will have a material impact
on our consolidated financial statements.

In June 2001, the FASB issued SFAS No. 142,
Goodwill and Other Intangible Assets. This statement
applies to intangibles and goodwill acquired after June 30,
2001, as well as goodwill and intangibles previously acquired.
Under this statement, goodwill and other intangibles determined
to have an infinite life will no longer be amortized; however,
these assets will be reviewed for impairment on a periodic
basis. We expect to early adopt

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this statement for the first quarter of fiscal
year beginning October 28, 2001. Management is currently
evaluating the impact that this statement will have on our
consolidated financial statements.


In June 2001, the FASB issued SFAS 143,
Accounting for Asset Retirement Obligations. This
statement requires entities to record the fair value of a
liability for an asset retirement obligation in the period in
which it is incurred. The amount recorded as a liability will be
capitalized by increasing the carrying amount of the related
long-lived asset. Subsequent to initial measurement, the
liability is accreted to the ultimate amount anticipated to be
paid and is also adjusted for revisions to the timing of the
amount of estimated cash flows. The capitalized cost is
depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the
obligation for its recorded amount or incurs a gain or loss upon
settlement. The provisions of this statement become effective
for our fiscal year beginning October 27, 2002. Management
has not determined the impact, if any, that this statement will
have on our consolidated financial statements.

In August 2001, the FASB issued SFAS 144,
Accounting for the Impairment or Disposal of Long Lived
Assets. This statement improves the financial reporting by
requiring that one accounting model be used for long-lived
assets to be disposed of by sale, whether previously held and
used or newly acquired, and by broadening the presentation of
discontinued operations to include more disposal transactions.
The provisions of this statement become effective for our fiscal
year beginning October 27, 2002. Management has not
determined the impact, if any, that this statement will have on
our consolidated financial statements.

Risk Factors

From time to time, information we provide,
statements by our employees or information included in our
filings with the Securities and Exchange Commission (including
those portions of the Managements Discussion and Analysis
that refer to the future) may contain forward-looking statements
that are not historical facts. Those statements are
forward-looking within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements, and our future performance, operating results,
financial position and liquidity, are subject to a variety of
factors that could materially affect results, including:

The aerospace industry is a highly regulated,
highly competitive industry.

The following risk factors describe the risks
associated with the aerospace industry generally:



| |   |                                   
| | - | ----------------------------------
| |  | The aerospace industry is cyclical

Substantially all of our gross profit and
operating income is derived from sales of products to the
aerospace industry. The commercial aerospace industry is
cyclical and has historically been subject to fluctuations due
to general economic conditions and incidents, such as the events
of September 11, 2001, which adversely affect the
commercial aerospace industry generally, and the commercial
airline industry specifically. A reduction in airline travel
will generally result in reduced orders or delay of delivery of
new aircraft, retirement of older aircraft and parking
underutilized aircraft. This leads to a corresponding decrease
in our sales of new components and aftermarket services and
related income and cash flow and could have a material adverse
effect on our business and profitability.



| |   |                                                                          
| | - | -------------------------------------------------------------------------
| |  | The aerospace industry is subject to
	government regulation and oversight

The aerospace industry is highly regulated in the
United States and in other countries. We must be certified or
accepted by the Federal Aviation Administration, the U.S.
Department of Defense and similar agencies in foreign countries
and by individual OEMs in order to sell and service parts and
components used in specific aircraft models. If material
certifications, authorizations or approvals were revoked or
suspended, our operations would be adversely affected. In the
future, new and more demanding government regulations may be
adopted or industry oversight may be increased, which may have
an adverse effect on our profitability.



| |   |                                              
| | - | ---------------------------------------------
| |  | The aerospace industry is highly
	competitive

The aerospace industry is a highly competitive
global industry which has experienced significant consolidation
in recent years. Our competitors include several companies that
have significantly greater financial resources than we do.

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| |   |                                                              
| | - | -------------------------------------------------------------
| |  | There are a limited number of customers for
	certain products

Due to the relatively small number of customers
in the aerospace industry, customers are often able to influence
prices and other terms of sale for certain of our products. This
influence can have a material adverse effect on our
profitability, as would the loss of one or more these
significant customers.



| |   |                                                                    
| | - | -------------------------------------------------------------------
| |  | Government Contracts are subject to reductions
	in defense spending

Approximately 18.0% of our sales in fiscal 2001
were related to products used in U.S. designed military
aircraft. In general, the U.S. defense budget has been declining
in recent years, which has resulted in reduced demand for new
aircraft and spare parts. In addition, foreign military sales
are affected by U.S. government regulations, regulations by the
purchasing foreign government and political uncertainties in the
U.S. and abroad. There can be no assurance that the U.S. defense
budget will not continue to decline or that sales of defense
related items to foreign governments will continue at present
levels. In addition, the terms of defense contracts with the
U.S. government generally permit the government to terminate
contracts, with or without cause, at any time. Any unexpected
termination of a significant government contract could have an
adverse effect on our business and profitability.

Risks Associated with our
Operations.



| |   |                                                                
| | - | ---------------------------------------------------------------
| |  | We depend on the skill and experience of our
	senior executives

Our success depends upon the efforts, abilities,
experience and expertise of the executive officers of our senior
management team. The loss of services of those individuals and
or other key employees could have a material adverse effect on
our company.



| |   |                                                          
| | - | ---------------------------------------------------------
| |  | Our operations depend on maintaining a skilled
	workforce

Our operations are highly dependent on an
educated and trained workforce. All of our hourly employees at
the Cleveland facility are represented by the United Auto
Workers union. Because we maintain a relatively small inventory
of finished goods, and because the aerospace industry operates
on relatively long production lead times, any interruption of
the work force due to strikes, work stoppages, shortages of
appropriately skilled production and professional workers or
other interruption could have a material adverse effect on our
business and results of operations.



| |   |                                                                     
| | - | --------------------------------------------------------------------
| |  | We depend on suppliers for essential materials
	used in our products

Our profitability is affected by the price and
continuity of supply of raw materials and component parts. Like
all other aerospace fuel pump manufacturers, we rely on one
supplier for CPM-10V, a powdered metal used in the manufacture
of certain pump components. If that supply ceased to exist, our
ability to operate would be adversely affected. We could also be
adversely affected by factors affecting our suppliers, or by
increased costs associated with supplied materials or components
if we are unable to make corresponding increases in the prices
of our products. We maintain a relatively small inventory of raw
materials and component parts and could be adversely affected by
a reduction of supply from vendors. Although we believe that
alternative suppliers, or alternate materials or components,
could be identified, the lengthy and expensive FAA and OEM
certification process associated with aerospace products could
prevent efficient replacement of a material or supplier and
could have a material adverse effect on our business and
profitability.



| |   |                                    
| | - | -----------------------------------
| |  | We depend on our Cleveland facility

We believe that our success to date has been, and
future results of operations will be, dependent in large part
upon our ability to manufacture and deliver products promptly
upon receipt of orders and to provide prompt and efficient
service to our customers. As a result, any disruption of our
day-to-day operations could have a material adverse effect on
our business, customer relations and profitability. The
Cleveland facility is the primary production, research and
marketing facility for Argo-Tech products and also serves as our
corporate headquarters. A fire, flood, earthquake or other
disaster or condition affecting this facility could disable
these functions which are critical to our business. Any such
damage to, or other condition interfering with the operation of,
this facility would have a material adverse effect on our
business, financial position and results of operations.

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| |   |                                                         
| | - | --------------------------------------------------------
| |  | We have potential exposure to environmental
	liabilities

Our business operations and facilities are
subject to a number of federal, state and local laws and
regulations, which govern the discharge of pollutants and
hazardous substances into the air and water as well as the
handling, storage and disposal of such materials. Under certain
environmental laws, as a current or previous owner or operator
of real property, we could be held liable for the costs of
removal or remediation of hazardous substances found on the
property. Environmental laws typically impose liability whether
or not the owner or operator knew of, or was responsible for,
the presence of such hazardous substances.

Our Cleveland, Ohio and Costa Mesa, California
facilities are currently the subject of environmental
remediation regarding contamination resulting from the
operations of our predecessors. Those predecessors have
indemnified us for substantially all costs of remediation at
each site. There can be no assurance, however, that those
parties will continue to satisfy their indemnification
obligations or that we would not be ultimately responsible as
owner and/or operator of either or both of these sites for
potentially significant remediation costs. Moreover, there can
be no assurance that future changes in environmental laws or the
nature of our operations will not require us to make significant
additional expenditures to ensure future environmental
compliance.



| |   |                                            
| | - | -------------------------------------------
| |  | Potential risk of product liability
	claims

While we have never been a defendant in a product
liability case involving our aerospace or ground fueling
products, our operations expose us to potential liabilities for
personal injury or death as a result of the failure of an
aircraft component that has been designed, manufactured or
serviced by us, or the irregularity of metal products we have
processed or distributed. We believe that our liability
insurance is adequate to protect us from future product
liability claims. However, we cannot assure you that if claims
were to arise, our insurance coverage will be adequate.






|         |                                                             
|-------- | ------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures About
	Market Risk.

In the ordinary course of operations,
Argo-Techs major market risk exposure is to changing
interest rates. Argo-Techs exposure to changes in interest
rates relates primarily to its long term debt obligations. At
October 27, 2001, Argo-Tech had fixed rate debt totaling
$195 million, including $2.9 million of accretion, at
8.625% and variable rate debt under its existing credit facility
of $60.5 million calculated at Argo-Techs choice
using an alternate base rate (ABR) or LIBOR, plus a supplemental
percentage determined by the ratio of debt to EBITDA. The
variable rate is not to exceed ABR plus 1.50% or LIBOR plus
2.50%. In order to reduce variable interest rate exposure on our
existing credit facility, we had two interest rate swap
agreements which fixed the rate on the notional amounts of $10.0
million at 5.60% and terminated on October 26, 2001. Argo-Tech
does not enter into derivative contracts for trading or
speculative purposes. A 10% fluctuation in interest rates would
not materially affect Argo-Techs financial condition,
results of operations or cash flows.






|        |                                              
|------- | ---------------------------------------------
|Item 8. | Financial Statements and Supplementary
	Data.

The response to this item is submitted in a
separate section of this report following the signature page.






|        |                                                                                       
|------- | --------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants
	on Accounting and Financial Disclosure.

There were no changes in, or disagreements with,
accountants on accounting and financial disclosure.

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##### Table of Contents






PART III






|         |                                                
|-------- | -----------------------------------------------
|Item 10. | Directors and Executive Officers of
	Argo-Tech.

Directors and Executive Officers.The following table sets forth certain
information concerning our directors and executive officers.
Directors serve until their successors are elected at each
annual meeting. Officers hold office until their successors are
elected and qualified.

|                     |  |     |    |          |  |                                                       
|-------------------- |  | --- | -- | -------- |  | ------------------------------------------------------
|Name                 |  | Age |    | Position
|                     |  |     |    |         
|Michael S. Lipscomb  |  |     | 55 |          |  | Chairman, President & CEO, Director                   
|Paul R. Keen         |  |     | 52 |          |  | Vice President, General Counsel & Secretary,
	Director
|Frances S. St. Clair |  |     | 46 |          |  | Vice President and CFO, Director                      

Michael S. Lipscombhas been Chairman, President &
Chief Executive Officer since 1994. Mr. Lipscomb joined
TRWs corporate staff in February 1981 and was made
Director of Operations for the Power Accessories Division in
1985. Mr. Lipscomb was named Vice President of Operations
when Argo-Tech was formed in 1986, becoming President in 1990
and Chairman in 1994. Mr. Lipscomb has also served as a
director of Argo-Tech and AT Holdings Corporation since 1990.

Paul R. Keenhas
been Vice President, General Counsel and Secretary since 1990.
Mr. Keen was named Vice President and General Counsel in
1987, and became Secretary in December 1990. Prior to 1987,
he spent the majority of his career with TRW as Senior Counsel,
Securities and Finance and as primary legal counsel to two
operating groups. Mr. Keen joined the Board of Directors of
Argo-Tech in April 1999.

Frances S. St. Clairhas been Vice President and Chief Financial Officer since 1992.
Ms. St. Clair joined the Company in 1991 as Controller and
was promoted to Vice President and Controller in
November 1991. Ms. St. Clair received her C.P.A.
certification in 1984. Ms. St. Clair joined the Board
of Directors of Argo-Tech in April 1999 and was elected to the
Board of Directors of AT Holdings Corporation in September 2001.






Item 11.  Executive
Compensation.


The following table sets forth, for the fiscal
years 2001, 2000 and 1999, certain information about the
compensation paid to the Chief Executive Officer and each of our
other executive officers (the Named Executives).

|                            |                                 |                     |      |           |      |       |         |                    |         |   |         |         |        |   |        |        |       | 
|--------------------------- | ------------------------------- | ------------------- | ---- | --------- | ---- | ----- | ------- | ------------------ | ------- | - | ------- | ------- | ------ | - | ------ | ------ | ----- | 
|                            |                                 |                     |      |          
|                            |                                 | Annual Compensation |      |          
|                            |                                 |                     |      | All Other
|Name and Principal Position |                                 | Fiscal Year         |      | Salary    |      | Bonus |         | Compensation(1)(2)
|                            |                                 |                     |      |           |      |       |         |                   
|Michael S. Lipscomb         |                                 |                     | 2001 |           |      | $     | 419,193 |                    |         | $ | 194,625 |         |        | $ | 46,414 |       
|                            | Chairman, President and CEO     |                     |      | 2000      |      |       | $       | 397,777            |         |   | $       | 209,306 |        |   | $      | 48,323 |      
|                            |                                 |                     | 1999 |           |      | $     | 339,200 |                    |         | $ | 205,544 |         |        | $ | 47,623 |       
|                           
|Paul R. Keen                |                                 |                     | 2001 |           |      | $     | 232,530 |                    |         | $ | 75,459  |         |        | $ | 6,013  |       
|                            | Vice President, General Counsel |                     |      | 2000      |      |       | $       | 222,768            |         |   | $       | 78,303  |        |   | $      | 6,073  |      
|                            |                                 | and Secretary       |      |           | 1999 |       |         | $                  | 189,045 |   |         | $       | 88,387 |   |        | $      | 6,235 | 
|                           
|Frances S. St. Clair        |                                 |                     | 2001 |           |      | $     | 200,016 |                    |         | $ | 64,166  |         |        | $ | 9,277  |       
|                            | Vice President and CFO          |                     |      | 2000      |      |       | $       | 189,428            |         |   | $       | 66,586  |        |   | $      | 3,824  |      
|                            |                                 |                     | 1999 |           |      | $     | 168,648 |                    |         | $ | 86,170  |         |        | $ | 4,278  |       



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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 1999, 2000 or 2001.                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(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 $22,000 for each of the fiscal
	years 2001, 2000 and 1999, respectively, paid as AT Holdings
	Corporation directors fees. For Ms. St. Clair, the amounts
	listed also include $5,500 for fiscal year 2001 paid as AT
	Holdings Corporation directors fees.

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Management Retention Agreements

Stay Pay and Severance
Agreements.We have entered into Stay
Pay and Severance Agreements with each of the Named Executives.
Our Board of Directors believes that these severance agreements
benefit us by securing the continued services of key management
personnel and by enabling management to perform their duties and
responsibilities without the distracting uncertainty generally
associated with a change in control.

The severance agreements provide that, if a
change in control (as defined in the agreements) occurs and the
executive remains employed by us on a full-time basis through
the effective date of the change in control, the executive will
receive a single lump sum stay payment equal to 25%
of the sum of the highest annual base salary and the highest
bonus amount received by the executive in the preceding five
years.

The severance agreements also provide that if an
executives full-time employment is terminated without
cause (as defined in the agreements), either before or after a
change in control has occurred, or upon a voluntary termination
of employment by an executive upon the reduction of his or her
base salary by 5% or more, if the reduction is not a result of a
company policy to reduce the salaries of a substantial number of
officers or employees, or if the executive ceases to be employed
in a position involving substantially the same level of
responsibility or duties as performed by the executive on the
date the severance agreement was executed (a Qualifying
Voluntary Termination), the executive will receive a basic
severance payment. The payment will consist of a single lump sum
equal to the sum of the highest annual base salary and the
highest bonus amount received by the executive in the preceding
five years.

Additional payments will be made to the executive
in the event that a change in control has occurred and the
executives employment is terminated without cause within
the six-month period following the effective date of such change
in control, or upon a Qualifying Voluntary Termination within
that period. The executive will receive additional severance
payments equal to the amount he or she would have received had
employment continued, at the same intervals and at the same rate
of base salary the executive was receiving during the month
preceding termination, until the six-month anniversary of the
effective date of the change in control. These additional
severance payments, if paid, would be in addition to the basic
severance payment and the stay payment described above.

Each executive is entitled to several other
benefits contained in the severance agreements, including

 life, health, medical/hospital,
dental, and vision insurance benefits for a period of 12 months
in the event that an executives full-time employment is
terminated without cause or upon a Qualifying Voluntary
Termination, either before or after a change in control has
occurred and

 gross-up payments to cover any excise
tax imposed by Section 4999 of the Internal Revenue Code upon
any payment made to the executive under the severance
agreements, subject to certain limitations.

We have agreed to be solely responsible for any
and all attorneys fees and related expenses incurred by
the executive in the event that we fail to comply with our
obligations under the severance agreements.

Trust
Agreement.In connection with an
additional stay pay agreement with Mr. Lipscomb, we entered
into a trust agreement, which established an irrevocable grantor
trust for the benefit of Mr. Lipscomb as the beneficiary.
This agreement provides for payment of $315,600 on
January 1, 2007, or earlier, upon Mr. Lipscombs
voluntary or involuntary termination of full-time employment
with us, with or without cause (as defined in the agreement).

The assets to be held by the trust include the
original deposit of principal and any other contributions made
by us, at our option. These trust assets are to be disposed of
by the trustee when certain conditions in Mr. Lipscombs
stay pay agreement occur or when the trustee is directed by two
officers of Argo-Tech, other than Mr. Lipscomb, to dispose of
the assets.

If the amount disbursed by the trustee is
insufficient to fully fund the $315,600 payment specified under
Mr. Lipscombs stay pay agreement, we will be required
to pay the balance. However, if the amount disbursed by the
trustee exceeds the amount to which Mr. Lipscomb or his
qualifying successor is entitled under the stay pay agreement,
Mr. Lipscomb or his qualifying successor is entitled to
retain such excess. The trust assets and any

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income earned on those assets remain at all times
subject to the claims of our general creditors under state and
federal law.


This agreement also provides for the payment of
attorneys expenses if enforcement of the contract becomes
necessary, and contains certain restrictions on certain types of
competitive activity by Mr. Lipscomb. The benefits provided
by the trust and this stay pay agreement and the Trust Agreement
are in addition to the benefits provided under the severance
agreements described above and Mr. Lipscombs
employment contract which is described below.

Employment
Agreements.We have entered into
employment contracts with Mr. Lipscomb and Mr. Keen.
These contracts provide for the payment of severance benefits
upon termination of employment without cause (as defined in the
contracts). In the event of such a termination,
Mr. Lipscomb will receive all salary and bonuses for a
period of twelve months from the date of termination, in an
amount equal to all salary and bonuses received during the
twelve month period immediately preceding termination.
Mr. Keen will receive, in the event of such a termination,
a single lump sum payment equal to 24 months of his base salary,
in an amount calculated from the base salary in effect for the
full month immediately preceding the date of termination. Both
Mr. Lipscomb and Mr. Keen will receive life, health,
medical/hospital, dental and vision insurance benefits for a
period of twelve months. Mr. Keens contract also
provides for the payment of attorneys expenses if
enforcement of the contract becomes necessary, and contains
restrictions on certain competitive activities by Mr. Keen.
The benefits provided by these additional contracts are provided
in addition to the benefits provided under the severance
agreements, and Mr. Lipscombs trust agreement.

Compensation Pursuant to Employee Benefit
Plans of the Company

Retirement Plan

Salaried Pension
Plan.Our Salaried Pension Plan
was established effective November 1, 1986. Prior to July 1,
1994, our regular, permanent, salaried employees were eligible
to participate in this plan. Participation in the plan was
closed to any person who was not a participant on June 30,
1994, and all benefit accruals ceased as of the close of
business on June 30, 1994. The benefits of participants in
the Salaried Pension Plan who were employees on June 30,
1994, became vested (to the extent otherwise non-vested) as of
the close of business on June 30, 1994. Employee
contributions were neither required nor permitted. All Salaried
Pension Plan assets are presently invested in an annuity
contract with Aetna Life Insurance Company as the funding agent.

The monthly normal retirement benefit under the
Salaried Pension Plan is 1.25% of a participants final
average monthly compensation multiplied by the
participants years of benefit service. Compensation earned
after June 30, 1994, and service performed after
June 30, 1994, are not taken into account in determining a
participants benefit under the Salaried Pension Plan.
Final average monthly compensation means the average monthly
compensation (computed before withholdings, deductions for taxes
or other purposes, and salary reduction amounts under the
Argo-Tech Employee Savings Plan) paid or payable to the
participant for the five calendar years which produce the
highest such average, determined as if the participants
employment terminated on June 30, 1994 (or, if earlier, the
date the participants employment actually terminated or
the participant ceased to be within the class of employees
eligible to participate in the Salaried Pension Plan). If a
participant ceased to be within the class of employees eligible
to participate or a participants employment terminated (or
is deemed to have terminated) prior to July 1 of a calendar
year, that calendar year is not taken into account for purposes
of determining final average monthly compensation. A
participants vested benefit cannot be less than the
participants vested benefit under the Salaried Pension
Plan, if any, as of October 31, 1989.

The Internal Revenue Code of 1986, limits the
maximum annual retirement benefit payable under the Salaried
Pension Plan and the maximum amount of annual compensation that
can be taken into account in calculating benefits under the
Salaried Pension Plan.

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At retirement, based on benefits accrued as of
June 30, 1994, the monthly retirement benefits payable to
each of the individuals named in the Summary Compensation Table
are:

|                     |  |         |          | 
|-------------------- |  | ------- | -------- | 
|                     |  | Monthly
|Name                 |  | Benefit
|                     |  |        
|Michael S. Lipscomb  |  | $       | 1,799.32 | 
|Paul R. Keen         |  | $       | 1,188.83 | 
|Frances S. St. Clair |  | $       | 411.56   | 

The benefits shown above are in the form of a
single life annuity commencing as of the first day of the month
after the participant attains age 65. Benefits may commence at
any time after age 55 if the participant had at least five years
of service when the participants employment terminated.
Actuarial reductions would apply for early commencement and for
payment in the form of a joint and survivor annuity.

The normal form of payment under the Salaried
Pension Plan is a single life annuity. However, participants may
elect payment of retirement benefits under several joint and
survivor forms of payment, subject to the requirement that a
married participant receive benefits in the form of a joint and
survivor annuity with the spouse as contingent annuitant unless
the spouse consents to the participants election of
another form of payment, another contingent annuitant, or both,
as applicable.

Salaried Savings
Plan

Our Salaried Savings Plan has been in place since
1987. Regular, permanent, salaried employees who have completed
at least 3 months of service are eligible to participate in
the plan. All assets of the plan are held in trust.

Participants may elect to have
tax-deferred (401(k) compensation reduction)
contributions made to the plan of up to 13% of their eligible
compensation. Participants may also elect to have after-tax
contributions made to the Plan of up to 10% of their eligible
compensation. Employer matching contributions to the plan ceased
on July 1, 1994. For periods before July 1, 1994, the Salaried
Savings Plan provided for employer matching contributions as
follows: Basic matching contributions of 25% of each
participants tax-deferred contributions not in excess of
3% of compensation and discretionary additional matching
contributions of a percentage (within the range of 0% and 125%
established for each fiscal year (the plan year)) of
each participants tax-deferred contributions not in excess
of 3% of compensation. A participants benefit under the
plan is the balance of the participants accounts
attributable to after-tax contributions and the vested balance
of the participants accounts attributable to employer
matching contributions. Tax-deferred contributions and after-tax
contributions are always 100% vested. Participants (including
former employees) whose accounts attributable to employer
matching contributions had not been forfeited prior to November
1, 1994, became, to the extent otherwise non-vested, 100%
vested. Benefits are payable in the form of a single lump sum
payment.

The Internal Revenue Code limits the maximum
annual contributions that can be made to the Salaried Savings
Plan and the maximum amount of annual compensation that can be
taken into account in calculating contributions to the Salaried
Savings Plan. Contributions for a plan year on behalf of certain
highly compensated individuals may also be limited to comply
with Internal Revenue Codes nondiscrimination requirements.

Benefits are generally payable after a
participant is separated from service. A participant who is an
employee may, however, apply for an in-service distribution of
all or a portion of the participants vested account
balance after attainment of age 59 1/2 or in the event of a
hardship (as defined in the Salaried Savings Plan). A
participant may apply for an in-service distribution of
after-tax contributions at any age and for any reason. A
participant who is a party in interest may apply for
a loan of up to 50% of the participants vested account
balance (subject to a $50,000 maximum) under the Salaried
Savings Plan.

Employee Stock Ownership
Plan

The Employee Stock Ownership Plan was established
in 1994 with the participation of Argo-Techs salaried
employees. State Street Bank and Trust Company serves as the
plans trustee, and holds all of its assets in trust.

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On May 17, 1994, the trustee purchased
420,000 shares of common stock of AT Holdings Corporation with
the proceeds of a $16.8 million loan from us to the
Employee Stock Ownership Plan. The term of the loan, unless it
is prepaid or accelerated, ends on April 28, 2004. The
interest rate for the loan is fixed for the ten year term at
7.16% per year. The purchase price for the AT Holdings common
stock was $40 per share.

The shares of AT Holdings common stock
purchased by the Employee Stock Ownership Plan with the proceeds
of the loan are held in a suspense account and released to
eligible participants on a pro rata basis as loan principal
payments are made. Shares released from the plan for each plan
year are allocated to each eligible participants account
based on the ratio of each such participants eligible
compensation to the total eligible compensation of all eligible
participants. Forfeitures of the accounts of non-vested
participants are reallocated among eligible participants in the
same manner as shares of AT Holdings common stock released
from the suspense account.

For each of the Plan Years ended October 31,
1999, October 31, 2000 and October 27, 2001, 42,000
shares of AT Holdings common stock were released from the
suspense account. Based on the loan payment schedule, the number
of shares of AT Holdings common stock released from the
suspense account each future plan year during the loan period
would be:

|                 |  |                 |        | 
|---------------- |  | --------------- | ------ | 
|                 |  | Number of      
|Plan Year Ending |  | Shares Released
|                 |  |                
|October 31, 2002 |  |                 | 42,000 | 
|October 31, 2003 |  |                 | 42,000 | 
|October 31, 2004 |  |                 | 21,000 | 

If we make additional contributions to the
Employee Stock Ownership Plan, the plan would use the
contribution to prepay the loan, and shares would be
released from the suspense account more rapidly than shown
above. If, however, for any reason we do not make contributions
to the plan to pay the principal on the loan as described above,
the shares would not be released from the suspense account as
rapidly as shown above.

We may, for any plan year, make additional
discretionary contributions for the benefit of plan
participants. These contributions may be made in cash, shares of
qualifying employer securities, or other property.

Whether the Employee Stock Ownership Plan will
acquire additional shares of AT Holdings common stock or
other qualifying employer securities in the future depends upon
future business conditions. Such purchases, if made, would be
funded through additional borrowings by the plan or additional
contributions from us. The timing, amount and manner of future
contributions to the plan will be affected by various factors,
including prevailing regulatory policies, the requirements of
applicable laws and regulations, and market conditions.

Participants may elect to receive the shares of
qualifying employer securities credited to their accounts after
their termination of employment, and in specified instances,
after attaining age 55 with 10 or more years of participation in
the Employee Stock Ownership Plan. Participants vest in their
plan accounts 20% per year of service, and service prior to the
effective date of the plan counts for this purpose. A
participant can require us to purchase qualifying employer
securities received from the plan at the value the stock then
has, as determined for plan purposes (a put option).
Shares of qualifying employer securities distributed from the
plan are subject to a right of first refusal in
favor of us or the Employee Stock Ownership Plan at the value
the stock then has, as determined for purposes of the plan. The
put option and right of first refusal will no longer apply if
the qualifying employer securities become tradeable on an
established securities market.

Voting rights on and decisions whether to tender
or exchange shares of qualifying employer securities held in the
Employee Stock Ownership Plan are passed through to
participants. Each participant is entitled to direct the
plans trustee as to the voting of (1) shares of
qualifying employer securities credited to the
participants account; and (2) a proportionate part of
the unallocated shares of qualifying employer securities held in
the suspense account and shares of qualifying employer
securities allocated to participants accounts as to which
no direction is received by the plans trustee. In the
event of a tender or exchange offer for qualifying employer
securities held in the plan, each participant is entitled to
direct the plans Trustee whether to tender or exchange

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shares of qualifying employer securities held in
the plan in a manner similar to the voting directions described
above.


Because the employers contributions to the
Employee Stock Ownership Plan are not fixed, benefits payable
under the plan cannot be estimated.

For the plan year ended October 31, 2001,
the number of shares of AT Holdings common stock allocated
under the Employee Stock Ownership Plan to the accounts of the
individuals named in the Summary Compensation Table were:

|                     |  |                  |          |               |  |  |            | 
|-------------------- |  | ---------------- | -------- | ------------- |  |  | ---------- | 
|                     |  |                 
|                     |  | Shares Allocated
|                     |  |                 
|                     |  | Year Ended       |          | Cumulative to
|Name                 |  | Oct. 31, 2001    |          | Oct. 31, 2001
|                     |  |                  |          |              
|Michael S. Lipscomb  |  |                  | 417.4458 |               |  |  | 3,089.4839 | 
|Paul R. Keen         |  |                  | 417.4458 |               |  |  | 3,089.4839 | 
|Frances S. St. Clair |  |                  | 417.4458 |               |  |  | 3,040.5195 | 

Generally accepted accounting principles require
that any third party borrowing by the Employee Stock Ownership
Plan be reflected as a liability on our statement of financial
condition. Since the plan is borrowing from us, the obligation
is not treated as an asset of ours, but will be deducted from
shares of stock held by the Employee Stock Ownership Plan. If
the plan purchases newly issued shares of AT Holdings
common stock, total stockholders equity would neither
increase nor decrease.

The Internal Revenue Service has issued a
determination letter that the plan is qualified under
Section 401(a) of the Internal Revenue Code and is an
employee stock ownership plan under Section 4975(e)(7)
thereof. Contributions to the plan and allocations to the
accounts of eligible participants thereunder are subject to
applicable limitations imposed under the Internal Revenue Code.
The plan is subject to the requirements of the Employee
Retirement Income Security Act of 1974, as amended, and the
regulations thereunder.

Employee Stock Ownership Plan
Excess Benefit Plan

We maintain the Employee Stock Ownership Plan
Excess Benefit Plan, an unfunded plan that at all times will be
deemed invested in AT Holdings common stock. This plan is for
employees participating in the Employee Stock Ownership Plan in
respect of reduction to allocations to their accounts because of
limitations under the Internal Revenue Code applicable to
tax-qualified plans. Benefits under this plan vest in the same
manner as benefits under the Employee Stock Ownership Plan and
distributions from the plan will, subject to certain
restrictions, be made in whole or fractional shares of AT
Holdings common stock at the same time or times as benefits
under the Employee Stock Ownership Plan are distributable, or in
the case of benefits with respect to qualifying employer
securities subject to the put option under the Employee Stock
Ownership Plan at the time the plan participant exercises (or is
deemed to have exercised) a hypothetical put option
under the plan.

We maintain a bookkeeping account for amounts
credited to the accounts of plan participants. For the plan year
ended October 31, 2001, the amounts credited to the accounts of
the individuals named in the Summary Compensation Table were:

|                     |  |                             |            |               |  |  |            | 
|-------------------- |  | --------------------------- | ---------- | ------------- |  |  | ---------- | 
|                     |  |                            
|                     |  | Equivalent Shares Allocated
|                     |  |                            
|                     |  | Year Ended                  |            | Cumulative to
|Name                 |  | Oct. 31, 2001               |            | Oct. 31, 2001
|                     |  |                             |            |              
|Michael S. Lipscomb  |  |                             | 1,108.0563 |               |  |  | 5,859.8807 | 
|Paul R. Keen         |  |                             | 347.9893   |               |  |  | 1,474.5876 | 
|Frances S. St. Clair |  |                             | 239.1172   |               |  |  | 920.6865   | 

Incentive Stock Option
Plans

1991 Performance Stock Option
Plan.The 1991 Performance Stock
Option Plan provides for option grants for the purchase of AT
Holdings common stock. The exercise price of each option
is $10.00 per share. All of the

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options available under this plan were granted
and have been amended by the Compensation Committee of AT
Holdings, upon the recommendation of our compensation committee,
and with the consent of the optionees in June 2001. These
options expire on November 9, 2011. All of the options under
this plan became fully vested in January 1999.


Aggregate Option Exercises in Last Fiscal
Year

and Fiscal Year End Option Values


|                     |  |          |        |             |  |             |   |               |  |                      |   |  |  |  |         |   |  |  |            |   
|-------------------- |  | -------- | ------ | ----------- |  | ----------- | - | ------------- |  | -------------------- | - |  |  |  | ------- | - |  |  | ---------- | --
|                     |  |          |        |             |  |             |   | Number of     |  |                     
|                     |  |          |        |             |  |             |   | Securities    |  |                     
|                     |  |          |        |             |  |             |   | Underlying    |  |                     
|                     |  |          |        |             |  |             |   | Unexercisable |  | Value of Unexercised
|                     |  |          |        |             |  |             |   | Options at    |  | In-the-Money        
|                     |  |          |        |             |  |             |   | FY-End        |  | Options at FY-End($)
|                     |  |          |        | Shares      |  |             |   |               |  |                     
|                     |  | Exercise |        | Acquired on |  | Value       |   | Exercisable/  |  | Exercisable/        
|Name                 |  | Price($) |        | Exercise    |  | Realized($) |   | Unexercisable |  | Unexercisable       
|                     |  |          |        |             |  |             |   |               |  |                     
|Michael S. Lipscomb  |  | $        | 10.00  |             |  |             | 0 |               |  | $                    | 0 |  |  |  | 8,670 / |  |  |  | $344,979 / | $
|                     |  |          | 40.00  |             |  |             | 0 |               |  |                      | 0 |  |  |  | 6,125 / |  |  |  | 59,964 /   |  
|                     |  |          | 100.11 |             |  |             | 0 |               |  |                      | 0 |  |  |  | 4,000 / |  |  |  |  /        |  
|Paul R. Keen         |  |          | 10.00  |             |  |             | 0 |               |  |                      | 0 |  |  |  | 1,990 / |  |  |  | 79,182 /   |  
|                     |  |          | 40.00  |             |  |             | 0 |               |  |                      | 0 |  |  |  | 2,760 / |  |  |  | 27,020 /   |  
|                     |  |          | 100.11 |             |  |             | 0 |               |  |                      | 0 |  |  |  | 1,400 / |  |  |  |  /        |  
|Frances S. St. Clair |  |          | 10.00  |             |  |             | 0 |               |  |                      | 0 |  |  |  | 2,990 / |  |  |  | 118,972 /  |  
|                     |  |          | 40.00  |             |  |             | 0 |               |  |                      | 0 |  |  |  | 2,760 / |  |  |  | 27,020 /   |  
|                     |  |          | 100.11 |             |  |             | 0 |               |  |                      | 0 |  |  |  | 1,400 / |  |  |  |  /        |  

1991 Management Incentive Stock Option
Plan.The 1991 Management Incentive
Stock Option Plan provides for option grants for the purchase of
AT Holdings common stock. The exercise price of each
option is $10.00 per share. All of the options available under
this plan were granted and have been amended by the Compensation
Committee of AT Holdings, upon the recommendation of our
Compensation Committee, and with the consent of the optionees in
June 2001. These options expire on November 9, 2011. All of the
options under this plan became fully vested in January 1999.

1998 Equity Replacement Stock Option Plan.The 1998 Equity Replacement Stock
Option Plan (as amended June 12, 2001) was established to
provide for option grants for the purchase of AT Holdings
common stock. The exercise price of each option is $40.00 per
share. The options were granted to each person who was a
participant in the 1997 Stock Appreciation Rights Plan in
exchange for, and in cancellation of, all of the rights of each
such participant under the Stock Appreciation Rights Plan (See
Benefits Restructuring). These options, which were granted by
the Compensation Committee of AT Holdings upon the
recommendation of our compensation committee, expire on
January 2, 2005. All of the options under this plan were
fully vested upon issuance.

1998 Incentive Plan.The 1998 Incentive Plan was
established to provide option grants for the purchase of AT
Holdings common stock, at prices that may be more than,
less than, or equal to the fair market value of the shares, as
the Board or Compensation Committee of AT Holdings may determine
at the time of grant. Options are granted by the Compensation
Committee of AT Holdings upon the recommendation of our
compensation committee. There have been two option grants under
the 1998 Incentive Plan, the first in 1999 with an exercise
price of $100.11, the second in 2001 with an exercise price of
$69.18. The option agreement governing the options granted in
1999 provides that such options vest in 20% increments over five
successive years. For any year in which the EBITDA of the
company exceeds 105% of the target EBITDA, an additional
13 1/3% of the optioned shares will vest. Effective
November 2, 2000 all holders of options granted in 1999
agreed to the cancellation of the portion of the 1999 options
which were not vested at such date. Pursuant to the plan, such
cancelled options are available for new grants. The option
agreement governing the options granted under the plan in
September 2001 provides for vesting as follows: 33.3% at the
time of issuance and 33.3% on the anniversary date of the grant
over the next two years. All options granted under the plan
expire ten years from the

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##### Table of Contents



date of grant. None of the Named Executives
received options in September 2001. In the event that AT
Holdings common stock becomes registered or traded on a
national exchange or in the event of a change in control, all
options will become exercisable in full.


Executive Life Insurance
Plan

Our executive life insurance plan permits certain
officers and key employees to obtain life insurance benefits in
addition to those generally provided to salaried employees. The
level of coverage provided to such officers and key employees
consists of basic term and whole life insurance coverage equal
to 3 times the individuals salary.

Bonus Plan

We have in effect a plan pursuant to which
officers and other key management employees may receive cash
bonuses paid upon (1) the achievement of specified cash
flow goals in the preceding fiscal year and (2) individual
performance. The amounts of such bonus awards are approved by
the AT Holdings Compensation Committee.

Compensation of
Directors

Since 1999, Argo-Tech has not compensated its
directors. AT Holdings Corporation pays its directors a
quarterly fee of $2,500 plus $3,000 and reasonable out-of-pocket
expenses for each board meeting attended. Fees paid to
Mr. Lipscomb and Ms. St. Clair for service on the board of
AT Holdings are included in the Summary Compensation table. See
Executive Compensation.

Benefits
Restructuring

On January 4, 1999, AT Holdings repurchased
639,510 shares of its common stock that were held by its
majority stockholder, AT Holdings, LLC. AT Holdings also issued
30,000 shares of its preferred stock on December 17, 1998.
In connection with these transactions, we amended our Employee
Stock Ownership Plan Excess Benefit Plan and the Stock
Appreciation Rights (SAR) Plan. The amendment to the Employee
Stock Ownership Plan Excess Benefit Plan allowed for the
transfer of approximately 4,500 shares of AT Holdings common
stock in place of cash payments to members of management who
have been credited with Employee Stock Ownerships Plan excess
benefits as of October 31, 1998. The SAR plan provided for
grants of up to 34,450 SARs, 17,225 of which were granted in
fiscal years 1997 and 1998. The remaining SARs were granted in
the first quarter of fiscal 1999. Pursuant to the amendment of
the SAR plan, all SARs became fully vested and were then
converted into fully vested stock options under the 1998 Equity
Replacement Stock Option Plan. In addition, all granted options
under the 1991 Performance Stock Option Plan and 1991 Management
Incentive Stock Option Plan, to the extent not vested, became
fully vested upon completion of AT Holdings repurchase of
AT Holdings, LLCs common shares.




Item 12.  Security Ownership of
Certain Beneficial Owners and Management.

Principal Stockholders

Argo-Tech is a wholly owned subsidiary of AT
Holdings, which owns the only outstanding share of
Argo-Techs common stock, par value of $.01 per share. The
following table sets forth the ownership of AT Holdings
common stock as of October 27, 2001 by:



| |   |                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------
| |  | each person known to Argo-Tech to be the
	beneficial owner of more than 5% of AT Holdings common
	stock,
|
| |  | each director of Argo-Tech and AT Holdings, and                                                          
|
| |  | all of Argo-Tech and AT Holdings directors
	and executive officers as a group.                          

25



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##### Table of Contents



On October 27, 2001, there were 653,844
shares of AT Holdings common stock outstanding, exclusive
of treasury shares. AT Holdings also has 30,000 shares of its
preferred stock outstanding. All of these shares are held by
Chase Venture Capital Associates, L.P. These preferred shares
have no voting rights.

|                                                         |                                                              |                                        |         |             |  |                 |        |       |  |                  |       |  |  |  |         |     |  |  |      |  | 
|-------------------------------------------------------- | ------------------------------------------------------------ | -------------------------------------- | ------- | ----------- |  | --------------- | ------ | ----- |  | ---------------- | ----- |  |  |  | ------- | --- |  |  | ---- |  | 
|                                                         |                                                              |                                       
|                                                         |                                                              | Ownership of AT Holdings common stock
|                                                         |                                                              |                                       
|                                                         |                                                              |                                        |         | Shares      |  |                
|                                                         |                                                              |                                        |         | Number of   |  | Attributable to |        |      
|                                                         |                                                              | Number                                 |         | Immediately |  | Employee Stock  |        |      
|Name of                                                  |                                                              | Beneficially                           |         | Exercisable |  | Ownership       |        |      
|Beneficial Owner                                         |                                                              | Owned                                  |         | Options     |  | Plan Account    |        | Total |  | Percent of Class
|                                                         |                                                              |                                        |         |             |  |                 |        |       |  |                 
|KeyTrust Company of Ohio, N.A.(1)                        |                                                              |                                        | 365,412 |             |  |                 | 0      |       |  |                  | 0     |  |  |  | 365,412 |     |  |  | 55.9 | 
|                                                         | 127 Public Square
	Cleveland, OH 44114                       |                                        |         |             |  |                 |        |       |  |                  |       |  |  |  |         |     |  |  |      |  | 
|                                                        
|YC International, Inc.                                   |                                                              |                                        | 39,000  |             |  |                 | 0      |       |  |                  | 0     |  |  |  | 39,000  | (2) |  |  | 6.0  | 
|                                                         | 725 South Figueroa Street
	Suite 3870
	Los Angeles, CA 90117 |                                        |         |             |  |                 |        |       |  |                  |       |  |  |  |         |     |  |  |      |  | 
|                                                        
|AT Holdings, LLC                                         |                                                              |                                        | 187,452 |             |  |                 | 39,000 | (2)   |  |                  | 0     |  |  |  | 226,452 |     |  |  | 34.6 | 
|                                                         | 1390 Highway 50 East
	Suite 4
	Carson City, NV 89701         |                                        |         |             |  |                 |        |       |  |                  |       |  |  |  |         |     |  |  |      |  | 
|                                                        
|Chase Venture Capital Associates,
	L.P.                  |                                                              |                                        | 0       |             |  |                 | 46,025 |       |  |                  | 0     |  |  |  | 46,025  |     |  |  | 6.6  | 
|                                                         | 380 Madison Ave.
	New York, NY 10017                         |                                        |         |             |  |                 |        |       |  |                  |       |  |  |  |         |     |  |  |      |  | 
|                                                        
|Confar, Thomas*                                          |                                                              |                                        | 0       |             |  |                 | 0      |       |  |                  | 0     |  |  |  | 0       |     |  |  | **   | 
|de Chastenet, Remi*                                      |                                                              |                                        | 0       |             |  |                 | 500    |       |  |                  | 277   |  |  |  | 777     |     |  |  | **   | 
|Dougherty, Thomas*                                       |                                                              |                                        | 2,094   |             |  |                 | 0      |       |  |                  | 0     |  |  |  | 2,094   |     |  |  | **   | 
|Keen, Paul                                              |                                                              |                                        | 13,502  |             |  |                 | 8,381  |       |  |                  | 3,089 |  |  |  | 24,972  |     |  |  | 3.8  | 
|Lipscomb, Michael*                                      |                                                              |                                        | 27,883  |             |  |                 | 25,104 |       |  |                  | 3,089 |  |  |  | 56,076  |     |  |  | 8.2  | 
|Nagata, Robert*                                          |                                                              |                                        | 0       |             |  |                 | 500    |       |  |                  | 0     |  |  |  | 500     |     |  |  | **   | 
|St. Clair, Frances*                                     |                                                              |                                        | 6,733   |             |  |                 | 9,381  |       |  |                  | 3,041 |  |  |  | 19,155  |     |  |  | 2.9  | 
|Storrie, Karl*                                           |                                                              |                                        | 1,204   |             |  |                 | 450    |       |  |                  | 0     |  |  |  | 1,654   |     |  |  | **   | 
|Directors and Executive Officers as a Group (8
	persons) |                                                              |                                        | 51,416  |             |  |                 | 44,316 |       |  |                  | 9,496 |  |  |  | 105,228 |     |  |  | 14.9 | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*   | Director of AT Holdings Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|**  | Less than 1%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|   | Director of Argo-Tech                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(1) | State Street Bank and Trust Company replaced
	KeyTrust Company of Ohio, N.A. as the trustee of the Employee
	Stock Ownership Plan in January 2002. The Plan trustee
	holds shares of AT Holdings common stock in trust for the
	benefit of the plan. Under normal circumstances, the trustee
	votes all of the shares held by the plan in proportion to the
	actual voting directions of the plan participants. Under certain
	limited circumstances, the plan trustee may, in the exercise of
	its fiduciary duty, vote the shares held by the plan as a block.
	The share ownership numbers for officers do not include shares
	held through the plan, other than those shares directly
	attributed to the officers account.
|   
|(2) | AT Holdings, LLC has the option to purchase all
	of YC Internationals shares of AT Holdings common
	stock. AT Holdings, LLC disclaims all beneficial ownership of
	those shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              




Item 13. Certain Relationships and
Related Transactions.

Upsilon International
Corporation Distribution Agreement

Upsilon International, a company owned by YC
International Inc., which is under the control of
Mr. Masashi Yamada, Holdings majority
stockholder through his control of YC International and
AT Holdings, LLC, was appointed as the exclusive
distributor of Argo-Tech products in 1990 with respect to the
Japanese market and in 1994 for the entire international market
under a long-term distribution agreement. We believe that this
distribution agreement was entered into on terms and conditions
customary for the industry in all respects with the exception of
the basic contract term of 50 years and termination
provisions which are more favorable to Upsilon International
than industry norm. The distribution agreement provides for a
15% discount from Argo-Tech catalog prices on all purchases of
Argo-Tech products by Upsilon International. For fiscal 2001,
sales by Upsilon International accounted for approximately 15%
of our net revenues.

26



---



##### Table of Contents



Officer Loans

Each of the Named Executives have entered into
presently outstanding recourse loan agreements with
AT Holdings. The largest amount of indebtedness outstanding
since the beginning of fiscal 2001 for each such Named Executive
was: $499,174 (Mr. Lipscomb), $272,326 (Mr. Keen) and
$71,688 (Ms. St. Clair). Each loan is due October 30,
2005 and accrues interest at 6.75% annually. These loans,
secured by a pledge of AT Holdings common stock, were
extended for the purchase of AT Holdings common
stock, or for the personal use of the Named Executive. Each of
the Named Executives having an outstanding loan has entered into
a pledge agreement and promissory note with AT Holdings in
connection with such loans. We believe that the terms of these
loans are no less favorable to AT Holdings than would have
been available pursuant to arms length negotiations with
unaffiliated parties.






PART IV







|         |                                                                   
|-------- | ------------------------------------------------------------------
|Item 14. | Exhibits, Financial Statement Schedules, and
	Reports on Form 8-K.

(a)(1) Financial Statements

The following consolidated financial statements
of the Company are included in a separate section of this report
following the signature page:



| |                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------
| | Consolidated Balance Sheets 
	October 28, 2000 and October 27, 2001                                                                 
|
| | Consolidated Statements of Net Income 
	Years ended October 30, 1999, October 28, 2000 and
	October 27, 2001                        
|
| | Consolidated Statements of Cash Flows 
	Years ended October 30, 1999, October 28, 2000 and
	October 27, 2001                        
|
| | Consolidated Statements of Shareholders
	Equity/ (Deficiency)  Years ended October 30,
	1999, October 28, 2000 and October 27, 2001
|
| | Notes to Consolidated Financial
	Statements  October 27, 2001                                                                       
|
| | Report of Independent Auditors                                                                                                       

(a)(2) Financial Statement
Schedules

No schedule or schedules for which provision is
made in the applicable accounting regulations of the Securities
and Exchange Commission are required, or such schedules are not
applicable, and therefore, have been omitted.

(a)(3) Exhibits

|        |     |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                              
|------- | --- | ----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |                        
|Number  |     | Description of Document
|        |     |                        
|        | 3.1 |                         |  | Restated Certificate of Incorporation of the
	Company, dated April 16, 1999 (incorporated herein by
	reference to Exhibit 3.1 of the Companys registration
	statement on form S-4/ A filed April 22, 1999, SEC File
	No. 333-73179).                                                                                                                                                                                        
|        | 3.2 |                         |  | Restated By-Laws of the Company dated
	April 16, 1999 (incorporated herein by reference to
	Exhibit 3.2 of the Companys registration statement on
	form S-4/ A filed April 22, 1999, SEC File
	No. 333-73179).                                                                                                                                                                                                              
|        | 4.1 |                         |  | Indenture dated September 26, 1997, between
	the Company, the Subsidiary Guarantors signatory thereto and
	Harris Trust and Savings Bank, as Trustee, relating to the
	8 5/8% Senior Subordinated Notes due 2007 (the form of
	which is included in such Indenture) (incorporated herein by
	reference to Exhibit 4.1 of the Companys Registration
	Statement on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).
|        | 4.2 |                         |  | First Supplemental Indenture, dated
	December 17, 1998 between the Company, the Subsidiary
	Guarantors signatory thereto and Harris Trust and Savings Bank,
	related to the Indenture dated September 26, 1997
	(incorporated by reference to Exhibit 4.4 of the
	Companys Current Report on Form 8-K, filed
	January 14, 1999).                                                                                            

27



---



##### Table of Contents



|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                              
|------- | ----- | ----------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 4.3   |                         |  | Indenture dated December 17, 1998 between
	the Company, the Subsidiary Guarantors signatory thereto and
	Harris Trust and Savings Bank, as Trustee, related to the
	8 5/8% Senior Subordinated Notes due 2007 (a form of which
	is included in such Indenture) (incorporated by reference to
	Exhibit 4.5 of the Companys Current Report on
	Form 8-K, filed January 14, 1999).             
|        | 10.1* |                         |  | Form of Stay Pay and Severance Agreement dated
	June 6, 1996, between the Company and certain Executive
	Officers of the Company (Michael S. Lipscomb, Frances S. St.
	Clair, and Paul R. Keen) (incorporated herein by reference to
	Exhibit 10.1 of the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).                                   
|        | 10.2* |                         |  | Employment Agreement dated February 13, 1989
	between the Company and Paul R. Keen (incorporated herein by
	reference to Exhibit 10.2 of the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).                                                                                                                                                
|        | 10.3* |                         |  | Employment Agreement dated October 15, 1986
	between the Company and Michael S. Lipscomb (incorporated herein
	by reference to Exhibit 10.3 of the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).                                                                                                                                          
|        | 10.4* |                         |  | Argo-Tech Corporation Trust Agreement dated
	October 28, 1994 between the Company and Society National
	Bank, as Trustee, relating to the Employment Agreement dated
	October 15, 1986 between the Company and Michael S.
	Lipscomb (incorporated herein by reference to Exhibit 10.4
	of the Companys Registration Statement on form S-1, filed
	October 17, 1997, SEC File No. 333-38223).
|        | 10.5* |                         |  | Argo-Tech Corporation Salaried Pension Plan,
	dated November 1, 1995 (incorporated herein by reference to
	Exhibit 10.5 of the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).                                                                                                                                                              
|        | 10.6* |                         |  | First Amendment to Argo-Tech Corporation Salaried
	Pension Plan (incorporated herein by reference to
	Exhibit 10.6 of the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).                                                                                                                                                                   
|        | 10.7* |                         |  | Argo-Tech Corporation Employee Stock Ownership
	Plan and Trust Agreement, dated May 17, 1994 (incorporated
	herein by reference to Exhibit 10.7 of the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).                                                                                                                                      
|        | 10.8* |                         |  | 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 the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).                                                                                                          
|        | 10.9* |                         |  | 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 the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).                                                                                                              
|        | 10.10 | *                       |  | 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 the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).                                                                                                            
|        | 10.11 | *                       |  | Argo-Tech Corporation Employee Stock Ownership
	Plan Excess Benefit Plan, dated May 17, 1994 (incorporated
	herein by reference to Exhibit 10.11 of the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).                                                                                                                                     
|        | 10.12 |                         |  | AT Holdings Corporation Stockholders
	Agreement, dated December 17, 1998 (incorporated herein by
	reference to Exhibit 10.12 of the Companys Annual
	Report on form 10-K for the year ended October 30, 1999,
	SEC File No. 333-38223).                                                                                                                                                    
|        | 10.13 |                         |  | AT Holdings Corporation 1998 Supplemental
	Stockholders Agreement, dated December 17, 1998
	(incorporated herein by reference to Exhibit 10.13 of the
	Companys Annual Report on form 10-K for the year ended
	October 30, 1999, SEC File No. 333-38223).                                                                                                                                  
|        | 10.14 | *                       |  | Form of Management Incentive Compensation Plan
	for key employees of Argo-Tech (incorporated herein by reference
	to Exhibit 10.19 of the Companys Registration
	Statement on form S-1, filed October 17, 1997, SEC File No.
	333-38223).                                                                                                                                                   

28



---



##### Table of Contents



|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- | ----- | ----------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 10.15 | *                       |  | 1991 Management Incentive Stock Option Plan, as
	amended, dated May 16, 1994 (incorporated herein by
	reference to Exhibit 10.20 of the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).                                                                                                                                                                                                                                                                                         
|        | 10.16 | *                       |  | Amendment to the 1991 Management Incentive Stock
	Option Plan, as amended, dated June 12, 2001 (incorporated
	herein by reference to Exhibit 10.3 of the Companys
	Quarterly Report on form 10-Q for the quarter ended
	July 28, 2001).                                                                                                                                                                                                                                                                                         
|        | 10.17 | *                       |  | 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 the
	Companys Registration Statement on form S-1, filed
	October 17, 1997, SEC File No. 333-38223).                                                                                                                                                                                         
|        | 10.18 | *                       |  | 1991 Performance Stock Option Plan, as amended,
	dated May 16, 1997 (incorporated herein by reference to
	Exhibit 10.22 of the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File No.
	333-38223).                                                                                                                                                                                                                                                                                                  
|        | 10.19 | *                       |  | Amendment to the 1991 Performance Stock Option
	Plan, as amended, June 12, 2001 (incorporated herein by
	reference to Exhibit  10.1 of the Companys
	Quarterly Report on form 10-Q for the quarter ended
	July 28, 2001).                                                                                                                                                                                                                                                                                                       
|        | 10.20 | *                       |  | Form of Stock Option Agreement in connection with
	the 1991 Performance Stock Option Plan, as amended, between
	Argo-Tech and certain key employees (incorporated herein by
	reference to Exhibit 10.23 of the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).                                                                                                                                                                                                                  
|        | 10.21 |                         |  | Credit Facility, dated July 18, 1997, as
	amended and restated on September 26, 1997, between
	Argo-Tech, AT Holdings, the lenders party thereto and the Chase
	Manhattan Bank, as Administrative Agent (incorporated herein by
	reference to Exhibit 10.24 of the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).                                                                                                                                                              
|        | 10.22 |                         |  | 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 the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).                                                                                                                                                                                                                                        
|        | 10.23 |                         |  | 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 the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).                                                                                                                                                             
|        | 10.24 |                         |  | 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 the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).
|        | 10.25 |                         |  | 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 the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).                                                                                                                                                                                                                                                    
|        | 10.26 |                         |  | Prism Prototype Retirement Plan and Trust
	(incorporated herein by reference to Exhibit 10.29 of the
	Companys Registration Statement on form S-1, filed
	October 17, 1997, SEC File No. 333-38223).                                                                                                                                                                                                                                                                                                                            
|        | 10.27 |                         |  | 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 the
	Companys Registration Statement on form S-1, filed
	October 17, 1997, SEC File No. 333-38223).                                                                                                                                                                                                                                                                 
|        | 10.28 | *                       |  | 1997 Stock Appreciation Rights Plan (incorporated
	herein by reference to Exhibit 10.31 of the Companys
	Annual Report on form 10-K, for the year ended October 31,
	1998).                                                                                                                                                                                                                                                                                                                                                     
|        | 10.29 | *                       |  | AT Holdings Corporation/ Argo-Tech Corporation
	1998 Equity Replacement Stock Option Plan (incorporated herein
	by reference to Exhibit 10.32 of the Companys
	registration statement on form S-4 filed March 1, 1999, SEC
	File No. 333-73179).                                                                                                                                                                                                                                                                                

29



---



##### Table of Contents



|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------- | ----- | ----------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 10.30 | *                       |  | 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 the Companys Quarterly Report on
	form 10-Q for the quarter ended July 28, 2001).                                                                                                                                                                  
|        | 10.31 | *                       |  | 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 the Companys registration
	statement on form S-4 filed March 1, 1999, SEC File No.
	333-73179).                                                                                                                                  
|        | 10.32 | *                       |  | First Amendment to the Argo-Tech Corporation
	Employee Stock Ownership Plan Excess Benefit Plan (incorporated
	herein by reference to Exhibit 10.34 of the Companys
	registration statement on form S-4 filed March 1, 1999, SEC
	File No. 333-73179).                                                                                                                                                                                   
|        | 10.33 |                         |  | Amendment, dated December 4, 1998 to the
	Amended and Restated Credit Facility, dated July 18, 1997,
	as amended and restated on September 26, 1997, between
	Argo-Tech, AT Holdings Corporation, the Lenders party thereto
	and Chase Manhattan Bank, as Administrative Agent (incorporated
	herein by reference to Exhibit 10.32 of the Companys
	registration statement on form S4/ A filed April 22, 1999,
	SEC File No. 333-73179).
|        | 10.34 |                         |  | Amendment, dated June 9, 2000 to the Amended
	and Restated Credit Facility, dated July 18, 1997, as
	amended and restated on September 26, 1997, between
	Argo-Tech, AT Holdings Corporation, the Lenders party thereto
	and Chase Manhattan Bank, as Administrative Agent (incorporated
	herein by reference to Exhibit 10.31 of the Companys
	Annual Report on Form 10-K, for the year ended October 28,
	2000).                       
|        | 12**  |                         |  | Statement regarding computation of ratios.                                                                                                                                                                                                                                                                                                                                                                                                
|        | 21    |                         |  | List of Subsidiaries (incorporated herein by
	reference to Exhibit 21 of the Companys Registration
	Statement on form S-1, filed October 17, 1997, SEC File No.
	333-38223).                                                                                                                                                                                                                                                             



---



|    |                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------
|*   | Reflects management contract or other
	compensatory arrangement required to be filed as an exhibit
	pursuant to Item 14(c) of this Report.
|   
|**  | Filed herewith                                                                                                                            
|   
|(b) | We did not file any reports on Form 8-K
	during the fourth quarter of 2001.                                                               



|    |                                                                                                  
|--- | -------------------------------------------------------------------------------------------------
|(c) | The exhibits which are listed under
	Item 14(a)(3) are filed or incorporated by reference herein.



|    |                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------
|(d) | No financial statement schedules are required to
	be filed herein, therefore, none are listed under
	Item 14(a)(2).

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

No annual report or proxy statement covering our
last fiscal year has been or will be circulated to security
holders.

30



---



##### Table of Contents



SIGNATURES

Pursuant to the requirements of
Section 13 of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

| |  |                        |  |                                                                 
| |  | ---------------------- |  | ----------------------------------------------------------------
| |  | ARGO-TECH CORPORATION 
|
| |  | By:                    |  | /s/ FRANCES S. ST. CLAIR                                        
| |  |                        |  |                                                                 
| |  |                        |  | Frances S. St. Clair
	Vice President and Chief Financial Officer
|
| |  | Date: January 23, 2002

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the
capacities and on the dates indicated.

|                                             |  |                                                                                             |  |                 
|-------------------------------------------- |  | ------------------------------------------------------------------------------------------- |  | ----------------
|SIGNATURE                                    |  | TITLE                                                                                       |  | DATE            
|                                             |  |                                                                                             |  |                 
|                                            
|/s/ MICHAEL S. LIPSCOMBMichael S. Lipscomb   |  | Chairman, President and Chief Executive Officer
	and Director (Principal Executive Officer) |  | January 23, 2002
|                                            
|/s/ FRANCES S. ST. CLAIRFrances S. St. Clair |  | Vice President and Chief Financial Officer and
	Director (Principal Financial Officer)      |  | January 23, 2002
|                                            
|/s/ PAUL R. KEENPaul R. Keen                 |  | Vice President, General Counsel, Secretary and
	Director                                    |  | January 23, 2002
|                                            
|/s/ PAUL A. SKLADPaul A. Sklad               |  | Controller (Principal Accounting Officer)                                                   |  | January 23, 2002

31



---



##### Table of Contents



ARGO-TECH CORPORATION AND SUBSIDIARIES

ANNUAL REPORT ON FORM 10-K:

FISCAL YEAR ENDED OCTOBER 27, 2001


ITEM 8 AND ITEM 14(a)(1)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES

(A Wholly-Owned Subsidiary of AT Holdings
Corporation)







INDEX TO FINANCIAL STATEMENTS


|                                                                                                                                                   |  |      |          | 
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -------- | 
|                                                                                                                                                   |  | Page
|                                                                                                                                                   |  |     
|INDEPENDENT AUDITORS REPORT                                                                                                                       |  |      | F-1      | 
|CONSOLIDATED BALANCE SHEETS AS OF OCTOBER 27,
	2001 AND OCTOBER 28, 2000                                                                           |  |      | F-2      | 
|CONSOLIDATED STATEMENTS OF NET INCOME FOR THE
	FISCAL YEARS ENDED OCTOBER 27, 2001, OCTOBER 28, 2000
	AND OCTOBER 30, 1999                         |  |      | F-3      | 
|CONSOLIDATED STATEMENTS OF SHAREHOLDERS
	EQUITY/(DEFICIENCY) FOR THE FISCAL YEARS ENDED
	OCTOBER 27, 2001, OCTOBER 28, 2000 AND
	OCTOBER 30, 1999 |  |      | F-4      | 
|CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
	FISCAL YEARS ENDED OCTOBER 27, 2001, OCTOBER 28, 2000
	AND OCTOBER 30, 1999                         |  |      | F-5      | 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR
	THE FISCAL YEARS ENDED OCTOBER 27, 2001, OCTOBER 28,
	2000 AND OCTOBER 30, 1999                    |  |      | F-6F-21 | 



---



##### Table of Contents






INDEPENDENT AUDITORS REPORT

To the Shareholder and Board of Directors

of Argo-Tech Corporation and Subsidiaries


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


We have audited the accompanying consolidated
balance sheets of Argo-Tech Corporation and Subsidiaries (A
Wholly-Owned Subsidiary of AT Holdings Corporation) (the
Company) as of October 27, 2001 and
October 28, 2000 and the related consolidated statements of
net income, shareholders equity/(deficiency), and cash
flows for each of the three years in the period ended
October 27, 2001. 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 October 27, 2001
and October 28, 2000, and the results of their operations
and their cash flows for each of the three years in the period
ended October 27, 2001 in conformity with accounting
principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP

Cleveland, Ohio

December 19, 2001


F-1



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES

(A Wholly-Owned Subsidiary of AT Holdings
Corporation)







CONSOLIDATED BALANCE SHEETS





October 27, 2001 and October 28,
2000


|                                                         |                                                                                        |                                         |         |         |         |   |         |         |         |  
|-------------------------------------------------------- | -------------------------------------------------------------------------------------- | --------------------------------------- | ------- | ------- | ------- | - | ------- | ------- | ------- | -
|                                                         |                                                                                        | 2001                                    |         | 2000   
|                                                         |                                                                                        |                                         |         |        
|                                                         |                                                                                        |                                        
|                                                         |                                                                                        | (In thousands, except                  
|                                                         |                                                                                        | share data)                            
|ASSETS                                                  
|CURRENT ASSETS:                                          |                                                                                        |                                         |         |         |         |   |         |        
|                                                         | Cash and cash equivalents                                                              |                                         | $       | 8,057   |         |   | $       | 5,174   |        
|                                                         | Receivables, net                                                                       |                                         |         | 32,051  |         |   |         | 27,008  |        
|                                                         | Income tax receivable                                                                  |                                         |         | 3,885   |         |   |         |        |        
|                                                         | Inventories                                                                            |                                         |         | 28,861  |         |   |         | 30,115  |        
|                                                         | Deferred income taxes and prepaid expenses                                             |                                         |         | 5,648   |         |   |         | 5,613   |        
|                                                         |                                                                                        |                                         |         |         |         |   |         |        
|                                                         |                                                                                        | Total current assets                    |         |         | 78,502  |   |         |         | 67,910  |  
|                                                         |                                                                                        |                                         |         |         |         |   |         |        
|PROPERTY AND EQUIPMENT, net of accumulated
	depreciation |                                                                                        |                                         | 29,027  |         |         |   | 32,701  |        
|GOODWILL, net of accumulated amortization                |                                                                                        |                                         | 108,933 |         |         |   | 112,422 |        
|INTANGIBLE ASSETS, net of accumulated amortization       |                                                                                        |                                         | 44,145  |         |         |   | 48,173  |        
|OTHER ASSETS                                             |                                                                                        |                                         | 12,967  |         |         |   | 16,128  |        
|                                                         |                                                                                        |                                         |         |         |         |   |         |        
|Total Assets                                             |                                                                                        | $                                       | 273,574 |         |         | $ | 277,334 |        
|                                                         |                                                                                        |                                         |         |         |         |   |         |        
|LIABILITIES                                             
|CURRENT LIABILITIES:                                     |                                                                                        |                                         |         |         |         |   |         |        
|                                                         | Current portion of long-term debt                                                      |                                         | $       | 18,612  |         |   | $       | 11,634  |        
|                                                         | Accounts payable                                                                       |                                         |         | 4,840   |         |   |         | 4,990   |        
|                                                         | Accrued liabilities                                                                    |                                         |         | 19,146  |         |   |         | 18,009  |        
|                                                         |                                                                                        |                                         |         |         |         |   |         |        
|                                                         |                                                                                        | Total current liabilities               |         |         | 42,598  |   |         |         | 34,633  |  
|                                                         |                                                                                        |                                         |         |         |         |   |         |        
|LONG-TERM DEBT, net of current maturities                |                                                                                        |                                         | 234,768 |         |         |   | 253,128 |        
|OTHER NONCURRENT LIABILITIES                             |                                                                                        |                                         | 24,333  |         |         |   | 27,432  |        
|                                                         |                                                                                        |                                         |         |         |         |   |         |        
|                                                         |                                                                                        | Total Liabilities                       |         |         | 301,699 |   |         |         | 315,193 |  
|                                                         |                                                                                        |                                         |         |         |         |   |         |        
|REDEEMABLE ESOP STOCK                                    |                                                                                        |                                         | 18,194  |         |         |   | 26,863  |        
|                                                         | Unearned ESOP stock                                                                    |                                         |         | (4,200  | )       |   |         | (5,880  | )      
|                                                         |                                                                                        |                                         |         |         |         |   |         |        
|                                                         |                                                                                        |                                         | 13,994  |         |         |   | 20,983  |        
|SHAREHOLDERS EQUITY/(DEFICIENCY):                       |                                                                                        |                                         |         |         |         |   |         |        
|                                                         | Common Stock, $.01 par value, authorized 3,000
	shares; 1 share issued and outstanding |                                         |         |        |         |   |         |        |        
|                                                         | Paid-in capital                                                                        |                                         |         |        |         |   |         |        |        
|                                                         | Accumulated comprehensive income/(loss)                                                |                                         |         | (1,948  | )       |   |         | 31      |        
|                                                         | Accumulated deficit                                                                    |                                         |         | (40,171 | )       |   |         | (58,873 | )      
|                                                         |                                                                                        |                                         |         |         |         |   |         |        
|                                                         |                                                                                        | Total shareholders equity/(deficiency) |         |         | (42,119 | ) |         |         | (58,842 | )
|                                                         |                                                                                        |                                         |         |         |         |   |         |        
|Total Liabilities and Shareholders
	Equity/(Deficiency) |                                                                                        | $                                       | 273,574 |         |         | $ | 277,334 |        
|                                                         |                                                                                        |                                         |         |         |         |   |         |        



The accompanying notes to consolidated financial
statements are an integral part of this statement.


F-2



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES

(A Wholly-Owned Subsidiary of AT Holdings
Corporation)







CONSOLIDATED STATEMENTS OF NET
INCOME





For the Fiscal Years Ended October 27, 2001,
October 28, 2000 and October 30, 1999


|                                    |                    |                |         |        |  |      |         |        |  |   |         |        | 
|----------------------------------- | ------------------ | -------------- | ------- | ------ |  | ---- | ------- | ------ |  | - | ------- | ------ | 
|                                    |                    | 2001           |         | 2000   |  | 1999
|                                    |                    |                |         |        |  |     
|                                    |                    |               
|                                    |                    | (In thousands)
|Net revenues                        |                    | $              | 173,208 |        |  | $    | 159,353 |        |  | $ | 176,178 |       
|Cost of revenues                    |                    |                | 94,175  |        |  |      | 92,483  |        |  |   | 96,782  |       
|                                    |                    |                |         |        |  |      |         |        |  |   |         |       
|                                    | Gross profit       |                |         | 79,033 |  |      |         | 66,870 |  |   |         | 79,396 | 
|                                    |                    |                |         |        |  |      |         |        |  |   |         |       
|Selling, general and administrative |                    |                | 23,094  |        |  |      | 24,404  |        |  |   | 28,791  |       
|Research and development            |                    |                | 10,265  |        |  |      | 9,597   |        |  |   | 9,281   |       
|Amortization of intangible assets   |                    |                | 7,515   |        |  |      | 7,517   |        |  |   | 7,478   |       
|                                    |                    |                |         |        |  |      |         |        |  |   |         |       
|                                    | Operating expenses |                |         | 40,874 |  |      |         | 41,518 |  |   |         | 45,550 | 
|                                    |                    |                |         |        |  |      |         |        |  |   |         |       
|Income from operations              |                    |                | 38,159  |        |  |      | 25,352  |        |  |   | 33,846  |       
|Interest expense                    |                    |                | 24,534  |        |  |      | 25,644  |        |  |   | 25,003  |       
|Other, net                          |                    |                | (51     | )      |  |      | (402    | )      |  |   | (516    | )     
|                                    |                    |                |         |        |  |      |         |        |  |   |         |       
|Income before income taxes          |                    |                | 13,676  |        |  |      | 110     |        |  |   | 9,359   |       
|Income tax provision (benefit)      |                    |                | 2,876   |        |  |      | (642    | )      |  |   | 4,021   |       
|                                    |                    |                |         |        |  |      |         |        |  |   |         |       
|Net income                          |                    | $              | 10,800  |        |  | $    | 752     |        |  | $ | 5,338   |       
|                                    |                    |                |         |        |  |      |         |        |  |   |         |       



The accompanying notes to consolidated financial
statements are an integral part of this statement.


F-3



---



##### 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 Ended October 27, 2001,
October 28, 2000 and October 30, 1999


|                                                                 |  |                |   |         |  |               |   |             |  |       |        |   |  |   |         |   |  |   |         |  
|---------------------------------------------------------------- |  | -------------- | - | ------- |  | ------------- | - | ----------- |  | ----- | ------ | - |  | - | ------- | - |  | - | ------- | -
|                                                                 |  |                |   |         |  | Accumulated   |   |             |  |      
|                                                                 |  | Common         |   | Paid-In |  | Comprehensive |   | Accumulated |  |      
|                                                                 |  | Stock          |   | Capital |  | Income (Loss) |   | Deficit     |  | Total
|                                                                 |  |                |   |         |  |               |   |             |  |      
|                                                                 |  |               
|                                                                 |  | (In thousands)
|BALANCE, OCTOBER 31, 1998                                        |  | $              |  |         |  | $             |  |             |  | $     | (1,004 | ) |  | $ | (35,282 | ) |  | $ | (36,286 | )
|Net income                                                       |  |                |   |         |  |               |   |             |  |       |        |   |  |   | 5,338   |   |  |   | 5,338   |  
|Elimination of redemption feature of common stock                |  |                |   |         |  |               |   |             |  |       |        |   |  |   | 6,713   |   |  |   | 6,713   |  
|Accretion of redeemable ESOP stock                               |  |                |   |         |  |               |   |             |  |       |        |   |  |   | (6,655  | ) |  |   | (6,655  | )
|Dividend                                                         |  |                |   |         |  |               |   |             |  |       |        |   |  |   | (53,568 | ) |  |   | (53,568 | )
|Reduction of minimum pension liability                           |  |                |   |         |  |               |   |             |  |       | 1,004  |   |  |   |         |   |  |   | 1,004   |  
|Activity related to stock appreciation rights and
	stock options |  |                |   |         |  |               |   |             |  |       |        |   |  |   | 3,914   |   |  |   | 3,914   |  
|Foreign currency translation adjustment                          |  |                |   |         |  |               |   |             |  |       | 132    |   |  |   |         |   |  |   | 132     |  
|Other, net                                                       |  |                |   |         |  |               |   |             |  |       |        |   |  |   | 453     |   |  |   | 453     |  
|                                                                 |  |                |   |         |  |               |   |             |  |       |        |   |  |   |         |   |  |   |         |  
|BALANCE, OCTOBER 30, 1999                                        |  |                |  |         |  |               |  |             |  |       | 132    |   |  |   | (79,087 | ) |  |   | (78,955 | )
|Net income                                                       |  |                |   |         |  |               |   |             |  |       |        |   |  |   | 752     |   |  |   | 752     |  
|Reduction of redeemable ESOP stock                               |  |                |   |         |  |               |   |             |  |       |        |   |  |   | 25,133  |   |  |   | 25,133  |  
|Dividend                                                         |  |                |   |         |  |               |   |             |  |       |        |   |  |   | (5,383  | ) |  |   | (5,383  | )
|Foreign currency translation adjustment                          |  |                |   |         |  |               |   |             |  |       | (101   | ) |  |   |         |   |  |   | (101    | )
|Other, net                                                       |  |                |   |         |  |               |   |             |  |       |        |   |  |   | (288    | ) |  |   | (288    | )
|                                                                 |  |                |   |         |  |               |   |             |  |       |        |   |  |   |         |   |  |   |         |  
|BALANCE, OCTOBER 28, 2000                                        |  |                |  |         |  |               |  |             |  |       | 31     |   |  |   | (58,873 | ) |  |   | (58,842 | )
|Net income                                                       |  |                |   |         |  |               |   |             |  |       |        |   |  |   | 10,800  |   |  |   | 10,800  |  
|Additional minimum pension liability                             |  |                |   |         |  |               |   |             |  |       | (1,828 | ) |  |   |         |   |  |   | (1,828  | )
|Reduction of redeemable ESOP stock                               |  |                |   |         |  |               |   |             |  |       |        |   |  |   | 9,081   |   |  |   | 9,081   |  
|Dividend                                                         |  |                |   |         |  |               |   |             |  |       |        |   |  |   | (1,661  | ) |  |   | (1,661  | )
|Foreign currency translation adjustment                          |  |                |   |         |  |               |   |             |  |       | (151   | ) |  |   |         |   |  |   | (151    | )
|Activity related to stock options                                |  |                |   |         |  |               |   |             |  |       |        |   |  |   | 526     |   |  |   | 526     |  
|Other, net                                                       |  |                |   |         |  |               |   |             |  |       |        |   |  |   | (44     | ) |  |   | (44     | )
|                                                                 |  |                |   |         |  |               |   |             |  |       |        |   |  |   |         |   |  |   |         |  
|BALANCE, OCTOBER 27, 2001                                        |  | $              |  |         |  | $             |  |             |  | $     | (1,948 | ) |  | $ | (40,171 | ) |  | $ | (42,119 | )
|                                                                 |  |                |   |         |  |               |   |             |  |       |        |   |  |   |         |   |  |   |         |  



The accompanying notes to consolidated financial
statements are an integral part of this statement.


F-4



---



##### 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 27, 2001,
October 28, 2000 and October 30, 1999


|                                      |                                                                                    |                                                                                                 |                               |         |        |        |   |         |        |        |   |         |        |        |  
|------------------------------------- | ---------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ----------------------------- | ------- | ------ | ------ | - | ------- | ------ | ------ | - | ------- | ------ | ------ | -
|                                      |                                                                                    | 2001                                                                                            |                               | 2000    |        | 1999  
|                                      |                                                                                    |                                                                                                 |                               |         |        |       
|                                      |                                                                                    |                                                                                                
|                                      |                                                                                    | (In thousands)                                                                                 
|CASH FLOWS FROM OPERATING ACTIVITIES: |                                                                                    |                                                                                                 |                               |         |        |        |   |         |        |        |   |        
|                                      | Net income                                                                         |                                                                                                 | $                             | 10,800  |        |        | $ | 752     |        |        | $ | 5,338   |       
|                                      | Adjustments to reconcile net income to net cash
	provided by operating activities: |                                                                                                 |                               |         |        |        |   |         |        |        |   |         |       
|                                      |                                                                                    | Depreciation                                                                                    |                               |         | 5,559  |        |   |         | 5,977  |        |   |         | 6,561  |       
|                                      |                                                                                    | Amortization of intangible assets and deferred
	financing costs                                 |                               |         | 9,655  |        |   |         | 9,658  |        |   |         | 9,412  |       
|                                      |                                                                                    | Accretion of bond discount                                                                      |                               |         | 252    |        |   |         | 230    |        |   |         | 186    |       
|                                      |                                                                                    | Compensation expense recognized in connection
	with employee stock ownership plan               |                               |         | 2,091  |        |   |         | 2,972  |        |   |         | 4,322  |       
|                                      |                                                                                    | Compensation expense recognized in connection
	with stock appreciation rights and stock options |                               |         | 526    |        |   |         |        |        |   |         | 2,983  |       
|                                      |                                                                                    | Amortization of inventory step-up                                                               |                               |         |        |        |   |         | 155    |        |   |         | 77     |       
|                                      |                                                                                    | Deferred pension cost                                                                           |                               |         | (2,299 | )      |   |         | (523   | )      |   |         | 520    |       
|                                      |                                                                                    | Deferred income taxes                                                                           |                               |         | (1,962 | )      |   |         | (2,136 | )      |   |         | (2,535 | )     
|                                      |                                                                                    | Changes in operating assets and liabilities:                                                    |                               |         |        |        |   |         |        |        |   |         |        |       
|                                      |                                                                                    |                                                                                                 | Receivables                   |         |        | (8,928 | ) |         |        | 3,161  |   |         |        | (6,079 | )
|                                      |                                                                                    |                                                                                                 | Inventories                   |         |        | 1,254  |   |         |        | 3,773  |   |         |        | (3,682 | )
|                                      |                                                                                    |                                                                                                 | Prepaid expenses              |         |        | 301    |   |         |        | (191   | ) |         |        | (202   | )
|                                      |                                                                                    |                                                                                                 | Accounts payable              |         |        | (150   | ) |         |        | (1,657 | ) |         |        | (1,216 | )
|                                      |                                                                                    |                                                                                                 | Accrued and other liabilities |         |        | 1,161  |   |         |        | 382    |   |         |        | (519   | )
|                                      |                                                                                    | Other, net                                                                                      |                               |         | (197   | )      |   |         | (126   | )      |   |         | 132    |       
|                                      |                                                                                    |                                                                                                 |                               |         |        |        |   |         |        |        |   |        
|                                      | Net cash provided by operating activities                                          |                                                                                                 |                               | 18,063  |        |        |   | 22,427  |        |        |   | 15,298  |       
|                                      |                                                                                    |                                                                                                 |                               |         |        |        |   |         |        |        |   |        
|CASH FLOWS FROM INVESTING ACTIVITIES: |                                                                                    |                                                                                                 |                               |         |        |        |   |         |        |        |   |        
|                                      | Acquisition of Durodyne, net of cash acquired                                      |                                                                                                 |                               |         |        |        |   |         |        |        |   | (2,587  | )     
|                                      | Capital expenditures                                                               |                                                                                                 |                               | (1,885  | )      |        |   | (3,025  | )      |        |   | (6,050  | )     
|                                      |                                                                                    |                                                                                                 |                               |         |        |        |   |         |        |        |   |        
|                                      | Net cash used in investing activities                                              |                                                                                                 |                               | (1,885  | )      |        |   | (3,025  | )      |        |   | (8,637  | )     
|                                      |                                                                                    |                                                                                                 |                               |         |        |        |   |         |        |        |   |        
|CASH FLOWS FROM FINANCING ACTIVITIES: |                                                                                    |                                                                                                 |                               |         |        |        |   |         |        |        |   |        
|                                      | Sale of senior subordinated notes                                                  |                                                                                                 |                               |         |        |        |   |         |        |        |   | 52,250  |       
|                                      | Additional borrowing of long-term debt                                             |                                                                                                 |                               |         |        |        |   | 6,000   |        |        |   | 3,200   |       
|                                      | Repayment of long-term debt                                                        |                                                                                                 |                               | (11,634 | )      |        |   | (17,343 | )      |        |   | (7,147  | )     
|                                      | Durodyne acquisition note payable                                                  |                                                                                                 |                               |         |        |        |   | (1,112  | )      |        |   | 1,112   |       
|                                      | Payment of financing related fees                                                  |                                                                                                 |                               |         |        |        |   | (263    | )      |        |   | (10,213 | )     
|                                      | Dividend                                                                           |                                                                                                 |                               | (1,661  | )      |        |   | (5,383  | )      |        |   | (53,568 | )     
|                                      |                                                                                    |                                                                                                 |                               |         |        |        |   |         |        |        |   |        
|                                      | Net cash used in financing activities                                              |                                                                                                 |                               | (13,295 | )      |        |   | (18,101 | )      |        |   | (14,366 | )     
|                                      |                                                                                    |                                                                                                 |                               |         |        |        |   |         |        |        |   |        
|CASH AND CASH EQUIVALENTS:            |                                                                                    |                                                                                                 |                               |         |        |        |   |         |        |        |   |        
|                                      | Net increase (decrease) for the period                                             |                                                                                                 |                               | 2,883   |        |        |   | 1,301   |        |        |   | (7,705  | )     
|                                      | Balance, Beginning of period                                                       |                                                                                                 |                               | 5,174   |        |        |   | 3,873   |        |        |   | 11,578  |       
|                                      |                                                                                    |                                                                                                 |                               |         |        |        |   |         |        |        |   |        
|                                      | Balance, End of period                                                             |                                                                                                 | $                             | 8,057   |        |        | $ | 5,174   |        |        | $ | 3,873   |       
|                                      |                                                                                    |                                                                                                 |                               |         |        |        |   |         |        |        |   |        



The accompanying notes to consolidated financial
statements are an integral part of this statement.


F-5



---



##### 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 27, 2001,
October 28, 2000 and October 30, 1999


1.     Basis of
Presentation

Argo-Tech Corporation and Subsidiaries (the
Company) (A Wholly-Owned Subsidiary of AT Holdings
Corporation) principal operations include the design,
manufacture and distribution of aviation products, primarily
aircraft fuel pumps, throughout the world. In addition, the
Company leases a portion of its manufacturing facility to other
parties. The Companys fiscal year ends on the last
Saturday in October. The fiscal years ended October 27,
2001, October 28, 2000 and October 30, 1999 consisted
of 52 weeks. The Company is obligated to fulfill certain
obligations of AT Holdings Corporation. As a result, those
obligations have been reflected in the Companys financial
statements. Certain reclassifications have been made in the
prior years financial statements to conform to the current
year presentation.

The Company is a parent, holding company with 4
wholly-owned operating guarantor subsidiaries, Argo-Tech
Corporation (HBP), Argo-Tech Corporation (OEM), Argo-Tech
Corporation (Aftermarket) and Argo-Tech Corporation Costa Mesa
(formerly named J.C. Carter Company, Inc.). The Company has
no outside assets, liabilities or operations apart from its
wholly-owned subsidiaries. The Senior Subordinated Notes
(Note 11) are fully, unconditionally, jointly and severally
guaranteed by the guarantor subsidiaries, and therefore,
separate financial statements of the guarantor subsidiaries will
not be presented. The Company also has one wholly-owned,
non-guarantor subsidiary that has inconsequential assets,
liabilities and equity, and its only operations are the result
of intercompany activity which is immediately dividended back to
the Company.

2.     Summary of
Significant Accounting Policies

Principles of Consolidation The consolidated financial
statements include the accounts of the Company. All material
intercompany accounts and transactions between these entities
have been eliminated.

Cash Equivalents Cash equivalents represent
short-term investments with an original maturity of three months
or less.

Receivables The Company does not generally
require collateral or other security to guarantee trade
receivables.

Inventories Inventories are stated at standard
cost which approximates the costs which would be determined
using the first-in, first-out (FIFO) method. The recorded
value of inventories is not in excess of market value.

Property and Equipment Property and equipment are stated
at cost and are depreciated using the straight-line or an
accelerated method over their estimated useful lives as follows:

|                           |  |              
|-------------------------- |  | -------------
|Buildings and improvements |  | 7 to 30 years
|Equipment                  |  | 3 to 10 years

Goodwill Goodwill is amortized on a
straight-line basis over forty years. Accumulated amortization
at October 27, 2001 and October 28, 2000 was
$31,332,000 and $27,843,000, respectively. The Company assesses
the recoverability of goodwill by determining whether the
amortization over the remaining life can be recovered through
projected undiscounted future operations.

F-6



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Intangible Assets In conjunction with the
acquisition of Argo-Tech Corporation Costa Mesa in 1997, the
Company recognized identified intangible assets which are
amortized on a straight line basis over their estimated economic
lives as follows:

|                    |  |            
|------------------- |  | -----------
|Workforce           |  | 8 Years    
|Contracts           |  | 10 Years   
|Spare Parts Annuity |  | 10-28 Years
|Patents             |  | 14-17 Years

Deferred Financing Costs The costs of obtaining financing
are amortized over the terms of the financing. The amortized
cost is included in interest expense in the consolidated
statements of net income. Accumulated amortization at
October 27, 2001 and October 28, 2000 was $7,346,000,
and $5,205,000 respectively.

Redeemable Stock Redeemable ESOP Stock has been
excluded from Shareholders Equity/(Deficiency) due to the
ability of the holders of AT Holdings common stock to
put, subject to certain restrictions, the shares to
the Company. The increase/(decrease) in the Redeemable ESOP
Stock has been recorded in Accumulated Deficit.

Foreign Currency Translation Assets and liabilities of the
Companys foreign subsidiaries are translated into U.S.
dollars at the current rate of exchange, while revenues and
expenses are translated at the average exchange rate during the
year. Adjustments from translating foreign subsidiaries
financial statements are excluded from the consolidated
statements of net income and are reported as a component of
shareholders equity/(deficiency).

Derivative Financial
Instruments All
derivative financial instruments, such as interest rate swap
contracts and foreign exchange contracts, are recognized in the
financial statements and measured at fair value regardless of
the purpose or intent for holding them. Changes in the fair
value of derivative financial instruments are either recognized
periodically in income or shareholders equity (as a
component of comprehensive income), depending on whether the
derivative is being used to hedge changes in fair value or cash
flows. At October 27, 2001 the Company did not have
derivative activity.

Revenues and Cost Recognition Revenues are generally recognized
when goods are shipped or services provided.

Income Taxes Income taxes are accounted for
under the asset and liability approach, which can result in
recording tax provisions or benefits in periods different than
the periods in which such taxes are paid or benefits realized.
Expected tax benefits from temporary differences that will
result in deductible amounts in future years and from
carryforwards, if it is more likely than not that such tax
benefits will be realized, are recognized currently.

Use of Estimates The preparation of financial
statements in conformity with accounting principles generally
accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

3.     Recapitalization

On December 17, 1998, AT Holdings entered
into an agreement to repurchase 639,510 shares of stock from AT
Holdings, LLC, the companys largest shareholder for
$79.4 million plus transaction expenses. The transaction,
which was consummated on January 4, 1999, was funded by the
proceeds of Argo-Techs issuance of $55.0 million in
principal amount of 8 5/8% Senior Subordinated Notes,
issued at a 5% discount, due 2007 in a

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)

private offering on December 17, 1998,
$50.0 million of which was dividended to AT Holdings; the
proceeds of the issuance by AT Holdings of 30,000 shares of its
preferred stock to Chase Venture Capital Associates, L.P.; and
cash. On May 27, 1999, the $55.0 million in principal
amount of 8 5/8% Senior Subordinated Notes were exchanged
for similar notes registered under the Securities Act of 1933.
As a result of this recapitalization, Argo-Techs Employee
Stock Ownership Plan became AT Holdings majority
stockholder. In addition, AT Holdings amended its Certificate of
Incorporation to provide for the issuance of the preferred stock
and Argo-Tech amended its existing credit agreement and
indenture to permit the issuance of the Notes, payment of the
dividend and amendment of the Supplemental Employee Retirement
Plan and the 1997 Stock Appreciation Rights Plan. The Stock
Appreciation Rights Plan provided for grants of up to 34,450
stock appreciation rights, 17,225 of which were granted in
fiscal years 1997 and 1998. The remaining 17,225 stock
appreciation rights were granted in November, 1998. In
connection with the stock repurchase, all stock appreciation
rights became fully vested in accordance with their terms and
were converted into fully vested stock options. In addition, all
granted options under the 1991 Performance Stock Option Plan and
1991 Management Incentive Stock Option Plan, to the extent not
vested, became fully vested in accordance with their terms on
January 4, 1999. The vesting of the stock appreciation
rights and stock options resulted in a charge to pre-tax
earnings of $2.8 million in fiscal year 1999. In connection
with the recapitalization, managements right to require
Argo-Tech to repurchase shares of redeemable common stock was
eliminated.

4.     Acquisition of
Durodyne, Inc.

On August 19, 1999, Argo-Tech purchased all
the outstanding stock of Durodyne, Inc., a manufacturer of
specialty industrial hose for aerospace, chemical transfer and
marine applications for $3.4 million, including acquisition
costs. The acquisition was funded with $2.3 million of cash
and a note payable for $1.1 million. Durodyne is a
subsidiary of Argo-Tech Corporation Costa Mesa. The acquisition
was accounted for using the purchase method of accounting, and
accordingly, an allocation of the purchase price has been made
using estimated fair market values of the assets acquired and
liabilities assumed as of the acquisition date and the results
of its operations have been included since the date of
acquisition. The purchase price of $3.4 million exceeded
the net assets of Durodyne at the date of acquisition by
$1.6 million. This amount was considered goodwill that is
being amortized on a straight-line basis over 40 years.

5.     Supplemental
Financial Statement Information

The major components of the following balance
sheet captions were (in thousands):

|                   |                          |             |   |             |        |  |   |         |        | 
|------------------ | ------------------------ | ----------- | - | ----------- | ------ |  | - | ------- | ------ | 
|                   |                          | October 27, |   | October 28,
|                   |                          | 2001        |   | 2000       
|                   |                          |             |   |            
|Intangible assets: |                          |             |   |             |        |  |   |        
|                   | Workforce                |             | $ | 4,900       |        |  | $ | 4,900   |       
|                   | Contracts                |             |   | 17,100      |        |  |   | 17,100  |       
|                   | Spare parts annuity      |             |   | 38,200      |        |  |   | 38,200  |       
|                   | Patents                  |             |   | 380         |        |  |   | 380     |       
|                   |                          |             |   |             |        |  |   |        
|                   |                          | Total       |   |             | 60,580 |  |   |         | 60,580 | 
|                   | Accumulated amortization |             |   | (16,435     | )      |  |   | (12,407 | )     
|                   |                          |             |   |             |        |  |   |        
|                   |                          | Total  net |   | $           | 44,145 |  |   | $       | 48,173 | 
|                   |                          |             |   |             |        |  |   |        

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)

|                              |                                   |             |   |             |        |  |   |        |        | 
|----------------------------- | --------------------------------- | ----------- | - | ----------- | ------ |  | - | ------ | ------ | 
|                              |                                   | October 27, |   | October 28,
|                              |                                   | 2001        |   | 2000       
|                              |                                   |             |   |            
|Accrued liabilities:          |                                   |             |   |             |        |  |   |       
|                              | Salaries and accrued compensation |             | $ | 7,916       |        |  | $ | 5,919  |       
|                              | Accrued interest                  |             |   | 1,315       |        |  |   | 1,313  |       
|                              | Accrued warranty                  |             |   | 2,099       |        |  |   | 2,258  |       
|                              | Accrued income taxes              |             |   | 3,618       |        |  |   | 1,486  |       
|                              | Other                             |             |   | 4,198       |        |  |   | 7,033  |       
|                              |                                   |             |   |             |        |  |   |       
|                              |                                   | Total       |   | $           | 19,146 |  |   | $      | 18,009 | 
|                              |                                   |             |   |             |        |  |   |       
|Other noncurrent liabilities: |                                   |             |   |             |        |  |   |       
|                              | Deferred income taxes             |             | $ | 13,323      |        |  | $ | 16,443 |       
|                              | Accrued post retirement benefits  |             |   | 9,843       |        |  |   | 9,304  |       
|                              | Other                             |             |   | 1,167       |        |  |   | 1,685  |       
|                              |                                   |             |   |             |        |  |   |       
|                              |                                   | Total       |   | $           | 24,333 |  |   | $      | 27,432 | 
|                              |                                   |             |   |             |        |  |   |       

6.     Receivables

Receivables consist of the following (in
thousands):

|                                                                               |                                                           |                      |        |             |     |   |        |         |       | 
|------------------------------------------------------------------------------ | --------------------------------------------------------- | -------------------- | ------ | ----------- | --- | - | ------ | ------- | ----- | 
|                                                                               |                                                           | October 27,          |        | October 28,
|                                                                               |                                                           | 2001                 |        | 2000       
|                                                                               |                                                           |                      |        |            
|Amounts billed  net of allowance for
	uncollectible amounts of $316
	and $347 |                                                           | $                    | 31,598 |             |     | $ | 25,832 |        
|Amounts unbilled (principally commercial
	customers):                          |                                                           |                      |        |             |     |   |        |        
|                                                                               | Net reimbursable costs incurred on uncompleted
	contracts |                      |        | 16,550      |     |   |        | 16,149  |      
|                                                                               | Billings to date                                          |                      |        | (16,097     | )   |   |        | (14,973 | )    
|                                                                               |                                                           |                      |        |             |     |   |        |        
|                                                                               |                                                           | Total unbilled  net |        |             | 453 |   |        |         | 1,176 | 
|                                                                               |                                                           |                      |        |             |     |   |        |        
|Net receivables                                                                |                                                           | $                    | 32,051 |             |     | $ | 27,008 |        
|                                                                               |                                                           |                      |        |             |     |   |        |        

7.     Inventories

Inventories consist of the following (in
thousands):

|                                          |       |             |        |             |  |   |        |        | 
|----------------------------------------- | ----- | ----------- | ------ | ----------- |  | - | ------ | ------ | 
|                                          |       | October 27, |        | October 28,
|                                          |       | 2001        |        | 2000       
|                                          |       |             |        |            
|Finished goods                            |       | $           | 2,100  |             |  | $ | 2,259  |       
|Work-in-process and purchased parts       |       |             | 17,696 |             |  |   | 19,106 |       
|Raw materials and supplies                |       |             | 12,975 |             |  |   | 11,866 |       
|                                          |       |             |        |             |  |   |        |       
|                                          | Total |             |        | 32,771      |  |   |        | 33,231 | 
|Reserve for excess and obsolete inventory |       |             | (3,910 | )           |  |   | (3,116 | )     
|                                          |       |             |        |             |  |   |        |       
|Inventories  net                         |       | $           | 28,861 |             |  | $ | 30,115 |       
|                                          |       |             |        |             |  |   |        |       

Related to the Durodyne acquisition, the
inventory amounts at August 19, 1999 were increased by
$0.2 million to record inventories at their fair value as
of the date of acquisition in accordance with Accounting
Principles Board Opinion No. 16  Business
Combinations. Based on Durodynes inventory turnover
rate,

F-9



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

$0.1 million of this amount is included in
cost of revenues for each of the fiscal years ended
October 28, 2000 and October 30, 1999.

8.     Property and
Equipment

Owned Property Property and equipment owned by
the Company consists of the following (in thousands):

|                                 |       |             |         |             |  |   |         |        | 
|-------------------------------- | ----- | ----------- | ------- | ----------- |  | - | ------- | ------ | 
|                                 |       | October 27, |         | October 28,
|                                 |       | 2001        |         | 2000       
|                                 |       |             |         |            
|Land and land improvements       |       | $           | 7,663   |             |  | $ | 7,654   |       
|Buildings and building equipment |       |             | 34,058  |             |  |   | 33,728  |       
|Machinery and equipment          |       |             | 37,383  |             |  |   | 40,846  |       
|Office and automotive equipment  |       |             | 7,721   |             |  |   | 8,377   |       
|Construction-in-progress         |       |             | 822     |             |  |   | 1,559   |       
|                                 |       |             |         |             |  |   |         |       
|                                 | Total |             |         | 87,647      |  |   |         | 92,164 | 
|Accumulated depreciation         |       |             | (58,620 | )           |  |   | (59,463 | )     
|                                 |       |             |         |             |  |   |         |       
|Total  net                      |       | $           | 29,027  |             |  | $ | 32,701  |       
|                                 |       |             |         |             |  |   |         |       

Property Leased to Others The Company leases certain
portions of its facility in Euclid, Ohio. The leases have been
accounted for as operating leases whereby revenue is recognized
as earned over the lease terms. The cost of property leased to
others is included in property and equipment and is being
depreciated over its estimated useful life. It is not practical
to determine the cost of the property that is being leased to
others or the related amount of accumulated depreciation. In
addition, the Company has separate service contracts with its
tenants under which the Company provides maintenance,
telecommunications and various other services. A large portion
of the Companys cost related to the receipts based on
usage is variable in nature.

Total rental revenue under the property leases
and service contracts was as follows for the fiscal years ended
2001, 2000 and 1999 (in thousands):

|                                                  |       |      |       |       |  |      |       |       |  |   |       |       | 
|------------------------------------------------- | ----- | ---- | ----- | ----- |  | ---- | ----- | ----- |  | - | ----- | ----- | 
|                                                  |       | 2001 |       | 2000  |  | 1999
|                                                  |       |      |       |       |  |     
|Minimum contractual amounts under property leases |       | $    | 4,368 |       |  | $    | 4,548 |       |  | $ | 4,205 |      
|Service contracts revenue based on usage          |       |      | 862   |       |  |      | 847   |       |  |   | 832   |      
|                                                  |       |      |       |       |  |      |       |       |  |   |       |      
|                                                  | Total |      | $     | 5,230 |  |      | $     | 5,395 |  |   | $     | 5,037 | 
|                                                  |       |      |       |       |  |      |       |       |  |   |       |      

Future minimum rentals under the noncancelable
property leases and service contracts at October 27, 2001
are (in thousands): $3,839 in 2002, $3,605 in 2003, $2,185 in
2004, $708 in 2005, and $257 in 2006.

9.     Employee
Benefit Plans

Employee Stock Ownership Plan The Company has an Employee Stock
Ownership Plan (ESOP) to provide retirement benefits to
qualifying, salaried employees. The ESOP grants to participants
in the plan certain ownership rights in, but not possession of,
the common stock of the Companys parent held by the
Trustee of the Plan. Shares of common stock are allocated
annually to participants in the ESOP pursuant to a prescribed
formula. The value of the shares committed to be released by the
Trustee under the Plans provisions for allocation to
participants was recognized as an expense of $2,091,000,
$2,972,000 and $4,322,000 for the fiscal years ended 2001, 2000
and 1999, respectively. The cost of the shares acquired for the
ESOP that are not committed to be released to participants is
shown as a contra-account, Unearned ESOP shares.

F-10



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Summary information regarding ESOP activity
consists of the following:

|                                             |  |             |           |             |  |   |            |  
|-------------------------------------------- |  | ----------- | --------- | ----------- |  | - | ---------- | -
|                                             |  | October 27, |           | October 28,
|                                             |  | 2001        |           | 2000       
|                                             |  |             |           |            
|Allocated shares                             |  |             | 273,000   |             |  |   | 231,000    |  
|Shares released for allocation               |  |             | 42,000    |             |  |   | 42,000     |  
|Unearned ESOP shares                         |  |             | 105,000   |             |  |   | 147,000    |  
|                                             |  |             |           |             |  |   |            |  
|Total ESOP shares                            |  |             | 420,000   |             |  |   | 420,000    |  
|Repurchased shares received as distributions |  |             | (54,588   | )           |  |   | (31,697    | )
|                                             |  |             |           |             |  |   |            |  
|Total available ESOP shares                  |  |             | 365,412   |             |  |   | 388,303    |  
|                                             |  |             |           |             |  |   |            |  
|Fair market value of unearned ESOP shares    |  | $           | 5,227,950 |             |  | $ | 10,169,460 |  
|                                             |  |             |           |             |  |   |            |  

All of the shares acquired for the ESOP (both
allocated and unearned shares) are owned and held in trust by
the ESOP.

The Companys stock is not listed or traded
on an active stock market and market prices are, therefore, not
available. Annually, an independent financial consulting firm
determines the fair market value based upon the Companys
performance and financial condition.

The Company provides an internal
market for shareholders through its purchase of their
common shares. Participants in the Companys ESOP have the
right to require the Company, within a specified period, to
repurchase shares received as distributions under the ESOP at
their fair market value.

Pension and Savings Plans The Company has two
noncontributory defined benefit pension plans for qualifying
hourly and salary employees. A plan covering salaried employees
provides pension benefits that are based on the employees
compensation and years of service. The future accrual of
benefits was terminated in connection with the formation of the
ESOP. A plan covering hourly employees provides benefits of
stated amounts for each year of service. The Companys
funding policy is to contribute actuarially determined amounts
allowable under Internal Revenue Service regulations. The
Company also sponsors four employee savings plans which cover
substantially all of the Companys employees. The plan
covering Argo-Tech Corporation Costa Mesa employees provides for
a match of participating employees contributions. The
Companys contribution, recognized as expense was
approximately $373,000, $507,000 and $499,000 in fiscal years
2001, 2000 and 1999 respectively.

A summary of the components of net periodic
pension cost for the pension plans for the fiscal years ended
2001, 2000 and 1999 is as follows (in thousands):

|                                                  |  |      |        |      |  |      |        |   |  |   |        |  
|------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                                  |  | 2001 |        | 2000 |  | 1999
|                                                  |  |      |        |      |  |     
|Service cost  benefits earned during
	the period |  | $    | 196    |      |  | $    | 224    |   |  | $ | 257    |  
|Interest cost on projected benefit obligation     |  |      | 1,191  |      |  |      | 1,149  |   |  |   | 1,101  |  
|Expected return on plan assets                    |  |      | (1,666 | )    |  |      | (1,642 | ) |  |   | (1,582 | )
|Net amortization and deferral                     |  |      | (99    | )    |  |      | (135   | ) |  |   | (25    | )
|                                                  |  |      |        |      |  |      |        |   |  |   |        |  
|Net periodic pension benefit                      |  | $    | (378   | )    |  | $    | (404   | ) |  | $ | (249   | )
|                                                  |  |      |        |      |  |      |        |   |  |   |        |  

F-11



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following table sets forth the change in
projected benefit obligation (in thousands):

|                                        |  |             |        |             |  |   |        |  
|--------------------------------------- |  | ----------- | ------ | ----------- |  | - | ------ | -
|                                        |  | October 27, |        | October 28,
|                                        |  | 2001        |        | 2000       
|                                        |  |             |        |            
|Benefit obligation at beginning of year |  | $           | 15,309 |             |  | $ | 14,729 |  
|Service cost                            |  |             | 196    |             |  |   | 224    |  
|Interest cost                           |  |             | 1,191  |             |  |   | 1,149  |  
|Benefits paid                           |  |             | (900   | )           |  |   | (839   | )
|Actuarial (gain) loss                   |  |             | 95     |             |  |   | 505    |  
|Change in discount rate                 |  |             | 1,984  |             |  |   | (459   | )
|                                        |  |             |        |             |  |   |        |  
|Benefit obligation at end of year       |  | $           | 17,875 |             |  | $ | 15,309 |  
|                                        |  |             |        |             |  |   |        |  

The following table sets forth the change in plan
assets (in thousands):

|                                               |  |             |        |             |  |   |        |  
|---------------------------------------------- |  | ----------- | ------ | ----------- |  | - | ------ | -
|                                               |  | October 27, |        | October 28,
|                                               |  | 2001        |        | 2000       
|                                               |  |             |        |            
|Fair value of plan assets at beginning of year |  | $           | 19,291 |             |  | $ | 19,031 |  
|Actual return on plan assets                   |  |             | (114   | )           |  |   | 943    |  
|Employer contributions                         |  |             | 512    |             |  |   | 156    |  
|Benefits paid                                  |  |             | (900   | )           |  |   | (839   | )
|                                               |  |             |        |             |  |   |        |  
|Fair value of plan assets at end of year       |  | $           | 18,789 |             |  | $ | 19,291 |  
|                                               |  |             |        |             |  |   |        |  

The following table sets forth the funded status
of the plans (in thousands):

|                                |  |             |       |             |  |   |        |  
|------------------------------- |  | ----------- | ----- | ----------- |  | - | ------ | -
|                                |  | October 27, |       | October 28,
|                                |  | 2001        |       | 2000       
|                                |  |             |       |            
|Funded status                   |  | $           | 914   |             |  | $ | 3,982  |  
|Unrecognized net (gain) loss    |  |             | 1,789 |             |  |   | (2,214 | )
|Unrecognized prior service cost |  |             | 224   |             |  |   | 269    |  
|                                |  |             |       |             |  |   |        |  
|Prepaid benefit cost            |  | $           | 2,927 |             |  | $ | 2,037  |  
|                                |  |             |       |             |  |   |        |  

Amounts recognized in the statements of financial
position consist of (in thousands):

|                                       |  |             |        |             |  |   |       | 
|-------------------------------------- |  | ----------- | ------ | ----------- |  | - | ----- | 
|                                       |  | October 27, |        | October 28,
|                                       |  | 2001        |        | 2000       
|                                       |  |             |        |            
|Prepaid benefit cost                   |  | $           | 1,066  |             |  | $ | 2,037 | 
|Accrued benefit liability              |  |             | (1,409 | )           |  |   |      | 
|Intangible asset                       |  |             | 224    |             |  |   |      | 
|Accumulated other comprehensive income |  |             | 3,046  |             |  |   |      | 
|                                       |  |             |        |             |  |   |       | 
|Net amount recognized                  |  | $           | 2,927  |             |  | $ | 2,037 | 
|                                       |  |             |        |             |  |   |       | 

F-12



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The foregoing net amounts regarding the pension
benefit obligation and the value of plan assets for the year
ended October 27, 2001 are based on a combination of both
overfunded and underfunded plans. The aggregate amounts relating
to the underfunded plan are as follows (in thousands):

|                             |  |             |       | 
|---------------------------- |  | ----------- | ----- | 
|                             |  | October 27,
|                             |  | 2001       
|                             |  |            
|Projected benefit obligation |  | $           | 8,357 | 
|Fair value of plan assets    |  |             | 6,948 | 

The assumptions used to determine net periodic
pension cost as well as the funded status are:

|                                                 |  |      |      |      |  |      |      |   |  |  |     |  
|------------------------------------------------ |  | ---- | ---- | ---- |  | ---- | ---- | - |  |  | --- | -
|                                                 |  | 2001 |      | 2000 |  | 1999
|                                                 |  |      |      |      |  |     
|Discount rate                                    |  |      | 7.50 | %    |  |      | 8.25 | % |  |  | 8.0 | %
|Expected long-term rate of return on plan assets |  |      | 9.0  | %    |  |      | 9.0  | % |  |  | 9.0 | %

Other Postretirement Benefits The Company provides certain
postretirement health care benefits to qualifying hourly
retirees and their dependents.

The net postretirement benefit cost for the
fiscal years ended 2001, 2000 and 1999 includes the following
components (in thousands):

|                                |  |      |     |      |  |      |     |  |  |   |     | 
|------------------------------- |  | ---- | --- | ---- |  | ---- | --- |  |  | - | --- | 
|                                |  | 2001 |     | 2000 |  | 1999
|                                |  |      |     |      |  |     
|Service cost                    |  | $    | 124 |      |  | $    | 146 |  |  | $ | 201 | 
|Interest cost                   |  |      | 634 |      |  |      | 626 |  |  |   | 693 | 
|Net amortization and deferral   |  |      | (32 | )    |  |      |    |  |  |   | 92  | 
|                                |  |      |     |      |  |      |     |  |  |   |     | 
|Net postretirement benefit cost |  | $    | 726 |      |  | $    | 772 |  |  | $ | 986 | 
|                                |  |      |     |      |  |      |     |  |  |   |     | 

The following table sets forth the change in
projected benefit obligation (in thousands):

|                                        |  |             |       |             |  |   |        |  
|--------------------------------------- |  | ----------- | ----- | ----------- |  | - | ------ | -
|                                        |  | October 27, |       | October 28,
|                                        |  | 2001        |       | 2000       
|                                        |  |             |       |            
|Benefit obligation at beginning of year |  | $           | 8,321 |             |  | $ | 9,374  |  
|Service cost                            |  |             | 124   |             |  |   | 146    |  
|Interest cost                           |  |             | 634   |             |  |   | 626    |  
|Benefits paid                           |  |             | (188  | )           |  |   | (133   | )
|Actuarial (gain) loss                   |  |             | (584  | )           |  |   | (1,406 | )
|Change in discount rate                 |  |             | 860   |             |  |   | (286   | )
|                                        |  |             |       |             |  |   |        |  
|Benefit obligation at end of year       |  | $           | 9,167 |             |  | $ | 8,321  |  
|                                        |  |             |       |             |  |   |        |  

The following table sets forth the funded status
of the plans (in thousands):

|                             |  |             |        |             |  |   |        |  
|---------------------------- |  | ----------- | ------ | ----------- |  | - | ------ | -
|                             |  | October 27, |        | October 28,
|                             |  | 2001        |        | 2000       
|                             |  |             |        |            
|Benefit obligation           |  | $           | (9,167 | )           |  | $ | (8,321 | )
|Unrecognized net (gain) loss |  |             | (676   | )           |  |   | (983   | )
|                             |  |             |        |             |  |   |        |  
|Accrued benefit cost         |  | $           | (9,843 | )           |  | $ | (9,304 | )
|                             |  |             |        |             |  |   |        |  

Benefit costs were generally estimated assuming
retiree health care costs would initially increase at an 11%
annual rate, decreasing gradually to a 5% annual growth rate
after 12 years and remain at a 5% annual growth rate
thereafter. A 1% increase in this annual trend rate would have
increased the accumulated postretirement

F-13



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

benefit obligation at October 27, 2001 by
$1,156,087 with a corresponding effect on the 2001
postretirement benefit expense of $127,527. The discount rate
used to estimate the accumulated postretirement benefit
obligation was 7.50% and 8.25% for fiscal years 2001 and 2000.

10.     Income
Taxes

The income tax provision consists of the
following for the fiscal years ended 2001, 2000 and 1999 (in
thousands):

|                                 |                 |       |        |       |       |      |        |       |       |   |        |       |       | 
|-------------------------------- | --------------- | ----- | ------ | ----- | ----- | ---- | ------ | ----- | ----- | - | ------ | ----- | ----- | 
|                                 |                 | 2001  |        | 2000  |       | 1999
|                                 |                 |       |        |       |       |     
|Current tax provision:           |                 |       |        |       |       |      |        |       |       |   |        |      
|                                 | Federal         |       | $      | 4,143 |       |      | $      | 1,590 |       |   | $      | 5,967 |      
|                                 | State and local |       |        | 695   |       |      |        | (96   | )     |   |        | 589   |      
|                                 |                 |       |        |       |       |      |        |       |       |   |        |      
|                                 |                 | Total |        |       | 4,838 |      |        |       | 1,494 |   |        |       | 6,556 | 
|Deferred tax provision (benefit) |                 |       | (1,962 | )     |       |      | (2,136 | )     |       |   | (2,535 | )    
|                                 |                 |       |        |       |       |      |        |       |       |   |        |      
|Income tax provision (benefit)   |                 | $     | 2,876  |       |       | $    | (642   | )     |       | $ | 4,021  |      
|                                 |                 |       |        |       |       |      |        |       |       |   |        |      

The difference between the recorded income tax
provision and the amounts computed using the statutory U.S.
Federal income tax rates are as follows (in thousands):

|                                               |  |      |        |      |  |      |        |   |  |   |        |  
|---------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                               |  | 2001 |        | 2000 |  | 1999
|                                               |  |      |        |      |  |     
|Income tax provision at statutory rate         |  | $    | 4,787  |      |  | $    | 39     |   |  | $ | 3,275  |  
|State tax provision  net of federal
	benefits |  |      | 451    |      |  |      | (541   | ) |  |   | 492    |  
|FSC benefit                                    |  |      | (1,458 | )    |  |      | (1,941 | ) |  |   | (1,323 | )
|R & D credit                                   |  |      | (2,714 | )    |  |      | (240   | ) |  |   | (200   | )
|Goodwill                                       |  |      | 1,195  |      |  |      | 1,222  |   |  |   | 1,268  |  
|ESOP                                           |  |      | 291    |      |  |      | 429    |   |  |   | 925    |  
|Other  net                                    |  |      | 324    |      |  |      | 390    |   |  |   | (416   | )
|                                               |  |      |        |      |  |      |        |   |  |   |        |  
|Income tax provision (benefit)                 |  | $    | 2,876  |      |  | $    | (642   | ) |  | $ | 4,021  |  
|                                               |  |      |        |      |  |      |        |   |  |   |        |  

During the fiscal years ended 2001, 2000 and 1999
the Company paid (net of refunds received) approximately $6.6,
$2.2 and $5.8 million in income taxes, respectively.

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)

The components of the Companys net deferred
tax asset (liability) are as follows (in thousands):

|           |                               |             |         |             |   |   |         |         |  
|---------- | ----------------------------- | ----------- | ------- | ----------- | - | - | ------- | ------- | -
|           |                               | October 27, |         | October 28,
|           |                               | 2001        |         | 2000       
|           |                               |             |         |            
|Current:   |                               |             |         |             |   |   |         |        
|           | Inventory                     |             | $       | 1,369       |   |   | $       | 1,360   |  
|           | Employee benefits             |             |         | 1,285       |   |   |         | 1,170   |  
|           | Warranty                      |             |         | 954         |   |   |         | 918     |  
|           | Engineering reserves          |             |         | 482         |   |   |         | 446     |  
|           | Other reserves                |             |         | 897         |   |   |         | 1,033   |  
|           |                               |             |         |             |   |   |         |        
|Total      |                               | $           | 4,987   |             |   | $ | 4,927   |        
|           |                               |             |         |             |   |   |         |        
|Long-term: |                               |             |         |             |   |   |         |        
|           | Salary/Hourly retiree medical |             | $       | 4,594       |   |   | $       | 3,782   |  
|           | Prepaid pension benefit       |             |         | (148        | ) |   |         | (827    | )
|           | Property and equipment        |             |         | (206        | ) |   |         | 78      |  
|           | Intangible assets             |             |         | (18,080     | ) |   |         | (19,780 | )
|           | Other  net                   |             |         | 517         |   |   |         | 304     |  
|           |                               |             |         |             |   |   |         |        
|Total      |                               | $           | (13,323 | )           |   | $ | (16,443 | )      
|           |                               |             |         |             |   |   |         |        

The temporary difference described above
principally represent differences between the tax bases of
assets (principally inventory, property and equipment, and
intangible assets) or liabilities (principally related to
employee benefits and loss reserves) and their reported amounts
in the consolidated financial statements that will result in
taxable or deductible amounts in future years when the reported
amounts of the assets or liabilities are recovered or settled,
respectively.



|    |     
|--- | ----
|11. | Debt

Summary The Companys long-term debt
consists of the following (in thousands):

|                          |                  |             |         |             |  |   |         |         | 
|------------------------- | ---------------- | ----------- | ------- | ----------- |  | - | ------- | ------- | 
|                          |                  | October 27, |         | October 28,
|                          |                  | 2001        |         | 2000       
|                          |                  |             |         |            
|Term Loans                |                  | $           | 60,462  |             |  | $ | 72,093  |        
|Revolving Credit Facility |                  |             |        |             |  |   |        |        
|Senior Subordinated Notes |                  |             | 192,918 |             |  |   | 192,666 |        
|Other                     |                  |             |        |             |  |   | 3       |        
|                          |                  |             |         |             |  |   |         |        
|                          | Total borrowings |             |         | 253,380     |  |   |         | 264,762 | 
|Current maturities        |                  |             | (18,612 | )           |  |   | (11,634 | )      
|                          |                  |             |         |             |  |   |         |        
|Long-term portion         |                  | $           | 234,768 |             |  | $ | 253,128 |        
|                          |                  |             |         |             |  |   |         |        

Credit Facility and Term
Loans The Company has
available $110.0 million principal amount of Term Loans,
and a seven-year $20.0 million Revolving Credit Facility.
The unused balance of the Revolving Credit Facility
($19.0 million at October 27, 2001 after reduction of
$1.0 million for letters of credit) is subject to a .50%
commitment fee. The Credit Facility is collateralized by
substantially all of the tangible assets of the Company
(including the capital stock of AT Holdings) as well as the
unearned shares of the AT Holdings common stock held by
the ESOP. The Credit Facility contains a number of covenants
that, among other things, limit the Companys ability to
incur additional indebtedness, pay dividends, prepay
subordinated indebtedness,

F-15



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

dispose of certain assets, create liens, make
capital expenditures, make certain investments or acquisitions
and otherwise restrict corporate activities. The Credit Facility
also requires the Company to comply with certain financial
ratios and tests, under which the Company is required to achieve
certain financial and operating results. On June 9, 2000,
certain financial ratios and tests for the remainder of the
Credit Facility were amended, primarily to adjust for the
additional interest expense and debt associated with the
$55.0 million of 8 5/8% senior subordinated notes that
were issued on December 17, 1998. In addition, the
supplemental percentage of interest applied to an Alternate Base
Rate (ABR) or LIBOR, as chosen by the Company, was
increased .25% when the leverage ratio, as defined by the ratio
of total debt to EBITDA, exceeds a multiple of 5.0 times
and .50% when the leverage ratio exceeds a multiple of
5.5 times. The Company was in compliance with the covenants
at October 27, 2001. Interest was calculated, at the
Companys choice, using an ABR or LIBOR, plus a
supplemental percentage determined by the ratio of debt to
EBITDA. The interest rate for fiscal year 2001 ranged from 1.25%
to 1.50% plus ABR or 2.25% to 2.50% plus LIBOR.

Senior Subordinated
Notes The Company has
outstanding $195.0 million 8 5/8% Senior Subordinated
Notes due 2007 (the Notes ). At October 27,
2001 the accreted value of the notes was $192.9 million.
Interest on the Notes is payable semiannually on April 1
and October 1 of each year. The Notes will mature on
October 1, 2007. The Company may not redeem the Notes prior
to October 1, 2002. On or after such date, the Company may
redeem the Notes, in whole or in part, at the redemption prices
at the time, together with accrued and unpaid interest, if any,
to the date of redemption.

The Notes are unsecured and are subordinated in
right of payment to all existing and future Senior Indebtedness
of the Company and are subject to certain limitations and
restrictions which the Company has not exceeded at
October 27, 2001.

Annual Maturities and Interest
Payments The
maturities of the Companys long-term debt during each of
the next five fiscal years are as follows (in thousands):

|            |  |        |         | 
|----------- |  | ------ | ------- | 
|Fiscal Year |  | Amount
|            |  |       
|2002        |  | $      | 18,612  | 
|2003        |  |        | 20,932  | 
|2004        |  |        | 20,918  | 
|2005        |  |        |        | 
|2006        |  |        |        | 
|Thereafter  |  |        | 192,918 | 
|            |  |        |         | 
|Total       |  | $      | 253,380 | 
|            |  |        |         | 

Total interest paid during the fiscal years ended
2001, 2000 and 1999 was $22.1 million, $23.7 million
and $22.4 million, respectively.



|    |                    
|--- | -------------------
|12. | Segment Information

Prior to fiscal year 2000, the Company operated
in two business segments, Argo-Tech and Argo-Tech Corporation
Costa Mesa. In fiscal year 2000, the Company reorganized into
two new business segments, Aerospace and Industrial. The
Aerospace segment includes the design, manufacture and
distribution of aviation products throughout the world
consisting of aircraft fuel pumps, fuel flow related products
found on a planes airframe and aerial refueling systems.
The Industrial segment includes the design, manufacture and
distribution of industrial pumps, ground fueling system valves
and related components, industrial marine cyrogenic pumps for
transferring liquefied natural gas and operation of a business
park where we maintain our headquarters and one of our
production facilities.

F-16



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The Company evaluates the performance of its
segments based primarily on operating profit before amortization
of goodwill, deferred financing fees and other identified
intangibles, interest expense, interest income, other
miscellaneous fees and income taxes.

The following table presents revenues and other
financial information by business segment. Segment information
based on the new structure is not available prior to fiscal year
2000, therefore a historical comparison of Argo-Tech and
Argo-Tech Costa Mesa is also presented (in thousands):

|                                                                                  |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|--------------------------------------------------------------------------------- |  | --------- | ------- | ---------- |  | --------- | ------ | ------------ |  | - | ------ | - |  | - | ------- | -
|                                                                                  |  |          
|                                                                                  |  | 2001     
|                                                                                  |  |          
|                                                                                  |  | Aerospace |         | Industrial |  | Corporate |        | Consolidated
|                                                                                  |  |           |         |            |  |           |        |             
|Customer revenues                                                                 |  | $         | 142,000 |            |  | $         | 31,208 |              |  | $ |       |   |  | $ | 173,208 |  
|Intersegment revenues                                                             |  |           |         |            |  |           | 10     |              |  |   |       |   |  |   | 10      |  
|Eliminations                                                                      |  |           |         |            |  |           |        |              |  |   |        |   |  |   | (10     | )
|Operating profit (loss)                                                           |  |           | 47,548  |            |  |           | (252   | )            |  |   | (1,622 | ) |  |   | 45,674  |  
|Amortization of goodwill and intangible assets                                    |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 7,515   |  
|                                                                                  |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Income from operations                                                            |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 38,159  |  
|Interest expense                                                                  |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 24,534  |  
|Other, net                                                                        |  |           |         |            |  |           |        |              |  |   |        |   |  |   | (51     | )
|                                                                                  |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Income before tax                                                                 |  |           |         |            |  |           |        |              |  |   |        |   |  | $ | 13,676  |  
|                                                                                  |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Capital expenditures                                                              |  |           | 1,453   |            |  |           | 432    |              |  |   |        |   |  |   | 1,885   |  
|Depreciation                                                                      |  |           | 3,124   |            |  |           | 1,165  |              |  |   | 1,270  |   |  |   | 5,559   |  
|Compensation expense recognized in connection
	with employee stock ownership plan |  |           | 1,791   |            |  |           | 300    |              |  |   |        |   |  |   | 2,091   |  
|Compensation expense recognized in connection
	with stock options                 |  |           |         |            |  |           |        |              |  |   | 526    |   |  |   | 526     |  

|                                                                                  |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|--------------------------------------------------------------------------------- |  | --------- | ------- | ---------- |  | --------- | ------ | ------------ |  | - | ------ | - |  | - | ------- | -
|                                                                                  |  |          
|                                                                                  |  | 2000     
|                                                                                  |  |          
|                                                                                  |  | Aerospace |         | Industrial |  | Corporate |        | Consolidated
|                                                                                  |  |           |         |            |  |           |        |             
|Customer revenues                                                                 |  | $         | 129,406 |            |  | $         | 29,947 |              |  | $ |       |   |  | $ | 159,353 |  
|Intersegment revenues                                                             |  |           |         |            |  |           | 7      |              |  |   |       |   |  |   | 7       |  
|Eliminations                                                                      |  |           |         |            |  |           |        |              |  |   |        |   |  |   | (7      | )
|Operating profit (loss)                                                           |  |           | 34,628  |            |  |           | (204   | )            |  |   | (1,555 | ) |  |   | 32,869  |  
|Amortization of goodwill and intangible assets                                    |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 7,517   |  
|                                                                                  |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Income from operations                                                            |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 25,352  |  
|Interest expense                                                                  |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 25,644  |  
|Other, net                                                                        |  |           |         |            |  |           |        |              |  |   |        |   |  |   | (402    | )
|                                                                                  |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Income before tax                                                                 |  |           |         |            |  |           |        |              |  |   |        |   |  | $ | 110     |  
|                                                                                  |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Capital expenditures                                                              |  |           | 2,329   |            |  |           | 696    |              |  |   |        |   |  |   | 3,025   |  
|Depreciation                                                                      |  |           | 3,311   |            |  |           | 1,607  |              |  |   | 1,059  |   |  |   | 5,977   |  
|Amortization of inventory step-up                                                 |  |           |         |            |  |           |        |              |  |   | 155    |   |  |   | 155     |  
|Compensation expense recognized in connection
	with employee stock ownership plan |  |           | 2,645   |            |  |           | 327    |              |  |   |        |   |  |   | 2,972   |  

F-17



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                                                                  |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|--------------------------------------------------------------------------------- |  | --------- | ------- | ---------- |  | --------- | ------ | ------------ |  | - | ------ | - |  | - | ------- | -
|                                                                                  |  |          
|                                                                                  |  | 2001     
|                                                                                  |  |          
|                                                                                  |  |           |         | Argo-Tech  |  |          
|                                                                                  |  | Argo-Tech |         | Costa Mesa |  | Corporate |        | Consolidated
|                                                                                  |  |           |         |            |  |           |        |             
|Customer revenues                                                                 |  | $         | 123,536 |            |  | $         | 49,672 |              |  | $ |       |   |  | $ | 173,208 |  
|Intersegment revenues                                                             |  |           | 704     |            |  |           |       |              |  |   |       |   |  |   | 704     |  
|Eliminations                                                                      |  |           |         |            |  |           |        |              |  |   |        |   |  |   | (704    | )
|Operating profit (loss)                                                           |  |           | 42,286  |            |  |           | 4,396  |              |  |   | (1,008 | ) |  |   | 45,674  |  
|Amortization of goodwill and intangible assets                                    |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 7,515   |  
|                                                                                  |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Income from operations                                                            |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 38,159  |  
|Interest expense                                                                  |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 24,534  |  
|Other, net                                                                        |  |           |         |            |  |           |        |              |  |   |        |   |  |   | (51     | )
|                                                                                  |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Income before tax                                                                 |  |           |         |            |  |           |        |              |  |   |        |   |  | $ | 13,676  |  
|                                                                                  |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Capital expenditures                                                              |  |           | 1,453   |            |  |           | 432    |              |  |   |        |   |  |   | 1,885   |  
|Depreciation                                                                      |  |           | 3,941   |            |  |           | 1,387  |              |  |   | 231    |   |  |   | 5,559   |  
|Compensation expense recognized in connection
	with employee stock ownership plan |  |           | 2,091   |            |  |           |        |              |  |   |        |   |  |   | 2,091   |  
|Compensation expense recognized in connection
	with stock options                 |  |           |         |            |  |           |        |              |  |   | 526    |   |  |   | 526     |  

|                                                                                  |  |           |         |            |  |           |        |              |  |   |      |   |  |   |         |  
|--------------------------------------------------------------------------------- |  | --------- | ------- | ---------- |  | --------- | ------ | ------------ |  | - | ---- | - |  | - | ------- | -
|                                                                                  |  |          
|                                                                                  |  | 2000     
|                                                                                  |  |          
|                                                                                  |  |           |         | Argo-Tech  |  |          
|                                                                                  |  | Argo-Tech |         | Costa Mesa |  | Corporate |        | Consolidated
|                                                                                  |  |           |         |            |  |           |        |             
|Customer revenues                                                                 |  | $         | 108,083 |            |  | $         | 51,270 |              |  | $ |     |   |  | $ | 159,353 |  
|Intersegment revenues                                                             |  |           | 49      |            |  |           |       |              |  |   |     |   |  |   | 49      |  
|Eliminations                                                                      |  |           |         |            |  |           |        |              |  |   |      |   |  |   | (49     | )
|Operating profit (loss)                                                           |  |           | 28,098  |            |  |           | 5,207  |              |  |   | (436 | ) |  |   | 32,869  |  
|Amortization of goodwill and intangible assets                                    |  |           |         |            |  |           |        |              |  |   |      |   |  |   | 7,517   |  
|                                                                                  |  |           |         |            |  |           |        |              |  |   |      |   |  |   |         |  
|Income from operations                                                            |  |           |         |            |  |           |        |              |  |   |      |   |  |   | 25,352  |  
|Interest expense                                                                  |  |           |         |            |  |           |        |              |  |   |      |   |  |   | 25,644  |  
|Other, net                                                                        |  |           |         |            |  |           |        |              |  |   |      |   |  |   | (402    | )
|                                                                                  |  |           |         |            |  |           |        |              |  |   |      |   |  |   |         |  
|Income before tax                                                                 |  |           |         |            |  |           |        |              |  |   |      |   |  | $ | 110     |  
|                                                                                  |  |           |         |            |  |           |        |              |  |   |      |   |  |   |         |  
|Capital expenditures                                                              |  |           | 2,329   |            |  |           | 696    |              |  |   |      |   |  |   | 3,025   |  
|Depreciation                                                                      |  |           | 4,245   |            |  |           | 1,485  |              |  |   | 247  |   |  |   | 5,977   |  
|Amortization of inventory step-up                                                 |  |           |         |            |  |           | 155    |              |  |   |      |   |  |   | 155     |  
|Compensation expense recognized in connection
	with employee stock ownership plan |  |           | 2,972   |            |  |           |        |              |  |   |      |   |  |   | 2,972   |  

F-18



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                                                                                |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|----------------------------------------------------------------------------------------------- |  | --------- | ------- | ---------- |  | --------- | ------ | ------------ |  | - | ------ | - |  | - | ------- | -
|                                                                                                |  |          
|                                                                                                |  | 1999     
|                                                                                                |  |          
|                                                                                                |  |           |         | Argo-Tech  |  |          
|                                                                                                |  | Argo-Tech |         | Costa Mesa |  | Corporate |        | Consolidated
|                                                                                                |  |           |         |            |  |           |        |             
|Customer revenues                                                                               |  | $         | 121,055 |            |  | $         | 55,123 |              |  | $ |       |   |  | $ | 176,178 |  
|Intersegment revenues                                                                           |  |           | 80      |            |  |           |       |              |  |   |       |   |  |   | 80      |  
|Eliminations                                                                                    |  |           |         |            |  |           |        |              |  |   |        |   |  |   | (80     | )
|Operating profit (loss)                                                                         |  |           | 36,037  |            |  |           | 8,332  |              |  |   | (3,045 | ) |  |   | 41,324  |  
|Amortization of goodwill and intangible assets                                                  |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 7,478   |  
|                                                                                                |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Income from operations                                                                          |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 33,846  |  
|Interest expense                                                                                |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 25,003  |  
|Other, net                                                                                      |  |           |         |            |  |           |        |              |  |   |        |   |  |   | (516    | )
|                                                                                                |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Income before tax                                                                               |  |           |         |            |  |           |        |              |  |   |        |   |  | $ | 9,359   |  
|                                                                                                |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Capital expenditures                                                                            |  |           | 5,000   |            |  |           | 1,050  |              |  |   |        |   |  |   | 6,050   |  
|Depreciation                                                                                    |  |           | 4,065   |            |  |           | 2,232  |              |  |   | 264    |   |  |   | 6,561   |  
|Amortization of inventory step-up                                                               |  |           |         |            |  |           | 77     |              |  |   |        |   |  |   | 77      |  
|Compensation expense recognized in connection
	with employee stock ownership plan               |  |           | 4,322   |            |  |           |        |              |  |   |        |   |  |   | 4,322   |  
|Compensation expense recognized in connection
	with stock appreciation rights and stock options |  |           |         |            |  |           |        |              |  |   | 2,983  |   |  |   | 2,983   |  

13.     Major
Customers and Export Sales

During the fiscal years ended 2001, 2000 and
1999, the Company had revenues in excess of 10% from the
following customers (in thousands):

|                           |  |      |        |      |  |      |        |  |  |   |        | 
|-------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|                           |  | 2001 |        | 2000 |  | 1999
|                           |  |      |        |      |  |     
|Customer A (Related Party) |  | $    | 26,792 |      |  | $    | 21,969 |  |  | $ | 29,751 | 
|Customer B                 |  |      |       |      |  | $    | 16,261 |  |  |   |       | 

During the fiscal years ended 2001, 2000 and
1999, export sales to foreign customers were comprised of the
following (in thousands):

|                                        |       |      |        |        |  |      |        |        |  |   |        |        | 
|--------------------------------------- | ----- | ---- | ------ | ------ |  | ---- | ------ | ------ |  | - | ------ | ------ | 
|                                        |       | 2001 |        | 2000   |  | 1999
|                                        |       |      |        |        |  |     
|Europe                                  |       | $    | 34,954 |        |  | $    | 31,116 |        |  | $ | 30,501 |       
|All others (individually less than 10%) |       |      | 45,841 |        |  |      | 39,366 |        |  |   | 50,159 |       
|                                        |       |      |        |        |  |      |        |        |  |   |        |       
|                                        | Total |      | $      | 80,795 |  |      | $      | 70,482 |  |   | $      | 80,660 | 
|                                        |       |      |        |        |  |      |        |        |  |   |        |       

14.     Fair Value of
Financial Instruments

The Company has various financial instruments,
including cash and short-term investments and long-term debt.
The Company has determined the estimated fair value of these
financial instruments by soliciting available market information
and utilizing appropriate valuation methodologies, which require
judgment. The Company believes that the carrying values of the
short-term investments and term loans approximates their fair
value. The fair value of the Companys Senior Subordinated
Notes approximated $120.9 million at October 27, 2001
based upon quoted market prices. The Company does not enter into
derivative contracts for trading or speculative

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)

purposes. A 10% fluctuation in interest rates
would not materially affect Argo-Techs financial
condition, result of operations or cash flow.

15.     Contingencies

Environmental
Matters The soil and
groundwater at the Companys Euclid, Ohio facility and the
Costa Mesa, California facility contain elevated levels of
certain contaminants which are currently in the process of being
removed and/or remediated. Because the Company has certain
indemnification rights from former owners of the facilities for
liabilities arising from these or other environmental matters,
in the opinion of the Companys management, the ultimate
outcome is not expected to materially affect the Companys
financial condition, results of operations or liquidity.

Other
Matters The Company is
subject to various legal actions and other contingencies. In the
opinion of the Companys management, after reviewing the
information which is currently available with respect to such
matters and consulting with the Companys legal counsel,
any liability which may ultimately be incurred with respect to
these additional matters is not expected to materially affect
the Companys financial condition, results of operations or
liquidity.

16.     New
Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 141,
Business Combinations. This pronouncement
establishes new standards for accounting and reporting
requirements for business combinations and will require that the
purchase method of accounting be used for all business
combinations initiated after June 30, 2001. Management does
not believe that SFAS No. 141 will have a material impact
on the Companys consolidated financial statements.

In June 2001, the FASB issued SFAS No. 142,
Goodwill and Other Intangible Assets. This statement
applies to intangibles and goodwill acquired after June 30,
2001, as well as goodwill and intangibles previously acquired.
Under this statement, goodwill and other intangibles determined
to have an infinite life will no longer be amortized; however,
these assets will be reviewed for impairment on a periodic
basis. The Company expects to early adopt this statement for the
first quarter of fiscal year beginning October 28, 2001.
Management is currently evaluating the impact that this
statement will have on the Companys consolidated financial
statements.

In June 2001, the FASB issued SFAS 143,
Accounting for Asset Retirement Obligations. This
statement requires entities to record the fair value of a
liability for an asset retirement obligation in the period in
which it is incurred. The amount recorded as a liability will be
capitalized by increasing the carrying amount of the related
long-lived asset. Subsequent to initial measurement, the
liability is accreted to the ultimate amount anticipated to be
paid and is also adjusted for revisions to the timing of the
amount of estimated cash flows. The capitalized cost is
depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the
obligation for its recorded amount or incurs a gain or loss upon
settlement. The provisions of this statement become effective
for the Companys fiscal year beginning October 27,
2002. Management has not determined the impact, if any, that
this statement will have on the Companys consolidated
financial statements.

In August 2001, the FASB issued SFAS 144,
Accounting for the Impairment or Disposal of Long Lived
Assets. This statement improves the financial reporting by
requiring that one accounting model be used for long-lived
assets to be disposed of by sale, whether previously held and
used or newly acquired, and by broadening the presentation of
discontinued operations to include more disposal transactions.
The provisions of this statement become effective for the
Companys fiscal year beginning October 27, 2002.
Management has not determined the impact, if any, that this
statement will have on the Companys consolidated financial
statements.

F-20



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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)

17.     Other
Comprehensive Income (Loss)

Other comprehensive income (loss) includes
foreign currency translation adjustments and deferred pension
expense (in thousands).

|                                                                           |                                         |      |        |        |   |      |      |      |   |   |       |       | 
|-------------------------------------------------------------------------- | --------------------------------------- | ---- | ------ | ------ | - | ---- | ---- | ---- | - | - | ----- | ----- | 
|                                                                           |                                         | 2001 |        | 2000   |   | 1999
|                                                                           |                                         |      |        |        |   |     
|Net income                                                                 |                                         | $    | 10,800 |        |   | $    | 752  |      |   | $ | 5,338 |      
|Other comprehensive income (loss):                                         |                                         |      |        |        |   |      |      |      |   |   |       |      
|                                                                           | Foreign currency translation adjustment |      |        | (151   | ) |      |      | (101 | ) |   |       | 132   | 
|                                                                           | Deferred pension expense                |      |        | (3,046 | ) |      |      |      |   |   |       | 1,674 | 
|                                                                           |                                         |      |        |        |   |      |      |      |   |   |       |      
|Other comprehensive income (loss) before tax                               |                                         |      | (3,197 | )      |   |      | (101 | )    |   |   | 1,806 |      
|Income tax benefit (expense) related to
	other comprehensive income (loss) |                                         |      | 1,218  |        |   |      |      |      |   |   | (670  | )    
|                                                                           |                                         |      |        |        |   |      |      |      |   |   |       |      
|Other comprehensive income (loss) net of tax                               |                                         |      | (1,979 | )      |   |      | (101 | )    |   |   | 1,136 |      
|                                                                           |                                         |      |        |        |   |      |      |      |   |   |       |      
|Comprehensive income                                                       |                                         | $    | 8,821  |        |   | $    | 651  |      |   | $ | 6,474 |      
|                                                                           |                                         |      |        |        |   |      |      |      |   |   |       |      

F-21



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##### Table of Contents






EXHIBIT INDEX

|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                              
|------- | ----- | ----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 3.1   |                         |  | Restated Certificate of Incorporation of the
	Company, dated April 16, 1999 (incorporated herein by
	reference to Exhibit 3.1 of the Companys registration
	statement on form S-4/ A filed April 22, 1999, SEC File
	No. 333-73179).                                                                                                                                                                                        
|        | 3.2   |                         |  | Restated By-Laws of the Company dated
	April 16, 1999 (incorporated herein by reference to
	Exhibit 3.2 of the Companys registration statement on
	form S-4/ A filed April 22, 1999, SEC File
	No. 333-73179).                                                                                                                                                                                                              
|        | 4.1   |                         |  | Indenture dated September 26, 1997, between
	the Company, the Subsidiary Guarantors signatory thereto and
	Harris Trust and Savings Bank, as Trustee, relating to the
	8 5/8% Senior Subordinated Notes due 2007 (the form of
	which is included in such Indenture) (incorporated herein by
	reference to Exhibit 4.1 of the Companys Registration
	Statement on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).
|        | 4.2   |                         |  | First Supplemental Indenture, dated
	December 17, 1998 between the Company, the Subsidiary
	Guarantors signatory thereto and Harris Trust and Savings Bank,
	related to the Indenture dated September 26, 1997
	(incorporated by reference to Exhibit 4.4 of the
	Companys Current Report on Form 8-K, filed
	January 14, 1999).                                                                                            
|        | 4.3   |                         |  | Indenture dated December 17, 1998 between
	the Company, the Subsidiary Guarantors signatory thereto and
	Harris Trust and Savings Bank, as Trustee, related to the
	8 5/8% Senior Subordinated Notes due 2007 (a form of which
	is included in such Indenture) (incorporated by reference to
	Exhibit 4.5 of the Companys Current Report on
	Form 8-K, filed January 14, 1999).                                             
|        | 10.1* |                         |  | Form of Stay Pay and Severance Agreement dated
	June 6, 1996, between the Company and certain Executive
	Officers of the Company (Michael S. Lipscomb, Frances S. St.
	Clair, and Paul R. Keen) (incorporated herein by reference to
	Exhibit 10.1 of the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).                                                                   
|        | 10.2* |                         |  | Employment Agreement dated February 13, 1989
	between the Company and Paul R. Keen (incorporated herein by
	reference to Exhibit 10.2 of the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).                                                                                                                                                                                
|        | 10.3* |                         |  | Employment Agreement dated October 15, 1986
	between the Company and Michael S. Lipscomb (incorporated herein
	by reference to Exhibit 10.3 of the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).                                                                                                                                                                          
|        | 10.4* |                         |  | Argo-Tech Corporation Trust Agreement dated
	October 28, 1994 between the Company and Society National
	Bank, as Trustee, relating to the Employment Agreement dated
	October 15, 1986 between the Company and Michael S.
	Lipscomb (incorporated herein by reference to Exhibit 10.4
	of the Companys Registration Statement on form S-1, filed
	October 17, 1997, SEC File No. 333-38223).                                
|        | 10.5* |                         |  | Argo-Tech Corporation Salaried Pension Plan,
	dated November 1, 1995 (incorporated herein by reference to
	Exhibit 10.5 of the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).                                                                                                                                                                                              
|        | 10.6* |                         |  | First Amendment to Argo-Tech Corporation Salaried
	Pension Plan (incorporated herein by reference to
	Exhibit 10.6 of the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).                                                                                                                                                                                                   
|        | 10.7* |                         |  | Argo-Tech Corporation Employee Stock Ownership
	Plan and Trust Agreement, dated May 17, 1994 (incorporated
	herein by reference to Exhibit 10.7 of the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).                                                                                                                                                                      
|        | 10.8* |                         |  | 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 the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).                                                                                                                                          
|        | 10.9* |                         |  | 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 the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).                                                                                                                                              

X-1



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##### Table of Contents



EXHIBIT INDEX  Continued


|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                     
|------- | ----- | ----------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 10.10 | *                       |  | 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 the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).                                                                                   
|        | 10.11 | *                       |  | Argo-Tech Corporation Employee Stock Ownership
	Plan Excess Benefit Plan, dated May 17, 1994 (incorporated
	herein by reference to Exhibit 10.11 of the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).                                                                                                            
|        | 10.12 |                         |  | AT Holdings Corporation Stockholders
	Agreement, dated December 17, 1998 (incorporated herein by
	reference to Exhibit 10.12 of the Companys Annual
	Report on form 10-K for the year ended October 30, 1999,
	SEC File No. 333-38223).                                                                                                                           
|        | 10.13 |                         |  | AT Holdings Corporation 1998 Supplemental
	Stockholders Agreement, dated December 17, 1998
	(incorporated herein by reference to Exhibit 10.13 of the
	Companys Annual Report on form 10-K for the year ended
	October 30, 1999, SEC File No. 333-38223).                                                                                                         
|        | 10.14 | *                       |  | Form of Management Incentive Compensation Plan
	for key employees of Argo-Tech (incorporated herein by reference
	to Exhibit 10.19 of the Companys Registration
	Statement on form S-1, filed October 17, 1997, SEC File No.
	333-38223).                                                                                                                          
|        | 10.15 | *                       |  | 1991 Management Incentive Stock Option Plan, as
	amended, dated May 16, 1994 (incorporated herein by
	reference to Exhibit 10.20 of the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).                                                                                                                            
|        | 10.16 | *                       |  | Amendment to the 1991 Management Incentive Stock
	Option Plan, as amended, dated June 12, 2001 (incorporated
	herein by reference to Exhibit 10.3 of the Companys
	Quarterly Report on form 10-Q for the quarter ended
	July 28, 2001).                                                                                                                            
|        | 10.17 | *                       |  | 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 the
	Companys Registration Statement on form S-1, filed
	October 17, 1997, SEC File No. 333-38223).                            
|        | 10.18 | *                       |  | 1991 Performance Stock Option Plan, as amended,
	dated May 16, 1997 (incorporated herein by reference to
	Exhibit 10.22 of the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File No.
	333-38223).                                                                                                                                     
|        | 10.19 | *                       |  | Amendment to the 1991 Performance Stock Option
	Plan, as amended, June 12, 2001 (incorporated herein by
	reference to Exhibit  10.1 of the Companys
	Quarterly Report on form 10-Q for the quarter ended
	July 28, 2001).                                                                                                                                          
|        | 10.20 | *                       |  | Form of Stock Option Agreement in connection with
	the 1991 Performance Stock Option Plan, as amended, between
	Argo-Tech and certain key employees (incorporated herein by
	reference to Exhibit 10.23 of the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).                                                     
|        | 10.21 |                         |  | Credit Facility, dated July 18, 1997, as
	amended and restated on September 26, 1997, between
	Argo-Tech, AT Holdings, the lenders party thereto and the Chase
	Manhattan Bank, as Administrative Agent (incorporated herein by
	reference to Exhibit 10.24 of the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223). 
|        | 10.22 |                         |  | 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 the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).                                                                           
|        | 10.23 |                         |  | 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 the Companys
	Registration Statement on form S-1, filed October 17, 1997,
	SEC File No. 333-38223).

X-2



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##### Table of Contents



EXHIBIT INDEX  Continued


|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- | ----- | ----------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 10.24 |                         |  | 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 the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).
|        | 10.25 |                         |  | 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 the Companys Registration Statement
	on form S-1, filed October 17, 1997, SEC File
	No. 333-38223).                                                                                                                                                                                                                                                    
|        | 10.26 |                         |  | Prism Prototype Retirement Plan and Trust
	(incorporated herein by reference to Exhibit 10.29 of the
	Companys Registration Statement on form S-1, filed
	October 17, 1997, SEC File No. 333-38223).                                                                                                                                                                                                                                                                                                                            
|        | 10.27 |                         |  | 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 the
	Companys Registration Statement on form S-1, filed
	October 17, 1997, SEC File No. 333-38223).                                                                                                                                                                                                                                                                 
|        | 10.28 | *                       |  | 1997 Stock Appreciation Rights Plan (incorporated
	herein by reference to Exhibit 10.31 of the Companys
	Annual Report on form 10-K, for the year ended October 31,
	1998).                                                                                                                                                                                                                                                                                                                                                     
|        | 10.29 | *                       |  | AT Holdings Corporation/ Argo-Tech Corporation
	1998 Equity Replacement Stock Option Plan (incorporated herein
	by reference to Exhibit 10.32 of the Companys
	registration statement on form S-4 filed March 1, 1999, SEC
	File No. 333-73179).                                                                                                                                                                                                                                                                                
|        | 10.30 | *                       |  | 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 the Companys Quarterly Report on
	form 10-Q for the quarter ended July 28, 2001).                                                                                                                                                                                                                                                         
|        | 10.31 | *                       |  | 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 the Companys registration
	statement on form S-4 filed March 1, 1999, SEC File No.
	333-73179).                                                                                                                                                                                                                         
|        | 10.32 | *                       |  | First Amendment to the Argo-Tech Corporation
	Employee Stock Ownership Plan Excess Benefit Plan (incorporated
	herein by reference to Exhibit 10.34 of the Companys
	registration statement on form S-4 filed March 1, 1999, SEC
	File No. 333-73179).                                                                                                                                                                                                                                                                          
|        | 10.33 |                         |  | Amendment, dated December 4, 1998 to the
	Amended and Restated Credit Facility, dated July 18, 1997,
	as amended and restated on September 26, 1997, between
	Argo-Tech, AT Holdings Corporation, the Lenders party thereto
	and Chase Manhattan Bank, as Administrative Agent (incorporated
	herein by reference to Exhibit 10.32 of the Companys
	registration statement on form S4/ A filed April 22, 1999,
	SEC File No. 333-73179).                                                                                       
|        | 10.34 |                         |  | Amendment, dated June 9, 2000 to the Amended
	and Restated Credit Facility, dated July 18, 1997, as
	amended and restated on September 26, 1997, between
	Argo-Tech, AT Holdings Corporation, the Lenders party thereto
	and Chase Manhattan Bank, as Administrative Agent (incorporated
	herein by reference to Exhibit 10.31 of the Companys
	Annual Report on Form 10-K, for the year ended October 28,
	2000).                                                                                                              
|        | 12**  |                         |  | Statement regarding computation of ratios.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 21    |                         |  | List of Subsidiaries (incorporated herein by
	reference to Exhibit 21 of the Companys Registration
	Statement on form S-1, filed October 17, 1997, SEC File No.
	333-38223).                                                                                                                                                                                                                                                                                                                                                    



---



|  |                                                                                                                                           
|- | ------------------------------------------------------------------------------------------------------------------------------------------
|* | Reflects management contract or other
	compensatory arrangement required to be filed as an exhibit
	pursuant to Item 14(c) of this Report.



|   |                
|-- | ---------------
|** | Filed herewith.

X-3