<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   FORM 10-K

           (x)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT of 1934

                  For the fiscal year ended December 31, 2000

                                      OR

         ( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                        Commission File Number:  1-5951

                                CMI CORPORATION
            (Exact name of registrant as specified in its charter)

        Oklahoma                                                 73-0519810
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

         I-40 & Morgan Road
           P.O. Box 1985
         Oklahoma City, OK                                           73101
(Address of principal executive offices)                          (Zip Code)

      Registrant's telephone number, including area code  (405) 787-6020

          Securities registered pursuant to Section 12(b) of the Act:

                                                     Name of Each Exchange
        Title of Each Class                           on Which Registered
        -------------------                           -------------------

  Voting Class A Common Stock Par Value $.10        New York Stock Exchange

          Securities registered pursuant to Section 12(g) of the Act:

                                     NONE

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

     Indicate by check mark 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 Form 10-K or any amendment to this
Form 10-K. [ ]

     The aggregate market value of the Voting Class A Common Stock (Class A
Common Stock) and the Voting Common Stock (Common Stock) held by non-affiliates
of the registrant on March 26, 2001 was $19,334,502.

     The number of shares of the registrant outstanding on March 26, 2001 was
21,690,886 shares of Class A Common Stock and 602 shares of Common Stock.

                      DOCUMENTS INCORPORATED BY REFERENCE

          Documents                                          Form 10-K Reference
          ---------                                          -------------------
Proxy Statement for the 2001 Annual Meeting of Shareholders        Part III
<PAGE>

                                CMI CORPORATION
                                   FORM 10-K

                               December 31, 2000

                               TABLE OF CONTENTS

          PART I                                                         PAGE

Item 1.        Business.................................................    3

Item 2.        Properties...............................................    9

Item 3.        Legal Proceedings........................................   10

Item 4.        Submission of Matters to a Vote of Security Holders......   11

          PART II

Item 5.        Market for the Registrant's Common Stock and
                  Related Shareholder Matters...........................   11

Item 6.        Selected Financial Data..................................   12

Item 7.        Management's Discussion and Analysis of Financial
                  Condition and Results of Operations...................   13

Item 7A.       Quantitative and Qualitative Disclosures About
                  Market Risk...........................................   20

Item 8.        Financial Statements and Supplementary Data..............   22

Item 9.        Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure...................   48

          PART III

Items 10-13.   All Items are Incorporated by Reference to the Company's
                  Proxy Statement for the 2001 Annual Meeting of
                  Shareholders..........................................   48

          PART IV

Item 14.       Exhibits, Consolidated Financial Statement Schedules,
                  and Reports on Form 8-K...............................   48

          SIGNATURES....................................................   50
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================

                                    PART I
Item 1.   Business

(a)  General Development of Business

Unless the context requires otherwise, as used herein, the terms "Company" and
"CMI" mean CMI Corporation and its consolidated subsidiaries. Information
regarding 2000 business developments is located in Item 1(c).

(b)  Financial Information About Operating Segments

The Company primarily operates in the road and heavy construction industry and
information regarding this and other products is located in Item 1(c). The
Company's operating segments are defined by operating locations. See note 12 of
the Notes to Consolidated Financial Statements (Item 8).

(c)  Narrative Description of Business

CMI was organized in 1926. Since 1964, the Company has manufactured and marketed
a wide variety of equipment for the road building and heavy construction
industry. These products are divided into two primary categories: mobile
equipment and materials processing equipment. Regarding mobile equipment, the
Company is an industry leader in the design and manufacture of automated
machines for the construction and maintenance of highways, city streets, airport
runways, county roads, bridges, and parking lots. The Company's mobile equipment
includes concrete pavers; machines for concrete placing and spreading,
finishing, texturing, and curing; pavement profiling machines; pavement
reclaimers; automated fine grading, materials spreading and placing equipment;
soil stabilizers and soil compacting machines; trailers used by the construction
and mining industries; industrial scales; and bridge and canal paving equipment.
The Company's materials processing equipment includes a wide variety of paving
material production plants for the manufacture of both hot mix asphalt and
concrete pavements. The Company also makes plants that recycle old pavements and
thermal systems for remediating contaminated soils and sanitizing medical waste.
Waste industry products included in materials processing equipment include
municipal landfill compactors and industrial and green waste grinding machines.
The Company has won market recognition by producing products emphasizing
recycling and energy conservation.

During 2000, the Company held its first customer classes in the Swisher Training
Center, a 17,500 square foot ultra-modern customer training facility. The number
one problem identified in surveys of our customer base has been the lack of
qualified, trained machinery operators and mechanics for them to hire. The
Swisher Training Center provides hands-on training in the operation and
maintenance of all equipment manufactured by the Company.

During 2000, the Company introduced to the North American construction markets,
the Hydraulically Variable Width slip-form pavers manufactured by

                                       3
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================

CMI Belgium in a factory purchased by CMI in the first quarter of 2000. This
facility is located in Ogplabbeek, Belgium. These newly designed pavers feature
patented technology that permits fast adjustment to paving width, reducing the
field requirement for such changes from hours to just minutes. This capability
brings significant cost savings and has been of greatest importance on smaller
paving jobs like city streets, highway lane and ramp additions and parking lots.
These are market areas where previously CMI has not played a leadership role.
Additionally, the Company will introduce multi-lane versions of this new
technology in April 2001 at the BAUMA Equipment Fair in Munich, Germany.

Also during 2000 the Company began marketing products manufactured by R. M.
Barton Co., Inc. of Oklahoma City, Oklahoma. The Barton acquisition was
completed during the first quarter of 2000. Barton brings to CMI a line of small
utility sized pavement profilers and pavement and base reclaiming machines. The
Barton machines are targeted to government and support equipment markets that
have not been served by CMI in recent years. Barton also brings an important
parts business to CMI, specializing in equipping profiling and reclaiming
contractors with replacement drums. Barton replacement drums fit well with the
Company's goal to build a stronger after-market business.

During 2000, the Company acquired 75% of the outstanding equity of Cifali, & CIA
LTDA, of Cachoeirinha, Brazil, a manufacturer of hot mix asphalt production
plants and hot mix asphalt paving machines designed for Latin American
construction markets. The Company plans to offer the Cifali products through its
worldwide network of construction machinery distributors and agents. The Company
also plans to begin manufacturing products designed in other locations at the
Cifali facility.

Additional information regarding the Company's operating segments, including the
products produced by its segments, is contained in note 12 of the Notes to
Consolidated Financial Statements (Item 8).

The largest single impactor of Company business is the United States national
highway construction program, which is funded in multiyear blocks. The current
program, TEA-21 (Transportation Equity Act for the 21st Century) began October
1, 1998 and extends through September 30, 2003. TEA-21 provides $175 billion, of
its total $217 billion funding, for highway construction and rehabilitation for
the five-year period, an increase of 43 percent over the previous six-year
program. A significant addition to the current program sets mandatory funding
levels and guarantees all additional revenues of the Federal Highway Trust Fund.
Regardless of this possible additional funding, the mandatory funding levels are
having a strong, favorable impact upon our customers, who now can plan and
prepare for an extended period of market expansion. Provisions of TEA-21 favor
the recycling of worn pavement materials. The Company has been a leader in
providing equipment for pavement recycling.


                                       4
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================

Principal product information is as follows:

     Hot Mix Asphalt Production Systems
     ----------------------------------

     The Company manufactures and markets, primarily in North America, a wide
     variety of portable and stationary hot mix asphalt production and recycling
     plants including batch plants and parallel and counter-flow continuous mix
     drum plants.

     The Company's most popular plants are marketed under the trade name
     "TRIPLE-DRUM." Production tests show that this plant has superior heat
     transfer performance compared to other counter-flow plant designs,
     especially for recycle operations. The ease with which TRIPLE-DRUMs are
     passing tough exhaust emissions standards with high production rates, even
     under adverse production conditions, has been noticed by the industry and
     is resulting in stronger sales.

     The Company manufactures substantially all of the plant system including
     components for aggregate feeding, liquid asphalt cement and additive
     metering, material mixing and heating, finished material storage and truck
     loading, exhaust cleaning and computerized control packages for operating
     the complete system. See Item 3 - Legal Proceedings.

     Concrete Plants
     ---------------

     The Company's concrete batching plants are manufactured and marketed by CMI
     Johnson/Ross, with plants in Champaign, Illinois and Brownwood, Texas. The
     Company offers the industry's largest range of ready-mix and central-mix
     plants. The Company is an industry leader in providing large mass pour
     plants for dams, power plants, and other giant concrete facilities.

     Concrete Paving Systems
     -----------------------

     The Company introduced the industry's first automated grading and concrete
     paving machines in the 1960's. Today, the Company manufactures and markets
     worldwide a complete line of automated street and highway class concrete
     slipform paving and paving train support machines. The popularity of these
     machines relates directly to job site performance, which has resulted in
     some contractors earning performance bonuses for pavement smoothness as
     recorded by profileograph measuring.

     The Company's highway class pavers incorporate machine improvements into
     the basic machine design, making features like computerized crowning and
     automatic placement of dowel bars less costly to add. The Company also
     manufactures and markets a line of curb and gutter pavers and smaller
     slipform pavers for residential, parking lot and building site paving
     requirements.


                                       5
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================

     Pavement Profiling Equipment
     ----------------------------

     The Company introduced the industry's first dedicated pavement milling
     machine in 1976. Since that time, the Company's line of "ROTO-MILL"
     Pavement Profilers has set the standards for the fast developing pavement
     restoration and recycling market. The Company offers a wide range of models
     from small utility machines to the PR-1200, the world's largest pavement
     profiling machine. Current models include the PR-500C and PR-525-7 half
     lane width models; the PR-800-7/12, half to full lane width models; the PR-
     1050 and PR-1200, full lane width machines; and new utility rubber tire
     models from Barton.

     Reclaiming/Stabilizing Equipment
     --------------------------------

     The Company's popular road reclamation and soil stabilization machines,
     beginning with the RS-500 introduced in 1991, have had excellent market
     acceptance. Now marketed under the trade name ROTO-MIXER, the productivity
     and versatility of these machines have created new work classifications for
     recycling pavements; and have dramatically increased the productivity of
     traditional stabilization and recycling methods. Current models include the
     RS-425, RS-450, RS-500B, RS-650, and RS-800. New utility sized models from
     Barton have also been added to the reclaimer/stabilizer line.

     Weighing Equipment
     ------------------

     The Company manufactures and distributes a broad line of electronic scales
     for construction, transportation, material processing, mining, energy,
     agricultural, and industrial applications. These systems permit direct
     linkage to data processing equipment to speed material processing, record
     keeping, and billing. The Company also markets high technology automatic
     computer controls for continuous material blending, weighing, record
     keeping, inventory tracking, invoicing, and report writing. These control
     systems are marketed with the Company's hot mix asphalt production plants
     and soil remediation systems.

     Waste, Construction and Demolition Equipment
     --------------------------------------------

     The Company's TRASHMASTER landfill compactors enjoy strong market
     acceptance. Their unique design offers full width compaction resulting in
     10% to 15% greater landfill densities over conventional waste compactors.
     The Company also offers three green-waste and heavy materials grinding
     models that are sold to the timber, landscaping, construction, demolition
     and waste recycling industries. The Company's grinders have patented
     features that provide excellent productivity and minimal downtime.

     Load King Division
     ------------------

     Load King, headquartered in Elk Point, South Dakota, manufactures a broad
     line of heavy-duty trailers for equipment and material hauling.

                                       6
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================
     Bottom discharge material trailers and a family of redesigned rock hauler
     trailers have been added to the broad line of folding gooseneck and
     lightweight detachable gooseneck trailers engineered to meet individual
     state weight distribution requirements. Load King also responds to customer
     requirements for custom heavy-haul trailers.

     Bid-Well Division
     -----------------

     Bid-Well, headquartered in Canton, South Dakota, is an industry leader in
     the development and manufacture of a wide variety of specialized
     lightweight grading and concrete paving and finishing machines for
     construction markets. This equipment includes bridge deck pavers and
     concrete overlay machines, building floor pavers and finishers, and
     specialized graders, pavers, and finishers for slope and canal paving.

     Remediation Equipment
     ---------------------

     Soil remediation is a process whereby non-hazardous contaminates like oil,
     jet fuel, and other hydrocarbon-based pollutants are removed from the soil
     in a thermal process. Soil remediation systems use similar equipment and
     processes as the Company's asphalt production systems.

     The Company has engineered and is marketing remediation systems with
     production ranges from 80 to 160 tons per hour. The Company's systems have
     been used at military and industrial sites, where they have set new
     production records, doubling the tons per hour produced on any previous
     jobs of similar nature.

     Equipment Service and Parts
     ---------------------------

     The Company maintains a service department, to provide customers with
     operational and start-up assistance, and to provide assistance with
     repairs, maintenance and training, as needed by customers. A full-scale
     parts department is also maintained by the Company.

Marketing and Distribution.
--------------------------
The Company's construction equipment is sold directly to end users and through
independent dealers. The Company's scale and trailer products are also sold
through independent dealers. All products are sold in the United States and in
foreign markets, except for weighing equipment and products manufactured by the
Load King Division which are sold primarily in the United States. The Company's
year-to-date orders booked to ship in the year 2001, are approximately $90
million, compared with $77 million in 2000.

Sources and Availability of Raw Materials.
-----------------------------------------
The principal component parts used in the Company's manufacturing of its road
building and heavy construction equipment that are supplied by others include
gas and diesel engines, hydraulic cylinders, tires, bearings, and raw steel. The
Company has not experienced any delays in deliveries of component parts or
received inferior component parts that have adversely affected its business. In
addition, the Company purchases many of these components from a variety of
outside suppliers and believes

                                       7
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================
that alternate sources of supply exist for substantially all items.

Importance of Patents. The Company has obtained patent protection on certain
---------------------
components and features incorporated into its products, which patents expire on
various dates. The Company's patents, together with licenses under patents owned
by others, are considered by the Company to be adequate for the conduct of its
business.

Seasonal Nature of the Business. The Company's business is seasonal in nature
-------------------------------
and precedes the months in which highway and road construction and restoration
generally occur. A large portion of the Company's orders for its products are
received in the months of November through July, with significant shipments
occurring in the months of March through August.

Practices Relating to Working Capital. The Company recognizes revenues related
-------------------------------------
to equipment sales when the equipment is shipped, and title has transferred to
the customer. Service revenues are recognized when services are rendered. In
certain cases, at the customer's written request, the Company enters into bill
and hold transactions whereby title transfers to the customer, but the equipment
does not ship until a specified later date. The Company recognizes revenue
associated with the sale of equipment under bill and hold arrangements when the
equipment is complete, ready to ship, and the other bill and hold criteria have
been met. Sales generally require a down payment or trade allowance and are due
within normal trade terms. The Company also sells certain products under
installment sales contracts. Inventories are carried in proportion to customer
requirements and fluctuate in relation to the seasonal nature of the Company's
business.

Dependence Upon a Single Customer or a Few Customers. The Company is not
----------------------------------------------------
dependent on any single customer or group of customers.

Competitive Conditions. The Company is one of the largest producers of road
----------------------
building and heavy construction equipment in the United States. The Company has
won substantial market recognition in the pavement maintenance and construction
industry by producing products emphasizing recycling and energy conservation.
The Company also has received market recognition for the quality and
productivity of its equipment and believes improvements can be made in after-
market services (i.e. parts availability and services). Numerous companies
produce equipment with similar features and the construction equipment market
remains very competitive. Competition is based primarily on price, product
quality, financing, productivity, quality of construction, service, and
availability of replacement parts.

Company-Sponsored Engineering and Product Development Activities. The Company
----------------------------------------------------------------
invests significant resources in the development, enhancement, refinement, and
production of new technologies for the road and heavy construction industry. The
Company patents new technologies relating to significant changes and development
of finished products. See discussion regarding current engineering and product
development activities under

                                       8
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================
principal product information and also see Management's Discussion and Analysis
of Financial Condition and Results of Operations (Item 7).

Environmental Laws and Regulations. The Company is subject to various
----------------------------------
environmental laws and regulations, none of which have a current or expected
future material financial impact on the Company.

Employees. The Company had 1,711 employees as of December 31, 2000.
---------

(d)  Financial Information About Geographic Areas
     --------------------------------------------

Information regarding revenues from external customers in different geographical
areas is as follows (dollars in thousands):

                                                2000       1999       1998
                                              --------   --------   --------
   United States                              $199,060    201,620    179,289

   North and Central America, other than the
       United States                            13,035      6,300     15,322

   South America                                 7,516      2,082        962

   Asia                                          3,185      7,102      8,173

   Australia                                       539        149      1,740

   Europe                                        4,202      1,009      2,055

   Other regions                                   711        401         32
                                              --------   --------   --------
       Total net revenues                     $228,248    218,663    207,573
                                              ========   ========   ========

Sales of Company products outside the United States are denominated in U.S.
dollars. International sales are generally secured by letters of credit from
financial institutions to reduce credit risk. Additional information about the
Company's operating segments is incorporated by reference from note 12 of the
Notes to Consolidated Financial Statements (Item 8).


Item 2.   Properties
          ----------

The Company has total plant, office, and warehouse areas of approximately
1,446,500 square feet, which are located in four states and three countries.

The largest manufacturing plant (utilized by the Company's Oklahoma City
operating segment), including the corporate headquarters and training facility,
has approximately 730,000 square feet and is located in Oklahoma City, Oklahoma.
The Company's aftermarket division leases approximately 87,000 square feet of
warehouse and office space in Oklahoma City. R. M. Barton Co., Inc., also
located in Oklahoma City, leases approximately 81,000 square feet of plant and
office space. Other principal U. S. manufacturing plants and offices owned by
the Company, aggregating approximately 304,000 square feet, are located in South
Dakota, Texas, and Iowa. Foreign manufacturing plants and offices owned by the
Company, aggregating

                                       9
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================
approximately 149,500 square feet, are located in the United Kingdom, Belgium
and Brazil. The Company also leases approximately 95,000 square feet of
manufacturing and office space located in Illinois. These facilities are
adequate for the current and expected near future operations of the Company.

In addition, the Company owns approximately 32 acres of land in Tennessee
currently being held for sale.


Item 3.   Legal Proceedings
          -----------------

Since 1996, the Company has been involved in litigation in the U.S. District
Court for the Western District of Oklahoma (the District Court) with Cedarapids,
Inc. (Cedarapids). The Company sued Cedarapids seeking a declaratory judgment
that a patent held by Cedarapids was invalid, or, in the alternative, that the
Company was not infringing the patent. Cedarapids subsequently filed a
counterclaim against the Company, alleging that the Company's Triple-Drum Mixer
infringes this same patent.

During February 2001, the District Court issued a ruling in this case. The court
ruled that one configuration of CMI's Triple-Drum mixer (used on approximately
100 Triple-Drums) infringed the patent held by Cedarapids. The court enjoined
the Company from selling this particular configuration of Triple-Drum. On March
20, 2001, the court awarded damages and prejudgment interest to Cedarapids of
approximately $11,700,000.

The Company plans to appeal the judgment to the United States Court of Appeals
for the Federal Circuit (the Federal Circuit). It is the opinion of management
and legal counsel that the Company will ultimately have no liability for
infringement in this case. The Company has a number of defenses which, in the
opinion of management and counsel, will result in the original judgment being
overturned upon appeal. Accordingly, no accrual has been established for this
judgment. In addition, the Company has capitalized approximately $1.7 million in
legal fees incurred in defense of the Triple Drum patent. These costs are being
amortized over the remaining life of the patent. In the event that the Federal
Circuit does not overturn the District Court's ruling, these costs will be
expensed in the period when the final decision is rendered.

Under the injunction issued by the court, the Company can continue selling
Triple-Drum Mixers with total air burners which were found not to infringe. The
costs associated with using the total air burners are not significant.
Therefore, management does not expect that the injunction will have a material
impact on future sales.

In September 1998, Cedarapids filed a separate suit against the Company in the
U.S. District Court for the Northern District of Iowa, alleging that the Company
has infringed on a second patent held by Cedarapids. Cedarapids is seeking
damages in excess of $10 million in this case. The Company, together


                                      10
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================
with its legal counsel, believes that this claim is without merit, and intends
to vigorously contest this lawsuit. Since the likelihood of an unfavorable
outcome in this case has not been determined to be probable by the Company and
its legal counsel, no liability has been recorded for this case.

There are numerous other claims and pending legal proceedings that generally
involve product liability and employment issues. These cases are, in the opinion
of management, ordinary matters incidental to the normal business conducted by
the Company. In the opinion of the Company's management after consultation with
outside legal counsel, the ultimate disposition of such other proceedings will
not have a material adverse effect on the Company's consolidated financial
position, liquidity or future results of operations.


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

No matters were submitted to a vote by the security holders during the fourth
quarter of 2000.


                                    PART II


Item 5.   Market for the Registrant's Common Stock and Related Shareholder
          ----------------------------------------------------------------
Matters
-------

Principal Market and Stock Prices:
---------------------------------

The Company's Class A Common Stock is traded on the New York Stock Exchange
under the symbol "CMI." The closing market price for the Company's Class A
Common Stock on March 30, 2001, was $1.60. The number of holders of record of
the Company's Class A Common Stock and Common Stock at March 30, 2001 was 1,411
and 32, respectively. The table below presents the high and low market prices
for the Company's Class A Common Stock for each three month period in 2000 and
1999. The following information was obtained from the monthly market statistics
report prepared by the New York Stock Exchange.

                                 2000                        1999
                       ------------------------    -------------------------
                        3/31  6/30  9/30  12/31     3/31  6/30   9/30  12/31
                       -----  ----  ----  -----    -----  ----  -----  -----
Class A Common Stock:
        High           $7.31  4.50  2.94   2.44    $7.88  9.69  12.38   8.69
        Low             4.38  2.63  2.00   1.50     6.25  6.63   6.56   6.25


Dividend Information:
--------------------

Due to the Company's current year net loss, the Board of Directors decided to
suspend the Company's semi-annual dividend until profitability improves. In
addition, as a result of the current defaults on indebtedness, the Company is
prohibited from paying dividends.

                                      11
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================

Recent Sales of Unregistered Securities:
---------------------------------------

On February 17, 2000, the Company issued 50,000 shares of Class A Common Stock
as part of the consideration paid for the capital stock of Metra Metaalwerken
B.V.B.A. This sale was exempt from registration under Section 4 (2) of the
Securities Act of 1933, no public offering being involved.


Item 6.   Selected Financial Data
          -----------------------

The following selected financial data should be read in conjunction with the
consolidated financial statements of the Company, including notes and
supplementary information appearing elsewhere herein.

Five-Year Selected Financial Data - (dollars in thousands, except per share
data)

<TABLE>
<CAPTION>
                                      2000      1999      1998      1997      1996
                                   ---------   -------   -------   -------   -------
<S>                                <C>         <C>       <C>       <C>       <C>
Net revenues (1), (4)              $ 228,248   218,663   207,573   154,014   138,788

Operating earnings (loss)            (11,354)    9,576    13,890     6,746    10,987

Net earnings (loss)                  (30,195)    2,489     6,217     3,165     5,461

Earnings (loss) per common share-
         diluted                       (1.39)      .11       .29       .15       .25

Total assets (2)                     192,900   215,475   189,711   144,428   113,454

Long-term debt and redeemable
    preferred stock (2 & 3)            3,449    94,497    77,049    49,274    34,103

Cash dividends per common share            -      .045       .04       .04       .01
</TABLE>

     (1)  Certain reclassifications have been made to prior year amounts in
          order to conform to current year presentation.

     (2)  Total assets and long-term debt for 2000 and 1999 reflect the impact
          of acquisitions of businesses (See Notes to Consolidated Financial
          Statements, Item 8). The acquisitions did not have a material impact
          on net revenues, operating earnings or net earnings in 2000 or 1999.

     (3)  Substantially all long-term debt in 2000 has been classified as
          current due to the defaults on the senior notes agreement, the
          revolving credit agreement, and the Oklahoma Development Finance
          Authority note. Total debt at December 31, 2000 was $113.5 million.

     (4)  Net revenues for 2000, 1999, and 1998 include shipping and handling
          revenues, as discussed in Note 1 to the financial statements. Net
          revenues for 1997 and 1996 do not include shipping and handling
          revenues, as it was not practical for the Company to determine such
          amounts during those years, as a result of the fact that the Company
          utilized different accounting software during those years.

                                      12
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================

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

Changes in Financial Condition, Liquidity, and Capital Resources
----------------------------------------------------------------

The Company amended its revolving line of credit agreement on February 3, 2000
to increase the Company's borrowing capacity from $70 million to $100 million.
Under the forbearance agreements discussed below, the line was later reduced to
$80 million on September 26, 2000, and further reduced to $77 million on
November 15, 2000. As of December 31, 2000, the Company had utilized
approximately $74 million of the revolving line of credit. Other long-term debts
have maturity dates through September 2010. However, the majority of the
Company's long-term debt is classified as current at December 31, 2000, based on
the defaults occurring on the majority of the Company's financing arrangements.

At December 31, 2000, and during most of 2000, the Company was not in compliance
with certain provisions of its senior notes agreement, its revolving credit
agreement, and its Oklahoma Development Finance Authority note. In addition, the
Company did not make a required payment on the senior notes in the third quarter
of 2000. Compliance with these provisions is determined each quarter based on
the results of the trailing four quarters ending on each determination date.
Noncompliance with these provisions permits the lenders to accelerate the
Company's debt under the senior notes agreement, the revolving credit agreement,
and the Oklahoma Development Finance Authority note. As a result, the Company
obtained forbearance agreements with the senior notes and revolving line of
credit lenders, on September 26, 2000, November 15, 2000, and January 15, 2001.
Among other things, the forbearance agreements prevent the Company's lenders
from exercising their acceleration rights, provided that the Company complies
with the terms and conditions of the forbearance agreements, discussed further
below. The latest forbearance agreements (dated January 15, 2001) extend the
forbearance period through June 30, 2001. The Company has the option to extend
the forbearance period through September 30, 2001 in order to facilitate a
refinancing of the Company's obligations to its lenders, provided that certain
terms and conditions are met, which are discussed further below. The Company
will also have the option to further extend the forbearance period to January
31, 2002, contingent upon payment of additional fees and meeting certain terms
and conditions, which are discussed further below.

The January 15, 2001 forbearance agreements provide for additional forbearance
periods as discussed above and divided the $74.0 million balance on the
revolving line of credit into three new debt facilities. This new debt structure
is as follows: $49.5 million for a revolving loan, $15.3 million for a term loan
and $9.2 million for an additional term loan. This debt accrues interest at
Prime plus 2.5% per annum and is paid monthly. The revolving line is an asset-
based loan in which the face commitment of $49.5 million is reduced to $41.5
million by December 2, 2001. In addition, the total principal amount outstanding
on the revolving line cannot exceed the "borrowing base" as defined in the
agreement. The revised agreements specify certain monthly principal reductions
on the term loans. The first term loan requires monthly principal

                                      13
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================
reductions of $182,476 from February 2001 through August 2001 increasing to
$681,897 from September 2001 through December 2001, and a balloon payment of
$11,323,110 in January 2002. The other term loan requires monthly principal
reductions of $1,223,364 from February 2001 through August 2001 and a final
payment of $637,386 in September 2001.

The senior note balance at December 31, 2000 was $28,822,430. Interest accrues
at Prime plus 2.5% and is payable monthly. Under the terms of the January 15,
2001 forbearance agreements, $8,514,136 in aggregate principal payments are
required to be paid from February 2001 through December 2001, with the remaining
balance of $20,308,294 due January 2002. The principal payment dates discussed
in this paragraph and the previous paragraph apply only if the Company has the
ability to extend the forbearance agreements through January 31, 2002. This
ability is contingent upon the Company meeting the scheduled payments and paying
all required fees, which total approximately $1.4 million. Should the Company
fail to make the required principal or fee payments, the lenders will have the
right to accelerate the indebtedness during 2001. As a result of this
uncertainty, the indebtedness covered under these forbearance agreements has
been classified as current. The Company's Oklahoma Development Finance Authority
indebtedness has also been classified as current, as a result of financial
covenant violations.

Under the revised agreements, the Company also granted security interests to its
lenders in substantially all of its assets including receivables, inventories,
patents, machinery and equipment, and real estate.

Management has taken steps in order to assist the Company in maintaining
compliance with the forbearance agreements. The Company conducted an extensive
operations review in May 2000. Based on this review it was determined that the
Company's overhead costs and cost of goods sold had risen beyond levels which
could be tolerated given the Company's industry, history and volume of business
the Company was achieving. Annualized cost cuts of approximately $12.4 million
have been made which were comprised of approximately $5.3 million in selling,
general and administrative expenses and approximately $7.1 million in
manufacturing overhead. These cost cuts were achieved by reductions in workforce
and discretionary spending.

The Company also plans to liquidate certain ancillary divisions, if necessary,
in order to maintain compliance with these agreements. In addition, management
plans to begin negotiating new financing agreements with new lenders, in order
to obtain more favorable terms for the Company. Management plans to have new
agreements in place before the end of 2001. However, as of the date of this
filing, no substantive negotiations have occurred.

The minimum principal payments required during 2001, which are discussed above,
total approximately $30 million and must be made in order to maintain compliance
with the forbearance agreements, and in order to have the right to exercise the
right to extend the forbearance period. Due to the Company's reliance on these
debt financing arrangements for working capital, compliance

                                      14
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================
with the forbearance agreements currently in place or additional forbearance by
its lenders is necessary for the Company to meet its obligations as they become
due and to avoid potentially material adverse effects on the Company's financial
position, results of operations, and liquidity.

Additionally, as discussed above, a judgment of approximately $11.7 million has
been entered against the Company in its long-standing patent infringement case
with Cedarapids. The Company plans to appeal this decision to the Federal
Circuit and it is the opinion of management and legal counsel that the Company
will ultimately have no liability to Cedarapids in this case. There can be no
assurance, however, that the Company will be successful in its appeal.
Furthermore, unless the Company posts a bond in favor of Cedarapids or obtains
an order prohibiting Cedarapids from executing on its judgment, Cedarapids could
attempt to collect the judgment during the pendency of the appeal. The impact of
this situation on the Company's liquidity is unknown, due to the court's
latitude in making a determination regarding the bond requirements.

The debt-to-total-capital percentage increased to 70.3% at December 31, 2000
compared to 55.9% at December 31, 1999. This increase is primarily the result of
funding business acquisitions during 2000, as well as the reduced equity
resulting from the Company's net loss of $30.2 million in 2000.

Other Changes in Financial Condition, Liquidity, and Capital Resources
----------------------------------------------------------------------

The Company's current ratio at December 31, 2000 was 1.05:1 compared to 4.06:1
at December 31, 1999. Working capital decreased to approximately $6.5 million at
December 31, 2000 from $131.3 million at December 31, 1999. The classification
of the indebtedness currently in default with current liabilities was the
primary cause for the change in the current ratio and working capital.

Cash provided by operating activities was $0.9 million for the year ended
December 31, 2000, compared to cash used in operating activities of $12.0
million for the year ended December 31, 1999. This decrease in cash used in
operating activities is primarily attributable to the decreased investment in
inventories. Financing activities for the year ended December 31, 2000 provided
$8.9 million, which included $9.0 million of net borrowings from the Company's
revolving line of credit. These additional borrowings were used primarily to
fund the business acquisitions during 2000.

Capital expenditures and acquisitions for 2000 were $8.9 million, an increase of
$1.8 million from the prior year. Capital expenditures consisted primarily of
computer software and hardware and equipment for use in manufacturing
facilities. Capital expenditures for 2001 are budgeted at $5.2 million. Capital
expenditures are financed using internally generated funds.

Due to the Company's current year net loss, the Board of Directors decided to
suspend the Company's semi-annual dividend until profitability improves. In
addition, as a result of the current defaults on indebtedness, the Company is
prohibited from paying dividends.

                                      15
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================

Results of Operations
---------------------

Years ended December 31, 2000 and 1999. Revenues increased 4.4% to $228.2
million for the year ended December 31, 2000 from $218.7 million for the year
ended December 31, 1999. The revenue increase for the year ended December 31,
2000 was primarily generated through the acquisitions of R. M. Barton, Drion and
Cifali. Sales in the asphalt and Roto-Mill product lines increased, but were
offset by decreases in the reclaimer/stabilizer, compactor and paving and
trimming product lines.

The Company's international sales were $29.2 million in 2000 compared to $17.0
million in 1999, resulting in an increase of approximately 72.3% from 1999. The
Company's domestic sales were $199.1 million in 2000 and $201.6 million in 1999,
a decrease of approximately 1.4%. International sales were positively impacted
by $7.0 million generated from the Drion and Cifali acquisitions. International
revenues as a percentage of the Company's total revenues were 12.9% in 2000 and
7.8% in 1999.

Gross margin, as a percentage of net revenues, was 15.9% for the year ended
December 31, 2000, down from 25.3% for the year ended December 31, 1999. The
decline in margins was due primarily to inventory write-downs of approximately
$6.7 million made in the second quarter of 2000. Margins were further adversely
impacted by the change in product mix (lower percentage of mobile equipment
revenues which experience higher margins).

The Company's inventory build up over the recent past has impacted the Company's
financing (the Company has maintained higher debt levels to finance the
inventory) and has increased the risk of possible obsolescence. Cash flow is
important to the Company at this time, in light of the current year operating
losses, its high level of bank debt and the forbearance agreements on its debt
in default. (See Changes in Financial Condition, Liquidity, and Capital
Resources.) As such, the Company's plan is to turn much of this inventory to
cash. Management is continuing a widespread investigation to dispose of
inventory items which are no longer used in the manufacturing process. This has
aided the Company in reducing inventory levels during 2000, and management
expects this process to continue throughout 2001. As a result of these plans,
the Company reevaluated its inventory reserves during 2000 and established
market value estimates based on transactions in the short term, rather than the
amounts which the Company could realize if it held these inventories for
extended periods. Adjustments to the valuation reserves which were made in the
second quarter of 2000 totaled approximately $6.7 million.

Marketing and administrative expenses increased $1.4 million in 2000. As a
percentage of net revenues, marketing and administrative expenses were 17.0% in
2000 compared to 17.1% in 1999. The increase in marketing and administrative
expenses over the prior year is attributable to higher legal fees, consulting
fees, and the additional marketing and administrative expenses of R. M. Barton
Co., Drion, Metra and Cifali. The legal fees are associated with the litigation
with Cedarapids, Inc. The consulting fees are

                                      16
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================
primarily associated with the George Group, a consulting firm previously used by
the Company to assist with business process reengineering. The contract with the
George Group was terminated in May 2000. Due to cost cutting initiatives taken
in the second half of 2000 management is confident marketing and administrative
expenses will be lower in 2001.

Engineering and product development expenses increased $636,000 in 2000. As a
percentage of net revenues, engineering and product development expenses were
3.9% percent in 2000 compared to 3.8% in 1999. Engineering and product
development expenses increased due to new development and enhancements in the
Company's reclaiming and stabilizing machines, Roto-Mills and grinding machines.
In addition, costs increased due to design changes and enhancements to the
Series 3000 and 6000 concrete pavers.

Interest expense increased $5.7 million from the prior year. The Company's
effective interest rate was approximately 10.32% in 2000 compared to
approximately 7.29% in 1999. The increase in interest expense was due to
additional borrowings on the Company's revolving line of credit primarily for
the increased working capital requirements required during the first half of the
year and recent business acquisitions, as well as increases in interest rates.

Income tax expense was $8.1 million in 2000 compared to expense of $1.5 million
in 1999. Due to the Company's operating loss for the year 2000, a 100% valuation
allowance has been established against the $16.3 million net deferred tax asset.
This caused the Company's tax expense to significantly increase. The Company's
effective tax rate for 1999 was 37.8%. The effective rate of 37.8% differs from
the statutory federal rate of 35% primarily due to state income taxes.

The net loss was $30.2 million in 2000 compared to net earnings of $2.5 million
in 1999, or $1.39 loss per share for 2000 compared to net earnings of 11 cents
per diluted share for 1999.

Results of Operations
---------------------

Years ended December 31, 1999 and 1998. Revenues increased 5.3% to $218.7
million for the year ended December 31, 1999 from $207.6 million for the year
ended December 31, 1998. The revenue increase for the year ended December 31,
1999 was primarily generated through asphalt plants and concrete paving and
trimming products. The reclaimers/stabilizers and soil remediation lines
increased, but were offset by decreases in the compactor and grinder lines.
Revenues were also negatively impacted by the strike which occurred at the
Company's Load King Division in the first half of 1999.

The Company's international sales were $17.0 million in 1999 compared to $28.3
million in 1998, resulting in a decrease of approximately 40% from 1998. The
Company's domestic sales were $201.7 million in 1999 and $179.3 million in 1998,
an increase of approximately 12.4%. Excluding the impact of the decrease in
Canadian sales, foreign revenues declined 9.4%. The road

                                      17
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================
building and reconstruction program declined significantly in Canada due to an
election year spending freeze and a generally depressed economy across the
country. International revenues as a percentage of the Company's total revenues
were 7.8% in 1999 and 13.6% in 1998.

Gross margin, as a percentage of net revenues, was 25.3% for the year ended
December 31, 1999, down from 25.8% for the year ended December 31, 1998.

Marketing and administrative expenses increased $6.9 million in 1999. As a
percentage of net revenues, marketing and administrative expenses were 17.1% in
1999 compared to 14.7% in 1998. The primary factors contributing to the increase
in marketing and administrative expenses were: (1) costs of approximately
$350,000 incurred in connection with the Company's restructuring of its Oklahoma
City manufacturing operations, (2) costs of $785,000 related to the Company's
participation in the trienniel CONEXPO-CONAGG tradeshow in Las Vegas, (3)
outside consulting fees of $794,000 to evaluate the Company's manufacturing
processes, production efficiencies, and sales and marketing operations, with the
goal of overhauling the Company's overall business structure, (4) $358,000 for
executive moving and relocation costs, (5) settlement of two long-standing
litigation matters, (6) the termination of a potential acquisition for which the
Company had incurred due diligence costs of approximately $368,000, and (7)
overall higher business volume.

Engineering and product development expenses increased $477,000 in 1999. As a
percentage of net revenues, engineering and product development expenses were
3.8% percent in 1999 compared to 3.8% in 1998.

Product line relocation costs for the year ended December 31, 1998 were $1.4
million. These costs were incurred by the Company to move the landfill and
embankment compactor and material reduction grinder product lines from Rexworks,
Inc. in Milwaukee, Wisconsin to our Oklahoma City facility in the first and
second quarters of 1998.

Interest expense increased $1.6 million from the prior year. The Company's
effective interest rate was approximately 7.29% in 1999 compared to
approximately 7.87% in 1998. The increase in interest expense was due to
additional borrowings on the Company's revolving line of credit primarily for
capital expenditures and increased working capital requirements, primarily
inventories, for the year ended December 31, 1999.

Income tax expense was $1.5 million in 1999 compared to $3.6 million in 1998.
The Company's effective tax rates in 1999 and 1998 were 37.8% and 36.9%,
respectively. Excluding losses of the Company's foreign subsidiaries, the
Company's effective tax rate was 36.5% in both 1999 and 1998. The effective rate
of 36.5% differs from the statutory federal rate of 35% primarily due to state
income taxes.

Net earnings were $2.5 million in 1999 compared to $6.2 million in 1998, or 11
cents per diluted share for 1999 compared to 29 cents per diluted share for
1998. Net earnings were negatively impacted due to $14.3 million in

                                      18
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================
asphalt plant orders at December 31, 1999 that could not be recognized as
revenues in 1999 because the equipment had not left the Company's premises, was
not complete and ready-to-ship, or other revenue recognition criteria had not
been met. The Company recorded these orders as sales in the first half of 2000.

Impact of Recently Issued Accounting Standards Not Yet Adopted
--------------------------------------------------------------
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 is effective for fiscal years
beginning after June 15, 2000. SFAS No. 133 establishes standards for accounting
and reporting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It requires
that an entity recognizes all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value. The
accounting for changes in fair value of a derivative depends on the intended use
of the derivative and the resulting designation. Adoption of SFAS No. 133 as of
January 1, 2001 did not materially impact the Company.

Federal Highway Legislation
---------------------------

The Company has assessed the longer-range impact of the $217 billion national
highway bill (TEA-21) which currently has guaranteed appropriations over the
next three years. The Company believes that its significant investment in
capital improvements and plant modernization efforts have the Company positioned
to take advantage of the anticipated increased business as a result of this
legislation.

Forward-Looking Statements
--------------------------

Statements of the Company's or management's intentions, beliefs, anticipations,
expectations and similar expressions concerning future events contained in this
report constitute "forward-looking statements," as that term is defined in the
U.S. federal securities laws. You can identify these statements by forward-
looking words such as "may," "will," "expect," "anticipate," "believe,"
"estimate," and "continue" or similar words. Although the Company believes that
the expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
Important factors that could cause the Company's actual performance and
operating results to differ materially from the Company's expectations include,
among others, levels of funding for highway construction and rehabilitation; the
outcome of the Company's patent infringement lawsuits with Cedarapids, Inc.; the
Company's ability to comply with its forbearance agreements with its lenders and
extend or replace existing financing; adverse weather conditions; the level of
protection provided by patents and other proprietary rights issued, licensed, or
sublicensed to the Company; the impact of various types of governmental
regulation, domestic and foreign; competitive factors; the Company's ability

                                      19
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================
to successfully integrate and manage profitably the businesses acquired in 2000;
the overall economic environment, domestically and overseas; and whether the
investments and cost-cutting initiatives implemented by the Company in 2000 are
successful.

All subsequent written and oral forward-looking statements attributable to the
Company, or persons acting on its behalf, are expressly qualified in their
entirety by the cautionary statements set forth above. The Company assumes no
duty to update or revise its forward-looking statements based on changes in
internal estimates or expectations or otherwise, except as required by law.

Clean Air Act
-------------

In 1990, the United States Congress passed certain amendments to the National
Clean Air Act. The 1990 amendments have required certain products manufactured
by the Company to be equipped with pollution control devices. Additional
products manufactured by the Company include pollution control devices. The
Company believes it continues to meet the requirements of the Clean Air Act.

Inflation
---------

The Company did not experience any significant inflationary impact on its costs
of materials.

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

The primary objective of the following information is to provide forward-looking
quantitative and qualitative information about the Company's potential exposure
to market risks. The term "market risk" for the Company refers to the risk of
increased interest expense and decreased earnings arising from adverse changes
in interest rates. The disclosures are not meant to be precise indicators of
expected future decreases in earnings, but rather indicators of reasonably
possible decreases in earnings. This forward-looking information provides an
indication of how the Company views and manages its ongoing market risk
exposures.

At December 31, 2000, the Company had debt outstanding of $113.5 million. Of
this amount, substantially all of the Company's borrowings bear interest at
variable rates, which were approximately 11.5% at December 31, 2000. The Company
had $48.6 million more variable rate borrowings at December 31, 2000 than at
December 31, 1999, and the average rate at which the variable rate borrowings
accrue interest was approximately 375 basis points (3.75%) higher at the end of
2000 compared to 1999. A 10% increase in short-term interest rates on the
variable rate debt outstanding at the end of 2000 would approximate 115 basis
points. Such an increase in interest rates would increase the Company's annual
interest expense by approximately $1,222,000 assuming December 31, 2000 borrowed
amounts remain outstanding.

                                      20
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================

The above sensitivity analysis for interest rate risk excludes accounts
receivable, accounts payable and accrued liabilities because of the short-term
maturity of such instruments. The analysis does not consider the effect this
movement may have on other variables including changes in revenue volumes that
could be indirectly attributed to changes in interest rates. The actions that
management would take in response to such a change are also not considered. If
it were possible to quantify this impact, the results could well be different
than the sensitivity effects shown above.

                                      21
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



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

--------------------------------------------------------------------------------

                                                                           PAGE

Independent Auditors' Report..............................................   23

Consolidated Financial Statements
---------------------------------

     Consolidated Statements of Operations
          Years ended December 31, 2000, 1999, and 1998...................   24

     Consolidated Balance Sheets, December 31, 2000 and 1999..............   25

     Consolidated Statements of Changes in Common Stock and Other Capital,
          Years ended December 31, 2000, 1999, and 1998...................   27

     Consolidated Statements of Cash Flows,
          Years ended December 31, 2000, 1999, and 1998...................   28

     Notes to Consolidated Financial Statements,
          December 31, 2000, 1999, and 1998...............................   29

                                      22
<PAGE>

                        INDEPENDENT AUDITORS' REPORT



The Board of Directors and Stockholders
CMI Corporation:


We have audited the consolidated financial statements of CMI Corporation and
subsidiaries (the Company) as listed in the accompanying index. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of CMI Corporation and
subsidiaries as of December 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 2000, in conformity with accounting principles generally
accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 3 to the
consolidated financial statements, at December 31, 2000, the Company failed to
comply with certain covenants in its financing arrangements and has entered into
forbearance agreements with its primary lending institutions which require
significant principal payments during 2001, in order to prevent the lending
institutions from exercising their right to accelerate the indebtedness. The
status of the Company's financing arrangements, as described above, and the
Company's significant loss in 2000 raise substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 3. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.


                                                       KPMG LLP

Oklahoma City, Oklahoma
February 23, 2001, except as to Note 14,
which is as of March 20, 2001

                                      23
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
                     Consolidated Statements of Operations

                 Years ended December 31, 2000, 1999, and 1998
                     (in thousands, except per share data)

===============================================================================

                                                  2000       1999        1998
                                                --------   --------    --------
Net revenues                                    $228,248    218,663     207,573

Costs and expenses:
   Cost of goods sold                            191,879    163,402     154,003
   Marketing and administrative                   38,794     37,392      30,445
   Engineering and product development             8,929      8,293       7,816
   Product line relocation costs                       -          -       1,419
                                                --------   --------    --------
                                                 239,602    209,087     193,683
                                                --------   --------    --------
   Operating earnings (loss)                     (11,354)     9,576      13,890
                                                --------   --------    --------
Other expense (income):
   Interest expense                               12,248      6,573       5,000
   Interest income                                (1,359)      (980)       (934)
   Minority interest                                  (5)         -           -
   Other, net                                       (117)       (18)        (35)
                                                --------   --------    --------
Earnings (loss) before income taxes              (22,121)     4,001       9,859

Income tax expense                                 8,074      1,512       3,642
                                                --------   --------    --------
Net earnings (loss)                             $(30,195)     2,489       6,217
                                                ========   ========    ========
Share data:
   Weighted average outstanding common
    shares:
       Basic                                      21,683     21,566      21,523

       Diluted                                    21,683     21,805      21,660

   Net earnings (loss) per average outstanding
    common share:
       Basic                                      $(1.39)       .12         .29
                                                ========   ========    ========
       Diluted                                    $(1.39)       .11         .29
                                                ========   ========    ========

See notes to consolidated financial statements.

                                      24
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
                          Consolidated Balance Sheets

                          December 31, 2000 and 1999
                            (dollars in thousands)

================================================================================

                    Assets                                 2000           1999
                                                         --------       --------
Current assets:
   Cash and cash equivalents                             $ 13,637         12,681
   Receivables less allowance for doubtful accounts
    of $629 and $645 at December 31, 2000 and 1999,
    respectively                                           27,972         31,257
   Inventories:
       Finished equipment                                  42,382         43,124
       Work-in-process                                     16,130         20,212
       Raw materials and parts                             46,683         58,566
                                                         --------       --------
           Total inventories                              105,195        121,902

   Other current assets                                       696            892
   Deferred tax asset                                           -          7,400
                                                         --------       --------
           Total current assets                           147,500        174,132

Property, plant, and equipment:
   Land                                                     2,684          2,109
   Buildings                                               20,708         18,600
   Machinery and equipment                                 53,628         48,204
   Other                                                    1,059          1,070
                                                         --------       --------
                                                           78,079         69,983
   Less accumulated depreciation and amortization          45,153         38,815
                                                         --------       --------
           Net property, plant, and equipment              32,926         31,168

Long-term receivables                                         964            642

Marketable securities, at fair value                        1,465          1,417

Deferred tax asset                                              -            600

Other assets, principally patents and goodwill             10,045          7,516
                                                         --------       --------
           Total assets                                  $192,900        215,475
                                                         ========       ========

See notes to consolidated financial statements.

                                      25
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
                    Consolidated Balance Sheets, Continued

                          December 31, 2000 and 1999
                            (dollars in thousands)

================================================================================

Liabilities, Common Stock and Other Capital
-------------------------------------------
                                                               2000       1999
                                                             --------   -------
Current liabilities:
   Current maturities of long-term debt and
    long-term debt in default                                $110,062     4,551
   Accounts payable                                            12,342    22,002
   Accrued liabilities                                         18,608    16,316
                                                             --------   -------
           Total current liabilities                          141,012    42,869
                                                             --------   -------
Long-term debt                                                  3,449    94,497

Minority interest                                                 425         -

Common stock and other capital:
   Common stock:
       Par value $.10; shares issued and outstanding
        - 602 at December 31, 2000 and 1999                         -         -
   Class A common stock:
       Par value $.10; shares issued and outstanding
        - 21,690,886 and 21,640,883 at December 31, 2000
        and 1999, respectively                                  2,169     2,164
   Additional paid-in capital                                  50,905    50,610
   Accumulated other comprehensive loss                          (397)     (197)
   Retained earnings (accumulated deficit)                     (4,663)   25,532
                                                             --------   -------
                                                               48,014    78,109

Commitments and contingencies (notes 13 and 14)
                                                             --------   -------
          Total liabilities, common stock and
           other capital                                     $192,900   215,475
                                                             ========   =======


See notes to consolidated financial statements.

                                      26
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
     Consolidated Statements of Changes in Common Stock and Other Capital

                 Years ended December 31, 2000, 1999, and 1998
                                (in thousands)
================================================================================
<TABLE>
<CAPTION>

                                                                                  Accumulated     Retained
                                   Class A Common Stock   Additional                 Other        Earnings
                                   --------------------     Paid-in   Treasury   Comprehensive    (Accum.
                                    Shares      Amount      Capital    Stock         Loss         Deficit)    Total
                                   --------    --------   ----------  --------   -------------    --------   -------
<S>                                <C>         <C>        <C>         <C>        <C>              <C>        <C>
Balance December 31, 1997            21,506    $  2,151   $   49,816  $    (32)  $           -    $ 18,658   $70,593
Net earnings                              -           -            -         -               -       6,217     6,217
Retirement of treasury stock             (6)          -          (32)       32               -           -         -
Exercise of stock options                49           4          273         -               -           -       277
Dividends paid, common
  stock ($.04 per share)                  -           -            -         -               -        (861)     (861)
                                   --------    --------   ----------  --------   -------------    --------   -------
Balance December 31, 1998            21,549    $  2,155   $   50,057  $      -   $           -    $ 24,014   $76,226
Net earnings                              -           -            -         -               -       2,489     2,489
Unrealized loss on available
  for sale securities, net
  of tax benefit of $113                  -           -            -         -            (197)          -      (197)
                                                                                                             -------
Comprehensive income                                                                                         $ 2,292
Retirement of voting common stock         -           -           (1)        -               -           -        (1)
Exercise of stock options                35           3          160         -               -           -       163
Common stock issued                      57           6          394         -               -           -       400
Dividends paid, common stock
  ($.045 per share)                       -           -            -         -               -        (971)     (971)
                                   --------    --------   ----------  --------   -------------    --------   -------
Balance December 31, 1999            21,641    $  2,164   $   50,610  $      -   $        (197)   $ 25,532   $78,109
Net loss                                  -           -            -         -               -     (30,195)  (30,195)
Unrealized loss on available
  for sale securities                     -           -            -         -             (60)          -       (60)
Foreign currency
  translation adjustments                 -           -            -         -            (140)          -      (140)
                                                                                                             -------
Comprehensive loss                                                                                           (30,395)
Common stock issued                      50           5          295         -               -           -       300
                                   --------    --------   ----------  --------   -------------    --------   -------
Balance December 31, 2000            21,691    $  2,169   $   50,905  $      -   $        (397)   $ (4,663)  $48,014
                                   ========    ========   ==========  ========   =============    ========   =======
</TABLE>

See notes to consolidated financial statements.

                                      27
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
                     Consolidated Statements of Cash Flows

                 Years ended December 31, 2000, 1999, and 1998
                            (dollars in thousands)

================================================================================
<TABLE>
<CAPTION>
                                                              2000      1999      1998
                                                            --------  --------  --------
<S>                                                         <C>       <C>       <C>
Operating activities:
   Net earnings (loss)                                      $(30,195)    2,489     6,217
   Adjustments to reconcile net earnings (loss) to net
     cash provided by (used in) operating activities:
       Depreciation                                            4,622     3,995     2,944
       Amortization                                              963       326       300
       Gain on sale of assets                                   (110)      (18)      (36)
       Deferred tax expense                                    8,000     1,213     3,100
       Minority interest in loss of                               (5)        -         -
         consolidated subsidiary
       Change in assets and liabilities net of effects
         of acquisitions of businesses:
           Receivables                                         7,388    (3,008)   (1,096)
           Inventories                                        23,856   (18,799)  (34,220)
           Other current assets                                  365        31      (344)
           Accounts payable                                  (10,901)      286     6,896
           Accrued liabilities                                (2,689)    1,563     4,970
           Long-term receivables                                (312)     (286)    2,153
           Other non-current assets                              (97)      209     1,348
                                                            --------  --------  --------
               Net cash and cash equivalents provided by
                 (used in) operating activities                  885   (11,999)   (7,768)
                                                            --------  --------  --------
Investing activities:
  Proceeds from sale of assets                                   132       119       305
  Capital expenditures                                        (3,473)   (5,717)  (13,309)
  Purchases of marketable securities                             (48)     (122)     (107)
  Cash paid for acquisitions of businesses                    (5,434)   (1,405)        -
  Cash paid to defend patent                                       -    (1,072)        -
                                                            --------  --------  --------
               Net cash and cash equivalents used in
                 investing activities                         (8,823)   (8,197)  (13,111)
                                                            --------  --------  --------
Financing activities:
  Payments on notes payable                                   (1,512)     (269)     (216)
  Borrowings on notes payable                                  1,428         -         -
  Net borrowings on revolving line of credit                   8,978    22,000    28,000
  Proceeds from stock options exercised                            -       163       277
  Payment of common stock dividends                                -      (971)     (861)
                                                            --------  --------  --------
               Net cash and cash equivalents provided by
                 financing activities                          8,894    20,923    27,200
                                                            --------  --------  --------
Increase in cash and cash equivalents                            956       727     6,321

Cash and cash equivalents at beginning of year                12,681    11,954     5,633
                                                            --------  --------  --------
Cash and cash equivalents at end of year                    $ 13,637    12,681    11,954
                                                            ========  ========  ========
See notes to consolidated financial statements.
</TABLE>
                                      28
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements

                       December 31, 2000, 1999, and 1998

================================================================================

(1)  Description of Business and Summary of Significant Accounting Policies
     ----------------------------------------------------------------------

     Description of Business
     -----------------------
     Since 1964, CMI Corporation and its subsidiaries (the "Company") have
     manufactured and marketed equipment for the road and heavy construction
     industry. The Company's construction equipment has a wide variety of uses
     in the maintenance, construction, paving, and resurfacing of highways, city
     streets, parking lots, airport runways, tunnels, and bridges. The Company's
     raw materials are readily available, and the Company is not dependent on a
     single supplier or only a few suppliers.

     Seasonal Nature of the Business
     -------------------------------
     The Company's business is seasonal in nature and precedes the months in
     which highway and road construction and restoration generally occur. A
     large portion of the Company's orders for its products are received in the
     months of November through July, with significant shipments occurring in
     the months of March through August.

     Principles of Consolidation
     ---------------------------
     The consolidated financial statements include the accounts of CMI
     Corporation and its subsidiaries. All significant intercompany balances and
     transactions have been eliminated in consolidation.

     Reclassifications
     -----------------
     Certain reclassifications have been made to the prior periods to conform to
     the 2000 presentation. The primary reclassification relates to freight
     billed to customers. During 2000, the Company adopted the provisions of
     EITF 00-10 "Accounting for Shipping and Handling Fees and Costs." This EITF
     requires that all amounts billed to a customer in a sale transaction
     related to shipping and handling be classified as revenues. Accordingly,
     net revenues include approximately $4.1 million, $4.1 million, and $1.9
     million related to shipping and handling charges billed to customers during
     2000, 1999, and 1998, respectively. The related costs associated with
     shipping and handling are included as a component of cost of goods sold.

     Cash and Cash Equivalents
     -------------------------
     For purposes of the statements of cash flows, the Company considers cash
     instruments with original maturities of less than three months to be cash
     equivalents.

     Business and Credit Concentrations
     ----------------------------------
     The Company's customers are not concentrated in any specific geographic
     region, but are concentrated in the road and heavy construction business.
     No single customer accounted for a significant amount of the Company's
     sales, and there were no significant accounts receivables from a single
     customer. The Company reviews a customer's credit history before extending
     credit. The Company establishes an allowance for doubtful accounts based
     upon factors surrounding the credit risk of specific customers, historical
     trends, and other information. To reduce credit risk, the Company generally
     requires a down payment on large equipment orders, and international sales
     are generally secured by letters of credit from commercial banks.


                                      29
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================

     The Company had short-term notes receivable and sales-type lease payments
     due from customers included in accounts receivable of approximately
     $5,508,000 and $3,440,000 at December 31, 2000 and 1999, respectively.

     Inventories
     -----------
     Inventories are stated at the lower of cost or market, with cost being
     determined using the first-in, first-out (FIFO) method. Costs included in
     inventories consist of materials, labor, and manufacturing overhead which
     are related to the purchase and production of inventories.

     Property, Plant, and Equipment
     ------------------------------
     Property, plant, and equipment, stated at cost or the present value of
     minimum lease payments for assets under capital leases, are depreciated
     over the estimated useful lives of the assets using the straight-line
     method. Estimated useful lives for buildings, machinery and equipment, and
     other property, plant, and equipment range from 15 to 40, 3 to 15, and 2 to
     10 years, respectively. Significant improvements and betterments are
     capitalized if they extend the useful life of the asset. Routine repairs
     and maintenance are expensed when incurred.

     The Company reviews long-lived assets for impairment whenever events or
     changes in circumstances indicate that the carrying amount of an asset may
     not be recoverable. Recoverability of assets to be held and used is
     measured by a comparison of the carrying amount of an asset to future net
     cash flows expected to be generated by the asset. If such assets are
     considered to be impaired, the impairment recognized is measured by the
     amount by which the carrying amount of the assets exceeds the fair value of
     the assets. Assets to be disposed of are reported at the lower of the
     carrying amount or fair value less costs to sell.

     Other Assets
     ------------
     Other assets include patents and other intangible assets. Patent costs are
     being amortized on a straight-line basis over the life of the related
     patent. Also included in other assets is the excess of acquisition costs
     over the fair value of net assets acquired (goodwill). Goodwill is being
     amortized on a straight-line basis over fifteen years. Accumulated
     amortization for goodwill was $758,000 and $505,000 at December 31, 2000
     and 1999, respectively. The Company assesses the recoverability of goodwill
     by determining whether the amortization of the goodwill balance over its
     remaining life can be recovered through undiscounted future operating cash
     flows. The amount of goodwill impairment, if any, is measured based on
     projected discounted future operating cash flows using a discount rate
     reflecting the Company's average borrowing rate.

     Revenue Recognition
     -------------------
     Substantially all of the Company's sales transactions incorporate two
     separate elements - sale of equipment and sale of service. These sales
     transactions constitute multiple element arrangements. Revenue is
     recognized for the sale of equipment when the equipment is shipped and

                                      30
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
     title has transferred to the customer. Revenues associated with the service
     element of the arrangement are recognized when the underlying customer site
     visits are completed. Revenues in multiple element arrangements are
     allocated to each element based upon the relative fair values of each
     element, based upon published list prices. Service revenue is insignificant
     for all periods presented.

     In certain cases, at the customer's written request, the Company enters
     into bill and hold transactions whereby title transfers to the customer,
     but the equipment does not ship until a specified later date. The Company
     recognizes revenue associated with the sale of equipment bill and hold
     arrangements when the equipment is complete, ready to ship, and hold
     criteria have been met.

     In the fourth quarter of 2000, effective as of January 1, 2000, the Company
     adopted Staff Accounting Bulletin 101, "Revenue Recognition in Financial
     Statements" (SAB 101). The only modification to the Company's revenue
     recognition practices as a result of the adoption of SAB 101 relates to the
     bifurcation of the service element from all equipment sales transactions.
     The adoption of SAB 101 did not have a significant impact upon adoption at
     January 1, 2000, any quarterly reporting period during 2000, or at December
     31, 2000.

     Income Taxes
     ------------
     Income taxes are accounted for using the asset and liability method under
     which deferred income taxes are recognized for the tax consequences of
     "temporary differences" by applying enacted statutory tax rates applicable
     to future years to differences between the financial statement carrying
     amounts and the tax bases of existing assets and liabilities and operating
     losses and tax credit carry forwards. The effect on deferred taxes for a
     change in tax rates is recognized in income in the period that includes the
     enactment date. Management provides valuation allowances against the
     deferred tax asset for amounts which are not considered "more likely than
     not" to be realized.

     Stock Options
     -------------
     Statement of Financial Accounting Standards No. 123, "Accounting for Stock-
     Based Compensation" (SFAS No. 123), encourages, but does not require,
     companies to record compensation cost for stock-based employee compensation
     plans at fair value. The Company has chosen to continue to account for
     stock-based compensation using the intrinsic value method prescribed in
     Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
     Employees" (APB No. 25), and related Interpretations. Accordingly, the
     Company records expense in an amount equal to the excess of the quoted
     market price on the grant date over the option price. Such expense is
     recognized at the grant date for options fully vested. For options with a
     vesting period, the expense is recognized over the vesting period. The
     Company has not recognized any stock-based compensation expense for the
     periods ended December 31, 2000, 1999 and 1998.


                                      31
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================

     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.

     Fair Value of Financial Instruments
     -----------------------------------
     The carrying amounts of cash and cash equivalents, receivables, accounts
     payable, and accrued liabilities approximate fair value because of the
     short maturity of these instruments. The carrying amounts of long-term
     receivables approximates fair value as the effective rates for these
     instruments are comparable to market rates at year-end. The carrying amount
     of investments approximates fair market value. The carrying amount of debt
     was approximately $113.5 million and $99.0 million at December 31, 2000 and
     1999, respectively. The carrying amount of debt at December 31, 2000
     approximates fair value, as a result of the variable interest rates paid on
     the majority of the Company's borrowings. The fair value of long-term debt
     at December 31, 1999 was approximately $98.0 million. The estimated fair
     value of debt is based on borrowing rates currently available with similar
     terms and average maturities.

     Marketable Securities
     ---------------------
     The Company classifies its marketable securities as available for sale. The
     securities consist of equity securities, which are stated at fair value,
     with net unrealized gains or losses on the securities recorded as
     accumulated other comprehensive income (loss) in shareholders' equity.
     Realized gains and losses are included in earnings and are derived using
     the specific identification method for determining the cost of the
     securities. There were no realized gains in 2000, 1999 or 1998.

     Earnings Per Common Share
     -------------------------
     Basic earnings (loss) per share is computed by dividing net earnings (loss)
     applicable to common stock by the weighted average number of common shares
     outstanding for the period. Diluted earnings per share reflects the
     potential dilution that could occur if the Company's outstanding stock
     options were exercised (calculated using the treasury stock method).

     The following table reconciles weighted average common shares outstanding
     used in the calculation of basic earnings (loss) per common share to the
     number of shares used in the calculation of diluted earnings (loss) per
     share for the years 2000, 1999 and 1998 (shares in thousands):

                                                       Year ended December 31
                                                       ----------------------
                                                        2000    1999    1998
                                                       ------  ------  ------
     Weighted average number of common
       shares outstanding - basic                      21,683  21,566  21,523

     Dilutive effect of potential common shares
       issuable upon exercise of employee
       stock options                                        -     239     137
                                                       ------  ------  ------
     Weighted average number of common
       shares outstanding - diluted                    21,683  21,805  21,660
                                                       ======  ======  ======

                                      32
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
     For 2000, all stock options are excluded from consideration of diluted loss
     per share because of the Company's net loss. See Note 5.

     Comprehensive Income
     --------------------
     SFAS No. 130 "Reporting Comprehensive Income," establishes standards for
     reporting and display of comprehensive income and its components in
     financial statements. It requires that all items that are required to be
     recognized under accounting standards as components of comprehensive income
     be reported in a financial statement that is displayed with the same
     prominence as other financial statements. Comprehensive income consists of
     net earnings, the net unrealized gains or losses on available for sale
     marketable securities and foreign currency translation adjustments and is
     presented in the consolidated statement of changes in common stock and
     other capital.

     Impact of Recently Issued Accounting Standards Not Yet Adopted
     --------------------------------------------------------------
     In June 1998, the Financial Accounting Standards Board issued Statement of
     Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
     Instruments and Hedging Activities." SFAS No. 133 is effective for fiscal
     years beginning after June 15, 2000. SFAS No. 133 establishes standards for
     accounting and reporting for derivative instruments, including certain
     derivative instruments embedded in other contracts, and for hedging
     activities. It requires that an entity recognize all derivatives as either
     assets or liabilities in the statement of financial position and measure
     those instruments at fair value. The accounting for changes in fair value
     of a derivative depends on the intended use of the derivative and the
     resulting designation. Adoption of SFAS No. 133 as of January 1, 2001 did
     not materially impact the Company.


(2)  Acquisition of Businesses and Product Lines
     -------------------------------------------
     In January 2000, the Company acquired all of the outstanding stock of R. M.
     Barton Co., Inc. (Barton) for approximately $2.1 million in cash, and the
     assumption of approximately $1.4 million in liabilities. The purchase price
     was allocated to the net assets acquired based on the estimates of fair
     value and resulted in goodwill of approximately $1.1 million which is being
     amortized on a straight-line basis over 15 years.

     In February 2000, the Company acquired all of the outstanding stock of
     Metra Metaalwerken B. V. B. A. (Metra) for approximately $1.8 million in
     cash, 50,000 shares of the Company's Class A Common Stock (valued at
     $300,000), and the assumption of approximately $900,000 in liabilities. The
     purchase price was allocated to the net assets acquired based on the
     estimates of fair value and resulted in goodwill of approximately $835,000
     which is being amortized on a straight-line basis over 15 years.

                                      33
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================

     On July 26, 2000, the Company acquired 75% of the outstanding equity of
     Cifali & CIA LTDA. (Cifali), a Brazilian company located in Cachoeirinha,
     Brazil, for $1.5 million in cash and direct costs and the assumption of
     approximately $5.2 million in liabilities. An additional $900,000, payable
     in three annual installments of $300,000, will be paid if Cifali attains
     certain levels of net earnings for each of the fiscal years ending December
     31, 2001, 2002, and 2003. The purchase price was allocated to the net
     assets acquired based on the estimates of fair value and resulted in
     goodwill of approximately $118,000 which is being amortized on a straight-
     line basis over 15 years.

     In October 1999, the Company acquired all of the outstanding stock of Drion
     Constructie B. V. B. A. (Drion) for approximately $1.4 million in cash,
     57,143 shares of the Company's Class A Common Stock (valued at $400,000),
     and the assumption of approximately $300,000 in liabilities. The purchase
     price was allocated to the assets acquired based on their estimated fair
     values and resulted in goodwill and other intangible assets of
     approximately $1.5 million.

     The pro forma effects of all acquisitions in 1999 and 2000 are
     insignificant.

(3)  Long-Term Debt and Notes Payable and Liquidity
     ----------------------------------------------
     Long-term debt and notes payable at December 31 are summarized as follows
     (dollars in thousands):

                                                                2000     1999
                                                              -------- --------
     Series A Senior Notes, collateralized by a security
     interest in certain real property, with interest at
     11.50% at December 31, 2000 and 7.68% at December 31,
     1999, under forbearance agreement                        $ 28,822   30,000

     Revolving line of credit, collateralized by security
     interests in all assets including receivables,
     inventory, patents, real estate and machinery
     and equipment, with interest of 11.5% at December 31,
     2000 and 7.75% at December 31, 1999, under forbearance
     agreement                                                  49,449   65,000

     Term Loan, collateralized by security interests in all
     assets including receivables, inventory, patents, real
     estate and machinery and equipment, with interest of
     11.5% at December 31, 2000, under forbearance agreement     9,201        -

                                      34
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================

                                                                2000     1999
                                                              -------- --------

     Term Loan, collateralized by security interests in
     all assets including receivables, inventory, patents,
     real estate and machinery and equipment, with interest
     of 11.5% at December 31, 2000, under forbearance
     agreement                                                  15,328        -

     4.4% to 8.25% (8.1% weighted average rate) fixed rate
     bonds, collateralized by a first security interest
     in certain real property, due September 2010                3,455    3,682

     Note payable to leasing institution due January 2002,
     with interest at the Libor rate plus 4.5%, which was
     11.065% at December 31, 2000, collateralized by
     certain equipment.                                          3,519        -

     Lease-purchase obligations and notes payable due
     through September 2008, with interest from 6.25% to
     10.25%, collateralized by certain buildings and
     equipment                                                   3,737      366
                                                              -------- --------
                                                               113,511   99,048

     Less current maturities of long-term debt and
       long-term debt in default                               110,062    4,551
                                                              -------- --------
     Long-term debt                                           $  3,449   94,497
                                                              ======== ========

     The Company amended its revolving line of credit agreement on February 3,
     2000 to increase the Company's borrowing capacity from $70 million to $100
     million. Under the forbearance agreements discussed below, the line was
     later reduced to $80 million on September 26, 2000, and further reduced to
     $77 million on November 15, 2000. As of December 31, 2000, the Company had
     utilized approximately $74 million of the revolving line of credit. Other
     long-term debts have maturity dates through September 2010. However, the
     majority of the Company's long-term debt is classified as current at
     December 31, 2000, based on the defaults occurring on the majority of the
     Company's financing arrangements.

     At December 31, 2000, and during most of 2000, the Company was not in
     compliance with certain provisions of its senior notes agreement, its
     revolving credit agreement, and its Oklahoma Development Finance Authority
     note. In addition, the Company did not make a required payment on the
     senior notes in the third quarter of 2000. Compliance with these provisions
     is determined each quarter based on the results of the trailing four
     quarters ending on each determination date. Noncompliance with these
     provisions permits the lenders to accelerate the Company's debt under the
     senior note agreement, the revolving credit agreement, and the Oklahoma
     Development Finance Authority note. As a result, the Company obtained
     forbearance agreements with the senior notes and revolving line of credit
     lenders, on September 26, 2000, November 15, 2000, and January 15, 2001.
     Among other things, the forbearance agreements prevent the


                                      35
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
     Company's lenders from exercising their acceleration rights, provided that
     the Company complies with the terms and conditions of the forbearance
     agreements, discussed further below. The latest forbearance agreements
     (dated January 15, 2001) extend the forbearance period through June 30,
     2001. The Company has the option to extend the forbearance period through
     September 30, 2001 in order to facilitate a refinancing of the Company's
     obligations to its lenders, provided that certain terms and conditions are
     met, which are discussed further below. The Company will also have the
     option to further extend the forbearance period to January 31, 2002,
     contingent upon payment of additional fees and meeting certain terms and
     conditions, which are discussed further below.

     The January 15, 2001 forbearance agreements provide for additional
     forbearance periods as discussed above and divided the $74.0 million
     balance on the revolving line of credit into three new debt facilities.
     This new debt structure is as follows: $49.5 million for a revolving loan,
     $15.3 million for a term loan and $9.2 million for an additional term loan.
     This debt accrues interest at Prime plus 2.5% per annum and is paid
     monthly. The revolving line is an asset-based loan in which the face
     commitment of $49.5 million is reduced to $41.5 million by December 2,
     2001. In addition, the total principal amount outstanding on the revolving
     line cannot exceed the "borrowing base" as defined in the agreement. The
     revised agreements specify certain monthly principal reductions on the term
     loans. The first term loan requires monthly principal reductions of
     $182,476 from February 2001 through August 2001 increasing to $681,897 from
     September 2001 through December 2001, and a balloon payment of $11,323,110
     in January 2002. The other term loan requires monthly principal reductions
     of $1,223,364 from February 2001 through August 2001 and a final payment of
     $637,386 in September 2001.

     The senior notes balance at December 31, 2000 was $28,822,430. Interest
     accrues at Prime plus 2.5% and is payable monthly. Under the terms of the
     January 15, 2001 forbearance agreements, $8,514,136 in aggregate principal
     payments are required from February 2001 through December 2001, with the
     remaining balance of $20,308,294 due January 2002. The principal payment
     dates discussed in this paragraph and the previous paragraph apply only if
     the Company has the ability to extend the forbearance agreements through
     January 31, 2002. This ability is contingent upon the Company meeting the
     scheduled payments and paying all required fees, which total approximately
     $1.4 million. Should the Company fail to make the required principal or fee
     payments, the lenders will have the right to accelerate the indebtedness
     during 2001. As a result of this uncertainty, the indebtedness covered
     under these forbearance agreements has been classified as current. The
     Company's Oklahoma Development Finance Authority indebtedness has also been
     classified as current, as a result of financial covenant violations.

     Under the revised agreements, the Company also granted security interests
     to its lenders in substantially all of its assets including receivables,
     inventories, patents, machinery and equipment, and real estate.


                                      36
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
     Management has taken steps in order to assist the Company in maintaining
     compliance with the forbearance agreements. The Company conducted an
     extensive operations review in May 2000. Based on this review it was
     determined that the Company's overhead costs and cost of goods sold had
     risen beyond levels which could be tolerated given the Company's industry,
     history and volume of business the Company was achieving. Annualized cost
     cuts have been made in selling, general and administrative expenses and in
     manufacturing overhead. These cost cuts were achieved by reductions in
     workforce and discretionary spending.

     Management also plans to liquidate certain ancillary divisions, if
     necessary, in order to maintain compliance with these agreements. In
     addition, management plans to begin negotiating new financing agreements
     with new lenders, in order to obtain more favorable terms for the Company.
     Management plans to have new agreements in place before the end of 2001.
     However, as of the date of this filing, no substantive negotiations have
     occurred.

     The minimum principal payments required during 2001, which are discussed
     above, total approximately $30 million and must be made in order to
     maintain compliance with the forbearance agreements, and in order to have
     the right to exercise the right to extend the forbearance period. Due to
     the Company's reliance on these debt financing arrangements for working
     capital, compliance with the forbearance agreements currently in place or
     additional forbearance by its lenders is necessary for the Company to meet
     its obligations as they become due and to avoid potentially material
     adverse effects on the Company's financial position, results of operations,
     and liquidity.

     During the second quarter of 1999, the Company entered into a transaction
     with a customer and a leasing institution, whereby the Company agreed to
     repurchase the equipment underlying the transaction in the event that the
     customer did not exercise its purchase option at the end of the lease term.
     The repurchase agreement provided for a purchase price which was below the
     estimated fair value of the equipment at the time of the repurchase.
     Accordingly, the Company applied sales-type lease accounting. Ultimately,
     the customer did not exercise its purchase option, and the equipment was
     returned to the leasing institution during 2000. As a result, the Company
     recorded a liability to the leasing institution in the amount of the agreed
     upon price and the fair value of the inventory was also recorded at the
     same time. During February 2001, the Company entered into a formal
     agreement with the leasing institution, whereby the Company is obligated to
     make payments of approximately $352,000 during April, July, and October of
     2001. The remaining principal balance is due in January 2002.

     The Company maintains a fleet financing agreement which allows the Company
     to borrow 100 percent of the net sales price of specific equipment under
     lease contracts. The terms of the individual borrowings under the financing
     agreement are consistent with the lease contracts and generally range from
     three months to three years. Borrowings under

                                      37
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
     the fleet financing agreement are secured by the specific equipment. As of
     December 31, 2000 and 1999, the Company had no borrowings outstanding under
     the fleet financing agreement.

(4)  Common Stock and Other Capital
     ------------------------------
     In 1991, the Company entered into an Investment Agreement with Recovery
     Equity Investors, L.P. (REI) pursuant to which the Company sold REI
     6,666,667 shares of Common Stock (subsequently Class A Common Stock) at
     $.75 per share. The Investment Agreement contains various covenants and
     restricts the Company from taking certain actions without the prior written
     consent of REI.

     On February 14, 1992, the Company filed an amended and restated certificate
     of incorporation, which authorizes 20,000 shares of Common Stock and
     45,000,000 shares of Class A Common Stock. Additionally, the Company
     effected a 1-for-2,000 reverse split of the Common Stock and declared a
     stock dividend of 1,999 shares of Class A Common Stock for each whole share
     of Common Stock outstanding following the reverse split. Owners of the
     remaining shares of Common Stock were offered the opportunity to exchange
     each share of Common Stock for one share of Class A Common Stock. The
     exchange offer expired on April 30, 1992. At December 31, 2000, 602 shares
     of Common Stock were still outstanding. The Class A Common Stock has
     certain transfer restrictions in order to prevent a change in ownership,
     which could limit or eliminate the Company's income tax net operating loss
     carryforwards (see note 7).

     Due to the Company's current year net loss, the Board of Directors decided
     to suspend the Company's semi-annual dividend profitability improves. In
     addition, as a result of the current defaults on indebtedness, the Company
     is prohibited from paying dividends.

(5)  Stock Option Plans
     ------------------
     In 1992, the Company established a Stock Option Plan (the "Plan") for its
     employees. In 1999, the Board of Directors and the shareholders of the
     Company approved certain amendments to the Plan. The Plan has two features:
     (1) stock options and (2) stock appreciation rights. The Plan is
     administered by a committee comprised of at least two members of the Board
     of Directors. The granting of stock options and/or appreciation rights is
     at the sole discretion of the committee. A maximum of 2,100,000 stock
     options and/or appreciation rights may be granted under the Plan. The
     exercise price of the stock options is the market value of Class A Common
     Stock at the date of grant. Generally, the options vest and become
     exercisable ratably over a four-year period, commencing six months after
     the grant date. The committee is entitled in its discretion to grant
     options with vesting periods which are different from the standard four
     year period. In some instances, the committee has exercised its discretion
     and has granted options with both shorter and longer vesting periods than
     the standard four year period. There were 1,076,348 options available for
     grant under the Plan at December 31, 2000.


                                      38
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
     During 2000, 320,000 stock options were granted. None were granted during
     1999. The per share weighted-average fair value of stock options granted
     during 2000 and 1998 was $1.99 and $3.77 respectively, on the date of grant
     using the Black Scholes option-pricing model with the following
     assumptions:

                                                  2000    1999    1998
                                                ------- ------- -------
          Expected volatility                       63%      -    55.0%
          Expected dividend yield                    -       -     0.6%
          Risk free interest rate                  5.5%      -     5.5%
          Expected life                         7.5 yrs      -  7.3 yrs

     The Company applies APB Opinion No. 25 in accounting for its stock options
     and, accordingly, no compensation cost has been recognized for stock
     options in the financial statements. Had the Company determined
     compensation cost based on the fair value at the grant date for its stock
     options under SFAS No. 123, the Company's net earnings (loss) would have
     been adjusted to the pro forma amounts indicated below (in thousands,
     except per share data):

                                                     2000     1999    1998
                                                   --------  ------  ------
     Net earnings (loss)           As reported     $(30,195)  2,489   6,217
                                   Pro forma        (30,311)  2,186   6,040

     Earnings per share - diluted  As reported       $(1.39)   0.11    0.29
                                   Pro forma         $(1.40)   0.10    0.28

     Stock appreciation rights may be issued with stock options or separately,
     at the sole discretion of the committee. Stock appreciation rights, if
     granted, would be payable in shares of Class A Common Stock over the same
     vesting period as the stock options. At December 31, 2000, no stock
     appreciation rights had been granted.

                                      39
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
     Stock option activity during the periods indicated is as follows:

                                            Number of        Weighted-Average
                                              Shares          Exercise Price
                                            ---------        ----------------
        Balance at December 31, 1997          435,000              $4.83

                Granted                       550,000               6.25
                Exercised                      48,860               5.66
                Forfeited                      51,140               4.61
                                            ---------
        Balance at December 31, 1998          885,000              $5.68

                Granted                             -                  -
                Exercised                      35,000               4.70
                Forfeited                      75,000               5.41
                                            ---------
        Balance at December 31, 1999          775,000              $5.75

                Granted                       320,000               3.12
                Exercised                           -                  -
                Forfeited                     550,000               6.30
                                            ---------
        Balance at December 31, 2000          545,000              $3.20
                                            =========

     At December 31, 2000, the range of exercise prices and weighted-average
     remaining contractual life of outstanding options was $2.75 - $6.81 and 4.5
     years, respectively.

     At December 31, 2000, 1999, and 1998, the number of options exercisable was
     290,558, 333,642, and 243,533, respectively, and the weighted-average
     exercise price of those options was $3.20, $5.35, and $5.04, respectively.

(6)  Leases
     ------
     The Company leases equipment to customers under short-term and long-term
     contracts. Short-term contracts generally range from three to six months.
     Rental income from short-term leases was approximately $1,621,000,
     $770,000, and $1,384,000, for the years ended December 31, 2000, 1999, and
     1998, respectively.

     The Company's long-term leases generally qualify as sales-type leases. The
     net investment in such leases is included in receivables. Future minimum
     lease payments to be received for long-term leases are as follows (dollars
     in thousands):

                    2001                5,509
                    2002                  332
                    2003                  309
                    2004                  245
                    2005                   78
                    Thereafter              -
                                       ------
                                       $6,473
                                       ======

                                      40
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================

(7)  Income Taxes
     ------------

     Income tax expense consisted of the following (dollars in thousands):

                                                 2000    1999    1998
                                                ------  ------  ------
                Current tax expense             $   74     299     542

                Deferred tax expense             8,000   1,213   3,100
                                                ------  ------  ------
                                                $8,074   1,512   3,642
                                                ======  ======  ======

     Income tax expense differed from the amounts computed by applying the U.S.
     federal income tax rate of 34% (35% in 1998) to earnings (loss) before
     income taxes in 2000, 1999, and 1998, as a result of the following (dollars
     in thousands):

                                                      2000    1999    1998
                                                    -------  ------  ------

       Computed expected tax (benefit) expense      $(7,521)  1,360   3,451
       State income tax (benefit) expense              (995)    181     410
       Increase (decrease) in valuation allowance    16,309      29    (177)
       Other, net                                       281     (58)    (42)
                                                    -------  ------  ------
                                                    $ 8,074   1,512   3,642
                                                    =======  ======  ======

     The tax effects of temporary differences that give rise to significant
     portions of the deferred tax assets and liabilities at December 31, 2000
     and 1999 are as follows (dollars in thousands):

                                                             2000     1999
                                                           --------  ------
        Net operating loss and other carryforwards         $ 13,992   5,566
        Other, primarily accrued liabilities                  6,137   5,592
                                                           --------  ------
        Deferred tax assets                                  20,129  11,158
        Deferred tax liability (plant and equipment
                temporary differences)                       (3,845) (2,663)
                                                           --------  ------
                                                             16,284   8,495
        Less valuation allowance                            (16,284)   (495)
                                                           --------  ------
        Net deferred tax asset                             $      -   8,000
                                                           ========  ======

     The net deferred tax asset at December 31, 1999 was $8.0 million. No net
     deferred tax asset was recorded at December 31, 2000. The Company has
     assessed its past earnings history and trends, reversing taxable temporary
     differences, the current year net loss, the substantial doubt regarding the
     Company's ability to continue as a going concern, and expiration dates of
     carryforwards and has determined that it is not "more likely than not" that
     the December 31, 2000 net deferred tax asset will be realized. Accordingly,
     a valuation allowance has been established against the net deferred tax
     asset.

     Prior to 2000, the Company's taxable income in 1998 and 1999, prior to
     utilization of income tax net operating loss carryforwards, supported the
     "more likely than not" criteria that net deferred tax assets would be
     realized.

                                      41
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

     At December 31, 2000, the Company had tax net operating loss carry forwards
     of approximately $25.5 million for federal income tax purposes. Such
     carryforwards, which may provide future tax benefits, expire as follows:
     $2.1 million in 2010 and $23.4 million in 2020. At December 31, 2000 the
     Company also had tax net operating loss carryforwards of approximately
     $52.2 million for state income tax purposes. Such carryforwards expire as
     follows: $1,300,000 in 2001; $100,000 in 2002; $4,100,000 in 2004;
     $7,300,000 in 2005; $4,400,000 in 2006, $12,200,000 in 2010; and
     $22,800,000 in 2020. Future changes in ownership, as defined by Section 382
     of the Internal Revenue Code, could limit the amount of net operating loss
     carryforwards used in any one year (see note 4).

     At December 31, 2000, the Company had tax credit carryforwards of
     approximately $1.2 million which expire in varying amounts from 2001 to
     2010, and depletion carryforwards and AMT credit carryforwards of
     approximately $1.9 million and $1.4 million, respectively, which do not
     expire.

(8)  Export Sales
     ------------
     The Company had export sales of approximately $29.2 million, $17.0 million,
     and $28.3 million in 2000, 1999, and 1998, respectively. These sales were
     made through foreign subsidiaries, dealers and representatives. A
     significant portion of these sales were made in Asia, Europe, South
     America, and North and Central America, excluding the United States.

(9)  Employee Benefit Plan
     ---------------------
     The Company has a defined contribution plan whereby eligible employees may
     contribute pre-tax wages in accordance with the provisions of the plan. At
     the discretion of the Board of Directors, the Company matches certain
     contributions made by eligible employees. Discretionary matching
     contributions of approximately $307,000, $339,000, and $346,000 were made
     in 2000, 1999 and 1998, respectively.

(10) Supplemental Quarterly Financial Information (Unaudited)
     --------------------------------------------------------
     Following is a summary of the unaudited interim results of operations for
     the years ended December 31, 2000 and 1999 (dollars in thousands, except
     per share data):

                                              2000
                              -----------------------------------------------
                               First    Second     Third    Fourth      Full
                              Quarter   Quarter   Quarter   Quarter     Year
                              -------   -------   -------   -------   -------
     Net revenues             $67,303    65,123    47,748    48,074   228,248
     Net (loss)                (1,023)   (8,320)   (1,482)  (19,370)  (30,195)
     Earnings (loss) per share
          Basic               $  (.05)     (.38)     (.07)     (.89)    (1.39)
          Diluted             $  (.05)     (.38)     (.07)     (.89)    (1.39)


                                      42
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================

                                                       1999
                                   -------------------------------------------
                                    First    Second   Third   Fourth    Full
                                   Quarter  Quarter  Quarter  Quarter   Year
                                   -------  -------  -------  -------  -------
     Net revenues                  $53,461   71,946   54,606   38,650  218,663
     Net earnings (loss)               172    5,239      331   (3,253)   2,489
     Earnings (loss) per share
          Basic                    $   .01      .24      .02     (.15)     .12
          Diluted                  $   .01      .24      .02     (.15)     .11

     During the fourth quarter of 2000, the Company recorded adjustments to
     reflect changes in the Company's estimates of the required valuation
     allowance against the deferred tax assets. The impact of this adjustment
     resulted in an increase in the 2000 net loss of $14.8 million.

     In the fourth quarter of 1999, the Company recorded adjustments to reduce
     the carrying value of inventory, increase accrued liabilities for legal
     contingencies and warranties, and to expense incurred due diligence costs
     related to the termination of a potential acquisition. The after tax effect
     of the fourth quarter adjustments decreased net earnings by approximately
     $1.2 million.

(11) Supplemental Cash Flow Information
     ----------------------------------
     Cash paid for interest approximated $11,330,000, $6,734,000, and $4,731,000
     in 2000, 1999, and 1998, respectively.

     Cash paid for income taxes approximated $191,000, $554,000, and $229,000 in
     2000, 1999, and 1998, respectively.

     In February 2000, the Company acquired Metra Metaalwerken B.V.B.A. The
     consideration paid to the former owner of Metra included shares of the
     Company's Class A Common Stock. The fair value of the stock issued was
     approximately $300,000.

     As discussed in Note 3, certain inventory was returned to the Company
     during 2000 related to a transaction recognized as revenues in accordance
     with sales type lease accounting. The returned inventory was recorded on
     the books at fair value, and a liability was recorded to the leasing
     company involved in the transaction.

     In October 1999, the Company acquired Drion Constructie B.V.B.A. The
     consideration paid to the former owner of Drion included shares of the
     Company's Class A Common Stock. The fair value of the stock issued was
     approximately $400,000.

(12) Segment Information
     -------------------
     The Company currently manages its business by operating location. As such,
     the Company identifies its segments based on its individual manufacturing
     facilities. The Company has three reportable segments, its main Oklahoma
     City manufacturing facility its Bid-Well facility, and its Johnson-Ross
     facilities. These facilities manufacture and market products in the mobile
     and materials processing equipment categories as well as parts for the
     products.

                                      43
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================

     The specific products manufactured at the Oklahoma City facility are as
     follows: (i) mobile equipment - the Company's primary line of concrete
     paving systems, pavement profiling and reclaiming/stabilizing equipment,
     weighing equipment, municipal landfill compactors, and industrial and green
     waste grinding machines; and (ii) materials processing equipment - hot-mix
     asphalt production systems, and thermal systems for remediating
     contaminated soils and sanitizing medical waste. The products manufactured
     at the Bid-Well facility include lightweight grading and concrete paving an
     finishing machines. The products manufactured at the Johnson-Ross
     facilities include concrete batching plants. The products manufactured at
     the "Other" facilities include custom heavy hauling and heavy-duty
     trailers, and small utility sized pavement profilers and pavement
     reclaiming machines, all of which fall into the mobile equipment category.

     Following is certain financial information regarding the Company's Oklahoma
     City, Bid-Well and Johnson-Ross facilities and all other manufacturing
     facilities. The revenues reported below are all from external customers.
     General corporate expenses are not allocated to the operating segments;
     rather, such expenses are included as a reconciling item to reported
     operating earnings (dollars in thousands).

<TABLE>
<CAPTION>
                                       Oklahoma               Johnson      All
                                         City     Bid-Well     -Ross      Other      Total
                                      -----------------------------------------------------
     <S>                              <C>         <C>         <C>        <C>        <C>
     As of December 31, 2000:
       Total assets                   $141,781       4,311     16,516     30,292    192,900

     Year ended December 31, 2000:
       Net revenues                   $168,528       8,215     19,191     32,314    228,248
       Costs and expenses              175,164       6,556     20,966     30,798    233,484
                                      --------    --------    -------    -------    -------
         Segment measure of
           operating profit (loss)    $ (6,636)      1,659     (1,775)     1,516     (5,236)
                                      ========    ========    =======    =======
       General corporate expenses                                                    (6,118)
                                                                                    -------
         Operating loss                                                             (11,354)

       Interest expense                                                             (12,248)
       Interest income                                                                1,359
       Other, net                                                                       122
                                                                                   --------
         Loss before income taxes                                                   (22,121)

       Income tax expense                                                             8,074
                                                                                   --------
       Net (loss)                                                                  $(30,195)
                                                                                   ========
       Capital expenditures          $   2,068         113      157        1,135      3,473
                                      ========    ========    =======    =======   ========
       Depreciation and amortization $   3,994         118      349        1,124      5,585
                                      ========    ========    =======    =======   ========
</TABLE>
                                      44
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================

<TABLE>
<CAPTION>
                                      Oklahoma                Johnson      All
                                        City      Bid-Well     -Ross      Other      Total
                                      -----------------------------------------------------
     <S>                              <C>         <C>         <C>        <C>        <C>
     As of December 31, 1999:
        Total assets                  $180,333       3,841     18,452     12,849    215,475

     Year ended December 31, 1999:
        Net revenues                  $175,088       8,488     17,017     18,070    218,663
        Costs and expenses             161,460       7,008     16,245     17,893    202,606
                                      --------    --------    -------    -------    -------
           Segment measure of
             operating profit         $ 13,628       1,480        772        177     16,057
                                      ========    ========    =======    =======
        General corporate expenses                                                   (6,481)
                                                                                    -------
           Operating earnings                                                         9,576

        Interest expense                                                             (6,573)
        Interest income                                                                 980
        Other, net                                                                       18
                                                                                    -------
           Earnings before income taxes                                               4,001

        Income tax expense                                                            1,512
                                                                                    -------
        Net earnings                                                                $ 2,489
                                                                                    =======
        Capital expenditures          $  4,648         265        800          4      5,717
                                      ========    ========    =======    =======    =======
        Depreciation and amortization $  3,578          96        315        332      4,321
                                      ========    ========    =======    =======    =======
     As of December 31, 1998:
        Total assets                  $166,036       4,029     13,778      5,868    189,711

     Year ended December 31, 1998:
        Net revenues                  $163,077       6,132     16,328     22,036    207,573
        Costs and expenses             148,572       5,171     14,305     20,607    188,655
                                      --------    --------    -------    -------    -------
           Segment measure of
             operating profit         $ 14,505         961      2,023      1,429     18,918
                                      ========    ========    =======    =======
        General corporate expenses                                                   (5,028)
                                                                                    -------
           Operating earnings                                                        13,890

        Interest expense                                                             (5,000)
        Interest income                                                                 934
        Other, net                                                                       35
                                                                                    -------
           Earnings before income taxes                                               9,859

        Income tax expense                                                            3,642
                                                                                    -------
        Net earnings                                                                $ 6,217
                                                                                    =======
        Capital expenditures          $ 12,804          58        203        244     13,309
                                      ========    ========    =======    =======    =======
        Depreciation and amortization $  2,520          87        276        361      3,244
                                      ========    ========    =======    =======    =======
</TABLE>

     At December 31, 2000, the Company had one operating location in the United
     Kingdom, one in Belgium, and another in Brazil. The United Kingdom location
     serves as a sales office and has approximately $283,000 of long-lived
     assets comprised of property, plant and equipment. The Belgium location,
     which manufactures a high-tech line of midrange concrete slip-form pavers,
     has approximately $5.8 million of long-lived assets comprised primarily of
     property, plant and equipment and other assets. The Brazilian location
     which manufactures asphalt plants,

                                      45
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================

     asphalt pavers and surface finishing machines, has approximately $8.2
     million of long-lived assets comprised primarily of property, plant and
     equipment and other assets. At December 31, 2000 all remaining assets were
     located in the United States.

     Revenues for products were as follows (dollars in thousands):

                                                  2000      1999     1998
                                                --------  -------  -------
                Mobile Equipment                $ 85,522   88,450   79,248
                Materials Processing Equipment   108,996   97,837   96,131
                Parts and Used Equipment          33,730   32,376   32,194
                                                --------  -------  -------
                                                $228,248  218,663  207,573
                                                ========  =======  =======

(13) Commitments and Contingencies
     -----------------------------
     The Company and its subsidiaries are parties to various leases relating to
     plants, warehouses, office facilities, transportation vehicles, and certain
     other equipment. Real estate taxes, insurance, and maintenance expenses are
     normally obligations of the Company. It is expected that in the normal
     course of business, the majority of the leases will be renewed or replaced
     by other leases. Leases do not restrict dividends, debt, or future leasing
     arrangements. All leasing arrangements contain normal leasing terms without
     unusual purchase options or escalation clauses. Rent expense was $1,731,000
     in 2000, $1,502,000 in 1999, $1,402,000 in 1998.

     Minimum rental commitments under all non-cancelable leases for five years
     subsequent to December 31, 2000, are approximately as follows: $926,000 in
     2001, $751,000 in 2002, $535,000 in 2003, $297,000 in 2004, and $297,000 in
     2005.

     At December 31, 2000, the Company was contingently liable as guarantor for
     certain accounts receivable sold with recourse of approximately $4,093,000
     through September 2009.

(14) Litigation
     ----------
     Since 1996, the Company has been involved in litigation in the U.S.
     District Court for the Western District of Oklahoma (the District Court)
     with Cedarapids, Inc. (Cedarapids). The Company sued Cedarapids seeking a
     declaratory judgment that a patent held by Cedarapids was invalid, or, in
     the alternative, that the Company was not infringing the patent. Cedarapids
     subsequently filed a counterclaim against the Company, alleging that the
     Company's Triple-Drum Mixer infringes this same patent.

     During February 2001, the District Court issued a ruling in this case. The
     court ruled that one configuration of the Company's Triple-Drum mixer (used
     on approximately 100 Triple-Drums) infringed the patent held by Cedarapids.
     The court enjoined the Company from selling this particular configuration
     of Triple-Drum. On March 20, 2001, the court awarded damages and
     prejudgment interest to Cedarapids of approximately $11,700,000.

                                      46
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
     The Company plans to appeal the judgment to the United States Court of
     Appeals for the Federal Circuit (the Federal Circuit). It is the opinion of
     management and legal counsel that the Company will ultimately have no
     liability for infringement in this case. The Company has a number of
     defenses which, in the opinion of management and counsel, will result in
     the original judgment being overturned upon appeal. Accordingly, no accrual
     has been established for this judgment. In addition, the Company has
     capitalized approximately $1.7 million in legal fees incurred in defense of
     the Triple Drum patent. These costs are being amortized over the remaining
     life of the patent. In the event that the Federal Circuit does not overturn
     the District Court's ruling, these costs will be expensed in the period
     when the final decision is rendered.

     Under the injunction issued by the court, the Company can continue selling
     Triple-Drum Mixers with total air burners which were found not to infringe.
     The costs associated with using the total air burners are not significant.
     Therefore, management does not expect that the injunction will have a
     material impact on future sales. However, unless the Company posts a bond
     in favor of Cedarapids, or obtains on order prohibiting Cedarapids from
     executing on its judgement, Cedarapids could attempt to collect the
     judgement during the pendency of the appeal. The impact of this situation
     on the Company's liquidity is unknown, due to the court's latitude in
     making a determination regarding the bond requirements.

     In September 1998, Cedarapids filed a separate suit against the Company in
     the U.S. District Court for the Northern District of Iowa, alleging that
     the Company has infringed on a second patent held by Cedarapids. Cedarapids
     is seeking damages in excess of $10 million in this case. The Company,
     together with its legal counsel, believes that this claim is without merit,
     and intends to vigorously contest this lawsuit. Since the likelihood of an
     unfavorable outcome in this case has not been determined to be probable by
     the Company and its legal counsel, no liability has been recorded for this
     case.

     There are numerous other claims and pending legal proceedings that
     generally involve product liability and employment issues. These cases are,
     in the opinion of management, ordinary matters incidental to the normal
     business conducted by the Company. In the opinion of the Company's
     management after consultation with outside legal counsel, the ultimate
     disposition of such other proceedings will not have a material adverse
     effect on the Company's consolidated financial position, liquidity or
     future results of operations.

(15) Related Party Transactions
     --------------------------
     During 1997, the Company leased a manufacturing facility and offices
     located in Champaign, Illinois from Steve Hillard, the current President of
     CMI Johnson-Ross. This lease expires on April 1, 2006. The lease provides
     for rental payments of $15,000 per month. Aggregate lease payments for the
     years ended December 31, 2000, 1999 and 1998 were $174,000, $180,000, and
     $150,000 respectively.


                                      47
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================

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

          Not applicable.

                                   PART III

In accordance with the provisions of General Instruction G(3), Items 10, 11, 12,
and 13 are incorporated herein by reference to the Company's Proxy Statement for
the 2001 Annual Meeting of Shareholders.


                                    PART IV

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

(a)  Consolidated Financial Statements and Consolidated Financial Statement
     ----------------------------------------------------------------------
     Schedules
     ---------

1.   Consolidated Financial Statements:
     ---------------------------------

     See Index to Consolidated Financial Statements at Item 8 on Page 22 of this
     Form 10-K.

2.   Consolidated Financial Statement Schedules:
     ------------------------------------------

     Information required by schedules called for under Regulation S-X is either
     not applicable, not material, or is included in the consolidated financial
     statements or notes thereto.

3.      Exhibits

                                                       Page Number or
Exhibit                                               Incorporation by
Number    Description                                   Reference to
------- -------------------------------------     -----------------------
(3.1)   Amended and Restated Certificate          Exhibit 2 on Form 8-K,
        of Incorporation, as amended              dated February 18,
                                                  1992; and Exhibit (3i)
                                                  on Form 10-Q dated
                                                  August 14, 1995

(3.2)   Amended and Restated By-Laws              Exhibit (3ii) on Form
                                                  10-Q, dated August 13,
                                                  1999

(4.1)   Series A Senior Notes Loan Agreement      Exhibit 4.1 on
                                                  Form 10-K dated
                                                  March 19, 1999

(4.2)   Revolving Line of Credit Loan Agreement   Exhibit 4.2 of on
        and Amendments                            Form 10-K, dated
                                                  April 7, 2000


                                      48
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000

================================================================================

(4.3)   The registrant, by signing this report,
        agrees to furnish the Securities and
        Exchange Commission, upon its request, a
        copy of any instrument which defines the
        right of holders of long-term debt of the
        registrant and all of its subsidiaries for
        which consolidated or unconsolidated finan-
        cial statements are required to be filed,
        and which authorizes a total amount of
        securities not in excess of 10 percent
        of the total assets of the registrant and
        its subsidiaries on a consolidated basis.

(4.4)   Revolving Credit Agreement Loan                Exhibit 4.4 of this
        Modification and Forbearance Agreement         Form 10-K
        dated January 15, 2001


(4.5)   Series A Senior Notes Agreement Forbearance    Exhibit 4.5 of this
        Agreement dated January 15, 2001               Form 10-K

(10.1)  Investment Agreement dated August 19, 1999     Exhibit 28.1 on
        between Recovery Equity Investors, L. P.       Form 8-K filed
        and the Company                                on/or about
                                                       September 10, 1991


(10.2)  Amendment No. 1 to Investment Agreement        Exhibit 10.5 on
        dated November 6, 1998 between Recovery        Form 10-K, dated
        Equity Investors, L. P. and the Company        April 7, 2000


(10.3)  Registration Rights Agreement dated            Exhibit 28.2 on
        August 19, 1991 between Recovery Equity        Form 8-K filed
        Investors, L. P. and the Company               on/or about
                                                       September 10, 1991


(10.4)  Amendment No. 1 to Registration Rights         Exhibit 10.7 on
        Agreement dated January 15, 1993 between       Form 10-K, dated
        Recovery Equity Investors, L. P. and           April 7, 2000
        the Company


                                      49
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================

(21) Subsidiaries of the Registrant:
                                                  Place of Incorporation
              Name                                    or Organization
              ----                                ----------------------
     CMI Limited Partnership                      Oklahoma
     CMI Sales Co.                                Oklahoma
     Product Support, Inc.                        Oklahoma
     Machinery Investment Corporation             Oklahoma
     CMI International (U.K.), Ltd.               England
     CMI Energy Conversion Systems, Inc.          Oklahoma
     CMI OIL Corporation                          Oklahoma
     CMI Dakota Co.                               South Dakota
     CMI Cedar Falls, Inc.                        Iowa
     Transport Trailer Manufacturing Company      Oklahoma
     Brownwood Ross Company                       Texas
     CMI Johnson Corporation                      Illinois
     CMI Belgium NV                               Belgium
     Drion Constructie B. V. B. A.                Belgium
     R. M. Barton Co., Inc.                       Oklahoma
     CMI Cifali Equipamentos, Ltda.               Brazil

(23) Consent of Independent Auditors              Exhibit 23

(b)  Reports on Form 8-K
     -------------------
     No reports on Form 8-K were filed during the last quarter of 2000.

                                  SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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:

(Registrant)
CMI CORPORATION

By:  /s/ Bill Swisher                                Dated:   April 16, 2001
     -------------------------------------                    --------------
     Bill Swisher
     Chief Executive Officer and Chairman

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

By:  /s/ Kenneth J. Barker                             Dated: April 16, 2001
     -------------------------------------                    --------------
     Kenneth J. Barker
     Director

By:  /s/ Joseph J. Finn-Egan                           Dated: April 16, 2001
     -------------------------------------                    --------------
     Joseph J. Finn-Egan
     Director


                                      50
<PAGE>

CMI CORPORATION
FORM 10-K
December 31, 2000
================================================================================


By:  /s/ Carl Hatton                                   Dated: April 16, 2001
     -------------------------------------                    --------------
     Carl Hatton
     Executive Vice President, and
     Chief Operating Officer

By:  /s/ Larry D. Hartzog                              Dated: April 16, 2001
     -------------------------------------                    --------------
     Larry D. Hartzog
     Director

By:  /s/Jim D. Holland                                 Dated: April 16, 2001
     -------------------------------------                    --------------
     Jim D. Holland
     Senior Vice President, Treasurer
     and Chief Financial Officer

By:  /s/ Ronald A. Kahn                                Dated: April 16, 2001
     -------------------------------------                    --------------
     Ronald A. Kahn
     Director

By:  /s/ Jeffrey A. Lipkin                             Dated: April 16, 2001
     -------------------------------------                    --------------
     Jeffrey A. Lipkin
     Director

By:  /s/ J. Larry Nichols                              Dated: April 16, 2001
     -------------------------------------                    --------------
     J. Larry Nichols
     Director

By:  /s/ Thomas P. Stafford                            Dated: April 16, 2001
     -------------------------------------                    --------------
     Thomas P. Stafford
     Director

By:  /s/ C. Bruce Gaylord                              Dated: April 16, 2001
     -------------------------------------                    --------------
     C. Bruce Gaylord
     Principal Accountant

                                      51